§ Mr. LEES-SMITHI beg to move, in page 2, line 40, to leave out the word "shall," and to insert instead thereof the word "may."
This Amendment is intended to lead up to the next Amendment in my name—in page 2, line 41, to leave out the word "sixty," and insert instead thereof the word "seventy-five"—and, with your permission, Mr. Hope, I will argue the two Amendments together, although we may take a separate Division finally on each, without a separate argument on the second. Clause 2 fixes the fiduciary circulation at £260,000,000, and the object of these Amendments is to increase that sum to £275,000,000. My reason for moving this Amendment is to express our view that the fiduciary circulation provided at the present moment in this Bill is too strictly limited—that it is too low, that it does not allow enough elbow room, that it does not give sufficient margin for the contingencies which the Bank Reserve has to meet, and that consequences may follow which we particularly wish to avoid.
The chief evil that we fear is the evil of deflation, with its results on employment and on the revival of trade: and the chief danger, as we see it, that may be inherent in this Bill is that it leads to the possibility, indeed the probability, of deflation by the action of the Bank of England, which probability is, in our opinion, intensified by fixing the fiduciary 1268 issue at this limit of only £260,000,000. This view is very widely held, and, if I may quote an authority frequently quoted in the House, I notice a very long letter in the "Times" by Mr. J. M. Keynes expressing this view, and stating that in his opinion the limit of the fiduciary issue ought to be £300,000,000, a larger sum than we are now proposing. In order to explain why we put the figure at £275,000,000, may I remind the Committee of the figures which were given to us by the Financial Secretary and by the Secretary of State for War during the Second Reading Debate? It is our policy to maintain in this country a gold reserve in actual gold of £160,000,000, and that, of course, is in accordance with the recommendations of the Cunliffe Committee and there will, therefore, be in circulation notes to the value of £160,000,000, with that gold reserve behind them.
Then the Bill provides that, in addition, there shall be a fiduciary issue of £260,000,000 without any gold reserve behind it. Those two figures together give a total note issue of £420,000,000. It is agreed that. the circulation of notes in the country—the domestic circulation—for purposes of trade, in the banks, in the pockets of the people and in the hands of the consuming public amounts, at any moment, to from £370,000,000 to £380,000,000, according to the season of the year. Putting it at £370,000,000, that means that, of the total of £420,000,000, £370,000,000 is in the hands of the public, leaving the Bank of England with a 1269 reserve of £50,000,000 in notes. I have looked at the actual Bank return of last Thursday, and find that the reserve there was £45,000,000.
Our argument is that a reserve which averages round about £45,000,000—which may fall to £40,000,000, and practically never gets beyond £50,000,000—will be found to be insufficient for the contingencies that it has to meet, particularly if they come in combination, as they may, if you have a revival of trade, or particularly if you have a drain from abroad, and if this comes at the same time as, say, the special demand which the Christmas season will produce. The Secretary of State for War gave us figures last Monday which showed quite clearly that this amount was broadly the same as is provided by the present system, but that does not satisfy us, because of the delicacy, the instability, of the existing position, which was shown only a short time ago, when the proposal of the Bank of France to withdraw quite a small proportion of the gold which it had in London created such perturbation that remonstrances had to be made, almost of a diplomatic nature, and we really forfeited the claim that we put forward that London is a free gold market.
Let us consider what the prospects are The Bank of France has about 2100,000,000 in London, and the other foreign banks have at least another £100,000,000, perhaps £200,000,000; so that there are between £200,000,000 and £300,000,000 of foreign deposits in London. It would require a very small crisis abroad, a very small movement from abroad to withdraw gold, to reduce that amount by 10 per cent., or £20,000,000 to £30,000,000, and, if that occurred, the gold reserve would fall from £50,000,000 to £30,000,000 or less. 'The Bank of England could not allow that to continue even by itself, but, supposing that it coincided with an increase of demand owing to increased circulation, say, at Christmas, what would be the result? The Bank would then either have to come to the Treasury for these emergency powers—which it would be extremely unwilling to do, because the very request would mean a lowering of its prestige—or it would have to raise the Bank Rate, and set in progress that deflation the possibility of which we desire 1270 to avoid, with all the checks to trade revival and prosperity which it brings with it.
That is the reason for this Amendment, I hope we are not going to be told, as we have been told already, that because we put forward these views we are inflationists. This proposal is no more inflation than the proposal of the Government that the Bank of England may increase its fiduciary circulation with Treasury consent. What we propose is that the Bank shall have power so that, instead 'of having to meet these contingencies by these exceptional measures or by raising the bank rate, it shall have sufficient margin to be able to meet these contingencies as part of the daily mechanism of the Bank.
§ Mr. OLIVER STANLEYI have neither the confidence nor the competence to detain the Committee more than a few minutes. I have a very imperfect understanding of the difficult problems that are raised, but I am strengthened in my temerity by the right hon. Gentleman's statement, which would lead one to believe that if we left the Debate to those who have a complete knowledge and a perfect understanding of these problems your task, Sir, would come to a premature and not perhaps unpleasant conclusion. We must all agree with the hon. Member that the Amendment raises no point of party politics whatever and that it does not raise the cry of inflation. There may be Members opposite who are inflationists. If so I am certain they will not agree to a limitation of this fiduciary issue to the sum of £275,000,000, and it therefore becomes a mere economic question between two sets of people who are striving to arrive at some figure, and that is a minimum figure to meet the needs of the time in bank rates without running the risk of those notes being underestimated.
There is some difficulty in discussing the Clause independently of Clause 8, because it may be an answer for the right hon. Gentleman to say that, whether or not the amount fixed in this Clause is sufficient, the difficulty can easily be got over by recourse to procedure under Clause 8. That may or may not be. There are, I think, certain difficulties with regard to that procedure, but in any case, before we come to Clause 8, it would be useful to ascertain on this Amendment 1271 whether the Government, in fixing this amount, have fixed an amount which they believe will only be exceeded in very exceptional circumstances or whether they believe it is an amount which may quite easily, in fact probably, be exceeded and therefore the procedure under Clause 8 may become a matter almost of regular practice. The Financial Secretary to the Treasury on the Second Reading gave us a very clear and intelligible account of how this £260,000,000 was arrived at but even he will admit, I am sure, that his analysis of that sum showed that the estimate was a very close one and that, even granting the correctness of the figure of £6,000,000 for the Free State notes, there is certainly no unrevealed margin in the figure and that therefore the only possible margin, as compared with the present position, is a sum of slightly over £1,000,000.
The further demands made on the note issue fall under two heads. The first is dependent either on an increase in trade or on circumstances connected with the foreign exchange. That has been very fully dealt with already. I do not want to repeat arguments which have already been advanced but I want to ask a question with regard to the other possible demand, and that is the seasonal demand for notes in the holiday periods. It is a demand which even in the past has put a considerable strain at various times on the fixed amount of the note issue, and what I should like to know is whether there is any truth in what one sometimes hears in the City, that invariably during the last two years what one might call the rush hours have been preceded by large payments in to the Bank of England of bank notes. If that be so, I should like to know what is the reason of those payments in. It is obviously important to know if they come from some reason that is permanent, if we can expect that those large payments in will continue whatever may happen or whether they are due to some fortuitous circumstance which may come to an end and may put us in the position that the peak of past years on which after all this limitation is fixed was a false peak in that it was reduced from the proper level by these fortuitous payments in and that by the cessation of those payments in you might find yourself, and perhaps fairly soon, faced with a large increase of demand. 1272 I should be very glad if the right hon. Gentleman could assure me on that point.
There is one other point which I am afraid will not appeal to hon. Members opposite. It is with regard to the position of the shareholders of the Bank of England under this Clause and the possibility of the fixed amount in this Clause being excluded and recourse being had to the procedure under Clause 8. The hon. Member for Bridgeton (Mr. Maxton), in the Second Reading Debate, spoke of the Bank of England as a profit-making concern and accused the governor and the directors of pandering to the desire to make profits for their shareholders. If that is so, the governor and the directors stand condemned, not for immorality but for inefficiency.
§ The CHAIRMANThis is more relevant to Clause 6, is it not?
§ Mr. STANLEYI think not, if I may develop my argument. It is that if £260,000,000 is not enough and recourse has to be made to Clause 8, shareholders of the Bank of England will be prejudiced. I do not think anyone can accuse the Bank of England of having given undue profit to its shareholders. A yield of under 5 per cent. with the stock at 260, in view of the rise in the cost of living over a long period cannot be said to be excessive. I cannot think anyone would like to see the shareholders of the Bank of England prejudiced. As matters are now, when the £260,000,000 is fixed, securities to cover that amount are transferred from the Government to the issue department of the Bank of England. As far as the banking department is concerned, the profit-making side of the Bank, it has no effect whatever. The issue department goes to the Treasury for the return of the securities that were deposited. What is going to be the case if the £260,000,000 has to meet a sudden and temporary emergency? The fiduciary issue has to be increased, say, to £275,000,000, and an extra £15,000,000 of securities has to be found, not by the Government but by the Bank of England. It has to be transferred from the banking department. into the issue department. I have no doubt when the emergency is over and the rush has died down the securities are replaced in the banking department by notes, but as long as the Treasury 1273 minute is in existence, so long as the issue is increased, the issue department has lost £15,000,000 of profit-earning securities and has to replace it by £15,000,000 of notes, which as far as profit making is concerned are dead, and the profits on those securities goes to the Treasury.
If that is the case, it puts the governor and the directors in a difficult position. We all agree that those in charge of an institution of this national character should he able more or less to ignore the interests of the shareholders. The shareholders, after all, look on it, as a more or less fixed interest-bearing security and they do not expect to get more than the yield they do get, but it is putting those in control in a very difficult position if they have to choose between going to the Treasury and asking them to increase the note issue, knowing that that is going to cause perhaps grave loss to their shareholders, or else by some other means to reduce the demand on the note issue, means which may be most injurious to the national interest. This is a question of very great importance, and even with the security provided in Clause 8 the Government would be unwise to take this sum of £260,000,000 unless they can assure the -Committee they regard it as a sum that is unlikely to be exceeded and not as a sum which may probably be exceeded on many occasions and that recourse will be had frequently to the procedure under Clause 8.
§ 6.0 p.m.
§ Mr. GILLETTI do not think the hon. Member's fears will be justified in connection with the line of argument he has taken. As far as I can understand his criticism in regard to the injury to shareholders, he was only referring to an emergency power and not to the actual Amendment before the Committee. I gather the argument was that if the Bank of England had to ask for permission to issue a larger number of notes than the £260,000,000, when that had been granted they would have to provide security as cover, with which I should agree. Then he suggested that the Bank of England would take some of the securities it now holds and place them as cover against the notes issued. As a matter of fact, I do not think that that is what the procedure will be. At any rate, it 1274 need not be the procedure, because the hon. Gentleman will see that one of the problems that the Bank would have before it would be that if they wanted more notes it would have to get them into circulation. Therefore, the whole transaction that would take place would be, that you would buy with the notes you wanted to put into circulation, the stocks you wanted to act as cover. Actually, in that way, without touching the holding of stocks, it would be possible to get the cover required. I do not know whether my argument satisfies the hon. Member. I think there is one conclusive argument which would satisfy him, and that is a provision further on in the Bill. That was the point at which the Chairman suggested that the argument the hon. Member was addressing to the Committee would be more appropriate, where the matter is entirely set at rest, because it says that the profits are to be handed over to the Government after all expenses have been paid by the Bank. Supposing the hon. Member's argument had been correct—I do not think it was—and that this had involved any expenditure to the Bank, it would have been taken from the profits which ultimately go to the nation. I see no danger, either in our proposal or in the proposal of the Government, of the shareholders of the Bank suffering in any way.
Turning to the actual proposal before the Committee at the present time, I myself did not quite grasp at first, when this Bill was brought forward, the act that we were really making a very important change with regard to the currency note issue. The currency note issue has been a varying figure, but we have now to consider that that with which we are going to deal is a fixed amount. With regard to the issuing department of the Bank of England, we now have a figure which amounts to about £19,000,000 odd, and I understand that what is going to happen after this change has taken place is, that the item which amounts to £19,700,000 will disappear and be replaced by a figure of £260,000,000. The Financial Secretary agrees? Our proposal is, that instead £260,000,000 the figure should be increased to £275,000,000. This is based on three conditions. The first is that we fear that the ordinary demands of trade—for instance, at Christmas and at holiday times, when there is an extra demand, 1275 especially on the part of the working class, for £1 and 10s. notes—would be so large that the present supply would be exhausted. I am not sure of the figure that the right hon. Gentleman gave as being his estimate of the actual figure at the present time, but the "Economist" stated that it was £258,000,000 on the 2nd May.
§ Sir L. WORTHINGTON-EVANSI really gave a figure a little higher than that. I said there was 11,250,000 in hand on the maximum.
§ Mr. GILLETTWhat has not been mentioned this afternoon is the fact that the Government are reckoning upon an extra £6,000,000 being available from the Irish Free State for instituting their new system of notes. So that the Government are really counting upon a margin of from £6,000,000 to £8,000,000 being available. Our view is, on the first question with regard to the holidays and Christmas demands of trade, that the Bank will be hard pressed to provide the necessary amount of notes. The figures with which the great banks deal are really very large. Our fear is that the Bank of England will not care to go to the Government in times like that., and that therefore, in order to avoid going to the Government, they will, as they see their reserves diminishing, put up the bank rate at a time when otherwise this would not be done. My regret is, that in adopting this fixed system the Bank of England note issue will differ very much from the note issues of the banks of the rest of the world.
I would sooner have seen the Bank of England given powers gradually to increase the sum than have adopted the proposal which we are compelled to make to-day on account of the way the Bill has been formulated. I would sooner give the Bank of England permission to increase the issue from £260,000,000 to 1275,000,000 just when they desired to do so, provided, as I suggested the other day, that it was backed by some short term security in the nature of bills. It is impossible to put down Amendments to that effect. We can only really increase the figure decided upon to-day by backing every note with gold and that is the fundamental difference between us and the banking systems in other parts of 1276 the world. I agree with the right hon. Gentleman in the answer he gave to us in regard to the powers of the Government to allow the Bank to issue a larger number of notes in an emergency. We have bad mention made of what might happen supposing France took away £10,000,000 or £30,000,000 in gold, and he has suggested that in a ease of that kind the powers that the Government are granting would be sufficient. I am prepared to agree that powers of that kind obviously would have to be given to meet such an emergency.
Our principal objection to the figure that has been fixed and to the margin being so small is that we ourselves are hoping to see an expansion of trade as years go by. We are fully convinced that if you have an expansion of credit and a general improvement in trade, possibly even a rise in prices, and the figure remains as it is at the present time, if you reduce the amount of your banknotes to the volume of trade, it will be another kind of deflation. If you increase the amount of notes you will have inflation; if you stand still when the other standards are altering, and you get out of touch with those standards, you will have deflation. This is the reason why we are so strongly opposed to the rigid lines upon which the Bill is drawn. The right hon. and gallant Gentleman may get up and suggest that to place the figure at £275,000,000 instead of at £260,000,000 is inflation. I would like to suggest to him that if the Bank of England—supposing the House decided upon this sum—felt that it was likely to lead to a currency inflation, it would be quite easy, by liquidating stocks, to reduce for the time being the amount of credit in the country. In that way it would be possible to counteract for the moment any immediate inflation, and it would leave the elasticity asked for. That is the vital principle which divides us from the Government. I do not think that it can be said that our proposal necessarily involves inflation because of the way the Bank of England manages the money market at the present time. It has at the present time means of counteracting any monetary danger from inflation, and if trade expanded, as we hope it will, it could easily pursue that course. In that way we should have a system not so rigid and better adapted to the needs of our times.
§ Sir L. WORTHINGTON-EVANSThis is a very important Amendment, very important indeed. It really does go to the heart of the Bill. The Government had to determine what figure they would put in the Bill as the limit of the fiduciary circulation, and they had to make the best review they could and take the best advice they could on that subject, and they fixed £260,000,000. This Amendment suggests that there is no elbow room in £260,000,000, and that £275,000,000 would be a hotter figure. The particular reason given for the choice of £275,000,000 as against £270,000,000, £280,000,000 or £300,000,000, was that, apparently, it was thought that £260,000,000 was too rigid and that £275,000,000 might be a better shot, to put it no higher than that. The actual figures upon which we relied for guidance I gave the other day. They appear not to have been entirely understood, and I will re-state them shortly. The present maximum, that is the maximum of currency notes to be issued as now fixed in accordance with the Cunliffe Committee's advice at £260,000,000, will show a margin of £1,250,000 over the highest. figure for the year before last. Over the notes in issue at this moment there is a margin of very nearly £9,000,000. Those figures are net figures, after deducting the £6,000,000 of Irish Free State notes which we expect to conic in later. So we have a margin of £9,000,000 in the £260,000,000 over the present note issue, a margin of £1,250,000 over the highest for the year before last.
As hon. Members will remember, the fiduciary note issue has been contracting year after year, although very much less rapidly later. It has been contracting year after year from the time when the highest point was reached some years ago. I would myself agree that that margin would not be safe. I need not go as far as the hon. Member for Finsbury (Mr. Gillett), for even if £275,000,000 were fixed, I understood him to say that he still wanted power to extend that. I think it will be unsafe to fix any figure as the fiduciary note issue without some power under some circumstances to expand, because no one could really pretend to prophesy what the future of the currency is going to be. The unknown with regard to gold itself, the demands upon gold, the possibility of a great expansion of trade here, of great alterations in the 1278 lives of the people requiring a great deal more currency—all these are possibilities we must provide for and protect the fiduciary limit against. That we are going to do.
The hon. Member for Westmorland (Mr. Stanley) in a most interesting speech for which, certainly, he had no need to apologise, asked me two questions. His first question was: is the maximum which has been fixed a reliable maximum, er has there been some manipulation which is preventing it from going still higher? My answer is, none on the part of the Government, and none on the part of the Bank of England. I believe it is true that before Christmas a rather unusual number of notes came from circulation back to the Bank of England, but to what extent that occurred or how that has affected the maximum, if at all, I cannot say. I do not think, but have very little information on this point, that that is likely to affect the issue to any considerable extent. The second question was this: Would there not be hesitancy on the part of the Bank of England to put into operation Clause 8 and to ask for an increase of the fiduciary circulation? If they did so, would that not interfere with their profits and would it not be done at the expense of their shareholders Up to a point, there would be an interference with the earning capacity of the bank, but not very great.
Let us consider in what circumstances a demand for an increase of the fiduciary issue would be made. It would be because the bank reserve was unduly reduced, that of their assets too much were in the form of interest-bearing securities, and too little in the form of notes. It would be because there was too little in the form of notes that they would ask for an increase of the fiduciary circulation, so that they could make up a larger reserve. That would be at a time when their interest-bearing securities were too great, and although it would increase the reserve which is not in interest-earning securities yet, on the whole, I think it ought not to act as a deterrent, because it would only come at a time when the proportion was all wrong and when the action taken was righting the proportion, and so strengthening their position and the whole financial position of the bank. Therefore, J do not think there is likely to be any check 1279 upon the action of the bank, through, shall we say; selfish motives.
If this Amendment were to be accepted and we were to substitute 1275,000,000 for £260,000,000, we should be in this position that we should have immediately an excessive fiduciary issue. If the provision for the £260,000,000 were now in force it would already be £9,000,000 in excess of the notes at present in issue, and if you add £15,000,000 to that, you acid £15,000,000 to the reserve of the Bank of England. I do not want to accuse any hon. Member opposite of being an inflationist, but that increase by £15,000,000 of the reserve of the Bank of England would, undoubtedly, relax credit unless special measures were taken by the Bank of England to avoid it, which would mean that the Bank of England would have to sell, say, 15,000,000 of securities which were earning money and take in exchange £15,000,000 worth of notes on which they would not be earning money. That is a reverse process to the one which my hon. Friend the Member for Westmorland mentioned. Whereas I do not think my hon. Friend's fear is well founded, I do say that it is not right for us to put upon the Bank of England a charge which would amount to something like £600,000 a year, by the addition of the 115,000,000 to the fiduciary issue, unless you are going to run the risk of inflation, which the hon. Member for Finsbury denies is his intention.
§ Sir L. WORTHINGTON-EVANSI should have thought not. It is rather in the nature of a loss of profit than a cost. I will consider the point as I am not sure about it, but I think it would be a loss of profit, or of possible profit, than an actual cost.
§ Mr. STANLEYIn that case, would it not be covered by Clause 5? If we increase the £260,000,000 to £275,000,000 in Clause 2, it would automatically increase the amount of the securities which the Government have to hand over to the Bank of England when the note issue is transferred.
§ Sir L. WORTHINGTON-EVANSIt would undoubtedly, if we did it now. The only other way of preventing that increase 1280 being the basis of an inflation would be that when they found it excessive the Bank should come to the Treasury and say: "Reduce it again. Although you have a maximum of £275,000,000 in your Bill, we do not want it at this moment. Use Clause 2 to reduce it to £260,000,000." That would be a method of temporarily curing the excessive fiduciary issue which this Amendment would bring about. I suggest to hon. Members that the figure of £260,000,000 is the best figure that the experts could give us. It is a figure which gives a considerable margin on existing issues, and that, along with Clause 8, does provide all the means that are required for giving elasticity to meet special emergencies. I do not pretend that it would meet the emergency which was suggested by the hon. Member for Keighley (Mr. Lees-Smith), that France and other foreign nations might have from £200,000,000 to £300,000,000 deposited in this country and that they might choose to demand back a large proportion of their deposits. I do not suggest that Clause 8 would be sufficient in all cases to deal with that situation, nor would the Amendment. An Amendment adding £15,000,000 to the fiduciary issue would go but a very small way should a demand eventuate in the way he suggested. I maintain that we have taken the best advice we could, that the figure of £260,000,000, coupled with the powers under Clause 8, is a safe figure, and that we can rely upon the Bank of England and upon the Treasury to utilise the powers of alteration of that figure, should the future prove an alteration to be necessary.
Mr. RUNCIMANThe Amendment which we are discussing is one of very great importance. I do not think that it in any way strikes at the root principle of the Bill, but it has within it two important considerations. The first consideration is that we should not be bound down too rigidly to one figure. The Amendment is that the word "may" shall be substituted for the word "shall." Therefore, to increase the limit as suggested in the Amendment to £275,000,000 is not actually to fix a limit. It does not mean that, of necessity, you must have the whole issue of £275,000,000 now. I would like to ask the right hon. Gentleman whether he has taken into account two facts which seem to me to be of considerable importance. The first is the 1281 undesirability of having to come to the House too frequently laying minutes for an alteration in the limit. I can imagine nothing being more disturbing than that, say, every six months or every twelve months, the Treasury and the Bank having arrived at an agreement, a Minute should have to be laid for an increase or a decrease. Is it not better to have a certain amount of elasticity? I do not elaborate the point now because I have no doubt my right hon. Friend would like to discuss the point in greater detail with his technical advisers before we come to the Report stage, if not now.
The further point is one upon which, no doubt, he will be able to give me information. It relates to the seasonal fluctuations. The seasonal fluctuations are sometimes of great volume. It depends very largely upon what happens within the board roams of the great banks. If what are called the big five and the co-operative bank were to decide to make abnormal payments of notes into the Bank of England they would not by that increase or decrease their reserves. Their reserves would remain exactly the same. For the purpose of reserves it makes no difference whether the notes are held in their own safes or put into the Bank of England, which is their bank, the bank for the whole lot. Is it not the case that these fluctuations have been kept within very narrow limits by the restraint and discretion of the great general managers and boards? Suppose those demands were to assume rather larger dimensions. Would not that entirely upset the limit?
Would not a rigid limit of £260,000,000 be upset if very much larger demands were made in the coming Christmas than were made last Christmas '? Would not that entirely destroy the virtue of the limit of £260,000,000? As far as I can see, no experts in the banking world or outside can say what will happen in Christmas week next.
It is impossible to look ahead so accurately as to say that £260,000,000 is the right figure and that £275,000,000 is the wrong figure. The right hon. Gentleman did not address himself to the details of these seasonal requirements, but these seasonal requirements can be easily extended or contracted by the policy of the joint stock banks. 1282 £260,000,000 may prove to be too low and may bring about the very risk which we want to avoid, of too many applications being made to the Treasury and resort having to be made too often to this House to alter the limit. In these circumstances; is not there very much to be said for making the limit elastic? If you are going to make it elastic, let it be within seine reasonable figure. If the figure of £275,000,000 is not the right figure, say, £280,000,000, or £270,000,000, but to cut it so fine as to leave only a margin of £1,500,000 above the maximum of last year is, it appears to me, to be taking steps which must inevitably lead to further artificial contraction of the use of the currency, and must, in effect, be a kind of deflatory process. May I ask that this point should be reconsidered? It is not a matter of principle. The Government may possibly decide between now and the Report stage that they would prefer something more elastic than the original proposal. Nor is this a matter of mere pedantry, nor is it nor has it taken anything like a party form, although there are a great many people outside who have been considering this matter with very great care who regard the rigid limit of £260,000,000 with some apprehension. I would ask the Government not to be too rigid in regard to this matter, seeing that they are receiving such general support on their main project.
§ Mr. WARDLAW-MILNEThe Secretary of State for War has given excellent reasons for our not accepting the rigid figure of £275,000,000, although he evidently omitted to note that, in fact, the Amendment does not fix that figure but merely makes it an optional one. He gave us, however, almost equally good reasons I thought for not fixing the figure at £260,000,000. I do hope most earnestly that the Government will give an undertaking to reconsider this matter and to fix some figure which is not so rigid as the one laid down in Clause 2, but one-which will allow of that considerable expansion in trade to which we all look forward and hope for in the near future-It is perfectly true to say that to lay down the figure of £275,000,000 as the limit might involve a certain loss, which the Secretary of State for War has estimated at £600,000, but to my mind the whole question is whether in fixing the present limit of £260,000,000, or 1283 £275,000,000, the advisers of the Government have sufficiently considered what is likely to be in front of us in the near future.
I would remind my right hon. Friend that in 1919, when the Cunliffe Committee issued its Report—the recommendations of which are probably in general a matter of agreement in all parts of the House—the results of the action taken upon that Report were perhaps somewhat different from those which were expected. Let the Committee observe what 'happened. The Cunliffe Committee issued its Report and the Treasury Minute on that Report was dated 15th December, but by April following we had a Bank rate of 7 per cent., an immense slump in trade, and while Government securities rushed up, filling no doubt the coffers of the banks, the general result was undoubtedly reacting adversely on the large manufacturing trades of the country by restricting their advances. I am not going to suggest that this result was entirely due to the Committee's Report and the action of the Government, but to-day in fixing the limit of £260,000,000 are not the Government as it were laying it down that we are going to have a period of unemployment ahead of us instead of considering that it is possible—and many of us hope and believe it is—that in the next year or two most of the million unemployed will be fully or partly employed. With g real expansion of trade we might find that this figure in Clause 2 is totally and utterly inadequate; we might find that the figure of £275,000,000 is totally inadequate, and as by laying down this rigid figure of £260,000,000 we are making it a difficult and an unusual step on the part of the Bank of England to come forward from time to time and ask the Government to change it. You thus arrive at a stage where possibly industry is seriously handicapped and the great manufacturing concerns would find extreme difficulty in financing their operations.
I was much struck by a phrase used by the right hon. Member for Colne Valley (Mr. Snowden) on the Second Reading of the Bill. I know he did not claim it as original any more than I do, but it is one which we should remember, and it is this, that money should not be the master but the servant of industry. It is unfortunately too often our master. As I 1284 have said, under the present proposals it will be extremely difficult to induce the Bank of England to come forward and ask for powers under Clause 8. They will only do so in exceptional circumstances as the right hon. Gentleman the Secretary of State for War has in fact admitted will be the procedure, and the point I want to emphasise is that this or some other figure in excess of £260,000,000 may not be required only in order to meet exceptional circumstances but in order to meet what we hope may be quite ordinary circumstances. Therefore, I do hope the Government will see that while there may be disadvantages in accepting the figure of £275,000,000, they will between now and Report stage consider the matter again with their advisers and, if possible, arrive at some method which will give real elasticity and enable the currency of the country to be suited to the needs of our great manufacturing industries, and I hope to an ever increasing standard of living.
§ Mr. PETHICK-LAWRENCEI hope the Government will show a somewhat conciliatory spirit to this Amendment in view of the fact that it has been supported from all sides of the Committee and that there has not been a single supporter of the Government who has defended the Clause as it stands. In addition to what has been said inside this House I was very pleased to find that the Conservative paper in my own constituency published a leading article the other day in these words:
We do not often find ourselves agreeing with Mr. Pethick-Lawrence, but we certainly do on this occasion share his view that the Bill will limit the growth of currency below what will be required in order to finance trade. The limit of the fiduciary issue of the new £1 and 10s. Bank of England notes is put at £260,000,000. That, as Mr. Pethick-Lawrence points out, may cover immediate requirement, but provides no surplus for dealing with a revival of trade and a reduction of unemployment.That is what the Conservative paper in my own constituency says, and I think it is entitled to some respect by the Government and hon. Members opposite. I want to emphasise two points in answer to the speech of the Secretary of State for War. One point has already been made by the right hon. Member for West Swansea (Mr. Runciman) and the hon. Member for Kidderminster (Mr. Wardlaw-Milne). We deliberately put in this word 1285 "may" instead of the word "shall," and coupled it with the Amendment of the £275,000,000, precisely to meet the point which the right hon. Gentleman made. We recognise clearly that if we did not make the former Amendment we should be charged with inflation tendencies to which the right hon. Gentleman referred, but we cannot be charged with those tendencies in view of the earlier Amendment, which we intend to press to a division unless the Government indicate their readiness to meet us. The right hon. Gentleman went a very long way in acknowledging the grounds for our Amendment. He admitted that £260,000,000 might well prove inadequate but he defended the Bill on the lines that all that was necessary was provided for in Clause 8.It would obviously be out of order for me to discuss now in any detail the procedure involved in Clause 8, but in view of what the right hon. Gentleman has said I am entitled to point this out, that the Bank of England in going to the Treasury and asking for an increase of the fiduciary issue under Clause 8 will be confessing the weakness of its position and, therefore, I think me may quite properly take it that the Bank of England will go a long way before it avails itself of the procedure in Clause 8. That would probably involve the raising of the rate of discount, or the adoption of other means by which credit may be curtailed. In these circumstances we suggest that there is a great deal of difference between accepting the principle of this Amendment and the procedure involved in Clause 8. If the procedure in this Amendment is accepted in principle it will mean that the Bank of England will have a, free hand to enlarge the issue up to this further limit of £275,000,000 as and when it may be required. If, however, the procedure in Clause 8 appears by itself the Bank will feel that that is in the nature of a crisis, and it will avoid that by means which may be deleterious to industry and bad for employment.
There are one or two other points on the Amendment which I desire the Committee to consider. It seems to me that we are locking up a great deal of unnecessary gold under the present proposal. The gold of the country in the 1286 1928 Bank Notes Bill. 1286 past has been required for two purposes—to meet the internal demand for gold and to meet the external demand for gold. Under this Bill, and in accordance with our procedure since 1914, the internal demand for gold has disappeared, and the idea that we have to lock up this large amount of gold entirely for external purposes is a mistake. The grounds for increasing this figure are therefore very strong. We have to justify ourselves not nationally but internationally in this matter, and I suggest that in the form in which it appears we are being bad internationalists because we are in effect hoarding gold unnecessarily. In that connection I should like to read an extract from the current number of the "Statist." Hon. Members will find it on page 815:
Had the fiduciary circulation been fixed higher, say at £275,000,000"—the figure in our Amendment was chosen before the issue of this number—the Bill would have lost none of its present qualities and it would at least have given proof of a helpful attitude in the matter of international control of gold values.That is the point in regard to the international situation which I am trying to make; that if we take and lock up this large amount of gold other countries will follow suit and it, will have an exceedingly bad effect. The example we are now setting is a bad one. In conclusion I feel that there has been in the mind of a great many people, and particularly in the mind of the Bank of England, a fatalistic belief in the inevitability of a steady appreciation of gold and it appears to underlie this Bill. It underlies the failure to provide a sufficient margin in this Clause. As against that I believe I am really trying to safeguard British industry; and I look for support from hon. Members opposite in an effort to apply our method of safeguarding—and I think it is their method, too, in a great many cases—British industries as against the financial superstition which is working towards deflation. In view of the feeling in all parts of the House I hope the Government will meet us in this matter so that this rigid limit of £260,000,000 will no longer be contained in the Bill.
Sir HILTON YOUNGThis is a matter for practical consideration and one on which one is not inclined to dogmatise. I come to the question with an open mind, anxious to hear what the arguments are. After hearing them I do not find myself convinced by the arguments in favour of the immediate extension of the fiduciary issue. It appears that the ruling consideration is this: that the figure of £260,000,000 conforms to a state of affairs which has now existed with some stability for at least a couple of years. An arrangement which corresponds to that figure of £260,000,000 has been found adequate for the needs of the country for a considerable period, and there is no immediate reason to suppose that it will not be so as far as the future is foreseeable for a reasonable period. Suppose you were to make an immediate extension to £275,000,000, either it would be immediately used or it would not. If it was immediately used, I believe that the Secretary of State for War is right, and it would have a deflationary tendency which would be undesirable. If it were not used, what would be the good of doing it? It would only induce the belief that there was going to be an immediate inflationary extension of credit, which would be unwholesome.
What the Amendment asks us to do is that we should, by a special and abnormal form of procedure, anticipate the procedure which is provided for by Clause 8. I do not think that would be a wise thing to do. In the first place, it is not immediately necessary. The figure of £260,000,000 is adequate for the immediate future. Secondly, it would be undesirable for a reason that is most important. It is this: that the workability of the Bill is going to depend on Clause 8 being used as a practical and living provision and not merely as a power to be used in cases of grave and exceptional crisis. It is undesirable that we should supplant the procedure under Clause 8 by any anticipation of it, any special procedure, decided upon by this Committee. It would be wise to leave the next step in the expansion of the fiduciary issue to be taken under Clause 8 in order to bring that Clause into use and cause it to be regarded as a normal and necessary procedure in the 1288 machinery of our currency control. For these reasons I believe we should support the figure of £260,000,000.
§ Mr. W. BAKERI believe the right hon. Gentleman the Member for Norwich (Sir H. Young) has brought us to the point where the issue between the two groups can be clearly seen. He holds the view that you can fix a limit to this issue with advantage to the nation. I, on the other hand, believe with the hon. Member for Kidderminster (Mr. WardlawMilne) that this Bill is the final step in the policy of deflation which has been consistently pursued since 1919.
§ Mr. WARDLAW - MILNEI did not say that. I have not accused this or any other Government of pursuing a policy of deflation.
§ Mr. W. BAKERIn my view, there has been a consistent policy of deflation and while the Government may quite sincerely deny responsibility for many unfortunate happenings in the intervening period, there is a very strong opinion on this side of the Committee that the policy pursued in respect of deflation was the fundamental cause of the trouble. I want to say a few words with regard to the endeavour to fix this figure at the £260,000,000 point. If I understood the Financial Secretary aright, he said, that the maximum issue last year was 264.60 millions.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Arthur Michael Samuel) indicated dissent.
§ Mr. BAKERI accept the correction. I should have said that the total available currency was 264.69 millions. I am told, although I have no personal knowledge of it, that on 22nd December last the corresponding figure was 263 millions. We get the complication of the Irish note issue and that figure is estimated at £6,000,000. Is it too much to suggest that that is a wrong estimate and does not give us that margin suggested by the right hon. Gentleman the Secretary of State for War? With regard to this £260,000,000, we have had quoted the opinion of Mr. Keynes. To the opinion of Mr. Keynes may be added the opinion of the Midland Bank. The Midland Bank has publicly expressed the same point of view as that attributed to Mr. Keynes, namely, that the figure should be 1289 £300,000,000. What strengthens my argument here this afternoon is that a great organ of public opinion which speaks for the Government takes our point of view. I listened carefully to the Second Reading Debate and I was struck by the fact that this Bill was presented as though general agreement existed on it, except, perhaps, for the opinion of my hon. Friend the Member for West Leicester (Mr. Pethick-Lawrence). But, as far as I can understand, economists and bankers of the highest standing take a view contrary to the view of the Government on this matter. The "Times" newspaper, whatever else it may be, is not sympathetic to the Labour party, or, as it is pleased to term it, the Socialist party. The "Times" has definitely declared against the Government on this point. On the 14th April this year, not in a letter from a correspondent, but in an official pronouncement in the City columns, the "Times" states:
There are obvious objections to fixing once for all a country's requirements of fiduciary currency. The various economic elements are always changing.… It is therefore unscientific to make inelastic a monetary element which ought to adjust itself automatically to changes in the dimensions of the economic elements.
§ Sir L. WORTHINGTON - EVANSHear, hear!
§ Mr. BAKERThe right hon. Gentleman appears to agree, and if he agrees with the point of view expressed by the "Times" then this is a matter on which the Committee might be unanimous. It is important instead of giving a fixed total of currency that you should endeavour, following as I imagine the thought which was very ably expressed at Genoa, to find the means whereby your supplies of gold can be economised to the greatest possible extent and, in addition, that you should find a standard whereby your currency would automatically be related to the economic needs of the moment. I am strongly of opinion that the Government have made a mistake with regard to the fixing of a limit and with regard to the figure too. Again, I am reinforced by the City Correspondent of the "Times" who says:
The supply of legal tender should he adequate to meet the requirements of internal payments. These requirements necessarily vary, and it would therefore appear that a more scientific basis for regulating the fiduciary issue might be an index com- 1290 posed of population production and price figures.That doctrine has been widely taught in economic circles for a considerable time and it was a surprising and pleasing revelation to me to find the "Times" taking that view. Having regard to the endorsement of that policy by the "Times" I respectfully submit to the right hon. Gentleman that there is a case for reconsideration. There is a case for going over the whole of this question again, to see whether even at this late hour it might not be well to alter the plan, and to see whether the inquiry for which we have been pressing would not be preferable to reaching a decision before that inquiry has been held. As a matter of fact, as the hon. Member for West Leicester has said, changes in the supply of money are quite as important as changes in the supply of goods and between 1913 and 1919 changes in prices bore a direct and continuous relation to the amount of money in circulation. It is because I believe that the amount of money in circulation has a direct effect upon prices that I regard the decision which we are to give to-day as of tremendous importance and I would earnestly appeal to the right hon. Gentleman to give this matter very careful attention, with a view to the appeal which has been made from various parts of the Committee, being further considered.
§ Sir L. WORTHINGTON-EVANSI want to remind the Committee of what is the Amendment on which they are asked to vote. I hope we are going to a Division very soon upon the first Amendment which has now been debated at some length. The Debate has been one of great interest and I am sure has been very useful indeed. But the actual Amendment on which we are asked to divide is that "may" shall be substituted for "Shall" and subsequently another Division is to be taken on the question of whether "£275,000,000" should be substituted for "£265,000,000." The actual effect of the two Amendments together would be to provide that there "might" be a fiduciary issue of £275,000,000 and that the Bank would have complete and absolute discretion, without the assent of the Treasury or the Government, to reduce that from £275,000,000 to any figure they liked and to bring about just the sort of deflation about which hon. Gentlemen 1291 opposite express such fears. It is an utterly impracticable Amendment upon which, however, we have had an interesting Debate.
§ Mr. WARDLAW-MILNEWill not my right hon. Friend state the Government's intentions on properly drawn Amendments?
§ Captain MACMILLANThe right hon. Gentleman has called the attention of the Committee to the actual legal effect of this first Amendment upon which we are about to vote, but he will agree that this Debate has been of a kind to raise general questions. Although it is the case that if the Amendments were accepted as they stand they would have the effect which he describes in connection with any further change in the Bill, yet it is also true that a great number of questions may be raised on an Amendment of this kind in the Committee stage, and it is proper that they should be raised in that way and if they prove acceptable to the Government at some further stage there is no difficulty in meeting any technical objections which may follow from accepting them. It is quite possible to lay down that there shall be an issue of a certain amount, and still to leave in the hands of the Bank a certain power of increasing the issue to a further maximum.
7.0 p.m.
I feel reluctant to intervene on such a difficult subject but I gathered that there were, roughly, two plans and that the difference between them was not so much one of principle as one of procedure. One of the plans is that the Bank of England should be required to make an issue of £260,000,000. If they wish to reduce that issue they operate under Subsection (2) of this Clause. If they wish to increase that issue they operate under Clause 8 and the whole point was, as stated by the right hon. Gentleman the Member for Norwich (Sir H. Young), whether this method of Clause 8 is to be the normal method, one that can be resorted to without raising public fears and causing a great deal of public discussion, or whether it is to be preserved for exceptional cases and emergencies. If it is to be preserved for emergencies it. seems to me there is a great deal of danger in relying solely on Clause 8. I should have thought that the Bank would 1292 have been reluctant to make use of these powers, in view of all the publicity and fears of disturbing the market which might follow. I should have thought there was a good deal to be said for a system which gave a greater measure of elasticity to the Bank in order that it might be able to operate by normal methods rather than to make use of a procedure, which, as it is framed, seems rather intended to meet emergencies than to be a normal method of operation. That is really the only question we are discussing, and I hope it may be possible for the Government to consider which of the two procedures indicated in the Debate is likely to be the more useful and in the long run more valuable. The right hon. Member for Norwich referred to the Amendment as if the fiduciary issue was to be immediately raised to £275,000,000. Of course, as the Amendment is framed, it gives a discretion to the Bank, but, as I understand it, it is simply a difference in procedure. The right hon. Member for Norwich seemed rather uncertain as to that, and thought that there would be difficulties, but he seemed to wish the method of Clause 8 to be regarded as the normal method. I cannot help feeling that the Bank would be very unwilling to operate under Clause 8. The result may be that there may be on occasions periods when we shall be running a risk of other methods being used, and these may have unduly deflationary effects, with bad results upon industry as a whole. I hope that the Government will be prepared to consider this question and to see whether it may not be possible, without raising the difficulties which the right hon. Member the Minister for War has pointed out, to frame a Clause which would give this extra power to the Bank without raising the other objections to which he called attention.
§ Mr. WALLHEADI sincerely hope that we on the Labour Benches are not to be allowed to go into the Lobby alone in support of the "Times," and that we may expect some help from the other side. It is a curious thing that on this occasion the "Times" should take the view that it does with regard to this question. In these matters one has to tread carefully and in the temple of the god of gold speak with bated breath. I am 1293 in favour of the Amendment because I hope to see the fiduciary issue made as big as possible. To speak of anything that appears to be inflation is to call on ones head the condign condemnation of all the so-called experts, but one has to go by experience, and the experience of the working classes is that, from the moment when currency began to be curtailed, their conditions began to get worse. The hon. Gentlemen on the other side may say what they will about deflation, but when currency was plentiful the working classes were well off, well clothed, well fed and with reasonable access to some of the things that make life better. The moment deflation began and our policy began to be the cutting down of the vehicle by which consumption is possible, we had curtailment of purchasing power, cutting down of wages, vast increases in unemployment, bankrupticies—particularly among the small traders—and we have never recovered from the day deflation began until now.
I may be a heretic, a Philistine, utterly wrong, but, with all due deference to those who speak with a greater scientific knowledge, after all the attempts we have made in this country to deal with this problem of unemployment, I have been driven to the conclusion that the one thing that is essential in this country now is to put in the hands of the people the means whereby they can begin to purchase goods. Whatever Government tackles this problem, whether Conservative or Socialist, the thing they will have to deal with is the currency. They will have to inflate in ratio to the producing power of the country. Does it not seem strange that we are here squabbling about whether we shall have £15,000,000 of notes more or less in circulation when we are discussing a Budget in which we are dealing with 2800,000,000, or while we are talking about annual production in terms of £3,000,000,000 or £4,000,000,000? We ought to have a currency fixed by experts in direct ratio to the annual production of wealth, and our currency ought to be based upon the measure of the consuming power of our people, so as to give them consuming power over the wealth they create annually. It may be unscientific, but it appears to me thoroughly rational and sensible.
1294 I notice that, when the gold standard was restored in 1925, it was predicted that it would bring about a further depression in the condition of our people. But I see that in 1924, before the gold standard was restored, the issue of Bank of England notes was roughly £26,000,000, but, immediately the gold standard was restored, the Bank of England issue of notes went up to £56,000,000. Why was that done? Was it done to check the effect of the restoration of the gold standard? Why was it done at that particular moment? Is it a fact that there had been too much deflation and that £30,000,000 more purchasing power in currency was required by the State? What was the precise reason for it? Was it based on gold? Had the Bank of England got the gold on which they issued those notes? Presumably they had. I say that the people of England might just as well have their currency based on actual goods produced, on cloth and calico, corn and flour, as on gold. If they Lye stores of corn and clothing on which currency is based, it will be far better for the people of my constituency than the Bank of England notes, based on boxes full of gold.
The Bank of England gold reserve has been relatively small. The American gold reserve has been enormous. They have three parts of the world's gold supply, but it does not stop an unemployment problem of between 4,000,000 and 6,000,000 people at this moment. It does not stop misery in the Southern States of America, or a gold strike in North Virginia, or a strike in the textile trades there, where thousands of people are striking now because of bad conditions. Gold in the vaults of banks does not bring prosperity. They have five times as much as we have, yet they are as badly off as we are, as far as some of their people are concerned. It all shows the weakness of capitalist methods and organisation. It shows that there is a weakness somewhere, that there ought to be some means whereby the plenty we can produce can be translated into terms of wealth and life for the whole mass of the people. Until that is done, all the talk about gold and currency leaves me cold. You talk very learnedly about your inflation and deflation. What does it matter to the man who does not know where his breakfast is 17,o come from? There are millions of such men. Last 1295 night we were pleading for a milk meal for the children of this country in South Wales, yet this country cannot afford to give more than one milk meal a day—
§ The DEPUTY-CHAIRMAN (Captain FitzRoy)That is not relevant on this Amendment.
§ Mr. WALLHEADI was pointing out that we were discussing questions of currency which mean little or nothing to the people I have mentioned. I was asking that the Government should deal with currency from a rational point of view and not from the scientific point of view that has brought civilisation almost to ruin.
§ Sir FRANK MEYERI do not know whether the hon. and right hon. Gentlemen on the Front Bench opposite will be glad of the intervention which has taken place, as they have assured the House that they are not inflationists.
§ Mr. WALLHEADI am not committing them; they probably agree with you more than with me.
§ Sir F. MEYERThe hon. Gentleman might look to Germany instead of America, because there they employed the printing press as he has been suggesting—
§ Mr. WALLHEADI did not mention the printing press. I said that we should have a currency based on the wealth of production. That is not inflation. I should call it inflation if currency exceeded the ratio to annual production.
§ Sir F. MEYERI shall not dispute with the hon. Gentleman what inflation means. We can both look it up in the dictionary and then form our own con-elusions. It seems to me that the Mover and Seconder of this Amendment, and those who are going to support it from the benches opposite, are somewhat on the horns of a dilemma. If they are in favour of a fixed limit to the fiduciary issue, are they in favour of £275,000,000 or 2260,000,000? If they are, then they are pro tauto inflationists, because the figures given to the House on the previous occasion show that our present requirements are satisfied by £260,000,000. Therefore, if there is to be a fixed sum of £275,000,000, then for the moment they are inflationists. If, on the other hand, they do not require such a fixed maxi- 1296 mum—and from the form of their Amendment which would substitute "may" for "Shall" that seems likely—then all that they are doing by this Amendment is taking out of the power of the Treasury, subject to the approval of this House, the right to increase this maximum, and giving it to the institution which I have heard so severely criticised in the past, the Bank of England. It is made optional. They are merely saying that the Bank of England is to be subject to a maximum of £275,000,000, and they are also giving power to lower it, instead of saying, as in the present Bill say, that this is a fixed maximum and that the Treasury, with the approval of the House, can raise that maximum. It seems to me that we ought to know from the party opposite on which of these two horns they are going to be impaled. Are they going to fix the maximum at £275,000,000, or are they willing to give the Bank power, which they have under the present Bill, of increasing the amount over a certain maximum?
§ Mr. DALTONI do not propose to spend many minutes in prolonging this discussion, but in view of the speeches which have been made in different parts of the House I think it would not be asking too much that we should at any rate get some understanding that this matter will be reconsidered. After all, there has not been unanimous support for the figure of £260,000,000 from the supporters of the present Government. The right hon. Gentleman the Member for Norwich (Sir H. Young) defended the figure of £260,000,000 on the ground that it corresponded with the figure for the last two years. It is just for that reason that we are asking for a higher figure to be substituted, because we believe that if trade revives this figure of £260,000,000 will prove to be much too low to permit of expansion. In reply to the hon. Member who has just spoken, I do not think the dilemma which he suggests in reality exists, because if our Amendment is accepted, or if it is carried, it still leaves power under Clause 8 for the limit of £275,000,000 to be further exceeded, if the conditions of trade justify it, by the Treasury's consent on the Bank of England's application. We are merely taking the higher figure of £275,000,000 instead of the lower figure of £260,000,000 at this stage and leaving free a margin 1297 of £15,000,000 within which discretion can be exercised, before putting into operation the later powers under Clause 8.
The word inflation has been introduced into this discussion, and without pronouncing on its merits or demerits, I would like to observe that inflation is in fact barred out—whether it is desirable or disastrous—from the possibilities of this situation so long as the Gold Standard Act of 1925 remains on the Statute Book. I do not discuss whether that Act should have been put on the Statute Book or whether it should remain there, but so long as it remains it does prevent inflation, because it links up by means of the gold bullion mechanism the price level in this country with the world price level as a whole. We can, however, still to some extent determine what the world level—and therefore our own level—shall be. If our Amendment is accepted, giving power to raise the level from £260,000,000 to £275,000,000, that would free £15,000,000 worth of gold which would otherwise have been use-
| Division No. 129.] | AYES | [7.20 p.m. |
| Acland-Troyte, Lieut.-Colonel | Cazalet, Captain Victor A. | Gilmour, Lt.-Col. Rt. Hon. Sir John |
| Ainsworth, Lieut.-Col. Charles | Cecil, Rt. Hon. Sir Evelyn (Aston) | Goff, Sir Park |
| Albery, Irving James | Cecil, Rt. Hon. Lord H. (Ox. Univ.) | Gower, Sir Robert |
| Alexander, E. E. (Leyton) | Chamberlain, Rt. Hon. N. (Ladywood) | Grace, John |
| Amery, Rt Hon. Leopold C. M. S. | Charterls, Brigadier-General J. | Graham, Fergus (Cumberland, N.) |
| Applin, Col. R. V. K. | Christie, J. A. | Grant, Sir J. A. |
| Ashley, Lt.-Col. Rt. Hon. Wilfrid W | Churchman, Sir Arthur C. | Grattan-Doyle, Sir N. |
| Astbury, Lieut-Commander F. W. | Cobb, Sir Cyril | Greene, W. p. Crawford |
| Baldwin, Rt. Hon, Stanley | Cochrane, Commander Hon. A. D. | Grenfell, Edward C. (City of London) |
| Balniel, Lord | Colfox, Major Wm. Phillips | Grotrlan, H. Brent |
| Barclay-Harvey, C. M. | Conway, Sir W. Martin | Guinness, Rt. Hon. Walter E. |
| Barnett, Major Sir Richard | Cooper, A. Duff | Gunston, Captain D. W. |
| Beamish, Rear-Admiral T. P. H. | Cope, Major William | Hacking, Douglas H. |
| Beckett, Sir Gervase (Leeds, N.) | Couper, J. B. | Hall, Lieut.-Col. Sir F. (Dulwich) |
| Bellairs, Commander Carlyon | Courtauld, Major J. S. | Hall, Capt. W. D'A. (Brecon & Rad.) |
| Berry, Sir George | Craig, Sir Ernest (Chester, Crewe) | Hamilton, Sir George |
| Bethel, A. | Croft, Brigadier-General Sir H. | Hammersley, S. S. |
| Betterton, Henry B. | Crookshank, Cpt. H.(Lindsey,Gainsbro) | Harrison, G. J. C. |
| Birchall, Major J. Dearman | Curzon, Captain Viscount | Harvey, Major S. E. (Devon, Totnes) |
| Blundell, F. N. | Dalkeith, Earl of | Haslam, Henry C. |
| Boothby, R. J. G. | Davidson, Rt. Hon. J. (Hertford) | Headlam, Lieut.-Colonel C. M. |
| Bourne, Captain Robert Croft | Davidson, Major-General Sir John H | Henderson, Capt. R. R.(Oxf'd,Henley) |
| Bowater, Col. Sir T. Vansittart | Davies, Maj. Geo.F.(Somerset,Yeovil) | Henderson, Lieut.-Col. Sir Vivian |
| Bowyer, Captain G. E. W. | Davies, Sir Thomas (Cirencester) | Heneage, Lieut.-Col. Arthur P. |
| Brass, Captain W. | Davies, Dr. Vernon | Henn, Sir Sydney H. |
| Bridgeman, Rt. Hon. William Clive | Drewe, C. | Hennessy, Major Sir G. R. J. |
| Brocklebank, C. E. R. | Eden, Captain Anthony | Hills, Major John Waller |
| Brooke, Brigadier-General C. R, I. | Elliot, Major Walter E. | Hilton, Cecil |
| Broun-Lindsay, Major H. | Erskine, Lord (Somerset, Weston-s.-M.) | Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. |
| Brown, Brig.-Gen.H.C.(Berks, Newb'y) | Fairfax, Captain J. G. | Hohler, Sir Gerald Fitzroy |
| Buckingham, Sir H. | Fanshawe, Captain G. D. | Hope, Capt. A. O. J. (Warw'k, Nun.) |
| Bull, Rt. Hon. Sir William James | Fermoy, Lord | Hopkins, J. W. W. |
| Bullock, Captain M. | Fielden, E. B. | Howard-Bury, Colonel C. K. |
| Burgoyne, Lieut.-Colonel Sir Alan | Forestier-Walker, Sir L. | Hudson, Capt. A. U. M.(Hackney, N.) |
| Burman, J. B. | Foster, Sir Harry S. | Hudson, R. S. (Cumberland, Whiteh'n) |
| Butler, Sir Geoffrey | Foxcroft, Captain C. T. | Hurd, Percy A. |
| Cadogan, Major Hon. Edward | Fraser, Captain Ian | Hurst, Gerald B. |
| Caine, Gordon Hall | Fremantle, Lieut.-Colonel Francis E. | inskip, Sir Thomas Walker H. |
| Carver, Major W. H. | Gadie, Lieut.-Col. Anthony | Jackson, Sir H. (Wandsworth, Cen'l) |
| Cautley, Sir Henry s. | Galbraith, J. F. W. | James Lieut.-Colonel Hon. Cuthbert |
| Cayzer, Sir C. (Chester, City) | Ganzonl, Sir John | Jephcott, A. R. |
| Cayzer, Maj Sir Herbt. R.(Prtsmth.S.) | Gates, Percy | Jones, Sir G.W.H. (Stoke New'gton) |
§ lessly held, and thereby would prevent the possibility of a further fall in world prices, which we submit would bring about trade depression and unemployment. This Amendment, if accepted, will not in fact make possible inflation, whether that is desirable or not. What it will do will be to prevent the world price level from falling, which it may do if there is an expansion of trade, and it will prevent that helpful movement from being cancelled out by a subsequent credit stringency. I see no reason why, within the limits of orthodoxy which the Government have professed, and particularly after the support given by hon. Members to our Amendment, the Government should not give some undertaking that they will reconsider the matter and bring in their own words on the Report stage of this Measure.
§ Question put, "That the word 'shall' stand part of the Clause."
§ The Committee divided: Ayes,233; Noes, 131.
| Joynson-Hicks, Rt. Hon. Sir William | Percy, Lord Eustace (Hastings) | Steel, Major Samuel Strang |
| Kennedy, A. R. (Preston) | Perkins, Colonel E. K. | Streatfeild, Captain S. R. |
| King, Commodore Henry Douglas | Peto, Sir Basil E. (Devon, Barnstaple) | Stuart, Hon. J. (Moray and Nairn) |
| Kinloch-Cooke, Sir Clement | Peto, G. (Somerset, Frome) | Sugden, sir Wilfrid |
| Knox, Sir Alfred | Pilcher, G. | Templeton, W. P. |
| Lamb, J. Q. | Pilditch, Sir Philip | Thompson, Luke (Sunderland) |
| Locker-Lampson, Com. O.(Handsw'th) | Pownall, Sir Assheton | Thomson, F. C. (Aberdeen, South) |
| Loder, J. de V. | Preston, William | Thomson, Rt. Hon. Sir W. Mitchell |
| Looker, Herbert William | Price, Major C. W. M. | Vaughan-Morgan, Col. K. P. |
| Lougher, Lewis | Ralne, sir Walter | Wallace, Captain D.E. |
| Lucas-Tooth, Sir Hugh Vere | Ramsden, E. | Ward, Lt.-Col. A.L. (Kingston-on-Hull) |
| Luce, Maj.-Gen. Sir Richard Harman | Reld, D. D. (County Down) | Warner, Brigadier-General W. W. |
| Lumley, L.R. | Remnant, Sir James | Warrender, Sir Victor |
| MacAndrew, Major Charles Glen | Rhys, Hon. C. A. U. | Waterhouse, Captain Charles |
| MacIntyre, Ian | Rice, Sir Frederick | Watson, Rt. Hon. W. (Carlisle) |
| McLean, Major A. | Richardson, Sir P. W. (Sur'y,Ch'ts'y) | Wells, S. R. |
| Macnaghten, Hon. Sir Malcolm | Rodd, Rt. Hon. Sir James Rennell | White, Lieut.-Col. Sir G. Dairymple- |
| MacRobert, Alexander M. | Ropner, Major L. | Williams, A. M. (Cornwall, Northern) |
| Maitland,A. (Kent, Faversham) | Russell, Alexander West (Tynemouth) | Williams, Com. C. (Devon, Torquay) |
| Makins, Brigadier-General E. | Rye, F. G. | Williams, Herbert G. (Reading) |
| Manningham-Buller, Sir Mervyn | Salmon, Major I. | Wilson, R. R. (Stafford, Lichfield) |
| Margesson, Captain D. | Samuel, A. M. (Surrey, Farnham) | Winby, Colonel L. P. |
| Marriott, Sir J. A. R. | Samuel, Samuel (W'dsworth, Putney) | Windsor-Clive, Lieut.-Colonel George |
| Mason, Colonel Glyn K. | Sandeman, N. Stewart | Withers, John James |
| Meller, R. J. | Sanders, Sir Robert A. | Wolmer, Viscount |
| Merriman, Sir F. Boyd | Sassoon, Sir Philip Albert Gustave D. | Womersley, W. J. |
| Meyer, Sir Frank | Savery, S. S. | Wood, E C. (Somerset, Bridgwater) |
| Milne, J. S. Wardlaw | Sheffield, Sir Berkeley | Wood, E. (Chest'r, Stalyb'ge & Hyde) |
| Mitchell, S. (Lanark, Lanark) | Shepperson, E. W. | Wood, Rt. Hon. Sir Kingsley |
| Monsell, Eyres, Com. Rt. Hon. B. M. | Simms, Dr. John M. (Co. Down) | Woodcock, Colonel H. C. |
| Morrison, H. (Wilts, Salisbury) | Skelton, A. N. | Worthington-Evans, Rt. Hon. Sir L. |
| Morrison-Bell, Sir Arthur Clive | Smith, R. W. (Aberd'n & Kinc'dlne, C) | Yerburgh, Major Robert D. T. |
| Nelson, Sir Frank | Smlth-Carington, Neville W. | Young, Rt. Hon. Sir Hilton (Norwich) |
| Newman, Sir R. H. S. D. L. (Exeter) | Somerville, A. A. (Windsor) | |
| Newton, Sir D. G. C. (Cambridge) | Spender-Clay, Colonel H. | TELLERS FOR THE AYES.— |
| Oakley, T. | Stanley, Licut.-Colonel Rt. Hon. G. F. | Mr. Penny and Major The Marquess of Titchfield. |
| Oman, Sir Charles William C. | Stanley, Lord (Fylde) |
| NOES | ||
| Adamson, Rt. Hon. W. (Fife, West) | Henderson, Right Hon. A. (Burnley) | Salter, Dr. Alfred |
| Adamson, W. M. (Staff., Cannock) | Henderson, T. (Glasgow) | Scurr, John |
| Alexander, A. V. (Sheffield, Hillsbro') | Hirst, G. H. | Sexton, James |
| Ammon, Charles George | Hirst, W. (Bradford, South) | Shaw, Rt. Hon. Thomas (Preston) |
| Baker, J. (Wolverhampton, Bliston) | Hollins, A. | Shiels, Dr. Drummond |
| Baker, Walter | Hore-Bellsha, Leslie | Shinwell, E. |
| Barker, G. (Monmouth, Abertillery) | Hudson, J. H. (Huddersfield) | Short, Alfred (Wednesbury) |
| Barnes, A. | Jenkins, W. (Glamorgan, Neath) | Sinclair, Major Sir A. (Caithness) |
| Barr, J. | John, William (Rhondda, West) | Slesser, Sir Henry H. |
| Beckett, John (Gateshead) | Johnston, Thomas (Dundee) | Smillie, Robert |
| Briant, Frank | Jones, Morgan (Caerphilly) | Smith, H. B. Lees- (Keighley) |
| Broad, F. A. | Jones, T. I. Mardy (Pontypridd) | Smith, Rennie (Penlstone) |
| Bromley, J. | Kelly, W. T. | Snell, Harry |
| Brown, Ernest (Leith) | Kennedy, T. | Snowden, Rt. Hon. Philip |
| Brown, James (Ayr and Bute) | Kenworthy, Lt.-Com. Hon. Joseph M. | Stamford, T. W. |
| Buchanan, G. | Kirkwood, D. | Stephen, Campbell |
| Cape, Thomas | Lawson, John James | Stewart, J. (St. Rollox) |
| Charleton, H. C. | Lee, F. | Sullivan, Joseph |
| Cluse, W. S. | Lindley, F. W. | Sutton, J. E. |
| Connolly, M. | Lowth, T. | Thomas, Sir Robert John (Anglesey) |
| Cove, W. G. | Lunn, William | Thorne, G. R. (Wolverhampton, E.) |
| Cowan, D. M. (Scottish Universities) | Mackinder, W. | Thorne, W. (West Ham, Plaistow) |
| Dalton, Hugh | MacLaren, Andrew | Thurtie, Ernest |
| Davies, Rhys John (Westhoughton) | MacNeill-Weir, L. | Tinker, John Joseph |
| Dennison, R. | Malone, C. L'Estrange (N'thampton) | Tomlinson, R, p. |
| Duncan, C. | March, S. | Trevelyan, Rt. Hon. C. P. |
| Edwards, C. (Monmouth, Bedwellty) | Maxton, James | Varley, Frank B. |
| Garro-Jones, Captain G. M. | Mitchell, E. Rosslyn (Paisley) | Viant, S. P. |
| Gibbins, Joseph | Montague, Frederick | Wallhead, Richard C |
| Gillett, George M. | Morrison, R. C. (Tottenham, N.) | Watson, w. M. (Dunfermline) |
| Gosling, Harry | Murnin, H. | Watts-Morgan. Lt.-Col. D. (Rhondda) |
| Graham, D. M. (Lanark, Hamilton) | Oliver, George Harold | Wedgwood, Rt. Hon. Josiah |
| Graham, Rt. Hon. Wm. (Edin., Cent.) | Owen, Major G. | Wellock, Wilfred |
| Greenall, T. | Palln, John Henry | Welsh, J. C. |
| Greenwood, A. (Nelson and Colne) | Paling, W. | Wheatley, Rt. Hon. J. |
| Grenfell, D. R. (Glamorgan) | Parkinson, John Allen (Wigan) | Williams, Dr. J. H. (Llanelly) |
| Griffith, F. Kingsley | Pethick-Lawrence, F. W. | Williams. T. (York, Don Valley) |
| Griffiths, T. (Monmouth, Pontypool) | Ponsonby, Arthur | Wilson, R. J. (Jarrow) |
| Groves, T. | Potts, John S. | Windsor, Walter |
| Grundy, T. W. | Pureed, A. A. | Wright, W. |
| Hall, F. (York, W.R., Normanton) | Richardson, R. (Houghton-le-Spring) | Young, Robert (Lancaster, Newton) |
| Hall, G. H. (Merthyr Tydvll) | Ritson, J. | |
| Hamilton, Sir R. (Orkney & Shetland) | Runciman, Hilda (Cornwall, St. Ives) | TELLERS FOR THE NOES.— |
| Hardie, George D. | Runciman, Rt. Hon. Walter | Mr. Whiteley and Mr. Hayes. |
| Hayday, Arthur | Saklatvala, Shapurji |
§ Mr. LEES-SMITHI beg to move, in page 2, line 41, to leave out the word "sixty," and to insert instead thereof the word "seventy-five."
The reasons for this Amendment have already been stated, and I therefore move it formally.
§ Mr. WARDLAW-MILNEBefore this Question is put, may I ask whether the Government,in view of the discussion
| Division No. 130.] | AYES | [7.30 p.m. |
| Acland-Troyte, Lieut.-Colonel | Davies, Maj. Geo. F. (Somerset, Yeovil) | Kindersley, Major Guy M. |
| Ainsworth, Lieut.-Col. Charles | Davies, Sir Thomas (Cirencester) | King, Commodore Henry Douglas |
| Albery, Irving James | Davies, Dr. Vernon | Knox, Sir Alfred |
| Alexander, E. E. (Leyton) | Drewe. C. | Lamb, J. Q. |
| Amery, Rt. Hon. Leopold C. M. S. | Eden, Captain Anthony | Lloyd, Cyril E. (Dudley) |
| Ashley, Lt.-Col. Rt. Hon. Wilfrid W. | Elliot, Major Walter E. | Locker-Lampson, Com. O. (Handsw'th) |
| Astbury, Lieut.-Commander F. W. | Ellis, R. G, | Loder. J. de V. |
| Baldwin, Rt. Hon. Stanley | Erskine, Lord (Somerset, Weston s-M.) | Looker, Herbert William |
| Balniel, Lord | Fairfax, Captain J. G. | Lougher, Lewis |
| Barclay-Harvey, C. M. | Fanshawe, Captain G. D. | Lucas-Tooth, Sir Hugh Vere |
| Barnett, Major Sir Richard | Fermoy, Lord | Luce, Maj.-Gen. Sir Richard Harman |
| Beamish, Rear-Admiral T. P. H. | Fielden, E. B. | Lumley, L. R. |
| Beckett, Sir Gervaie (Leeds, N.) | Forestler-Walker, Sir L. | MacAndrew, Major Charles Glen |
| Bellalrs, Commander Carlyon | Foxcroft, Captain C. T. | MacDonald, R. (Glasgow, Catheart) |
| Benn, Sir A. S. (Plymouth, Drake) | Fraser, Captain Ian | MacIntyre, Ian |
| Bennett, A. J. | Fremantle, Lt.-Col. Francis E. | McLean, Major A. |
| Berry, Sir George | Gadie, Lieut.-Col. Anthony | Macnaghten, Hon. SirMalcolm |
| Bethel, A. | Galbraith, J. F. W. | MacRobert, Alexander M. |
| Betterton, HenryB. | Ganzonl, Sir John | Maitland, A. (Kent, Faversham) |
| Birchall, Major J. Dearman | Gates, Percy | Makins, Brigadier-General E. |
| Blundell, F. N. | Gilmour, Lt.-Col. Rt. Hon. Sir John | Manningham-Buller, Sir Mervyn |
| Boothby, R. J. G. | Goff, Sir Park | Margesson, Captain D. |
| Bourne, Captain Robert Croft | Gower, Sir Robert | Marriott, Sir J. A. R. |
| Bowater, Colonel Sir T. Vansittart | Grace, John | Mason, Colonel Glyn K. |
| Bowyer, Captain G. E. W. | Graham, Fergus (Cumberland, N.) | Meller, R. J. |
| Brass, Captain W. | Grant, Sir J. A. | Merriman, Sir F. Boyd |
| Bridgeman, Rt. Hon. William Clive | Grattan-Doyle, Sir N. | Meyer, Sir Frank |
| Brocklebank, C. E. R. | Greene. W. P. Crawford | Mitchell, S. (Lanark, Lanark) |
| Brooke, Brigadier-General C.R. I. | Grenfell, Edward C. (City of London) | Moniell, Eyres, Com. Rt. Hon. B. M. |
| Broun-Lindsay, Major H. | Grotrlan, H. Brent | Morrison-Bell, Sir Arthur Clive |
| Brown, Brig.-Gen.H.C.(Berks, Newb'y) | Gunston, Captain D. W. | Nelson, Sir Frank |
| Buckingham, Sir H, | Hacking, Douglas H. | Newman, Sir R. H. S. D. L. (Exeter) |
| Bull, Rt. Hon. Sir William James | Hall, Lieut.-Col. Sir F. (Dulwich) | Newton, Sir D. G. C. (Cambridge) |
| Bullock, Captain M. | Hall, Capt. W. D'A. (Brecon & Rad.) | Oakley, T. |
| Burgoyne, Lieut.-Colonel Sir Alan | Hamilton, Sir George | Oman, Sir Charles William C. |
| Burman, J, B. | Hammertley. S. S. | Percy, Lord Eustace (Hastings) |
| Butler, Sir Geoffrey | Hannon, Patrick Joseph Henry | Perkins, Colonel E.K. |
| Cadogan, Major Hon. Edward | Harland, A. | Peto, Sir Basil E. (Devon, Barnstaple) |
| Calne, Gordon Hall | Harrison, G. J. C. | Peto, G. (Somerset, Frome) |
| Carver, Major W. H. | Harvey. Major S. E. (Devon, Totnes) | Plicher, G. |
| Cassels, J. D. | Haslam, Henry C. | Pilditch, Sir Philip |
| Cautley, Sir Henry S. | Headlam, Lieut.-Colonel C. M. | Pownall, Sir Assheton |
| Cayzer, Sir C. (Chester, City) | Henderson, Capt. R.R. (Oxf'd,Henley) | Preston, William |
| Cayzer, Maj. Sir Herbt.R.(Prtsmth.C) | Henderson, Lieut.-Col. Sir Vivian | Price, Major C. W. M. |
| Cazalet, Captain Victor A. | Heneage, Lieut.-Colonel Arthur P. | Raine, Sir Walter |
| Cecil, Rt. Hon. Sir Evelyn (Aston) | Henn, Sir Sydney H. | Ramsden, E. |
| Cecil, Rt. Hon. Lord H. (Ox. Univ.) | Hennessy, Major Sir G. R. J. | Reid, O. D. (County Down) |
| Chamberlain, Rt. Hon. N. (Ladywood) | Hills, Major John Waller | Remnant, Sir James |
| Charter's, Brigadier-General J. | Hilton, Cecil | Rhys, Hon. C. A. U. |
| Christie, J. A. | Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. | Rice, Sir Frederick |
| Cobb, Sir Cyril | Hohler, Sir Gerald Fitzroy | Rodd, Rt. Hon. Sir James Rennell |
| Cochrane, Commander Hon, A. D. | Hope, Capt. A. O. J. (Warw'k, Nun.) | Ropner, Major L. |
| Coltox, Major Wm. Phillips | Hopkins, J. W. W. | Russell, Alexander West (Tynemouth) |
| Conway, Sir W. Martin | Hudson, Capt. A. U. M. (Hackney,N.) | Rye, F. G. |
| Cooper, A. Duff | Hudson, R. S. (Cumberl'nd, Whlteh'n) | Salmon, Major I. |
| Cope, Major William | Hume-Williams, sir W. Ellis | Samuel, A. M. (Surrey, Farnham) |
| Couper, J, B. | Hurd, Percy A. | Samuel, Samuel (W'dsworth, Putney) |
| Courtauld, Major J. S. | Hurst, Gerald B. | Sandeman, N. Stewart |
| Craig, Sir Ernest (Chester, Crewe) | Inskip, Sir Thomas Walker H. | Sanders, Sir Robert A. |
| Croft, Brigadier-General sir H. | Jackson, Sir H. (Wandsworth, Cen'l) | Sassoon, Sir Philip Albert Gustavo D. |
| Crookshank,Cpt.H.(Lindsey, Gainsbro) | James, Lieut.-Colonel Hon Cuthbert | Savery, S.S. |
| Curzon, Captain Viscount | Jephcott, A. R. | Sheffield, Sir Berkeley |
| Dalkeith, Earl of | Jones, Sir G. W. H. (Stoke New'gton) | Shepperson, E. W. |
| Davidson, Rt. Hon. J. (Hertford) | Joynson-Hicks, Rt. Hon. Sir William | Simms, Dr. John M. (Co. Down) |
| Davidson, Major-General Sir J. H. | Kennedy, A. R. (Preston) | Skelton, A. N. |
§ which has taken place, will undertake to consider before the Report stage the necessary Amendment to provide for a minimum of £260,000,000 and a maximum of £275,000,000, as suggested in this Amendment?
§ Question put, "That the word 'sixty' stand part of the Clause."
§ The Committee divided: Ayes,234; Noes,133.
| Smith, R. W. (Aberd'n & Kino'dine, C.) | Titchfield, Major the Marquess of. | Windsor-Cllve, Lieut.-Colonel George |
| Smith-Carington, Neville W. | Vaughan-Morgen, Col. K. P. | Withers, John James |
| Somerville, A. A. (Windsor) | Ward, Lt.-Col. A.L.(Kingston-on-Hull) | Wolmer, Viscount |
| Spender-Clay, Colonel H. | Warner, Brigadier-General W. W. | Womersley, W. J. |
| Stanley, Lieut.-Colonel Rt. Hon. G. F. | Warrender, Sir Victor | Wood, B. C. (Somerset, Bridgwater) |
| Stanley, Lord (Fylde) | Waterhouse, Captain Charles | Wood, E. (Chest'r, Stalyb'dge & Hyde) |
| Steel, Major Samuel Strang | Watson, Rt. Hon. W. (Carlisle) | Wood. Rt. Hon. Sir Kingsley |
| Streatfeild, Captain S. R. | Wells, S. R. | Woodcock, Colonel H. C. |
| Stuart, Hon. J. (Moray and Nairn) | White, Lieut.-Col. Sir G. Dalrymple | Worthington-Evans, Rt. Hon. Sir L. |
| Sugden, Sir Wilfrid | Williams, A. M. (Cornwall, Northern) | Yerburgh, Major Robert D. T. |
| Templeton, W. P. | Williams, Com. C. (Devon, Torquay) | Young, Rt. Hon. Sir Hilton (Norwich) |
| Thom, Lt.-Col. J. G. (Dumbarton) | Williams, Herbert G. (Reading) | |
| Thompson, Luke (Sunderland) | Wilson, R. R. (Stafford, Lichfield) | TELLERS FOR THE AYES.— |
| Thomson, F. C. (Aberdeen, South) | Winby, Colonel L. P. | Mr. Penny and Captain Wallace. |
| NOES. | ||
| Adamson, Rt. Hon. W. (Fife, West) | Hayday, Arthur | Ritson, J |
| Adamson, W. M. (Staff., Cannock) | Henderson, Rt. Hon. A. (Burnley) | Saklatvala, Shapurji |
| Alexander, A. V. (Sheffield, Hillsbro') | Henderson, T. (Glasgow) | Salter, Dr. Alfred |
| Ammon, Charles George | Hirst, G. H. | Scurr, John |
| Baker, J. (Wolverhampton,Bliston) | Hirst, W. (Bradford, South) | Sexton, James |
| Baker, Walter | Hollins, A. | Shaw, Rt. Hon. Thomas (Preston) |
| Barker, G. (Monmouth, Abertillery) | Hore-Belisha, Leslie | Shiels, Dr. Drummond |
| Barnes, A. | Hudson, J. H. (Huddersfield) | Shinwell, E. |
| Barr, J. | Hutchison, Sir Robert (Montrose) | Short, Alfred (Wednesbury) |
| Beckett, John (Gateshead) | Jenkins, W. (Glamorgan, Neath) | Sinclair, Major Sir A. (Caithness) |
| Briant, Frank | John, William (Rhondda, West) | Slesser, Sir Henry H. |
| Broad, F. A. | Johnston, Thomas (Dundee) | Smollie, Robert |
| Bromley, J. | Jones, Morgan (Caerphilly) | Smith, H. B. Lees (Keighley) |
| Brown, Ernest (Leith) | Jones, T. I. Mardy (Pontypridd) | Smith, Rennie (Penistone) |
| Brown, James (Ayr and Bute) | Kelly, W. T. | Snell, Harry |
| Buchanan,G. | Kennedy, T. | Snowden, Rt. Hon. Philip |
| Cape, Thomas | Kenworthy, Lt.-Com. Hon. Joseph M. | Stamford, T. W. |
| Charleton, H. C. | Kirkwood. D. | Stephen, Campbell |
| Cluse, W. S. | Lawson, John James | Stewart, J. (St. Rollox) |
| Connolly, M. | Lee, F. | Sullivan. J |
| Cove, W. G. | Lindley, F. W. | Sutton, J. E. |
| Cowan, D. M. (Scottish Universities) | Lowth, T. | Thomas, Sir Robert John (Anglesey) |
| Dalton, Hugh | Lunn, William | Thome, G. R. (Wolverhampton, E.) |
| Davies, Rhys John (Westhoughton) | Mackinder, W. | Thorne, W. (West Ham, Plaistow) |
| Dennison, R. | MacLaren, Andrew | Thurtle, Ernest |
| Duncan, C. | MacNeill-Weir, L. | Tinker, John Joseph |
| Edwards, C. (Monmouth, Bedwellty) | Malone, C. L'Estrange (N'thampton) | Tomlinson, R. P. |
| Foster, Sir Harry S. | March, S. | Trevelyan, Rt. Hon. C. P. |
| Garro-Jones, Captain G. M. | Maxton, James | Varley, Frank B. |
| Gibbins, Joseph | Milne, J. S. Wardlaw- | Viant, S. P. |
| Gillett, George M. | Mitchell, E. Rosslyn (Paisley) | Wallhead, Richard C. |
| Gosling, Harry | Montague, Frederick | Watson, W. M. (Dunfermline) |
| Graham, D. M. (Lanark, Hamilton) | Morris, R. H. | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| Graham, Rt. Hon. Wm. (Edin.,Cent.) | Morrison, R. C. (Tottenham, N.) | Wedgwood, Rt. Hon. Josiah |
| Greenall, T. | Murnin, H. | Wellock, Wilfred |
| Greenwood, A. (Nelson and Colne) | Oliver, George Harold | Welsh, J. C. |
| Grenfell, D. R. (Glamorgan) | Owen, Major G. | Wheatley, Rt. Hon. J. |
| Griffith, F. Kingsley | Palin, John Henry | Williams, Dr. J. H. (Llanelly) |
| Griffiths, T. (Monmouth, Pontypool) | Paling, W. | Williams, T. (York, Don Valley) |
| Groves, T. | Parkinson, John Allen (Wigan) | Wilson, R. J. (Jarrow) |
| Grundy, T. W. | Pethick-Lawrence, F. W, | Windsor, Walter |
| Hall, F. (York, W.R., Normanton) | Ponsonby, Arthur | Wright, W. |
| Hall, G. H. (Merthyr Tydvil) | Potts, John S. | Young, Robert (Lancaster, Newton) |
| Hamilton, Sir R. (Orkney & Shetland) | Purcell. A. A. | |
| Hardle, George D. | Richardson, R. (Houghton-le-Spring) | TELLERS FOR THE NOES.— |
| Mr. Hayes and Mr. Whiteley. |
§ It being half-past Seven of the Clock, and leave having been given to move the Adjournment of the House under Standing Order No. 10, further Proceeding was postponed, without Question put.