§ Motion made, and Question proposed, "That this House do now adjourn."—[Commander Lyres Monsell.]
§ Mr. RAMSAY MacDONALD
In the previous Debate the right hon. Gentleman the Minister of Health said that the Budget statement had been the subject of attacks at so many points that it was impossible for him to reply to them all. By some curious process of thought on the part of the right hon. Gentleman, that was considered to be a commendation. That being so, I will take the consideration of Government action out of that field and bring it into contact with the criticisms which have been showered at the Government during the last two or three days in connection with another matter. I would call attention to the extraordinary transaction for which the Government are responsible, affecting a very important industry in this country and in certain of our Colonies. I refer to what the Government have done in removing the restrictions of the Stevenson scheme from the rubber industry, the result of which, according to the experts in the trade, has been to depreciate the value of stocks in hand by something between £25,000,000 and £30,000,000, and reducing the market value of shares by something like onehalf—a sum equivalent to £100,000,000. It may be that those figures are a little 1162 bit doleful and that the position in which the industry finds itself to-day may be, at any rate, partly temporary; but no spokesmen of the Government can deny the fact that awing to a statement made by the Prime Minister outside this House, on the 8th February, the rubber trade was thrown into a most tragic panic on the 9th. Not content with that, on the 4th April, by a statement which the right hon. Gentleman made in this House, he renewed the panic. A suspension took place in the business in rubber shares and the stock-in-hand had to be sold at prices of a most sacrificing kind on account of the panic state of the market. We must add to the survey of our own losses the losses borne by the growers in Ceylon and Malaya, because we were responsible for them.
What was the occasion of this disastrous action, handled so extraordinarily badly by the Government? There had been an agreement imposed by legislation, which we prompted and for which we are responsible, that exports of rubber from Ceylon and Malaya should be determined in a special way. The rubber industry had been subject to far more speculation than was good for it, and it also suffered far too many feverish episodes in the interests of its own good health. Uncontrolled, two clear things happened. First of all, the agricultural side of the rubber industry had been neglected, trees were badly planted and the economic resources of the industry were being wasted. The second thing that had undoubtedly occurred was that the industry had never been allowed to settle down to normal conditions. Such was the effect of private enterprise and unlimited competition in this industry. Everybody engaged in it saw, before 1922, that prices had to be stabilised somehow or other, that agricultural economy had to be encouraged, arid that as far as this House was concerned British industry must be protected in a way that it had not been protected before. Therefore, the Stevenson scheme was adopted.
I will not go into the details of the Stevenson scheme, but it meant that exports were controlled and that protection was given by an official declaration that certain percentages of rubber might be exported, but a penalty in export duties was imposed which made further 1163 exportation prohibitive. That scheme was accepted and was worked. There were, of course, certain interests in the rubber industry who did not accept the Stevenson scheme. We always find that. Our economic text books are always telling us that if we were only wise, farseeing, deep-seeing and high-seeing we should find that all our economic interests would be saved; but in a society which was created in rather a destructive way that is not quite so apparent, and it does not always square with experience, especially if the experience is a narrow-visioned one. In this rubber industry the producer had his interest, the financier had his interest, and the user had his interest. Nevertheless, it was perfectly certain, and I do not think anyone would deny it, that the general effect of the Stevenson scheme was to stabilise the industry and to protect British interests in that industry. Answering a question on the 10th May, 1927, the Secretary of State for the Colonies said:I see no reason to suppose that in the long run the effects"—that is, the effects of the Stevenson scheme—will be disadvantageous to British interests.An hon. Member who sits on the Government side of the House asked the question:Is it not a fact that the Stevenson restriction scheme has saved British rubber plantations from ruin and bankruptcy?The answer of the Colonial Secretary was:That is undoubtedly the case."—[OFFICIAL REPORT, 10th May, 1927; cols. 199 and 200; Vol. 206.]That was as recently as 10th May, 1927. That was the Colonial Office view at that time, after all these rival interests in the industry had said everything they had to say. The Colonial Office had weighed them all up, had listened to them, was in possession of all the statistics regarding exports, both British and Dutch, and had come to the conclusion that this particular scheme had undoubtedly saved British rubber plantations from ruin and bankruptcy. It is perfectly true that the scheme was in that way one created by what we might call artificial economic and industrial conditions. It also was true that nearly everyone assumed that 1164 the scheme was a temporary one. It was created for a specific purpose, and as soon as that purpose was effected the rubber industry by its own internal organisation, control and discipline, and by the wisdom it had gathered during those years, could run without anyone interfering.
First of all, let this House remember that for this scheme the Government alone were responsible. The Government got the necessary legislation passed in Ceylon, and it got the necessary Orders issued in Malaya. If there were any artificial conditions imparted to this industry, the Government were responsible for those conditions, and when those conditions had to be removed it was the Government's duty to see that the conditions were removed in such a way that the rubber industry would not suffer grievously by the change. The trade had reacted to them; it had accommodated itself to them. Shares had been sold on these conditions. The price of material had been regulated and determined by them, and the distributive methods and the competition of the various sections of the trade had been determined by them. That is the thing that we have first of all to remember. For what happened the Government alone are responsible. Whether this scheme was a good scheme or a bad scheme, a workable scheme or an unworkable scheme, it was the Government's scheme, and the Government have to take the responsibility for taking it off in the same way as they took the responsibility for putting it on.
How has the scheme worked? Again, I am not going into all the details. I am going to mention only two features which are essential to an assignment of the heavy responsibility that now rests on the Government's shoulders. First of all, in every quarter surveys were made as to prices. Reassessments of the exportable quota were made. Then at stated intervals the Secretary of State for the Colonies announced what was going to happen to the industry under the scheme during the succeeding three months. Another feature was that the Secretary of State had an Advisory Committee to guide him in the working of the scheme. I assume that he selected the members of the Advisory Committee because he had confidence in them. 1165 Every member of the Committee was an expert of some kind or other in the operations of the trade. Then what happened? What was the, course of events that the Government should have made up its mind that its work had come to an end, had reached the apex of its beneficence and had to be taken off?
The trade, I think very reasonably, expected that when the proper announcements were made—I might almost call them statutory announcements—if the Government contemplated any change, the announcements would be communicated to the country. The trade also was surely justified in the most reasonable way in assuming that if any change was to take place, certainly any big change like the removal of the whole scheme, the Secretary of State for the Colonies would have consulted the Advisory Committee that was supplied to him for the purpose of guiding 'him on matters like that. On the day to which I have referred, 10th May, 1927, when this question was brought to the notice of the Colonial Secretary by the questions of hon. Members belonging to' his own party, he used this expression:I have the advantage of advice from a strong committee representing the various interests concerned, and I am continually taking the advantages or disadvantages of a scheme into consideration."—[OFFICIAL REPORT, 10th May, 1927; col. 199, Vol. 206.]What is that statement meant to imply? That whatever action he agreed to he would take the advice of his Advisory Committee first of all. It does not mean, of course, that he would act on the advice of his advisers. No Minister who has held office would say that. I do not accuse him of not doing that, but I do accuse him of not taking the advice of the Advisory Committee at all. The fact of the matter is that the Advisory Committee was ignored altogether. The right hon. Gentleman himself told us the other day, very unwillingly—I sat and not only listened but saw him—that he did not take the advice of his Advisory Committee but that the members of that Committee were communicated with privately. Is the right hon. Gentleman going to get up this evening and say that that carried out the pledge implied in the answer by him which I have just read. He has an Advisory Committee 1166 and what he tells them he tells them individually and separately, never asking them to come and see him. He writes a letter to them and he admits that he did it privately. At any rate he has removed privacy from any communication he made to them. He writes them individually a letter saying that he proposes certain things, "But you are not going to be consulted, and I am: only giving you the information so that you may know."
That is not the function of an Advisory Committee. The Colonial Office were ignored. It was not only that the right hon. Gentleman ignored his Advisory Committee, but he himself was ignored, for apparently when the Government made up its mind to take some action in this matter, the prompting did not come from the Colonial Office; it did not come from the Advisory Committee. The prompting came from some interests outside, and those interests have not yet been disclosed. Therefore, when it came into the hands of the Government, as opposed to the Colonial Office, a new Committee was brought into operation, and that new Committee, brought into operation without any knowledge of what had gone before, without any expert knowledge to guide them in weighing the value of evidence presented to them, began its work. That Committee was the Civil Research Committee. Regarding that Committee, there is a good deal of mystery, The names of its members have not been disclosed. Its report is not to be published, and its advice, either in specific terms or in general, is not to be communicated to this House. There have been speeches made in public regarding the Committee and the House is entitled to take some notice of them. There was a speech made by Mr. James Fairbairn at the Annual General Meeting of the Barrier and General Finance Company. That company is interested in rubber. I quote from the public press and so I am not giving any thing away. Mr. James Fairbairn said about the Committee:Those who gave evidence before this Committee were asked that, should they recognise any of 'the members of the Committee, they should not divulge their names.What a childish thing! What an absurd and childish thing! It shows the spirit and the capacity for the handling 1167 of great financial interests like this. The quotation goes on:As to Sir Herbert Hambling, who is the Chairman, had the Prime Minister made the smallest inquiry as to his personal leanings, he would have found out quite readily that Sir Herbert Hambling, from pronouncements made as Vice-Chairman of Barclays Bank, had clearly indicated that he was opposed to any form of restriction such as the Stevenson scheme.That is published. The Government ought to tell us whether that is true or not. Did the Government deliberately appoint as Chairman of this special Committee, after having set aside the Advisory Committee, after having put the Colonial Office on one side—did they knowingly and deliberately appoint as Chairman of this Committee a gentleman who had already in public and in private expressed his views that the Stevenson scheme ought to be terminated? Whoever speaks for the Government to-night must give a categorical reply to that question. This gentleman goes on to say:I am credibly informed by a member of one of the groups who gave evidence that he found Sir Herbert Hambling a distinctly hostile chairman.8.0 p.m.
Is that true? So much for the committee. The evidence given to the committee was private. It has never been published, and those of us who are outside know nothing about it. Questions have been put to the Prime Minister, again and again, to which he quite frankly gave the reply that committees of that character are not public committees, that their evidence ought not to be communicated to the House, and that the Government took upon themselves the responsibility of acting upon their recommendations or not doing so. From the Constitutional point of view, if I may use the term, I range myself alongside the Prime Minister in that respect. But unfortunately the evidence in this case has got out, and if Ministers, especially Prime Ministers, in relation to these national economic matters, are going to make this claim to a purely personal advisory committee—which anyone who has occupied even for a day, the position of Prime Minister knows is of enormous value, and no Prime Minister I hope will ever go into that place without having such a committee to advise and assist him—they must be exceedingly careful as 1168 to how they use that committee. They cannot possibly use that committee in the rough and ready way in which a public committee is used, and that is what the right hon. Gentleman has done.
Surely if the right hon. Gentleman had sat down for five minutes by the fireside and thought over what he was doing and the consequences and had said to himself, "If I appoint this Committee to take evidence and this gentleman of known opinions is going to be chairman, can I regard that Committee as one whose evidence will not only be considered by me as private, but whose evidence, as a matter of fact, will be kept private?" I am perfectly certain that if the right hon. Gentleman had given five minutes' consideration to that simple practical problem, he would have come to the conclusion that it was absolutely impossible. As a matter of fact, those in the trade know who gave evidence. Everybody knows now who gave evidence and they do not only know that, but they know what the evidence was. Just as in the case of a committee or a commission which is taking evidence, let us say on the question of lunacy, I do not require to waste my time in reading through all the evidence of certain witnesses in order to know what the effect of their evidence will be, so, in this case, if Mr. Smith is a witness the trade know precisely what his point of view will be and the same thing applies to Mr. Brown and Mr. Robinson. Therefore, the trade know precisely what was the evidence submitted to the Committee. They also know now that either the Committee reported against the evidence, or that the Prime Minister refused to take the advice of the Committee which was set up to advise him. Either one or the other is bound to be true. The evidence was unanimous in its main features, so they say. So I have read again and again and so I am told by those interested in it. There were certain variations, there were slightly different angles of viewing matters, there were variations in method, but what I may call the trunk, the main fundamental body of evidence was unanimous, and it was opposed to the decision to which the Prime Minister came.
Then we have to consider how the Government handled the situation. We have 1169 brought it to this point. With all the operations of the Committee, and the queer judgment used in the appointment of the Committee, and the equally strange judgment used in the kind of Committee appointed, we have got to this point—that the Government had made up their mind, either in accordance with or contrary to the advice of that special Committee, that the Stevenson scheme must go. And how is it to be done? Let me remind the House that as late as 21st October last year the Colonial Secretary issued the following notification through the Colonial Office:It is officially announced that it is not proposed that any change shall be made on 1st November next in the Regulations which operate at present governing the export of rubber from Ceylon and Malaya. The Governments of the territories concerned will be asked to overhaul the machinery of the scheme with a view to increasing the efficiency of its working.So far from their being any indication there that the Government were changing their mind against the scheme, not a single person could read that statement without coming to the conclusion that the Government's determination to support the scheme had been strengthened rather than weakened and that it was, as a matter of fact, communicating with the Governments concerned in order that the scheme might be so amended that its continuance would be made certain:The Governments are being consulted on the question of whether any, and, if so, what alterations are required in the Regulations now in force.Then comes another sentence of even greater importance:If it is considered that any changes are necessary, full right is reserved to make them as from 1st February, 1928, as long notice being given as may be practicable in the circumstances.That is an intimation to the trade that, if, in spite of these inquiries which the Government are making, in spite of these attempts which the Government are making to enable the Stevenson scheme to continue, the Government in the meantime should change their mind, then that change will be announced on 1st February, 1928. On 1st February, 1928, when what I have taken the liberty of calling the "statutory" announcement was made, that announcement was that the scheme was to be continued and that the proportions had been settled as 1170 so-and-so, but no indication was given that any change had taken place in the Government's attitude. The Colonial Office knew perfectly well when it made the announcement on 1st February that the industry expected that if there was to be any change it would be announced then. The industry concerned expected that if the Government contemplated any change it would be announced then. No announcement being made, the industry assumed, quite rightly, that there was to be no change during that quarter and that the Government contemplated no change. Then on 9th February came the Prime Minister's announcement. It was made on a special day. He did not wait for the statutory date of announcement, but within eight days after 1st February he announces that an inquiry is going to be made. Of course, a panic took place. Of course, all the fears and suspicions that enter the heart of the City were aroused, and the City is open to more fears and suspicions than any other quarter of the world. The City is the easiest upset body in the whole world and any rumour immediately becomes revolutionary in the City provided it deals with finance.
On 9th February, the Prime Minister went out of his way to make an announcement which was bound to create suspicion. He did not even take the trouble to study the psychological effect of that announcement or seek to diminish the evil results by choosing a normal day. He did it as a special matter, of special importance, on a special date. He was questioned on the 13th March as to what he meant to do, how the machinery was to be operated, how the Committee was constituted and so on. These were very proper and legitimate questions and if he had been able to give definite and specific answers to several of them, he would have allayed a good deal of the panic that was raging. What was his attitude? On 13th February he answered a series of questions, and every answer he gave was a suspicion in itself. He was either unwilling to answer or did not know the answers to the questions, but the sum total of the effect of his answers on 13th February—and he can refresh his memory by looking up the OFFICIAL REPORT as I have done—was to make the industry more and more suspicious of what he had in mind and what the result of his inquiry was going to be.
1171 On 15th February he was again questioned, and he gave a pledge that every consideration of the industry would be taken into account. He gave another curious pledge, namely, that the Treasury interests would be watched. On 20th February, he renewed his pledge that in the time and the manner of the earlier proposal all British interests would be considered. On 5th March he gave precisely the same assurance and on 4th April he made his announcement of a scheme with which nobody agreed and which brought a second panic upon the market. Could any handling of a situation be more maladroit than that? It was a delicate question. It was like a surgeon touching the inflamed nerve of a patient. He must have known that he could not play fast and loose with an industry like this which had been rather notorious for its feverishness. He must have known, as a man who can look at things fairly and objectively, that when 1st February had passed without an announcement and when he chose 9th February, an odd date, an unexpected date, on which to make this announcement, what effect it would have. He must have known that the way in which he answered these questions was adding to the difficulties of the industry. Then on 4th March, as I say, he made an announcement with which nobody agreed. He announced that the Stevenson scheme would be terminated. A good many people agreed with that. A good many of the rubber interests never believed in the Stevenson scheme, though the Colonial Office said the Stevenson scheme had saved British rubber interests from bankruptcy. But that was not the importance of the Prime Minister's announcement. The importance of the announcement was how the Stevenson scheme was to be stopped. Sir Eric Geddes, who is not in favour of the Stevenson scheme, and who is very glad that it is going to be stopped, made this statement after the Prime Minister's announcement. I quote from a paraphrase of his speech in the "Economist." It says:Sir Eric Geddes revealed the interesting fact that the Rubber Growers' Association, the India Rubber Manufacturers' Association, and the Society of Motor Manufacturers and Traders had unanimously suggested to the Committee"—that is the Committee which the Prime Minister set up— 1172which decided the fate of the scheme, that if restriction was to be abrogated, its demise should be delayed sufficiently to enable the industry to liquidate its stocks. To this end, an interim period of three years was suggested. While Sir Eric regretted that the joint advice of the growers, the manufacturers, and the principal consumers of rubber' in this country had not been followed,he nevertheless made no objection. While making no objection to the Prime Minister's scheme, he did regret the method by which the scheme was to be terminated. This is not a question whether the Stevenson scheme should be terminated or not. It is much more than that. It is an accusation made against the Government for mishandling the situation. It is an accusation that the Government, by their own action, have depreciated stocks and diminished share values by a sum, which is estimated between £120,000,000 and £150,000,000. It is perfectly clear from this recital that, first of all, the Prime Minister ought not to have made his announcement when he did; that if he wanted advice about the rubber industry, and wished to be put into possession of the facts, he ought to have done it in the ordinary quiet way. To announce an inquiry at that time was, at any rate from the financial point of view, tantamount to a criminal act. The second point is that the Advisory Committee of the Colonial Office ought not to have been overlooked, and no scheme of decontrol ought to have been launched without the advice of that Committee and without its consent. The third point is that the time when the change took place was so badly chosen, that anybody who had any knowledge of industrial sensitiveness, would never have chosen it at all.
It is clear that when this scheme was to come off, the Government's action. preparatory to taking it off, ought to have been to try and get the 100 per cent. exportable quota approached; they should also have chosen the time when stocks in hand were low. As a matter of fact, they chose a time when the exportable quota was not especially high, and when stocks in hand were especially high. They chose a time when balance-sheets were being made out, when the stocks had been valued in the balance-sheet at something like 1s. 6d. a lb.; and before the winding-up of last year's business had been given effect to. They 1173 depreciated the value of those stocks from 1s. 6d. to something like 8d. or 9d., thus taking off 10d. for every lb. of rubber value in the stocks which had been entered in the balance-sheets that had just been made out, and were on the way from Ceylon and Malaya to London. They did things that may have been necessary in time, but they did them with the maximum of clumsiness and the maximum of loss.
If this party had been sitting there, and if we had been in office, and had done it in this way, a howl of execration would have gone up from one end of the country to the other. We would have been told that we were the enemies of everybody who is investing money, that we were absolutely indifferent to the loss of anybody who has invested money in anything; we would have been told, especially by the Home Secretary, that we were prompted by Moscow influences and suggestions, and he would have wanted even to raid our private houses, for somebody would have told him, probably the hon. Member for Hitchin (Major Kindersley), that we had documents in our private possession to prove that what we had done with the rubber industry was done because we had been asked to do it from Moscow. What is more, every Tory Member of this House would have gone into the Division Lobby against us. There is not a single member of the Government party, if they had been in the House with us sitting on that bench, and having done what their own Government has done for them in this industry, but would have gone into the Lobby against us, and would have gone in honestly because they would have fully believed it. They would have been perfectly justified in taking the maximum political activity to show us up both in the House and in the country. There would have been quotations for the next generation published by the Conservative headquarters about how we mishandled the rubber industry and lost the hard-working thrift investors a sum of from £120,000,000 to £130,000,000, and they would have finished up with a great peroration: "Labour again has proved itself absolutely unfit to govern." I confess that if that accusation could have been made successfully against us for once in my life I would have agreed 1174 with what was published by the Conservative headquarters.
§ Sir FRANK NELSON
The House will perhaps allow me at the outset a brief personal explanation. I have in my commercial career been a director of only one rubber company, and I resigned that four years ago, when I retired from the East. Incidentally, it was a British company in Java, and we voluntarily restricted ourselves in 1922. Ever since I have had any money to invest I have invested it in rubber, but my present disapproval of my own party's action is in no way prompted by the small losses which I have experienced, in common with all other investors, as, fortunately, my investments are most moderate. I believe I am one of the few Members in the House who have any first-hand knowledge of the Straits Settlements, Ceylon, and the Federated Malay States, with especial reference to the rubber industry. It was my good fortune in 1904, when I first went out there, to make the acquaintance of the pioneers of this great industry. Many of them have passed on, but some of them are working in London to-day, and it is through my acquaintanceship with them that I retain my interest in the industry, and such knowledge as I possess of the parlous conditions into which this great industry has been thrown since 9th February.
My case can be stated in a sentence or two. I have no word of disapproval to say about the removal of the rubber export restrictions. I have always been an anti-restrictionist, and I always shall be. I hate Government control, because I have seen a great deal too much of it in other directions. It always results in trouble to the industry which is destined to be benefited by it, but all my case is summed up in one small question. Could this removal of the rubber export restriction scheme have been done in such a way and at such a time as would not have inflicted these appalling losses on a very valuable industry, and not have thrown tens of thousands—if you like, hundreds of thousands—of perfectly inoffensive investors in this industry into anxiety, and in many cases into something worse, as I shall show later if I retain the patience of the House? I will only say this regarding restriction. There is no doubt that in 1922 it was adopted as a desperate 1175 remedy, as a desperate alternative, to prevent bankruptcy. I was in the East at that time, and a director of the only rubber company of which I have been a director, and I saw the repercussions out there. There was a miasma of utter gloom and despondency over the whole rubber world, and waiting on the outskirts of that miasmic zone, if I. may use that term, were three or four syndicates with unlimited money behind them, of which I had personal knowledge, and I will ask the house to accept my word for it. They were waiting to buy up such plantations as had no alternative except bankruptcy in front of them. [Interruption.] The right hon. Gentleman the Member for Derby (Mr. J. H. Thomas) says what I had hesitated to say quite openly, but it was American money. I know that. It was a question of days, a question almost of hours—until the restriction scheme was approved.
What has that scheme done? If I may be permitted to give the only figures with which I propose to weary the Committee, in 1922 there were 460 British rubber-producing companies, and 21 per cent. of them only were paying any dividends at all. In 1927 there were 512 British rubber producing companies, and 95 per cent. of them were paying dividends. That is what restriction has done for the rubber-producing industry. There is one more fact which I think is lost sight of by a great number of people who have taken part in discussions in and out of the House, and that is that the rubber-producing industry is owned for the most part by tens of thousands, or hundreds of thousands, of small investors. That is a fact which is beyond dispute. You may call them what you like, call them greedy, say they are speculators, but the fact remains that for the most part the industry is owned by hundreds of thousands of small investors. It has been my lot to read countless letters and a number of articles in the Press, and to hear statements made by people in conversation who, with great respect, should know better, using as they do ponderous platitudes—this is the only term to apply to them, though I hope I shall be acquitted of any desire to be offensive—where they say that restriction must go at some time—it is perfectly true; that restriction is uneconomic—perfectly true; that re- 1176 striction enables the Dutch to reap where the British have sown—perfectly true; where it is said that in a year or two the British industry will be on its feet again and be sturdier and healthier—perfectly true; and when they finish by saying that for the next two or three years there will be no dividends, that it will be a very difficult time and that uneconomically-managed estates will go bankrupt, again I agree. Those are all platitudes which have appeared, with great respect, in the Press. Those statements, however true, lose sight of one salient fact, and that is that it is no earthly good saying to hundreds of thousands of small investors who, rightly or wrongly, own this very valuable British industry, that in two or three years everything will be all right again, that though in the interim they will have no dividends, and some of their concerns will go bankrupt, that in the long run it will be all right.
I am quite sure that in the long run it will he all right. I am perfectly and absolutely certain that nothing except the production of synthetic rubber can possibly hurt this valuable British industry. But here we have this great industry, which has been of incalculable benefit to this nation in helping us to pay the American debt, treated in this way, without—subject to what we shall hear from my right hon. Friend— any reasons being given for that action. I should like to say at once that these objections which I am putting forward and the profound disapproval I am expressing, must all be regarded as subject to any explanations we may have from the Secretary of State for the Colonies. The right hon. Gentleman the Leader of the Opposition has made it perfectly plain that we who thought we knew something about the industry were very disgruntled by the sequence of events from November, 1927, to February of this year. The shareholders who own this great industry are, after all, very reasonable people. If they had been given some reason or reasons for this very drastic action, I am convinced that there would have been no outcry. I am convinced, classing myself as a rubber shareholder—I have already made a clean breast of my small holding—that we should have taken the ordinary course that every ordinary citizen does take. We should have said "This is done in the public interest." But we have been given no 1177 reasons at all other than those which the Under-Secretary of State for the Colonies gave in Kuala Lampura some weeks ago, in which he said that certain facts and figures had been. placed before the Cabinet in the early part of this year.
Again, subject to what my right hon. Friend may say, may I also give certain facts and figures? A great deal has been said about the on-coming of the Dutch producers. It has been said that the Dutch are reaping where we have sown. I admit that that is so, to a certain extent. In 1922, the year in which the restrictions came on, the world produced 400,000 tons of rubber. The British share of that was 75 per cent., and the Dutch and other rubber, that is Brazilian, Indian, and so forth, was 25 per cent. In 1927 the world's production was, roughly, 605,000 tons, and the British share of that was 63 per cent, and the Dutch and other rubber, 37 per cent. I agree that those figures are ominous, very ominous indeed, and I think they ought to cause us to think whether it was not time that this restriction scheme should be raised; but I do not agree, with very great deference, that they call for the precipitous raising of the rubber restriction scheme. It may not be known to the House, though I feel confident it is known by my right hon. Friend, that at the time when the Government, in their wisdom, chose to come into the rubber situation in February, that the Council of the Rubber Growers' Association had evolved and practically completed. with the exception of one or two negligible details, a scheme which would have raised restriction over a period of about two and a-half years, or a maximum of three years, without, so far as it is humanly possible to say, any disturbance in the rubber market at all.
I come to the question of reclaimed rubber. There has been an enormous amount of uninformed criticism on the subject of reclaimed rubber. Anybody who knows anything of this industry knows perfectly well that the chief uses of reclaimed rubber are such that crude rubber would not be used for them even if it were 4d. or 3d. or 2d. per lb. The degree to which reclaimed rubber is in competition with crude rubber is about 15 per cent. [Interruption.] Well, I give it as 15 per cent., and if my right hon. Friend would like my reference for that it is in 1178 the "India-Rubber Journal" of 15th April. It is given by the trade, and I can see no possible reason why the trade should under-estimate or over-estimate such an important figure. The figures which appear in the very admirable Blue Book issued by the Government show that in the year 1927 the ratio for reclaimed rubber was about 50 per cent. That bears out my statement that there has been a good deal of misinformed criticism upon this subject. The degree to which reclaimed rubber is a competitor with raw rubber is 15 per cent. Reclaimed rubber is a manufactured compound of rubber and several minerals, and is not directly in competition with crude but is complementary.
I would like to say a word as to the inadequacy of the chosen method of investigation of the industry. I feel that here again the Government must have been up against a very great difficulty. By means of a private notice question to the Prime Minister which I put the day after the appointment of this Committee, I endeavoured to show that the uncertainty while this Committee was sitting would be such as to throw the whole industry into confusion, and that is what happened. On the other hand, I pointed out that if the Committee carried out their duties as quickly as they have done —I admit that frankly, and I have the greatest admiration for the way in which they handled a most difficult task—they could not possibly give an adequate Report. You cannot give a decision on a matter in which £200,000,000 of capital is involved in six weeks by the investigations in London of a committee of Men who have not been on the spot, and who have not had an opportunity of cross-examining those who have borne the heat and burden of the day. Most of the evidence considered by the Committee has reached them by cable from the East, and it would be almost impossible to do justice to a question of such magnitude in this way. If the Committee had taken adequate time, it would have taken them six months, because they would have had to go out to the East. Under those circumstances, during that time the whole of the industry would have been in confusion and even worse than what has happened. I really do not know what would have happened during that time.
I have two more observations to make on this question. May I put two definite 1179 questions to the Secretary of State to the Colonies? Some people who have not been out to the Far East are a little confused in their geography. Singapore is quite distinct from the Federated Malay States. It is within the recollection of the House that the rulers of the Federated Malay States gave a battleship to this country, "The Malaya," and a short time ago they gave £2,000,000 to the Singapore base. May I ask the Secretary of State for the Colonies whether, before the Committee was appointed, and before they decided to remove the restrictions, the rulers of the Malay States were consulted? May I tell my right hon. Friend—I know he would not contradict the source of my information if I disclosed it, but I am not at liberty to do so—that it is estimated that the revenues of the Federated Malay States will be depreciated 40 per cent. this year as a result of the action of the Government in this matter. Perhaps my right hon. Friend will tell the House whether they were consulted or not.
On evidence which I believe is correct, I am told that the issued capital of the rubber companies registered in the United Kingdom is £92,000,000—that figure is quite distinct from the dollar companies and the rupee companies registered in India or the Straits. The dividends declared in 1927 amounted to £17,000,000. I hope that the Chancellor of the Exchequer, who is the Minister originally responsible for putting in force the Stevenson Scheme—I am certain the Minister had no alternative at that time having regard to the fact that he sat as a Member of the Coalition Government—will be able to show us that it was a matter of extreme urgency which thus necessitates him using millions of valuable revenue. I am wondering what effect this is going to have on our revenues, and whether the right hon. Gentleman was specially consulted in regard to this very desperate step which has been taken. There is a great responsibility resting upon the Secretary of State for the Colonies, and 'I sincerely trust that the right hon. Gentleman will be able to give us some explanation which will enable me to recant everything I have said to-night. There is nothing I want more than to be placed in the position, at the end of the right hon. Gentleman's speech, to say that I 1180 have been misinformed and that I am wrong in my conclusions. If that turns out to be the case, I shall be prepared to support my party in the Division Lobby on this question. If, on the other hand, I am not satisfied in this respect, I shall go into the Lobby against my party.
Major-General Sir ROBERT HUTCHSON
I do not want at this stage to repeat what has been already said on this subject. I would remind the House that the deplorable disaster which overtook the rubber industry came immediately after the announcement made from 10, Downing Street, that the conditions of the Stevenson scheme were to be referred to the Committee of Civil Research. I think, if the Prime Minister had to handle this question again, he would do it in an entirely different manner. We have been told by the Leader of the Opposition and by my hon. Friend the Member for Stroud (Sir F. Nelson) that various faults were committed by the Government in this matter. I would like to point out that the rubber industry in 1922 put itself voluntarily into the hands of the Colonial Office. We had the Stevenson scheme and the rubber industry consented voluntarily to accept the regulations issued by the Colonial Office. The Colonial Office was used because of its power to enforce. regulations on the various Colonial Governments abroad.
The rubber industry was perfectly satisfied to continue with the Colonial Office. They had an advisory committee, who were advising the Minister of that Department in all the intricacies of the trade, but here you have, entirely outside the Colonial Office, entirely outside the people to whom the industry had voluntarily given powers, another body coming along and upsetting the apple-cart by issuing further restrictions and further orders. I doubt whether that is really legal. After all, the industry went voluntarily into this scheme, accepting the various Regulations in a very loyal and gallant way, and I must say, knowing the industry as I do, that the Colonial Office have every reason to be thankful to the various companies for the loyal way in which they carried out the orders which were given. Now you get another body outside the voluntary committee, a body whose chairman's views were well known in the City of London to he opposed to the scheme. It 1181 was really a loaded body before it sat, and I, for one, think that the Government as a whole are very much to blame for the present situation in which the rubber industry finds itself.
There is another point in regard to the question of legality, as to which I should like to ask the Colonial Secretary. How far is the Colonial Office in a position to give orders to the various Legislative Councils abroad? I understand that the official majority has now disappeared from those councils, and that resolutions are now carried by the unofficial members. How far are the councils in the Malay States and Ceylon going to carry out the wishes of the Colonial Secretary in regard to giving up the restriction scheme? They have been given full powers in regard to legislation, and I should like to know to-night how far the Colonial Secretary can impress his will on them. Another point in regard to this intricate question is as to how far the revenues are going to be affected by this sudden reversal of policy. Are the rubber companies going to continue to pay the two cents per pound export duty, or are they going back to the old system of an ad valorem duty? It is all very well to charge two cents per pound with rubber at is. 6d. or is. 3d., but, when it comes to producing rubber at less than cost, it becomes almost vital to a great many companies if they have to pay an export duty of two cents per pound.
How far is the Colonial Office going to keep on the advisory committee? Is the advisory committee still in existence, and is it going to continue to advise the Government on matters connected with rubber? I understand that the criticism which was largely made in the rubber industry of the fault of raising the pivotal price from 1s. 3d. to 1s. 9d. was directed at the advisory committee. It is all very well to blame the advisory committee for one decision, but what about the other decision, on which they were never consulted? Are we going to keep the advisory committee still in commission? Are they going to advise the Government, and are the Government going to take their advice? It is a very serious matter when a large industry dike this is in the hands of people who do not take the advice of their advisers. What other industry would be handled 1182 in this way by the Government without consulting the leaders or the various trade associations of the industry?
I understand that the trade associations of the rubber industry tendered a definite form of advice, which, however, was not taken. I wonder whether the Government really know what they are doing in this industry—whether the experts who have been advising them really know what they are talking about? We hear that the real reason given for the change is the large increase in the use of reclaimed rubber; but reclaimed rubber is used for entirely different purposes from raw rubber. If you take £100 invested in the ordinary rubber-producing industry on a good estate, 350 lbs. of rubber are produced for the £100 invested, representing something like 1½ per cent. on the amount invested for every penny above the cost of production. But the same amount of money, namely, £100, invested in reclaimed rubber machinery, is an entirely different proposition. The more reclaimed rubber is used, the more cheaply can the product be produced, and the rubber producing industry can never compete with reclaimed rubber, simply because the reclaimed rubber is used for entirely different purposes—for flooring and other purposes where the elasticity of raw rubber is not required. The American tried to do that about a year-and-a-half ago, and they failed miserably. They put reclaimed rubber into tyres and tubes, and the whole of the tyres produced from that material were returned on their hands; and now, as everyone knows, buyers of cars in the American market insist on a clause specifying that all tyres must be made from fresh material. I, for one, think that the whole of the evidence given as to the competition of reclaimed rubber with raw rubber has been misleading from the beginning, and my friends in the rubber trade tell me the same thing.
There is another point that I should like to raise, and that is as to what the companies which at present are producing rubber as a loss are going to do in regard to their finances for next year. The large companies, with large reserves, seem to think that, if there is a flood of cheap rubber on the market, they will be able to knock out the native production of rubber and the use of reclaimed rubber, and get rid of the weak companies; but, 1183 in doing that, even though they may be successful for a time, they will be using up their reserves, and their position at the end of that period will be far worse than it is to-day. The Government are postponing the taking off of the restriction scheme for another eight months, but, if they had made up their minds to take it off, why did they not take if off now and be done with it? Instead of that, they have done a second bad thing by keeping it on till the 1st November. The result of that, as every rubber producer knows, has been that telegrams have gone out to the East telling them to produce to the full. Every one of the companies in the East is now producing to the full, and all the surplus rubber over and above the exportable allowance is being collected out there in Malaya and Ceylon. The result will be that on the 1st November, when the release comes, there will be this flood of rubber further depressing our already hopeless market.
Surely, anyone who knew anything about the market—and I am sure the Colonial Secretary does, though evidently he will be superseded in his supervision of the industry—must know that such a state of affairs will exist on the 1st November. I wonder if the Government can tell the trade how much rubber is at present lying in the Colonies over and above what they can export, and how much will have been accumulated by the 1st November next. We shall then know in what kind of position the industry is going to be. As far as I can see it is going to be in a very parlous condition for the next year. What about the unfortunate people who have invested their small savings in rubber companies? I reckon on a very conservative estimate the loss caused by the announcement of 8th February last is something like £75,000,000 or £80,000,000. I am certain it will be a long time before those who have interests in rubber companies will put their faith in the business capacity of the present Government. The question of Income Tax is a very serious one. This year companies will be assessed either on the profits of the previous year or, in the case of new companies, on the average of the past three years' profits. Many of these companies will have no profits 1184 at all, and where are they going to get the money wherewith to satisfy the demand of the Chancellor of the Exchequer? Are we going to get a grant from the Treasury to help them as producing industries? The more one looks into the position of the industry, and its future position, as the result of Government action, the worse it becomes. I should be glad if the Colonial Secretary can clear up some of the points which have been raised, and especially the last one about Income Tax.
§ Mr. CAMPBELL
I am very glad to be able to intervene, because I believe the public as a whole, and a great number of my friends in the City, have been grossly misled by exaggerated statements, and statements which in many cases are without foundation. I should like to take one or two criticisms which came to my notice immediately after the announcement that restriction was to he taken off. The first was that owing to leakage of information, for which the Government are held responsible—Governments are held responsible, even sometimes by their own supporters, for all sorts of things—America had made lots of money at our expense. The figure was given as £50,000,000. I have it oh the very highest authority that there is no truth whatever in that statement. It may have been a few millions, but £50,000,000 is an absurd figure.
§ Mr. CAMPBELL
I am speaking from personal information which I have from someone who is not in the House but is an expert, and one of the best experts in the country.
§ 9.0 p.m.
There is no extract at all. I am simply saying it has been stated, even I believe between these four walls, that there has been a loss very nearly totalling to that amount. Number 1185 two is that the announcement should have been made on 1st February together with the Colonial Office routine announcement. I have never denied that I think that was a very great misfortune indeed. I wish to be quite fair. I am giving my opinion as one who has for many years had some interest in rubber. I have been a big shareholder and have taken an interest in it in various ways. I have been to a certain extent in rubber in the Dutch East Indies and have lived there 21 years, and have probably seen a great deal more of rubber than anyone who sits in the House. I agree it was an unfortunate thing that those in charge of this Committee did not keep in closer touch with the Colonial Office so that the announcement could have been made on the same day. The third one was that none of those who sat on the Civil Research Committee were rubber experts. That is a very proper thing. It would have been perfectly absurd to have had one rubber expert, we will say, who came from one particular group of planters or estate managers and sat on the Committee and gave it as his opinion. I know a great number of rubber people, managers and company directors and others, and, however much I may appreciate their advice from time to time—and naturally if one is trying to find out everything possible about rubber one listens to all one can hear—I have failed to find a great number of them who have the same opinion. The hon. and gallant Gentleman who has just spoken is rather inclined to think it was a. wrong thing that restriction was taken off. His predecessor who spoke said he had always been in favour of taking it off. I may be exaggerating to a certain extent, but my point is that the opinions expressed by those two gentlemen are not identical. If you go to Mincing Lane and see these men individually you will find that their opinions are not identical. Of course, one reads in the papers the opinions they put before the Committee, which I thought they gave under secrecy. I believe they were not published by the Civil Research Committee or by Members who sat on the Committee. How they were published I leave it to the House to guess. Last year I asked the Colonial Secretary:Does the right hon. Gentleman not think the time has Dome when it would he advisable to form a small independent committee to go into the whole question and 1186 advise him as to the advantage or otherwise of retaining the Stevenson scheme?To which I got the reply:I have the advantage of advice from a strong committee representing the various interests concerned, and I am continually taking the advantages or disadvantages of the scheme into consideration."—[OFFICIAL REPORT, 10th May, 1927; col. 199, Vol. 206.]At that time evidently he did not think it was right to set up the independent Committee I suggested. The only possible Committee to set up was an absolutely independent Committee. [Interruption.] I am not here to speak on the question of the Committee. None of the gentlemen is an acquaintance of mine. The hon. and gallant Gentleman has referred to the delay in the removal of the restriction scheme. After all, that was their own fault, and it was the hon. and gallant Gentleman who himself asked the Prime Minister that restriction should not be removed. He asked:Whether, in view of the long time which must elapse before the Committee of Civil Research can report on the rubber restriction scheme, he will issue a considered statement on the whole situation and, if possible, include in it a declaration that no change in the present scheme can take place before 1st November of this year.On the same day my hon. Friend the Member for Streatham (Sir W. Lane Mitchell) asked something very similar:Whether the Prime Minister has received any communication from the Rubber Trade Association with regard to allowing the present restriction scheme to remain in force until 31st October, and whether he is now able to give the assurance asked for?" —OFFICIAL REPORT, 20th February, 1928; col. 1192, Vol. 213.]I understand that those questions, although they were asked in that form, were intended otherwise.
§ Mr. CAMPBELL
I understand now, from discussions which I have had with friends of mine in the City, that what they meant to ask was that if there was to be a modification of the existing Stevenson Scheme it should not come into force until the 31st October. But that is not what they said. What they actually asked was, that, if anything was done, for goodness sake do not do it until the 31st October. I remember at the time that the whole House—and I was, perhaps, as capable as other Members of reading the questions—took 1187 it for granted that the rubber growers were anxious that whatever was done nothing should not be done until 31st October. I stated in a letter which I wrote on the very eve that restriction was taken off that I believed it must have been in the minds of the Committee. I did not know, and I never heard a word about the Committee, and I took no interest in it. It was my opinion that if they were going to take off restriction, they ought to have taken it off there and then. The hon. and gallant Gentleman said: "Why did they delay it until 31st October?" The right hon. Gentleman the Member for Derby (Mr. J. H. Thomas) keeps on laughing the whole time. He may laugh, but I am stating facts.
§ Mr. THOMAS
I am sorry. I thought you were unduly flattering the hon. and gallant Member for Montrose (Sir It. Hutchison).
§ Sir R. HUTCHISON
May I ask the hon. Gentleman to read the question? Owing to the long time which must elapse before the Committee on Civil Research could report, I asked for a considered statement from the Prime Minister. I asked why no alteration could be made in the Stevenson Scheme before the 1st November, and I asked for a statement from the Prime Minister at that time in order to do away with the uncertainty in the industry. The Prime Minister was not in a position to make a statement.
§ Mr. CAMPBELL
If the hon. Gentleman is not satisfied with that, we will take the question of the Member for Streatham (Sir W. Lane Mitchell). He asked practically the selfsame question. In any case, in my opinion, the restriction should have been taken off at once. I believe that there is a great measure of agreement in the City that even now it would he advisable to take it off, say, on 1st May. Naturally, one can understand that my right hon. Friend the Colonial Secretary will he averse to doing anything at present, because, whatever is done, probably there will be a great number of people who will say once again that the Government are wrong. — [AN HON MEMBER: "The Colonial Secretary was never consulted"]—I do not blame the speculators for getting cold feet as soon as they heard that an inquiry was to be set up, 1188 especially when one realises that rubber is, probably, one of the most speculative articles with which anybody can deal.
Nobody can deny that the market was full of people who knew nothing whatever about the article of rubber. They had been led on, as many of us have been led on, to speculate by putting in money which they never had.—[HON. MEMBERS: "Oh!"] You may say "Oh!" I have done it myself very often. "This is a thing which is going to make you money. Put it in my dear fellow. It does not matter. Put in your last bean, and I promise you, you will make money out of it." They were led on to do it, and they have suffered these terrible losses. I do not for a moment minimise the fact that many speculators have lost a great deal of money. The fact is, that when an inquiry was set up the whole thing went panicky; everybody went panicky. I only regret that during that panic some of those who were in a position to do so did not try to stem that panic and that in the maelstrom many genuine investors were brought down and they lost their money. That is the shame of the thing. Not only that, but many dealers and reputable firms who have year in and year out done good, solid business, and many plantations and many manufacturers have been sacrificed. Why should the Government be blamed for this?
§ Mr. CAMPBELL
Were they originally asked to keep their hands off when the Stevenson scheme came in? I have heard, and all of us have heard, during the last year or two, and read in the papers, of the various criticisms of the Stevenson scheme. "The Stevenson scheme was not elastic enough." "The pivotal price was wrong." "There was laxity with regard to smuggling." "The unused coupons ought to have been cancelled." "It is no use unless the Dutch come in." And so on and so forth. From those interested in the industry and all around, we have heard these criticisms. Surely, it was time that the Colonial Office, who were then responsible, should say to themselves: "Well, after all this confusion among those who are experts in the trade, surely it is time that we looked into the matter."
§ Mr. CAMPBELL
The great majority of people were saying that the time had come when the question of restriction, whether it was good or whether it was bad, should be investigated. I presume, though I have no right to speak on the subject, that the Colonial Office decided that they would set up this independent Committee.
§ Mr. CAMPBELL
I presume that they thought of it long before the 1st February; otherwise, it would not have been appointed. I was in Java when the question of restriction was first mooted. I attended a meeting as the representative of mid-Java when the question was discussed. This was before the Stevenson scheme was formulated. A meeting was called of all Dutchmen except two. The chairman asked our opinions. He asked three Dutchmen first, and he asked me also in Dutch, and I gave as my opinion that unless they could compel people to restrict it would be useless. We were told that there were no means of compelling them. The following gentleman who was asked said he did not speak Dutch, but that he agreed with the Dutchman who had just spoken, which was myself. We all came to the conclusion that unless there was compulsion it was useless. I was at that time entirely against restriction, because I do not believe in Government interference with business. I have never believed in it, and I never shall. I have made up my mind since that the restriction scheme did save the rubber industry in the Straits Settlements. It came at an opportune moment; but it has outlived its usefulness. The only advantage to be gained from a restriction scheme will be gained by the Dutch East Indies and, to some extent, by America.
Figures have already been given as to production, from which it will be seen that the Dutch East Indies was fast increasing its output. In 1926 they had 1,100,000 acres of rubber land, of which only 800,000 acres were in production; therefore they had still 300,000 acres of rubber land to be brought into production. We have also the production of the Javanese. In 1922 the natives of the Dutch East Indies produced some 20,000 tons of 1190 rubber, but in 1926 it had grown to 80,000 tons. It is possible, indeed it has been predicted, that they will produce up to 200,000 tons, but personally I do not think they will because of the difficulty of labour and expense, and I do not think the Dutch will allow native grown rubber to come under restriction. Having once helped the natives to build up this industry they are very unlikely, and I know the Dutch Government very well, to curtail the output of the natives. I had hoped that the Dutch would be tempted to see that it was to their own advantage to come in under the restriction scheme, but I learn that the negotiations will not lead to this result and we shall have to fight our own battle. I believe we shall be able to do so, excellently, I regret that for a long time, for a year or more, the rubber industry will have a very difficult time, but the less this House interferes, the less talk there is amongst the rubber people themselves, the less panic there is, the better. Those engaged in the industry must go on calmly and reorganise it; must consider the best way in which they can meet competition, and then they will within a reasonable time come through all their difficulties. All that we can do here is to support all kinds of research and methods of using rubber. To the trade I say "keep calm"; to the shareholders, "sit tight, do not throw your shares away. Better times must come, if not this year at any rate we hope next year." In any ease it is absolutely useless for people to throw their shares away imagining that the rubber market can never return. An expert told me only two days ago that the low prices ruling for rubber are the only thing which will lead to an improvement. I support the action of the Government. I believe the reports are exaggerated. I commiserate with the rubber trade. They have been through a very difficult time indeed, but I consider that the Prime Minister, having once made up his mind that the rubber restrictions should go, did a brave and manly thing in saying that they should go all at once.
§ The SECRETARY of STATE for the COLONIES (Mr. Amery)
I am rising at this early period in the Debate in order to afford time for the right hon. Member for Derby (Mr. J. H. Thomas) to speak; also the question which has been raised is one of such complexity that I could 1191 not possibly do it justice unless I dealt with it at some length. I must apologise to the House on account of this, but the Government have been attacked very bitterly on this question not only from those who are their normal opponents but by some of their friends, and it is essential that I should endeavour to remove the misapprehensions of both sections. If I might turn from the very helpful speech which has just been delivered by the hon. Member for North Camberwell (Mr. Campbell) to the opening speech of the Leader of the Opposition, I should like to refer to what the right hon. Member said as to the origin of the whole matter. His conception of the origin of the restriction scheme was that the effects of private enterprise upon this industry were so bad that it was necessary for the State to intervene. I am afraid it was the necessary State intervention during the War which prevented rubber from Malay reaching its market and piled up stocks, followed in 1920 by the depression in the United States, which created a situation of the utmost gravity in Malay.
It is perfectly true, as my hon. Friend the Member for Stroud (Sir F. Nelson) has said, that the great majority of producing companies in Malay at that moment were in a position of such extreme difficulty that outside syndicates might quite easily, for a mere song, have got possession of a very great part of that important industry. It was in that very difficult crisis that the Colonial Office appealed to the late Lord Stevenson, whose ability and resource were ever readily at our disposal, to see whether some way could be devised of helping the rubber growers to do what they had failed voluntarily to achieve—namely, ration, or restrict, the industry over a period of exceptional difficulty. The Committee under Lord Stevenson met and came to the conclusion that the position of the industry at that moment was this: that the production amounted to some 400,000 tons a year as against a consumption of about 300,000 tons; that there were surplus stocks in hand, over and above the normal stocks likely to be absorbed, of 110,000 tons. That was, indeed, a position of extreme gravity, but, even confronted with that position, the first conclusion to which the Committee came in 1192 the spring of 1922 was that unless the Dutch joined in a restriction scheme could not succeed. The leak in the vessel would be too large to enable it to hold water.
The situation continued even more serious, and towards the end of the year, having meanwhile ascertained that the Dutch Government absolutely refased to come into any scheme, but that a considerable number of British planters in the Dutch East Indies, representing something not far off one-third of the actual estates as apart from the native rubber producers, were prepared to cooperate voluntarily, Lord Stevenson recommended that undoubtedly it was a risky business but that prices were such that the attempt should be made. At that moment the British exports from Malaya represented over 70 per cent. of the total exports, and voluntary assistance from British companies represented fully 5 per cent. more. In other words, we were restricting with a 75 per cent. control and with 25 per cent. leakage. However, even with that open sore, the effect of which was bound to be felt ultimately, at the time the Stevenson scheme did undoubtedly help the industry.
During the year following the application of the scheme, the price of rubber was kept up, on an average, to just below the pivotal price of 1s. 3d. which was aimed at. In the. following year the scheme was not quite so successful, and prices for a considerable part of the year were substantially below it. Then came those unforeseen developments which will always affect the State when it endeavours to try to control all the complexities of industry. They have beaten the most ingenious manipulators on the market again and again, and they will always beat the State. There was an enormous increase in the demand of the United States, the demand cleared off the stocks and entirely ran away from production. At once prices began to rise, not to a normal, sensible figure, but to a figure fantastically beyond the normal cost of production and normal profits. By the end of 1925 the price of rubber had run up to 4s. 6d. per lb.
§ Mr. THOMAS
I am sorry to intervene, but this is rather important. The right hon. Gentleman has just quoted the OFFICIAL REPORT regarding the answer 1193 which was referred to by the Leader of the Opposition. I want him to say whether the answer was the answer given, not in 1924 or 1925, with which he is now dealing, but in May of last year, 5½ years after the scheme?
§ Mr. AMERY
I gave that answer in May, 1927, and I repeated it in April, 1928. The scheme did save the industry at that critical moment. I am not saying that in May, 1927, it was still saving it, because the situation had by then altered, and it has altered still more since then, but undoubtedly the scheme was of value at the commencement. Now we come to 1925, when it was discovered that the scheme was quite unable to secure stability of price, and that prices ran right away from the scheme. At that stage there were those who recommended the abolition of the restriction, and those who, like Sir Eric Geddes, strongly urged it, or, at least, urged an entirely fresh and independent inquiry.
§ Mr. AMERY
I will come to that. No, it was not. Production was not adjusting itself to the demand, because the scheme was too inelastic. It could only be modified by 5 per cent. steps, but, as an emergency measure, I myself broke the scheme and brought up the release to 100 in order to give time to look about and consider with the Advisory Committee what we were to do. The conclusion we came to then, rightly or wrongly, was not to abolish the scheme, but to endeavour to make the scheme more elastic. We approved of a modified scheme giving wider steps, and enabling the control to adjust itself more rapidly to the rise and fall of prices. At that stage we also altered the pivotal price.
§ Mr. AMERY
I will deal with that. From first to last I was in close touch with Lord Stevenson as Chairman of the Advisory Committee and, as I understood, he was either formally meeting or informally keeping in the closest and continuous touch with the members. I also, personally, attended more than one meeting of that Committee. I will say this. The general view of all those I had to deal with, and as reported to me by Lord Stevenson, as well as of the 1194 great American consuming interests, was that the essential thing was stability, and that to declare, when the price for over a year had been well above 3s., that 1s. 3d. was our pivotal figure would have no relationship to reality at all. At that time large forward contracts were being made for long periods, and more than that, being refused, at over 2s. At that time it seemed entirely proper and reasonable if you wished to secure stability to secure it on a figure somewhat nearer than 1s. 3d. to that which the industry thought would be the price for years to come. I say that, if there be any blame for fixing the figure of 1s. 9d. I will take it myself. I will also say it was only after weeks of discussion with Lord Stevenson that I persuaded him to come down from the figure which he wished and to make the pivotal figure is. 9d.
Scarcely had we fixed it when once again the incalculable element entered. How far the development of reclaimed rubber entered into it—the increased figures for the period were phenomenal—I am not prepared to say. Certainly the development of native rubber in the Netherlands East Indies, and the general unforeseen elasticity of the whole supply from the Netherlands East Indies, defeated all calculations. We had scarcely settled the pivotal price at 1s 9d. when in the next quarter prices, which had been over 2s. 4d. in the last quarter and 3s. in the past year, dropped away again, and it was with the greatest difficulty, and only by considerable special manœuvring, as may be seen from the closeness of the figures, that the price was just kept to is. 9d. in the quarter July to October, 1926. Already by then the scheme, as modified in the Summer of 1926, was showing grave signs of weakness, and I was beset by hosts of counsellors suggesting new and independent inquiries and modifications. But I thought it highly desirable in the interest of stability that the modified and more elastic, scheme with the 1s 9d. pivotal figure should be given a full run, and at that date, 1st November, 1926, I announced that the scheme would run at least for 12 months, though I made it perfectly clear in my answer that it was a temporary scheme and might be modified at the end of that 12 months.
During those 12 months naturally, and afterwards, every answer I gave in the 1195 House was with a view to giving confidence and not prematurely upsetting any section of the community. At the same time, I can assure the House that the Colonial Office was getting increasingly anxious as to the actual effect of the restriction scheme in 1926 and still more in the course of 1427. For one thing, it was becoming increasingly clear that the scheme no longer had the same effect in actually influencing or stabilising the price. It had that effect in the first two years. We endeavoured to remedy, in 1926, the failure to secure stability in 1925, but we found that it was not able to keep up the price which we had fixed. The reason was the inevitable reason, inherent in the scheme from the beginning, that restriction in the British area inevitably encouraged increased output in the Dutch area, where they got all the benefit, both of the increased price and of economic production. At the beginning of the scheme the British control of production was 75 per cent., but now, with restriction, it is only about half. When you have 75 per cent. of the industry under your control, you can achieve a 20 per cent. total reduction by restricting yourselves to the extent of 30 per cent. When you have only 50 per cent. under your control and the other 50 per cent. outside, you have to restrict yourself to the tune of 40 per cent. to effect even a 20 per cent. reduction in the total output. We were discovering that our power to fix the price was growing, less and less day by day.
§ Mr. AMERY
We were discovering it increasingly during 1926 and 1927. But the price, after all, is not the main or the only factor with which we were concerned. As the Colonial Office, we were concerned with the prosperity of British territories under our control and with the development of a great Empire industry. We were concerned, above all, to see that the industry in Malaya should grow and flourish. During the period 1922–1927 the output of rubber in the Dutch East Indies increased by 145 per cent., and in Malaya and the Straits Settlements it increased by 13 per cent. The Netherlands East Indies' share in the world export went up from 23 to 38 per cent. The Dutch native production, the really incalculable factor 1196 in the whole business, went up from 17,000 tons in 1922 to 100,000 tons in 1927, and all the evidence placed before the Hambling Committee, led them to the conclusion that that figure might before long easily reach from 150,000 to 200,000 tons a year. British industry stationary, the industry of our main competitors growing by leaps and bounds.
More than that, we are concerned in this great industry with the question of competitive efficiency. The restriction of production inevitably means a loss of productive efficiency. The overhead charges on the plantations remain the same, but they work out very much more per pound of rubber when production is reduced; and the other day, on the occasion of the meeting of the Dunlop Company, Sir Eric Geddes, who after all has not shown too friendly an attitude to us in this matter, pointed out that with the restriction at a nominal 60 per cent. but really, owing to various causes, nearer 50 per cent., what would be an overhead charge of 3d. a pound on full production is to-day an overhead charge of 6d. a pound. That constitutes a very serious handicap to the British producer, not only in reducing his profits to-day, but still more in reducing his chances in the future. More than that, while the Dutch producer, with a free field in which to produce, not only saves on those overhead charges, but has every inducement to study every conceivable new developmerit—seed selection; bud grafting, anything which would increase the output—the British producer under restriction has no such incentive to efficiency.
§ Mr. AMERY
May I put another point, which concerns not so much the Colonial Office as the Treasury? The hon. and gallant Member for Montrose (Sir R. Hutchison) asked what the Treasury was doing. The Treasury is undoubtedly concerned with the fact that this great export industry in British hands, of which the product is largely consumed in the United States, plays a most important part in our balance of trade and in the maintenance of the gold standard. But it is not in virtue of the profits on the individual pound of rubber sold, not in virtue even of the profits made by companies, but 1197 in virtue of the total amount of money spent in British territory or paid to British producers on their product of British rubber; and any position which steadily undermined the British producer and transferred the rubber industry to Dutch hands was certainly not helping Great Britain in the task of holding her own in the world's exchanges. All these and other considerations, such as the very great difficulty of dealing with smuggling, the corruption of native staffs, and, in one part of the Colonial Empire at any rate —Ceylon—the growing opposition of the Legislature, made it very difficult to know how long we should be able to carry on. The hon. and gallant Member for Montrose asked by what method I was going to control those Colonial Legislatures which had an unofficial majority. The question of control does not arise now, because they are opposed to restriction, but it might have arisen in a very definite form if I had been resolved to continue to impose it indefinitely.
All these considerations weighed in our minds, and finally, as from the Colonial Office, we approached the Cabinet towards the close of last year and asked the Cabinet for an independent, impartial inquiry. The right hon. Gentleman the Leader of the Opposition suggested that the prompting in this case did not come from the Colonial Office. I am sorry to say that he made, I think, a very unfair suggestion that there were influences outside, not disclosed, which affected the position of the Government in this matter.
§ Mr. MacDONALD
May I ask why it was that the statement that is now being made was not made when questions were put in this House as to who prompted the action that has been taken?
§ Mr. AMERY
The right hon. Gentleman has the answer now, and I give it him in the most explicit form. To suggest that a matter of this sort should originate from any Department other than the Department concerned or that the Prime Minister and the Cabinet 1198 should take action over-riding the views of the Department concerned, is absurd.
§ Sir R. HUTCHISON
Why did the right hon. Gentleman give out one advice on the 1st February and another on the 8th February?
§ Mr. AMERY
I will deal with that point in a moment: I will only say now that it is not true. The Colonial Office owes a great debt to Lord Stevenson and Sir Matthew Nathan and the advisory committee. They gave their services ever readily and with great ability, but we have to remember the fact that these gentlemen were concerned throughout the initiation and working of the scheme of restriction itself. Moreover, they were persons directly financially interested in the rubber business. It was obvious and reasonable that in this matter we should endeavour to get the opinion of the ablest impartial inquirers that we could obtain.
§ Mr. THOMAS
This is a very serious statement which the right hon. Gentleman is making. Will he deny that the right hon. Member for Stafford (Mr. Ormesby-Gore), in explaining the Government's attitude in Malaya, distinctly stated that the previous alteration was the responsibility of this committee alone, and not of the Cabinet? If the committee can be blamed in one connection, surely the responsibility must be transferred in the other.
§ Mr. AMERY
If the right hon. Gentleman had been in the House this afternoon and had listened to an answer which was given to a Private Notice question, he would have heard that my right hon. Friend the Under-Secretary of State for the Colonies never made that statement. He made it quite clear that the change was made on the responsibility of the Government and not on the advice of the Committee. We did not take the view which the right hon. Gentleman the Leader of the Opposition takes that we could not appoint an impartial committee without the consent of the advisory committee. Moreover, practically every member of the advisory committee had the opportunity of appearing before the Rambling Committee and had every opportunity of putting his experience and views most fully forward.
There is one further point which the Leader of the Opposition made. He 1199 suggested that we were appointing a loaded committee, a committee as to whose views we were already informed; that we deliberately appointed it with a view to putting an end to the restrictions. That is not true. I believe that I can say for my right hon. Friend the Prime Minister that he had no information as to any previous views of any members of that committee. They were appointed purely on their personal ability, and they entered upon the investigation absolutely free and with open minds. The result of that investigation was to convince the Government that the restrictions as they are operating now, owing to the rapid growth of supplies outside the spheres of restriction and partly owing to the immense development of the reclaimed rubber industry, are becoming increasingly ineffective as a means either of stabilising prices or even of keeping them up in the interests of the British producer. On the contrary, the effect of them is adverse to our interests to-day and will be increasingly so. Hitherto, what we have had to deal with has been the extension of Dutch production on estates already planted, but now every year we are going to be confronted with an ever-increasing output from new plantation in these territories since 1922. To-day, the continuance of that scheme is most disadvantageous to our growers and appears to threaten the dominant position which the British Empire occupies in the producton of the raw material of one of the world's great key industries. These restrictions to-day discourage progress in management, raise the cost of production and severely handicap our producers, compared with the foreign competitor.
To-day, those who are benefiting most are the Dutch and those who feel all the disadvantages are the British producers, and the time has come to remove a scheme which, admittedly, served its immediate purpose at the time, but which to-day is a severe handicap to the British producer. We then had to consider how the scheme should come to an end. We received, and the committee received, advice from many quarters, in favour of a long-ranged tapering scheme taking two or three years to wind up. It was obvious that once we had settled upon such a scheme we were bound to carry it 1200 through and adhere to it. During the whole of that period the increasing disadvantage of our position would have gone on and our producers would have been in no position to deal with it, except in one respect which was indicated by the hon. and gallant Member for Montrose. He asked: "What is the good of your six months notice? Every firm is telegraphing out to its people to produce more, and before the 1st of November there will be a great mass of rubber sent over." As a matter of fact, they cannot produce much more, immediately. It will take them several months to get their labour supply, to build new coolie lines, and to send their recruiters to Southern India. Therefore, for the first few months they could not produce more. If, however, we had adopted a scheme extending over two or three years, we should have had the very process which was so indignantly denounced by the hon. and gallant Member for Montrose in operation, not for a few months but for nearly two or three years, with still more disastrous results.
§ Sir R. HUTCHISON
Does the right hon. Gentleman know that at the present time companies have robber in store which they cannot export?
§ Mr. AMERY
if so, that situation would have been still further aggravated over a two or three years period. A more practical alternative was that of immediate withdrawal suggested by the hon. Member for Camberwell, but we were up against the difficulty of personnel and recruiting which I have already mentioned. The immediate cessation of restriction could not for some months give our producers the benefit of full scale production. It could not give the Governments time to make their various arrangements. On the other hand, I was besieged throughout February and March by hon. Members on all sides and by many people outside saying: "Cannot you give an undertaking that, at any rate, the scheme will continue up to the end of the restriction year—the let November." That was the date urged on me from every quarter. That was the date which, after the fullest and most careful consideration, the Hambling Committee recommended to the Government and which the Government, with full responsibility, have accepted.
§ Mr. AMERY
I have dealt with the really serious issue, the main issue. Now I come to what has been magnified into a great charge, the real gravamen against the Government, and that is that we made certain announcements, that the Government announced that we were going to have a Committee of Inquiry. I have been a good many years in this House, and I have never known an an-announcement of a Committee of Inquiry seriously to perturb the equanimity of the House as a whole. Such an announcement is usually met by the taunt, "Oh, another Committee, another postponement, another failure on the part of the Government to recognise its responsibility to deal with the matter!" Why should an announcement of the appointment of an independent and impartial inquiry to look into the whole matter, to consider whether restriction should be maintained or modified or abolished, create such a sensation? Why Because the whole position was already beginning to topple. The whole situation in the rubber market, in the share market, was entirely artificial, and all those values about whose loss such talk has been made, were not real values, but were fictitious values which were bound to come down and disappear in the very working of the scheme if it had been allowed to go on. The hon. and gallant Member for Montrose asked whether the losses would have occurred if we had not made that announcement, whether it would have been possible to make an announcement that would not have created these losses. I say "No "No announcement at any time would have failed to be followed by those losses, unless we had postponed the announcement until after the losses themselves had occurred.
§ Lieut.-Commander KENWORTHY
In that case, why did you let the New York "bears" get the advantage of the announcement?
§ Mr. AMERY
I will deal with those animals very shortly. Meanwhile, I will give to the hon. and gallant Member an experience of mine, not taken from "bears," but in another field of sport. It has often been my fortune and my anxiety to thread my way through a great and broken glacier with towers and pillars of ice 50 or 100 feet 1202 high in danger of toppling over at any moment. There comes a time when the guide says to you, "Do not speak; do not even whisper, because the concussion of the air may have some effect on these ice blocks. Pass quickly and silently. "You do, but then, if the ice has not come down from your whisper, the effect of the sun will bring it down in the next few hours. If we had made no announcement whatever these losses were bound to come sooner or later as the inevitable result of the thoroughly unhealthy position in which the whole industry was.
§ Sir R. HUTCHISON
Why did the Colonial Office say that they were going to continue the scheme on 1st February and then alter their mind on 8th February?
§ Mr. AMERY
The hon. and gallant Member displays a great measure of impatience. I am dealing with this question stage by stage. First of all, I will deal with what the right hon. Member opposite, in his eloquence, described as tantamount to a criminal act—the announcement of the fact that we were going to have a committee of inquiry. This announcement, I say again, would have produced no effect whatever unless the whole industry had been in a precarious and unsound position, and unless those who knew most about the industry were convinced that the outcome of any impartial inquiry would be the termination of the present scheme. Now I come to the even more criminal charge that the announcement, was made on 8th February and not made in the ordinary routine way by the Colonial Office on 1st February, with the announcement of the figure at which restriction would stand in the following quarter. The Colonial Office announcement was a perfectly routine announcement, based on the calculated average prices through the quarter. Anyone who took the trouble to study these prices could have made that same announcement on the same day. It proceeded from the Office purely as a matter of routine.
On the other hand, the appointment of the special committee of inquiry, made at the instance of the Colonial Office and accepted by the Cabinet, which takes the full responsibility for that as for everything else that is done by any Depart- 1203 ment of the Government—that committee naturally took some time to set up. It was essential to find the right men as members and to suit their time and convenience as to the beginning of the committee. To meet them and in order to fix as early as possible a date to get the committee started, the announcement was made the very first moment after we got all the names together and ascertained that the members of the committee were really ready to begin. That date was a week after the ordinary routine announcement by the Colonial Office. it was obvious from the routine announcement that no change would be made in the course of the quarter, and from that point of view, the point of view of giving the largest possible notice it was obviously desirable that a notice about the inquiry should come as soon as possible after that date. There was no essential reason why it should appear on the same day, and no inconvenience was caused except in a market already in a state of unreasoning nerves and panic.
The right hon. Gentleman opposite made a very elaborate argument—for which there is no foundation whatever—drawn from the fact that, in answer to a question some months before, I said that no change would be introduced before the beginning of February, and that, if it were, ample notice would be given beforehand. He drew from that the inference that when the routine notice came out on 1st February, the public would at once know that no inquiry would be held in the matter. It was obvious that, if a change had been determined upon as from 1st February, I should have given notice long before that, and equally obvious that when it was known that the quarter figure for February to April was 60, there would be no change in that, quarter, and even more obvious to anyone who knows the amount of investigation required in this matter that the announcement of 8th February of the appointment of the committee could not possibly mean any change in the whole situation before at least July. As a matter of fact, no change is going to take place before November.
I am reminded by the Prime Minister of certain wild animals to which the hon. and gallant Member opposite referred. 1204 Talking of wild animals, I find that the charge that we caused ruinous losses to the investor and the trader owing to the leakage of news to the United States was given, as one would expect, in its most vigorous, most picturesque and, I might add, loosest, form by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). This is what he said:The Government have dealt with this matter in such a way as to inflict the maximum of injury upon British investors and British traders, and the minimum of injury upon foreign investors and foreign traders. They first of ail fumbled about the date. Then they suddenly made up their minds to do something and they issued a statement to the Press about six o'clock. They said that is two hours after our Stock Exchange has closed.' They forgot that it was two hours before the New York Stock Exchange closed. Mr. Baldwin forgot that, even under a stable Tory Government, this old world was still engaged in revolution once every 24 hours. Having made that astronomical discovery, which has been known to every child in a first form for many generations, he then felt pained that there should be men so sordid in the United States of America as to take advantage of the marvels of the universe. But his pain was not comparable to that felt by the poor investor who found his money swept away by this blunder.I need not quote any more. [HON. MEMBERS: "Go on!"] I will quote another less picturesque passage from that well-informed organ, the "Daily Mail," which declared on 10th February:British traders and 230,000 British shareholders of all parties suffered a serious financial reverse yesterday as a result of New York knowing in advance of London of the Government's intention to institute an inquiry into the existing scheme of restriction on rubber exports. The losses are estimated at about £1,170,000.It will be noted that the figures have grown a great deal since then. Let me deal with those statements. The announcement made by the Government was one for publication in the Press on the morning of 9th February. It was given, as such announcements usually are, at six o'clock in the evening to the representatives of the Press, and I think the right hon. Gentleman opposite will agree with me, as would the right hon. Gentleman the Member for Carnarvon Boroughs if he were in his place, that the confidence of the Government in the Press on these occasions has always been justified. That at any rate has been my experience —that if you take the Press into your confidence you can do so with safety.
Captain GAR RO-JONES
Did that arrangement include the foreign Press? Was the statement issued at the same time to the representatives of the foreign Press?
§ Mr. THOMAS
This is very important, and we do not want to indict our own Press. We may as well face what is common gossip. Is it not true that the Government, quite honestly—I make no charge against them for it—invited representatives of the American Press with the other Press representatives?
§ Mr. AMERY
I think I can explain the whole position very clearly in a moment if the hon. and gallant Member will restrain his impatience. The Press were given that communication at six o'clock in the evening. Whether there was any misunderstanding, or whether, in one of the Press offices, there was a leakage, I cannot tell, but apparently someone did, by telephone, communicate this information to New York before the New York rubber exchange had closed. Now let us consider how anyone in New York, receiving that information, was going to proceed with the lucrative and pleasant enterprise of spoiling the British. How would the right hon. Gentleman the Member for Carnarvon Boroughs or the hon. and gallant Gentleman the Member for Montrose have proceeded if they had been in that position in New York? I can conceive anyone receiving that exclusive information, if he thought it was going to depress the market, spoiling some of his fellow Americans. He could deal with them. They were with him on the Exchange or he might have telephoned to Chicago and other Exchanges and possibly have fleeced some of his fellow-citizens. But how was he going to fleece anyone in this country? He could not, by any telegraphic sale, deal with them until the following morning, when their information would be as good as his.
1206 There is one exception only. There is one set of circumstances in which a British trader in rubber could conceivably have been worsted by an American speculator. That is if a British firm, at the close of the market in London, had telegraphed to its agents in New York to say "Buy for us, while the market is still open, at such and such a price. Telegraph to us in the morning when we will confirm. "But that is not a position which was occurring to any great extent. Taking into account the immense disproportion between American rubber requirements and British rubber requirements, the volume of dealing was not by British users buying rubber from the United State, but by Americans buying here for their own already very considerable stocks. However, all this is a rather hypothetical consideration. What happened as a matter of fact? The right hon. Gentleman the Member for Carnarvon Boroughs and the hon. and gallant Member for Montrose might, conceivably, have rushed in with their information, to see what use they could make of it. They are bold and sanguine and possibly credulous persons. But your Yankee is a shrewd speculator and a careful man. I am told that those who got the information in the United States were very doubtful as to how far it was all right, and how far it was an attempt to get them to alter their prices. Those to whom they communicated the information were still more doubtful and, as a matter of fact neither American citizens nor British investors were fleeced at all. Practically no business took place on that information in New York, and to all intents and purposes the position of the investor or trader in the United States was where geography and astronomy have always put him—some six hours behind the opening of the market in London.
§ Captain GARRO-JONES
May it not be the case that the very fact that a limited amount of business did take place, shows the losses which were caused, as considerable offers may have been made by cable to American interests to purchase at a certain price which they refused when they heard this news, tending to show that the price would fall still further.
§ Mr. AMERY
That is a very hypothetical question, based on a hypothetical fact which did not occur. No business did in fact take place. The fall 1207 in prices—real or fictitious prices—took place upon the announcement, here and in America, for the very same reason in both countries, namely, that the whole position in the rubber share market was top heavy and unsound and was bound to come down heavily the moment anyone knew the facts of the situation. I hope that I have now dealt with both the mare's nest and the more serious issue. With regard to the mare's nest, I would only repeat that there was nothing in the manner or the hour of the Government notification of the initiation of the inquiry by a Committee, which could have any effect whatever if the market had been in a sound position, and if the whole position had not been, as I have already described it, top-heavy and unsound. As regards the real merits of the case, and the whole difficult and complex problem with which the Government have had to deal during these years, I hope I have made it sufficiently clear that the Government which initiated the scheme, the Government of the right hon. Gentleman the Member for Carnarvon Boroughs, the Government of the right hon. Gentleman opposite, and ourselves throughout have been concerned with one issue only, and that is the prosperity of the British rubber industry, and the prosperity of the British colonies which depend upon it. They have been concerned throughout with that position.
From that point of view, they regarded the initiation of the scheme as a necessarily temporary expedient. They are still satisfied that, in its initial stages, that scheme served its purpose. As the scheme proceeded and failed to serve its purpose, we became increasingly conscious of the difficulties and disabilities which that scheme has been imposing, with growing momentum every year and every month, upon this great British key industry and we were finally reluctantly forced to the conclusion that the matter had to be inquired into. When all the information, had been obtained and submitted to us, we were still more definitely forced to the conclusion that, however beneficial in its initial stages, that scheme had become a stranglehold, fettering development and initiative, fettering progress, and endangering the future prosperity of a great British industry. The hon. and gallant Member opposite asked two questions
§ Mr. AMERY
That question would have to be considered by the Governments of both Ceylon and Malaya in connection with the whole revenue position. It is the permanent interests of our Colonies that have weighed most with our Colonial Office, and, from that point of view, nothing could be more distressing to those Colonies, either the Straits Settlements and territories immediately under British control, or to the territories ruled over by sovereign native potentates, than to see the great industry, to which they owe so much, being steadily transferred to foreign hands. The hon. and gallant Member asks whether we communicated directly with those rulers whose interests are affected, and who have shown themselves throughout the period of the British connection with them, the finest friends that Britain has had anywhere in the world. The answer is that we communicate in all these matters with the High Commissioner, whose normal and ordinary duties on any of these issues is to get into touch with the native rulers, and to keep them informed of all that affects them. I have no doubt that they were kept fully informed all along, and they, like the British territories directly administered, will, I believe, inspite of immediate difficulties, benefit greatly in the long run.
We know quite well that there is no decision we could have taken which would not have affected the market, not involved loss to many people who in good faith, but often with wonderful innocence, invested their money in all kinds of rubber companies about the working of which they know nothing whatever. If that illustrates anything, it only illustrates the converse of the point made by the right hon. Gentleman at the beginning, showing how dangerous and difficult a thing it is for a Government to try to interfere and control an industry direct, and how much better it is that such a question should be left to the industry to settle for itself. I believe this great industry, which owes so much to British science, to British ability and to British energy, is going to win its way through in spite of the difficulties of the next year or the next few years. At any rate, we are giving it a fair field.
§ Mr. THOMAS
I think it is only fair, before the division is taken on this question, that the House should clearly understand the object of the Motion. We have heard a good deal about the merits and demerits of restriction, but my right hon. Friend throughout the whole of his speech carefully avoided discussing that issue, and I therefore want to say quite frankly that we are not concerned at the moment with whether restriction is a good or a bad thing; but it is only fair to say, when the Liberal Benches are quiet—I presume the hon. Member is answering the questions which apparently my right hon. Friend did not answer—that I do not think there can be any dispute about this: Not only did restriction save the rubber industry at the time, but it was of immense benefit to the British revenue. I presume that Lord Stevenson gave the same advice to the right hon. Gentleman that he gave to me, and I think everyone connected with the rubber industry will admit the tremendous loss suffered by the death of the great public servant, who rendered immense services to all Governments. I think it only fair to say that not only was everything that the right hon. Gentleman has said to-night in the mind of Lord Stevenson, but that there is nothing which has happened since which the Committee, even when they determined this question, had not clearly in mind. It is fair to say that in their first Report they said in substance—I am summarising it—"We favour restriction, but we are afraid of its effect unless we get Dutch co-operation. "They made an effort to obtain Dutch co-operation and to bring the Dutch in. They failed, and, having failed, they then examined the situation in the light of that fact.
With all the facts before them, with the certain knowledge that the Dutch did not intend to come in and would ultimately benefit, they made that recommendation, and the Government of the day accepted it. Therefore it is idle for the right hon. Gentleman to stand here to-night and say the Government cannot interfere, and that what has happened only shows how dangerous it is for the Government to interfere. The fact remains that the Government did interfere, 1210 that the Government of the day were responsible, and therefore the Government must bear the responsibility for the action taken. I have no hesitation in saying that, on the advice of Lord Stevenson and the Committee, I took the view that it was a good thing. I still believe it was a good thing, but, unlike the Colonial Secretary, who merely says to the House "Do the Dutch benefit?" I say that the best experts in rubber must have told him, as they told me, that the heavy tapping of rubber by the Dutch might have given them a greater output, but the ultimate benefit of the industry is on our side.
§ Mr. THOMAS
All I can say is that people who have as much expert knowledge as the hon. Member for North-West Camberwell (Mr. Campbell) as growers take that view. They are people engaged in the growing of rubber, and they definitely take the view that restriction on the whole has benefited the agricultural side of the industry. At all events, we are not concerned to-night whether restriction is a good or a bad thing, but what we are concerned about is whether the Government, accepting the restriction scheme, handled it in the Tight way, and in the best interests of the country. The Colonial Secretary's speech can be summarised in a few sentences. The right hon. Gentleman said that from 1924 gradual pressure was being put upon him, and he himself became so apprehensive that every year and every month convinced him that the restriction ought ultimately to be removed. Is that a fair summary of the speech of the right hon. Gentleman?
§ Mr. AMERY
From 1925 onwards, I realised that there were difficulties, and I endeavoured to meet them by modification. We came gradually to the conclusion, in the course of 1927, that, whatever the difficulties were, the situation had become so difficult that a fresh inquiry was necessary, and that definite conclusion was put before the Cabinet at the end of 1927.
§ Mr. THOMAS
On the 10th flay, 1927, the Colonial Secretary was asked:If he has any information tending to show that the policy of restriction of output imposed upon British rubber plantations is enabling other rubber producers, 1211 particularly the Dutch, to expand at the expense of British producers?That is not May, 1925 or 1926, but it is May, 1927, when he had all the information and all the accumulation of evidence that we have heard about in his possession. At that time, the specific question was put to him having regard to the Dutch position0: Do they benefit? What was his answer with all the knowledge in his possession? He said:The hon. Member is no doubt aware that a large proportion of rubber producers in the Dutch East Indies are voluntarily adherents of the restriction scheme. The stabilisation of prices at a not unremunerative level in consequence of that scheme must obviously benefit all producers who are not subject to restriction, but I see no reason to suppose that in the long run the effects will be disadvantageous to British interests.What is the meaning of "in the long run" In 1924, says the right hon. Gentleman, he was becoming disturbed; in 1925, he was alarmed; in 1926, the evidence was pouring in on him—that is his own statement to-night; and in May, 1927, he said: "Yes, but notwithstanding all the evidence, in the long run I am sure restriction is good." That is his answer. He shakes his head. On the same afternoon, a supplementary question was asked by the hon. Member for North-West Camberwell, and that is the gentleman who has been giving his blessing to-night, so we will assume that he was on the right lines then. He asked:Does the right hon. Gentleman not think that the time has come when it would be advisable to form a small independent committee to go into the whole question and advise him as to the advantage or otherwise of retaining the Stevenson scheme?That was two and a-half years after the right hon. Gentleman, according to his statement to-night, became disturbed; that was two and a-half years after the accumulated evidence that there was something wrong. The hon. Gentleman gave him a chance to get out of it. Let us see what he says:I have the advantage of advice from a strong committee, representing the various interests concerned, and I am continually taking the advantages or disadvantages of a scheme into consideration.Then the hon. Member for Withington (Dr. Watts) intervened, and asked:Is it not a fact that the Stevenson restriction scheme has saved British rubber plantations from ruin and bankruptcy?1212 And the right hon. Gentleman replied:That is undoubtedly the case."—[OFFICIAL REPORT, 10th May, 1927; cols. 199-200, Vol. 206.]I would ask any hon. Member who heard the right hon. Gentleman's speech this evening whether I am putting it too high when I say that the substance of the speech, and, indeed, its intention was to convey to the House the impression that from 1924 onwards he was apprehensive, and ultimately came to the conclusion that the only way to deal with the matter was the way in which he did deal with it? Therefore, I would ask, how can he reconcile that position with the conclusive statement that he made last year?
"But," the right hon. Gentleman says, "I have the advantage of a strong advisory committee whom I consult from time to time." Let us see how he treated this strong advisory committee. In December of last year, according to the Prime Minister's statement, they were privately informed that the matter was to receive consideration. That was while the right hon. Gentleman was away. They replied to that communication saying that, in their judgment, it was disastrous to do anything at that stage. The reply of this strong advisory committee was that it was not only wrong, but dangerous, and for this very good reason, that the accumulation of stocks in London at that moment was in the vicinity of 60,000 to 70,000 tons. They took the view, rightly, that between then and the middle of this year those stocks would gradually have been worked out. This strong advisory committee gave that information when they received the first intimation of the appointment of the committee. The next they knew was that on 1st February the ordinary announcement was made by the Colonial Office. I ask the House what interpretation could be put upon that situation? What did they have a right to expect? There was the advisory committee. They were informed that the matter was under consideration. They protested. To put it another way, they gave their views as practical men and as an advisory committee, because if we are to be told, as we were told incidentally, that they were interested parties, the answer to that is that they ought never to have been put 1213 in the position. They were either there to advise or they ought not to have been there at all.
They gave their advice, and they were told nothing could be done. The, 1st of February arrived. There is the announcement of the ordinary continuation which led everyone to believe there was no change contemplated, and then on 8th February came the bombshell. I ask the House whether we are not entitled to say that is not a fair handling of the situation and that people were deceived. "Ah" says the right hon. Gentleman, "What do the investors in rubber know about the working of the business?" A more absurd and ridiculous statement was never made. What do the investors in railway companies know of the working of the railways? What do the investors in mines know about the working of the mines?
That argument might be applied to every industry in the country with the same result. The fact remains that the Government, by their handling of the situation, not only did incalculable harm to British investors, but certainly helped American investors. The right hon. Gentleman was waiting for someone to give him an opportunity for that quotation. I could see him waiting for someone to say something to give him the chance of the quotation he made about those people who took advantage of the announcement. I do not think he put it quite high enough. I agree entirely that some of the statements made were not only grossly exaggerated, but, on the face of it, could not possibly happen, because at the worst the American situation was such that if they wanted to deal they had to deal with us and not with themselves. Therefore the time could not possibly have given them the benefit it did.
There is another thing the right hon. Gentleman did not mention. Here I do not blame the Prime Minister, because, if representatives of the Press are called in and told something confidentially, the Minister has a right to expect that they will honour his confidence. If they do not, he is not to blame, and the responsibility must rest with them. In any case, the right hon. Gentleman failed to observe that the way British people were hammered and badly hit was not alone the way he indicated but in the orders that failed to materialise here, because the orders that came to the London 1214 market the next morning would naturally have been cancelled, and that was a big contributory factor to the break in the market in London the next morning. The Government were not to blame for that, if their confidence was broken, but equally it is fair to say that the British people suffered in consequence.
I want to put this question to the right hon. Gentleman. He has said all through that the Colonial Office must bear the responsibility. I believe that the Colonial Office are not entirely responsible for this matter. I go as far as to say that the Treasury were not only parties to it, but that at the initiation of the scheme they were, and they have been since, jointly concerned with the Colonial Office. No one has benefited out of it, as I have already said, more than the British Treasury. The right hon. Gentleman was aware of it. What I ask, and what many people are in doubt about at this moment, is: How does it come about that the Colonial Office, who had issued the clear and specific notice on the 1st February, merely sent this question to the Treasury without advice of any sort or kind, and that on the 8th February the Prime Minister announced the decision, which is under the direction of the Colonial Office?
§ Mr. AMERY
I think I can answer that question. I thought I had really answered it before. I thought that I had made it clear that the request for an inquiry was made by the Colonial Office. In view of the effect on the Exchequer, the Colonial Office has always been in close contact with the Treasury. In any case, the Cabinet, of which the Chancellor of the Exchequer is a member, accepted the Colonial Office proposal and decided to have this inquiry. The decision was held up for a short time for the reason the hon. Member has mentioned, namely, to allow stocks to work off to some extent. When the Colonial Office made its announcement on the 1st February, it was perfectly well aware that the inquiry was not only settled, but that; the personnel had been settled and that the announcement about the inquiry would be made in the course of a few days. It issued, and always does on the first of every quarter, the ordinary routine announcement, and was equally well aware that the announcement of the committee of inquiry would be made very shortly.
§ Mr. THOMAS
Now we have this position, that the Colonial Office was aware of this and was a party to it, and that when it issued the notice on let February it had knowledge of what was going to take place. That is the statement of the right hon. Gentleman. Let the House observe this. There was an Advisory Committee set up for this purpose, and for this purpose alone. In December this Committee were told that there was to be an inquiry. They objected.
§ Mr. THOMAS
Observe what the right hon. Gentleman has just said: that the Committee, as such, never made a recommendation. I ask: Was the Committee, as such, ever consulted? The Committee, I repeat, were never consulted as a Committee; they were told individually, privately and separately, and for the right hon. Gentleman to say that as a Committee they never object leads the House to believe that they here formally consulted, which is absolutely contrary to the facts. The facts are these. The Committee were told privately and individually, and as individuals they replied pointing out the difficulties and dangers. Then they were told that the matter was dropped. The next thing that happened was the Colonial communication of the 1st February, followed by the communication of the 8th February. All these facts clearly demonstrate that the Government did not have the interests of the industry in mind. They could not have had. They must have known the utter and absolute confusion which would be created by their attitude, and it is because we think that they have badly blundered by not availing themselves of the best advice which was at their disposal and have totally disregarded the interests of the British public in this matter that we are going into the Division Lobby to-night.
Sir W. LANE MITCHELL
It is not very easy to speak against your own Government and party, but the right hon. Member for Derby (Mr. Thomas) has put the case in the way I know it. 1216 Let me remind the House of the real position. British investors, whose shares before the 9th of February were worth £200,000,000 find that to-day they are worth £100,000,000. The stocks in this country are 60,000 tons, and the price has dropped over £100 per ton; which means a loss of £6,000,000. The Advisory Committee consider that if the scheme had been allowed to work on for the next two or three years that the consumption of rubber would overtake the supply and we should have got to the 100 per cent. stage, when it would have been able to drop the restriction scheme altogether. Instead of those in the industry being allowed to control it, those who know the conditions, amateurs come in who know nothing about it. The industry has not received anything from the British Government. They did attempt to get a voluntary scheme to regulate shipments in some way in 1920; but the voluntary scheme did not work because the Malay States did not come in. In 1921 we were still in the same position. In 1922 the present Chancellor of the Exchequer was Colonial Secretary, and he had as his commercial adviser Sir James Stevenson. He said to Sir James Stevenson that if he could get a scheme which would be likely to work, the Government were prepared to back it. That is all the Government. did. If any hon. Member on this side goes down to his constituency, in which I have no doubt there will be many who have made investments in rubber, he will find that they have lost very much money in rubber, and the moment you make excuses they will only say that it is because the Prime Minister and the Colonial Secretary have put them into this trouble and that there is no explanation at all. The hon. Member for North-West Camberwell (Mr. Campbell) gave certain advice, saying that people should not sell their shares. I have here a letter which has been addressed by one of these banks in London in connection with a poor shareholder who had an advance on his shares. This is what it says:Referring to our conversation yesterday, I have received a letter from my head office this morning which contains definite instructions that, unless further securities are produced, we shall at once proceed to sell the shares.That is the kind of thing which is going on all over the place. The hon. 1217 Gentleman spoke of £50,000,000 being lost in two hours. Nobody suggested anything of the kind. What was suggested was a loss of £50,000,000 on the industry. It is difficult to handle this matter. You have had an illustration of the way in which the Government have blundered over the whole business. You cannot get any information. We come here to discuss it to-night, and we have the only statement which has been made, by the Colonial Secretary. What is it that has been done. Here you appoint a Committee of Civil Research. You cannot get any information about it. It is under the Board of Education, and you cannot put any questions about it or get any information at all, and you do not know what the names are. You cannot see the evidence. Sir Eric Geddes has said that he did not believe that weight had been given to the evidence put before the Committee, because of the unanimous opinion of every section of the trade. With regard to this evidence, you have it defended, because there is nobody in the trade who is against it. It is said the Rubber Growers' Association are unanimous. You get certain elements in every trade and certain individual men who come and give evidence. These have been taken by a Committee in the same way. Sir Eric Geddes was perfectly straight in saying that judgment had been given against the weight of evidence. Practically every section of the trade was in favour of it to tide over this period, and it passes the wit of anybody to realise how the Government ever took the step they did in the way they did. You cannot see the Report of the Committee of Civil Research or the evidence put before it.
I hope that hon. Members when they go back to their constituencies will realise that the Government have sold the trade, though they may say they are doing it in the best interests. The one advantage from all this is that the trade is clear of them and will not have the Colonial Secretary again, and, if the trade can get through, it will not be because of the Colonial Secretary or the Government. I bitterly regret the way in which this matter has been handled. From start to finish the answers to questions on this subject have been given with a curtness and a callousness that everybody realises, and when it came to the finish the same brutality was shown 1218 all through. I feel it bitterly, because I happen to be in the trade, but I do not hold a pennyworth of rubber or of rubber shares, so that this is nothing to me except as a broker with a good deal more business passing through, but one does regret that a Conservative Government, that is supposed to have some respect for the interests of investors, should put it in this particular way. If the Labour party had brought this forward, they would have been hounded out of the country. I was speaking to a Scottish friend of mine the other day on this subject, and he said that if we did not get any Report from the Committee and if we did not get any evidence, the Government ought to be hounded out of the country. One does not like to say these things, but they are said all over the place, and it is just as well that they should be said by a Member of the Conservative party, who does not feel any pride in the position he is now in, and who regrets that those who ought to lead the party should be leading it in such a miserable way.
§ Captain GARRO-JONES
What would have been the position if this had been done by the Labour party or the Liberal party? I venture to say that, great as has been the criticism of the Colonial Secretary to-night, he has got off very lightly compared with the treatment which would have been accorded to one of the other parties if they had made this mistake. The Colonial Secretary did not know whether the foreign Press had been invited to receive this information or not, and he appeared to cast some aspersion—
§ Captain GARRO-JONES
The right hon. Gentleman appeared to cast some aspersion on the British Press, who might have given this information abroad.
§ Captain GARRO-JONES
In any case, the right hon. Gentleman ought to have known that the foreign Press is represented in this country also by members of the British Press, and that they have not only private correspondents, but that information of any specific character of this kind is always given to the foreign 1219 Press. They work in the closest liaison with the British Press, and the British Press has completely fulfilled its obligation of secrecy if it sees that this information is not published in British papers until the following morning. That is the only obligation they have to maintain, and they carried it out to the full, and
§ the Government., by not realising that, made a gross blunder, for which the Colonial Secretary has offered no satisfactory defence to-night.
§ Question put, "That this House do now adjourn."
§ The House divided: Ayes, 194; Noes, 94.1221
|Division No. 91.]||AYES.||[11.0 p.m.|
|Acland-Troyte, Lieut.-Colonel||Fremantle, Lieut.-Colonel Francis E.||Moore-Brabazon, Lieut.-Col. J. T. C.|
|Agg-Gardner, Rt. Hon. Sir James T.||Ganzoni, Sir John||Morrison, H. (Wilts, Salisbury)|
|Albery, Irving James||Gates, Percy||Morrison-Bell, Sir Arthur Clive|
|Alexander, E. E. (Leyton)||Gilmour, Lt.-Col. Rt. Han. Sir John||Murchison, Sir Kenneth|
|Allan, J. Sandeman (L'pool, W. Derby)||Gower, Sir Robert||Nicholson, Col. Rt. Hn. W. G. (Ptrst'ld.)|
|Amery, Rt. Hon. Leopold C. M. S.||Graham, Fergus (Cumberland, N.)||Nuttall, Ellis|
|Apsley, Lord||Grant, Sir J. A.||O'Connor, T. J. (Bedford, Luton)|
|Ashley, Lt.-Col. Rt. Hon. Wilfrid W.||Grattan, Doyle, Sir N.||Oman, Sir Charles William C.|
|Astbury, Lieut.-Commander F. W.||Greene, W. p. Crawford||Percy, Lord Eustace (Hastings)|
|Atholl, Duchess of||Grenfell, Edward C. (City of London)||Perkins, Colonel E. K|
|Atkinson, C.||Gretton, Colonel Rt. Hon. John||Perring, Sir William George|
|Baldwin, Rt. Hon. Stanley||Grotrian, H. Brent||Pownall, Sir Assheton|
|Barclay-Harvey, C. M.||Guinness, Rt. Hon. Walter E.||Raine, Sir Walter|
|Barnett, Major Sir Richard||Hacking, Douglas H.||Remer, J. R.|
|Bellairs, Commander Carlyon||Hall, Lieut.-Col. Sir F. (Dulwich)||Rhys, Hon. C. A. U.|
|Benn, Sir A. S. (Plymouth, Drake)||Hall, Admiral Sir R. (Eastbourne)||Ropner, Major L.|
|Bentinck, Lord Henry Cavendish.||Hall, Capt. W. D'A. (Brecon & Rad.)||Ruggles-Brise, Lieut.-Colonel E. A.|
|Betterton, Henry B.||Hammersley, S. S.||Salmon, Major I.|
|Birchall, Major J. Dearman||Hanbury, C.||Samuel, A. M. (Surrey, Farnham)|
|Blundell, F. N.||Harrison, G. J. C.||Sandeman, N. Stewart|
|Bourne, Captain Robert Croft||Hartington, Marquess of||Sanders, Sir Robert A.|
|Bowyer, Captain G. E. w||Harvey, G. (Lambeth, Kennington)||Sanderson, Sir Frank|
|Brasa, Captain W.||Harvey, Major S. E. (Devon, Totnes)||Sandon, Lord|
|Bridgeman, Rt. Hon. William Clive||Headlam, Lieut.-Colonel C. M.||Sassoon, Sir Philip Albert Gustave D.|
|Briscoe, Richard George||Henderson, Capt. R. R. (Oxf'd, Henley)||Shepperson, E. W.|
|Brocklebank, C. E. R.||Henderson, Lieut.-Col. Sir Vivian||Simms, Dr. John M. (Co. Down)|
|Broun-Lindsay, Major H.||Heneage, Lieut.-Colonel Arthur P.||Skelton, A. N.|
|Brown, Col. D. C. (N'th'l'd., Hexham)||Henn, Sir Sydney H.||Slaney, Major P. Kenyon|
|Brown, Brig.-Gen. H. C.(Berke, Newb'y)||Henneesy, Major Sir G. R. J.||Smith-Carington, Neville W.|
|Buchan, John||Hills, Major John Waller||Smithers, Waldron|
|Buckingham, Sir H.||Hilton, Cecil||Spender-Clay, Colonel H.|
|Burgoyne, Lieut.-Colonel Sir Alan||Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.||Sprot, Sir Alexander|
|Cadogan, Major Hon. Edward||Hohler, Sir Gerald Fitzroy||Stanley, Lieut.-Colonel Rt. Hon. G. F.|
|Campbell, E. T.||Hopkins, J. W. W.||Stanley, Lord (Fylde)|
|Carver, Major W. H.||Hudson, Capt. A. U. M.(Hackney, M.)||Stanley, Hon. O. F. G. (Weatm'eland)|
|Cassels, J. D.||Hunter-Weston, Lt.-Gen. Sir Aylmer||Stuart, Hon. J. (Moray and Nairn)|
|Cayzer, Sir C. (Chester, City)||Huntingfield, Lord||Sugden, Sir Wilfrid|
|Cecil, Rt. Hon. Sir Evelyn (Aaton)||Iliffe, Sir Edward M.||Tasker, R. Inigo.|
|Cecil, Rt. Hon. Lord H. (Ox. Univ.)||Inskip, Sir Thomas Walker H.||Templeton, W. P.|
|Chapman, Sir S.||Jackson, Sir H. (Wandsworth, Cen'l)||Thomson, F. C. (Aberdeen, South)|
|Charteris, Brigadier-General J.||King, Commodore Henry Douglas||Thomson, Rt. Hon. Sir W. Mitchell|
|Churchman, Sir Arthur C.||Kinloch-Cooke, Sir Clement||Tinne, J. A.|
|Clarry, Reginald George||Knox. Sir Alfred||Titchfield, Major the Marquess of|
|Cochrane, Commander Hon. A. O.||Lane Fox, Col. Rt. Hon. George R.||Tryon, Rt. Hon. George Clement|
|Colfox, Major Wm. Phillips||Lister, Cunliffe-, Rt. Hon. Sir Philip||Turton, Sir Edmund Russborough|
|Colman, N. C. D.||Little, Dr. E. Graham||Vaughan-Morgan, Col. K. P.|
|Cope, Major William||Locker-Lampson, G. (Wood Green)||Waddington, R.|
|Courthope, Colonel Sir G. L.||Lougher, Lewis||Wallace, Captain D. E.|
|Croft, Brigadier-General Sir H.||Lucas-Tooth, Sir Hugh Vere||Ward, Lt.-Col. A.L.(Kingston-on-Hull)|
|Crookshank, Col. C. de W. (Berwick)||Luce, Major-Gen. Sir Richard Harman||Warner, Brigadier-General w. W.|
|Culverwell, C. T. (Bristol, West)||Lumley, L. R.||Warrender, sir Victor|
|Cunliffe, Sir Herbert||MacAndrew, Major Charles Glen||Watson, Rt. Hon. W. (Carlisle)|
|Dalkeith, Earl of||Macdonald, R. (Glasgow, Cathcart)||Wayland, Sir William A.|
|Davies, Maj. Geo. F. (Somerset, Yeovil)||Macintyre, Ian||White, Lieut.-Col. Sir G. Dairymple.|
|Davies, Dr. Vernon||McLean, Major A.||Williams, Herbert G. (Reading)|
|Dixey, A. C.||Macmillan, Captain H.||Wilson, R. R. (Stafford, Lichfield)|
|Drewe, C.||Macnaghten, Hon. Sir Malcolm||Winby, Colonel L. P.|
|Eden, Captain Anthony||MacRobert, Alexander M.||Windsor-Clive, Lieut.-Colonel George|
|Edmondson, Major A. J.||Manningham-Buller, Sir Mervyn||Winterton, Rt. Hon. Earl|
|Elliot, Major Walter E.||Margesson, Captain D.||Withers, John James|
|Ellis, R. G.||Mason, Colonel Glyn K.||Womersley, W. J.|
|Everard, W. Lindsay||Mailer, R. J.||Wood, E. (Chester, Stalyb'ge & Hyde)|
|Fairfax, Captain J. G.||Merriman, Sir F. Boyd|
|Fielden, E. B.||Milne, J. S. Wardlaw||TELLERS FOR THE AYES.—|
|Ford, Sir P. J.||Mitchell, W. Foot (Saffron Walden)||Captain Viscount Curzon and Mr. Penny.|
|Forestier-walker, Sir L.||Monsell, Eyres Com. Rt. Hon. B. M.|
|Alexander, A. V. (Sheffield, Hillsbro')||Grundy, T. W.||Riley, Ben|
|Ammon, Charles George||Hamilton, Sir R. (Orkney A Shetland)||Roberts, Rt. Hon. F. O. (W. Bromwich)|
|Attlee, Clement Richard||Hardie, George D.||Robinson, W. C. (Yorks, W.R., Elland)|
|Baker, J. (Wolverhampton, Bliston)||Harris, Percy A.||Saklatvala, Shapurji|
|Baker, Walter||Hartshorn, Rt. Hon. Vernon||Salter, Dr. Alfred|
|Barr, J.||Hayday, Arthur||Scrymgeour, E.|
|Bondfield, Margaret||Henderson, T. (Glasgow)||Scurr, John|
|Bowerman, Rt. Hon. Charles W,||Hirst, W. (Bradford, South)||Sexton, James|
|Broad, F. A.||Hudson, J. H. (Huddersfield)||Shepherd, Arthur Lewis|
|Bromley, J.||Hutchison, Sir Robert (Montrose)||Shiels, Dr. Drummond|
|Brown, Ernest (Leith)||John, William (Rhondda, West)||Shinwell, E.|
|Buchanan, G.||Johnston, Thomas (Dundee)||Short, Alfred (Wednesbury)|
|Charleton, H. C.||Jones, Morgan (Caerphilly)||Sitch, Charles H.|
|Compton, Joseph||Kelly, W. T.||Snowden, Rt. Hon. Philip|
|Connolly, M.||Kennedy, T.||Stamford, T. W.|
|Cove, W. G.||Kenworthy, Lt.-Com. Hon. Joseph M.||Stephen, Campbell|
|Crawfurd, H. E.||Kirkwood, D.||Stewart, J. (St. Rollox)|
|Davies, Rhys John (Westhoughton)||Lawrence, Susan||Thomas, Rt. Hon. James H. (Derby)|
|Day, Harry||Lee, F.||Tinker, John Joseph|
|Dennison, B.||Lindley, F. W.||Tomlinson, R. P.|
|Duckworth, John||Lunn, William||Wallhead, Richard C.|
|Duncan, C.||MacDonald, Rt. Hon. J. R.(Aberavon)||Watson, W. M. (Dunfermline)|
|Dunnico, H.||Maxton, James||Wellock, Wilfred|
|Edge, Sir William||Mitchell, Sir w. Lane (Streatham)||Welsh, J. C.|
|Garro-Jones, Captain G. M.||Morris, R. H.||Westwood, J.|
|Gibbins, Joseph||Morrison, R. C. (Tottenham, N.)||Wilson, R. J. (Jarrow)|
|Gillett, George M.||Naylor, T. E.||Windsor, Walter|
|Gosling, Harry||Owen, Major G.||Young, Robert (Lancaster, Newton)|
|Graham, D. M. (Lanark, Hamilton)||Palin, John Henry|
|Greenwood, A. (Nelson and Colne)||Paling, W.||TELLERS FOR THE NOES.—|
|Grenfell, D. R. (Glamorgan)||Pethick-Lawrence, F. W.||Mr. Charles Edwards and Mr. Whiteley.|
|Griffith, F. Kingsley||Potts, John S.|
|Groves, T.||Richardson, R. (Houghton-le-Spring)|
§ Adjourned accordingly at Seven Minutes after Eleven o'clock.