ADJOURNMENT (EASTER).

HC Deb 27 March 1929 vol 226 cc2458-505

Question again proposed, "That this House do now adjourn."

Mr. JOHNSTON

I was making reference to the State railways of Nigeria, and last year, as hon. Members may find from the Reports in the Library, there was a profit of £925,000 odd. Freights were reduced simultaneously by from 1s. to 33s. 9d. per ton, according to the class of goods and distances, and, in addition to that, labour rates have generally increased. It is, as far as I know, the only railway system in the world where simultaneously there were very large profits made, considerable reductions in freights and increases in wages. To come to the Canadian National Railways, also a fruitful source of Tory oratory, I do not know that I can do better than quote from a leading article in a leading Conservative newspaper in Canada, the Toronto "Daily Star," after the Prime Minister's speech at Newcastle. In a leading article on 1st February, the Toronto "Daily Star" refers to the surprising statement in the course of a speech by Mr. Baldwin that Canada's experiment in nationalising her railways was causing her a loss of $50,000,000 a year.… Misinformation about nationalised railways or public ownership in any form is provided with easy means of travel all over the world. It goes on to say: The nationalised railways are operating in Canada with a success that has silenced every critical voice in the country. They are operating not at a loss but at a net profit of $50,000,000. This net profit more than pays all interest charges except on an accumulated railway debt piled up in the hands of the Government in the course of 70 or 80 years of subsidised private railway operation and management. This piled up debt the railway in private hands would never have attempted to pay. No private company would have accepted the railway as a gift with this debt to pay. The railways were taken over by the Canadian Government and nationalised in order to rescue them from bankruptcy. Since the nationalisation and consolidation of several railways took place"— And this is a capitalist Tory newspaper— a miracle has been witnessed—new life surges through the entire system, and failure has been replaced by success. I go to the Canadian Government offices in London, and I ask Mr. Harding, the manager there, if he will oblige with balance sheets for the National Railways in Canada. Any hon. Member can get copies, and the Secretary of State for the Dominions has put them in the Library. What do these balance sheets show? They show that a few years ago the privately-owned railways in Canada were in ruin. They were bound to be given up. They were offered to the Government. They could no longer be continued. The owners could not pay the wages, and they served notice on the Government that they required to close the railways. The Government took over these railways really as a bankrupt concern. What is the financial result? In 1926, there was a net operating profit of $47,000,000 odd; in 1927, a net operating profit of $42,000,000 odd; and in 1928 a net operating profit of $55,000,000. From that there has to be deducted interest due and paid upon the publicly held bonds and other securities, and after paying interest on the publicly held portion of the bonds and securities, there was still a profit on the last three years to hand over to the State Treasury. It is quite true that the railways have not paid interest on the accumulated deficit in the old days of private enterprise, and those of us who were members of the Parliamentary delegation to Canada last year learnt that the Conservative party leaders in Canada agreed that they ought not to pay interest upon these accumulated deficits. But there is no party in Canada—neither Mr. Mackenzie King's party nor Mr. Bennet's party—which is willing to pay, and we know that all parties in Canada were satisfied that the Canadian National Railways under the valuable direction of Sir Henry Thornton have become an unqualified success. There were members of the Government in that delegation. There were the Under-Secretary of State for India, who headed the deputation, and the Parliamentary Secretary to the Board of Trade, both of whom signed a report, which was signed by all parties, in which I find these words: Another important fact….was the advance of the Canadian National Railways from their old position of insolvency to the profit-making stage….Members of the delegation were impressed throughout their westward tour by the vigour and capacity shown by the management of the National lines under Sir Henry Thornton. The Hon. Charles Stewart, Minister for the Interior, in the Canadian House of Commons, used these words: After the demonstration of public administration of our National railways and public administration by the Hydro Electric of Ontario, you will not have any difficulty in persuading the various Provinces to join hand in hand in bringing about public ownership of our water power and coal mines. So satisfied were they with the success of the nationalisation of the railways in Canada that leading statesmen, not Socialists at all, stand up publicly in the Canadian House of Commons and declare that they are prepared to extend it.

Then I turn briefly to the question of the Indian railways, and I ask the Noble Lord the Under-Secretary of State for India, whom I am pleased to see here—

The UNDER-SECRETARY of STATE for INDIA (Earl Winterton)

I came out of compliment to the hon. Member.

Mr. JOHNSTON

I appreciate the compliment. The Noble Lord is a very efficient member of the Government, and I ask him publicly in this House if he will give me the results of the State management of the Indian railways. He gives us some of those results in the Library of this House, which show that the net profits on the Indian State railways, including both commercial and strategic lines—upon which there will never be a profit, but which are run away up to the Afghan border for military purposes—for 1927–8 were £8,205,000, and of that sum £4,731,000 was handed to the Indian Treasury in relief of taxation. How can the Prime Minister possibly go about this country saying there is not a solitary instance of the success of nationalisation when we can quote four Members from his own Front Bench who are compelled, in answer to questions in this House, to give results from their own Departments showing the success of nationalisation in one form or another?

In regard to the Australian Commonwealth Shipping Line, I see that the "Speaker's Notes"—a Speaker of the Conservative party, whose notes are not supposed to fall into alien hands at all—for the 7th February, the "Speaker's Notes" for the 21st February, and the Prime Minister, who evidently gets his inspiration from the same source, all agree that the losses on the Commonwealth Shipping Line were £14,000,000, but the Commonwealth Auditor-General, who is supposed to know something more about it, says, in his annual report, published in the Australian Press on the 8th February, this year: The net loss on the Commonwealth Shipping Line to 31st March, 1928, was £7,967,236.

Sir GEORGE HAMILTON

Is not that enough?

Mr. JOHNSTON

It is only half of the lie that is being told about it. But if you are going to make a balance-sheet on these matters, you must obviously take into account the financial advantages which have accrued to Australia as a result of the Commonwealth shipping venture, and I am going to quote an official Report which has been placed in the Library of this House by the Secretary of State for Dominion Affairs. The Report is numbered 132, and dated 11th November, 1927, and hon. Members will find in it the statement that the Commonwealth Line was instrumental in bringing about a general reduction of approximately 10 per cent. on freight rates on commodities exported from Australia to the United Kingdom and the Continent. Confidential documents placed before the Committee prove that this all round reduction was not a spontaneous action by the other shipowners, but was forced by the determined action of the members of the Shipping Board in Sydney. The annual saving to Australian primary producers and exporters by reason of this reduction alone amounts to far more than the greatest annual loss made by the Line, even including all interest and debenture charges, and it must be remembered that the greater portion of voyage losses was incurred owing to the unsuitable tonnage transferred to the Board. In October, 1926, another attempt was made to raise freights by 15 per cent. on cargo from the United Kingdom to Australia, but that was frustrated by the Commonwealth Line. The board refused to agree. They only carried 7 per cent. of the total, and their earnings would therefore have gone up materially, but in the interests of Australia they declined. The Report also states: The annual saving to Australia in this instance again more than covers the annual loss by the Line after including all charges, such as interest and depreciation. Since the line has been handed over to Lord Kylsant and his friends, we find, in the City notes of the London "Times":

Sir G. HAMILTON

Why did they sell?

Mr. JOHNSTON

Because there was a majority of profiteers in the Commonwealth Parliament. After the line was sold to Lord Kylsant there was an intimation in the City Notes of the London "Times" that a 10 per cent. rise was to be made on the freights between Australia and this country. Surely, if we are to have the balance-sheet at all, we must take into consideration the saving in freights to the primary producer and the development of inter-Empire trade, and, if the profiteers in the shipping world are to be allowed to put up freights 10 per cent., 15 per cent. and another 10 per cent. against Australian-British trade, the results will be much more serious both for Australia and this country than many hon. Members presently imagine. I could on this subject quote the Conservative party in Australia protesting in the interests of Australia against the handing over of this State shipping service to a profiteering interest, which can only regard Australian interests as a secondary consideration.

Then I take the South African Steamships. They show a profit last year, according to the Controller and Auditor-General, of £29,678 net. The Canadian Merchant Marine is another fruitful source of Tory sneers and jeers. Every party in Canada stands by that Merchant Marine, which is an attempt to develop trade between Canada and the West Indies, and to prevent the West Indies falling economically into the orbit of the United States. One might have expected that a party which pretends on the hustings to have some sympathy and friendship for the British Empire, would not spend their time running down a State service which has the support of all political parties in Canada, and which is justified by Liberals, Socialist, and Tories alike in Canada on the ground that it is bringing a big developing trade between the West Indies and Canada, which would otherwise be lost entirely to the United States.

With regard to Nigerian shipping, I asked the right hon. Gentleman the Secretary of State for Dominion Affairs whether he is aware that the State shipping service of the Government of Nigeria after allowing for depreciation, overhead charges, etc., can transport coal from Port Harcourt to Lagos at 6s. 9d. per ton, whereas the Elder Dempster Company is charging 19s. 6d. for the same service. What does the right hon. Gentleman reply to that? Does he deny it? Not he! He says: I am aware that the Nigerian Marine Department is able to carry coal at the figure stated. There cannot be any denial. Then I take one of the greatest enterprises which I ever had the privilege of studying. I see present hon. Gentlemen opposite who were on the Parliamentary Delegation to Canada last year, and who saw that great Hydro-Electric undertaking operating at Niagara Falls. This is publicly owned, and was originated by a member of the Conservative party. The Conservatives in Canada took office in 1905, and the then Premier took Sir Adam Beck into his Cabinet for the express purpose of securing national ownership of the electric supplies at Niagara and that Cabinet definitely repudiated the profiteering concession handed out by their predecessors in office. What does the Tory Prime Minister of Ontario, Sir James Whitney, say about the hydro-electric scheme? He comes to this country and addresses the Parliamentary Association, the chairman of which is a member of the Government, and he says: We have the cheapest electric current anywhere in the world. I remember him pointing to the international bridge at Niagara and saying that half of the bridge was lit by publicly-owned electricity, and the other half was lit by privately-owned electricity from a corporation in the United States, and the publicly-owned current was one-third of the price of the privately-owned undertaking. Investi- gators were sent by the Government of the United States, and they all came back with the same story, that the Canadian electric current, owned by the Hydro Corporation with Government capital administered by the municipality, is at least one-third of the price of private enterprise electricity on the other side of the water. Mr. Fergusson declared that as a result of the cheap electricity supply hundreds of miles away from Niagara Falls, companies are coming over from the United States to build their factories near in order to reap the benefit of the cheaper electricity. I do not know how the right hon. Gentleman is going to attack the Hydro undertaking, and I do not know how he and the profiteers in the forthcoming Election will successfully attempt to prove that nationalisation has been a failure in the Hydro-Electric undertaking of Canada. I turn next to the Commonwealth Bank of Australia, which had a net profit in 1927 of £6,031,000.

Mr. LLOYD

Profiteers!

Mr. JOHNSTON

If the hon. Gentleman will listen a minute, he will understand. Part of that profit is handed over in legal taxation; another part is spent upon opening up new branches and developing savings banks all over Australia. These profits are apart from the profits on the note issue, which for the half-year ending 30th June, 1928, amounted to over £500,000. How that is going to be answered I do not know. No Government in Australia would think of stopping the Commonwealth Bank. It was started, certainly, by the Labour party, but it has been adopted and taken over by the Conservatives. It is run as part of the machinery of State in the Commonwealth, and it has been a huge success. Not only has it earned these profits, but it has kept down the rate of interest which would otherwise have been exceeded by private banks. There are any number of other enterprises in the Commonwealth where financial success has been secured. There are butcher shops, fish shops, produce agencies, railway refreshment rooms, and so on. The profits upon all these enterprises can be seen by any hon. Member who cares to turn them up in the Annual Report of the Auditor-General on Public Accounts for 1927–28, Document A.52, Tying in the Library of this House.

Take State insurance. Has that been a loss in Queensland? Can anybody say that? It has raised the benefits paid to workmen who suffer injury from £1 per week to £3 10s. per week, has reduced the premiums paid by the employers, and has handed over profits to the State. Since its inception, there has been an average annual profit of £50,000 handed over in relief of taxation, and premiums have been reduced by from 25 per cent. to 33 per cent. Who is going to say that that system has proved a loss? Its working expenses have been reduced by as much as 13 per cent. compared with those of the companies. One could go on for hours with a catalogue of the successes of nationalisation drawn from the Library of this House. There is the most remarkable instance of the diamond mines of South Africa. The "Daily Telegraph" of 15th March this year prints the annual report of the Treasurer, Mr. Havenga. That shows a net profit of £6,450,000 to the South African Treasury in a year, on a capital expenditure of only £150,000. That is 6,000 per cent. profit; and the money is handed over to the Treasury.

Mr. RHYS

Who bought the diamonds?

Mr. JOHNSTON

I can answer that silly question. I can answer as many silly questions as you like to put.

Commander SOUTHBY

Manners!

Mr. JOHNSTON

I am dealing for the moment with the success, or otherwise, of nationalisation. I am not arguing whether it is advisable or not that we should have diamonds, or that people should wear them, or that we should have a social system in which people want to wear them. I am dealing purely with the financial success or otherwise of State enterprises. I am showing that, according to the "Daily Telegraph" report, there was a profit of £6,450,000 on a capital investment of £150,000 in one year, and that the Treasurer comments: This is a complete vindication of the Government's policy of establishing State diggings in the face of the strongest opposition.

Lieut.-Colonel FREMANTLE

Will the hon. Member tell us what diamond mines the South African Government own, and whether the figure he has quoted does not include royalties? They do not own De Beers.

Mr. JOHNSTON

No, but they own State diggings in Namaqualand and other places.

Lieut.-Colonel FREMANTLE

Does the figure include royalties on De Beers?

Mr. JOHNSTON

The words in the "Daily Telegraph" are "net profits."

Rear-Admiral BEAMISH

I do not often intervene. Will the hon. Member allow me to ask him one question: "Who buys the diamonds? Where does the money come from to buy them?"

Mr. JOHNSTON

Will the hon. and gallant Member let me go on with my arguments? I would be very glad at another time to have a discussion on the folly or otherwise of a social system which permits people to have such an accumulation of capital that they can afford to waste money on diamonds. In the meantime, under some difficulties on account of interruptions, I am endeavouring to show the financial results of these State enterprises. Take the State coal mines of Victoria. There was a net profit last year of £74,000, according to the "Financial Times" of 4th February this year. I have not been able to check that figure by any Government report. But I will take the case of Nigeria, about which we have fortunately, official information. The hon. and gallant Member, the Secretary of the Scottish Board of Health was the leader of a delegation to Nigeria in 1928, and on his return he issued an interesting and valuable report, which is in print. He says of Nigeria that there they have nationalised railways, and, what is more, they draw their coal from State mines. The State railway goes to the State mines, the coal is taken out by State miners, and sold to the State railways at a price fixed not by the higgling of the market, but by the costing section of the coal-mining department of the Labour Department. The State railway hauls the coal down to the State port, and loads it into State-owned ships. Further, the land is communally owned.

What is the economic result? The first economic result is that Nigeria buys 70 per cent. of her total imports from this country. She is the best buyer per head of British goods, and her purchasing power is rising more rapidly than the purchasing power of any other part of the British Empire. [Interruption.] I am sorry I could not hear the hon. Gentleman's interruption. Perhaps it was just a cough. I was saying that her purchasing power is rising more rapidly than the purchasing power of any other part of the British Empire; and she has State ownership practically of every possible monopoly. Wages are continuously rising in Nigeria, and we are assured by the delegation which went from this House that there is a state of contentment and happiness visible among the people of Nigeria such as they saw nowhere else in Africa. Hon. Members opposite will have to meet these statements of fact on the hustings.

We do not require to go to other parts of the British Empire for examples. We have here some successful results of nationalisation. I personally am not a supporter of public ownership of the liquor traffic, but for other reasons many of my hon. Friends differ from me in that regard. However, the economic results of the Carlisle experiment are surely patent to everyone. The Government have issued a document giving the trading accounts. It is No. 32, and they are on page 96. This report declares that from Carlisle alone the Treasury has received £1, 107,676 since the inception of this experiment. Hon. Members who have attempted to criticise the Carlisle experiment have been at some pains to show that this scheme has paid no Income Tax, no Corporation Profits Tax, and no Excess Profits Duty since its inception, and figures are got out in the Public Accounts Committee upstairs which show that these three sums together would reach £599,000. Even after deducting the £590,000, there remains a profit of £500,000. I cannot see what answer there is to that argument. In reference to the Post Office, it is quite clear that last year the State Department made a net profit of £8,850,000. The Postmaster-General went down to Croydon on the 12th of this month and said: If he liked he could show a very much larger surplus on the telephone account, but in effect he was ploughing the profits back into the business. Therefore, we have the admission of the Postmaster-General that he is using the profits made by the Post Office as fresh capital. Take the case of the telegraphs for which the Government paid £10,880,571 of good cash for a property that was valued, goodwill included, at £2,000,000. In the purchase of the telegraphs we gave away £9,000,000 for nothing, a deal which Lord Goschen declared to be wicked and monstrous. Since then, the telegraph department have gone on paying 3 per cent. interest on that bogus £9,000,000. The Post Office Telegraph and Telephone Departments taken together, according to the commercial accounts issued by the Postmaster-General for last year, show a profit of £7,500,000. With all these facts and figures before the Government, taken from official documents relating to the British Dominions and this country, how the Prime Minister can stand up before a public audience and say that there has been no instance of successful nationalisation either in this country or in the Dominions, I cannot imagine.

I will end, as I began, by saying that, apart altogether from the political Debates, arguments, and economic discussions which we must have before any fresh developments in nationalisation can take place, we on these benches regard it as a menace to the British Empire that the Prime Minister of this country in order to gain a temporary political advantage, should be going about the country making statements and giving figures which cannot be substantiated, which are untrue in fact, and which can only have the result of making it more difficult for the Dominions overseas to raise money upon their own public property. The course which has been suggested has already been protested against by overseas statesmen. We believe that the attitude of the present Government towards nationalisation is a menace to the continuance of the British Empire, and the sooner they are out of the road the better.

Mr. PILCHER

The hon. Member for Dundee (Mr. Johnston) has made against no less a person than the Prime Minister a very serious charge of telling deliberate untruths. I have in my hand a report of the Prime Minister's speech at Newcastle, and I cannot trace any statement in that speech in which he states that no country under a system of nationalisation has ever produced a profit.

Mr. JOHNSTON

The Prime Minister said at Newcastle on 24th February, 1929: Any policy of nationalisation, of which there is not a single successful instance in any country, in a country controlled by ballot, operated by bureaucracy would inevitably transfer, if it did not lead to the loss of our overseas trade.

Mr. PILCHER

Of course, if the hon. Member says that the statement he has just read appeared in a speech made by the Prime Minister, I have nothing more to say upon that point. I know that the Prime Minister put a certain question to the Socialist party, and he asked how they proposed: to avoid falling into the same pit into which many other countries so far had fallen in making the experiment of nationalisation. The fact that he used the expression "many other countries" appears to me to prove to demonstration that the Prime Minister did not make, and could not have made, the categorical charge of total and universal failure attributed to him by the Member for Dundee. Another misleading statement made by the Member for Dundee was to the effect that the Prime Minister chose the bulk of his examples from the Empire. The Prime Minister, in effect, examined the subject impartially. He alluded to the fact that Belgium had abandoned the nationalisation of her railways; that Germany, a highly industrialised nation, had, like ourselves, made a failure of nationalised mines; and that Russia, when all the circumstances should have been favourable for experiment, had made "colossal losses" in the same field. The hon. Member for Dundee went further and made the assertion that the Prime Minister and Conservative critics generally based themselves on unreliable telegrams to the "Daily Mail." Nothing could be wider than the truth. A telegram describing the admission of the President of the American Shipping Board that losses on the nationalised American Mercantile Marine amounted to £72,000,000 in the past eight or nine years was published in the "Times," where it attracted universal attention.

There is another point which I should like to make before I examine some of the examples of successful nationalisation which the hon. Member has adduced. One argument used by the hon. Member for Dundee was based on the suggestion that, by examining the facts and figures of nationalisation in the Dominions, a person no other than the Prime Minister is doing some harm to the great imperial cause of which he has always been a faithful champion. I think such a charge as that against the Prime Minister comes very ill indeed from the hon. Member. I have in my possession a series of articles written in the "Manitoba Free Press" in December and January this year, in which comment is made upon what happened in Winnipeg during the visit paid to that country by a deputation of British Members of Parliament. The following criticism appears in one of these articles, which contains a reference by name to the hon. Member for Dundee: Does a lie, once started keep on for ever? One would hate to think that western Canada will for ever, or even for a century, be 'tarred and feathered and carried in a cart' by a portion of the Press of the Empire because disgruntled men among the British harvesters made certain exaggerated and fantastic statements regarding their treatment here, which were further strengthened by the condemnatory attitude of certain Labour Members of the British Parliamentary Delegation. Will the 'Iron gate' in the second-class waiting-room of the Dominion Government immigration hall at Winnipeg, which has now become 'iron cages in which we were imprisoned,' frighten away good settler material in the Old Country, because these Parliamentarians passed by—not a poet this time—and with the dramatic way of orators referred to it in the striking term, 'Iron cage'. 1.0 p.m.

The allusions scattered through these lines to iron bars and armed soldiers guarding the emigrants, which were all proved to be absolutely false, refer to statements made in Winnipeg by the particular hon. Member, who now accuses the Prime Minister of endangering the Imperial connection by making untrue statements.

Mr. JOHNSTON

On a point of Order. If the hon. Gentleman desires to have a discussion upon what happened at Winnipeg, that can be quite easily arranged, but I submit that, as there will be no opportunity on this occasion of replying to or rebutting these statements, it is irrelevant that they should be made. I am perfectly willing if I can be given a further opportunity of replying.

Captain FANSHAWE

May I point out that the hon. Member made certain allegations about the Prime Minister—I think he said that the Prime Minister had been round crying "stinking fish"—and yet the Prime Minister is not even in this town, and the hon. Member knows that he cannot be in this House, and, therefore, cannot rebut what the hon. Member has said about him.

Lieut.-Colonel LAMBERT WARD

Is it not the case that any subject can be raised on the Motion for the Adjournment of the House?

Mr. SPEAKER

One subject is as relevant as the other. It is true that the hon. Member for Dundee (Mr. Johnston) has spoken, and so has exhausted his right to speak. But no doubt one of his friends can speak in reply.

Mr. PILCHER

I should not have referred to the matter but for the cruel and damaging charges which have been made against the Prime Minister by the hon. Member for Dundee. I was in Winnipeg myself at the time, and I know that there have been few more serious occurrences, from the point of view of the relationship between Canada and the home country, than those events in Winnipeg in which the hon. Member was concerned. [Interruption.]

I should like to examine a few of the cases which the hon. Member has adduced as actual practical examples of the advantages of nationalisation. He alluded to the fact that, by question and answer in this House, the information had been obtained from the Under Secretary of State for India that of late years the Indian State Railways have been making considerable profits. It is a fact, which everyone who is interested in India must be very pleased to learn, that the State Railways have been making a profit of £8,000,000 or £9,000,000 a year; but the hon. Member does not seem to be aware that these very important railways have been the property of the State in India since 1880, a matter of 48 years. I have here the Report of the Acworth Committee on Indian Railways, which gives some idea of the results of that experiment over a long term of years. This is what the Report says: To the end of the last century there was an annual loss amounting in the aggregate to £51,500,000. For the next 10 years the State secured a small annual profit, ranging roughly from £100,000 to £1,250,000. That is on an outlay of very nearly £400,000,000. The Report—it was written in 1921—goes on to say: In the last nine years the profits have been considerable, averaging up to £4,000,000 per annum. Then, coming to the final result: These heavy profits, apparently, began to be made in the War years. In effect, the Report states that the making of so great a profit out of the State railways was rather a proof of the deleterious consequences which often arise from State management. It is notorious that, until the recent separation of the Railway Budget from the State Budget, the State milked these railways relentlessly. Something like £14,000,000 or £15,000,000 was taken from the railways in a single year and they were left with nothing for renewals or reserves—

Mr. BROAD

They must have been really profitable.

Mr. PILCHER

I have paid not that a profit was made, but that the State took from them £14,000,000 or £15,000,000 without leaving them anything for replacements, renewals, reserves and so on. The very serious state into which the Indian nationalised railways were allowed to get is just an example of the dangers of nationalisation. At present a profit of £7,000,000 or £8,000,000 is being made, but it is on a capital investment of about £400,000,000. The hon. Member never referred at all to capital charges. Do not let us be told that these profits have been made, without any mention of capital charges. The hon. Member, I think, mentioned that the South African railways made a profit of £370,000, but I wonder what the capital at charge is. I cannot tell the House in that case, but in the case of the Indian railways the House can rely upon its being something like £400,000,000, while the profits are now something like £8,000,000 or £9,000,000 per annum. That in itself is rather exceptional and not yet characteristic of these railways, although everyone hopes that it will be permanent.

Mr. SAKLATVALA

Would the hon. Member be good enough to make it clear whether these profits on the Indian railways are not after interest at the rate of 5 per cent. has been paid on the invested money?

Mr. PILCHER

These are genuine profits—

Mr. SAKLATVALA

After allowing 5 per cent. interest on the capital.

Mr. PILCHER

The profits that have been made during the past three or four years, since the separation of the general Budget from the railway Budget, have been perfectly genuine profits, and the interest has been paid on the capital. [HON. MEMBERS: "Hear, hear!"] That is so, but look at the contrast with the previous 40 or 50 years. I was trying to tell the House what the cause of the profits has been. In the first place, India for three or four years has had a succession of extraordinarily good monsoons, and there have been other rather exceptional reasons. For instance, in, I think, 1923, permission was given to raise freights and passenger rates. We hope that the profits will go on, but the point is that the amount of capital at charge and the previous history of these railways are very important factors in arriving at a balance of advantage as between State and company management. They are now living under a new regime in India, and there has not yet been time for all the possible developments of nationalisation suggested by the Acworth Committee. One of the serious effects of complete national management has been that strikes on these railways and in the shops have become considerably more frequent, and, since the nationalisation of the management of the railways, there has been considerably greater pressure to favour special classes in the community. If the facts are going to be stated in the country, they should be stated in relation to the amount of capital at charge, and it should also be clearly explained that the system is on its trial, and that it is quite impossible at the present time to prognosticate anything in regard to its future working.

Reference was made by the hon. Member to a report, which I do not think I am guilty of an impropriety in saying was drafted by me as the Secretary of the Delegation to Canada. The statement was, of course, seen and passed by other members of the Delegation before it was published, and I do not think that any alterations were made. In justice to myself, I should like to read the whole of the passage to which the hon. Member referred. I do not know why he did not read it in its entirety; it seems unfortunate. The passage is a quotation from a speech made at Montreal in the presence of the hon. Member, of myself, and of Lord Peel, the Chairman of the Delegation, by Mr. R. S. White, whom I myself described as a veteran Canadian Parliamentarian and publicist, and it was obviously included in the Report in justice to Canada, in order to show that the Delegation had been seriously studying the whole economic outlook of that country. It says: Owing to the advance of the Canadian National Railways from their old position of insolvency to the profit-making stage on the £200,000,000, approximately, of national bonds and debentures held by the public it was possible in 1926 and 1927 to pay a dividend from profits, although the payment of a net return on the whole of the £200,000,000 of national stock and bonds held by the Canadian Government is still a matter of future development.

Mr. White

further stated that it was extremely problematical whether a single penny of interest would ever be paid on that sum. Do let us have a full disclosure of the facts.

Mr. JOHNSTON

I distinctly stated that no dividend was paid on that sum.

Mr. PILCHER

The only comment I would like to suggest is that that very fine system of railways is showing, as we said in our Report, signs of great vitality, but I would suggest to the hon. Member that a great deal of that has been brought about by the fact that Sir Henry Thornton was induced to go over there again, after having been associated with extraordinary success in the management of one of our own company-managed lines. To throw further light on this matter, I should like to refer to the balance-sheet of the Canadian National Railways, and perhaps some succeeding speaker on the Opposition side will explain these facts. I have here the consolidated balance-sheet at the 31st December, 1927, and I do not think that to quote it can do any harm to the relations between this country and Canada. Otherwise, I would not mention it, but it is a subject of discussion from one end of the Dominion to the other, and they are rather gratified than otherwise at any serious interest taken here in their economic affairs. The balance-sheet contains the following item: Profit and Loss Balance—Deficit…438,413,818 dollars. What is the meaning of that? Then there is this item in the income statement: Miscellaneous operating deficit…45,000 dollars. That is not a very great matter, but further on it says: Net income deficit: Year ending 31st December, 1926…27,247,000 dollars. Year ending 31st December, 1927…31,373,000 dollars. I will not attempt to go into the accounts, but I do think that the Prime Minister may very well have been justified in suggesting that there was at least a net loss of £10,000,000.

Then I should like to say a word or two about the shipping figures given by the hon. Member. There, again, the Prime Minister did not rely on the "Daily Mail," and it is very curious that, a few days after he spoke, everything that he said in this regard was completely confirmed by no less a person than Sir William Currie, the president of the Chamber of Shipping, a man whose industry and character are known throughout the shipping world. He said this: One of the principal difficulties which British shipping has had to face since the War has been the incursion into the industry of various countries in the form of State-owned ships. Whether the results justify this experiment must be left to the judgment of those who indulge in the experiment, but it would seem to the onlooker that losses of £3,250,000 over seven years, such as Australia has suffered, £56,000,000 over seven years in America, and £1,750,000 over five years in Canada, require some very tangible compensating conditions. Have the conditions, in those Dominions to which the hon. Member referred, really been tangibly compensating conditions? The hon. Member for Dun- dee quoted a statement made, I think, possibly, by Mr. Bruce in Australia, or certainly by an Australian Conservative, to the effect that the admitted losses had been almost intentionally incurred with a view to the system of back-block settlement and so forth. Here, again, I do not want to say a word that will impede the development of the process of migration to our overseas Dominions. Most of us want to aid that process as far as we can. But is not the result of all this experimentation in Australia rather to retard that back block settlement than otherwise? I remember hearing the Australian Prime Minister say in this Palace of Westminster that the cost of that black block settlement, owing to the high cost of living, grows higher and higher every year until you hear of staggering sums of £2,000 or £3,000 that are needed to plant migrants on the land. The hon. Member has made out no really valid case either against the Prime Minister or in favour of nationalisation. All over the world, all over Europe, all over the British Empire, and at home also, there is a great cloud of witness adverse to his proposition. I thought his defence of the Post Office was extraordinarily flimsy. What is the capital? How many hundreds of millions have been put into the Post Office account? As to the telegraph service, I do not know how anyone can defend it in the face of the Hardman Lever report. Wherever you examine it, the Prime Minister's contention is sound. It is very difficult to slow any clear example of nationalisation which will stand complete investigation as to capital and current account, where over a term of years a genuine profit has been made and the economic position of the taxpayers improved by the experiment.

Mr. MONTAGUE

The subject of the Hardman Lever Report has been discussed several times in the House, and a sufficient answer was given to the statements in reference to the telegraphs. The last speaker exhibits the Tory mind upon this question by his reference to the Post Office and to the fact that Rowland Hill established the penny post many years ago, and that we are now charged 1½d. for our stamps instead of 1d. When Sir Rowland Hill established the penny post, economic conditions and price values were considerably different from what they are now, and I do not think it would be very easy to find any company or any industry which has only increased its prices 50 per cent. over pre-war. After all, the point is that the telegraphs are part of the national Post Office concern. Reasons have been given for the handicap the State has had with regard to the telegraphs and the astounding ramp many years ago which the nation, is paying upon to-day—paying upon false capital to the extent of 3 per cent. Those matters have not been answered by the last speaker.

I want to go on to one or two things he mentioned with regard to Canadian and Belgian railways and other subjects connected with public enterprise. He quoted some figures to show that some millions have been lost upon the Canadian State railways. I imagine he means millions of dollars and not sterling. He does not mention that those railways were taken over because they were in a state of complete insolvency. Suppose it were true that at this date, nearly 10 years after they had been declared by the highest authorities perfectly bankrupt, there were losses to the extent of a few million dollars on some branches of that national service.

Mr. PILCHER

433,000,000 dollars deficit.

Mr. MONTAGUE

Upon what? Certainly not a deficit so far as the earnings and the progress of the State railways are concerned. I know precisely to what the hon. Member is referring. For 70 years, under private ownership, those railways which have been nationalised have paid practically no dividend. Yet because there are losses from a certain aspect to the extent of some millions of dollars, and after 10 years of unquestionable progress, which is admitted by everybody who knows anything about those railways, we are told that that is an argument against nationalisation. After the War, the Canadian Government found it necessary to take over those railways, and, in adjudicating upon the question of compensation, two out of the three arbitrators took the view that the Preference and Common Stocks had no value. The shareholders appealed to the Judicial Committee of the Privy Council, and Lord Birkenhead delivered the judgment upholding the award. After 70 years of private enterprise, the shares have no value. After 10 years of public enterprise, the railways have been put upon a profit-making basis, upon the basis of huge advances to the advantage of Canada, huge advances between income and output, and yet we are told that the example of the Canadian State Railways is an argument not in favour of nationalisation, but against nationalisation. The net earnings for 1928 exceeded 50,000,000 dollars. Of course, if you load these schemes with all the failures of private enterprise before, and expect an additional profit out of them, you can always show a loss. That is precisely what is done in order to show losses upon national and municipal enterprises all over the world and all over this country. What you call debt, you would, if it were private enterprise, call capital. That is the difference. You are paying twice over.

Mr. PILCHER

The hon. Member is under a complete misapprehension. In the income (accounts, there is a net income deficit. There is no charge in these accounts whatever for interest. It had a net income deficit of 34,000,000 dollars, over £6,000,000, in December, 1927.

Mr. MONTAGUE

That does not alter the statement which I was making. I am going to deal with my argument in my own way, and it is sound enough to stand without interruptions of that kind. This applies to the Indian railways in the same way. If you are going to pay private enterprise as well as expect money to be made for public services, you put a double burden upon national enterprise. The "Economist"—and it is an announcement coming from a journal of standing—says this about the Canadian State railways on the 22nd December, 1928: When it is realised that as short a time ago as 1922 the earnings of the State-owned systems were slightly less than 3,000,000 dollars the improvement in position can only be considered as phenomenal. That is the evidence of the leading financial journal of this country. Reference has been made to Sir Henry Thornton, the idea of the argument being that if you can show that a national railway or a national concern of any kind has the good sense to employ brains and ability in the prosecution of the concern, that that is a tribute to private enterprise. After all, we of the Labour party who want more public enterprise and to nationalise concerns which are essentially national in their character—not all industry—say that the nation can quite as well employ the best brains and ability of the nation as can a private board of directors. There is nothing that capitalists as capitalists, apart from the possessors of brains and ability, an do for the nation that the nation, properly organised, cannot very well do for itself, and there is abundant evidence in proof of that statement. Sir Henry Thornton, who is a man whose word is to be respected in regard to the affairs for which he is responsible, says: We have knocked sky-high the belief that good and efficient management with enterprise and initiative cannot be applied successfully to a Government-owned railway. I want to put before the House the consideration that after all the mere question of whether a concern pays financially is not the only, and not necessarily the main, consideration. Public enterprise pays even when there is no profit at all, or no possibility of profit. We do not expect the Navy to make a profit or Westminster Bridge to make a profit. We do not expect other concerns of public service to be judged from the standpoint of an ordinary commercial balance-sheet. The hospitals, of course, are largely voluntary services. That view is supported by no less an authority than the Chancellor of the Exchequer. I know that if one is going to quote the Chancellor of the Exchequer one is faced with the fact that he can prove almost anything from the statements which he has made. The right hon. Gentleman, advocating railway nationalisation in 1918, said: So long as the railways were in private hands they might be used for immediate profit. In the hands of the State, however, it might be wise to run them at a loss if they developed industry, placed the trader in close contact with his market and stimulated development. That is a quotation taken from the "Dundee Advertiser" of the 5th December, 1918.

Dr. VERNON DAVIES

Who pays the loss?

Mr. MONTAGUE

The people of the nation pay out of one pocket and put the money into another pocket. I should not myself call that a loss. Surely, hon. Members have intelligence enough to realise that it is quite feasible that when the nation can afford to pay for a service it is going to be an advantage in several and more general directions. That is part of the business of government. In answer to the statement that the people pay the loss, let me give the hon. Member an illustration of the kind of thing I mean. I am not advocating free transport in this country. I do not think that this would be at all possible or practicable, but, supposing it was, and that the whole of this nation were to decide that it would be more economical if everybody could travel free on all railways and tramway systems, no profit could possibly be made. There would be no balance-sheet of an ordinary commercial character whatever. All the outgoings would be clear outgoings and there would be no incomings at all. If the nation decided that that would be the most efficient way of running the services, what is there to be said about it? The nation would pay. Everybody pays for everything which is worth having. The people who pay are the nation, but, in that case, they would have their services rendered in one particular fashion rather than put profit into private pockets. That is the only difference. What nonsense it is to talk about a commercial balance-sheet, which is the first, the primary, and almost the only consideration in private enterprise, and to argue as if that were the only consideration when dealing with public services.

The hon. Member was very much concerned and affected by the statement of my hon. Friend the Member for Dundee (Mr. Johnston), who said that the Prime Minister's statement that nationalisation had never shown a success in any part of the world. If there is no truth in that statement, then the Tory literature with which the nation is being flooded to-day is not true, and the electors at the next general election are being deliberately misled by the Tory party. The quotation occurs in Tory literature, that the Prime Minister said distinctly that there was no case anywhere in the world where nationalisation had succeeded.

Mr. PILCHER

He was referring to mines.

Mr. MONTAGUE

I will read an extract from the speech of the Prime Minister, which appears in "The Times" newspaper. The Prime Minister said: The industry is shrinking in every way.

Mr. PILCHER

That has reference solely to the mining industry.

Mr. MONTAGUE

I will read everything that the hon. Member wishes me to read. The Prime Minister said: With regard to mines, I would remind you that in this country from 1917 to early 1921, when they were controlled by the Government, 40 millions was paid into them by the Exchequer. Germany has tried it. She is a highly industrial country and has given it up. Even in Russia, where you would think all circumstances were favourable for experiment—(Laughter)—the losses have been colossal. The industry is shrinking in every way, and a portion of their richest mines have been leased to a foreign syndicate. The record is nothing but failure and loss everywhere. If loss is made it can only be made up in one of two ways. It can be made up by the Exchequer, which means the taxpayer, which means you, or it can be made up by reducing wages. There is no other way. I think we deserve a little more information about a great change of that kind before we express our approval of it.

Mr. PILCHER

I submit that that is proof positive that the Prime Minister never made the statement that has been attributed to him by hon. Members. He was talking about the mines.

Mr. MONTAGUE

If that is proof positive that the Prime Minister was talking about mines, what is the use of the headquarters of the Tory Party broadcasting all over the country, on posters and in leaflets, the statement, without its context, without any reference to mines, that nationalisation does not pay and has not paid anywhere? That is the answer to the hon. Member, if there is any ambiguity in the quotation from the speech of the Prime Minister. Reference has been made to the Belgian railways, by way of quotation from Tory leaflets. The hon. Member said that Belgium had given up her railways, and that Germany had given up her railways; that they had been failures and had been given back to private enterprise. Does the hon. Member agree that that is a fair statement?

Mr. PILCHER

I read a quotation from the Prime Minister's speech with reference to those railways.

Mr. MONTAGUE

The hon. Member throws the responsibility upon the Prime Minister. Therefore I will deal once more with the Prime Minister. What are the facts? The Prime Minister stated that Belgium had given up her national railways. For 70 years the Belgian railways were a magnificent commercial success. Their fares and their zone system were the wonder of the world, so far as advantage to the community was concerned. The service was given at practically cost price for 70 years by the State. The railways were not given over to private enterprise, and they do not belong to private enterprise to-day. So far as certain changes have been made, it has been because of the success of the Belgian State Railways and not because of their failure.

Mr. PILCHER

indicated dissent.

Mr. MONTAGUE

"No," says the hon. Member. As a result of the War, Belgium's finances became in a lamentable condition. Everybody knows that and everybody understands why that was the case. The result of that situation was, that the Government could not meet the Treasury Bonds which were falling due and it was necessary to take the one great national asset, the railways, as backing for the Government's financial responsibilities to the private holders of Treasury Bonds. Therefore, the Belgian Government induced the holders of Treasury Bonds to take railway bonds in place of them. The Government's great asset was the railways. Thereupon, the Government formed a company, called the Belgian National Railways. These are the railways supposed to have been given back to private enterprise. A lease was given to a company to work the railways for several years. The capital of the company was divided into 6 per cent. preference shares, participating in surplus profits, and ordinary shares. The holders of the Treasury Bonds were asked to take these preference shares, which they did, without any representation upon the board of directors.

The result was that the Government were relieved of their financial difficulties. It was purely a war measure, and purely the result of the abnormal circumstances incident upon post-War difficulties. The point about it is that the railways are still national railways. They are still run by the nation. They are not managed by private enterprise. All the ordinary shares are owned by the Belgian Government. The preference shares which were given in place of the Treasury Bonds do not carry any representation in the management of the railways. The board of directors is composed as follows: 15 members appointed by the Government direct, three chosen by the Government from a panel nominated by the State Industrial Council, Labour Members and the State Council of Agriculture, and three members appointed by the railway workers through their various trade unions and other organisations. That is what is called giving the State railways back to State enterprise, because they failed. This was done as a financial measure because of the abnormal difficulties of Belgium. It was done not because of the failure of State enterprise but because of the tremendous success of State enterprise.

Dr. DAVIES

To get rid of political influence.

Mr. MONTAGUE

The hon. Member cannot get out by bringing in another issue. He must stick to the argument. The statement was that the Belgium railways had failed, and because of their failure they had been given back to private enterprise. So far as political influence is concerned, I find plenty of political influence in regard to private enterprise in this House. Therefore, the Belgium railways remain the property of the State, and except for certain independent appointments they are still Government managed.

What about the German railways? This is another instance, we are told, of the failure of nationalisation. It is another case of war difficulties. The transfer of German railways to what is alleged to be private enterprise was insisted upon by General Dawes. It was not a question of the failure of the German railways. They are not a failure; they are a magnificent success. General Dawes knew that they were a magnificent success, and he viewed them with his eye on reparations. That is the reason why he provided for the creation of a private railway company with a mortgage of 11,000,000 gold marks in reparation bonds. That was imposed upon Germany.

Mr. PILCHER

The reference was to the German experiment in the nationalisation of mines.

Mr. MONTAGUE

It is mentioned in Tory literature that nationalisation, apart from mines, has failed, and it was mentioned by the Prime Minister. I am concerned about the insidious lying that is going on on the part of the Tory party.

Mr. PILCHER

Nothing was said in the Prime Minister's Newcastle speech about the German railways. The reference was to mines.

Mr. MONTAGUE

Let us see about the State mines in Germany. Mr. Baldwin inferred that Germany had given up State ownership of mines.

Mr. DEPUTY-SPEAKER (Sir Dennis Herbert)

I must ask the hon. Member not to refer to hon. Members by name.

Mr. MONTAGUE

I apologise for my mistake. The Prime Minister inferred that Germany had given up State ownership of mines. That is not the case. The various German Governments are large owners of coal, iron, potash, and other mines principally through their shareholdings in companies. In the prospectus issued on 6th November of the Prussian Electric Company it was stated that the Brunswick Coal Mines, one of the most successful lignite producing undertakings in Germany, was owned as to 92 per cent. of the shares by the Prussian Electric Company and the Electric Power Company. It was not added that these companies are directly but entirely owned by the German Government. That raises a point of great interest in this matter.

When we define nationalisation we are not advocating a system of complete centralised bureaucratic management of the whole of industry. The position of the Socialist party, and Socialist opinion, is that there are certain industries which serve a national purpose and which cannot be split up. You cannot split up the railways; they are a national service. The Post Office is a national service; you cannot run the Post Office on local or varied lines. It has to be co-ordinated because it is essentially national in its character. We say that because of their basic character the coal mines of this country are a national service, but it does not follow that we believe in nationalising everything. We do not. We believe in public ownership; in the people democratically organising their own work and their own resources in order to make the best for themselves and their country, but there is sufficient elasticity in Socialist theories to allow the principle not merely of nationalisation but of local administration and co-operative methods, and also methods which are known amongst the intelligentsia of the Socialist movement as guild Socialism.

Under Socialism there will be much more real individualism than you have to-day. No Socialist desires to interfere with things which are essentially individual in character. I am thinking about art and music, and the production of books. What the Socialist says is that industry and the resources of the nation should be taken out of the hands of profit mongering individuals; that no one has a right to make a profit out of the labour of someone else. Nationalisation is a principle which we seek to apply under capitalism. It is not Socialism, although it is managed on Socialist lines in a Socialist state. We advocate nationalisation for services which are ripe for nationalisation and which can be organised most efficiently on national lines. I should like to refer to another argument that has been used. We can show all over the world how efficiently national and municipal services can be run on national lines. In the town of Rosario in Southern America the drainage is leased to a public company. It is one of the most inefficient drainage systems in the world, but it makes a profit of 12 per cent. The Tory party—I notice that the Liberal party are absent as usual not having got over the effect of the Albert Hall meeting last night—would argue that Rosario with its inefficient drainage system was a success because it puts 12 per cent. into the pockets of private individuals, and that the main drainage system of London, which is one of the wonders of the world, is a failure because it does not put 12 per cent. into private pockets.

The hon. Member for Penryn and Falmouth argues that if you show a small profit on a big capital it is not worth mentioning. The difference is that the bigger profits on a small capital when they go into private pockets go to the advantage of private persons, and it is much more important to the public advantage that a small profit should go into the public purse than a large profit should go into private pockets. But why should we look at this question from the standpoint of making profits at all? When it is a question of serving the interests of commercial men in this House hon. Members ask that the Postmaster-General should bring about a return of the penny postage because the Post Office is making £6,000,000 profit. How dare the Post Office make that profit? The argument is that when it comes to making out a case against nationalisation a small profit is of no concern, but that when you have a large profit it must go into private pockets before you can prove it is a success at all. I think the case for nationalisation is proved overwhelmingly throughout the world.

Captain FANSHAWE

I do not want to follow the last speaker into an examination of the case in favour of nationalisation, but I am tempted to say a word or two on the question of the Belgian and German national railways.

Mr. JAMES STEWART

Will the hon. and gallant Member give us the date; whether it is pre-War or ante-War?

Captain FANSHAWE

Well, the hon. Member might allow me to say two or three words before he interrupts. In regard to the Belgian railways, and also in regard to the German railways, I do not understand why if they were so very profitable the system has been altered by anyone at all. The two cases are not quite parallel. For some reason the people in Belgium who knew the facts of the case in regard to their own railways made a change, and the change was rather away from absolute Government control and towards, at any rate, a wider system of control. The people of Belgium, apparently, did not agree with the strangle grasp of nationalisation on their railways. With regard to the German railways, it is a matter of history that when the Reparations Commission under General Dawes went to Germany to find out how we could get reparations from Germany they settled on the German railways as a very prosperous concern.

Why did the Commission not leave them with exactly the same management if they were so very prosperous, and if they considered that by the same management we should get the maximum amount of reparations from them? General Dawes was faced with a difficult problem. He was not a capitalist or an employer of labour, or any bad sort of man like that. He was sent as an American financier to find out how we could get the last penny out of this defeated country; and he fixed on the railways. But he did not leave the railways of Germany entirely under national ownership. It was not a change entirely towards private ownership, but it was a change in that direction. He altered the system of control of the railways in Germany, and the action of General Dawes shows that they were not quite so well managed as they might have been.

I see that the hon. Member for Dundee (Mr. Johnston) is again in his place. I am horrified that he, of all people in the world, has called the veracity of the Prime Minister into account. I speak with feeling because I read the hard things which the hon. Gentleman says about people in the paper which he edits in the West of Scotland. That paper is full of abuse of everyone with whom the hon. Gentleman does not happen to agree. I believe that we can safely leave the veracity of the Prime Minister to the judgment of the general public, particularly when the record of the Prime Minister is compared with the record of the hon. Member. The Prime Minister has remained silent amid the jeers and taunts of hon. Members opposite, while struggling for national prosperity during 1926 and the other difficult years which have had to be faced during the lifetime of this Government. The record of the hon. Member for Dundee can be read. Hon. Members can get his paper "Forward" in the Library. I have a number of quotations here. Everyone who believes in fair play will be entirely disgusted by what they read in the columns of that newspaper.

I believe that if a system of nationalisation, even the restricted system of which the last hon. Member spoke, were found to be the best thing for the industry of the country we should most certainly have that system. We have heard many cases cited. Some hon. Members have said that nationalisation has been a success, and others have said that it has not been a success. That is not the way in which we have to approach the problem. We have to make up our minds whether our industrial machine could in any way be speeded up by the adoption of nationalisation. Of course the old policy of the Socialist party was to throw the net of nationalisation over all the industries of the country. I was glad to hear from one hon. Member that they have reached a sort of convalescent stage, that the disease is passing out of their minds and bodies, and that now they say that nationalisation is only to be applied to certain industries.

Mr. MONTAGUE

What I said can be seen in "Labour and the Nation," the official statement of the Labour party. Socialists never did say that they were in favour of the nationalisation of everything.

Captain FANSHAWE

I am judging from the remarks that fell from the hon. Member just now. He rather let the cat out of the bag by his later remarks, which showed that though the Socialists are hoodwinking the country in "Labour and the Nation," and are putting that point before them, there are remarks of hon. Gentlemen, to be read in the OFFICIAL REPORT, which show that the net is still to be drawn over all the industries of the country But we can pass from that subject. The hon. Member for Dundee, we presume, wishes to nationalise the industries only because he thinks that it would be for the benefit of the country generally. The Prime Minister is not in favour of nationalising industry. Let us again compare the records of the two men. What did the hon. Member for Dundee do in 1926, when we had a great trial of strength and fortunately the country emerged and, though shattered, was eventually put on the way to recovery. What did the hon. Member for Dundee do then? Did he go anywhere and try to help the workers out of their trouble? Certainly not. He supported a strike, and even in my constituency he was all the time trying to keep the miners back from getting a decent and honourable settlement, such as they could have got long before. On records again the country will certainly turn to the Prime Minister.

The hon. Member was partly responsible for the loss of £7,000,000 in the trade of the country in 1926, by his support of industrial upheavals. The workers of the country should know that he was partially responsible for the misery of thousands of homes, for the unemployment of one-fifth of our industrial population. Now he comes and says that he really has at heart the welfare of the workers of the country. All I can say is that it is very difficult to believe that the sheet is entirely white in 1929 when it was so extraordinarily black in 1926. I do not believe that there is any machinery in the Government that could control the great industries of the country. Where it can be found that an industry could be worked better under nationalisation, let it work under that system, but let every single industry be examined on its own merits as a business proposition. No one would say nay to that. There is, however, only a certain amount of interference that the Government and Parliament can apply to industry, if good is to be done.

2.0 p.m.

Lord Melchett has instituted something which most of us hope will result in a great Industrial Council on which both sides, workers and employers, can get together to thrash out the problems of industry. How absurd it is to think that this House could thrash out the great affairs of industry! The hon. Member for Dundee, speaking from the Front Opposition Bench, has given us a vicious and bad-tempered speech. He has tried to advocate nationalisation, a great change in our industrial system. The speech itself was a condemnation of nationalisation. The Government has not gone in for a general system of nationalisation and never will do so. It has gone as far as it possibly can go already. It has gone a long way to help industry by its de-rating scheme and safeguarding measures, and I am sure that the country as a whole will accept the lead given to it by the Prime Minister rather than that given to it in the speech of the hon. Member for Dundee. The hon. Member for Dundee has gone all round the world for examples of where nationalisation has been a success. He has told us all sorts of stories about the Commonwealth Shipping Line in Australia. He has said that, even if the Commonwealth Shipping Line was running at a loss to the nation, that was able to give cheaper freights than Lord Kylsant's line or some other line. But these cheaper freights were only given at the expense of the community; and why should you burden the community in order to bolster up one particular trade?

Mr. MONTAGUE

They know their own business best.

Captain FANSHAWE

In this case, with all respect, I do not think they did, because they sold the Commonwealth Line after about five years at a loss of several millions of pounds. They made their experiment, and they practically admitted that the experiment was a failure. I do not wish to detain the House with all these examples, but I would refer to a report which appeared in the "Sunday Times" in October last of evidence given by a Mr. Eggleston before a Royal Commission which inquired into the finances of the State railways in Victoria. He said: The railways instead of being an asset to the Government were a burden on the community, and he definitely attributed this fact to political interference. If this political interference continued, the railway service would become an instrument of wholesale corruption, resulting in large losses to the State. The railways would become the playground of politicians and a sink for public funds. Is it really in the minds of hon. Gentlemen opposite to benefit industry, three years after they nearly smashed it, or is it only the case that they want to make our railways and other public services happy hunting grounds for themselves?

Mr. STEWART

Who is the gentleman whose words the hon. and gallant Member is quoting? What is his position, and who did he represent?

Captain FANSHAWE

He was one of the witnesses before this Royal Commission. He is a Member of Parliament in Australia, and knows the conditions in Australia. He is not one of the people who are sitting here thousands of miles away, telling us all about the Australian railways. He was able to speak from first-hand knowledge of the railways of his own country. The hon. Member for Dundee also referred to the hydro-electrical power scheme in Ontario. I have here the report of a United States Committee which was appointed to inquire into the electrical supplies of the United States and Canada, and they find that the municipal plants of the United States have an average revenue per kilowatt hour, which is 73 per cent. higher than the average revenue collected by the private companies. They find in Canada in 1925 the average revenue per unit of the municipal plants including this hydro-electric scheme in Ontario was 83 per cent. higher than that of the private plants. It is not a fact therefore that this scheme is an unqualified success. The hon. Member for Dundee visited Canada, but he was only there a few weeks at most. Yet he comes back and claims to be able to tell us all about the benefits of this great concern. This committee which was sent from New York to inquire into the prosperity of these electrical concerns expresses a contrary view. Again, who are we to believe—the people on the spot, or hon. Members sitting here? The hon. Member wants us now to alter the whole industrial system of this country—he and his friends having benefited our industrial system so much in the year 1926. If nationalisation can be proved an unqualified success in every place, let us adopt it; but do not let us forget that its adoption means that we must stop, or at least slow down our industrial machine. The people who will get the advantage of that slowing down or stoppage will be our foreign competitors, and the people who are going to suffer are the workers of the country. Is this system of nationalisation going to make for employment?

Mr. MONTAGUE

The same commission said so.

Captain FANSHAWE

The hon. Member for Linlithgow (Mr. Shinwell), writing only last November in "Forward," said the reverse. He said that nationalisation would never solve the unemployment problem. So that there is disagreement between hon. Mem- bers opposite on that point. Let us have sanity in this matter. Do not let us treat it, as the hon. Member for Dundee has treated it, merely as a political stunt. He has come into the House showing temper, and abusing the Prime Minister.

Mr. JOHNSTON

I have never heard a more ill-tempered speech than your speech to-day.

Captain FANSHAWE

The country, however, will decide for sanity and the Prime Minister rather than for the hot words and abuse of the hon. Member for Dundee.

Lieut.-Commander KENWORTHY rose—

Mr. SPEAKER

Sir Laming Worthington-Evans.

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

I would have liked very much to have heard the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy), who was not in his place in the earlier stages of the Debate. If he had been I would have made other arrangements, and would have been prepared to give way to him, but I think it is now time to reply to the Debate which has been occupying the House for some time.

Lieut.-Commander KENWORTHY

I was speaking on the nationalised wireless.

Sir L. WORTHINGTON-EVANS

This Debate has been initiated, not by an advocate of nationalisation putting forward the claims of nationalisation, but by one who sought to convict the Prime Minister of inaccuracies in certain references which he had made to nationalisation. I propose to follow the same line. I do not propose to deal with the case for or against nationalisation, but to confine myself to showing that what the Prime Minister said was actually and absolutely accurate, and that he was justified in saying it. Let us first make sure what the Prime Minister did say. Various quotations have been made, and I have been trying to follow them with the aid of an extract from the "Times" report, and I have heard things attributed to the Prime Minister which were not in fact said by him. The Prime Minister began by saying: There are one or two questions on which the electorate ought to be instructed by those who say they are advocates of nationalisation, whatever that may mean." It is noticeable that the hon. Member for Dundee (Mr. Johnston) did not take up that challenge. He did not say: "You want to know the answers to these questions. These are the answers." He might have tried to do that had he chosen, but he studiously avoided doing anything of the sort. The Prime Minister went on to say: I think the electorate want to know first of all how nationalisation is going to be brought about. They will want to know secondly, whether it will lead to cheaper production with a view to knowing whether it will make this country more efficient to compete in the foreign countries of the world; and thirdly, they will want to know whether nationalisation will lead to a higher standard of life for those who work in the industries concerned. Those are all three extremely pertinent questions, and, if the Opposition had really wished to discuss this matter intelligently to-day, they would have devoted themselves to dealing with those three questions, and they would have put before the House their considered reply to those three questions. What have they done? Instead of doing that, they first said that, when the Prime Minister spoke of Australian shipping, Canadian and Australian railways, he was casting aspersions upon the Dominions, stirring up difficulties in the Dominions, and generally that he should be censured for so doing. What was the Prime Minister doing? After asking those three questions, to which I referred, he said: How do they intend to avoid falling into the same pit into which many other countries so far have fallen in making this experiment? Nationalisation has been tried with regard to shipping, railways, and mines. The Australian experiment has shown a loss of some £14,000,000 in the last few years. That is the Prime Minister's statement with regard to Australia, and the hon. Member for Dundee gibes at him and says that the facts are not taken from official sources, but from the "Daily Mail" or some other paper with which he does not appear to agree. Those figures of £14,000,000 seem to me to have been almost accepted by the hon. Gentleman himself. I say almost because he accepted half of them. He quoted the Auditor-General of the Australian Commonwealth, who, in a calculation that he made, said that the losses were something over £7,000,000 and under £8,000,000. Again, is the hon. Member sure that those figures include interest?

Mr. JOHNSTON

It is the net loss.

Sir L. WORTHINGTON-EVANS

On capital or on running account? I do not want to pursue it, and I do not believe it is very material, for this can be said with fair certainty. I am now going to quote as my authority for this a non-political financial newspaper. An Australian correspondent of the "Financial News" has drawn up an account of these losses, and he makes them £10,500,000, plus interest. I myself cannot say whether the interest is £3,500,000, in which case the £14,000,000 would be arrived at, but it is at any rate a very substantial loss, a minimum of £8,000,000, a maximum of £14,000,000, which has been incurred over the nationalisation experiment in Australian shipping. If there is any change to be got out of that, if there is any satisfaction to be got out of the difficulties of nationalisation, then surely I will concede that at least there is a big loss, if not the whole loss.

Now I come to Canadian shipping. Again, no official figures are quoted, says the hon. Member. If he will look at the "Canada Year Book, 1927–28," which is a Government publication, and turn to page 708, he will find these words: Early operations proved profitable"— This is under the heading "Canadian Merchant Marine." and a surplus of 1,000,000 dollars without provision for interest charges was shown in the year ending December, 1920. Subsequent years, however, have shown the effects of the depression in the shipping industry and annual deficits of 8,000,000 dollars, 9,000,000 dollars, 9,000,000 dollars, 8,000,000 dollars, 7,000,000 dollars, and 8,000,000 dollars were shown in the years 1921 to 1926 respectively. What the Prime Minister said—I keep reminding the hon. Members of what the Prime Minister said—about Canadian shipping wag: The Canadian experience shows a loss of £10,000,000. and, if the losses on this account are added up, it will be seen that the statement made is entirely accurate and justifiable.

The next illustration that the Prime Minister gave us was the Australian railways. There he said that In railways, the Australian Government, not the separate States but the whole Federal Railways, have lost £16,000,000 in eight years. When I look up the "Report on the Economic and Commercial Situation of Australia," published by the Department of Overseas Trade, I find that they deal with the matter in a somewhat different way, but, in effect, the same result is arrived at. There different years are being compared, showing each year from 1920 onwards losses of £2,500,000, £3,500,000, £1,250,000, and so on. Then there are some years for which detailed figures are not given. Then, there occur these two lines on page 291: The total of the net deficits of all States from railway working, after payment of interest since 1911, has amounted to £24,000,000. It cannot be said, therefore, that there was any exaggeration in the statement made by the Prime Minister.

A great deal has been said in this Debate about the Canadian railways. The Prime Minister did not refer to them, but a great deal has been said about them. It is not my concern to prove that the Canadian railways have or have not paid. There has been a very good statement made in the House by the hon. Member for Penryn (Mr. Pilcher), who knows what he is talking about and who had the balance-sheet in front of him at the time, which quite clearly showed what the deficit was for the year of which he was speaking. Again, it gives me no pleasure to record it, but I read from the "Canadian Year Book" that the deficits are not only in the year to which the hon. Member referred but in other years. There was a deficit in 1922 of nearly 58,000,000 dollars, in 1923 of 51,000,000 dollars, in 1924 of 54,000,000 dollars, in 1925 of 41,000,000 dollars and in 1926 of 29,000,000 dollars. What is the use of denying that there has been a huge deficit? There is no use in trying to over-prove the Canadian case. It is quite likely that Canada was wise and well justified in assuming the Grand Trunk and the Grand Trunk Pacific Railroads, and in converting them into the Canadian National Railroads together with other lines. Very likely it was good State policy, and I am the last man in the world to try to criticise thorn for pursuing good State policy. But do not try and prove that it has paid when it has not paid, if their balance-sheets are correct, and I have not the slightest doubt that the figures they give officially are correct. Although the Prime Minister did not refer to it, the hon. Member and others on the other side of the House have dealt with that case as if it was on all fours with the Canadian shipping and Australian railways and seemed to suggest that he has been guilty of an inaccuracy there.

Then the hon. Member referred to India, but again the Prime Minister did not. It was my hon. Friend below the Gangway who read an extract from the Acworth Report. Thank goodness, the Indian railways are in a much better position, as a result of the Acworth Report and of the Governmental action that has been taken on it, than they have ever been in before. The service they are giving is better, and the revenues they are receiving are better, but it is a sorry tale if you read the whole story of the Indian railways and the results of the interference of Government in the running of those railways. I am sorely tempted to detain the House for a moment or two—

Mr. JOHNSTON

Since they took them over?

Sir L. WORTHINGTON-EVANS

No, but do not let the hon. Gentleman run away with the idea that something miraculous has happened since the Government took them over, because the Government have been the railway owners for a very long time in India. What has happened is that the two budgets have been separated. The railway budget has been separated from the general budget, and the Government of India have ceased to block capital expenditure on the part of the railways, because they wanted the capital expenditure for other purposes of the Government, which was the course which had been followed until after the Acworth Report, but in regard to all those years while the Government was in control, here is a little bit of evidence taken at Calcutta. Has the hon. Member ever read it?

Mr. JOHNSTON

Yes.

Sir L. WORTHINGTON-EVANS

And did it not make him very nearly sick to see what Government interference did with the management? If not, the hon. Member must have a stronger stomach than I should have had. This is what it says: There is a large demand for Indian coal for export, but in the absence of adequate transport facilities for meeting it, India is losing an exceptional opportunity of establishing herself in the markets of the world. Want of trucks, goods held up, Bengal iron cannot be developed because they cannot get it to the coast, trade generally cannot go on because of the absence of railway sidings and wagons, all under Government, all strangled by the Government's stranglehold—

Lieut.-Commander KENWORTHY

We have got that here in Hull.

Sir L. WORTHINGTON-EVANS

If a private railway company had been in the position that the Acworth Report dealt with, that company would have lost its franchise long before.

Mr. MONTAGUE

Government interference is not our case at all.

Sir L. WORTHINGTON-EVANS

The Prime Minister referred to New Zealand and said that nationalisation there had never paid, and that was not challenged by the hon. Member. Those are the only specific examples of the failure of nationalisation that the Prime Minister gave in his speech, but he made another statement, with regard to mines, which has already been read by the hon. Member for Islington, West (Mr. Montague), and my hon. Friend the Member for Penryn challenged him while he was reading it. The statement: The record is nothing but failure and loss everywhere. is a statement which refers to the nationalisation of mines. It is part of a paragraph which refers to mines, when they were controlled by the Government here, losing £40,000,000, and when they were controlled in Germany and control had to be given up; and then there is a reference to Russian mines, and then the statement in question.

Mr. MONTAGUE

I will accept the interpretation of the right hon. Gentleman of that paragraph in the Prime Minister's speech if he will communicate it to the Conservative headquarters, who are responsible for the Tory literature which is being circulated throughout the country.

Sir L. WORTHINGTON-EVANS

I am speaking in public and on record, and I do not know to what literature the hon. Member refers. I have not seen it. If he likes to call my attention to any specific leaflet, I will look at it, but obviously I cannot deal with it in Debate without having it in front of me. The case that was developed on the benches opposite was that the Prime Minister had said that everywhere and in every case nationalisation was a failure, and the hon. Member quoted a well-known power station in Quebec and showed that that was successful. An hon. Friend behind me, in reply, seemed to doubt whether all the claims that the hon. Member made for it were justified. I do not know. I am not concerned to say that nationalisation can in no case be successful. There are monopolies which can be held by a Government and the success or failure of which we cannot test, and perhaps ought not to test, from the pure profit-and-loss point of view. Wherever you get, however, into industrial and commercial things, you can test them from the costs, the wages, and the profits points of view, and wherever that has happened I believe it is true to say that there is a gross and absolute failure of nationalisation.

When, however, you are dealing with a monopoly like the Post Office, you cannot say, as some hon. Members say, that it has made a profit of £7,000,000. I always laugh when I hear of that profit of £7,000,000. If you can control the costs, more or less—because, after all, wages costs are not within absolute control, but more or less—and if you can control the price of the product that you sell, you must indeed be a fool if you cannot show a profit on your account; and no one has accused those who manage the General Post Office of wanting in wisdom and brilliance in that respect. They certainly can show a profit so long as they are enabled to charge 1½d. for a letter. Why should they not charge 1½d.? But if they go back to the old 1d., very nearly all that profit, so-called, that paper profit, will be gone, and it will cost £5,000,000 to £6,000,000 to knock the ½d. off, and then your so-called £7,000,000 profit will be £2,000,000. But are you really making a profit, and, if so, how much? I have no hesitation in saying, although I do not intend to devote the time to the general case against nationalisation, that, on balance, private ownership and individual enterprise in 95 cases out of 100 will beat nationalisation hollow.

Mr. T. SHAW

I regret that at the beginning of my speech I must refer to a personal attack that was made on my hon. Friend the Member for Dundee (Mr. Johnston) by the hon. Member for Penryn and Falmouth (Mr. Pilcher). The hon. Member referred to an occurrence in Canada. My hon. Friend the Member for Dundee was not only present, but saw that occurrence. There were at least five Members of this House and two Members of the Canadian House of Representatives who saw it, and it is a piece of colossal impertinence on the part of anybody who does not see a thing to pretend that those who do see it have not seen it.

Mr. PILCHER

May I state that immediately that occurrence happened and these assertions were made at a club at Winnipeg, I went down to see the alleged cage with iron bars and examined the conditions of all the Winnipeg immigration stations in the greatest detail, and satisfied myself that these assertions were false from beginning to end.

Mr. SHAW

I venture to say that the hon. Gentleman did not see the conditions at all, and he did not even see the immigration station that was complained about.

Mr. PILCHER

I examined every immigration station in Winnipeg the very same day.

Mr. SHAW

I say deliberately that two Members of the Canadian Parliament and five Members of the British Parliament saw these conditions. I regret that this thing is continually being raised, because it cannot do any good. The hon. Member for Penryn and Falmouth cannot attack my colleague without expecting a reply. If he had left the thing where it was, so it would have stood. Hon. Members of the Conservative party can take it for granted that we are not going to accept their assumption of superiority. My experience does not lead me to accept them as in any way superior, and we had better have a complete and proper understanding on that point. If they attack, they will get a return, and they are neither superior in points of honour nor in points of sportsmanship. That is my experience. I saw these things. The hon. Member for Penryn and Falmouth did not see them. I repeat that what the hon. Member for Dundee said in Winnipeg was true. About that there can be no question, but it is no new thing in the House for statements made by this side to be contradicted by people who do not know the circumstances.

Mr. PILCHER

I read from a leading Canadian newspaper published in Winnipeg. These words: Will a lie live for ever? were not mine but those of the "Manitoba Free Press."

Mr. SHAW

Whether a lie lives or not, the fact remains that the conditions described by the hon. Member for Dundee were the conditions that we saw, and there is no question about it. The hon. and gallant Member for Stirling and Clackmannan Western devoted a large part of his speech also to the sins of my hon. Friend the Member for Dundee. I suppose that all our sins are as scarlet, but may I call his attention to the fact that in my division at the last election handbills were circulated appealing to the people on the grounds that we were Communists and that Communism stood for the nationalisation of women and the destruction of religion. Was there ever a filthier lie than that in the political history of this country? Was anything worse than that ever done? When we are calling kettles and pans black, we do not gain anything. It would be infinitely better if we realised that we all have human frailties, and if we did not pretend that one side was all angelic and the other side all demoniacal.

Captain FANSHAWE

I would like to draw the right hon. Gentleman's attention to the fact that the hon. Member for Dundee, early in his speech, made the remark that the Leader of the House of Commons had been crying stinking fish. That is really what rightly annoyed hon. Members on this side, because it was a very offensive remark to make about the Leader of the House, and the hon. Member for Dundee has only reaped a little of what he tried to sow.

Mr. SHAW

My hon. Friend read an extract from a previous Prime Minister of Australia protesting against this kind of assumption.

Captain FANSHAWE

That remark was not in the letter which he read.

An HON. MEMBER

What about nationalisation?

Mr. SHAW

When we get to close grips with any question we have to be turned on to something else. The fact of the matter is that not only my hon. Friend the Member for Dundee is complaining. There is a considerable amount of feeling about these continual references to nationalised institutions, a great number of which are successful, which exist in our Dominions and Colonies. Speaking of nationalisation as a failure or otherwise, the hon. and gallant Gentleman referred to the example of Belgium. The national railway system of Belgium before the War was the cheapest in the world. You could travel any time during the year, or anywhere you liked for five days, for the sum in English money of 9s. 5d. [An HON. MEMBER: "What was the value of the franc?"] It was roughly 9½d. and the exchange value 25 francs 30.

Captain FANSHAWE

Will the right hon. Gentleman answer my question?

Mr. SHAW

I am telling him what the facts are. Does the hon. and gallant Member deny that it is a fact that both for goods and passengers the Belgian railways before the War were the cheapest in the world?

Captain FANSHAWE

I did not deny that, and I did not specifically go into it. What I said was that for some reason the Belgian people did in some measure alter the system of the control of their railways, and that they knew what they were about.

Mr. SHAW

The hon. Member for West Islington (Mr. Montague) gave a complete answer to that question, and I am not going to repeat answers that have been given. Take the case of the German national railways. Is there any question that if the German national railways had not reached their high state of efficiency, Germany would have been out of the War inside the first six months? Is it not the fact that the perfection of the German railway system was one of the principal reasons why Germany was able to stand up during the War as she did? What is the use of denying what is well known to anybody who has ever taken the trouble to investigate the position of the German railways? Before the War our business men continually complained because of the cheap rates on the German national railways, and because of the way that their Government helped them. Complaints were frequent from traders of all kinds in this country that they were badly handicapped.

Sir WILLIAM WAYLAND

Was not that due to the preferential rates granted by our own railways to German imports?

Mr. SHAW

I take it, from the interjection this time, that private enterprise is so bad that it helps the foreign producer as against the home producer.

Sir ROBERT THOMAS

Is the right hon. Gentleman not aware that the competition we suffer from on the Continent is cheap water transport, and not railway transport?

Mr. SHAW

I am sure the hon. Baronet, who is well informed, must know that what I am saying about the German railway system is perfectly true—that the goods rates were lower than ours, that those railways were deliberately run to help traders, and that if a certain class of commodities wanted a little help there was always the national railway system ready to give it a slightly less rate still. Is there any doubt about that?

Sir R. THOMAS

What I have tried to explain is that the competition we suffer from is not from the German railways, but from their canal system.

Mr. SHAW

The hon. Baronet will pardon me if I say that, whilst I am under no illusions as to the part the water system of Germany has played, I know something about what the railway system accomplished in that country. I really have taken some interest in one particular trade in this country, and have tried to get to know what was going on with regard to it in other countries, and I give my experience for what it is worth: that it was a matter of common knowledge before the War that the German railway system did give cheaper carriage rates and did help traders more than our own railways did. Germany had a railway system which had been developed nationally for two purposes, for trade and for military use, and for both purposes that system proved itself highly efficient. In Belgium there was a State system with the cheapest service in the world both for passengers and for goods.

With regard to electricity supply in Ontario, we have had quoted to us the report of some commission, I do not know what kind of commission, from the United States which solemnly goes to Canada and presents a report. Is there any doubt about this statement, made to some of us in Canada by the Canadian authorities themselves, that on the international bridge, with the American private concern on one side and the Canadian national concern on the other, the cost per lamp on the United States side was something like four times as much per month as it was on the Canadian side? These are facts which are easily ascertainable. Is there any question about the further fact that nobody in Ontario, whether Liberal, Conservative or Labour, would dream of pretending that the national system of electricity had not been successful? The things they are doing with it are marvellous, and they definitely claim that the cost of the current supplied by the publicly-owned system on the Canadian side is one-third, or less than one-third, of the cost of the current supplied by the privately-owned service on the American side.

We shall gain nothing by not looking facts in the face. I want to look facts squarely in the face, and I see over and over again the most overwhelming proof that nationalisation has been a success. I see cases—what is the use of denying it?—where apparently interest has not been paid on capital; but I ask myself, taking both together, is there something inherently good or something inherently bad about a national service? I look at the cases where it is alleged that money has been lost, and I find that where money had been apparently lost, it has generally been quite deliberately lost; that is to say, an uneconomic service has been provided in order to reap good results years ahead. It has been done for the future development of the country. In my opinion, before many years are past this country will be driven, though it had better do it voluntarily, to engage with other parts of the Empire to develop the Empire, whether economic results accrue immediately of not. What is the use of expecting that you can drive railways through unpopulated country in order to develop it and immediately get a profit? It is foolish; but if you waited for private enterprise, which must see its profits, development would inevitably be hindered.

Take, if you like, our own country. I am not going to flog the examples, though I could go into a dozen and one cases. Let us see how we stand in our own country. Whenever we are driven to extremities we adopt this method of bringing every thing under one head and under Government control. What did we do during the War? Did we allow private enterprise to go on making munitions in its own way? If we had done so, we should have lost the War. Did we allow the railways to go on in their own way? Not at all. We had to control the railways, or we should have been absolutely beaten inside the first three months; but as soon as ever a profit can be made out of them, after the War is over, we hand these things back to the profiteers. Would anybody ever dream of having the three Services which the party opposite think most about, the Navy, the Army and the Air Force, owned by anybody except the nation? Not at all. The policy is that whatever is needed in the interests of the country out of which profits cannot be made must be national or municipal; but the instant a condition of affairs arises in which a profit can be made, then private enterprise can have the profits. If the old theory of private enterprise and competition were good, one could understand this hostility to nationalisation; but the old system of private enterprise and competition is dying before our eyes. Who was the great apostle of private enterprise and competition in this House until quite recently? Lord Melchett. Now he is spending every waking moment in trying to abolish competition.

Mr. SPEAKER

The right hon. Gentleman must not proceed to an advocacy of nationalisation, on the Motion for the Adjournment, because that would be out of order.

Mr. SHAW

But I certainly understood that we were dealing with the subject of nationalisation and the Prime Minister's statement, alleged to have been made in Dundee, that nationalisation had never been a success in England. I bow at once to your ruling, Sir, but I thought that was the subject we were discussing.

Mr. SPEAKER

It would be out of order on the Motion for the Adjournment to discuss proposals which would lead to legislation. I understood the hon. Member for Dundee (Mr. Johnston) had accused the Prime Minister of inaccuracies in his statements outside this House as to the matter of nationalisation, more especially within the Empire. That is quite another thing from a general debate on the merits of nationalisation.

Mr. SHAW

I bow to your ruling at once, and I will confine myself simply to this contention, that the alleged statement of the Prime Minister at Dundee, that nationalisation had never been succesful, is not borne out by the facts. The State railways of Belgium show that the statement cannot be borne out; the State railways of Germany prove that the statement was incorrect; the electricity system in Ontario proves that the statement is not correct; our own Post Office proves that the statement is not correct; and I say, finally, that in the case of the most essential of all services for the defence of the country nobody would ever dream that anything but a national system could be in any way successful.