HC Deb 22 May 1928 vol 217 cc1719-54

The following Amendments stood upon the Order Paper:

In page 2, line 41, to leave out the word "the" and to insert instead thereof the word "an."

In page 2, line 41, to leave out the words "two hundred and sixty," and to insert instead thereof the words "not less than two hundred and fifty million and not more than two hundred and seventy-five."— [Captain Macmillan and Captain Loder.]

In page 2, line 43, after the word "Section" to insert the words "and may at any time issue an additional amount of fifteen million pounds." [Mr. Lees-Smith and Mr. Gillett.]


May I suggest to you, Mr. Speaker, that it would be more convenient to take a general discussion of this question on the first Amendment. The first three Amendments cover much the same ground and we might discuss all points raised in them together and then divide separately on each.


I think that it would be for the general convenience of the House to follow the course suggested, taking one Division only on the third Amendment.

Captain LODER

I beg to move, in page 2, line 41, to leave out the word "the" and to insert instead thereof the word "an."

Although we have had a long discussion upon the question of the limits of the fiduciary note issue, we do not scent to have reached agenerally satisfactory conclusion. I hope the Government will see their way either to meet the numerous appeals which were made during the Committee stage for a reconsideration of their attitude on this question, or else satisfy more fully the doubts which still exist on this side of the House as well as on the Opposition side. It is just as important that any impression that this Bill has a deflatory as well as an inflatory bias should be dissipated. I think the Secretary of State for War admitted that the figure of £260,000,000 could not safely be regarded as a permanent or final figure. He suggested that the figure of £275,000,000 put forward from the Opposition side was an attempt at a better shot. He did not claim that the figure of £260,000,000 was more than the best possible shot. It was not denied that that figure was in the nature of a shot. It is because any fixed figure must be in the nature of the best possible estimate at the moment that so much discussion has taken place about the procedure for altering that figure, and especially the procedure mentioned in Clause 8. It is because of doubts as to how that procedure will work that we are suggesting to give the Bank a certain amount of latitude.

A good deal was said in the Committee about the effect of all this on the profits of the Bank. I do not think it would be fair to suggest that the Bank would put considerations of private profit before its public duty. Nevertheless, there is a widespread feeling that the influences at work on the Bank are on the side of excessive caution and that the Bank will be unwilling to use the procedure under Clause 8, or, at any rate, will not use it as often and as soon as may be desirable. The Secretary of State for War objected to the Labour party Amendment on the Committee stage on the ground that it would give the Bank power to reduce the fiduciary issue to any extent, and it is for this reason that we have put a minimum figure in the Amendment which follows. I think if the Government were to accept the principle of a maximum and a minimum, there would he no desire to ire pernickaty as to the actual figures. The real point is that there should be enough latitude to cover the normal variations and that the special procedure should be kept for special circumstances.


I beg to second the Amendment.

4.0 p.m.


This Amendment simply repeats the proposals which were contained in the Amendment moved from the Opposition side of the House during the Committee stage, and of course we are very pleased to see our proposal being brought forward as an Amendment in the names of two enlightened Conservative Members. The only difference between this proposal and the one that we made last week is that the lower limit of the fiduciary issue is placed at £250,000,000, whereas we proposed to leave it, as the Bill does, at £260,000,000. On that point we object to the proposal of the Mover of the Amendment. We object because we consider that the chief danger of this Bill is that it may be used for the purpose of deflation, and this Amendment would allow the Bank to have an even greater deflationary power than the Bill at present gives them. I am not going to repeat our objections to the main mechanism of the Bill. The Secretary of State for War and the Financial Secretary know that we consider that to leave the Bank with a reserve of only between £40,000,000 and £50,000,000 will give it a reserve insufficient to meet the contingencies, especially those arising from the external demand for gold which may come upon it. That ground I am not going to cover again, but I want to take this opportunity of putting to the Secretary of State for War, if he is going to reply, a question which was raised last week by the hon. Member for Westmorland (Mr. O. Stanley).

I think it is essential that we should get this matter cleared up. The Secretary of State for War said that if he were to adopt the proposal we made, by which the fiduciary issue could be increased to £275,000,000, by means of which there would be an elasticity so that it could be placed at a maximum limit of £275,000,000, that would involve a loss to the Bank of £600,000 a year. I understand that the process would be that the Bank would have to take £15,000,000 worth of securities out of its banking department and transfer them to the issue department, which is really the Government Department, so that the Bank would lose the interest on, that £15,000,000, and the Government would obtain a corresponding sum. That seemed to me the process which the Secretary of State for War suggested it would have to go through. If that be so, will not exactly the same results follow if the Bank uses its power under this Bill, and, by the assent of the Treasury, issues a fiduciary issue of an extra £15,000,000? Will it, or will it not, lead to a loss of interest to the Bank of the sum of money stated? That is what I wish cleared up. If, as we suspect, that is so, what does it mean? It means this: We are afraid that the Bank will not utilise this machinery, because it involves a public confession of weakness. But if that be so, we find, in addition, that if the Bank utilises this machinery, it will involve it in a fine of hundreds of thousands of pounds. If that be so—and it appears to me it must be so—this again justifies the hostility which we have shown to the structure upon which this Bill is framed.

The SECRETARY of STATE for WAR (Sir Laming Worthington-Evans)

The Amendment moved by my hon. and gallant Friend the Member for East Leicester (Captain Loder) is one which would insert in this Bill, not a fixed fiduciary issue of £260,000,000, but a fluctuating sum varying, at the option of the Bank, between £250,000,000 and £275,000,000. This Amendment, like the Amendment moved by the party opposite, is based upon a fear that the figure we have selected of £260,000,000 is not sufficiently elastic, and that the provisions in Clause 8 are not likely to be used to give the elasticity which, it is feared, does not exist in the £260,000,000. But my hon. and gallant Friend does not seem to have considered the inconvenience of a fluctuating figure. If the Bill were in operation at this moment—and I think it is just as well that we should test it by the conditions of credit as they are to-day—there would be a margin of about £54,250,000 of notes in the reserve of the banking department and in the margin of the unissued currency notes. The unissued currency note margin would be, approximately, £9,000,000 if the Bill were now in operation, and the notes in reserve in the banking department were on 16th May last £45,000,000 and some odd hundreds of thousands. There would, therefore, be a margin of £54,250,000. If the Amendment were passed, the Bank, at its discretion, could make that margin either £44,000,000, if it adopted the lower figure of £250,000,000, or £60,000,000 if it adopted the higher figure. There would therefore be an obligation on the part of the Bank to keep £44,000,000 of non-earning assets, with power to increase the note issue by £25,000,000. On the present credit conditions, that would give a margin of at least £15,000,000 in excess of what is required, and it would be almost impossible to prevent a relaxation of credit and a gradual reduction by anything up to £15,000,000 of the actual gold that we now hold.

The hon. Member opposite repeated a question which was put to me in Committee, and I thought answered by me in Committee, with regard to the loss of profit to the Bank if the Bank suggested an increase under Clause 8, and my hon. Friend dealt with the same point. But the effect of this Amendment would be that it would enable the Bank to increase its profit. It could increase its profits by the interest on £10,000,000 at the expense of the Treasury, and it could increase its profits by the interest on £15,000,000 at the expense of the gold reserve, because the Amendment proposes that the Bank shall have the power to have a fiduciary issue of anything from £250,000,000 to £275,000,000 without check of any sort, at its entire discretion. The result of that would be that the Bank, as I say, could increase its profits by the interest on £10,000,000 at the expense of the Treasury, that is, by keeping the securities itself, instead of the Treasury having the benefit of the securities, and it could increase them by the interest on £15,000,000 by letting that amount of gold go, and, as I pointed out, it is almost certain that that amount of gold would go if credit were relaxed, as normally it would he, owing to the excessive reserves.

My hon. Friend argued that, of course, the Bank would not attempt to earn the extra profit if it were against the public interest, and the Bank, indeed, is accused of excessive caution by the hon. Gentleman opposite. But surely it is for Parliament to say, and it ought not to be left to the Bank. If Parliament wants the Bank to keep a gold supply, corresponding to the £260,000,000 of the fiduciary issue—and I would remind hon. Members that that was the figure arrived at from the Cunliffe Committee's advice—surely Parliament ought to say so, and ought to lay it down as was advised by the Cunliffe Committee. And if Parliament wants the Bank to reduce its gold holding by £15,000,000, as would be the natural consequence of accepting this Amendment, it seems to me that it would be quite absurd that Parliament should make a present to the Bank of the interest on that £15,000,000.

I will now specifically answer that particular question which the hon. Gentleman asked me before I leave the question of profits. If the Bank applied under Clause 8, it would be at a time when gold in their holding was low and when securities were high. It is because gold is low that they come for the increase on the fiduciary issue. What they would, in fact, be then doing would be to forgo the interest upon some of the securities they held, and exchange them for non-interest bearing assets. It is not the same thing as the case with which I was dealing when I said there would be a loss of £600,000 a year. That would be an actual loss of £600,000 a year, but in the case the right hon. Gentleman supposed it is a little different. It would be fortuitous that the Bank should be holding so much of its reserve in interest-bearing securities, and it is because of that that they come to ask for the increase of the fiduciary issue. So that in a sense it would be giving up a profit they ought not to be making, rather than losing a profit which is the legitimate result of their transactions.

I hesitate to say that it is possible to forecast the result if this Amendment were accepted. A fixed fiduciary issue is understood. It is understood on the Continent, and it is understod in England, and it has prevailed here for the last 80 years. It is not wise in a matter so difficult to depart from an understood principle unless some great advantage is to be gained. I do not know what the effect would be upon the gold reserves if this innovation were tried. I know that if it w ere applied in the circumstances of today, supposing that the Bill were in operation, the most probable effect would be to reduce our gold reserves by anything up to £15,000,000. That is a risk which I think we ought not to take. It would reduce our reserves without giving us any corresponding advantage, and it might, indeed, be one of those things which perhaps would risk the maintenance of the gold standard. I must, therefore, ask the House to reject the Amendment.


In spite of the remarks that have fallen from the Secretary of State for War, I still maintain that it is an advantage to have the opportunity of increasing the fiduciary issue to £275,000,000. I do not think that it would be a good thing to allow a reduction from £260,000,000 to £250,000,000, and, therefore, I do not think, speaking far myself, and, I believe, also for my colleagues, that we could very well support the Amendment of the hon. and gallant Member for East Leicester (Captain Loder); but we shall continue to press our Amendment, which I understand will be put separately after the first Amendment has been taken, if it is pressed to a Division. The great object of the two Amendments is to allow a slack in the Issue Department.

I am a little doubtful in my own mind as to whether the Secretary of State for War is correct in his explanation. It is a very technical and complicated matter, and I should not like to be dogmatic in regard to it, but, personally, I think the right hon. Gentleman is wrong, because I do not think he has quite clearly separated the position of the Bank in the Issue Department from that in the Banking Department. The object of the option to go to £275,000,000 is to give a measure of slack in the Issue Department. In the United States of America, where they have the Federal Reserve system, no distinction is drawn between the Issue Department and the Banking Department—it is all one; and there we have this phenomenon, that they have a very large measure of slack, and they do not use it as a basis of the credit policy of the banks.

Suppose that the Bank of England have an option to have an additional £15,000,000 of slack in the Issue Department. If they do not use that option, then there is no change in the position in the Banking Department. If they do use the option, and increase the fiduciary issue by £15,000,000, that goes into the Banking Department, and gives, at first blush, an increase of £15,000,000 in the reserve of the Banking Department. Of course, however, that addition to the reserve of the Banking Department has to be paid for by handing over securities from the Banking Department to the Issue Department. You have £15,000,000 extra in the Banking Department, and what is going to happen to it? If you followed the American principle, it would simply lie as slack in the Banking Department, and it seems to me that, if that could be done, it would be just as available as slack there as it would be in the Issue Department. But the trouble is that the Bank of England, being, naturally, a money-making concern, will use this £15,000,000 as a basis of credit, and, when it comes to use this £15,000,000 as a basis of credit, it will make a profit on it. I do not, however, think that the right hon. Gentleman was right iii supposing that it would make a profit in the aggregate, because, as a set-off against the profit that it makes in the Banking Department by having this additional £15,000,000, it has had to transfer from the Banking Department to the Issue Department £15,000,000 of securities. It seems to me, therefore, that, so far as the Banking Department is concerned, the position is, broadly speaking, all square, and I do not think that a profit arises.

The real issue seems to me to be whether the Bank will or will not use this as a basis of credit. If the Banking Department had to-day, not only the £9,000,000 extra which, as I understand from the right hon. Gentleman, they will possess even under this Bill, but also £15,000,000 extra, I think there might be quite good reason for saying that the use of the whole of that £24,000,000 of additional reserve to form the basis of additional credit might be of the nature of inflation, and, if the Bank is going to have £24,000,000 extra in its Banking Department and is not to be allowed to use it as a basis of credit, or, at any rate, if it is not going to use it as a basis of credit, I think the Bank would suffer, and that is why I say that the slack should be in the Issue Department and not in the Banking Department. Under the Bill as it stands, no slack is provided in the Issue Department, and it is because we feel that there ought to be slack there, where the Government will have to deal with it instead of the Bank, that we support the Amendment of my hon. Friend the Member for Keighley (Mr. Lees-Smith)—in page 2, line 43, after the word "section," to insert the words "and may at any time issue an additional amount of fifteen million pounds." Our Amendment would not allow the Bank to go below £260,000,000 of fiduciary issue in its Issue Department, and it would give an option of going to £275,000,000. If the contention which I have put forward is correct, it will not make any substantial difference to the profits of the Bank whether the figure in the Issue Department be £260,000,000 or £275,000,000, because the Banking Department will lose on the swings what it makes on the roundabouts. If, however, that option be not given, the Bank will be tied up, and the only means of increasing the issue beyond the figure printed in this Bill will be by the powers under Clause 8. Therefore, although I shall not be able to support the Amendment of the hon. and gallant Member for East Leicester, I shall certainly vote for the Amendment of my hon. Friend the Member for Keighley.


I have always understood that it was a very open question whether it was love, or drink, or currency that contributed most to the increase of lunacy, and I am bound to say, after giving very close and continuous attention to these Debates, that I have come deliberately to the conclusion that the last predisposing cause is, if not the most powerful, the most imminent. I must frankly say that, of the two Amendments that we are now considering, I distinctly prefer that which is to be moved from the Opposition benches, and for this reason. I look at this question from the broadest point of view, and I am very much more afraid of the dangers of inflation than I am of the danger of deflation. For that reason, as I have said, I prefer the Amendment which is to be moved from the opposite benches, but, to be perfectly candid, I do not propose to support either of them, because I think that the Government are right in adhering to the Bill. I was very much impressed, and not for the first time, by the statement made by my hon. Friend the Financial Secretary when he introduced the Second Reading of this Bill. It seemed to me that his argument was founded on the very safest ground. For myself, I have always adhered very closely to the conclusions which were reached by the Cunliffe Committee. Of all the main inquiries into this question—I mean, of course, since the termination of the War; I am not thinking of the elaborate inquiries which were made 80 or 90 years ago—of all the inquiries made since the War, the conclusions of the Cunliffe Committee seem to me to be very much the soundest and the best. This Bill as presented by the Government is specifically based upon the recommendations of the Cunliffe Committee. The Cunliffe Committee, as the Secretary of State for War has already explained to the House this afternoon, suggested two things. In the first place, they insisted on the specific sate of £260,000,000 for the fiduciary issue—


No. The Cunliffe Committee merely laid it down that the gold reserve should be maintained at £160,000,000; they said nothing about the amount of the fiduciary issue.


I agree; but the figure which is put into this Bill by the Government is, I think, a perfectly fair, indeed an irresistible deduction from the premises upon which the Cunliffe Committee built their Report. In the first place, then, I propose to vote against both these Amendments on the authority of the Cunliffe Committee, who, as it seems to me, produced reasons of very great weight. I have, however, a second reason, and that is the reason put forward by the Secretary of State for War, namely, that this is a matter not for the Treasury to determine, not for the Bank to determine, but for Parliament to determine. Parliament is to be asked to determine it in this Bill, and for that reason I shall support the proposal of the Government.


It seems to me that the main point brought out in the Amendment of the hon. and gallant Member for East Leicester (Captain Loder) is the question whether the fiduciary issue should be a fixed amount which cannot be altered except with the consent of the Treasury. I do not see that the Amendment would work on the lines suggested by the Secretary of State for War, because I gather that he surmised that there would be, under the conditions suggested in this Amendment, an almost weekly fluctuation of the figure that would appear as the fiduciary issue. I do not think, however, that there is anything in the Amendment that would necessitate that. I do not see, supposing that the Amendment were carried, that there would be anything to prevent the Bank from starting at £260,000,000, and leaving the figure in the Bank return at £260,000,000 until such time as there was quite a considerable change and it was desired, say, to raise it by £5,000,000, or to reduce it by £5,000,000. Therefore, I cannot see that the objections which the Secretary of State for War has made against the Amendment of the hon. and gallant Member for East Leicester are quite as strong as he would have us imagine. I quite agree with the Secretary of State, however, that, if the figure were reduced by £10,000,000, it might add to the profits of the Bank.

With regard to the point raised by the hon. Member for Westmorland (Mr. O. Stanley) in the Debate last week, I am not quite sure whether one point has been sufficiently accentuated. I noticed that the right hon. Gentleman always took it for granted that, if it were desired to increase the fiduciary issue, it would be necessary to take securities out of the Banking Department. I should like to suggest to him that, while that probably would be done, it is not needful to do it. We have never heard from the Government any answer to the question why, if more securities were wanted, the Bank should not be in a position to buy the securities that it required to put in as cover. I can tell the House the answer at once on this rather vital point. The answer is that, if it were done in that way, it would result, taking the figure of £15,000,000, in a pure inflation of £15,000,000 if it were done at the present time. When we talk about the sum of £15,000,000, it seems immediately to settle the question when it is said at once that it is obvious that something must be done, and, therefore, in order to counteract that, the Bank will sell some of its own £15,000,000, which brings us to the position which the right hon. Gentleman has laid down.

I bring out this point because one of the reasons why we have urged that this should be a shifting figure is that, as trade expands, we consider that the note issue ought to expand also, and if you have an expansion in trade, we hold that the increase in the amount of notes keeps step with an increase in trade, and you would not have inflation. Instead of

talking of £15,000,000, supposing you had arrived at a large expansion of trade and of credit and the Bank was to raise the figure by £5,000,000, in that emergency the securities might be purchased, the amount of credit would be increased, and the other deposits would rise by £5,000,000, but if the factors outside had also expanded, the note issue would only have expanded in proportion to the rest of the credit expansion, and you would have no inflation.

It was rather unfortunate that the hon. Member for Westmorland jumped to his conclusion without actually bringing out the point that why he said that you have to take the securities from the banking department was because he was naturally trying to avoid any question of inflation. I, personally, find it impossible to support the suggestion of a lower figure. In many ways it seems to me that the proposal of the hon. Member is really to be preferred to the proposals of the Government, because I still think that in fixing the figure at £260,000,000 and only allowing the very limited means of expansion that are proposed in this Bill, you are faced with the same difficulty against which we have been arguing in the earlier stages of the Bill. I very much wish that the Government could have seen their way to have accepted the suggestion of the hon. Member, because I cannot help thinking that in future years it would have been for the general benefit of the trade of this country.

Amendment negatived.


I beg to move, in page 2, line 43, after the word "section," to insert the words: and may at any time issue an additional amount of fifteen million pounds.


I beg to second the Amendment.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 129; Noes, 199.

Division No. 142.] AYES. [4.34 p.m.
Adamson, Rt. Hon. W. (Fife, West) Baker, Walter Broad, F. A.
Adamson, W. M. (Staff., Cannock) Barker, G. (Monmouth, Abertillery) Bromfield, William
Alexander, A. V. (Sheffield, Hillsbro') Barr, J. Bromley, J.
Ammon, Charles George Batey, Joseph Brown, Ernest (Leith)
Attlee, Clement Richard Bondfield, Margaret Buchanan, G.
Baker, J. (Wolverhampton, Bilston) Briant, Frank Cape, Thomas
Charleton, H. C. Kelly, W. T. Short, Alfred (Wednesbury)
Cluse, W. S. Kennedy, T. Simon, Rt. Hon. Sir John
Compton, Joseph Kenworthy, Lt.-Com. Hon. Joseph M. Sinclair, Major Sir A. (Caithness)
Connolly, M. Kirkwood, D. Smillie, Robert
Cove, w. G. Lawrence, Susan Smith, H. B. Lees (Keighley)
Cowan, D. M. (Scottish Universities) Lawson, John James Sneil, Harry
Dalton, Hugh Lee, F. Snowden, Rt. Hon. Philip
Davies, Rhys John (Westhoughton) Lowth, T. Spoor, Rt. Hon. Benjamin Charles
Day, Harry Lunn, William Stamford, T. W.
Dennison, R. MacDonald, Rt. Hon. J. R. (Aberavon) Stephen, Campbell
Dunnico, H. Mackinder, W. Strauss, E. A.
Edge, Sir William Maclean, Nell (Glasgow, Govan) Sullivan, J.
Fenby, T, D. MacNeill-Weir, L. Sutton, J. E.
Gillett, George M. Malone, C. L'Estrange (N'thampton) Thomas, Sir Robert John (Anglesey)
Gosling, Harry March, S. Thorne, G. R. (Wolverhampton, E.)
Greenall, T. Maxton, James Thorne, W. (West Ham, Plaistow)
Greenwood, A. (Nelson and Colne) Montague, Frederick Thurtle, Ernest
Grenfell, D. R. (Glamorgan) Morris, R. H. Tinker, John Joseph
Griffith, F. Kingsley Murnin, H. Tomlinson, R. P.
Groves, T. Naylor, T. E. Trevelyan, Rt. Hon. C. P.
Grundy, T, W. Oliver, George Harold Viant, S. P.
Hall, F. (York, W. R., Normanton) Owen, Major G. Wallhead, Richard C.
Hall, G. H. (Merthyr Tydvil) Palin, John Henry Watts-Morgan, Lt.-Col. D. (Rhondda)
Hamilton, Sir R. (Orkney & Shetland) Paling, W. Webb, Rt. Hon. Sidney
Hardie, George D. Parkinson, John Allen (Wigan) Wedgwood, Rt. Hon. Josiah
Hartshorn, Rt. Hon. Vernon Pethick-Lawrence, F. W. Wellock, Wilfred
Hayday, Arthur Ponsonby, Arthur Westwood, J.
Henderson, Right Hon. A. (Burnley) Potts, John S. Whiteley, W.
Henderson, T. (Glasgow) Richardson, R (Houghton-le-Spring) Wiggins, William Martin
Hirst, G. H. Riley, Ben Williams, David (Swansea, E.)
Hirst, w. (Bradford, South) Roberts, Rt. Hon. F. O.(W. Bromwich) Williams, T. (York, Don Valley)
Hollins, A. Rose, Frank H. Wilson, H. J. (Jarrow)
Hudson, J. H. (Huddersfield) Sakiatvala, Shapurji Windsor, Walter
Hutchison, Sir Robert (Montrose) Salter, Dr. Alfred Wright, W.
John, William (Rhondda, West) Scrymgeour, E. Young, Robert (Lancaster, Newton)
Johnston, Thomas (Dundee) Shaw, Rt. Hon. Thomas (Preston)
Jones, J. J. (West Hxm. Silvertown) Shiels, Dr. Drummond TELLERS FOK THE AYES.
Jones, Morgan (Caerphilly) Shinwell, E. Mr. Charles Edwards and Mr. B. Smith.
Acland-Troyte, Lieut.-Colonel Cochrane, Commander Hon. A. D. Hartington, Marquess of
Agg-Gardner, Rt. Hon. Sir James T. Cockerill, Brig.-General Sir George Harvey, G. (Lambeth, Kennington)
Albery, Irving James Cooper, A. Duff Harvey, Major S. E. (Devon, Totnes)
Alexander, E. E. (Leyton) Cooe, Major William Haslam, Henry C
Allen, J. Sandeman (L'pool, W. Derby) Cowan, Sir Wm. Henry (Islington, N.) Headlam, Lieut.-Colonel C. M.
Apsley, Lord Craig, Capt. Rt. Hon. C. C. (Antrim) Henderson, Capt. R. R. (Oxf'd, Henley)
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Craig, Sir Ernest (Chester, Crewe) Heneage, Limit.-Colonel Arthur P.
Astor, Maj. Hn. John J. (Kent, Dover) Crooke, J. Smedley (Deritend) Henn, Sir Sydney H
Atholl, Duchess of Crookshank, Cpt. H.(Lindsey, Gainsbro) Hennessy, Major Sir G. R. J.
Atkinson, C. Cuiverwell, C. T. (Bristol, West) Herbert, Dennis (Hertford, Watford)
Baldwin, Rt. Hon. Stanley Curzon, Captain Viscount Hilton, Cecil
Balniel, Lord Davies, Sir Thomas (Cirencester) Hoare, Lt.-Col. Rt. Hon. Sir S J. G.
Barclay-Harvey, C. M. Davies, Dr. Vernon Hope, Capt. A. O. J. (Warw'k, Nun.)
Beamish, Rear-Admiral T. p. H. Dean, Arthur Wellesley Hopkins, J. W. W.
Beckett, Sir Gervase (Leeds. N.) Drewe, C. Hopkinson, A. (Lancaster, Mossley)
Benn, Sir A. S. (Plymouth, Drake) Eden, Captain Anthony Howard-Bury, Colonel C. K.
Bennett, A. J. Edmondson, Major A. J. Hurd, Percy A.
Bentinck, Lord Henry Cavendish- Elliot, Major Walter E. Hurst, Gerald B.
Birchall, Major J. Dearman England, Colonel A. Inskip, Sir Thomas Walker H.
Bird, Sir R. B. (Wolverhampton, W.) Erskine, Lord (Somerset, Weston-s.-M.) Iveagh, Countess of
Blundell, F. N. Everard, W. Lindsay Jackson, Sir H. (Wandsworth, Cen't)
Boothby, R. J. G. Fairfax, Captain J. G. James, Lieut.-Colonel Hon. Cuthbert
Bourne, Captain Robert Croft Fermoy, Lord Joynson-Hicks, Rt. Hon. Sir William
Bowyer, Capt. G. E. W. Fielden, E. B. Knox, Sir Alfred
Brassey, Sir Leonard Forestler-Walker, Sir L. Locker-Lampson, G. (Wood Green)
Briscoe, Richard George Forrest, W. Loder, J. de V.
Brown, Brig.-Gen, H. C. (Berks, Newb'y) Fraser, Captain Ian Looker, Herbert William
Buchan, John Frece, Sir Walter de Lougher, Lewis
Bull, Rt. Hon. Sir William James Fremantle, Lieut.-Colonel Francis E. Luce, Maj.-Gen. Sir Richard Harman
Bullock, Captain M. Gadie, Lieut.-Col. Anthony Lynn, Sir R. J.
Burman, J. B. Gates, Percy MacAndrew, Major Charles Glen
Burney, Lieut.-Com. Charles D. Goff, Sir Park Macdonald, Capt. P. D. (I. of W.)
Butler, Sir Geoffrey Grace, John Macdonald, R. (Glasgow, Cathcart)
Cautley, Sir Henry S. Grant, Sir J. A. Macintyre, Ian
Cayzer, Sir C. (Chester, City) Grattan-Doyle, Sir N. McLean, Major A.
Cecil, Rt. Hon. Lord H. (Ox. Univ.) Greenwood, Rt. Hn. Sir H. (W'th's'w, E) Macnaghten, Hon. Sir Malcolm
Chamberlain, Rt. Hn. Sir J.A. (Birm.,W.) Grotrian, H. Brent Makins, Brigadier-General E.
Chamberlain, Rt. Hon. N. (Ladywood) Hacking, Douglas H. Malone, Major P. B.
Christie, J. A. Hamilton, Sir George Margesson, Captain D.
Churchman, Sir Arthur C. Hammersley, S. S. Marriott, Sir J. A. R.
Cobb, Sir Cyril Hannon, Patrick Joseph Henry Merriman, Sir F. Boyd
Mitchell, S. (Lanark, Lanark) Robinson, Sir T. (Lanes., Stretford) Thom, Lt.-Col. J. G. (Dumbarton)
Mitchell, W. Foot (Saffron Walden) Ropner, Major L. Thomson, Rt. Hon. Sir W. Mitchell-
Mitchell, Sir w. Lane (Streatham) Russell, Alexander West (Tynemouth) Tinne, J. A.
Monsell, Eyres, Com. Rt. Hon. B. M. Salmon, Major I. Titchfield, Major the Marquess of
Moore, Lieut.-Colonel T, C. R. (Ayr) Samuel, A. M. (Surrey, Farnham) Tryon, Rt. Hon. George Clement
Morrison, H. (Wilts, Sailsbury) Sandeman, N. Stewart Turton, Sir Edmund Russborough
Newman, Sir R. H. S. D. L. (Exeter) Sanders, sir Robert A. Vaughan-Morgan, Col. K. P.
Nicholson, O (Westminster) Sandon, Lord Waddington, R.
Nicholson, Col. Rt. Hn. W.G.(Ptrsf'ld.) Savery, S. S. Wallace, Captain D. E.
Penny, Frederick George Shepperson, E, W. Watson, Rt. Hon. W. (Carlisle)
Perkins, Colonel E. K. Simms, Dr. John M. (Co. Down) Wells, S. R.
Perring, Sir William George Skelton, A. N. White, Lieut.-Col. Sir G. Dairymplre
Peto, G. (Somerset, Frome) Smith, R. W.(Aberd'n & Kinc'dine, C.) Williams, Herbert G. (Reading)
Phillpson, Mabel Smith-Carington, Neville W. Wilson, R. R. (Stafford, Lichfield)
Pilcher, G. Smithers, Waldron Windsor-Clive, Lieut.-Colonel George
Pilditch, Sir Philip Somerville, A. A. (Windsor) Winterton, Rt. Hon. Earl
Pownall, Sir Assheton Spender-Clay, Colonel H. Wolmer, Viscount
Preston, William Sprot, Sir Alexander Womersley, W. J.
Price, Major C. W. M. Stanley, Lieut.-Colonel Rt. Hon. G. F. Wood, E. (Chest'r, Stalyb'dge & Hyde)
Radford, E. A. Stanley, Lord (Fylde) Wood, Rt. Hon. Sir Kingsley
Raine, Sir Walter Stanley, Hon. O. F. G. (Westm'eland) Wood, Sir S. Hill- (High Peak)
Ramsden, E. Steel, Major Samuel Strang Worthington-Evans, Rt. Hon. Sir L.
Reid, Capt. Cunningham (Warrington) Streatfeild, Captain S. R.
Reid, D. D. (County Down) Stuart, Crichton-, Lord C. TELLERS FOR THE NOES.
Rhys, Hon. C. A. U. Sueter, Rear-Admiral Murray Fraser Mr. F. C. Thomson and Sir Victor Warrender.
Richardson, Sir P. W. (Sur'y, Ch'ts'y) Sugden, Sir Wilfrid
Roberts, Sir Samuel (Hereford) Templeton, W. P.

I beg to move, in page 3, line 6, after the word "period," to insert the words "not exceeding six months."

Before dealing with this Amendment, I should like to suggest, with your permission, Mr. Speaker, that I should discuss this Amendment and the one that follows it at the same time. The second one appears on the Paper as follows: In page 3, line 9, at the end, to insert the words: (3) Any direction so given may be renewed or varied from time to time on the like request and in like manner. Provided that, notwithstanding the foregoing, provision, no such direction shall be renewed so as to remain in force (whether with or without variation) after the expiration of a period of two years from the date on which it was originally given, unless Parliament otherwise determines. (4) Any minute of the Treasury authorising an increase of the fiduciary note issue under this Section shall be laid forthwith before both Houses of Parliament. I must mention that there is a slight mistake in the latter part of the second Amendment, and the words "an increase" should be "a reduction." The principle involved in both Amendments is the same, and, with your permission, we will discuss the two together and then take a Division on each.


I think that course can be followed and that we can have one Debate and two Divisions.


The object of these two Amendments is to place precisely the same check upon an unwise reduction of the fiduciary issue as Clause 8 proposes to put upon unwise expansion. In Clause 8, even when the Bank of England and the Treasury are agreed that expansion is desirable, they cannot make it permanent or for any long period of time. At each successive period of six months the matter has to be considered afresh, and if the expansion lasts as long as two years, it has to come before Parliament itself, and a special Statute, or at any rate a Section in some other Statute—I think I am right in saying that—must be put through the House in order to enable the expansion to continue. But in this Bill, on the other hand, contraction can be agreed upon for any period that the Bank and the Treasury may decide, and Parliament is not to be consulted at all. The first of these two Amendments is to limit the time for which the Bank may direct a reduction in the fiduciary issue to six months, and the second Amendment is to enable Parliament to have the right, at the end of two years, to discuss the matter, and unless Parliament otherwise determines, this reduction shall then come to an end.

The final part of the second Amendment, where the error occurs, is to the effect that a minute of the Treasury authorising a reduction—not an increase, as on the Paper—of the fiduciary note issue tinder this Clause must be laid forthwith before both Houses of Parliament. The underlying idea in the Bill seems to be that there is something fascinating and wicked about expansion which has therefore to be severely watched and guarded against, whereas contraction is a part of virtue which has to be encouraged and fostered by every possible means. I cannot accept that view of expansion and contraction. I see only one path to rectitude, and that is stability, and, provided the currency is regulated to achieve that, I am satisfied that, whether it involves an increase or a decrease it is a salutary action. If the Bank needs to be watched to see that there is not an unwise expansion, I think it equally needs to be watched to see that there is not an unwise contraction.

Having regard to the tendency of the Bank and the Treasury in peace-time, I am more fearful that it will contract where it is improper to do so than that it will unduly expand. Therefore, I think it is if anything more important that Parliament should watch the possible undue contraction than that Parliament should be required to authorise a further continuance of expansion. The reason is that Parliament essentially represents the interests of the country as a whole, including the interests of industry and of labour, whereas the Bank and the Treasury represent financial interests. It may well be that the financier may think that deflation is desirable, whereas it might be not in the interest of industry and of employment. In this connection I was rather amused at a remark which was made by an hon. Friend of mine behind me in an earlier Debate on this subject. He said that inflation and deflation of the currency meant nothing to the working man; that what he wanted was employment and good wages. That rather reminds me of a story of a negro preacher who suggested as an explanation of the passage of the Red Sea by the Israelites that the Red Sea was then frozen over. One of his congregation said he had studied geography and pointed out that the Red Sea was in the tropics, and that therefore the suggestion of the preacher was not likely to be correct. But the preacher answered in this way. He said: "In the days when the Israelites crossed the Red Sea there was no geography, therefore there were no tropics and therefore that interruption was irrelevant." Of course, it is true that the average man and woman does not understand exactly what is involved in inflation and deflation, but, nevertheless, the effects of it will be felt in their daily lives. It is because I believe that undue deflation has brought about unemployment in the past, and that it is likely to continue to cause unemployment in the future, that I am against an unwise use of contracting the currency. In that connection I would like to make one quotation from a speech which the right hon. Gentleman the Secretary of State for War delivered at Genoa. He said: There is general agreement among experts that one of the most prominent causes of depression of trade and of unemployment is the fall of prices which has occurred in the past two years. In the resolutions which have been passed under the head of 'currency' there is embodied the principle of preventing undue fluctuations in the purchasing power of gold, and therefore equally in the purchasing power of currencies based on gold. In my view, if this power to reduce the currency is left without check, and Parliament has no means of guarding against it, I am afraid we are going to see further deflation, even in a currency which is based upon gold, and that in this Bill as it stands we may have a continuance of unemployment and depression of trade. I want, therefore, to introduce the check of Parliament to prevent that.


I beg to second the Amendment.

My hon. Friend who has just spoken has very clearly stated the case for this Amendment, and I do not propose to add at great length to what he has said. I understand the right hon. Gentleman the Secretary of State for War will be replying, and it would be convenient if he would tell us under what conditions this reduction of the fiduciary issue is likely to take place. For my part, I cannot imagine any conditions within a measurable length of time, under which that reduction would he desirable at all. I can imagine the conditions under which an increase may be brought about, but if we are to look forward to trade expansion, to a demand for currency and to all the general symptoms of trade revival, we cannot contemplate that the fiduciary issue has got to come down. The only conditions under which one could begin to contemplate a reduction in future would be if a much larger part of our notes were to be covered by gold. I will be much obliged, and I am sure the House will be much obliged, if we are given some indications as to the conditions under which this Clause will operate. Even, however, if it is to operate, there surely can be no logical answer to the request that we should make the thing symmetrical as between increase and decrease.

If it is desirable, as I hold it to be desirable, in Clause 8, that certain conditions should be attached to an increase, what possible argument can be put forward against attaching the same conditions to a reduction in the fiduciary issue if that should ever come about? Having regard to the very serious effect of falling prices on the level of employment and the welfare of the great masses of the population, it is possibly even more desirable, it is certainly not less desirable that we should have a limit of six months imposed and the subsequent safeguard of the Treasury Minute being put before us. If the Bill is left without amendment, it exhibits quite nakedly a deflationary bias. The right hon. Gentleman the Member for Colne Valley (Mr. Snowden) the other day quoted a remark of the Prime Minister, with which nearly all of us are able to agree, in which he condemned alike inflation and deflation and proclaimed himself a non-inflationist. If the right hon. Gentleman the Secretary of State for War is in agreement with his chief, and, like him, is a non-inflationist, he has, in my view, no possible logical ground for refusing to embody a non-inflationist technique in the Bill by putting deflation and inflation on exactly an identical plane.


The two hon. Members who have just spoken have put forward an Amendment which seems to me to have comparatively little relation to practice. They appear to suggest that the Bank of England, by printing paper money, could inflate the currency. I suggest that the Bank of England might set up its printing presses and might work day and night and print an infinitude of paper money, but that there would be no inflation until that paper money got into circulation. The hon. Gentleman the Member for Peckham (Mr. Dalton) spoke about contraction of the currency as if he anticipated a state of affairs when one might go to a bank to draw currency for the payment of wages and when the bank might refuse currency in return for one's cheque. The real point at issue is this. Is it possible to put into currency fiduciary issues beyond what there is a demand for? Everything depends upon the demand existing for currency. The mere fact that the bank is extending the fiduciary issue does not make any practical difference to trade and industry. The currency cannot get into circulation unless someone demands it, and people will not demand it simply because they happen to know that it has been printed. It seems to me, therefore, that the arguments of the two hon. Members are quite irrelevant.


The hon. Member for Peckham (Mr. Dalton), in supporting this Amendment, asked if we would say under what conceivable conditions it might be desirable to reduce the fiduciary issue. If the Genoa Resolutions are fully carried out, and gold is economised to the fullest extent, it is quite possible that an uncomfortable amount of gold might come into this country, and that, unless the fiduciary issue were at that time reduced, it might have inflationary effects which would be undesirable. It might happen if the Federal Reserve Board entirely changed its policy with regard to gold. I have no inflationary desires nor have I any of the deflationary bias which the hon. Member for Peckham seems to think is inherent in this Clause. Quite on the contrary. The hon. Member should by now have realised that so far as we can we are maintaining existing conditions in this Bill. Generally in other countries there are severe checks against increase, but no checks against reduction in the fiduciary issues of the central banks.

5.0 p.m.

But there is also another reason and I think a convincing reason for some discrimination between upward and downward movements. If you increase the fiduciary currency you may risk the gold standard. To increase the fiduciary issue without a contraction of the total note issue, enables gold to leave this country and thus you may, if you increase the fiduciary issue unduly, risk the gold standard. It is because it is essential that checks should be put upon this that the provisions of Clause 8 differ from the provisions of Clause 2. The hon. Member suggested that we think it is wicked to expand the fiduciary issue. It is not a question of vice or virtue. It is practical common sense. We have something definite to protect ourselves against, and we use the provisions of Clause 8 to protect ourselves against it. The evil is not present in the case of a reduction, and therefore we did not put in there any special measures to protect ourselves against that. When it is said it can be done secretly, that is not quite accurate because any reduction is made apparent in the returns of the Bank of England within a week and any further information required can always be obtained by a diligent pursuer of questions. There is no case for the Amendment, and I ask the House to reject it.

Lieut. - Commander KENWORTHY

The right hon. Gentleman reminds me of a man with a wicked past who is always liable to have it thrown up at him. He has my sympathy. He went to Genoa, where he lent himself to certain very respectable resolutions, and here he is back from his tanks and artillery affairs to listen to his past being examined by my hon. Friends. But I am not going to twit him with what happened at Genoa. I was there too, and he might twit me with things that happened there of which we have not heard the last. But he has not brought one single consideration to meet the case put forward by my two hon. Friends. In Clause 8 there are certain safeguards against so-called inflation—increase of the fiduciary issue—the six months' limit and, above all, Parliamentary control. But the Bank can reduce the issue simply by agreement, in secret behind closed doors, with the Treasury, and the next we hear of it is that in the Bank return we are informed that it has been reduced. Parliament knows nothing. The right hon. Gentleman, of all people, suggests that some diligent questioner can raise the matter in Parliament. What an absurd travesty of Parliamentary safeguards from the right hon. Gentleman, who is the most difficult Minister to draw at Question time and the most unsatisfactory to get answers from. A Parliamentary Question is no kind of safeguard here. We are simply delivering ourselves into the hands of a few anonymous Treasury officials and the Court of the Bank of England with no Parliamentary safeguard of any kind. The right hon. Gentleman says we might have too much gold coming into the country. What has that to do with it? We are not using gold as currency any longer. We are on a permanent paper money basis. The small safeguard of gold that the private man had in the old days is taken from him, because he might hoard it. I cannot see how the amount of gold coming into the country can really affect the issue. If I can have that pointed out I should be very glad to be informed.

The danger undoubtedly is of an over-conservative Court of the Bank of England, out of touch with the needs of business and industry, pursuing deflation to such an extent that unemployment is caused. We had these years of slump started—I do not say it was wrong—by a deflationary policy deliberately pursued by the great banks. Then we had a further setback to employment by the introduction of the gold standard. I was in favour of the gold standard, and still am. I think we had to submit to a surgical operation to get down to stability. But we have seen the effect in the country on the export trade and on unemployment. As things were, with the present system of finance and banking we could do nothing else, but it shows the immense power you are giving to the Bank. I referred to the Bank of England in Committee as the Kremlin of the capitalist system. It is more than that. The Kremlin has changed hands. It is the holy of holies. It must not be touched, and there is to be no Parliamentary control of any kind whatever. The matter is to be left in the hands of a few permanent civil servants at the Treasury, closeted in secret with the Governor and Directors of the Bank, and this House has no kind of control over the matter at all.

The right hon. Gentleman said action by the Federal Reserve Bank might affect it very much. What does he mean? What are the safeguards he proposes against the Federal Reserve Bank? Does he mean to say the policy of the Federal Reserve Bank can affect us in London? I dare say that is the case, but if that is so, what are the Government considering as a safeguard? Are we absolutely at the mercy of financial manipulation in America? If so, I ask the House to consider what we are doing, because Parliament is going to have no control over what happens, and apparently the Bank of England may have to decide to reduce the note issue as a safeguard against what happens in America, and we are to have no say. If, also in order to meet certain financial manipulations in Paris or elsewhere, the issue of bank notes is to be increased, of course it must be limited to six months and Parliament must be consulted, and in that case we have some control, but why if the issue is reduced are we to have no control?

There is another matter. The Financial Secretary to the Treasury, and to a less degree the Minister for War, speak with reverence and awe, they cross themselves figuratively speaking, when they refer to the Governor and the Court of the Bank of England—very great financiers, great public servants, and so on. We accept that. Then why cannot they be trusted not to increase the note issue without the consent of Parliament? Why cannot they be entrusted to increase the note issue without a six-months limit? Why all these safeguards? Why should not these wonderful paragons of financial virtue who are in charge of the Ark of the Covenant of the Financial Secretary and the Holy of Holies of the Minister of War, the standard bearers of financial rectitude, be entrusted with an increase of the note issue, and why the Parliamentary control? Those questions have not been answered and I can only think of two reasons why they have not been answered. One is that the Minister does not know what the answer is and the other is that there is some hidden reason that we are not to be trusted with.

This Bill is being forced down the throat of Parliament with very little explanation from the Government. Occasionally, they leave the matter of explanation to a back bencher and occasionally they give us a flippant and unsatisfactory and inadequate reply. Anyone after listening to the speeches of my two hon. Friends will say, either that the Government are ignorant, which I cannot accept, or that they have something to hide. There is some hidden reason which has not been disclosed and I hope the House will not go to a division now but will press for some further enlightenment on the matter. I do not pretend to be a financial expert at all but I know there is something very wrong with the present system which is being forced through Parliament in this Bill. I know also that up and down the country business men, producers, the men who are fighting the industrial battles of the country, are gravely dissatisfied with the present position. They are not Socialists or Bolshevists. Most of them are Conservatives. I do not know to what extent the right hon. Gentleman moves in these circles, amongst these struggling and hard pressed business men, but let him discuss the banking policy of the Government and the Bank of England—the Governor and this wonderful Court—and see what they have to say. They are frightened of the immense power the Bank of England is being given and this one little check that we ask for, this minor matter of a reduction of the fiduciary issue by Parliament, is denied us by the Minister for War and he gives us no reason.

Lieut.-Commander BURNEY

Will the right hon. Gentleman explain one point that was raised just now? He said, in reply to criticism from the other side, that the main reason why the power to contract the fiduciary issue below £260,000,000 might be used was that in the event of financial matters abroad turning in a certain manner, large sums of gold would came to this country and it would be necessary to reduce our fiduciary note issue. Does not the arrangement that was made under what I believe to be the Baldwin return of payment of debt to America, namely that it is at the option of this country always to pay in gold if we so require and not in United States currency or notes, remove any possibility of our being in the position of getting too much gold until the greater part of the debt payment is made? I appreciate the fact that in the United States to-day they have too much gold, and a great deal of it is not used for credit purposes and is not in circulation but is more or less dormant, and therefore a tax on the resources of the whole country. Dormant gold has to be paid for by the country.


I think that this question ought not to be, allowed to pass from this House quite so easily. The Secretary of State for War has given a very specious reply to the proposition that has been put forward. The situation which has been set up is of a very dangerous character. He has not answered at all satisfactorily the charge which has been brought against this Bill, and against this Clause in particular, that it allows deflation practically upon an unlimited scale. I consider that that is a very dangerous position to take up. This Bill is being discussed very largely from the point of view of experts, of those used to handling large sums of money, dealing with large credits and bills of exchange, and of those to be found round the banks and the big financial houses. I look at the matter from rather a different angle. I believe that this Bill is the last piece of work consequent upon the policy of deflation introduced in 1920. This is a point which I put before the House on the Second Reading of the Bill, and I still hold that opinion. Experience has proved to us beyond doubt that the policy of deflation has caused unemployment, misery and poverty to millions of our people. It has brought about a vast reduction in wages, and the working class have never yet been able to get their wages restored. I am one who believes that this control of currency is one of the means whereby their wages and their power of consumption are kept down. I am not one of those who believe that things happen without a cause. If the cause is a human cause, there is usually a motive.

The Court of the Bank of England have now become the custodians of the interests and the welfare of the community, and in their control of currency they are as much concerned with maintaining a sufficient supply of domestic servants as they are with anything else. If only they can control the currency, they can, in my opinion, control credit, production, the question of employment, the question of wages and income, and they can ensure that there will always be a sufficient supply of domestic servants. I am not so much concerned with that particular point of view. I am supporting this Amendment because I want to see Parliament getting and maintaining as much control as possible over this much discussed and vexed question of currency. Our experience of the past has not been a very happy one. The Secretary of State for War talks about too much gold coming into the country. There are millions of people in this country who have never seen sufficient gold to enable them to carry on. I frankly say that I am thoroughly convinced, that instead of establishing a possibility whereby there can be deflation on the part of the big financiers who always act in conjunction with the big financiers on the Continent and in New York—I have yet to learn that the Pierpont Morgans, the Vanderbilts and controllers of finance in New York have developed wings of any colour whatever; in fact, they are some of the most evil influences in the world to-day, and I am anxious we should escape them as far as possible—this Bill, instead of giving the power and control to the Bank of England, should vest that power and control in the Government and the State itself. We should keep this agency, for good or for evil, in our hands. I am quite prepared to face all the political evils that are supposed to accrue from the political control of currency.

As far as we are concerned, representing, as we claim to do, the great masses of people who are starving practically in the midst of plenty, we are not prepared to talk about the evils of political control. We can face those evils when they arrive. I have seen sufficient of the evils that have come from the control of currency by private interest. The capitalist system, private interests and purposes, have to be served through the use of currency as much as through the control of manufacture and industry. It is a question as to whether it suits the purposes and interests they have most at heart. I am in favour of the Amendment, because it will at least give Parliament some control. Parliament has too little control at the present moment. If the Government were really serving the purposes and the interests of the great masses of the people of this country, instead of the relatively few, they would have accepted the Amendment and strengthened their Bill in many directions by taking from the money lords some of the power which they at present possess, and which ought to be transferred.


The hon. and gallant Member for Uxbridge (Lieut.-Commander Burney) asked a question of the Secretary of State for War, and it appeared from this side that he was given a private answer. Perhaps the Minister will be good enough to give the House the answer which, apparently, he gave to the hon. Member.

Mr. WALTER BAKER rose—[Interruption].

Mr. DEPUTY-SPEAKER (Mr. James Hope)

The right hon. Gentleman the Secretary of State for War can only speak again by the leave of the House.


I can only speak by leave of the House, and I hesitated to impose myself upon the House. As, however, hon. Members wish these two questions to be answered, first of all, I would remind the hon. Member for Merthyr (Mr. Wallhead) that the effect of the deflationary process to which so many have objected has been that the real value of wages has gone up.


And wages have gone down.


And the value of wages received has gone up. There can be no doubt about it.

Lieut. - Commander KENWORTHY

The value of money has gone up, but not the wages.


The danger of surplus gold coming into this country, which this Clause is intended to protect us against, is, that there would be or might be inflation, where prices would go up and the real money value of wages would go down. If the hon. Gentleman is sincere in what he said, he should support the Government in rejecting this Amendment. If I may, I will answer my hon. and gallant Friend the Member for Uxbridge (Lieut.-Commander Burney), who says: Is it not true that if we had too much gold in that way we could pay off some more of our debt to America? I believe we have, under the terms of the debt settlement, power to anticipate payments off, but I believe that that is only after notice—considerable notice.


Six months' notice.


Yes, six months' notice. We cannot dispose of the surplus week by week, as it were, by shipping it across the Atlantic in payment of the American debt. The intention of this Clause is to give power to make a temporary reduction in the fiduciary note issue in the event of there being surplus gold in this country. It does not only depend, or not even primarily depend, upon the policy of the Federal Reserve Board. It depends much more upon the resolutions of Genoa being completely carried out that the central banks should arrive at conventions—that we discussed on Second Reading and in Committee—and come to terms for economising the use of gold. In such a case as that, it is conceivable—I do not put it any higher than a possibility—that we might have a surplus here which, temporarily at least, we ought to neutralise, and it is for that purpose, and not for any sinister object that this Clause is put in and that this Amendment should be rejected.


Is it not a fact that the French Government have not adopted the policy of deflation to the same extent that we have, and is it not a fact that there is less unemployment in France and that there wages are practically higher than they are here?


I am sure we have been very pleased to have a further opportunity of hearing the right hon. Gentleman the Secretary of State for War, but I am not, at all satisfied that he has dealt with the point which was so clearly submitted by my hon. Friend the Member for West Leicester (Mr. Pethick-Lawrence). This matter was fully discussed during the Committee stage, and I thought that the position taken up by my hon. Friend was perfectly clear to the right hon. Gentleman and his colleagues. Even his explanatory speech seemed to emphasise that point of criticism, namely, that there is a bias against deflation. But on this Amendment it is not possible to go over the whole ground as to the method which should have been adopted as an alternative to this Bill. Taking facts as we find them, it is perfectly clear that the Government are prepared to see deflation made more easy than inflation. Having regard to the generally expressed opinion amongst well-informed persons that a shortage of currency is a very much more real evil as far as we are concerned than an excess of currency, I can see no reason at all why the right hon. Gentleman should refrain from meeting the appeal which has been made to him from this side of the House.

I would like to endeavour to make this point in reply to the last few remarks made by the right hon. Gentleman. Deflation, as I understand it, has been of benefit solely to persons who live on fixed incomes and to persons who are in possession of large quanities of Government stock. I think it is a mistake to suppose that any of the active producing classes in the community can possibly have benefited under the policy which the Government have been pursuing for some years past. Before I sit down I want to say—and I think it is a matter of very great disappointment to every Member in the House no matter on which side he sits—that we have had no opportunity of hearing the Financial Secretary to the Treasury on his Bill. His name appears on the Bill with that of the Chancellor of the Exchequer, and, personally, I should have been very glad to hear him on this particular matter. Further, the selection of the Under-Secretary of State for Scotland to support the Treasury during the passage of this Bill was heralded with such loud praise and such bright anticipations that I have looked forward to hearing the hon. and gallant Gentleman with the very greatest pleasure.


This cannot be gone into on an Amendment.


It seemed to me that if there was anyone on the Government side who could have put a case to my satisfaction it would have been the Under-Secretary of State for Scotland. I hope that during the discussions on the subsequent Clauses of the Bill we shall hear the hon. and gallant Gentleman.


Nothing in our Amendment interferes with the point of view which the right hon. Gentleman has laid before the House, because the emergency that he has referred to is a temporary emergency. What we object to in regard to this Clause is that the fiduciary issue can be indefinitely reduced, with the consent of the Treasury. We are trying to bring into it some of the proposals made in Clause 8, in order that the matter may come up constantly for review. The right hon. Gentleman has said nothing in any way to meet that point. He suggests that in order to cover the emergency this Clause is needed, but the emergency would be met just as easily under the Amendment moved by my hon. Friend, and I cannot see any reason why the Government should not accept the same principle.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 115; Noes, 249.

Division No. 143.] AYES. [5.33 p.m.
Adamson, Rt. Hon. W. (Fife, West) Frece, Sir Walter de Lee, F.
Adamson, w. M. (Staff., Cannock) Gillett, George M. Lindley, F. W.
Alexander, A. V. (Sheffield, Hillsbro') Gosling, Harry Lunn, William
Ammon, Charles George Greenall, T. MacDonald, Rt. Hon. J. R.(Aberavon)
Attlee, Clement Richard Greenwood, A. (Nelson and Colne) Mackinder, W.
Baker, J. (Wolverhampton, Bliston) Grenfell, D. R. (Glamorgan) MacLaren, Andrew
Baker, Walter Groves, T. Maclean, Neil (Glasgow, Govan)
Barker, G. (Monmouth, Abertillery) Grundy, T. W. MacNeill-Weir, L.
Barnes. A. Hall, F. (York, W.R., Normanton) Malone, C. L'Estrange (N'thampton)
Barr, J. Hall, G. H. (Merthyr Tydvil) March, S.
Batey, Joseph Hardie, George D. Maxton, James
Bondfield, Margaret Hartshorn, Rt. Hon. Vernon Montague, Frederick
Broad, F. A. Hayday, Arthur Morrison, R. C. (Tottenham, N.)
Bromfield, William Henderson, Rt. Hon. A. (Burnley) Murnin, H.
Bromley, J. Henderson, T. (Glasgow) Naylor, T. E.
Buchanan, G. Hirst, G. H. Oliver, George Harold
Cape, Thomas Hirst, W. (Bradford, South) Palin, John Henry
Charleton, H. C. Hollins, A. Paling, W.
Cluse, W. S Hudson, J. H. (Huddersfield) Pethick-Lawrence, F. W.
Clynes, Rt. Hon. John R. Jenkins, W. (Glamorgan, Neath) Ponsonby, Arthur
Compton, Joseph John, William (Rhondda, West) Potts. John S.
Connolly, M. Jones, J. J. (West Ham, Silvertown) Purcell, A. A.
Cove, W. G. Kelly, W. T. Richardson, R. (Houghton-le Spring)
Dalton, Hugh Kennedy, T. Riley, Ben
Davies, Rhys John (Westhoughton) Kenworthy, Lt.-Com. Hon. Joseph M. Ritson, J.
Day, Harry Kirkwood, D. Roberts, Rt. Hon. F. O.(W.Bromwich)
Dennison. R. Lawrence, Susan Rose, Frank H.
Dunnico, H. Lawson, John James Salter, Dr. Alfred
Scrymgeour, E. Sullivan, J. Whiteley, W.
Shaw, Ht. Hon. Thomas (Preston) Sutton, J. E. Williams, David (Swansea, East)
Shiels, Dr. Drummond Thorne, W. (West Ham, Plaistow) Williams, T. (York, Don Valley)
Shinwell, E. Thurtle, Ernest Wilson, R. J. (Jarrow)
Short, Alfred (Wednesbury) Tinker. John Joseph Windsor, Walter
Smillie, Robert Trevelyan, Rt. Hon. C. P. Wright, W.
Smith, H. B. Lees- (Keighley) Viant, S. P. Young, Robert (Lancaster, Newton)
Smith, Rennie (Penistone) Wallhead, Richard C.
Snell, Harry Watts-Morgan, Lt.-Col. D. (Rhondda) TELLERS FOR THE AYES.
Snowden, Rt. Hon. Philip Webb, Rt. Hon. Sidney Mr. Allen Parkinson and Mr. Charles Edwards.
Stamford, T. W. Wedgwood, Rt. Hon. Josiah
Stephen, Campbell Westwood, J.
Acland-Troyte, Lieut.-Colonel Eden, Captain Anthony Luce, Maj.-Gen. Sir Richard Harman
Agg-Gardner, Rt. Hon. Sir James T. Edge, Sir William Lynn, Sir R. J.
Ainsworth, Lieut.-Col. Charles Edmondson, Major A. J. MacAndrew, Major Charles Glen
Albery, Irving James Edwards. J. Hugh (Accrington) Macdonald, Capt. P. D. (I. of w.)
Alexander, E. E. (Leyton) Elliot, Major Walter E. Macdonald, R. (Glasgow, Cathcart)
Allen, J. Sandeman (L'pool, W. Derby) England, Colonel A. Macintyre, I.
Applin, Colonel R. v. K. Erskine, Lord (Somerset, Weston-s.-M.) McLean, Major A.
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Everard, W. Lindsay Macnaghten, Hon. Sir Malcolm
Astor, Maj. Hn. John J. (Kent, Dover) Fairfax, Captain J. G. Macpherson, Rt. Hon. James I.
Atholl, Duchess of Fenby, T. D. Macquisten, F. A.
Atkinson, C. Fermoy, Lord Makins, Brigadier-General E.
Balniel, Lord Fielden, E. B. Malone, Major P. B.
Barclay-Harvey. C. M. Forrest, w. Margesson, Captain D.
Beamish, Rear-Admiral T. P. H. Foxcroft, Captain C. T. Marriott, Sir J. A. R.
Beckett. Sir Gervase (Leeds, N.) Fraser, Captain Ian Mason, Colonel Glyn K.
Benn, Sir A. S. (Plymouth, Drake) Fremantle, Lieut.-Colonel Francis E Merriman, Sir F. Boyd
Bennett, A. J. Gadie, Lieut.-Col. Anthony Meyer, Sir Frank
Berry, Sir George Ganzoni, Sir John Mitchell, S. (Lanark, Lanark)
Betterton, Henry B. Gates, Percy Mitchell, W. Fool (Saffron walden)
Birchall, Major J. Dearman Gilmour, Lt.-Col. Rt. Hon. Sir John Mitchell, Sir W. Lane (Streatham)
Blundell, F. N. Goff, Sir Park Monsell, Eyres, Com. Rt. Hon. B. M.
Boothby, R. J. G. Grace, John Morris, R. H.
Bourne, Captain Robert Croft Graham, Fergus (Cumberland, N.) Morrison, H. (Wilts, Salisbury)
Bowyer, Capt. G. E. W. Grant, Sir J. A. Nelson, Sir Frank
Brassey, Sir Leonard Grattan-Doyle, Sir N. Neville, Sir Reginald J.
Briant, Frank Greenwood, Rt. Hn. Sir H. (W'th's'w, E) Newman, Sir R. H. S. D. L. (Exeter)
Briggs, J. Harold Griffith, F. Kingsley Newton, Sir D. G. C. (Cambridge)
Briscoe, Richard George Grotrian, H. Brent Nicholson, O. (Westminster)
Brocklebank, C. E. R. Guinness, Rt. Hon. Walter E. Nield, Rt. Hon. Sir Herbert
Broun-Lindsay, Major H. Hacking, Douglas H. Owen, Major G.
Brown, Brig -Gen. H. C.(Berks, Newb'y) Hamilton, Sir George Penny, Frederick George
Brown, Ernest (Leith) Hamilton, sir R. (Orkney & Shetland) Percy, Lord Eustace (Hastings)
Buchan, John Hammersley, S. S. Perkins, Colonel E. K
Bull, Rt. Hon. Sir William James Hannon, Patrick Joseph Henry Perring, Sir William George
Bullock, Captain M. Harney, E. A. Peto, Sir Basil E. (Devon, Barnstaple)
Burman, J. B. Hartington, Marquess of Peto, G. (Somerset, Frome)
Burney, Lieut.-Com. Charles D. Harvey, G. (Lambeth, Kennington) Phillpson, Mabel
Butler, Sir Geoffrey Harvey, Major S. E. (Devon, Totnes) Pilcher, G.
Cautley, Sir Henry S. Haslam, Henry C. Pilditch, Sir Philip
Cayzer, Sir C. (Chester, City) Headlam, Lieut.-Colonel C. M. Pownall, Sir Assheton
Cecil, Rt. Hon. Lord H. (Ox. Univ.) Henderson.Capt.R.R. (Oxf'd, Henley) Preston, William
Chamberlain, Rt.Hn.Sir J.A (Birm., W.) Henderson, Lieut.-Col. Sir Vivian Price, Major C. W. M.
Chamberlain, Rt. Hon. N. (Ladywood) Heneage, Lieut.-Col. Arthur P. Radford, E. A
Charteris, Brigadier-General J. Hennessy, Major Sir G. R. J. Raine, Sir Walter
Christie, J. A. Herbert, Dennis (Hertford, Watford) Ramsden, E.
Churchman, Sir Arthur C. Hilton, Cecil Reid, D. D. (County Down)
Cobb, Sir Cyril Hohler, Sir Gerald Fitkroy Rice, Sir Frederick
Cochrane, Commander Hon. A. D. Hope. Capt. A. O. J. (Warw'k, Nun.) Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Cockerill, Brig.-General Sir George Hopkins, J. W. W. Roberts, Sir Samuel (Hereford)
Conway, Sir W. Martin Hopkinson, A. (Lancaster, Mossley) Robinson, Sir T. (Lanes., Strettord)
Cooper, A. Duff Hudson, Capt. A. U. M.(Hackney, N.) Rodd, Rt. Hon. Sir James Rennell
Cope, Major William Hume, Sir G. H. Ropner, Major L.
Courthope, Colonel Sir G. L. Hume-Williams, Sir W. Ellis Runciman, Hilda (Cornwall, St. Ives)
Cowan, O. M. (Scottish Universities) Hurd, Percy A. Russell, Alexander West (Tynemouth)
Cowan, Sir Wm. Henry (Islingtn. N.) Hurst, Gerald B. Salmon, Major I
Craig, Capt. Rt. Hon. C. C. (Antrim) Hutchison, Sir Robert (Montrose) Samuel, A. M. (Surrey, Farnham)
Craig, Sir Ernest (Chester, Crewe) Inskip, Sir Thomas Walker H. Sandeman, N. Stewart
Crooke, J. Smedley (Deritend) Iveagh, Countess of Sanders, Sir Robert A.
Crookshank, Col. C. de W. (Berwick) James, Lieut.-Colonel Hon. Cuthbert Sandon, Lord
Crookshank,Cpt.H.(Lindsey, Gainsbro) Kennedy, A. R. (Preston) Savery, S. S.
Culverwell, C. T. (Bristol, West) Kinloch-Cooke, Sir Clement Sheffield, Sir Berkeley
Curzon, Captain Viscount Knox, Sir Alfred Shepperson, E. W.
Dalkeith, Earl of Lamb, J. Q. Simms, Dr. John M. (Co. Down)
Davidson, Rt. Hon. J. (Hertford) Lane Fox, Col. Rt. Hon. George R. Simon, Rt. Hon. Sir John
Davies, Sir Thomas (Cirencester) Locker-Lampson, G. (Wood Green) Sinclair, Major Sir A. (Caithness)
Davies, Dr. Vernon Locker-Lampson, Com. O. (Handsw'th) Skelton, A. N.
Davison, Sir W. H. (Kensington, S) Loder, J. de V. Slaney, Major P. Kenyon
Dean, Arthur Wellesley Looker, Herbert William Smith, R. W. (Aberd'n & Kinc'dine, C.)
Drewe, C. Lougher, Lewis Smith-Carington, Neville W.
Smithers, Waldron Thompson, Luke (Sunderland) Williams, Herbert G. (Reading)
Somerville, A. A. (Windsor) Thomson, F. C. (Aberdeen, S.) Wilson, Sir C. H. (Leeds, Central)
Spender-Clay, Colonel H. Thomson, Rt. Hon. Sir W. Mitchell Wilson, R. R. (Stafford, Lichfield)
Sprot, Sir Alexander Thorne, G. R. (Wolverhampton, E.) Windsor-Clive, Lieut.-Colonel George
Stanley, Lieut.-Colonel Rt. Hon. G. F. Tinne, J. A. Winterton, Rt. Hon. Earl
Stanley, Lord (Fylde) Tomlinson, R. P. Withers, John James
Stanley, Hon. O. F. G. (Westm'eland) Tryon, Rt. Hon. George Clement Wolmer, Viscount
Steel, Major Samuel Strang Turton, Sir Edmund Russborough Womersley, W. J.
Strauss, E. A. Waddington, R. Wood, E. (Chester, Staty'b'ge & Hyde)
Stuart, Crichton, Lord C. Warrender, Sir Victor Wood, Rt. Hon. Sir Kingsley
Sueter, Rear-Admiral Murray Fraser Watson, Rt. Hon. W. (Carlisle) Wood, Sir S. Hill- (High Peak)
Sugden, Sir Wilfrid Wells, S. R. Worthington-Evans, Rt. Hon. sir L.
Templeton, W. P. White, Lieut.-Col. Sir G. Dairymple.
Thom, Lt.-Col. J. G. (Dumbarton) Wiggins, William Martin TELLERS FOR THE NOES.
Thomas, Sir Robert John (Anglesey) Williams, C. P. (Denbigh, Wrexham) Major The Marquess of Titchfield and Captain Wallace.

I beg to move, in page 3, line 9, at the end, to insert the words (3) Any direction so given may be renewed or varied from time to time on the like request and in like manner. Provided that, notwithstanding the foregoing provision, no such direction shall be renewed so as to remain in force (whether with or without variation) after the expiration of a period of two years from the date on which it was originally given, unless Parliament otherwise determines.

(4) Any minute of the Treasury authorising a reduction of the fiduciary note issue under this Section shall be laid forthwith before both Houses of Parliament.


I beg to second the Amendment.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 115; Noes, 256.

Division No. 144.] AYES. [5.42 p.m.
Adamson, Rt. Hon. W. (File, West) Henderson, Rt. Hon. A. (Burnley) Riley, Ben
Adamson, W. M. (Staff., Cannock) Henderson, T. (Glasgow) Ritson, J.
Alexander, A. V. (Sheffield, Hillsbro') Hirst, G. H. Roberts, Rt. Hon. F. O. (W. Bromwich)
Ammon, Charles George Hirst, W. (Bradford, South) Rose, Frank H.
Attlee, Clement Richard Hollins, A. Salter, Dr. Alfred
Baker, J. (Wolverhampton, Bilston) Hudson, J. H. (Huddersfield) Scrymgeour, E.
Baker, Walter Jenkins, W. (Glamorgan, Neath) Shaw, Rt. Hon. Thomas (Preston)
Barker, G. (Monmouth, Abertillery) John, William (Rhondda, West) Shiels, Dr. Drummond
Barnes, A. Johnston, Thomas (Dundee) Shinwell, E.
Barr, J. Jones, J. J. (West Ham, Silvertown) Short, Alfred (Wednesbury)
Batey, Joseph Jones, Morgan (Caerphilly) Smillie, Robert
Bondfield, Margaret Kelly, W. T. Smith, H. B. Lees (Keighley)
Broad, F. A. Kennedy, T. Smith, Rennie (Penistone)
Bromfield, William Kenworthy, Lt.-Com. Hon. Joseph M. Snell, Harry
Bromley, J. Kirkwood, D. Snowden, Rt. Hon. Philip
Buchanan, G. Lawrence, Susan Stamford, T. W.
Cape, Thomas Lawson, John James Stephen, Campbell
Charleton, H. C. Lindley, F. W. Sullivan, J.
Cluse, W. S. Lowth, T. Sutton, J. E.
Clynes, Rt. Hon. John R. Lunn, William Thorne, W. (West Ham, Plaistow)
Compton, Joseph MacDonald, Rt. Hon. J. R. (Aberavon) Thurtle, Ernest
Connolly, M. Mackinder, W. Tinker, John Joseph
Cove, W. G. MacLaren, Andrew Trevelyan, Rt. Hon. C. P.
Dalton, Hugh Maclean, Nell (Glasgow, Govan) Viant, S. P.
Davies, Rhys John (Westhoughton) MacNeill-Weir, L. Wallhead, Richard C.
Day, Harry Malone, C. L'Estrange (N'thampton) Watts-Morgan, Lt.-Col. D. (Rhondda)
Dennison, R. March, S. Webb, Rt. Hon. Sidney
Dunnico, H, Maxton, James Westwood, J.
Gillett, George M. Montague, Frederick Whiteley, W.
Gosling, Harry Morrison, R. C. (Tottenham, N.) Williams, David (Swansea, East)
Greenall, T. Murnin, H. Williams, T. (York, Don Valley)
Greenwood, A. (Nelson and Coins) Naylor, T. E. Wilson, R. J. (Jarrow)
Grenfell, D. R. (Glamorgan) Oliver, George Harold Windsor, Walter
Groves, T. Palin, John Henry Wright, W.
Grundy, T. W. Paling, W. Young, Robert (Lancaster, Newton)
Hall, F. (York, W. R., Normanton) Pethick-Lawrence, F. W.
Hall, G. H. (Merthyr Tydvil) Ponsonby, Arthur TELLERS FOR THE AYES.
Hardie, George D. Potts, John S. Mr. Allen Parkinson and Mr. Charles Edwards.
Hartshorn, Rt. Hon. Vernon Purcell, A. A.
Hayday, Arthur Richardson, R. (Houghton-le-Spring)
Acland-Troyts, Lieut.-Colonel Albery, Irving James Applin, Colonel R. V. K.
Agg-Gardner, Rt. Hon. Sir James T. Alexander, E. E. (Leyton) Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Ainsworth, Lieut.-Col. Charles Allen, J. Sandeman (L'pool,W.Derby) Astor, Maj. Hn. John J. (Kent, Dover)
Atholl, Duchess of Gilmour, Lt.-Col. Rt. Hon. Sir John Peto, Sir Basil E. (Devon, Barnstaple)
Atkinson, C. Goff, Sir Park Peto, G. (Somerset, Frome)
Baldwin, Rt. Hon. Stanley Grace, John Philipson, Mabel
Bainiel, Lord Graham, Fergus (Cumberland, N.) Pilcher, G.
Barclay-Harvey, C. M. Grant, Sir J. A. Pilditch, sir Philip
Beamish, Rear-Admiral T. P. H. Grattan-Doyle, Sir N. Pownall, Sir Assheton
Beckett, Sir Gervase (Leeds, N.) Greenwood, Rt. Hn. Sir H. (W'th's'w, E) Preston, William
Benn, Sir A. S. (Plymouth, Drake) Griffith, F. Kingsley Price, Major c. W. M.
Bennett, A. J. Grotrian, H. Brent. Radford, E. A.
Bentinck, Lord Henry Cavendish Guinness, Rt. Hon. Walter E. Raine, Sir Walter
Berry, Sir George Hacking, Douglas H. Ramsden, E.
Betterton, Henry B. Hamilton, Sir George Reid, D. D. (County Down)
Birchall, Major J. Dearman Hamilton, Sir R. (Orkney & Shetland) Rhys, Hon. C. A. U.
Blundell, F. N. Hammersley, S. S. Rice, Sir Frederick
Boothby, R. J. G. Hannon, Patrick Joseph Henry Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Bourne, Captain Robert Croft Harney, E. A. Roberts, Sir Samuel (Hereford)
Bowyer, Captain G. E. W. Hartington, Marquess of Robinson, Sir T. (Lanes, Stretford)
Brass, Captain W. Harvey, G. (Lambeth, Kennington) Rodd, Rt. Hon. Sir James Rennell
Brassey, Sir Leonard Harvey, Major S. E. (Devon, Totnes) Ropner, Major L.
Briant, Frank Haslam, Henry C. Runciman, Hilda (Cornwall, St. Ives)
Briggs, J. Harold Headlam, Lieut.-Colonel C. M. Russell, Alexander West (Tynemouth)
Briscoe, Richard George Henderson, Capt. R. R. (Oxf'd,Henley) Salmon, Major I.
Brocklebank, C. E. R. Henderson, Lieut.-Col. Sir Vivian Samuel, A. M. (Surrey, Farnham)
Broun-Lindsay, Major H. Heneage, Lieut.-Col. Arthur P. Sandeman, N. Stewart
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Hennessy, Major Sir G. R. J. Sanders, Sir Robert A.
Brown, Ernest (Leith) Herbert, Dennis (Hertford, Watford) Sandon, Lord
Buchan, John Hilton, Cecil Sassoon, Sir Philip Albert Gustave D.
Bull, Rt. Hon. Sir William James Hohler, Sir Gerald Fitzroy Savery, S. S.
Bullock, Captain M. Hope, Capt. A. O. J. (Warw'k, Nun.) Sheffield, Sir Berkeley
Burman, J. B. Hopkins, J. W. W. Shepperson, E. W.
Burney, Lieut.-Com. Charles D. Hopkinson, A. (Lancaster, Mossley) Simms, Dr. John M. (Co. Down)
Butler, Sir Geoffrey Hudson, Capt. A. U. M. (Hackney, N.) Simon, Rt. Hon. Sir John
Cautley, Sir Henry S. Hume, Sir G. H. Sinclair, Major Sir A. (Caithness)
Cayzer, Sir C. (Chester, City) Hurd, Percy A. Skeiton, A. N.
Cecil, Rt. Hon. Lord H. (Ox. Univ.) Hurst, Gerald B. Slaney, Major P. Kenyon
Chamberlain, Rt. Hn.Sir J.A.(Birm., W.) Hutchison, Sir Robert (Montrose) Smith, R. W.(Aberd'n & Kinc'dine, C.)
Chamberlain, Rt. Hon. N. (Ladywood) Inskip, Sir Thomas Walker H. Smith-Carington, Neville W.
Charterls, Brigadier-General J. Iveagh, Countess of Smithers, Waldron
Christie, J. A. James, Lieut.-Colonel Hon, Cuthbert Somerville, A. A. (Windsor)
Churchman, Sir Arthur C. Joynson-Hicks, Rt. Hon. Sir William Spender-Clay, Colonel H.
Cobb, Sir Cyril Kennedy, A. R. (Preston) Stanley, Lieut.-Colonel Rt. Hon. G. F.
Cochrane, Commander Hon. A. D. Kinloch-Cooke, Sir Clement Stanley, Lord (Fylde)
Cockerill, Brig.-General Sir George Knox, Sir Alfred Stanley, Hon. O. F. G. (Westm'eland)
Conway, Sir W. Martin Lamb, J. Q. Steel, Major Samuel Strang
Cooper, A. Duff Lane Fox, Col. Rt. Hon. George R. Strauss, E. A.
Cops, Major William Locker-Lampson, G. (Wood Green) Stuart, Crichton-, Lord C.
Courthope, Colonel Sir G. L. Locker-Lampson, Com. O.(Handsw'th) Sueter, Rear-Admiral Murray Fraser
Cowan, D. M. (Scottish Universities) Loder, J. de V. Sugden, Sir Wilfrid
Cowan, Sir Wm. Henry (Islingtn., N.) Looker, Herbert William Templeton, W. P.
Craig, Sir Ernest (Chester, Crewe) Lougher, Lewis Thom, Lt.-Col. J. G. (Dumbarton)
Crooke, J. Smedley (Deritend) Luce, Maj.-Gen. Sir Richard Harman Thomas, Sir Robert John (Anglesey)
Crookshank, Col. C. de W. (Berwick) Lynn, Sir R. J. Thompson, Luke (Sunderland)
Crookshank, Cpt.H.(Lindsey,Gainsbro) MacAndrew, Major Charles Glen Thomson, Rt. Hon. Sir W. Mitchell-
Culverwell, C. T. (Bristol, West) Macdonald, Capt. P. D. (I. of W.) Thorne, G. R. (Wolverhampton, E.)
Curzon, Captain Viscount MacDonald, R. (Glasgow, Cathcart) Tinne, J. A.
Dalkeith, Earl of Macintyre, Ian Tomlinson, R. P.
Davidson, Rt. Hon. J. (Hertford) McLean, Major A. Tryon, Rt. Hon. George Clement
Davies, Sir Thomas (Cirencester) Macnaghten, Hon. Sir Malcolm Turton, Sir Edmund Russborough
Davies, Dr. Vernon Macpherson, Rt. Hon. James I. Waddington, R.
Davison, Sir W. H. (Kensington, S.) Macquisten, F. A. Wallace, Captain D. E.
Dean, Arthur Wellesley Makins, Brigadier-General E. Warner, Brigadier-General W. W.
Drewe, C. Margesson, Captain D. Warrender, Sir Victor
Eden, Captain Anthony Marriott, Sir J. A. R. Watson, Rt. Hon. W. (Carlisle)
Edge, Sir William Mason, Colonel Glyn K. Wells, S. R.
Edmondson, Major A. J. Merriman, Sir F. Boyd White, Lieut.-Colonel G. Dairymple
Edwards, J. Hugh (Accrington) Meyer, Sir Frank Wiggins, William Martin
Elliot, Major Walter E. Mitchell, S. (Lanark, Lanark) Williams, C. P. (Denbigh, Wrexham)
England, Colonel A. Mitchell, W. Foot (Saffron Walden) Williams, Herbert G. (Reading)
Erskine, Lord (Somerset, Weston-s-M.) Mitchell, Sir W. Lane (Streatham) Wilson, Sir C. H. (Leeds, Central)
Everard, W. Lindsay Monsell, Eyres, Com. Rt. Hon. B. M. Wilson, R. R. (Stafford, Lichfield)
Fairfax, Captain J. G. Morris, R. H. Windsor-Clive, Lieut.-Colonel George
Fenby, T. D. Morrison, H. (Wilts, Salisbury) Winterton, Rt. Hon. Earl
Fermoy, Lord Morrison-Bell, Sir Arthur Clive Withers, John James
Fielden, E. B. Nelson, Sir Frank Wolmer, Viscount
Forrest, W. Neville, Sir Reginald J. Womersley, W. J.
Foxcroft, Captain C. T. Newman, Sir R. H. S. D. L. (Exeter) Wood, E. (Chest'r, Stalyb'ge & Hyde)
Fraser, Captain Ian Newton, Sir D. G. C. (Cambridge) Wood, Rt. Hon. Sir Kingsley
Frece, Sir Walter de Nicholson, O. (Westminster) Wood, Sir S. Hill- (High Peak)
Fremantle, Lieut.-Colonel Francis E. Nield, Rt. Hon. Sir Herbert Worthington-Evans, Rt. Hon. Sir L.
Gadie, Lieut.-Col. Anthony Owen, Major G.
Galbraith, J. F. W. Penny, Frederick George TELLERS FOR THE NOES.
Ganzoni, Sir John Percy, Lord Eustace (Hastings) Mr. F. C. Thomson and Major the Marquess of Tichfield.
Garro-Jones, Captain G. M. Perkins, Colonel E. K.
Gates, Percy Perring, Sir William George