EMPIRE TRADE.

HC Deb 14 March 1928 vol 214 cc1937-96

4.0 p.m.

Mr. BARCLAY-HARVEY

I beg to move, That this House is of opinion that the pursuit of a vigorous policy furthering Imperial trade and developing Imperial resources is desirable in the interests of the industries of this country and of the Empire. I move this Motion all the more emphatically in that it gives us an opportunity of considering some of those wider principles of Empire which I feel, in common with other Members, and, I think, Members on all sides of the House, that we get insufficient time in this House to consider. I have drawn this Motion widely enough to enable us to have a general discussion on Empire trade this afternoon, and if, during the course of the Debate, we manage to bring out present points or new points of view, I think the promoters may well feel that the time of the House has not been wasted. I should like to begin by calling attention to one or two points in connection with the situation. During the course of the last few years we have had an increase in the number of people in this country who are insured and in employment, amounting to over 1,000,000. It is not easy to give an absolutely correct figure, but that is near enough for my purpose. At the same time, we are all unfortunately aware that we have had a very large increase in the number of people who are not in employment. Meanwhile, ever since the War, the country has been pursuing a policy of increased social services. We are spending more money on pensions, on education and on social services of all sorts, and, for myself, I think very rightly so. During the last few years, as was pointed out by the Prime Minister the other day, real wages have shown a tendency to increase. During the period I have under review—in fact for many years—this country has led the way, at any rate as far as the old world is concerned, in the matter of social service and social conditions, and if we are to maintain that position—and I am sure it is the wish of every Member that we should do so—in face of a growing population and growing demands for increased services all over the world, there is only one way we can do it, and that is by developing the trade and production of our country. I am sure there is no other method. It is the only way by which we can satisfactorily improve and even maintain our present position.

It is no use merely looking to our home markets. Of course, I appreciate, in common with all other Members, that the home market is a very important section of Empire trade. I think it is sometimes forgotten that this country is part of the Empire at all. We must not make that mistake; but if we are to develop as we have developed in the past, we have to look outside this country, and look for an increase in our external trade. When we look at some of our old markets, some of which have stood us well in the past, we find that the position now is one of very great difficulty. Europe, still torn by the effects of the late War, full of modern national feelings, which have been created by the sub-division of the Continent into a much larger number of small peoples who are trying to develop and, in fact, in some cases trying to start industries of their own and impose tariffs, is no longer the easy field for us that it was. Of our total exports in 1913, Europe took something like 34¾ per cent. By 1927, that figure had dropped to about 30¼ per cent. Since 1923 the figures have shown a steady and persistent decline. It may well be, and I hope it will be, that with increased settlement of the affairs of Europe and increased stability, we shall get back something we have lost. Nevertheless, the prospects in Europe are none too bright, and, for that matter, neither are they a little further afield.

In the past, we have done a very great trade in the Far East. What is happening in the Far East to-day? Let me take two examples which, I think, the House will agree are striking examples. China, in 1913, took 16½ per cent. of her total imports from this country. By 1923 that figure had fallen to 12.7 per cent., and in 1925 as low as 9.7 per cent. Similarly. Japan, starting with the same figure, had fallen in 1923 to 12 per cent., and in 1925 to 8½ per cent. So that in the Far East you see the same story being told that is being told in Europe. To continue our tour of the world, take another market which has been a very great one in the past. In South and Central America, as I think, an even more alarming situation arises. Let me take, for example, the two largest States of South America. In 1913 Brazil took 24½ per cent. of her total imports from this country, whereas in 1925 the figure had fallen to 22.2 per cent.—not a very large drop in that instance, but, for other reasons which I will mention in a minute, I think a serious one.

The Argentine is a country which one would expect to take a very large percentage of our goods, because we have got a very large amount of capital invested out there. In the case of that country the figure has fallen from, 31 per cent. in 1913 to just under 22 per cent. in 1925. What, I think, makes the figures in South America even more alarming, is that while we have been losing steadily, the United States have equally steadily been gaining, and I think it will prove very difficult indeed for this country to overtake the United States. Their figures for Brazil have risen from 15.7 in 1913 to 24.6 in 1925, while in the Argentine they have risen from 14.7 in 1913 to 23½ in 1925. I think those figures show that, while we have been going back, our great trade rivals in the West—our friendly trade rivals may I say; nevertheless, our trade rivals—have been forging ahead, have captured the markets and dug themselves in, and it will be very difficult indeed for us to dig them out now. Whichever way we look over the world, whether in Europe, the Far East or in the great continent of the new world, we find the position a depressing one.

But if our foreign trade is not in that flourishing condition we would like to see: if the picture one paints of our foreign markets is gloomy, we have at least the satisfaction of realising that there is still such a thing as the British Empire, which covers a quarter of the inhabitable surface of the Globe, contains a quarter of its total population and is at least an area on which we can work with some possibility and some hope of success. Broadly speaking—and these figures are very broad—while we supply to foreign countries 10 per cent. of their total imports, we supply to the British Empire 40 per cent. That, in itself, is an encouraging figure, and there are one or two other figures I would like to quote in this connection. In 1913 the Empire took 37¼ per cent. of our total exports. In 1927 that figure had increased to rather over 42½ per cent., and since 1923, at a time when our exports to Europe have been gradually dwindling, our exports to the Empire have been very rapidly rising, and if we take figures on a comparative basis, that is to say, if we work out the 1927 figures on the same basis of value as the 1923 figures, in that time the increase in exports amounts to no less than £80,000,000.

That, I think, is a very satisfactory and highly encouraging figure. But I do not want the House to think that I am trying to make this point to infer that there is necessarily any antithesis between foreign trade and Empire trade; indeed, I think there is a very real connection between the two. One of the difficulties we have got in competing with foreign markets in this country is that our home market is so very limited as compared with that of some of our trade rivals that we have great difficulty in the matter of price. Therefore, every time we can use the Empire to broaden our base of action, and so increase our output in districts which are showing a natural preference for our goods, we are enabling ourselves to fight our battles in foreign markets, because we are enabled to produce our goods at a lower rate. Therefore, there is no antithesis between foreign trade and Imperial trade, and I hope we shall not be accused of any desire to foster such a belief.

I spoke just now in reference to South America, of the trade we are doing with Brazil. Along with various other hon. Members of this House, I had the pleasure of partaking of the great hospitality of the Government of Brazil during last autumn. One of the things which most impressed me was the immense potential wealth of that country, and the feeling that we ought to get a little more trade out there. There is no doubt that in Brazil we have very great difficulties to face. I will not deal with them at the moment, but I will say that you have got there a country with a European civilisation, a great modern capital city, Rio de Janeiro, with all the up-to-date things you find in this country, with a go-ahead population, the sort of population that one would imagine would be putting forward enormous demands for the sort of things we want to supply. In San Paulo they have a city which, I believe, is increasing at a greater rate than any other city in the modern world, not even excluding Chicago. It has got large, developing markets, and, in fact, there is in that country just the sort of thing which one would expect would produce a large increase in trade from this country as well as from other countries.

Looking at our present position in Brazil, and to the fact that we are merely holding our own, it impels me to a comparison with what is going on across the other side of the ocean. In our West African Colonies, a different story has to be told. There we have a district which has received European civilisation comparatively recently. There we have a country inhabited by a comparatively small number of white people, and mostly by natives, necessarily on account of the conditions which prevail, in the very primitive state of development. At the same time, we have got a district which is showing an enormous desire to trade with this country. In Nigeria, for example, in 1925, which is the most recent comparable figure I can get, out of a total of imports of something like £13,000,000, this country has provided over £10,000,000, and our nearest rival, Germany, £1,250,000. On the Gold Coast, out of a total of something like £8,750,000, this country produced £5,500,000, and the United States, our nearest rival, only just over £1,000,000. A very different story indeed! Moreover, not only is this great area willing to buy from us, but it seems to me it is one of the most suitable districts we could possibly select. West Africa and Central Africa, situated as they are more or less wholly in the tropical or sub-tropical belt, are producing the very type of things which cannot in any way come into competition with what we produce at home. They are, moreover, producing and will in future produce more and more raw materials which are so essential not only to the trade of this country but also, I believe, taking the long view, to the trade of the great Dominions as well.

We have not to look upon these Colonies, in my view, as merely an asset of Great Britain. They are assets of the Empire, and that is the point of view from which we have to look at them, so everything we can do to develop them is going to help us and at the same time to help our Dominions, because they are taking, and will take, just the secondary manufactures which we wish to supply and at the same time will supply us with those primary products of which we are in such great need. Let me take as an example of the potentialities of this great State what has been done in the case of the Gold Coast. At the beginning of this century I suppose the Gold Coast was most known in this country as being inhabited by a race of very hardy warriors with whom we had not long concluded a war, and it was also known, if it was ever known for anything else, as being one of the white men's graves. It was a savage country. In it there were no roads, no railways, no telephones, there was no such thing as electric light, of course, and there was practically no such thing as telegraphs. Yet in the 28 years which have passed since then, such has been the development of that small country that, with something like 2,500,000 of population, to-day they have no less than 5,000 miles of roads, 500 miles of rail, and 400 miles of telephone and telegraph, and only next month a vast new harbour is to be opened by the right hon. Gentleman the Member for Derby (Mr. Thomas), who, I believe, is starting next week. If that can be done in a small district like the Gold Coast, what can be done in the way of developing those vast areas over which we rule in Africa to-day?

Let me pause for a moment to ask this question. What has been the effect of this development on the native population of the districts? I have referred to the fact that our rule over these countries is of benefit to us, but it would be a sorry tale to tell if the benefit ceased there and if no account was taken of the native races who inhabit the country. There has been a spread through those districts of medical science, a spread of education, a spread of all the modern conveniences of life, and an undoubted raising of the standard of living amongst the natives with whom we have come in contact. If you go further into the country, not to the same extent, because civilisation has not been able to reach them, but where it has reached them we have seen the same thing. Hon. Members can picture for themselves the flourishing system of education, the great new Africa college which has been set up, and the series of first-class medical institutions culminating in the largest tropical hospital in any part of the world. That is no mean achievement in a small country after 28 years, and it is a thing that may well give us hope for the future development of the British Empire. The material benefits to the Colony itself are very great. Our trade in 1926 was £20,000,000, and in 1927 it increased by £5,000,000 more.

If that can be done there, what can we do in other parts, and how can we set about it? By common consent the first thing that has to be done is to provide transport to the outlying districts—railways and roads. It will be of immense and immeasurable benefit to the Empire to press on with all the speed that conditions will allow—I do not say regardless of all the difficulties which we know are there; we can, of course, go too far, but let us press on with all the speed we can in opening up these great districts of Africa, even although—the Chancellor of the Exchequer is not here, so I can say this with greater freedom—there may be no immediate prospect of a return for what we spend. I hope we shall see this development pressed, because it is the key to the whole situation. Unless we can provide people with transport to bring their goods down in this way, and give them cheaper methods than they have at present in many instances, there is no hope of the development, which I am certain can only be to the benefit of the whole Empire, which we so eagerly wish to see brought about. It is no exaggeration to say there is not a single trade—engineering, textile, shipbuilding, whatever it may be—which will not directly benefit by an increase of our prosperity in those countries. Also, when we have provided these facilities of roads and rail, we must not forget the ports.

A matter which has been raised many times in the House is that of shipping rates I am trenching on delicate ground, but it is no use providing ports if shipping freights are very high. I notice that at the meeting of the Niger Company the chairman complains of the high rates of freights charged to West Africa. I hope that question will receive the earnest attention of the shipping authorities, because it is essential to the development of these Colonies that they should have cheap transport, not only on land, but also on the sea, when their goods are being shipped. After that, the next most important thing is unquestionably the policy of increased research. Any system of research must be linked up not only with this country, but with the Empire as a whole. We have seen already how difficulties that arise, say, in Kenya or in New Zealand, may be the same difficulties from which we are suffering elsewhere, and cures which may be found by tropical research in Kenya may not inconceivably be able to assist us in our agricultural troubles in the north country. So we have to look upon this, too, as an Imperial question, and it is from that point of view that I urge that we should be generous in our support of research in our oversea Colonies.

But at the end of the day, when the Government have done all they can, it still remains for the manufacturers of this country to play their part. One of the things that struck me most of all in my recent tour in South America—I have been struck by it in every part of the world I have been in—is the constant complaint that local conditions are not sufficiently considered by would-be exporters from this country. Take, for example, motor cars. I find that the people who are making ears do not really appreciate the sort of thing that is wanted in the Argentine or that is required for peculiar road conditions in Brazil. Let our manufacturers send out some strong representative body, or go themselves, and see the local conditions and see what is wanted. Then let them unite together so that they can join in one body, like the General Motor Company of America, and if necessary pool their forces and, above all things, let them do what the Americans have done so successfully, and before they start to sell their cars, make certain that when they are sold and are running there will be an ample supply of spare parts and other services that will be required. That is one of the secrets of the great success of American motor ears. Where-ever you go, all over the world, you have the American car with its spare parts and no delay. It is not so with British cars, and I urge our manufacturers to follow the policy of the Americans in that respect, to go out and study the requirements themselves, and see that these necessary steps are taken in the great campaign which I hope they will launch before long, because it is no use our building roads for American motor cars to run on or railways for American locomotives. We have to look to our own market first and we have to look to our own manufacturers, whether of motor cars, cotton goods, or whatever it may be, to look after themselves and study the requirements of the localities themselves and take for themselves the full advantage of this opportunity. There is no doubt the opportunity is there. The fruit is ripe for the picking. If we do not take the opportunity our children will come to look upon us as the generation which let slip by, perhaps, the finest opportunity this country has ever had.

Captain EDEN

I beg to second the Motion.

I believe the House will approve the use to which my hon. Friend has put the opportunity which the fickle fortune of the ballot box has created for him. I feel also the House will approve of the wide terms in which he has drawn the Motion, because the opportunities that occur for Debates such as this are so rare that we are all the more grateful that he has not on this occasion detracted from the use to which the Debate may be put by confining us within precise or narrow limits. The House as a whole would agree as to the importance which Empire trade has, not only so far as our industries at home are concerned, but so far as the Colonies overseas are affected. Sometimes we hear Empire trade spoken of as though it were primarily, or even exclusively, our obligation in this country to do our utmost to develop it. It is not, of course, exclusively our obligation, because each part of the Empire shares equally in the benefits that result from the growth of that trade, and nothing is more significant about Empire trade to-day than the extent to which, if one part benefits other parts share in the improvement. In recent years it is true to say Empire trade has steadily progressed. Hon. Members from time to time have drawn attention to the trade figures for last year, and have commented, no doubt favourably, an the fact that those figures show an increase in our exports as compared with 1925. If we make the necessary allowances for a change in value, that, I think, is perfectly true, but it is also' true to say that that increase in the value of our exports is largely, if not indeed exclusively, due to the fact that we have sent an increased proportion of manufactured goods to destinations within the British Empire.

It is not part of my purpose to weary the House with figures this afternoon, but there is one comparison, perhaps, that I may be allowed to make. It is this. If we compare the values of our export trade last year with 1925, we find that, whereas our exports to the Empire last year were valued at some £366,926,000, those exports in 1925 were valued at £330,743,000; in other words, an increase of our exports to the Empire of something like 11.1 per cent. On the other hand, our exports to foreign countries, which in 1927 totalled £429,609,000, in 1925 totalled only £442,631,000; in other words, a decrease of 2.9 per cent. I make that comparison, which I do not want to exaggerate, because I think that, though those figures are only an approximation, they do suggest that the increase in volume of exports in 1927 compared with 1925 is due entirely to a larger Empire trade, and that exports to foreign countries, if anything, show a slight decrease as compared with 1925. I think that that should be our excuse for this Debate this afternoon.

No doubt, in discussing these figures, I may be told that I am pushing at an open door. There is no one in this House who does not appreciate the important part which Empire trade must play in our economic life to-day. But, though we may appreciate the present, I am not always quite so certain that we visualise the part that trade may have to play in our economic life in future years. It is, perhaps, impossible for us now to visualise the extent to which future generations here and oversea may be dependent upon Empire trade, but I believe that those 'possibilities, greater perhaps than we to-day can visualise will be realised if only we to-day fulfil those immediate obligations which are our responsibility at the present time.

I am convinced at least of this, that by the development of Empire trade we can enable our Dominions to increase their present rate of commercial progress, and thereby to increase the numbers which they are able to take as migrants year after year. Essentially migration is an economic problem, and it will only be solved by economic weapons. Equally, by such trade we can enable our Colonies to attain a development which will be more thoroughly in keeping with their great national wealth, and last, but by no means least, by such means we can enable this country at home to reach a standard of living very much higher than prevails to-day.

If we are agreed as to that, then by what means does it lie in the power of the Government and in the power of this House to further Imperial trade? Many methods are open to us. There is, first, the method of preferential tariffs. Of recent years the Dominions have given to us very valuable assistance by means of preferential tariffs. It is no part of my purpose to make any of Mrs. Malaprop's odoriferous comparisons. But certainly the preference, the new scale of tariffs which has been granted by New Zealand recently must prove of very great benefit to the. British manufacturer. We have received their assistance from the Dominions, and of recent years there has been some return by us—a return which has been of considerable service to some parts of the Empire.

I do not think anyone, for instance, can visit the Murray Valley in South Australia without perceiving at once the value which the preferences my right hon. Friend the Chancellor of the Exchequer granted to Empire wines and dried fruits in his Budget of 1925, I think, have been to the people of that district. Just now we are at a time when financial suggestions are allowed, and I would suggest to my right hon. Friend, the Secretary of State for Dominion Affairs that he might, perhaps, pass the Chancellor of the Exchequer the hint that if he wants to further that Imperial trade, about which no one has been more eloquent than he on the platform, he may, perhaps, consider the possibility of extending to tinned fruits produced in the Empire that same measure of preference which he now grants to dried fruits. I believe that if he could do that he would be giving a considerable measure of assistance to the fruit producing countries both of South Africa and of Australia and would enable them to compete even more successfully with competition from California. It is no part of my purpose this afternoon to discuss the good or ill of preferential tariffs. There are many parts of the Empire to-day which gain nothing from the preferences which we have already given, and the help which we can give is essentially limited to reduction of existing duties. It is impossible to put on any new duties, and I feel sure that this is fully appreciated in the Dominions.

But if we are compelled to rule out any consideration of extension of assistance in the matter of tariffs there remains the assistance which may be given by means of personal preference. In that work, I believe that the Empire Marketing Board is doing a service to-day far more valuable than some of us realise. It is creating just that atmosphere which will lead to a growth of personal preference by the consumer in this country. But that is by no means all. I do not believe the most valuable part of the work of the Empire Marketing Board is to be found in its display of posters, admirable though they may be. It has done even better work in the assistance which it has given to scientific research in recent years. I think it is quite true to say that but for that help which has been given through the Empire Marketing Board a great deal of the work which is now going on, and which is of vital importance to the future of Empire trade, would never have been started. It is true, I believe, that the United States of America, for instance, in 1925, spent more than twice as much on scientific, agricultural research alone as the whole of the British Empire put together. So that, though the Empire Marketing Board is doing very valuable work in that respect, there is still mach leeway to make up. I therefore very much hope that the Chancellor of the Exchequer, though we gladly contemplate him at work sometimes felling some old timber, will be careful to leave this young sapling scrupulously alone, because I am certain that the work the Empire Marketing Board is doing must in future be of great benefit to our trade. I need not enumerate its activities now. There is in existence an institution known as the Parasite Zoo. I do not know whether hon. Members know what a parasite zoo is. I am told that it is an institution where a certain number of parasites are bred so that they may in due course be launched out to feed on other parasites and ensure that these do not disturb the harmony of more useful members of society.

In the work which the Empire Marketing Board is doing to-day we have, perhaps, the most effectual answer which we can make to the preferential tariffs which the Dominions gave to us. The fiscal tradition of this country, an antiquated tradition perhaps some of us may think, makes it impossible to give the tariff assistance that some of us would wish, and the reply of the Empire Marketing Board, we hope, will be of real service to the Dominions and to ourselves. It is important to note that the Empire Marketing Board has not forgotten our home industries here, It would be a very poor form of Imperial vision that neglected to look after its own domestic doorstep, and grants are being given, as we know, to the Minister of Agriculture to-day by the Board. We are told that shortly there is to be a campaign to induce the people of this country to consume liquid milk, the produce of our country, rather than dried milk imported from abroad. All that is to the good, and it is only right that the work of the Empire Marketing Board should begin first at home.

There is a special reason why, to-day, we should give careful consideration to this question of our Imperial trade. If we look across the ocean we see something very significant going on in the United States. Unless I am very much mistaken, the capacity of the United. States to absorb the products produced within their borders has just about reached saturation point. It would seem that the United States are now producing more than their people are able to absorb at the same rate as they have been doing in the past. If that be the case—and I believe it is the case—that produce will gradually be squeezed out and will go and compete with us in foreign and in Imperial markets. Consequently, we have to look for a very much keener competition from the United States in the next few years. At present the United States export, I believe, only 5 per cent of their total produce, so it is easy to picture what an increase of even I per cent would mean in competing against our goods in various parts of the world. We cannot do very much directly, exclusively from the point of view of the development of Dominion trade, but we can do a good deal in the development of trade in the Colonies. My hon. Friend has referred to that and I will not enforce what he has said except as far as I can to remind the Chancellor of the Exchequer that it should be—it must be—a cardinal factor in the Conservative creed that we should do all that lies in our power to develop our Colonial resources. Otherwise to practise economy at the expense of our Colonies is to practise economy at the expense of employment in this country. We can ask, therefore, that the Government should pursue in that respect a very vigorous policy of Colonial development.

Sometimes, criticisms are brought by manufacturers in this country against what is called the growing habit of some of our Dominions to set up secondary industries and to manufacture for themselves. I think that it is natural that there should be some such criticism, especially when it means setting up tariffs which make it very difficult, or impossible, for our manufacturers to override them. But though that criticism is natural, I feel convinced it is unjustified, because after all it is only natural that a Dominion like Australia or New Zealand should wish to establish for itself a certain number of secondary industries. If I were an Australian I confess that personally that would be my desire. We can only leave it to them to discover in the long run how far it is possible to establish secondary industries at the expense of their primary industries. That is their task to discover. Nobody now believes, surely, that the Dominions will be content to absorb our manufactured goods and send us the products of their primary industries. To think so is to live in a fool's paradise. The Dominions are determined to go ahead with the development of their secondary industries. We are seeing it to-day, and we shall probably see it to an even greater extent in the coming years, but for my part I do not think that there is in that a cause for any undue anxiety. If a tariff wall is raised against one particular local manufacture in this country, the establishment of that industry in the Dominions will in itself call for a greater flow of population from this country, and while that particular market may be lost to this country, or may be much less valuable, we shall gain in the wider consuming market caused by the larger population in the Dominion. In other words, what we lose on the swings we shall gain on the roundabouts. It is a mistake which is sometimes made by manufacturers in this country to be antagonistic when they find, suddenly, that a tariff barrier is set up against them in a Dominion. It is a natural aspiration which we there see at work.

It is certainly true to-day that we have a volume of goodwill in the shape of the desire of our Dominions to purchase the manufactured goods of this country. I do not think anyone will deny that. A visitor to New Zealand, recently, noticed a hoarding outside a station, on which there was an exhortation to buy the manufactured goods of this country. Out of curiosity he made inquiries as to why the hoarding had been erected, and he found that it had been done, at his own private expense, by a citizen of New Zealand who was benefiting from the fact that this country was his best market, and he wished in some way to return to us some of the benefit that he was receiving from our custom. I do not think anyone will deny that there is a great benefit to us from that desire on the part of the Dominions, other things being equal, to purchase the manufactured goods of this country; but we shall be making the greatest mistake if we trade on that preferential taste. The very fact that the taste exists makes it all the more important for us to ensure that we satisfy it, well and truly. The fact that the purchaser has gone to the trouble to ensure that what he or she is buying is of British origin and the fact that they have taken such an interest in the purchase will make the disappointment all the keener if the results are not up to expectation.

Although we have this great asset of goodwill, unless we go out and look after it the asset may turn into a liability. It is very important, and my hon. Friend in introducing the Motion was right in urging it, that the manufacturers of this country should not rest content by sending out agents but that they should go out themselves, see for themselves, and judge for themselves. Unless they do that, we can trust to our American competitors doing it, and then the loss of trade that will ensue to us will be entirely our fault and our responsibility. I lay stress upon this matter because nothing is more important to the development of Imperial trade than personal contact. It is only by such contact that our manufacturers will get to know precisely what are the needs and necessities in one or other of our Dominions. It is not true to say that those needs are the same as the needs at home. They are not. It is true that the race is the same, but the changes of climate and conditions have modified tastes, with the result that the Dominions now have demands which differ in certain fundamentals from our own. It is only by going out and seeing for ourselves what those needs are that we shall be able to ensure that there is no disappointment in the purchase by the Dominions of our manufactured goods.

"Directors Down Under" would not be a bad slogan for those of our manufacturers who have trade associations with Australia and New Zealand. It used to be said that trade follows the flag. That may be true in some of our Colonies. The truth is that trade follows a knowledge of needs and conditions in our Dominions. It is of the utmost importance that we should bear that in mind. A great many years ago, a King in this country described more effectively than I can what must be our trading relations with our Overseas Dominions. He said that our object must be: To seek such things as we lacke and carry out to them such things as they lacke so that thereby not only commodities may ensue both to them and us but also an indissoluble and perpetual league of friendship. We cannot lay too great an emphasis upon the part which Empire trade has to play in the future of this country and in the future of our Colonies and Dominions overseas and it is because I believe that this Government, and future Governments, will allow no opportunity to slip by for the promotion of that trade, that I warmly endorse the Motion, and I trust that the House as a whole will see its way unanimously to approve it.

Mr. WHEATLEY

The House is indebted to the two bon Members for the excellent speeches which they have delivered. I feel particularly indebted to the Mover of the Motion for the statement of facts which will be very valuable to us, and I am no less indebted to the Seconder for the information which I received from him. While I am indebted to them for those facts, I cannot see my way to give support to the policy which they advocate. The Mover of the Resolution invited us, in a very persuasive way, to spend State money on unprofitable work and to leave the profits to accrue to the private enterprise that would follow. He said that at the end of the day when the State has done its part the manufacturers should come in. I should have thought that the manufacturers who are to have the benefits at the close of the day might be expected to make some small contribution at the beginning of the enterprise.

I was rather confused by one or two statements which were made. For instance, both speakers emphasised the importance of the manufacturers themselves going abroad to study conditions, instead of trusting to their agents and managers. Who in the great industries to-day are the manufacturers? The manufacturers are thousands of shareholders. The business is not conducted by private employers as in the old days but by managers who are paid more or less large salaries for carrying out the work on behalf of the numerous shareholders. There is one point which I should like to clear up before I examine the terms of the Motion. Both hon. Members spoke as if Great Britain and the British Empire were separate entities. Am I not safe in assuming that Great Britain is in the British Empire?

Mr. BARCLAY-HARVEY

I thought I had made it plain that in considering British trade, Great Britain was an essential part of the British Empire.

Mr. WHEATLEY

I am pleased to have that information, because it enables me to examine the Motion without any misunderstanding. May I also draw attention to the terrible disaster that seems to overshadow the mind of the Seconder of the Motion. He referred to the dreadful consequences of America having surplus goods. He said that we had reached a period when America, with its enormous powers of production, will put goods on to the market at a rate greater than the American population can consume them, and then he says those surplus goods will be sent to our Dominions and Colonies and even into Great Britain, to compete successfully with our manufactures. That, undoubtedly, he pointed out, will be followed by unemployment, and unemployment in turn will be followed by starvation, and the world will be faced with the dreadful situation of starving in the midst of plenty. I have more faith in the intelligence of mankind than seems to be held by the hon. and gallant Member. I believe that before any nation allows itself to be starved by surplus goods it will alter the system which makes that possible, and will give us a system which will distribute goods as rapidly as they can be produced.

Is it not remarkable that the people who come to this House, week after week, seeking State aid for industry, are the very people who tell us that industry can be left safely in the hands of private enterprise. We are told hero, night after night, that industry needs State aid to put it on to its feet, and when anything in the nature of a Socialist proposal comes from this side we are told that the State should mind its own business and allow industry to be left to the people who control it to-day. I would remind the House that competitive capitalism has now reached a stage at which it can do considerable damage to industry, and no good. It is quite clear from the two speeches which we have heard to-day, and similar propaganda, that they now regard the special function of private enterprise to be to grab all the profit on the goods produced by State assistance. Nothing big in the way of promoting and developing industry has been done by private enterprise. Both sneakers reminded the House of that. They tell us that all scientific research should be done to-day by the State, and they might have added that to-day that research is being done by the State.

Private enterprise is doing nothing to assist in research work. [HON. MEMBEES: "Oh!"] Private enterprise is depending very largely upon the £1,000,000 in the hands of the Empire Marketing Board for its assistance in the promotion of industry, and the land on which it makes its experiments is privately owned. The State which has to pay for this scientific research has not even in its possession a sufficient amount of land to enable it to get on with its work, and has actually to pay ground rent to private enterprise for leave to carry on work which it does on behalf of industry. I will give an instance. Take the ease of the malnutrition of soil, which is one of the principal questions with which the country has to deal to-day. An enormous amount of expenditure has been indulged in, and when the results accrue, who will get the benefit? Imperial Chemicals Limited. Imperial Chemicals Limited is not a State enterprise but a private enterprise. Again, the State will be incurring an expenditure and private profit makers will get off with the results.

5.0 p.m.

Let me give another instance, which comes very near the speeches of the two hon. Members. It is a well-known fact that 20 per cent. of the fruit grown in our tropical regions to-day is destroyed by insects. Private enterprise can do nothing to stop that waste, and if ever it is to be stopped it will be stopped by the defenders of private enterprise coming to this House and asking for public money to enable them to save the fruits of their industry. Private enterprise is not the friend of industry or of Empire trade. Private enterprise is the enemy of Empire trade. We have an Empire Marketing Board. I think the title is a misnomer, because it does no marketing at all. It spends its time in watching and exposing private enterprise in its handling of Empire goods, and instead of being called Empire Marketing it should be called Empire robbery. Let me give two instances from the reports which have been issued by the Imperial Economic Committee. In their Report on the fruit trade they say that Colombia apples are being sold in this country at 8d. per lb. and that the amount which the actual grower gets for producing these apples is less than ½d. per lb. It is ½d. for the producer of the apples and 8d. a lb. to the British consumers, in many cases it is as high as 10d. per lb. They also give another instance which is well worthy of attention. They tell us how Australian and New Zealand butter is dealt with, and we get a clear exposition of the damage that is done to Empire trade by private enterprise, which is so eloquently defended by hon. Members opposite. From June every year onwards till November they say that there is a fall in the supplies of butter from Australia and New Zealand, and that during the period of the fall the prices of butter steadily rise. Then, says the Report: A curious thing takes place about the month of November, or thereabouts. The Southern supplies, the fresh supplies, are on their way and the amount is known generally. One would expect that the party opposite would use their influence with the wholesale traders who control the butter trade to reduce the price of Empire butter now that there was no danger of a shortage, but what happens, according to the Report, is that prices continue to rise until the Christmas trade is over. The British Christmas consumer is exploited in the price of butter while large supplies are on the seas on the way to Britain.

Brigadier-General Sir HENRY CROFT

Is not the right hon. Member referring to co-operative society prices?

Mr. WHEATLEY

No I am referring to the wholesale prices fixed by private traders in London. The report points out that immediately the Christmas trade is over and we are on the eve of getting the Australian and New Zealand butter there is a sudden crash in prices, which fall considerably below the level at Christmas, and the object is to enable private enterprise to purchase Australian and New Zealand butter at much less than it would have had to pay if the prices had remained high. There you have an organisation in Britain actually existing for the purpose of damaging Empire trade, and here we have friends of these organisations coming to this House and asking us to pass pious resolutions in support of the development of Empire trade. Is it any wonder that all over Canada you have farms which have been broken up and deserted by the people who attempted to emigrate and work them, poor people who put their money into these farms. The business people who dealt with the product of their labour have crushed them and left them without the means of earning a livelihood; they have driven them into the cities for an existence. I am glad that I had the admission from the other side that Britain is within the British Empire.

We do not hear much from hon. Members opposite about the development of trade between Manchester and Glasgow or between England and Scotland. Nor have I heard a word of any move to develop trade between Britain and Ireland. I want to remind hon. Members opposite that there is a potential market for goods in the East End of Glasgow which could be considerably developed. In the East End of London, as well, I have heard that Poplar is so rich that there is very little room for development there, but I can speak from a knowledge of the locality I represent, and I assure hon. Members opposite that with a little exertion and expenditure they could develop a splendid market in the East End of Glasgow. If these thousands of people were put in a position to enable them to wear more clothes in weather like this, it would be of considerable assistance to Lancashire and Yorkshire. If they could wear more boots, Northampton, of course, would immediately benefit, and if these people were given a higher standard of housing accommodation the whole building industry of this country would be in a prosperous position. It is for this reason that I ask hon. Members opposite to remember that Great Britain is in the Empire, and I am hopeful now that they are displaying such a keen interest in Empire trade that they will help us to develop the trade between our own villages and towns and cities. Our people, of course, cannot buy the goods they might buy because they have not sufficient purchasing power.

They are in this curious position; they cannot buy because trade is bad, and trade is bad because they cannot buy. There is a tangle which I submit to hon. Members opposite. They often tell us that Labour is incapable of solving these knotty problems. I present them with this problem, and I ask them to deal with it here, where they have infinitely more influence than in Canada or Australia or New Zealand. It is no use passing these Resolutions and telling the Glasgow people that they ought to eat more fruit and wear more diamonds, because they cannot eat more fruit or wear more jewellery unless you give them more money with which to purchase these goods. I submit this suggestion to hon. Members opposite who have the power, I wish they had the knowledge, to give us a real Empire policy. I submit that instead of passing pious Resolutions of this kind they ought to take immediate steps to set up an Imperial industrial parliament which would be representative of the Governments of the Empire, which would, as far as human beings can he disinterested in economic questions, give us disinterested views and a disinterested policy on this Empire trade proposal.

Such a parliament or a board would at any rate give us the foundations of an economic Empire and devise schemes of mutual aid. You have no economic Empire to-day. As I have pointed out previously, you may have a German in New Zealand trading with a Dutchman in London, and you call it Empire trade! You have no trade between New Zealand and Australia and Britain. Britain does no trade. The people in Britain trade. The Colonies do no trade. The people in the Colonies do trade. If you want to develop you Empire you must knit it more closely together, and the proper way to do that is not by launching out money in the way we are doing here, leaving the results of our expenditure to whoever happens to be speculating in that particular enterprise, but for the Governments themselves to make a beginning and establish a central hoard, or an industrial parliament, and give us the beginnings of something which will be of real substance, which will protect. the trade of Britain and the trade of the Empire from the speculators who are ruining it by their depredations to-day.

Captain CUNNINGHAM REID

I do not intend to follow the right hon. Gentleman who has just sat down because consider that his arguments rather answer themselves. Having just returned from a somewhat extensive tour of the Empire, I find it all the more perplexing to understand why so many of our supposed authorities on trade and economics have paid so little attention during the last few years to Empire markets, especially when one bears in mind that these markets have proved of late the only bright spot in our otherwise somewhat gloomy trade returns. I also find it a little strange that so few people appear to realise that, if it were not for our Dominions and Colonies, the workers of this country would be far worse off than some of them may consider themselves to be to-day. I believe that this can largely be accounted for by mental habit. We have in the past been so used to having the markets of the world to choose from that it comes somewhat as a shock to us to realise that this is no longer the case, and that our markets, present and future, are to be found in quite different channels. I maintain that enough time has already been lost in bemoaning the loss of some of our old markets and that our time would be better occupied in concentrating upon some of the obvious new ones. I do not intend to tax the patience of the House with giving a number of figures on Empire trade, which I expect many hon. Members have at their fingertips. Suffice it to say that during the last few years our trade to foreign countries has steadily diminished, whilst our trade to British Possessions has steadily increased. This fact more than speaks for itself and goes to show that we are only on the fringe of the possibilities of Empire trade.

Further, if we were prepared as a nation to concentrate on this subject to the exclusion of many others, not only would it be to our advantage but what is more it might prove the speediest if not the only solution to many of the more formidable difficulties which confront this country at the moment. I expect that some hon. Members will say, "Well, if this solution is waiting at our doors to be picked up, why has it not been done before?" The answer to that is this, that though of late far more interest has been taken in the Empire than ever before, nevertheless, progress has been retarded because in equal proportions both cash and enterprise have been lacking. As far as cash is concerned, this country has been in that condition ever since the War, and for that matter during the War. But during the War we got over our troubles by means of War Loans.

I suggest that an Empire Loan would be quite as feasible and very nearly as necessary. As to lack of enterprise, that is a British innovation. A short time ago I had the pleasure of being in Australia. I can assure the House that in that country there is not very much love lost for the United States of America. Arriving there as a visitor and knowing this. I was somewhat surprised to find that in the cities there was a distinct American atmosphere and influence. I very soon discovered that the reason for this was a predominance of American goods in that country, and not only that, but the close proximity of the United States as compared with this country. The majority of Australians would a thousand times rather buy British goods than any others. At the moment, they only purchase American products faute de micux. They cannot understand why the British producers do not, show as much initiative as the American producers are doing.

I shall not weary the House with a number of examples, but I shall content myself with giving one glaring example. I refer to the motor industry in Australia. I think that our manufacturers here are wasting a good deal of time in congratulating each other whenever their exports to Australia show a slight increase over previous years. I maintain that they are living in a fools' paradise. I will put the position in a nutshell. In 1927 this country, together with the United States, exported to Australia the equivalent of £10,000,000 worth of motor ears. Of that total the British share was less than one quarter. When one considers that Australia is one of our own Dominions, it seems a somewhat strange state of affairs. I am told on the best authority that unless something is done fairly soon, this British percentage will diminish to very nearly nil. There is only one solution, and it has already been stated as far as the case for South America is concerned. It is this—that the more prominent British manufacturers in this country must get together and to some extent pool their resources and combine for mass production on a large scale, and mass production of a product that will be suitable for Australian conditions and not a product with one eye on the British market which entails necessary limitations because of our horse-power tax.

The hon. Member for Coventry (Sir A. Boyd-Carpenter). whom I am sorry not to see in his place, and leading representatives of the motor industry, together with Mr. Morris of Morris car fame, visited Australia only a short time ago. But I am led to understand that the big idea has yet to be grasped, because no individual firm in this country is at the moment prepared to enter into such an enterprise by itself, and on the other hand, no group of firms is prepared to sink some of their identity and to join forces in order to cope with the situation. This is a serious matter. Unless this country can stake out its claim very soon in that market, I am afraid that we are likely to lose it altogether. I make that statement for a special reason, because when I was in Australia I had it on the best and highest Australian authority that at this very moment an American motor concern of gigantic proportions, the name of which is familiar to every hon. Member, is contemplating the formation of a, company in Australia of many million pounds. A small and carefully disguised percentage of the capital issue is to be allotted to Australia. That is to give it an Australian flavour, and the delusion is completed by the intention to call the company by an Australian name, such as the Australian Motor Company or Australian Motors.

This particular combine intends, should it get the opportunity, to open factories in Australia, where only the bodies and minor chassis parts will be manufactured. That is, of course, to overcome the duties that are imposed in Australia on incoming bodies and assembled chassis. The main chassis parts are, as usual, to be manufactured in the United States. It is apparent that once such a combine gains a footing in Australia it will monopolise the motor industry of that country, and the British manufacturer then will not stand a chance, if only for the fact that he will be up against a product that is not only cheap but is suitable for Australian conditions, British manufacturers will be handicapped also because to all intents and purposes the enterprise would be an Australian concern employing Australian labour. The facts that I have placed before the House are to the best of my knowledge indisputable. I hope. that they will come to the ear of the motor manufacturers in this country and that they will give serious attention to the question, as I am convinced that if they did it would be to their advantage. There are one or two other questions relative to the Empire that I should like to lay before the House, but to-day time is limited. Therefore I will hope for an opportunity on some other occasion.

Captain GARRO-JONES

The House will have been greatly interested in the remarks which the hon. and gallant Member for Warrington (Captain Cunningham Reid) has just made about the motor trade in Australia. Everyone who knows anything about that trade must be aware that, owing to many handicaps that have been imposed on the British motor industry, we are finding it extremely difficult in every part of the world to compete with foreign motor-car manufacturers. Some of those handicaps are beyond the control of British manufacturers; others are within their control. I have just had the pleasure of a visit to some of the West African Colonies, where we were able to observe some factors in motor salesmanship which are undoubtedly within the control of the motor manufacturer and which should receive his attention. There was, for example, the case of the vice-president of the General Motors Company of the United States, a company which last year made a profit, I believe, of 47,000,000 dollars. The vice-president of that vast corporation was spending a long time in touring the West African Colonies, with all the discomforts attendant upon travelling in those regions, in order to make an assessment of present and future demands for motor cars and the characteristics required in cars to serve those particular regions.

I do not wish to make any complaint or criticism of the ability of those who are attempting to sell British cars there, but certainly we never found any of the directors or leading engineers or salesmen of the British motor-car companies there. The people that we have there are on very small salaries, with comparatively limited experience, and they find themselves in competition with the best brains that the United States can send over to study that particular market. I sincerely hope that before the motor-car manufacturers of Britain come to us and ask for tariffs to be imposed in these Colonies, they will put themselves in court by eliminating such adverse factors as are avoidable.

I had not intended to deal with that point. I rose primarily to ask whether it would be possible for the Under-Secretary to give us some information about the Crown Agents for the Colonies. They are closely associated with the trade of the various Colonies. They handle enormous sums every year. I believe that as much as £100,000,000 is turned over by the Crown Agents for the Colonies every year. Any interested inquirer finds it extremely difficult to get information as to the administration of the Crown Agents. I have spent a considerable time in trying to get hold of the accounts for recent years. The latest I have been able to get hold of were dated 1919, and there I found many interesting items which I am sure would prompt a spirit of inquiry in any hon. Member who perused them. I am not going to deal at length with the Crown Agents, except to say that they make charges for such things as inspection of goods sent to the Colonies. In investigating the cost of house building in one of our Colonies, I came across an item of £38 paid to the Crown Agents, over and above all shipping and other charges, for inspecting a small consignment of 100 tons or so of corrugated iron sheets. On going further into that, I found that they acted as agents for the shipment of all these materials and put these extraordinary charges upon the Colonies that buy these goods.

I know that this House is not called upon to defray any of the expenses of the agents. They are appointed by the Secretary of State and their salaries come from the commissions which they are able to charge. At the same time, I think it is due to the Colonies to see that the placing of these contracts and the allotting and placing of the loans which the Colonies raise in this country, are conducted on the most efficient possible basis. I want to hear the rules which govern the administration of the Crown agents, and whether the Colonial Office is satisfied that this is the best system. We had one or two examples recently which were very disturbing. We heard in the report of the two hon. Members who visited British Guiana that when that Colony wanted to place a loan in this country, the Crown agents introduced to them a financial agent who was willing to place the loan at a certain figure. Some other financial house heard of this, and they sent out a rival financier who placed the loan for them £2 cheaper—I think the figures were 96 and 98 respectively. There have been similar cases, and there was a Commission of Inquiry many years ago, but, although they found that all was not well from the point of view of efficiency, nothing has been done. Perhaps hon. Members who have a knowledge of these subjects will go into this matter in order to see if something cannot be done to improve the system.

It will be agreed that, as regards Empire trade in general, there is room for improvement. In spite of the strenuous efforts which are undoubtedly being made both in the Colonial Office and in the Colonies, we find that in many of our Colonies, the proportion of British goods bought in relation to the total trade, is growing less. Foreign countries are penetrating our Colonial markets year by year, and the total extent of that penetration is not always realised. In Nigeria, for example, goods going into the country for Customs purposes have only to be marked with the name of the country of consignment, though in most places the name of the country of origin is required. Thus, in considering the very bright and promising figures given by the Mover of the Motion, we must bear in mind that he is giving a total of goods consigned from Great Britain as though Britain was the country of origin of all those goods. Hon. Members will readily recognise that large quantities of foreign cotton goods, for example, come into England and are re-exported. Those goods, in the case I have just mentioned, would be marked only with the country of consignment, namely, the United Kingdom. That lulls us into a false sense that all is well. Most of the Colonies demand that the name of the country of origin should be on the goods coming into their ports, and I think that system should be extended to every Colony. Then, at any rate, we should know the facts of the situation.

As far as the Dominions are concerned, I do not think we have reason to feel happy about the position. If we look at the figures of population in South Africa, Canada and New Zealand, we find that in some cases, they are stationary, and that Empire migration appears to be practically at a standstill. The same remark applies to agricultural and mineral development in many parts of the Empire. Is everything possible being done in regard to mineral development? In many parts of the world great strides are being made in the development of mineral resources. Are British capitalists and financiers getting, for the benefit of this country, their proper share of such business? In the case of Canada we all know that American capital is proving a powerful factor. It is not only a question of capital. All the latest scientific methods of prospecting, such as the geo-physical, gravitational and magnetic systems of discovering minerals, are being employed to a far greater extent by foreign prospecting corporations than by British prospecting corporations. I wonder if the Department of Scientific Research and the Colonial Office and the Dominion Governments are all fully alive to this rapid scientific development, and whether everything possible is being done to see that British capitalists take their part in that development.

There is another feature of the problem which I would bring to the notice of the Colonial Office, and that is the question of air surveys. Every one knows that the swiftest, surest arid most excellent method of making a topographical survey is the aerial method. Admittedly, it requires large initial expense, and for that reason has been discouraged by many Colonies. We find, however, that in many parts of the world French and German air survey companies are getting contracts to make aerial surveys of large tracts of territory. Is everything possible being done to help British companies who have reached the latest developments in air surveying? I should also like to point out that the large initial expense involved in conducting these operations is likely to have a misleading effect, because the information which can be derived from these air photographs is not only of topographical value but is also of the utmost value as regards minerals and forestry. Each of our Colonies carries a very large staff in connection with the topographical survey, a very large staff for forestry work and also a large staff—though not as large as it might be—for the mineral survey. If we could eliminate these three services by means of an air survey, then the total increase of cost would not be sufficient to outweigh the advantage of the thoroughness, accuracy, and immediate value of an air survey of all the Colonies. I am not asking the Government to provide money for this purpose. I realise that it would be hopeless to do so, but I ask if it is not possible to press on the Colonies the question of whether they cannot conduct aerial surveys on a larger scale than they have done in the past.

On the question of industrial development, we find that since the War the Dominions have shown an increasing tendency to develop their own industrial resources. That tendency has received a rather doubtful welcome from manufacturers in this country. It has been laid down as a kind of unwritten principle that the function of the Dominions and Colonies is to produce raw materials, and that the function of the home population is to produce manufactured articles. I ask if that is a sound principle. I do not myself feel capable of making any definite recommendations and I doubt whether any individual could feel competent to express a definite opinion upon so large a question involving so many formidable factors. But in many parts of the world we are losing those markets for manufactured goods, and, undoubtedly, those markets could have been retained, had we not shown an attitude of discouragement towards industrial development in the Dominions and Colonies. For example, in the Colonies there are many places where cheap cotton goods could be manufactured and exported to markets which have been lost, as far as we can see irretrievably, to the British manufacturer. I hope that in the framing of any principle as to the industrial development of the Dominions and Colonies that aspect of the question will be considered.

The right hon. Gentleman the Secretary of State has just returned from a prolonged tour, but I hope he does not feel that he is putting off his harness. His task is of great magnitude. I should be the last to offer any criticism of the right hon. Gentleman, but I feel that unless something very drastic is done to develop the Empire on broader and bolder lines the time may come—perhaps in 20 years, which will very soon pass—when the other industrially developed parts of the world will say that the British Empire has not only ceased to be a great force for human progress, but that it is holding up the world. These vast spaces in Australia and Canada cannot be left indefinitely to lie fallow, and, for all that is being done to migrate population from England, they are being left to lie fallow. Development, looked at from the higher point of view, is proceeding far too slowly. I know the difficulties are great, but I hope something will be done on bigger lines to protect us from the charge which is already being murmured in many parts of the world that the British Empire is not progressing as fast as it ought to progress in the interests of human development.

Major STRANG STEEL

Those of us on this side of the House who are interested in this question are delighted to have the opportunity of this Debate. During the last century a large number of people in this country looked upon our overseas Empire as more of an incumbrance than an advantage to us, and, there is no doubt, that in connection with it, we were involved in a number of small wars which cost us a great deal in lives and money. The cost of defence was high and the trade which we did at that time was small; but, looking back on the history of the development of our Empire, one is struck by the fact that many of our statesmen during the last century took a rather narrow view. They had very little vision. They looked at the position immediately in front of them and did not realise the enormous importance of the development of these resources, and the great assets which they would eventually become. During the War, perhaps for the first time, we realised how dependent we were on the loyalty of our Dominions overseas, and every day Britain and our Dominions become more and more dependent, the one upon the other.

We are all delighted to see that Empire trade is increasing. That increase is due to the very great preferences which the Dominions give to us in their markets; it is due to the British origin of their stock; it is due to their high standard of living and consequent high purchasing power. In the year 1924 Canada, Australia, New Zealand, and South Africa, with a total population of only about 22,000,000, bought more manufactured goods and more products from us than the 204,000,000 people who live in those great countries, the United States, Italy, France and the Argentine. It is very significant that 22,000,000 of our own kith and kin in our Empire overseas should buy more goods from us than 204,000,000 foreigners. It is not only these figures that are important, but the value to us of the trade that we do with our Dominions, which is far greater than that of a similar amount of trade with a foreign country, because the vast bulk of the goods that our Dominions buy are in the nature of wholly manufactured goods, representing the maximum of employment and wages for our people here, whereas only a moderate amount of the goods that foreign countries buy is in the nature of wholly manufactured goods. In that same year the average of wholly manufactured goods which our Dominions bought was in the neighbourhood of 90 per cent., while the average of such goods bought by foreign countries was only a little over 40 per cent. Therefore, the trade with our Dominions is of infinitely more value to us, because it represents more employment for our people here.

We are unlike any other country in the world. The United States, for instance, is practically a self-supporting nation. There is no part of the British Empire which is self-supporting, but, on the other hand, the whole Empire is entirely self-supporting, and there is nothing, so far as I know, which is manufactured in the whole world, there is no crop which is grown in any part of the world, which cannot be either made or grown in one or other of the many parts of this great Empire. Therefore, it seems to me that our whole policy in the future should be devoted to trying to produce and grow our many requirements. In promoting Imperial trade the Imperial Economic Committee is doing a splendid work, and I think the advantages of the Empire Marketing Board are only now being realised by the public as a whole. We are all delighted to see that the Empire Marketing Board's activities are devoted, not merely to encouraging trade from our Dominions and Crown Colonies, but very largely to encouraging the purchase of home-grown produce. At the very top of the Report of that board, in red ink and inverted commas, they state that "Empire buying begins at home," and in the very first paragraph they tell us that their whole object is to try and induce the British public, where price and quality are satisfactory, to buy, in the first place, home-grown produce from our own farmers here, and, in the second place, to buy the produce from our farmers in the Empire overseas in preference to buying from foreign countries.

I am one of those who are pinning their faith to the work of the Empire Marketing Board to try and solve our agricultural problems in this country. I believe that these demonstrations which have been carried out by the Ministry of Agriculture under the ægis of the Empire Marketing Board and with the aid of their grants—demonstrations in packing, grading and marketing— are going to have a big effect, because there is no doubt that we are a great deal behind foreign countries in all these matters. I believe that foreign countries have captured a large part of our markets because they have been so much better skilled and organised in the grading, selling and marketing of their produce than we have been. What we require in this country is standardisation of an article that is required by the public; and once we have standardised an article to the required type, we want to ensure regular supplies. It is lack of standardisation and of regular supplies which to-day prevents first-class British produce from getting the price which it otherwise would get. I believe that these demonstrations which are being carried out by the Empire Marketing Board are having a great effect, and I was very pleased to read in one of our leading agricultural papers a week or two ago that they admit that there is a ready demand in this country for home-grown and Empire produce, provided it is well graded, carefully packed, and put upon the market in an attractive form. As a result of these demonstrations, I trust we shall educate our farmers in this country to the necessity for doing this.

Again, they are carrying out a great work in Scotland by granting money for investigations into milk and the manufacture of milk by-products. These experiments are going to show that milk is a very valuable food, especially for children, and they are affording a great deal of information for the "Drink more milk" campaign, which has already been started in many of the cities of Scotland. That campaign will have a double effect. In the first place, it will improve the health of the children in our great cities, and it will also have the effect of increasing the demand upon dairy farmers in the South West of Scotland, and I believe that as a result we shall find an increased demand for milk in the future. Then there is the question of milk by-products. It is a striking fact that although we have this large amount of surplus milk in the summer months, over 50 per cent. of the milk products which are used in this country come from overseas. Surely the vast bulk of these milk products could be made in this country, thereby finding an outlet for all the surplus summer milk. As a result of these grants and investigations, I believe we are going to do a very great deal to help agriculture at home. The reports of the Imperial Economic Committee are proving most valuable. They are furnishing a great deal of data and information with regard to our various trades, and certainly we cannot hope to improve our trade and compete successfully against the foreigner unless we have all this data and information as to where it is coming from.

I was reading the other day the Imperial Economic Committee's Report on fruit, which is a most interesting document, and one learns from it that this country is becoming every year a larger fruit-eating country. During the last 20 years our imports of fruit have been increasing at almost three times the rate of our imports of bread stuffs and at almost double the rate of those of meat, but while we are importing nearly £49,000,000 worth of fruit in the course of a year, three-quarters of it comes from foreign sources and only about one-quarter from Empire sources. The Committee go on to say that, providing we can organise and improve our marketing, at no distant date the vast quantity of fruit which at present comes from foreign sources might well come from within the Empire. Everybody who has read the Report realises how much we are at the mercy, in this connection, of foreign countries.

If you take the three principal fruits, namely, apples, oranges, and bananas, the average man in this country eats in a year 100 apples, 70 oranges, and 30 bananas, but of the 100 apples, only 25 of them are produced in this country, so that there is any amount of scope for our fruit growers here. For the rest, 19 of them come from Canada and eight from Australia and New Zealand, but 38 of them come from America. Thus we, in this country, are entirely dependent on the margin, or what is called the overspill, which comes every year from America. It is very difficult to see how we are going to compete with that American overspill without a duty, but certainly there is one way in which we can compete with it, and that is by improved methods of cold storage. You can eliminate all the waste that there is, not only in the fruit grown here, but in the fruit which comes to this country from Empire sources in ships, and I am sure that the money which is being spent by the Empire Marketing Board in research will prove to be of great value.

The grant for the low temperature research station at Cambridge, which is going into the question of research into cold storage, and the grant which is being given to the East Mailing research station in Kent, which is going into the question of research on a semi-commercial basis, will, I am sure, enable us to reap great advantages in the future. As a result, I hope it will be possible for our farmers, whose crop is reaped in the autumn, during October and November, and who very often find that in those months the market here is glutted and the price very poor, to put their apples and other fruit into cold storage, keep it throughout the winter, and sell it in the spring, when the price again begins to rise. It is all to the good that in this research work we are joining with our Dominions and Colonies and doing it upon a co-operative basis, and that all the information which we derive from research should be pooled and made known in every part of the Empire.

6.0 p.m.

The first Imperial Agricultural Research Conference was held last autumn, and it was a great success. We are pleased to know that this Agricultural Research Conference is to be held at regular intervals in different parts of the Empire. I believe that the next one is to be held in Australia. It is by methods of research and by improved markets that we are not only going to help our own farmers in this country in the sale of their produce, but we are going to help our Empire producers to sell their produce in our market against the very fierce competition of foreign countries.

Mr. DAVID GRENFELL

The hon. and gallant Member for Ashford (Major Steel) who has just spoken has succeeded in reconciling two opposing interests in his heart. He was anxious to do all he could to encourage the home agriculturist and to help to add to the importation of Dominion agricultural produce. He will find it very difficult to pursue the two policies at the same time. We have listened to what was supposed to be the initiation of a vigorous policy, and I have asked myself several times: Where is the vigour of the Tory party? Is this a sample of Tory vigour? I congratulate the Mover of the Motion on his modest interpretation of Tory Imperialism, but those who indulge in flag-wagging will be a little ashamed of the way the subject has been treated to-day. We are glad on this side of the House to recognise that there are Tory Members who can still believe in Imperialism, and talk about the Empire in a rational and courteous manner. The hon. Member, however, did not do justice to himself, because the subject is not as simple as it appears. Brought up in the good old Tory tradition, one is supposed to believe these things, and when called upon to make a speech, the most intelligent Tory has a difficulty in making a convincing case. The Mover and the Seconder of the Motion failed to convince anybody on this side of the House that their policy was acceptable. The hon. Gentleman who moved began by saying that in this country we have a million more employed than before the War. That is a thing of which we are proud, but he might have stressed more fully that we have had a million and a half people unemployed on the average during the last eight years, under Tory and Tory-Liberal Coalition Governments. The responsibility must come back to the Government. Our Tory friends must recognise that, if the Government are now to embark on a policy which will give more employment, the Government are to be blamed if their previous policy has not given employment. The hon. Member, after dealing lightly with these matters, went away at once to a country in America he had recently visited, namely, Brazil.

Mr. BARCLAY-HARVEY

What I pointed out was that it was a country where we ought to have markets. We are not getting as much trade as we ought to there.

Mr. GRENFELL

I do not want to do the hon. Member an injustice. He said that we are not getting as much trade as we ought to in Brazil. There is some reason for that. Then he skimmed away across the South Atlantic to the one solitary instance in the British Empire with which he dealt, namely, the Gold Coast Colony. He found that the Gold Coast was an example of the wonderful beneficence of imperialism and Imperial development. It was the most advantageous example which he could choose. He told us that in that Colony there is a trade with this country of £8,750,000, and that only £1,000,000 worth of trade was done with the United States. We have been able to compete successfully with the United States in the Gold Coast. He said that in the Gold Coast Colony there are 5,000 miles of railway, and that the rolling stock and materials were almost all made in this country. He also said that there were 500 miles of road and 500 miles of telegraph and telephone wires, the materials for which we had supplied. But that is not trade; that is an advance of credit from this country, and the people who get their railway and road material and telephone and telegraph systems from us must trade with us, because we hold them in pawn. If we rely upon such petty instances of trade development to help employment in this country, hon. Gentlemen on that side of the House will be disappointed when they consult the country on such a policy. The hon. Member did not help us at all, with all his good will, and with all his belief in the British Empire. There was not a word about Australia or Canada, countries with immense potentialities, but bristling with difficulties.

Although the Mover and the Seconder of the Motion must have given years of study to this question, they did not give a single helpful suggestion. I am one who believes in the Empire. I worked in Canada 25 years ago as a coalminer, and I became proud of our connection with the Canadian people. The population of that great Dominion was 8,000,000, and I realised when I was there that there could easily be a population of from 40,000,000 to 50,000,000, which could enjoy the highest standard of life. People, however, pour across the border into the United States; that process has been going on for 25 years, and there are hardly 10 per cent. more people in Canada now than there were 25 years ago. The amount of trade done with that country has not increased in proportion to the population. That is a question Imperialists must try to solve.

The hon. Member who seconded the Motion referred to the Murray River fruit-growing district, and represented this as an example of prosperity which may be repeated in other parts of the Empire. What are the true facts about this area? There is a river valley with the most fruitful soil, with wonderful sunshine and growing capacity, and yet you find there derelict farms. People are forsaking their farms because no market can be found for their fruit and wines. We are not against a vigorous policy for the development of Empire trade, but we differ from the hon. Gentlemen opposite as to how it should he done. I support the claim made by the right hon. Gentleman the Member for Shettleston (Mr. Wheatley) that there is an immense market for agricultural produce at home. If we claim credit for having supplied road and rail material to the Gold Coast, why cannot we make work for our own people by building roads and carrying on the same policy which we adopt in distant places, and more freely organise the development of our industrial system at home? It is folly to blind our eyes to the fact that there are much more valuable markets for development than those in the British Empire. Try as we might to build up a connection between the Empire and ourselves, we must not shut our eyes to the fact referred to by the Seconder, that our foreign trade has gone down by 2.9 per cent. in the last three or four years, while our Imperial trade has gone up by 11.1 per cent.

Where has that foreign trade been lost? In the lifetime of this Government we have lost a great volume of trade with Russia. Russia has 150,000,000 white people, decent people in the main, who buy and sell very little from the outside world, and who, if they were induced to buy £1 worth each from this country, would solve the unemployment problem here. Trade to the extent of £150,000,000 with Russia, in the kind of commodities that she can absorb, would find employment for every one of the unemployed workers in this country. We have also lost trade with China in the lifetime of this Tory Administration, owing to the methods practised by them. If they wish to solve the problem of unemployment and trade in this country, they must not keep their eyes glued altogether to the little red bits on the map. They are very good, and we are proud of them; they are populated by our own people, but patriotism in this matter is not enough. We must trade, in order to live, with the whole world. If we carry on a vigorous policy for the expansion of British trade wherever trade can be found, we shall do more service to the people than by confining ourselves to the narrow limits of the Motion.

Mr. CULVERWELL

I claim the indulgence of the House for my maiden speech. I make no apologies for entering into this discussion, because I believe that the question of the development of our Empire trade is going to play, perhaps, the most important part in the solution of the many difficulties with which we are faced. The hon. Member who has just sat down has taken us to Russia and to China, but the object of the Debate, as I understand it, is to urge upon the Government the importance of stimulating Empire trade. While the hon. Gentleman has discussed the question of trade with Russia, and has criticised the Mover of the Motion for having drawn attention to the fact that there are more people in employment to-day than at any previous period of our history, he was a little beside the point in drawing attention in this stage of the Debate to the fact that there are still over 1,000,000 unemployed with us.

The whole object of this Debate is to try to impress upon the House and upon the Government the importance which the development of Empire trade can play in the reduction of unemployment and in the assistance of migration. The right hon. Member for Colne Valley (Mr. Snowden), the Socialist Chancellor of the Exchequer, has stated that the recovery of industry in the last seven years is the most marvellous miracle in the history of the world. Although unemployment is bad, we are apt, in his opinion, to take too gloomy a view of it, and he says that had the tide of emigration maintained its pre-War level there would now he a shortage instead of a surplus of labour in this country. If that be a correct estimate of the situation, and I believe it is, then I think hon. Members opposite should treat less negligently, less critically and with less contempt the efforts which the Government have been making to stimulate trade within the Empire with a view to developing migration.

When we were discussing the work of the Overseas Settlement Department the other day it was brought home to all of us how mutually dependent Empire trade is upon migration, and vice versa. We cannot be successful with our policy of migration unless we are to develop our markets. We cannot expect the Dominions to take the surplus of our population unless we can assure to them markets for the produce of their labour. I think the importance of Empire trade cannot be over-estimated. If we examine the figures of our export trade we shall find that, whereas in 1913 the Empire took 37 per cent. of cur exports and Europe 34.02 per cent., in 1926 the share of the Empire had risen to 45 per cent. and that of Europe had fallen to 25.5 per cent. The figures for trade with Western Europe, that is, with France, Belgium, Italy, Spain and Portugal, are still more striking when compared with the trade with Australia and New Zealand. In 1913 Western Europe took 12.9 per cent. of our exports, and Australia and New Zealand, with a population of only 7,000,000, took 8.6 per cent. To-day the share of Western Europe has fallen to 9 per cent., whereas that of Australia and New Zealand has risen to 13.2 per cent. If we take the figures of our export trade per head of population we shall find an even more significant state of affairs.

The fact that the Empire is our best customer gives great encouragement to us in our policy of migration. If we can encourage, assist and train the youth of this country to seek a livelihood in the Dominions, they become large potential customers for our manufactured goods. When we are discussing the export trade of this country, we ought also to remember that it is not necessarily the volume of trade which counts, we should also reckon the quality of that trade. The quality of our trade with the Dominions is infinitely more helpful to this country than is the quality of our trade with foreign countries. Whereas trade with the Dominions is complementary, because we take their raw materials, to a large extent, and export manufactured goods, the trade with foreign countries is largely competitive, as we exchange with them manufactured goods which we can equally well produce in this country. One can quite understand the opposition of the Dominions to indiscriminate immigration unless they are assured of a market for their products, and the Government have done a very valuable work, in spite of the opposition of hon. Gentlemen opposite, in providing a market, and a very useful market, for the produce of the Dominions.

Although the preference duties have been very much criticised, the figures which have been given show what a very important effect they have had upon trade between the parts of the Empire. Though the figures at present are not as large as they will be in the future, the quality of those preference duties must be taken into consideration, because in several cases those duties have been applied—wines and dried fruits, for example—to just those industries which are most suitable for the development of schemes of emigration. They are the most suitable industries for close-settlement schemes, and close-settlement is the most effective, the cheapest and the best means of settling untrained people from this country in the Dominions. In close-settlement schemes provision can be made for educational and social activities, and one can settle a large number of people in a comparatively small area. From every point of view, therefore, the preference duties on wines and fruits have been of inestimable value in encouraging intercourse and migration between different parts of the Empire. At the same time the Dominion preferences have been a very great benefit to the manufacturers of this country, having increased trade between us and the Dominions.

There is certainly a tendency for trade to follow the flag, but, at the same time, I believe we should encourage that tendency by more material benefits than sentiment provides. If we examine the work of the Government in the encouragement of trade with the Empire, we find, I think, that they are moving in the right direction, but, in my opinion, they have not gone far enough. They have granted preferences in the teeth of the opposition of hon. Members opposite, and I think nobody here will dispute the fact that those preferences have been of very great benefit. Through the Empire Marketing Board they have done a great deal, as hon. Members have pointed out, to stimulate research and to encourage the better marketing of the produce of the Empire. But I think all the speeches have tended to show that a great deal more could be done in that direction than is being done at present. The work of the Overseas Settlement Department and these two questions of Empire trade and migration are, to my mind, intimately interwoven, depending one upon the other. They depend upon the old phrase, "Men, money and markets."

The work of the Overseas Settlement Department, which we discussed a few days ago, has not, in my opinion, been carried far enough. I am sure that money spent on marketing and research into the scientific production and distribution of goods, and money spent on encouraging and assisting the youth of this country to seek employment overseas, is money well spent, and I would urge upon the Government the desirability of devoting larger sums to those objects in the future. If we can develop our Empire trade and at the same time encourage migration within the Empire we shall be repaid tenfold for any money which we expend. I am sure the Empire Marketing Board can do a great deal, as it is doing at the present time, to educate people to buy British goods, and can also do a great deal to educate manufacturers in the best methods of selling their goods: because one has heard suggestions that manufacturers are not as forward as they might be, are not taking adequate steps to market our manufactured goods in the Dominions. I believe, in conclusion, that we are proceeding upon the right lines, but I would urge the Government not to treat Empire trade as a side line but to regard it as, perhaps, the most important factor in overcoming the difficulties with which we are faced to-day in reducing unemployment and maintaining and increasing the prosperity of this country.

Mr. JOHNSTON

Whatever views we may hold at variance with those which the hon. Member for West Bristol (Mr. Culverwell) has just expressed, I am sure we can all join in expressing our congratulations to him on a very successful maiden speech, on the care he has taken to master his facts and on the fluency with which he has given expression to them. This afternoon speakers on the other side have as a general rule avoided the habit of which we sometimes accused them of regarding the British Empire as a sort of stage property of the Carlton Club, as a sort of election stunt for profiteers, and I am glad to find speakers on the other side, and particularly the hon. Member who moved the Motion, admitting that all parties in this House are equally mindful of the destinies of the British Empire. For example, we owe to the Liberal party the retention of South Africa in the Empire, and, as nobody has mentioned it this afternoon, perhaps I ought to issue a reminder that in the great Dominion of Australia five out of the six Governments are Labour and Socialist Governments.

The hon. Member who spoke last, and some other hon. Members, indicated that the Empire could only be held together by the cement of a preferential tariff. I do not desire to argue that point tonight, except to say that we believe a preferential tariff would have the effect of raising food prices against the people of these islands, and to point out that a preferential tariff takes no cognisance of the labour conditions under which goods are produced, and the effect would be ultimately to disintegrate the British Empire. The policy which has been pursued is one of voluntary preference, and that is the policy of the Empire Marketing Board. The right hon. Gentleman the Member for Shettleston (Mr. Wheatley) has already pointed out that the Empire Marketing Board is forbidden to pursue to its logical conclusion the policy for which it was set up, and a policy which its name indicates. That Board is forbidden to market, and it has nothing to do with marketing. In the advertisements inserted by that Board in the British Press it is clearly laid down that they are forbidden to draw contrasts between the labour conditions under which goods are produced within the British Empire, and the conditions under which they are produced in foreign countries. For example, we are not permitted to say that the dried fruits of Smyrna are produced by labour which costs 4d. per hour as against 1s. 9d. per hour paid in Australia. We are told that the Foreign Office cannot interfere in these matters, and therefore the propaganda which the Empire Marketing Board might otherwise secure is limited in consequence. The chief work of the Empire Marketing Board, under its present administration, forbids State marketing, which ought to be the main function of the Board.

So far one of the main functions of this Board has been research and not publicity. I think all parties in the House agree with the work that the Empire Marketing Board is doing in that direction. We are told that the prickly pear is spreading at the rate of 1,000,000 acres per annum; and that the sheep blow-fly costs Australia £4,000,000 sterling in a bad year. The Council for Scientific and industrial Research marshals an amazing number of facts and figures, and they say in their report: Dr. Saunders says that marquis wheat has supplanted all other varieties in the spring wheat region of Canada and the United States, and it is estimated that this has led to an increased production worth several millions sterling per annum. William Farrer, Australia's pioneer wheat-breeder, has added millions of bushels to Australia's wheat harvests. In South Africa the scientific work of Sir Arthur Theiler on stock diseases has resulted in the saving of millions of sheep and cattle every year. The discovery of superphosphate by Liebig and Lawes has benefited Australian agriculture by at least £5,000,000 per annum. In Fiji for five years the copra industry was being ruined by a pest, but as a result of scientific research that pest has been destroyed. The boll weevil which did £40,000,000 damage to the cotton crop in one year has been attacked. The blow-fly in New South Wales which costs £2,000 a year is being dealt with, and the woolly aphis pest in apples has been wiped out. Our cold storage methods which were really primitive when the Empire Marketing Board began its operations are being speeded up.

I wish to draw attention to the hindrances to the development of Empire trade to which hon. Members opposite have in no wise referred. I take, for example, the question of shipping freights, organised and arranged by the International Shipping Companies under whose management preferences are given, not to British goods, but against British goods. I am going to take the admissions which have been made in this House on this subject by the President of the Board of Trade. If we send naphthalene from this country to South America, the charge would be 85s. per ton, but if naphthalene is sent from the same port in South America to Antwerp and Hamburg the charge would be 35s. per ton.

I will now take as an example cotton piece goods which is one of our primary industries upon which hundreds of thousands of our workpeople depend for a livelihood, and which is the great industry of Lancashire. We find that cotton piece goods sent from Liverpool to Constantinople cost 75s. per ton under the Shipping Conference arrangements. If the same goods are sent from Antwerp to Constantinople the cost is only 17s. 6d. per ton. This is actually a deterrent to British trade, and a stimulus to Continental manufacturers, and is distinctly favourable to German, Belgian, and French production. This does a great deal to increase the distress which exists in the Lancashire cotton trade. The cost of sending cotton piece goods from Liverpool to Brazil is 115s. per ton under the British flag, while the cost from Continental ports to Brazil under the British flag is 90s. per ton.

I wish to draw the attention of hon. Members representing Lancashire to these facts. In 1913, the freights from Liverpool to Bombay were 18s. 6d. per ton, and they have now gone up to 50s. per ton. Besides this, one half of our total exports of cotton piece goods to India has gone. In the midst of this terrible depression in the cotton trade, the freight charges from Liverpool to India have risen from 18s. to 50s. per ton. From Antwerp to Alexandria the freights are 15s. per ton, but from Liverpool to Alexandria the same goods are charged at the rate of 55s. per ton. Notwithstanding these facts, the President of the Board of Trade, in answer to a supplementary question put to him on the 22nd November, said: The rates from England are arranged by the Mediterranean Shipping Conference. The matter is not one on which I am prepared to recommend legislation."—[OFFICIAL REPORT, 22nd November, 1927; col. 1570, Vol. 210.] We have had even more extraordinary instances than those. I have just given of preferences being given against British Empire trade at the hands of the Shipping Conference and shipping rings. In 1924, for example, this fact was elicited by the Dominions Shipping Committee: British shipowners were charging 19 cents per 100 lbs. of flour more for taking Canadian flour from New York to this country than they were charging for bringing united States flour from New York to this country. The captains of the various lines engaged carrying this flour were actually compelled to separate the two loads of flour on the one ship, and the Canadian flour was charged 19 cents per 100 lbs. more than the American flour.

The Shipping Committee gave a pledge to stop this differentiation, and they gave an assurance that they would in future quote the same rates from the United States ports for Canadian flour as for American flour. We were not able to get any assurances that this arrangement, which did harm to British trade, would be permanently stopped. We have been told by the President of the Board of Trade that the worst of these discriminations are not now taking place, but the right hon. Gentleman admits that some of them do take place, and he declares that it is not his business to interfere, because it is the business of the Imperial Shipping Company. The Board of Trade are not doing anything at all to break down this preference against British industries, and the President has declared that he will not interfere.

I want to say a few words about the beam system. That system of wireless has been in existence for some nine months, and it has secured somewhere about 65 per cent. of the business that was previously conducted by the Eastern Telegraph Company. The price by beam was 3d. per word deferred rate, and 4d. per word full rate. The cable companies are still charging 6d. per ordinary word rate, no deferred rate, and 2s. full rate. Instead of encouraging cheap wireless telegraphy between this country and the Dominions overseas, a secret conference is now taking place, presided over by the Secretary of State for Scotland, at which all the private interests concerned in this question are being consulted as to how far the privileged position which the cable companies at present hold shall be maintained.

There is one other serious handicap to the development of British trade in the Colonies, and it has been referred to by more than one speaker to-night, and that is the question of the middleman's ramp. Mr. Bruce, the present Prime Minister of Australia, is not a Socialist, but he puts upon record at the last imperial Conference the fact that one of the chief deterrents to Empire trade was this parasitical middleman's growth between the producer and the consumer. Here are his exact words. He says: Practically every great country in the world to-day has taken some step towards organisation on a basis of co-operative marketing, and it is very possible that, on this whole question, we might have to take an Imperial point of view. … Co-operative marketing is a factor which we shall have increasingly to consider in the future. … I am certain that, in the end, it will be enormously to the benefit of the consumer if we can get all marketing done on a basis where the producers are not subject to the machinations of the speculator. … Take the case of meat. A man will breed cattle, carry them for five years, perhaps, transport them several hundreds of miles to a meat works, bear all the cost of treatment at the works, bear the freight, bring the meat to Britain, with the insurance and other incidental charges, and probably get, for his whole share, about one-half to one-third of what is received by those who handle the meat after it has actually reached the hands of the distributor in this country. It is the same with regard to apples. Where the grower gets 1d., the consumer here in London pays as much as 9d. and 10d.; and there is the historic case of the Tasmanian apple crop two years ago. The apples arrived at Tilbury Docks, they were marketed here, and, instead of the growers getting anything at all for their apples, they actually had to pay between £25,000 and £30,000 out of pocket towards the cost of marketing and transport.

Let me give the right hon. Gentleman one further case. I will take the case of another big industry in this country, an industry which I myself partly represent in this House, namely, the jute industry. Jute is grown entirely in the British Empire; it is grown in India, in the Presidency of Bengal. The price of raw jute in the British market fluctuated in one year, as a result of speculation as a result of market cliques buying and selling, bulling and bearing, between £29 and £61 per ton. If it would interest the right hon. Gentleman, I could give him figures showing the extraordinary fluctuations in price which have occurred during recent years, but he need only take these figures of £29 and £61 per ton. The grower gets nothing out of that increase; it makes contracts ahead very difficult for the manufacturers here; and the remedy is so simple. This crop is under British Empire control, and, if the British Government and the Government of India desired to do it, if they had the will—

Sir H. CROFT

The hon. Member will forgive me for interrupting him, but I think it is quite wrong to say that it is under the control of this Government. It would be necessary to bring in, not only the Indian Government, but all the Dominion Governments.

Mr. SKELTON

Could there not be an Export Marketing Board for Australian apples?

Mr. JOHNSTON

That gets down to the root of the whole Socialist case. New Zealand and Australia are organising their exports under Government now; they are grading their butter, and it can only be exported under licence—it is really under Government control now. What I am asking here is that His Majesty's Government should approach the Government of India, and, if necessary, discuss the matter with the Viceroy. My figures are indisputable; all that is needed is to chase off the speculator, to chase off the middleman, to chase off the stock exchange operators, who contribute nothing whatever, who are absolutely useless. The two Governments together could guarantee the price to the poor ryot, giving him a decent living, giving him a better purchasing power, and, at the same time, affording a stabilised market for the raw material in this country and giving the British industry a chance free from speculators. It is the same with a good many other Industries. Sir Joseph Cook, who was the Australian representative in this country until a year or so ago, has made a public declaration that Australian meat arrives here at Tilbury Docks at 4⅞d. per pound, and the poor consumer in London has to pay 1s. for it.

To take another case, there is a very remarkable article in to-day's "Manchester Guardian," entitled "Cotton Growing in the Sudan." In the Sudan, as a result, I think, partly—I put it no higher than that—of the activities of some of my hon. Friends on this side of the House some years ago, the native in the Sudan is apparently getting a decent chance. He is getting something for his crop, with the result that, as is declared in this special article in the "Manchester Guardian," a single tenant, a single Sudanese worker producing cotton, is getting wages as high as £400 per annum. They would not give that in Scotland; they would not give that to the colliers; but here you have people in Sudan who, 50 years ago, almost within my lifetime, were slaves, bought and sold by Egyptian raiders until Kitchener's time, and these people are now earning £8 a week, or £400 a year; and what, if you please, is the chief difficulty of the Sudanese Government in regard to them? The chief difficulty of the Sudanese Government is to protect these people from being robbed by the same stock exchange sharks and others who are floating down from Cairo.

That is the present system. We here are endeavouring to get a living wage for the producer in every part of the Empire. If it can be done in the Sudan, if it can be done in West Africa, as it has been done on the Gold Coast and in Nigeria, why cannot it be done in Kenya? Why will not the Government face up to the situation in Kenya? Why will they not apply the principles that Sir Hugh Clifford and others have applied in West Africa? Why not apply those principles in Kenya and in other parts of the Empire? Talking about the Sudan, I will give the right hon. Gentleman a further instance. Seventy per cent. of the world's gum arabic comes from the Sudan, and this commodity, too, is subject to the same extraordinary fluctuations—as much as 100 per cent.—due to speculators, due to market manipulators, and resulting in robbery of both consumer and producer. Why does not the right hon. Gentleman adopt the proposals put forward by the Economic Director of the Sudan? Why does not he assist in making gum arabic a State monopoly? Why not abolish all these middlemen and grafters who are floating about like parasites among the outposts of the Empire? Why does he not—and he would get every assistance from this side of the House—convert his Empire Marketing Board to becoming the sole importer of materials like jute, arranging with the Dominion Governments overseas, giving a guaranteed market, and abolishing all these speculators and middlemen? If he did that, he would undoubtedly cheapen prices to the consumer in this country, and he would give to the producer in other parts of the Empire a fair reward.

The British Empire is becoming more and more an association, a voluntary federation. It is associated, not by compulsion, but by desire. Let it develop on those lines. Let it develop so that, as a result of their appreciation of the benefits of federation, all these peoples will want to stay in the British Empire. Let it be a federation of peoples who find an economic and social benefit from remaining in the British Empire—not an Empire of exploitation at all. We have to-day one common tribunal for the ultimate settlement of disputes, a tribunal which all parts of the Empire recognise. Why not develop that? It would be the greatest instrument for peace that the world has even known—a voluntary federation of millions of people of all colours, of all stages in social development, bound together by a social advantage, by a mutual desire to secure peace and to ensure prosperity. The right hon. Gentleman, who, I knows, desires the prosperity and success of the British Empire, could, in his time at the Colonial Office, take a big vision of the possibilities of a great federation for world peace, and of the possibilities of prosperity, of comfort and of happiness that it would bring to all our people. If he would scrap the philosophy of his party, this philosophy of something for nothing, this philosophy of exploitation of the weak, this philosophy of graft, and if he would run the Empire as a great co-operative commonwealth, that chance is offered to him now, and I wish he would have the courage to take it.

7.0 p.m.

The SECRETARY of STATE for DOMINION AFFAIRS (Mr. Amery)

I think that my hon. Friend the Member for Kincardine (Mr. Barclay-Harvey) is most sincerely to be congratulated on having made use of his fortune in the Ballot to initiate the very interesting Debate that we have had this afternoon. He and my hon. and gallant Friend the Member for Warwick and Leamington (Captain Eden), who supported him, made most instructive and interesting speeches; and certainly not the least valuable contribution to the Debate was the very lucid, well-arranged and cogent maiden speech of the hon. Member for West Bristol (Mr. Culverwell). We have just listened, also to a speech packed with information and full of suggestions, though sometimes, possibly, not without a touch of provocation, from the hon. Member for Dundee (Mr. Johnston). He began by saying that this subject is not a party subject. It seems to me that the general case for the development of Empire trade is one which stands entirely outside our party differences. It may well be that, when we come to detailed methods, some of us may advocate methods, as the hon. Member has done just now, about which those in other parties may have misgivings, but, apart from methods which give rise to controversy, there is a broad middle field of method on which we can all unite.

7.0 p.m.

I know that the hon. Member will not expect me, in the time at my disposal, to follow him closely into the vigorous attack which he has made on middlemen and speculators. I am not sure tha in the world's economy the middleman or speculator has not also got an economic value. He may, at times, acquire a power and influence that may be dangerous, but I know from experience that the attempt to regulate prices by State action leads to very unexpected and difficult consequences. You fix a price and you may get a volume of production that defeats the whole of your schemes. Therefore, while realising that there are anomalies such as he has touched on in connection with shipping rates, and that there is very often an apparently unjustifiable "spread" between the price which the producer gets at one end and the price which the consumer pays at the other, I am, on the whole, inclined to believe that, before we rush into very bold schemes based on our own a priori political convictions, it is better to throw all the light we can on the actual facts and, therefore, it is wiser to begin by having recourse to such Imperial bodies as the Imperial Economic Committee and the Imperial Shipping Committee and to let them enable us to see where we really stand before we begin speaking of the course of legislation that is required.

Now if I may come to the general subject raised this afternoon, it is this. We are dealing with a situation which is in a state of transformation. Neither this country nor the British Empire to-day are what they were 20 years ago; still less are they what they are going to be 20 years hence. If we take Britain. first of all, as an industrial country side by side with the other industrial countries of Europe, the change in our positions during the last generation has been a very striking one. There has been an immense development of industrial power, both before and during the War, on the Continent of Europe, in the United States, in Japan and in other countries. Partly due to that, partly due to their tariffs and to other reasons, the character of our trade with the Continent of Europe, and to some extent with the United States and countries like Japan, is Continually changing. It is becoming less and less a complementary trade sustaining our industrial fabric, and more and more a purely competitive trade. On the other hand, trade with the British Empire is still essentially a complementary trade and is calculated to remain so for, at any rate, as far distant a period as one can possibly look ahead. I remember very well in a Debate on unemployment six or seven years ago Mr. Asquith, as he then was, whose Free Trade orthodoxy no one could possibly suspect, said he believed that Empire trade was essentially more valuable than the foreign trade, because it. was a complementary trade and he believed that, rightly developed and rightly fostered, it might well in our own time overtop, to use his own phrase. our trade with foreign countries.

I will turn from the changed condition of this country—the greater competition it has to meet in foreign countries and from its foreign competitors in our own markets—to the situation in the Empire markets. There, too, we are dealing with an entirely changed situation. If I may say a word first about the Dominions; I have just visited them again, in most cases after an absence of a great many years, and I was struck everywhere by the immense progress which the Dominions have made in the last 20 years as producers, and, for the moment, I am talking only of primary products. They stand on an entirely different plane from what they did 20 or 30 years ago. Owing to some of the scientific developments, to which hon. Members have referred, and to the improvement of co-operative organisation, the whole scale of their methods of production, whether in wheat or in meat, in dairy products or in fruit, has advanced to an extent that it would be difficult for anyone to realise who had been there 25 years ago and had not been there since. From that point of view, at any rate, any question of Empire co-operation, any question of Imperial preference, which concerns itself with the supply to this country of the products of the Empire, will be discussed under entirely different conditions, and under far more hopeful conditions, whatever method we adopt, whether voluntary preference or tariff preference, than when it was discussed 25 years ago.

But the advance has been not only in primary production. In every Dominion, and, above all, in the older Dominions and in a great Dominion like Canada, there has been a great step forward in industrial production. Canada to-day is one of the great manufacturing countries of the world, and, with her water power and the vast masses of raw material at her disposal, and with the enterprise and inventive ability of her people, there is nothing that can stop her from becoming an industrial country in the fulness of time on a level with ourselves. I do not believe for one moment that that development, or even the legislative measures which are taken in the Dominions to accelerate that development, diminish in any way the strength of the case for Imperial economic co-operation. It is perfectly true that the incidence of a Dominion tariff aimed at protecting this or that industry may hit the corresponding industry in this country. It is also true that, as long as they adhere to the policy which is theirs at the present time, both of fiscal and of voluntary preference to Empire products, so long what we lose in one direction we gain in another. These countries, if they develop, if their policies are justified—and if they are not justified they will not pursue them indefinitely—will grow, and their external trade will grow with them. It does not matter what their tariff may be on individual items, Canada, New Zealand, Australia and South Africa are always destined to do a great import trade, and, as long as they give a preference to our imports over foreign imports, so long we shall benefit by their development, and anything we can do to strengthen that development and to help them in the growth of their population will come back to us in greater trade.

Take the example of the Australian market. I know there are items in the tariff which press severely upon certain British trades. But, take it as a whole, I doubt whether there is any tariff in the Empire, except possibly that of New Zealand, which is more favourable to Great Britain. The other day certain changes were made in that tariff and Mr. Pratten, the Minister of Customs, who introduced those changes, calculated they would hit British trade to the extent of something like £3,000,000 and would thus enable Australian manufacturers to take about £3,000,000 worth of trade away from us. But he also said that the reorganisation of the preferential schedules would enable us to take something between £7,500,000 and £8,000,000 of trade away from our foreign competitors and that, taking those rearrangements as a whole, British trade would benefit to the extent of about £5,000,000. Whatever criticism may be directed by the industries immediately affected to rearrangements which may take place from time to time in Dominion tariffs, we have reached the point to-day at which there could be few disasters greater for British trade than if the Dominions became Free Trade countries, and, while giving no protection to their own industries, gave us no protection against our foreign competitors.

Turning for a moment from the position of the Dominions to that of the Colonies, there—and especially in Africa—you have a situation where trade development is essentially complementary. I do not mean by that to say that our trade with the Dominions is not essentially complementary because, even in so far as they may protect some of their own manufactures, they are not serious competitors in manufactures with us in our own market and they send us those raw materials and foodstuffs that we most need for the building up of our own industries and the sustenance of our population. However, in the case of the Colonial Empire, and in the case also of the Indian Empire, the whole development is complementary. They produce those tropical raw materials, which we cannot produce in this country, and which to some extent are not produced in the Dominions either, and they take in return our manufactured goods. It is a trade which has been developed very remarkably in recent years. We send them something like £80,000,000 of British goods, almost entirely manufactured.

Next to the Empire of India, the Colonial Empire, taking it as a whole, is our greatest single market. The trade shows remarkable expansion. Take the trade of Nigeria. In 1900 we sent there less than £2,000,000 worth of British exports, in 1910 we sent some £3,000,000 worth of goods and in 1927 over £8,000,000 worth of goods. If you take the Gold Coast, which has been quoted already, you find that in 1924 it had £18,250,000 worth of total trade and in 1927 it was just under £25,000,000—a growth of nearly £7,000,000 on £18,000,000 in three years. I could give another characteristic instance. Take East Africa. In 1922 we sent to the whole of East Africa 194 British bicycles; in 1926 we sent over 10,000. It is an illustration of the way in which progressive Governments have been enlisting the abilities of the native population. I agree with the hon. Member opposite that we do not believe our policy should be, or need be, a policy of exploitation. The policy must differ according to the different characteristics and the local circumstances, but in every case our object in the development of the Colonial Empire must be, in the first place, the development, mental and material, of the peoples concerned, and only as incidentals, but I believe inevitable incidentals, the development of British trade and the increase of opportunities for employment in this country.

There is one other point about the Colonial Empire that is worth touching upon. My hon. Friend the Member for Kincardine pointed out very truly that, in so far as the Colonial Empire is an economic field for the development of industry, we do not claim any monopoly of it for Great Britain. It is also an economic field for the development of the industries of the rest of the Empire. That is a development which may become of the very greatest importance in future years. As Canada becomes a great industrial country, she will need more and more the tropical raw materials as well as the tropical foodstuffs which the West Indies and West Africa can produce. Surely, from our point of view, the development of that trade will increase the power of West Africa and other Colonies to accept and purchase British manufactures. So even if the industrial development of the Dominions may to some extent put a check upon the direct trade in manufactured goods from here to the Dominions, it may very well, under a system of general Empire co-operation, be accompanied by a great enhancement of the triangular trade, the Colonies sending tropical produce not only to this market but to the markets of the great Dominions and taking more manufactures from us.

Here, then, is an opportunity of immense development, and the question is what practical means we can take of developing it. To a large extent those means are in the hands of the Governments immediately concerned. In the Colonial Empire we are concerned as administrators. It would take me far too long to enter into any kind of disquisition as to the work that is going on in the Colonial Empire to-day, but I can without fear say there has never been a period in our history when the promotion of the all-round development of our tropical Empire has taken place as rapidly and as effectively as it is taking place to-day. I believe it to be a development that is based on the development of the native himself—development of health, development of education, development even in a rudimentary beginning of political responsibility, and at the same time, with it a development of scientific agriculture which had never been done before, a development in transport, in road-work, in railway work, in harbour work un- exampled in our history, and that is having its direct effect upon the trade of the country.

Then, again, when we come to other factors, let me take Preference. I am not concerned at this moment with arguing the case for a further extension of that policy in this country, but only to state the facts as they exist in the Empire to-day. We enjoy Preference in the great Dominions, and that Preference is worth far more to us to-day than it would be to have those Dominions as Free Trade countries. We enjoy very valuable trade with them, and it is a trade the full extent of which is hardly realised unless we take into account how small are their populations compared with the populations of foreign countries. You have, for instance, 7,500,000 people in Australia and New Zealand, 12,000 miles away, buying more from you than the whole of Western Europe with 120,000,000 or 130,000,000 people at your very door. You have the fact that one Australian or New Zealander, from the point of view of your export trade alone, is worth more to you than a dozen Frenchman 20 miles across the Channel, a dozen Germans or Americans, or 500 Chinamen or, I think, 300 or 400 Russians. That is only taking the export trade and leaving out of account that when you are dealing with Europe or with America you get in return for your manufactures, not the raw materials and foodstuff that you need for your industry and for the sustenance of your population, but other competitive manufactures, which really ought to be taken off the total of your exports in order to arrive at a true net balance of the value of the trade.

So much for the value of Preferences to us. If they are so valuable, anything we can do to help Dominion and Empire trade is worth doing. Certainly, what we have already done in those Preferences which are within our present fiscal system has been of immense value. Today we import from the Empire over 30 per cent, of our total supply of sugar, as compared with 10 or 11 per cent. before the War. Take dried fruit—raisins. An hon. Member referred to what our Preference has done in building up the ex-service communities on the River Murray in Australia. We took 2½ per cent. of our total consumption from the Empire before the War. We took 36 per cent. in the year 1925–26, though it dropped slightly in the subsequent year.

Sir HARRY BRITTAIN

And better raisins.

Mr. AMERY

I wish I could translate to the mind of the House not mere statistics but what I have seen of prosperous settlers, comrades of ours in the War, British settlers, ex-service men, living decent lives under good conditions of labour, with every social amenity, doing their best to make a success of that great irrigation experiment which the Australian Government has launched in the Murray Valley. Take the consumption of wine per head. It has gone up from an average of about 700,000 gallons in pre-War years to 1,750,000 gallons last year. I might add a figure which has just been supplied by the Kitchen Committee. The benefit of Preference and the true understanding of the value of Empire production in wine has made itself felt in this House as well. I am informed that in 1922 the House of Commons drank only 42 whole bottles and 91 half-bottles of Empire wine. In 1924 it drank 121 whole bottles and 146 half-bottles. In 1926 it drank 240 whole bottles and 595 half-bottles, and last year the House of Commons fortified the Empire, and its own constitution, by drinking 407 whole bottles and 968 half-bottles.

Sir H. BRITTAIN

Does this include that excellent South African Van der Hum?

Mr. AMERY

I am not sure.

Captain GARRO-JONES

I hope I am not appearing too rude, but there are only five minutes left. There were several very important points raised in the Debate, and I gave the right hon. Gentleman specific notice at the Colonial Office that I desired him to give us some information about a question that I considered very important with regard to the Crown Agents of the Colonies. There is also the question of freights and several other specific points about which we have not heard anything at all.

Mr. AMERY

I will do my best in the time available but, after all, this is a general discussion on Empire trade and I am not sure it will be possible to reach purely administrative Points of Colonial Office administration and the question of Crown Agents.

There is another matter, and certainly not an unimportant one, on which I should like to touch, and that is the question of learning more about the course of Empire trade from the work of the Imperial Economic Committee and acting upon that knowledge in the direction of improved methods of marketing, improved research and publicity, which will give a greater voluntary Preference. It is impossible to say more than a word or two about the work of the Empire Marketing Board. On the publicity side I only want to say that what we are advertising is the idea of Empire trade, and not specific commodities. It rests with individual parts of the Empire, and individual firms, to push their special wares. What we advertise, and advertise very effectively and with great effect on Empire sentiment wherever I have been, is the general conception that it is worth our while to trade within the Empire rather than outside. I quite agree with the hon. Member who said that the most important part of the work of the Empire Marketing Board is the work it does in connection with research. There we have sanctioned expenditure running to £100,000 in dealing with problems of entomology and insect ravages which destroy 10 per cent. of the Empire's products. We are giving over £100,000 to research institutions, like Trinidad, Amani or the Queensland College of Agriculture. We are devoting very nearly £150,000 to the immensely important problem of cold storage. In all these lines of research a great deal of valuable and important work is being done, and there is room in other directions for a, more advanced policy of Empire development.

This issue is not one of Free Trade or Protection. They are neither of them absolute questions. Each has its arguments which are valuable relative to certain cases and certain circumstances. The greater the area, the wider the range of its production, the greater the advantage and the less the disadvantage of Protection. The narrower the area, the more one-sided the development, the greater the case for Free Trade and the greater the disadvantage of Protection. In the development of a great area like the British Empire, with unlimited resources, neither of these arguments comes in directly. What we are concerned with is a heritage of immense value and immense possibilities, and the practical ways and means of developing it.

Question put, and agreed to.

Resolved, That this House is of opinion that the pursuit of a vigorous policy furthering Imperial trade and developing Imperial resources is desirable in the interests of the industries of this country and of the Empire.