HC Deb 24 July 1930 vol 241 cc2427-517

Motion made, and Question proposed, That a sum, not exceding £101,741, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1931, for the Salaries and Expenses of the Office of the Committee of Privy Council for Trade, and Subordinate Departments, including certain Services arising out of the War.


In opening the discussion on this Vote for the Board of Trade, I want to ask the Committee to notice the very serious state in which our trade, and in particular our export trade, has got. It is not very long since we had this Vote down for discussion, but I do not think that any apology is necessary for asking the Committee to discuss it again in order to enable the Government to give us some idea of what they have in mind as to any method that is possible to deal with the very serious position of trade. We have had a growing volume of unemployment during a period when one expects those figures for seasonal reasons normally to decline. The Committee have now in their possession the figures issued by the Board of Trade for the six months of the present year. Every member who has studied those figure must have read them with a certain measure of dismay. They show a drop of foreign trade amounting to no less than £128,000,000, or about 15 per cent. of the volume of trade for the previous six months. It is interesting to note that that drop of trade is very evenly divided as between imports and exports. In other words, there is a drop of £63,000,000 in the volume of goods imported into this country during the first six months of this year as compared with the previous year.

4.0 p.m.

If the theory that is held by some Members of the House that the importation of foreign goods is the cause of unemployment, one would have expected to find a decrease of unemployment with that considerable drop in the volume of imports. But it will be obvious to those who have studied the figures that what has happened this year has happened whenever we have had a violent fluctuation in our overseas trade. In other words, a large contraction in the volume of imports invariably means a rise in the volume of unemployment. There will be some measure of possible consolation to some of our friends who regard imports as a cause of unemployment from the fact that the great bulk of them arise, not in foodstuffs, but raw materials. After all, however, from the point of view of employment, any discrimination between food, raw material or manufactured articles is quite fictitious. Raw material may have quite as much employment in its value as what we regard as manufactured articles. As a matter of fact, I suppose that, if there is much difference, there is probably more employment in £100 worth of coal at the docks than there is in £100 worth of cotton textiles or any other manufactures. Against that £63,000,000 of imports that we have lost, we have lost £54,000,000 of exports of British produce and £11,000,000 of re-exported goods—a total of overseas trade of £128,000,000 that we have lost. In looking more closely at these figures, it is noticeable that, as far as the export trade is concerned, with the solitary exception of coal, where there is a rise of about £1,000,000 in six months, and a small sum in relation to vehicles, in every single category into which this trade is divided, there is a drop in the export of British produce, and it does seem that we have got to consider very carefully, if we possibly can, what are the causes of this serious drop in our trade, and, if possible, how it may be remedied. It is noticeable that in the drop in exports we have lost our trade mainly in the cotton, woollen and iron and steel trades. Cotton accounts for no less than £18,600,000 odd, wool for £6,000,000 odd and iron and steel for very nearly £5,500,000. Therefore, as far as the export trade is concerned, a very large amount of the depression from which we are suffering lies in these heavy trades and in the textile industry. I shall hope to say a word before I sit down with regard to the cotton industry and the report which has been published of the inquiry into that industry.

In looking into these figures, I have taken some interest to go a little further and see if there are any indications as to what may have been the effect on our trade. The period of the War, of course, inevitably more or less destroyed—in fact, entirely destroyed—the normal movements of overseas trade, and, in the period of years following, a number of world causes have made it very difficult for us to recover that trade. Why I ask the Committee to look carefully at that trade situation is that in a period when you are suffering from very serious depression, as we are to-day, there is always the danger that if we do not carefully consider and trace out the actual causes of this loss of trade, the country may be led into catching, as a drowning man catches at a straw, at some suggested possible method of dealing with that loss, which might land the country into a very much greater difficulty than even we are in to-day. I took the trouble to try to trace out the figures a little.

Taking the year 1913 and the year 1928, the last year for which one had complete figures easily obtainable in the statistical abstract of the countries, there is in connection with the countries where our trade has improved most a very interesting fact which I found when I began to try to trace these figures country by country. The largest volume of trade we had with any country was with India, and in 1913 our exports to that country were £70,000,000. I am giving figures to the nearest million. In 1928, the figure was £84,000,000. Of course, consideration has to be given to the variation in value when you are considering these figures one against the other, but, as far as comparison is concerned, that, of course, applies to the whole of the figures, and it is rather the comparison that I want the Committee to notice. That is an increase, in what was the largest trade we had, of £14,000,000. I find that Australia has a larger increase still. We were doing £34,0000,00 worth of trade with Australia in 1913, and in 1928 we did £56,000,000, so that the country with which we have had the largest increase is the Australian Commonwealth. But what certainly interested me, and rather surprised me, as I was not aware of it until I found the figures, was that the next country which shows the largest increase of trade with us by receiving our exports is the United States of America, where our exports rose in that period from £29,000,000 to £47,000,000.

I am not going to commit the folly that is so often committed when we are dealing with trade figures of trying to build an argument on a solitary figure, but I do want to point out what is a rather interesting fact, that the two countries with which we have had the largest increase of trade, one of them in the Empire is, perhaps, the highest protected country of the Empire, the other one outside the Empire, is, again, the highest protected country, or very nearly the highest protected of the countries with which we trade. I am going to be content this afternoon with merely pointing out the facts as they are revealed in the figures issued by the Board of Trade, but it is interesting to note the simple fact that of the protected countries of the world, the two countries to which we have succeeded in sending the largest increase, and, curiously enough, the largest volume, are still the largest receivers of British goods in the world. Before 1913, Germany was the first country. To-day, the second is Australia, the third the United States, while Germany takes fourth place in receiving the products of the British Empire. I am not going to trouble the Committee with a large number of figures, but the next two countries, I find, are Canada and South Africa, both of which have increased by £10,000,000, namely, Canada from £24,000,000 to £34,000,000 and South Africa from £22,000,000 to £32,000,000. The next two countries are the Argentine and New Zealand—the Argentine from £23,000,000 to £31,000,000, and New Zealand from £11,000,000 to £19,000,000. Those figures, at least, show, to my mind, that there is no simple, easy rule of suggesting that by the introduction of a tariff or anything of that sort you are necessarily going to affect the flow and volume of trade.

There is another set of figures, that is, the figures of our trade with the Continent of Europe. Our trade with Europe shows two very distinct movements. I ask the Committee to notice that the countries I am considering are, first, the countries which were essentially War countries, and were immediately and directly affected by the War, and next the main European countries which were not engaged in the War. Here, again, the figures are very suggestive, because I find in the whole of the War countries, whether Allied Powers, which might be regarded as favourable to our trade, or ex-enemy countries, that our trade in Europe with the countries engaged in the War is absolutely stagnant. In the case of Germany the figures are exactly the same—£41,000,000 in 1913 and £41,000,000 in 1928. The figures with regard to France stood at £29,000,000 in 1913 and were reduced to £25,000,000 in 1928; and Italy, from £15,000,000 to £14,000,000. Belgium is the only country which shows any rise at all, namely, from, £13,000,000 to £17,000,000. In the case of the Austrian Empire the figures are rather difficult to compare, because that was broken up into three constituent States, but, taking these, there was an increase from £4,500,000 to £6,000,000, though I think it is perfectly obvious that the main part of the increase is due to Czechoslovakia, which has the same currency difficulties as other Powers. Russia is in an exceptional position. Our trade with that country in 1913 amounted to £18,000,000, and, taking the whole of the combined countries to-day, that is Finland and the other countries that were Russia, and, therefore, comparable, we have a trade of about £8,000,000, showing a drop of £10,000,000. If you total up these figures, you find about £120,000,000 of trade in 1913, whereas in 1928 it only amounted to £111,000,000.

Coming to the other countries in Europe—I will not trouble the Committee with detailed figures, but one or two, perhaps, are worth noticing—taking the countries of Europe not engaged in the War, you find that the figures for the Netherlands rose from £15,000,000 to £21,000,000; Sweden, from £8,200,000 to £9,700,000; and Denmark, from £5,700,000 to £9,700,000. The figures of Sweden, Norway, Denmark, the Netherlands, Switzerland and Spain, which represent practically the whole of the non-War countries, show a total trade in 1913 of £47,400,000, which had risen in 1928 to £66,800,000. I mention these figures because, to my mind, they suggest that there is a great deal in the monetary policy since the War that has had a very serious effect upon our export trade, because those countries where we show no expansion of trade at all are almost entirely countries which have been troubled with depreciated and fluctuating currencies. The value of their currencies has changed during a period of years, while we were carrying out a monetary policy of acute deflation, increasing the value of the £ until we brought it—in the opinion of a good many, I think, at too early a date—to the gold standard on the pre-War value of the dollar. I do not think that the financial experts who were advising the Treasury and the Government were in any sense responsible for that; they may have been carrying out what might be regarded as the bankers' policy. It may be a very sound policy, from the point of view of acute honesty, to pay your debts to the fullest extent, but there is no question whatever that that policy, carried out over a period of years, has placed a very heavy burden upon the industries of this country, not merely in the taxes they have had to bear, but in the increased difficulties in putting their goods into foreign markets, when those goods had to be exchanged into other currencies, in which the values were changed, and all the time depreciating, which inevitably meant that, in a sense, there was a temporary bonus to the foreigner to send his goods to us, and a serious barrier against us in sending our goods into foreign countries.

In looking at these figures, there is another aspect to which one would rather like to call the attention of the Committee, and that is the constant, steady relation of these figures in the classes which are divided by the Board of Trade into three general divisions. We divide these figures into articles that are partly manufactured, articles that are really raw material, and articles that are mainly or wholly manufactured. I will again ask the Committee to recognise that in some cases, while this division may have many advantages, it has not any great value as studied from the point of view of employment. There is an idea in the minds of a good many people that the mere importation of a manufactured article deprives the worker of em- ployment whereas, possibly, the importation of foodstuffs or raw materials does not. There is, of course, no foundation for that. In fact, under all normal conditions, it is the buyer who is the prominent factor in a trade transaction. In every trade transaction there must be a buyer and a seller. If there is an abnormal shortage, then the seller is dominant. In the conditions existing just after the close of the War, when there was a tremendous demand for commodities and very few were available, it was the seller who could command the situation; but the moment the situation changes, the buyer is the dominant factor in all transactions.

It is a delusion to suppose that goods are dumped on these shores merely because a foreign seller wants to sell them. He cannot sell unless somebody in this country wants to buy, and in conditions where we are fighting for trade the buyer is the dominant factor and determines the course of goods. Goods coming into this country are not sent here in the form of manufactured goods because there is a manufacturer abroad who wants to get rid of them. They arrive here in the form of manufactured goods because there is a buyer here who wants them in that form and places his order for them. In 1929 we imported £536,000,000 worth of foodstuffs. We exported £55,000,000 worth of British produce of the same class, and re-exported £26,600,000 worth, leaving a balance retained in this country of £455,000,000. At the moment I am using the term "balance" as not merely the balance of goods retained, but the actual balance after you have taken off the exports of our own produce of a similar nature. After the whole of the overseas transactions in food are completed, including the sales of our own produce in that class of goods, we kept a balance of £455,000,000. In raw materials—I am not troubling to go into the details—we retained a balance of £206,000,000. When we come to manufactured goods there is a distinctly different picture. We imported £334,000,000 worth, exported £573,000,000 worth, and re-exported £29,000,000 worth, and we have a balance of exports of goods mainly manufactured of £268,000,000. If we regard the goods in those classes into which the Board of Trade divides them, we are not, on balance, importers of manufactured goods. Far more than we import, we export.

It is interesting to note the changes in the percentages of goods between 1913 and 1929. I am trying to see whether there has been in the course of the last 15 years any real change in the flow of goods. In 1913 37.8 per cent. of our imports were foodstuffs, 36.7 per cent. raw materials and 25.1 per cent. manufactures. In 1929 the figures were: Foodstuffs 43.9, raw materials 27.8, manufactures 27.3; showing that in the 15 years there bad been a slight tendency to an increased flow of manufactured goods, or what we describe as such, but that the main transfer of flaw had not been from raw materials to manufactured goods but from raw materials to foodstuffs. That suggests that in considering all the schemes we may initiate for dealing with unemployment the problem will only be solved in the end so far as we get a definite improvement in the whole of our trade, both home and foreign.

The conclusion that I draw from those figures is this, that there is one line of development which we ought plainly to set before ourselves and expand to the utmost of our power, and that is the production of foodstuffs in our own country. I have referred to the buyer as being the dominant factor, and I would point out that when we have reorganised our textile industry and got costs down as low as we can, we still have no definite assurance that we can force other countries to buy our goods. Other factors may intervene. I am not suggesting that we ought not to compete as strongly as possible for export trade, but I do want to point out that in our own market at home there is a great demand for foodstuffs which we are filling with shipments from abroad. If we can reorganise our food production at home, putting agriculture on a sound and proper basis and making it really efficient, we have not to look abroad for a market for its products, because we have that market at our own doors. It would not be pertinent to this debate to discuss methods. I am merely pointing out one of the main lines, by which a larger number of our people might be absorbed in the cultivation of the soil and take a hand in the provision of foodstuffs which we need.

On the other hand we are a people who by our enterprise and initiative have built up an export trade that always has been and still is the wonder of the world. By virtue of that trade we bring every nation under tribute to this land. We have imported from the four corners of the globe the raw materials which we require for our industry, and have transformed them by our enterprise and our labour into manufactured goods which we have again sent to the four corners of the world. Even with the disheartening figures we have before us, I do not want to strike a despairing note. We frequently foul our own nest. We speak with an unnecessary amount of discouragement of the position into which we have fallen. After all, the truth is that we have succeeded in doing what no other nation in the world has done. More than any other nation we bore the financial burdens of those four years of strenuous strife, and we emerged from the War as the only one of the belligerent nations, with the exception of the United States of America—who are the only real recipients of reparations—which has undertaken to discharge its full liabilities. We are, in fact, discharging liabilities without receiving the corresponding assets.

It is true that we have a grave problem of unemployment, but we are keeping our unemployed at a higher standard of living than existed, for instance, when I was a boy. In South London I was associated for many years with various types of social work. In those days the moment there was anything in the nature of trade depression, though nothing like so severe as that from which we are now suffering, we had to open soup kitchens to feed the children, and even to feed the women and the workers. The only resource upon which they could fall back was the Poor Law, which was then administered with a harshness of which very few of the younger Members of the House are conscious, supplemented by the charity that came from people who felt for their fellows. To-day we have organised a great field of social services. Some people argue that those services are a burden upon our industry. I do not think they need be. Under a proper financial system they could be borne, not as a charge upon industry, but as a payment out of the excess profits that in- dustry makes, and that is the right way in which those charges should be regarded.

To recapture the foreign markets of the world and to bring our people back into employment we must reorganise our industries in the light of modern conditions. I have read with immense interest the report of the Committee on the Cotton Industry, and feel that we are indebted to the committee. To me, as representing an agricultural division, and having a hazy idea in my mind that agriculturists were all behind the times, some of the phrases in this report are exceedingly interesting. In passing, if we look at the figures given in that report, we see that there has been a decline in the exports of cotton goods. For 1929 the exports amounted to 3,764,000,000 linear yards. For the last six months under review the number is only 1,519,000,000 yards, which compares with 1,882,000,000 for the half of 1929. Those figures show that if we are to do anything for the cotton industry it must be done quickly, and I hope the President of the Board of Trade may be able to say something of the steps that are likely to be taken to meet the situation. The report shows that the cotton industry needs a reorganisation of its marketing arrangements, that it is divided into separate sections remote from each other. I thought in reading that report that if we substituted the word "agriculture" for Lancashire in some parts of it we should have an almost exact description of the conditions from which agriculture is suffering. I would like the President of the Board of Trade to give us some information regarding what is said in paragraph 66 of the report: A very significant step towards what may be termed 'vertical co-operation' was taken by the joint committee when it sponsored an experiment in the bulk production and marketing of a particular standard cloth in China. In this experiment all sections combined in an effort to reduce production costs to a competitive level. It was conducted by an ad hoc syndicate formed by the various concerns that were parties to the scheme. That is exceedingly interesting, but the report does not say whether that experiment met with any success. There is a suggestion that the Government will be willing to facilitate investigations in the Far East. Possibly the President of the Board of Trade can tell us how far the Government might be prepared to go in that assistance.

The figures I have been putting before the Committee illustrate the movement of trade. Other figures show the relationship between what is known as our Empire trade and our foreign trade. In 1913 our export trade with foreign countries amounted to £330,000,000, and in 1928 it had increased by £66,000,000 to £396,000,000. British Empire trade amounted to £195,000,000 in 1913, and had increased by 1928 to £328,000,000. A figure of £39,000,000 needs to be deducted, however, to allow for countries that are not comparable, i.e., the Irish Free State, and that brings the figure down to £289,000,000, or an increase of £93,000,000. Therefore, whereas our foreign trade increased by £66,000,000, the exports to our own Empire increased by £94,000,000. That is a symptom which we are all glad to recognise. There is, however, a word of warning that I ought to utter in view of controversies which are looming upon the political horizon, if they have not already loomed.

I am not one of those who say there is no sentiment in business. There never was a more stupid phrase. There is an immense amount of sentiment in business, as any of us realise who know what it is to do a friendly deal with a customer, the man who says, "You can have the order if you can do it at the price." There is a great deal of sentiment in business, and the more we can encourage that Imperial sentiment and encourage our Empire customers to deal with us the better. But it would really be a crime against the workers of this country if we were to do anything which seriously prejudiced that £396,000,000 worth of trade with foreign countries in the hope of largely increasing the trade within our own borders. We say sometimes that "the trade follows the flag" or "the flag follows the trade." Trade is the social service of mankind. Sometimes, it is regarded as a competition in which the weakest goes to the wall and the devil takes the hind-most. It is a fact that we enjoy all the facilities of life by virtue of trade. Rightly and properly considered, trade is a great service to mankind. This great Empire, with its far-reaching world-wide trade, runs services to all the countries of the world. If I wished to reach a better understanding throughout the world, I should try to do it by extending trade in every direction so that we might bring to each country a just return for its labours.

In conclusion, I would like to say that, even in face of all these dismal figures, I am not pessimistic about the future of this country. We have to be up and doing. Employers and workers must come together, and try to solve their difficulties by mutual arrangements. I think, if we tackle this problem in a proper way, we may bring back a large volume of trade to this country, and get back to a steadier and more even trade not only within our own Empire but with every other country in the world.


It is a rather curious fact that, although the members of the party opposite have made such a fuss about our trade, when this question comes to be discussed in this House, the Conservative benches are empty. My object in speaking to-day is to ask the Government whether we can have from them some indication, before the House rises for the Recess, of the proposals which they have in mind for dealing with unemployment, and whether those proposals will be put into operation before the winter comes in time to relieve the appalling condition of this country. The hon. Member for Mid-Bedford (Mr. Gray) closed his speech by saying that, in spite of the appalling trade figures, he still remained an optimist. It is very easy for hon. Members here to be optimistic, but this is a very serious problem for those who have experienced four or five years of unemployment, and it is also very alarming to those who have watched the figures of unemployment steadily go up instead of down.

Those hon. Members in this House who speak for the great iron and steel trade cannot share the views of the last speaker. In my own constituency of East Middlesbrough the number of unemployed has increased within the last few months by 50 per cent., and there are now 11,000 unemployed in a town of just over 100,000 inhabitants. This state of things cannot be allowed to go on. It is no use constantly quoting figures; something has got to be done. The condition of things is getting worse week after week. Fancy schemes of work are no good for us. In my constituency the roads all round are excellent. New roads have been constructed, and old roads have been mended. What else can we do? Are we going to set men manicuring or shampooing them, or putting frills on them? We want more markets for the steel trade. We want to get rid of red tape and bitter political prejudice.

We have said over and over again that we want to know what the Government are going to do about this problem of the iron and steel trade. I suggest that the Government can do much to get markets in Russia for our iron and steel trade, and they must be prepared to cut through all the red tape in order to get it. With regard to the actual orders placed by Russia between October, 1929, and June, 1930, the amount was £13,400,000. Out of that £13,400,000 a sum of £6,000,000 has been spent on industrial plant and equipment as against the sum of £2,000,000 during the same period of last year. In an article in the "British-Russian Gazette," these words are used: We believe that Soviet purchases in this country could easily reach £50,000,000 in value even during next year, if a financial basis existed, providing a Government guarantee and the co-operation of banks for British manufacturers and industrialists. I think it is necessary in the interests of the workers of this country that the Government should do all they can to put our trade with Russia on a satisfactory basis.

I should like also to quote what was said recently by one who is a very well-known member of the iron and steel industry, and an outstanding figure in my own constituency of Middlesbrough, on the occasion of a recent "British-Russian Gazette" luncheon. I refer to Sir Hugh Bell. Sir Hugh Bell made the point that the poverty of one particular area did not mean that anybody got an advantage from that poverty, but that, if one area was poor, it dragged down the standard of living of the rest of the world. He pointed out that America had increased from a population of 20,000,000 poor people to a population of 120,000,000 prosperous people, and he said that that was very largely due to the impetus given by the capital supplied by this country for railway undertakings. Then he went on to say—and I think that these words really ought to be quoted, because he is a man who to some extent stands out above the rest, and who speaks with a lifetime of experience, and also with a very passionate concern for the people whom he has employed in the past in so many thousands— If it be borne in mind that all nations are to-day suffering from one of the severest depressions in trade ever experienced, and are looking for fresh markets in which to sell their products, the importance of increasing the buying power of the Russian market will be realised. If, by the employment of relatively small amounts of credit and of capital, Russian purchasing power could be increased by even £100,000,000 a year, what an infinite benefit it would be to industry at large. He went on to say: From the point of view of the ability of Great Britain to supply capital and credit to Russia, there is no difficulty whatever. If Great Britain were convinced that such a course was desirable, both capital and credit would be forthcoming. The one thing needed is confidence. Given confidence, everything is possible. Without confidence, nothing is possible. I am sure that, if the Conservative Opposition were here, they would immediately cheer that observation. Sir Hugh Bell said, further: At the present time, many private firms in this country are supplying goods to Russia on credit, and, although these operations have been going on now for a number of years, I have not heard of any single instance in which Russia has failed to meet her engagements. He went on to deal in detail with the question of the settlement of debts, and pointed out that in 1924, that question was well on the way to settlement, but the settlement was destroyed by political reasons in this country. I am glad to think that, as a result of the work which has been done by the present. Government, we are getting back the ground that we lost in 1924, and that that matter is again on the way to discussion and settlement. I do, however, want to plead with the present Government not to keep men unemployed who could be employed on work that is so urgently needed, until those protracted negotiations are finished. It is essential to get on with the job now. There was a time when Russia was kneeling at our doors for almost any amount of credit, for almost any amount of capital. I do not think that the attitude which this country took in those days will be a very creditable chapter in its history, when that history comes to be written in more tranquil conditions, after the passions of these days have died down.

In any case, that period is over. Russia is no longer in the position of desperately trying to get little parcels of credit any old how, in any old way, paying almost any old percentage. She is now getting it from Germany, though not, I agree, to anything like the amount that she wants. It is probably very doubtful whether any country under present conditions could supply sufficient credit to meet her needs, but, at any rate, she is getting a good deal. It was pointed out to me, in an interview that I had with the Secretary of the British Steel Exporters' Association, which represents 95 per cent. of the exporting steel firms in this country, that an order for 100,000 tons of constructional steel, which could have been given in this country, and which was offered in this country on the basis of certain terms of credit, has in fact, within the past fortnight, been placed in Germany. What were those terms of credit? Were they anything outrageous? They were on the basis that one-third of the total amount should be paid in 12 months, that one-third should be paid at the end of 18 months, and that the third and last payment should be made at the end of two years. I would ask, is there anything outrageous in these suggested terms? These are the terms that have been offered to Germany, and have been accepted by Germany, while men in Middlesbrough—highly skilled artisans in the steel trade—who could have been employed on that order, will not only be unemployed, but will be paid for being unemployed with money that could have been used to finance that order, which would have given them employment to-day at the work for which they were trained.

I suggest that the time has really gone by when we can go on repeating the same old milk-and-water optimisms, and that we have got to come at once to brass tacks, and ask the Government what they are going to do in the face of a situation like this. The basis of credit that has been offered in the case of shipbuilding is from 12 to 72 months; and, in the case of general and electrical engineering, from 12 to 60 months, with an average of 27 months. It can be said, of course, that the present Export Credits Department has had more money placed at its disposal by the present Government, and that its hands have been free to a certain extent. That is, of course, true, but what has been done about it? What is the net result? I admit the increase in trade due to the better atmosphere created by this Government, but, after all, since the 1st August last year, the Government have only guaranteed £2,000,000 out of £13,400,000 worth of orders that have actually been placed, and that has not come from Russian sources, but from British sources. Moreover, the credit that is being given by the Export Credits Department—


I am bound to point out to the hon. Lady that export credits come under a separate Vote, namely, Vote 5, and that we cannot discuss export credits on Vote 1 of Class VI.


I am sorry if I was going into too great detail. I wanted merely to touch on the position in that respect; what I am really dealing with is the question of the state of the iron and steel trade, and I apologise if I have transgressed. I would point out, in passing, that, when you take into account the fact that the guarantees are for 12 months from the date of shipment, the credit is only for an average of nine months, and when it is realised that the cost of this credit is as high as 8 to 10 per cent., not including interest and bank charges, which bring it up to 13 to 16 per cent., it will be seen that the actual amount of credit granted is less than it appears to be on paper. I think that the Government might really have considered whether it is not possible to take a much longer and wider view than they have done with regard to the whole Russian trade position. Here is a country which at the present time is in a position more or less comparable with that which existed in very large areas of the world during our boasted expansion of trade in the 19th century. It is an agricultural country, largely concerned with the manufacture of primary products, though, of course, it is very anxious to industrialise itself. That is why I have said that there is no time to be lost, because the Russians are anxious, as far as possible, to equip themselves from within their own resources.

I am not speaking, nor am I particularly concerned at the moment, about conditions in Russia itself. What I am concerned about is the state of trade in this country. I am concerned about those 11,000 unemployed men in my own area, and about the thousands of other unemployed men over the whole of the North-East coast. They have to be got to work somehow. If we had shown imagination, if, instead of always looking at what everyone else has done previously, and going and doing more or less the same, we had really taken a broad view of the subject, it might have been possible to have taken a general view of the five-years' plan of the Russian Government, as the Americans have done, and to have seen to what extent production in this country could march step by step with it in order to equip their factories, their railways, and all the tremendous electrical undertakings that Russia is putting up.

When we consider that Russia has only 50,000 miles of railways, or only one-fifth of the railway mileage of the United States, over an area that is so much larger and has a population of 25 per cent. more, we realise that Russia is, as it were, virgin soil, and that our Government, because it is a Labour Government, and so has not to meet with a hostile spirit in Russia, might have used this advantage as an asset in order to advance the trade of this country and to get our people to work. When we consider the millions that have been poured out in out-of-work pay to these very men, surely what we need is to get away from all the old tradition of hostility and distrust, whatever may be the position in Russia at the present time. Certainly, the political complications are so great that they read like an Edgar Wallace thriller, with mysterious figures floating across the scene coming from and going no one knows where, with kidnapped generals, duchesses who have lost their jewels, and Heaven knows what else. No doubt these matters will have to be cleared up at some time, but that is not the job of those who are concerned with trade. I want to suggest to the Minister who is primarily concerned with trade that in a very special degree he is the Minister for a large section of our unemployed people, and that, While so many of the problems with which he is faced are insoluble, this particular one is not. The solution is there. It means, however, taking a brave stand; it means standing up to a great deal of obscurantism; it means being firm—even putting his foot down to the City of London.

The Minister, however, will have behind him some of the biggest firms of this country, some of the biggest industrialists of this country. Where men like Lord Melchett are willing to take a risk, surely this Government is prepared to take a risk also, when the alternative is so serious that it means leaving men to rot in all that unemployment means when it lasts year after year in areas where there is no hope apart from new ideas and new markets, where people are tired of hearing pettifogging speeches, where their whole souls are concentrated on the idle factories and the dead steel plants—and there is nothing on earth that looks so dead as a steel plant that is not working. One realises what that means to thousands of those tiny homes. Imagination is needed, and drive is needed, and that is what I want to appeal for. I ask the Minister, who, I know, has done so magnificently in other ways, now that he is free from other complications, to set his whole mind to this question, and see whether it is not possible to fertilise this great market and get our men back to work.

5.0 p.m.


I am not sure how far I shall be in order in following the hon. Lady on the proposals she had made to the Minister for his immediate action. He has, of course, in the Overseas Trade Department complete power to use export credits for any exports to Russia that he may desire to finance. On that, I take it, it is difficult to discuss the matter when new powers are asked for without referring to those powers that in fact exist.


There is a Vote for export credits and there is another for the Overseas Trade Department, and I think this question as to how those powers should be used must be raised on one or other of those Votes. On this Vote, we cannot do more than touch very lightly indeed on the subject. It is only possible to go into details on one of the later Votes in Class 6.


Is it not possible on this Vote, which includes the salary of the President, who is generally responsible for the policy of the Overseas Trade Department, to deal with the general question of policy? Obviously we should not be in order to going into intricate details of particular transactions but, as I understand it, the point raised is a general question of policy which, I submit, could be raised on the Vote for the right hon. Gentleman's salary.


The hon. Member has not been very long in the House and perhaps does not realise that, when there is a separate Vote for any given Service, questions relating to that Service can only be raised on the separate Vote. They cannot be raised on the general question of the Minister's salary.


The Minister has ample powers now to grant any credits which he may think reasonable and if, in fact, credit is not being granted, it is because, in the words of the hon. Lady, some prejudiced old gentlemen object. The prejudiced old gentlemen who have to decide these matters are the people whom Ministers themselves select as the most competent advisers, and it is a question whether the responsible Minister is to go contrary to all the best expert advice he can obtain and risk the taxpayer's money on proposals which his business advisers advise him are unjustifiable risks. Of course, if you are prepared to use the taxpayers' money for buying any commodity, steel, cotton or anything else, and proceed to distribute it to someone else, that is a simple way of doing business, but it would not come within the test of the hon. Member for Bedford (Mr. Gray), that in all trade transactions there must be a buyer and a seller. In such a transaction there is not, in fact, a buyer and a seller. There is a giver and a receiver.

We are really deluding ourselves if we imagine that we can restore the normal trade of the country by engaging in transactions upon which competent busi- ness men entirely refuse to embark for themselves and also refuse to advise the Minister are a reasonable risk for him to take. If we are to embark and distribute large sums of State money in re-equipping some country at considerable risk, I would infinitely rather that we should distribute it in our own country in the re-equipment of our own industries and in development within the Empire than risk it in a country where the hon. Lady herself admits that confidence is not yet restored, and the restoration of confidence rests not with us. It is not a matter of prejudice here. It really rests with the only people who can restore that confidence completely, namely, the Russian Government. When you have an example such as that of the Lena Goldfields Company, which took an enormous risk and invested large sums in Russia, when you find a series of events such as have befallen that company, and even the absolute refusal of the Russian Government to go into arbitration, into which they were bound to go by contract, it is really rather idle to say that the failure of confidence is our fault because it is plainly the fault of the people on the other side.

I pass from that to make one or two observations on an interesting subject with which the debate was opened. The hon. Member for Bedford gave interesting figures of imports and exports, but he omitted one figure, which I will give from memory. What has impressed me most of all in the recently published figures for the year is to find that since 1924 the imports of manufactures into this country have gone up by something like 60 per cent. in volume, a large proportion of them being goods that could be manufactured in this country. No one can look at that increase and at the increase in unemployment without wondering whether there is not some connection between those two figures. The hon. Member says you cannot found any argument for Protection on the figures of our export trade, because the strange thing is that the two countries to which we have exported most have been the United States of America and the Commonwealth of Australia.

The United States is a very highly protected country. We are, in fact, able to export to that country, because, in between the periods of acute slump, it is so prosperous that it buys novelties and luxury goods on a very large scale no matter what the tariff and no matter what the price. I found over and over again that she has that vast purchasing power, and if you take a novelty, it does not matter if there is a 100 per cent. duty, except in times of slump you can get it into the United States. Probably during a slump there will be a considerable falling off in our exports to the United States. The hon. Member says Australia is also a very highly protected country, but he forgot to add that we enjoy an enormous preference, and it is because we enjoy it that we are able to do the very large trade that we have done with that country. Recognising that fact, and looking not only to past figures but, as in a business proposition you must, to future prospects, you would be well advised not to concentrate your attention upon Russia, but to concentrate all the attention you can upon developing trade where you have people anxious to trade with you, where you are dealing with people who have the same ideas as yourselves and talk the same language and are the easiest people to trade with, and who are willing to give tremendous and increasing preferences, and to concentrate your attention on the growth of trade within your own Empire.

I will pass from that to put certain questions to the right hon. Gentleman on specific matters. We have had several general debates on trade which have been very interesting, but there are certain subjects which have been left rather in the air and on which we should like definite information as to what are the intentions of the Government. First, I take the question of cotton and the report of the Committee. I also read that report with great interest, and, after reading it, I did something that I do not often do. I read the last two speeches that I delivered on the subject in the House, on which I was a good deal challenged by some hon. Members who are now sitting there. I was rather interested to find that practically all the recommendations that figure in the report of the Cotton Committee were recommendations that I made two years ago, when I said I did not think we needed a commission to inquire into them. The first is the need for amalgamation. I not only spoke about it but I took some part in bringing about the only large amalgamation that exists in that industry, which the committee mentions with approval. The need for amalgamations large enough to buy efficiently and large enough to sell themselves, if necessary, and at any rate to make effective business arrangements with the merchants who have to sell, large enough to deal effectively with the finishing end of the trade, large enough to allocate the manufacture of one line or another to particular mills—all these things I emphasised over and over again. That is the first lesson that the Committee draws.

The second lesson is something that I have very often said and indeed, to anyone who makes a superficial study of the Lancashire position it stands out. It is the hopelessness of this industry recovering unless you get a closer and a real liaison between different sections of the industry. I have never known any industry like it, where the buying of the raw material and the different processes of manufacture are separated, and, when you come to the selling end, in nine cases out of ten the manufacturer has not the faintest notion with whom he is dealing and he merely makes, probably to the least advantage, what some merchant comes and asks him to make. It seems to me that that is absolutely impossible and that you must link up in the closest possible manner in partnership, or at any rate in co-operative work, the manufacturer and the merchant. I think it goes further. In order to get that, the merchants themselves have to get much closer together. In Japan, to which we are losing so much of this bulk trade, you find there are far fewer merchanting houses, and even the separate merchanting houses are financially interlinked. Therefore you are able to deal with a single merchanting combine. There is the closest possible co-operation between the merchant and the manufacturer. They meet together and concoct moves into a particular market. They do not wait for someone to come and say, "This is the particular kind of thing I wish to have." They consider what is the way to make a drive on a market and very often suggest to the market that they can give at a cheap price a particular line of goods, and they throw those goods into the market. I am certain that we have to get a very great deal closer to that idea. I took at the time a very keen interest in the tentative experiments which were made by the joint committee to get a particular line of goods sold through particular merchanting houses, mostly, I think, in the Chinese market.

The third thing which interests me is the great tribute which the report of the Minister's committee pays to the joint committee in the cotton trade. I ventured to say to the House, during the last two years that I was in office, that I thought that this trade ought to get together, and co-operate, so as to include the trade unions and become representative of every section; and this was exactly what the Joint Committee was doing. I am delighted to find in the report of the Minister's commitee that the highest tribute is paid to the joint committee in the cotton trade. Surely that is the best body to go ahead and try and bring about the necessary reforms in the industry. I certainly do not depart in any way from the proposals which I have made many times in this House, but I should like to know from the Minister what steps are being taken in this matter. Has he approached the different trade organisations, and what actual response is he receiving? At the end of the report there is a passage which says: We are confident that the organised operatives and employers of Lancashire will embark forthwith upon the serious consideration of the measures essential for the recovery of the trade. If, however? this hope is disappointed, or if any section proves recalcitrant, we think it right to place on record our considered view that it would be the duty of His Majesty's Government themselves to consider inviting Parliament to confer upon them any necessary powers. This report is signed by the Home Secretary and the First Lord of the Admiralty, and there must have been, I assume, definitely present to their minds the proposals that it might be necessary to ask Parliament to entertain. I ask the President of the Board of Trade—as I think it is very important—to elaborate that passage in the report and to tell us what are the steps which this Committee, presided over by the Home Secretary, meant should be taken in the event of voluntary reorganisation not taking place in the industry? I am sure, if he is able to enlighten us on that point, that the Committee will hear what he has to say with great interest.

I pass from that point to another matter, the question of the steel industry. We have not yet had the report presented to us—I suppose we shall—of the Committee on the Steel Industry, in which I understand several Cabinet Ministers took part with other people. We know that the report exists. The Government, I suppose, are considering it, and the Committee would be greatly interested to-day if the President of the Board of Trade could say what are the recommendations which are contained in that report. We have had given to us a sort of interim report, the report of the delegation sent out to find the facts in the different competing foreign countries. That report, Command Paper 3601 of this year, is certainly a document which is interesting. We find, first of all, that as regards wages, the average weekly earnings on the Continent are 30s. 5d. in Czechoslovakia, 35s. 5d. in Belgium, a little higher in Luxemburg, 37s. in France, and 50s. 11d. in Germany, whereas the average earnings, based on official figures, in the British trade are something like 63s. These are very remarkable findings of fact presented to us by the Government. When you come to hours, although the discrepancy is nothing like as great, yet there is a very considerable difference in the hours which are worked. On those facts I ask: what are the recommendations of the Committee to whom that delegation reported? I am sure that rationalisation is one of them. Let me put this point to the right hon. Gentleman. You can rationalise an industry by causing it to go lower and lower. That is rationalisation for contraction but not rationalisation for expansion. Great steps have been taken and are being taken by these industries.

It would be out of order for me to say that the remedy was a duty, though the right hon. Gentleman knows that I am convinced that it is. It would also be irrelevant from the point of view of the right hon. Gentleman because he has told us that in no circumstances can this industry possibly have a duty. As he has ruled out a duty, I would say to him in all sincerity: In the face of these figures and the position of the industry, and in face of the speech of the hon. Lady for East Middlesbrough (Miss Wilkinson), what is the policy of the Government for the steel industry? It must be administrative; legislation is ruled out. What is it? I ask him, as one who has a policy and one which is quite different from that of the hon. Lady, what is the policy which he is going to apply during the Recess and during the coming winter to the steel industry in regard to which these facts have been found by his own Committee?


Before the right hon. Gentleman passes from the report upon that trade, will he say whether the wages which he was giving were the wages of the skilled or the unskilled men?


They were the average wages. If the right hon. Gentleman looks at the report, he will see that, taking each of these countries in turn, the wages are given, first of all, for skilled men. In the case of one country it is shown that the wages of skilled men are 51s. 6d., semi-skilled men 40s. 3d., unskilled men 32s. 2d., and that the total normal weekly earnings are equivalent to 37s. I think the exact and fair comparison is the normal average weekly earnings in the iron and steel trade in this country.

I want to ask the right hon. Gentleman about another industry to which he must be directing his attention very closely in the next few months, and that is the dye industry. It is very important that everybody, whether they are dye makers or dye users, should know what future action is going to be taken. I think that it is also important that there should be the largest possible measure of agreement. There has been, I understand, a report made by the Dyestuffs Development Committee, an agreed report, by dye makers, users and independent scientific experts. Those are the people, if I remember aright, who sit on the Development Committee. I hope that we shall have the benefit of that report. There is no doubt at all that this industry has made tremendous progress under the Act. To-day the British production is more than six times the pre-War production, and not only have you the production of dyestuffs, but all these dyes are being made from British intermediates, so that you have another industry equally expanding in relation to the more skilled and finished industry of making dyes. You have a further industry making colours, the pigments and inks and so on.

This industry has developed very considerably in consequence of the Act. The export trade has benefited. The exports of dyes are three times what they were before the War. I have it on important authority that to-day the quality is satisfactory over a great range of basic dyes and over a very large range of specialities. Indeed, not only is the quality over a very large field satisfactory, but actually, in some cases, we have taken the lead. I think I am right in saying that in all the dyes for acetate silk the British dye makers have taken the lead and have produced dyes which the whole of the Continent is now copying. This is a tremendous record to have established. It could not have been possible except under the Act. It is essential to preserve and to encourage that industry. At the same time, it is of the greatest importance that British users should have ready access to other dyes where the British equivalent is either non-existent or not satisfactory. On the price factor I understand that to-day there is no dispute. The price factor has come steadily down, and I understand that on the licensing committee no difficulty over the question of price now arises. Therefore, over the great range of these dyestuffs the British dye user in this country is getting the British dye at the Continental price. That, again, is a tremendous achievement. The fact that you have complete satisfaction in quality and price over a very wide range ought to lead quite easily to agreement in this industry.

All those who read the speech delivered to the Colour Users' Association by Sir Henry Sutcliffe Smith, a few days ago, must have been greatly impressed by the suggestion which he made. He speaks with unique authority in this matter. He is not a maker; he is a user. He is a director of the Bradford Dyers' Association, one of the largest dye-using undertakings in this country. He is a man who has been for years chairman of the Colour Users' Association, and has done a tremendous amount of work in connection with licensing. No one can speak with the authority and the experience that he can on this matter. His suggestion, put forward in his speech at the annual meeting, was that the Act should be continued or renewed on an agreed basis, that you should take all the dyes that are produced in this country to-day and as regards which there is complete satisfaction—that is something between 80 and 90 per cent. of the total consumption here—keep the Act on in regard to those dyes, and give free access to dyes which are not satisfactorily made here at the present moment, or about which there is a dispute. I would ask the President of the Board of Trade—he is bound to be considering the matter now—whether he does not agree that the largest measure of agreement is very desirable in a matter of this kind? Would it not be wise to call into conference and take as a basis of discussion at the conference the proposal not of the dye-makers, but of this very large dye user, who is the most representative man in the whole of the dye-using industry? I think he probably could approach the subject with great hope of getting agreement and achieving success if he would take that line. I hope the right hon. Gentleman will tell us what are his intentions in regard to this matter.

I should also like to ask the right hon. Gentleman a question about a matter on which I have had no recent information from him, and that is the position under the Cinematograph Films Act. The object of that Act was to develop the production of British films. Originally, when I was discussing the position with the different sections in the film industry, the makers, the renters and the exhibitors, I put forward as a proposal for discussion that if you were going to have a quota, the best method might well be a quota upon the renter distributor, without a quota upon the exhibitor. That suggestion was not at that time acceptable to any section of the industry. On the other hand, they were agreed that a combined quota upon both the renter and the exhibitor would work satisfactorily. I am not sure that it is working satisfactorily to-day. As the Committee knows, the matter was raised in a Bill which was introduced recently. I am not at all sure, looking at the matter now in the light of experience, that the original proposal that I made might perhaps not have been the best way of dealing with the situation. What is the opinion of the President of the Board of Trade? How far does he think the Act is succeeding, and how far would it be improved by an alteration of that kind? Has he taken on this matter the opinion of the Advisory Committee, which exists under the Act and which is exactly the kind of expert body, with all the sections of the trade represented upon it, to which one would have thought it wise to refer a matter of this kind. I should like to have his answer.

There are two other matters which are very near to the right hon. Gentleman's heart and of great interest to the country. Where do we stand under the Tariff Truce? I do not know. [Interruption.] Does the hon. Gentleman know? I know where the President of the Board of Trade used to stand. He said that the Tariff Truce was a very great achievement or, at any rate, a very great beginning, that he was a convinced Free Trader, that in no circumstances whatever would he ever consider the imposition of a duty of any sort or kind in this country, and that therefore he was perfectly right in signing the Tariff Truce, which bound us, no matter what happened outside, not to impose a duty in any circumstances. During the intervening period which was allowed to foreign countries to put up their tariffs a great many of them have put up their tariffs, in order to get to the highest possible level before we start in the welter handicap. The President of the Board of Trade was bound, of course, to keep his tariff down. Are we bound at this moment, and, if so, for how long?

When are the negotiations to begin for the purpose of reducing tariffs all over the world, of which the Tariff Truce was only the prelude? Are the negotiations going to start at Geneva in September? The President of the Board of Trade went to Geneva last September and made a great oration, which was heralded by every good Free Trader in the country. I think they gave us all free copies of his address. He made it plain that he was going right on to his goal, no matter if no one followed him, and even if they all went in the opposite direction. What is he going to say at Geneva this time? Is he going to say that he is still going on, even as a solitary figure—no, not solitary, but with the Chancellor of the Exchequer, though possibly without the Secretary of State for the Dominions? What is the going to say? Will he give us a rehearsal of the speech on the Tariff Truce that he is going to address to the League of Nations at Geneva? Where do we stand to-day?

Where do we stand in regard to the other Convention which the right hon. Gentleman has made—the Convention for the prohibition of restrictions on exports and imports? The late Minister of Agriculture, who is now, alas! no longer with us, used to come down to the House, whenever I was not here, and say to my hon. Friends, "I cannot do anything, because your Government made a Convention." It is quite true that we did make a Convention, but the circumstances then were entirely different. When the right hon. Gentleman came into office he found that his hands were perfectly free, and he has told us so, quite frankly. That Convention was ratified by us subject to a number of other countries assenting. Those countries, or the necessary number of countries, did not assent. The right hon. Gentleman, therefore, became perfectly free to withdraw the ratification. He did not do it, although the circumstances have entirely changed, with the questions of dumped wheat, dumped oats and dumped this and that. I have a very clear recollection of what the conditions were when we made the Convention. The agitation about dumped stuff did not exist at the time that the earlier negotiations took place in 1925 or 1926.

There can be no doubt that the right hon. Gentleman was, as he has stated in this House, quite free. In December of last year he sent his representatives to a conference in Paris, and although they were free to have drawn us out of the Convention at that time, unless they got satisfaction, he told them to go on, although the other countries had not come in and signed the Convention. Subsequently, I understand that he ratified it. I want to know for how long we are bound by the Convention. I am not going to twit the right hon. Gentleman for having in this way signed away the whole of the "Labour and the Nation" although, incidentally, the policy of "Labour and the Nation" was the policy of prohibition. [Interruption.] Not being so subtle a moralist as the hon. Member opposite, I have never been able to see why a tariff, which lets in a certain amount of foreign goods, is a very evil thing, and a prohibition which lets in none is an accursed thing. The right hon. Gentleman bound us in December, 1929, and subsequently ratified that. For how long are we to be bound? When do we get out of the Convention? Can we denounce the Convention next year or the year after?

Have we an absolute right to denounce the Convention at a given date in the future, or are we still further bound if some other countries come along and add their ratification? We may be bound by our own unequivocal action and by having said that whatever happens we will stay for a certain period, although we have the right to come out on a given date. I have read the Convention and it is difficult to understand, but I gather that we are certainly bound for more than a year, but after that we should have the right at yearly intervals to denounce the Convention. But if in the meantime before the moment arises at which we can denounce the Convention 18 countries have come in and signed and ratified, our conditional right to denounce the Convention goes, and we are absolutely bound, so far as I can see, for an indefinite term of years. As the right hon. Gentleman has signed away the whole policy of his party, and as he has very likely seriously handicapped other parties in any process which they may seek to carry out, at least let him tell the House, before he goes to Geneva and signs anything else, in what way he has bound us, and for how long.


The House yesterday debated at considerable length the Unemployment Insurance Bill, and grave concern was expressed in all quarters at the vast sums of money required for the relief of unemployment. Almost every Member who took part in the debate declared, and it is a proposition which is obviously true, that of far greater importance than any question of relief for unemployment is the question of the prevention of unemployment, that is the restoration of trade. Therefore, the debate which we have initiated from these benches to-day is infinitely more important from the national point of view than that to which the House was called upon to devote itself yesterday. The world is still suffering, directly and indirectly, from the cataclysm of the War. In the letters of Mr. Page, the American Ambassador, there is one observation, which he wrote at the height of the War, in which he said: The world will not take up its knitting and sit quietly by the fire for many a year to come. Certainly, the world is not yet sitting quietly by the fire. We are feeling in a score of directions the effects of that great upheaval. I noted the other day an observation, which seemed to me to be a very wise one, by Sir Arthur Balfour, who was chairman of the famous Balfour Committee on trade and industry, and which touches the fundamental fact in the situation. He pointed out that of the whole population of the world, some 1,600,000,000, more than half live in three countries—India, China and Russia. Some 900,000,000 live in those countries. From the economic point of view those countries, which might be consumers of vast quantities of products from the more highly industrialised nations and which might themselves become great producers, exchanging their goods in vast quantities, are living at a comparatively low economic level, and the trade of all of them from different circumstances is at present disorganised.

We in this country are suffering largely from the fact that these countries which used to be three greatest of our markets are closed to us to a considerable extent, and although we still send considerable quantities of goods to India, the great depression from which our trade, and particularly the textile trade, is suffering is due in no small degree to that fact. In my own constituency, in the town of Darwen, there are 64 cotton mills. Not long ago they were busy and prosperous, giving employment to a steady and industrious population. Can the Committee imagine how many of those 64 mills are stopped to-day? No less than 52 out of the 64 are stopped, some of them permanently, and the other 12 are working only a part of their machinery. That is the explanation of the enormous increase in unemployment in the north-western division of the country during the last few months. The cotton trade is almost paralysed, mainly owing to the condition of affairs in India. In the presence of these circumstances, how foolish it is to suggest that the figures of the unemployed have been mounting up because the workers themselves are careless about seeking work, or to suggest that it is the effect of the modification of the "genuinely seeking work" provision.

What hope is there for men and women cotton operatives to find work when 52 out of 64 mills are closed? In the adjoining town of Blackburn, 65 per cent. of the cotton operatives are unemployed, and 50 per cent. of the other workers in that town. At the rate of unemployment pay in Blackburn during the last six weeks the unemployed population of Blackburn in a year would require an expenditure of £1,000,000. That, at the present rate, is the cost to the nation in unemployment relief for one Lancashire town alone. That indicates the measure of the burden imposed upon the whole county and the whole nation. In June last, 42 per cent. of the cotton operatives were unemployed. In the iron and steel trade, there were 30 per cent., shipbuilding 30 per cent., and, taking all the insured trades together, 15.8 per cent. is the latest figure of national unemployment. That is the statistical measure of the gravity of the situation.

It is a poor consolation to make comparisons with the misfortunes of others, but yet it is some consolation if you find that we are not alone in the trough of depression. If it were the case that Great Britain alone among the nations of the world presented this grave phenomenon our position would be even more tragic than it is, and we should have to review the whole of our fiscal and economic situation. But that is not so. In the latest number of the official Labour Gazette the latest figures of unemployed in Germany are 2,634,000, or double what they were a year ago. The trade unions of Germany with 4,500,000 workers return as totally unemployed 19.5 per cent. of their members, with 12 per cent. on short time, or over 30 per cent. altogether. In the United States of America, where there are no official figures, the Federation of Labour, which is a very large trade union organisation, returns 21 per cent. of its members unemployed in the metal trades, 37 per cent. in the building trade and 13 per cent. in other trades, or a general average of 20 per cent. In Germany, you have this high figure of unemployment, and in the United States an average of 20 per cent. They are worse even than our national average of 15.8.

Similarly, with regard to the sudden decline in trade, which came as a shock to the whole country when the statistics were published at the end of the first six months of this year. Comparing this year with last year, one would expect a decline in figures because of the great drop in the value of commodities, but British exports are down by £54,000,000 or 15 per cent. as compared with the first six months of last year, and our imports are down by £63,000,000, or 10 per cent. Our total trade shows a decrease of £128,000,000 as compared with the first half of last year. That is a great drop. To-day the President of the Board of Trade gave me a reply to an unstarred question which shows that while our trade has dropped by £128,000,000 the trade of the United States has dropped in the same period by £200,000,000. Our exports are down by 15 per cent., while the exports of the United States of America are down by 20 per cent., and French exports by 8 per cent. An interesting paper was published recently by the President of the Manchester Chamber of Commerce, Mr. Lee, who gave figures for the first quarter of this year. He had them analysed and compared our figures with those of 48 leading countries in the world. He found that our trade in the first quarter of this year had gone down by about 10 per cent. to 90.1, but that, taking the other 48 countries of the world, their trade was down to 90.6. The fall was almost exactly the same within a few decimal points with our own figures.


Do I understand the right hon. Gentleman to say that he has taken into account the difference in the price level in the two years? That is really the whole point.


No. I have taken the crude figures, but I have mentioned that the explanation of this great drop here and elsewhere is partly that the pound sterling is not what it was a year ago.


If the right hon. Gentleman will examine the volume of trade, he will see that there is practically no drop.


I am not quite sure that that is so now, but it may be in the case of some industries. It certainly is not the case in the cotton industry. Perhaps the hon. Member for Smethwick (Sir O. Mosley) will give us those figures when, as I hope he will, he takes part in the debate. Germany is the country usually taken as an example for purposes of comparison, because it is similar in many respects to our own. The right hon. Member for Hendon (Sir P. Cunliffe-Lister) mentioned a most interesting report which has just been published of the delegation sent out by the Economic Advisory Council to Germany and other Continental countries, France, Czechoslovakia, Belgium, and Luxembourg, to examine into the condition of the iron and steel trade in comparison with our own. He quoted certain facts from that report. The delegation contained a leading manufacturer, one of the best known representatives of the workers in the iron and steel industry, and two officials from Government Departments. They found that the industry was prosperous in France, Czechoslovakia, Belgium, and Luxembourg, but not in Germany. In Germany they found that the percentage unemployed in that trade was 14, and the percentage on short time 16. They came to the conclusion that: in spite of the rehabilitation of the German iron and steel industry after the War and the extent to which plants have been improved in their equipment, the industry is suffering from unemployment. And they say in conclusion: It is found that in principle, in policy, and in the difficulties confronting the post-War situation in the iron and steel industries, there is a marked similarity between Germany and Great Britain. That is a very important conclusion for a committee of that kind to arrive at, and it has an important bearing upon our fiscal controversy, for it is quite clear from all the facts I have quoted, and I do not think any impartially-minded man will dispute it, that as the rain falls on the just and the unjust alike, so commercial depression has fallen on Free Trade and Protectionist countries in common.

With regard to our own iron and steel trade, which is a factor of such tremendous importance in our national prosperity, many people hold the view, or have the impression, that it has collapsed to a considerable extent in this country since the War. As a matter of fact the production of the iron and steel industry here is much larger, or was last year, than it was before the War; it was something like 10 per cent. larger. The latest figures show that before the War it produced 7,600,000 tons, but in 1928 it produced 8,500,000 tons. There is a growth of about 11 per cent. in the output of the British iron and steel industry. The right hon. Member for Hendon drew attention to the fact that the imports of iron and steel had greatly increased. That is true, they have nearly doubled since the war. The latest figures for 1929 show that the imports of iron and steel of all classes into Great Britain have increased from £30,000,000 in 1913 to £58,000,000, nearly 100 per cent. increase, and our Friends above the Gangway frequently point out that our exports have increased by a much smaller percentage—by about 75 per cent. That is true, but in amount the increase in the exports is far larger than the increase in the imports. While our imports have gone up by 100 per cent., our exports have gone up from £108,000,000 to £185,000,000, or an increase of about £78,000,000. Our imports have increased by £28,000,000 but our exports have increased by £78,000,000.

That is the fallacy of percentages. A percentage of 100 is much more than a percentage of 75, and, therefore, apparently our imports have increased far more than our exports, but, as a matter of fact, our exports have increased far more than our imports. That is the fallacy of percentages which seems to dog the footsteps of hon. Members above the Gangway and prevents them from realising or presenting the facts as they really are. Let me give a personal but homely illustration. When I was 30 years old I had a son who was three years old. In the following year my age was 31, and his age was four. I had increased my age by three per cent. but he had increased his age by 30 per cent., and my hon. Friends the Protectionists would be prepared to prove that by now he must be considerably older than I am. As a matter of fact, in 1913 we exported in iron and steel £78,000,000 more than we imported. To-day we export £127,000,000 more than we import. So that, although the imports have gone up by this great percentage, the balance of exports against imports is far greater than it was some years ago.

6.0 p.m.

There is one other point to which I would draw attention. There was a manifesto signed by a number of distinguished bankers not very long ago, which gave the impression to those who read it that the course of trade was resulting in these years in a largely increased dumping, as it is called, of foreign produce in this country, and a greatly diminished export from this country. They indicated, and others who hold the same view have indicated, that while foreign countries refuse to buy from us and we were shut in so far as exports were concerned, they are dumping here enormously increased quantities of goods year by year, with the result that unemployment goes up to the figures which we have lately been discussing. So far as the last three years are concerned that is certainly not the case, and it is not the process which is going on now. In those three years, 1927, 1928 and 1929, we increased our purchases from Europe by £7,000,000 and we increased our sales to Europe by £13,000,000. We increased our sales to all foreign countries in those three years by £23,000,000. Foreign countries which, it is alleged, will not buy from us, bought from us £23,000,000 more in 1929 than in 1927. Unfortunately, the Empire purchases showed a slight decline of £2,000,000.

Let me come now to the other side of the case. I suggested at the beginning that our troubles were largely due to the disturbances of distant markets, India, China and Russia. So far as India is concerned, the economic questions are so closely interwoven with the political that they cannot usefully or properly be discussed here to-day on the Board of Trade Vote. But the fact remains that the closing of the Indian markets, partly by protective duties and partly by boycott, is the principal cause, among many, of the plight in which Lancashire finds itself to-day. With regard to China, I would ask the President of the Board of Trade whether he could note make representations to his colleague at the Foreign Office that some effort should be made in the interests of British trade with the Far East and the trade of the whole world in China, so far as is possible to bring within view some end of the turmoil, the wars, almost the anarchy which have now been prevailing in China for so many years. Is the whole world to sit still, decade after decade, and see this vast portion of mankind left floundering in the position in which they now are?

I do not suggest that there should be any intervention, except at the invitation of the Chinese Government itself; but I understand that there is some reason to think that in China this matter is now under consideration. If the Chinese Government were to invite the League of Nations and the United States together to assist by a commission, as the League of Nations has assisted in the restoration of some of the countries of Europe with great success, I feel sure that the Governments, members of the League of Nations, would readily respond to an invitation of that kind. There cannot be any question of intervening by force or of an unwelcome intervention. But I have reason to think that this idea is at all events in the air, and if there is anything that the British Government can do to promote it I feel sure that the nation as a whole would very cordially welcome it.

With regard to Russia, the hon. Member for East Middlesbrough (Miss Wilkinson) has already dealt with the matter. I understand that the commercial representative here of Russia has stated that in the nine months up to a recent date orders have been placed in this country by Russia to the extent of over £13,000,000 compared with the previous year of only £6,000,000. Orders have been placed for machinery for £6,000,000, as against £2,000,000 in the previous period. That is an admirable beginning. I entirely agreed with the hon. Member when she said that our Government ought to take all reasonable steps that are possible to promote that development. Here you have an immense market. Surely it is the height of folly on account of political antipathies, however well founded they may be, to hamper a commercial development which may bring great advantage to this country and give employment to large numbers of our people. We on these benches are entirely out of sympathy with the continual girding at the Government from the Conservative benches with regard to Russia, and we hope that the present Government will continue in the course that has been adopted since the diplomatic recognition of the Russian Republic, and will endeavour to promote our trade in that large and important market.

In the latter part of my remarks I want to ask some questions of the President of the Board of Trade. They are questions relating to the reports of committees which have been appointed and which either have reported or are on the point of doing so. The right hon. Member for Hendon mentioned several of these inquiries. With regard to cotton I am sure that the Committee would be greatly interested to know what steps are being taken consequent on the report of the Government Committee. That Committee appeared to me to propose a number of very wise suggestions, but whether those suggestions will be rapidly or soon put into effect we do not yet know. Of course, as the President of the Board of Trade must necessarily point out, it depends mainly upon action by the trade itself and very largely upon action by the trade unions. I know that the leaders of the cotton operative trade unions have before them a problem that is responsible, difficult, and very anxious, and upon the course that they take will depend in no small degree the possibility of a revival in the cotton industry.

I am somewhat nervous lest we should find ourselves in a position similar to that in which the country found itself with regard to the coal industry in 1926. I was very familiar with the course of events at that time, having so recently had the honour of presiding over the Royal Commission on the Coal Industry. The crux of the situation then was that the miners were asked to make certain sacrifices in order to assist the restoration of the industry. The employers were asked to take a large number of measures for the reorganisation of that industry. The standpoint of the miners was, "Why should we submit to these sacrifices, which are immediate and certain, on condition that the employers should carry out reforms which are in the future and doubtful?" They wanted definite guarantees or assurances that the two processes should be as nearly as possible simultaneous, and the negotiations that took place at that time, in which I had some part, were an endeavour to secure from the Government of the day adequate assurances on those lines.

It would be very unfortunate if in the cotton trade there was a breakdown similar to that in the coal industry in 1926, and if the operatives on the one hand should say, "If you ask us to remove certain restrictions on the use of machinery and other matters now and at once, what are you prepared to do with regard to the great reforms in the industry which the Government say are essential? Are you prepared to carry them out now?" If no satisfactory assurances are given on that point negotiations might fail. I earnestly hope that such an impasse will not occur, and that the two sides will be prepared to do that which it behoves them to do, simultaneously, in step with one another, and carry out to the full not one part only but the whole of the recommendations of that very important committee.

The right hon. Member for Hendon referred to another inquiry—into the dyes industry. That also is a matter of great moment to the textile trade as a whole. It may seem a small matter, but it really is one of very great importance not only to the textile industry but to the industries concerned with paints, printing ink and various other matters. The Act will come to an end in a few months from now, and I would draw the attention of the President of the Board of Trade to resolutions which have been passed by the Chambers of Commerce of two important towns bordering on my constituency, Blackburn and Preston, both of which say that the arrangements that have been in force in recent years with regard to dyes are deleterious to the textile industry and have been a cause of unemployment. The Colour Users Association, which is a body including representatives of all these trades, has quite recently resolved in the same sense. The right hon. Member for Hendon quoted a speech, which I have here, by Sir Henry Sutcliffe Smith, the very able chairman of that association, who has done so much in its interest. But the right hon. Gentleman did not mention that in the course of the same speech the following words were used: Your council desire that I, as your chairman, should publicly voice their views to the effect that they are opposed to any further extension of the Act, and they are equally opposed to any equivalent legislation which would hamper the colour-using trades in the efficient and economic pursuit of their industry. The right hon. Gentleman also said that the British dye user now can get British dyes at Continental prices. He said that the quality now left nothing to be desired; and Lord Melchett, as chairman of Imperial Chemical Industries, at the last annual meeting of that great corporation said: We are to-day manufacturing and even exporting dyes of a quality equal to those made by any other firm in the world. He also said later: We have reduced prices to figures which enable the English consumer to obtain his products at world prices. That is most satisfactory, and will be welcome to everyone. It, obviously, is quite unnecessary to continue any special legislation or restriction for the benefit of this industry. If it can produce dyes of equal quality and at the same price as any other producer in the world, obviously the necessity for any special legislation must have come to an end.


Does the right hon. Gentleman think that the industry would have been in this position to-day without Safeguarding?


I did not oppose this special legislation for dyes, because at the time it was regarded as a key industry and of special strategic importance. It was not based on any tariff. It was based on a system of prohibitions and licences—a very special and peculiar case which was to endure for a limited period. That period has now come to an end, and in view of what has been said by the Dye Users Association and Lord Melchett, and by the Chambers of Commerce, it appears to us that the Government and the President of the Board of Trade, in the negotiations now being conducted, should, when the time comes, let it be known that the Government take the same view. I believe that a report on the whole situation will shortly be presented. It is a very technical report, and I hope that it will throw further light on the subject. The third inquiry to which I would refer is the Iron and Steel Committee appointed by the Economic Advisory Council. They have, I believe, presented their report or are about to do so, and I ask the right hon. Gentleman if that report will be published at a very early date.

The fourth and last inquiry to which I would refer is the Macmillan Committee on Finance and Industry which is in vestigating the subject of banking, finance and credit. That is, perhaps, the most important of all because that inquiry goes to the very heart of the economic position. That committee was appointed last November, and while I do not complain at all that the report is now overdue—because the inquiry is an exceedingly difficult one and calls for exhaustive investigation by the very able body of experts who have been brought together under the chairmanship of Lord Macmillan—yet I venture to express the hope that the committee is pressing on the inquiry with all speed, and that it will not prove to be one of those investigations which drag on month after month and even year after year. The whole country, or all those concerned with these matters, are awaiting with the greatest interest the judgment of this committee upon currency and the financial situation at large. Our economic body is sick. There are many who think that the cause of the illness is the presence of foreign bodies in the blood, but it may be that it is really due to a defective circulation. At all events, these consultants having been called in, we should like to have their verdict as soon as may be.

Finally, I congratulate the right hon. Gentleman, as I am sure the whole Committee wishes to congratulate him, on the passage of the Coal Mines Bill to the Statute Book. Although there are many provisions in that Bill which we here greatly dislike, there are, on the contrary, other provisions of which we highly approve, and we cannot refrain from offering our whole-hearted congratulations to the right hon. Gentleman on the manner in which he has conducted the Bill and on the result which has now been achieved. Having passed it into law, his administrative difficulties will now commence. Possibly, the right hon. Gentleman may have something to say to us with regard to putting the Bill into operation. I hope that he will also be able to find something to say on the trade situation in general which will, in some degree, alleviate the very deep concern felt throughout the country at the present state of the nation—a concern which we here in Parliament are in duty bound to voice.

The PRESIDENT of the BOARD of TRADE (Mr. William Graham)

In the first place I should like to acknowledge in the warmest terms the kindly words which the right hon. Gentleman the Member for Darwen (Sir H. Samuel) used at the conclusion of his speech and to extend my thanks to other hon. Members for their references to that remarkable and highly controversial Measure, the Coal Mines Bill. Two months ago we had a debate on this Vote, dealing with the trade situation, and in that debate I spoke, I am afraid at very considerable length, and in much detail, regarding the position of our industry and commerce. I think hon. Members generally will agree that the better course for me to adopt this afternoon is, first, that I should speak much more shortly and, in the second place, that I should devote attention to the specific questions which have been asked, and conclude, as the right hon. Gentleman the Member for Darwen suggested, with a reference to the general trade position, on the facts before us at the Board of Trade.

To take the specific inquiries first, may I say that I think no hon. Member could fail to be impressed by the plea of my hon. Friend the Member for East Middlesbrough (Miss Wilkinson) regarding industrial conditions on the North-East Coast. But practically the whole of her address was devoted to the terms and conditions on which export credits are granted, and your predecessor in the Chair, Mr. Young, barred, under this Vote the possibility of a reply on that point. By that ruling we are of course bound, but I hope to have another opportunity of dealing with the matter and, in any event, if it can be raised later to-night, my hon. Friend the Secretary to the Overseas Trade Department will reply. Another point of importance—though I think the right hon. Gentleman the Member for Hendon (Sir P. Cunliffe-Lister) will agree that it is not of the same importance as other questions raised in this debate—related to the action which might be taken under the Cinematograph Films Act, 1927. It is the question of whether the quota should be on the renter or the exhibitor. On that point I have recently received a deputation of hon. Members from all parties. The question was very fully discussed and it will, of course, continue to be considered by the Advisory Committee under the Act. But as my hon. Friend is aware—because he promoted this legislation originally—any change either in the quota, or in the point which he mentions, involves an alteration in the Act of Parliament and so congested is the programme of the Government for the remaining four years during which we shall be in office, that it is impossible for me to make any promise on that matter. That is not to indicate, however, that we do not appreciate the importance of the question. We are very much alive to the different points which have arisen under the Act and I can only say that the Advisory Committee will keep in the closest touch with these developments and let us know regularly its view on this and kindred problems.


Has the right hon. Gentleman invited this statutory Advisory Committee to report on this specific question?


I think I am correct in saying that what was submitted to me by the members of the deputation, has already been brought to the notice of the Committee.


Has the right hon. Gentleman seen what is happening in the talking film industry? Has he seen a notice in the papers to the effect that the Germans and the Americans are agreeing together to partition the whole world between them, as far as this industry is concerned, and that Great Britain is included in the American section; and is he aware that this affects hundreds of thousands of pounds worth of machinery which could be made in this country and which would be made in this country if the right hon. Gentleman takes the necessary action?


I will certainly look into that report which I confess I have not yet seen. To return to the several questions raised by hon. Members who have taken part in the debate, practic- ally all those questions related to inquiries either by committees under the Economic Advisory Council, or under other auspices and I propose to take these inquiries one by one. Both the right hon. Gentleman the Member for Hendon and the right hon. Gentleman the Member for Darwen raised the question of the operation of the Dyestuffs Act, 1921, and asked what steps we proposed to take when that Act expires, on 15th January, 1931, at the end of the 10-year period. The Committee is broadly familiar with the origin of that legislation. It was, as has been pointed out, very largely a question of a key industry in this country, in peculiarly difficult circumstances following the War and what was done under that Act was to impose practically complete prohibition, subject to licences which might be issued by the Board of Trade from time to time for the importation of specified quantities. I am able to tell both right hon. Gentlemen and the Committee that, almost immediately, there will be available for hon. Members a comprehensive report of the Dyestuffs Industry Development Committee. That report will review all that has happened in the industry in the 10 years during which the Act has been in operation; will point to the central questions which the Government in due course will have to consider; and will give details of the prices of the dyestuffs, with, I have no doubt, a great deal of information regarding foreign competition.

Perhaps hon. Members will not expect me to go beyond that statement this afternoon. When the House of Commons has received that report and when the Government have discussed this matter with the representative committee during the period before Parliament resumes, the next stage must of course be a declaration of Government policy, some time in the Autumn Session, as to whether that Act is to be continued after 15th January next, whether it is to be allowed to expire, or whether it is to be continued under certain conditions. I am not able to anticipate that decision in any way this afternoon. We must have a further analysis of that report and I must have further consultations with this representative committee.

The next question which was raised related to the position of the iron and steel industry and the report which has been presented to the Economic Advisory Council. That is in a different position from the report on the cotton inquiry because, as the Prime Minister informed the House, it was decided to publish one document but at this stage at all events not to publish the other. Evidence in both inquiries was tendered in confidence. The Government came to the conclusion that there was no reason why the report of the cotton inquiry should not be issued publicly, but I am bound to say that there are graver difficulties in the case of the iron and steel report. It is, of course, easy to publish a document, but I think the Committee will agree that we must have regard to evidence taken in confidence and to the possible use which may be made of certain statements by foreign competitors. But I should like to add that while that decision stands at the moment, I propose to make further inquiries as to whether it can be varied in any way, and a statement will be made to the House of Commons, if Members so desire, on the position, before we separate for the Recess.


Will the right hon. Gentleman consider the possibility of issuing a summary?


That is precisely a point which might be taken into account.


It is very important that we should get what information we can. I quite understand the right hon. Gentleman's point about confidential evidence, but that would not prevent a statement of the conclusions and recommendations of the Committee being made available.


There is also this difficulty to be considered in connection with these matters. It is very difficult in many cases to give a summary of recommendations without the background of the views of the Members of the Committee, and I can only say to the right hon. Gentleman that that also is a point which I shall have to bear in mind before a final decision is taken. That does not, however, preclude some discussion in this debate regarding the position of the iron and steel industry. Hon. Members will clearly understand that in anything I am saying now I am not referring to the terms of the report but rather to the questions which hon. Members themselves have raised on what is quite public material in the technical journals, applicable to iron and steel.

I was very glad my right hon. Friend who has just spoken brought out the fact that the position in this industry is not so bad or so black as it is sometimes painted. When we take the figures of 1913 and 1929 and compare them, we find that they are not so far removed from one another as one would imagine by the very gloomy statements, which, I am afraid, are sometimes made for the purpose of securing certain fiscal changes which we are not at liberty to discuss this afternoon, but the ingredients of the debate and the difficulties of the debate can be made perfectly plain to this Committee. All along in this industry a very influential section, and probably the majority of the leaders in the industry, have said, on the question of reorganisation, that it is idle to attack that problem until they know whether there is to be a Safeguarding Duty or some form of Protection against foreign competition.

What they argue at the present time—and hon. Members in the industry will, of course, be painfully familiar with this—is that, on the basis of the existing fiscal practice, they can only look forward to a static position in iron and steel, that this industry is not going to expand, whereas, if there were any form of duty, they would have, they argue, a guaranteed home market and certain conditions, in reduction of overhead charges and increased volume of trade, which would enable them to make an effective appeal abroad. There is not the least doubt that, so long as there is that sharp controversy in the industry, and so long as there is no solution of that problem by agreement—and I am now speaking quite impartially, whether we are Free Traders or Tariffists—this uncertainty, this controversy, will continue, and presumably the reorganisation of the industry, which is urgently required, will at all events in certain important factors tend to be delayed. I would make the most earnest appeal this afternoon that, whatever view we take of the application of any duty there should be no doubt that, duty or no duty, certain steps are urgently necessary, of which the chief, according to these technical experts, is probably the regional reorganisation of this trade. That is one great recommendation which they have made.

Then there is a great deal of discussion within the industry on the fiscal side as to what would happen if any change were made as regards these great quantities of imports of iron and steel which are really of the nature partly of materials or raw materials of other industries, and whether substantial drawbacks would have to be given if the industries by which those imports are used were to continue. A further reason promoted in these journals and by leaders in the industry is that, as regards these 3,000,000 tons of imports into this country, it can be no question of some small duty or revenue tariff or anything like that, but an out-and-out prohibition, which would in effect guarantee the home market, so they say, to at least the amount of that imported material.

My reason for mentioning these things to-day is to remind the Committee of the literally enormous problems which are raised in the administrative discussion of remedies which might be applied to the iron and steel industry. There is, therefore, a very strong hope, on the part of the Government, that in the negotiations which are now being conducted with both sides of the industry and by representatives of the Government, we may find le largest measure of agreement on what can be done immediately, or at least until the country has again pronounced on a proposal which, beyond all question, raises the whole Protectionist issue in Great Britain. It was, I think, conceded by our predecessors in office when they made their Safeguarding Inquiry that anything of that kind would inevitably raise the whole tariff issue.

I pass to the report of the cotton inquiry. Both right hon. Gentlemen asked me certain important questions raised in he concluding paragraphs in that report. I regret to say, as regards the industry as a whole, that the position is much more difficult than it was when last addressed the House on trade matters. The boycott of cotton goods in India has brought a large part of he Lancashire trade to a standstill, and he conditions in China and the Far last have aggravated the difficulties. Ex- ports have again fallen, there is increased unemployment, there is a widespread feeling, I regret to say, that even if the revival were greater than many of us are prepared to forecast, many of these factories in Lancashire cannot be reopened for a long time to come, if, in fact, they are ever re-opened at all. In these matters, the Committee is perfectly familiar with the facts. All possible representations through diplomatic channels have been made, but hon. Members know the fiscal autonomy Convention with India, they know the political situation there, and the effect of the boycott, and there I am afraid I must leave the problem this afternoon.

But there is a plain duty devolving on all of us in the terms of the report of this committee. The report makes certain recommendations regarding the more technical processes of the trade, and beyond question it recommends the development of the work of the Lancashire Cotton Corporation in the fusion of these factories and also the linking together of the various processes or sections of this industry, because I think, by common consent, as the right hon. Gentleman opposite brought out in his speech, one of the greatest prejudices to the Lancashire cotton industry has been this segregation of the different parts of the industry and the failure of those parts which have been relatively stronger or financially sounder to come to the assistance of other parts which very greatly needed their help in recent trying years.

The fundamental question for us in this matter is whether the necessary organisation in linking the different sections together and developing work on the lines of the Lancashire Cotton Corporation can be overtaken on the basis which the report suggests without bringing in that element of compulsion which was referred to in those concluding paragraphs, and which the two right hon. Gentlemen who have spoken have mentioned. They asked me what is the attitude of the Government in that matter.


I did not.


It was my right hon. Friend opposite then. I think I can state it in perfectly plain and simple terms. At the present moment the Government are most anxious that the Joint Committee in this industry, which is representative of the employers and the trade unions in the industry, should proceed as rapidly as possible with the analysis of the report and with the consideration of every step which can be taken to give effect to its recommendations. We should very much rather that the Lancashire cotton industry did this job voluntarily without legislative interference. Ultimately, if all that fails, as the report indicates, it will be necessary to make some recommendation in Parliament, although the House will clearly understand that I am in no sense promising legislation this afternoon. But in reply to hon. Members I may add that legislation of that kind would be necessary, in the regrettable failure of voluntary, effort, presumably to bring in the minority or to promote fusion on the lines of what has been done in other industries in this country, on the lines, for instance, which this House has taken in regard to coal.

Let me make it perfectly clear that at this stage there is no suggestion on our part of anything of the kind. I am only giving my interpretation of that paragraph in the Report where the whole emphasis is laid upon Lancashire cotton, the two sides of the industry, all parties to the industry, taking those steps on their own account.


I would like the right hon. Gentleman to clear up this important point. As I understood the right hon. Gentleman, he said that the linking together of the different sections of the industry was to take place through the Lancashire Cotton Corporation, and as I understood the report it indicated that many possible fusions might take place which would be on similar but not identical lines with the Lancashire Cotton Corporation. I would like that point cleared up.


I hope I did not convey that impression when I spoke of fusion. I was thinking of development on the lines of the existing work of the Lancashire Cotton Corporation, not in the way which the hon. Member has suggested. That is the position regarding the cotton inquiry; and accordingly, in the coming months, the Government will be in the closest touch with this industry. I very much hope that steps be taken, after a very brief holiday, in the early autumn, and that we shall be in a position to report a fair measure of progress when Parliament resumes.

The next question which was raised, and on this occasion, I think, by my right hon. Friend the Member for Darwen, related to the coal industry, to the working of the new legislation, and to the administrative steps which are to be taken. I can describe them quite easily. The immediate task in this industry is for the owners to submit the national scheme, covering the country as a whole, and for the various districts—21 of them in all—to submit the district schemes which are requisite under that Act. A period of four or six weeks is laid down for the receipt of these schemes, and I very much hope that, making perhaps a little allowance for the intervention of the August holiday month, the great bulk of that preliminary work will he overtaken not later than September, and that we shall then be familiar with the broader lines of the national and the district schemes. That means in practice that the national body will fix or at all events will know, the aggregate amount of coal which can be put on the market at a proper price level, that the district allocations will be made, and that the machinery will also be set up, representative of the consumers and of other interests, nationally and in the districts, which is designed to protect the public in the operation of that part of the scheme.

Immediate steps will be taken to that end. We must also, of course, appoint the National Industrial Board under that Act, which will also be undertaken without delay, and set up the Amalgamation Commissioners, whose duty it will be, at the earliest possible moment, to begin the survey of such amalgamation schemes as have been already suggested, and to undertake the task of promoting the other amalgamation schemes in the different coalfields in the country; in short, to guarantee that initiative in amalgamation which was the central purpose of that part of the Bill.

May I say this in passing regarding the coal industry, because coal, like other great commodities, has suffered from the severe slump of recent months. The first half of this year to 30th June was on the whole good compared with last year, but it was not so good as the last half of 1929, and the slump was more pronounced, as hon. Members will understand, in the three months of April to June than it was in the period from January to March. Coal, in other words, is sharing in the downward tendency of commodity prices, which is a very large part of the explanation of the world depression through which we are passing at the present time. It is my earnest hope that the Coal Mines Bill—and I bear in mind all the controversy regarding this Bill on the Floor of the House—will at least do something to sustain pithead prices in the autumn and the winter months, and enable the industry in Great Britain to present a united front in the negotiations which must proceed with European interests, which are designed to remove some of the main difficulties of the general export trade. Hon. Members know that within recent times there has been a development of railway and other subsidies to certain classes of continental coal. How can we overcome that? What steps can be taken by a united industry or a regulated industry in this country in representations to German coalowners or Polish coal producers?

There are many difficulties of that kind, but I am glad to tell the Committee that as regards the contract which was secured in the Reparations settlement at The Hague last year, practically the full million tons in the first Reparations year to September, 1930, has already been taken from this country, and the remainder will be supplied before September. Practically the whole of that contract, as has been anticipated, has been supplied from the South Wales trade. I attach very great importance to the development of these negotiations in Europe, because the facts at my disposal show that it is only along that line that we are going to overcome the dislocation in the Scandinavian and other markets which has handicapped our export trade of coal in recent times. The regaining of that export trade which has been so largely reduced in recent times is essential to improve the pit-head price.

I come to the other questions which were raised by the right hon. Gentleman the Member for Hendon with regard to the Import and Export Prohibitions Convention and the Tariff Truce. I express no regret that he and others in recent times should have done everything in their power by question and debate to attack the steps which the Government have taken. As regards the Import and Export Prohibitions Convention, I do not deny for a moment that the position is disappointing. After all, it was promoted by our predecessors in office, and I can recall speeches in which my right hon. Friend opposite quite rightly took credit for the effort, for which he was mainly responsible. It was an effort to try to put an end to these import and export prohibitions so as to mitigate their effect on our overseas trade. It was hoped that a very large number of countries would assent, but many of them made their support conditional upon ratification or approval, in particular, by Czechoslovakia and Poland; and although the time was extended for the support of these two countries, and although I think that Czechoslovakia did take steps, Poland, for reasons I explained to the House, which were reasons largely of Poland's trade with her neighbours, did not ratify. Because of the non-ratification of Poland, the ratification and support of 11 or 12 other countries to the Convention disappears. I very much regret the result, because that leaves now only six or seven countries as parties to the Convention, which I am bound to say started under distinguished auspices, and which has encountered rather heavy weather.


As I understand it, these six or seven countries, of which we are one, are now bound under the right hon. Gentleman's application of the doctrine.


I was about to anticipate my right hon. Friend's question, and to give as clear an explanation as possible of the position of the different countries under that Convention. As I understand it, it is this. If these countries come back unconditionally—18 of them or some number like that—the Convention might run for a period of five years from 1930, and we might all be bound but, assuming for the moment that they do not return, the position under our ratification is that we and the six other countries are bound, at all events, until July, 1931—that is, for a period of one year. Notice may be given before that, and the obligation would be ended at the end of June next. That is the position of the Import and Export Prohibitions Convention. But my right hon. Friend fell into an error regarding the position of this Convention vis-a-vis the bounty-fed cereals, which has caused a good deal of comment in this House in recent times. He must have forgotten that with the disappearance of the Polish ratification, the Prohibitions Convention only remains necessarily binding upon us till July next, a shorter period than the Anglo-German Treaty. If any efforts be made to deal with that question, either by a prohibition or by any other device, by, for example, a tariff specifically directed against Germany, or against those commodities, then the real bar is no longer the Import and Export Prohibitions Convention, but the Anglo-German Commercial Treaty of 1924, which was signed and ratified by the Foreign Secretary of that day in the Government of which the right hon. Gentleman the Member for Hendon was a member. For the exclusion of any device calculated to deal with this problem, which device, after all, does exist in certain other treaties, so that in their case the most-favoured-nation problem is not raised, the responsibility for the absence of this device was fully and frankly taken by the right hon. Member for West Birmingham (Sir A. Chamberlain) in a debate in this House on that subject. So that I must make it perfectly clear that the bar is the Anglo-German Commercial Treaty of 1924.


The right hon. Gentleman has rightly challenged me on this. I agree that under the German Treaty, which is a bilateral treaty between this country and Germany, you could enter into direct negotiations with Germany, and threaten to denounce the treaty, but now the right hon. Gentleman has made that impossible by signing a multi-lateral convention.


It is quite true that we brought into effect the Import and Export Prohibitions Convention. I have explained to the Committee—if that is the Convention which the right hon. Gentleman has in mind, and not the Tariff Truce—that with the disappearance of the Polish ratification, that is not an effective document for so long a term as the Anglo-German Treaty of 1924. I want to make this clear, because it is a matter of vital importance. If any step were to be taken to deal on that basis with the question of bounty-fed cereals, which my right hon. Friend has raised in this debate, it can only be taken by denouncing that treaty. That requires one year's notice and raises very grave questions for important sections of British trade.


Do I understand that nothing that the right hon. Gentleman has done at Geneva will interfere with taking action, and that the only obstacle that remains is the treaty of 1924?


I am coming to that point. I am only making it plain at this stage that, apart from the Tariff Truce proceedings, the effective bar is the Anglo-German Treaty.


What would be the effect supposing the Government did prohibit the import of bounty-fed corn from either France or Germany?


The effect would be that we would violate the terms, to which we have applied our signature, of a number of commercial treaties which raise the most-favoured-nation problem. You cannot discriminate in that way without running counter to that Clause—


Prohibition, not duty—


Or any specific device not a duty generally directed, but a duty specifically directed, against one or two countries. My right hon. Friend is quite correct; the request here is for a duty specifically applicable to bounty-fed materials.


Assuming the Government took the responsibility for prohibiting the import of bounty-fed corn from Germany or France, would that violate the Anglo-German Convention?


I am advised that it would violate the treaty of 1924.


Is it not the case that both in that treaty of 1924, and in the Geneva Convention, there is a proviso which excepts from the operation of both these instruments the general prohibition which is part of the scheme of a Gov- ernment monopoly of imports of a particular commodity, so that if you set up an import board and it operates by a general prohibition on imports, except through that board, neither the treaty nor the Convention applies?

7.0 p.m.


I must not on these points be regarded as quoting the terms of the Treaty, but in reply to my hon. Friend's question, under any machinery of that kind, provided the machinery of the Import Board is applicable all round, to home produce as well as imported produce, a treaty problem is not raised. That is not the proposition before the Committee, because the proposition raised here is the prohibition of bounty-fed cereals from one country or two countries. The moment you discriminate in that way, then you are bound to come up against your most-favoured-nation arrangements under, perhaps, half a dozen treaties of that kind.


Supposing that the provision was a general one, not one applicable to any particular country, and that you had legislation directed against bounty-fed cereals that came from any country, not mentioning one of them, surely that would be all right?


My information is that so long as the basis is not discriminatory you can.


On a point of explanation. As I understand the Treaty and the Convention, it does not operate in the case of a complete prohibition of all imports, bounty-fed or non-bounty-fed, if, in fact, that is part of the machinery of a Government import monopoly. What the right hon. Gentleman is asking is whether you can within the terms of the existing Convention or Treaty impose a prohibition which operates on some countries and not on othears. [HON. MEMBERS: "No!"] That is the position, I think.


I certainly put nothing of the kind. Will the hon. Gentleman allow me to put my own position? I do not wish to introduce the element of an import board, though, naturally, the hon. Member does. I wish to put the specific proposition. Suppose that, instead of a prohibition directed against the individual country, you legislate to give the Government power to prohibit any bounty-fed cereals that come from any country, surely that would not interfere?


I am afraid you would have difficulty unless it was an all-round duty that you imposed. Incidentally, of course, it would provide some remarkable difficulties in deciding what "bounty-fed" is. That is the position regarding the Anglo-German Commercial Treaty and the Import and Export Prohibitions Convention. My right hon. Friend also asked me certain questions regarding the Tariff Truce. The short position is this, that there was a World Economic Conference in 1927 and there were virtually unanimous resolutions at that conference in favour, not of Free Trade, but of freer trade. The whole tendency at that time was that in succeeding years there should be a definite movement along those lines undertaken in Europe and other parts of the world. No one disputes that the results were very disappointing indeed, partly because of economic depression and to some extent because of the growth of economic nationalism. For these and other reasons tariffs tended to increase. We came into office last year on a verdict from the country which was not a verdict for Protection and, surely, it was incumbent on this Government to try and get practical results, if these were possible at all, from the World Conference of 1927.

It was in that spirit that I went to the Assembly of the League of Nations in September of last year. What was the proposal made? It was not the proposal which hon. Members opposite have constantly suggested. It was a desire to try to find out whether we could, with European and other countries, get, first of all, some kind of general understanding that they would not increase their tariffs above the existing level and then proceed not in terms of stabilisation—it was never decided to stabilise—but towards a progressive reduction of those tariffs, so that, in the environment of an agreement of that kind, we could proceed to a discussion on particular groups of commodities with the view to practical steps being taken to get these tariffs reduced. Although we came under the obligation of a "non-consolidating" country, and could not increase our protective duties, other countries, who do consolidate their rates of duty by treaty, were under a definite obligation to maintain those treaties in force and not to increase their consolidated duties. Let the Committee remember that these consolidations relate principally to manufactured goods, which, after all, is the principal subject in which this country is interested.

I did my very best in the Assembly of the League and in the conference at Geneva and the Convention signed at the end of March this year. We have never disputed the difficulties we have encountered. They have been stated with the utmost frankness to the House. It is quite true that, since the draft Convention was signed by a considerable number of countries, certain increases of tariffs have taken place in Europe. A number of those increases were proposed before March, 1930, the date of signature; some of them made under reservations which were made at Geneva; one or two may fall into another category. That is the disappointing feature of our efforts. To some extent these departures have been rendered necessary by the deep depression which has settled upon Europe and to some extent by political difficulties of the countries themselves. At all events, the position is that we have this draft proposal to which we have given preliminary support. Ratification is not due until November of the present year. The obligation only runs as between 1st April this year and the 1st April next year. It may be renewed in six monthly periods, but we can give notice of denunciation on very short terms and at any rate that Convention may be denounced by the countries adversely affected by the tariffs imposed, if they demand negotiations for the accord of compensation and do not receive satisfaction. The Opposition suggest that we have got a very imperfect instrument. From many points of view it was marvellous to get any understanding at all. In any event, I always made it perfectly clear to the House that I did not rely upon this draft tariff truce or convention but rather upon the spirit it gives, the environment it gives, for the subsequent negotiations.

My right hon. Friend asked me this afternoon what the position is of those negotiations and what steps I propose to take. The Treaty will, no doubt, be discussed at the coming Assembly of the League of Nations at Geneva. In the meantime, preliminary steps have been taken with other countries to arrange for the beginning of negotiations, and my hope is that we shall get into negotiations with European countries and with as many other countries as we can upon specific groups of commodities, say, the great textile groups, or iron and steel, or machinery, or any other group that we can take, and see whether we can get an understanding regarding the level of duties to be imposed upon those goods. Hon. Members will say that, in the midst of this world depression, we have very little chance of success. That may be, but I still think the effort is worth while, because surely, whether we are Tariffists or Free Traders, one of the curses of post-War Europe has been its economic nationalism. This self sufficiency and isolation and the erection of a great mass of tariff barriers have hindered the reconstruction upon which Europe was largely dependent. One has only to compare post-War Europe and the great Continent of the United States of America. I do not despair of that end. It may be that we are optimistic, but I still think it is economically sound in spite of this wave of tariffism. The Government certainly propose to go on and to endeavour to secure concrete results.


The right hon. Gentleman suggested just now that, in the forthcoming negotiations at Geneva, he would negotiate for a possible flat rate of duty imposed upon certain commodities. What flat rate duty would be imposed? Would he in those negotiations consider imposing in this country a similar rate to that imposed in other countries?


We are not going to make a contribution towards the reduction of tariffs in Europe by embarking on a tariff policy. If there were time this evening, I could convince this Committee that any step of that kind would provoke retaliation which would be disastrous for important sections of industry in this country and that we should lose quite definitely on balance.

I am afraid I have occupied a great deal of time because I have been asked a great many questions but I must conclude with a word or two about our general trade position. A great mass of material is available to the Board of Trade from many sources at home and abroad and I am afraid I can only say this afternoon that the position is quite definitely worse than it was when I last addressed this House in May on a similar vote. There is a remarkable accumulation of forces against our industry and commerce, so remarkable an accumulation that sometimes in an office of this kind one is almost driven to depression and desperate remedies. When we take the large industries, iron and steel and coal and cotton, in short, almost in any industry of this country, we find that the figures during the first half of the present year are worse than they were during the last half of 1929 and, of course, very often worse than in the corresponding period, the first half of that year. There has been in the textile and other industries the weight of the increased Australian tariff. It is perfectly true that certain preferences are accorded to this country under that tariff, but the preferential duties themselves are so high that it is virtually a prohibition in that market as far as British goods are concerned.

There has been the fall in silver, difficulties in China and other difficulties in the Far East. On that point I ought to say, in passing, that we propose to send almost immediately a trade mission to the Far East of the most representative character that we can get together for the express purpose over a fair period of studying that market and no doubt also of finding out whether there are any financial or other arrangements which can be recommended to this country and which can be made practical politics for developing what might be a huge market, a very important market, if we can get effective access to it. Steps will be taken almost immediately and I trust that trade mission will leave at a very early date. As to other markets, in the United States of America the tariff is higher and the problem is aggravated by the growth of unemployment in the United States. The probable tendency of the depth of industrial depression there will be to make them rely more and more on the artificial—as I regard them—tariff barriers on which they have so largely relied.

The one bright spot within recent times has been the preference accorded to this country in the Canadian market, and I very much hope that we can look to the coming Imperial Conference for a little more encouragement of that kind, and certainly there is a sincere desire on our part to make the very best arrangements we can consistently with our fiscal policy. [HON. MEMBERS: "Ah!"] There is not the least doubt that this accumulation of forces against our trade has added very largely to the numbers of the unemployed, and a most important contributory factor has been the downward plunge of commodity prices since October or November of last year, which has continued, I was about to say, with unabated force, certainly with very great force, almost until the present time.

One of the large questions before every country is this: Have we touched bottom in commodity prices? Will there be an improvement, and will that improvement, by encouraging enterprise in industry, progressively absorb the numbers of the unemployed and give us again a chance in the markets of the world? I confess that I am quite unable to say this afternoon. There is very great and very authoritative advice from one side which sees little hope in the immediate situation, which argues that commodity prices will go still lower, and, if that be so, then, of course, an even greater depression is before us. There is another body of opinion, and I think it is influential, and I believe to some extent well-founded, that conditions, everything considered, are better to-day than they were within recent months, and that it may just be possible to bring forward the industrial recovery within a period of about six months. In other words, they suggest that very soon commodity prices will be on the up grade and that this and other countries will progressively recover. I earnestly hope they are right.

In any event, side by side with that problem, there is the great problem of world monetary conditions, to which the Macmillan Committee will, I suppose, direct its attention in the course of its inquiry. I cannot speak for that committee this afternoon, because it is, of course, entirely a Treasury matter, but it is within my knowledge that they are still taking evidence, and I very much hope that they will report at the earliest date, and that there will be recommendations going down to the roots of, at all events, the financial side of this problem.

There is one great world fact which has impressed me and must have impressed other hon. Members very strongly indeed. We point to the world slump in commodity prices. We see that great sections of industry have produced goods in the belief that they would have a market at better prices in the different countries of the world and that they have been disappointed, that, in short, there has been large scale over-production, and there are great masses of material in stock which cannot be put on the market at the present time at other than ruinous prices. Perhaps there is some support for the argument that bumper harvests have aggravated the problem. I think I express the view of a great many hon. Friends on this side of the House, and I believe in other parts of the House, in saying that there is grave doubt whether there is, at root, such a thing as over-production, because on the other side we have the staggering fact that there is a great mass of legitimate and unsatisfied human demand, not for the comforts or for the luxuries of life, but for the necessaries of life.

We are confronted with this everlasting problem, How are we to bridge that gulf between production on the one side and on the other that great mass of legitimate and unsatisfied demand exemplified in the 900,000,000 people in India, China and Russia who have lost part of the standard of life which they previously enjoyed and have to that extent reduced the demand for these goods? What is the solution of that problem? Some of the ablest minds have suggested that there must be some question of credit or currency policy involved. There is the widespread effect of the so-called sterilisation of gold reserves in the United States and, to some extent, a similar sterilisation of gold reserves in France. There is the argument that there should be more credit made available in this hour of world emergency, that it would be sound policy to extend credit to meet the situation. And there are other proposals of a far-reaching character, side by side with them, for world price stabilisation. We have to try whether we can by some kind of agreement iron out these fluctuations, to use an awkward phrase, to remove that uncertainty in price levels which has done so much to contribute to this distress.

What Minister in any Government in any individual country could offer a solution this afternoon? I can only say that it is my profound belief, for what it is worth, as a student of these problems, that we must seek after frank and free discussion on international lines. There is no other basis on which these problems can be attacked. I conclude with an appeal to hon. Members to redouble their energies in the study of this vast issue, remembering always that if only we could bring together on the one side the producers, with their stocks, and on the other side the vast mass of consumers, with their unsatisfied demands, we should find a solution which would take us more rapidly, perhaps, than any other solution towards that improvement that it is our common purpose to achieve.


I see that the second item in the Estimates is headed, "Bankruptcy Department of the Board of Trade." This item possesses a certain piquancy in relation to the President of the Board of Trade.

The CHAIRMAN (Mr. Robert Young)

The hon. Member cannot discuss that item now.


I was only referring to it en passant for the purpose of introducing my remarks. In leading up to the question of the Tariff Truce, I was drawing attention to the fact that the President of the Board of Trade is the representative of the Bankruptcy Department. It is the policy of which the President of the Board of Trade and the Chancellor of the Exchequer are the chief exponents which is bringing the Socialist party and the Government into liquidation, land when the electorate step in as the official receiver we shall find that the only realisable assets of the party, the only assets which "Socialism Unlimited" can really count upon for a reconstruction, is the import control board, an asset which was a mere goodwill item in that magnificent prospectus which was put out under the title of "Labour and the Nation." The President of the Board of Trade and his co- director did not believe in it when it was admitted into the prospectus, but they stuck it in for the benefit of the subscribers to Hopes Deferred (1929 issue) in the hope that some of them might be attracted by it and would invest their votes. The directors themselves are really rather ashamed of that item of goodwill, principally because the patents have been stolen from the Conservative party.

I will go on to consider the unhappy experience which the President of the Board of Trade has had with that masterpiece of Cobdenite futility, the Tariff Truce. If this Truce had been on the basis of the Disarmament Conference, I agree that there would have been much to be said for it. The Disarmament Conference was based on a process of levelling down, and, so far as I can see, the singularly sterile conception of the Tariff Truce was that all foreign doors were to be left shut while ours were to remain open. If we had asked the Americans to leave their fleet as it was, without making any additions to it, we could hardly have hoped to have reached any success there.

I would like to consider from the point of view of an industry with which many of my own constituents are concerned the actual reflexes of this policy of trying to secure a stabilisation of European tariffs on the basis of having no tariffs ourselves. A large part of the population of Belfast is concerned, or was concerned when some years ago it was in employment, with the production of linen. So far as I can see the implications, the idea of the President of the Board of Trade would be that American tariffs should remain as they are. The Americans were not even parties to the Tariff Truce, and I gather there is no hope of securing any agreement with America to forgo her complete autonomy in the matter of tariffs. The American market is the most important market for the linen industry not only of Northern Ireland but also of Scotland, and the raising of the American tariff in 1921 severely hit it. While we are shut out from America, on the other hand the linen industry in Czechoslovakia and Belgium is to be allowed to send its products into our unprotected markets. They still retain their own tariffs and flood our markets. Therefore the unfortunate linen operatives will have no advantage of any reduction of tariffs anywhere and will still remain out of work.

If any good at all is to result from treating the trade of this country, and international trade, by international agreement, we have to treat all three sides of the problem—tariffs, hours and wages. I believe the question of hours is outside the scope of this debate. The Washington Hours Convention is a matter for the Minister of Labour. At the same time I should like to emphasise that we are at present tackling two sides of a triangle and leaving the third out of the question, because it is too difficult to deal with. In the linen industry with which Belfast is so largely concerned, we find that competition with foreign countries is in exact proportion to the wages of those countries. In Sweden the wages are slightly higher and we have no competition at all in the home market. In Germany wages are about 75 per cent. of ours, and the competition is negligible, but in Czechoslovakia, Italy, and Belgium, wages are from 30 to 40 per cent. of those paid in England and Ireland, and consequently competition with those countries is exceedingly severe. I am afraid that the whole question of foreign competition and dumping is not only a question of tariffs, but it is fundamentally a question of securing a levelling of wages in foreign countries. Low wages have the effect of flooding our markets. The International Labour Conference recently published two volumes of which four pages only out of 505 deal with the problem of international wage standards. In their report, they say: The International Labour Organisation has been slow in dealing with the wages problem, which is a question which requires to be delicately handled. On the Conservative Benches we have emphasised above all things the necessity of making some effort to secure a raising of the standard of wages in foreign countries, and I agree that it is a question which it is difficult to handle. The Government appear to have ignored absolutely and completely the vital bearing of international wage standards on the economic problem. The Government do not seem to recognise that international agreements on industrial problems are absolutely in their infancy. The Government do not recognise that the solution so far as we are concerned is to put our own house in order before attempting to put the whole world in order. The solution which has been put forward in this House by the hon. Baronet the Member for Smethwick (Sir O. Mosley) emphasises the necessity of insulating our industrial machine. The President of the Board of Trade went to Geneva with his Tariff Truce proposals which so far as I can see carried out the principle that Unto him that hath shall be given, but from him that hath not shall be taken away even that which he hath. That appears to be the only effect so far as the right hon. Gentleman's Tariff Truce proposals are concerned. This reminds me of the risk which chickens incur when they run across the road. Chickens are curious birds. They are fussy cackling creatures, and they can only see out of one side of their heads. That is why they run across the road when a motor car is coming. I suggest with all due respect that in regard to the tariff truce proposals the President of the Board of Trade has in many ways demonstrated the same psychology as that of the chicken, and if chickens are left to control the farmyard it is not surprising to find that the egg-boxes are being looted.

There is another point I should like to raise which I do not think has been referred to in this debate and that is the question of the export of capital. The President of the Board of Trade in many of the speeches he has made in this House has taken special pleasure in contemplating the export of capital. That policy has been supported by other distinguished Members of the Government from time to time and by some of the trade union representatives as well as the Lord Privy Seal and other organs of the party opposite and they have at the same time been denouncing employers and all their works. We all want to maintain a high standard of wages and we all want to see taxation reduced. But at present high taxation in this country and our general economic conditions lead up to a definite and continual export of capital and it is amazing to hear Members of the Government standing up in this House and applauding the investment of British capital abroad at a time when it is so much required to develop industry in this country.


May I remind the hon. Member that legislation would be required to stop the movement of this capital.


I do not think that I suggested legislation.


The subject which the hon. Member was referring to cannot be dealt with without legislation.


I am not asking for legislative action but I was attempting to deal with a statement made by the President of the Board of Trade as to the desirability of this constant export of capital. I know that on one occasion the right hon. Gentleman expressed satisfaction that £16,000,000 had been invested abroad during the previous month. I want to refer to one glaring example of this kind of thing which occurred in the iron and steel industry. The Skoda Works in Czechoslovakia have recently issued a prospectus inviting the investment of £2,500,000 of British capital. This capital is going to be used in employing Czechoslovak labour at wages 40 per cent. lower than are being paid in the iron and steel industry in this country. I happen to know that 25 per cent. of the Skoda contracts are Russian contracts and, although I am no enthusiast for credits to Russia, I feel that, if British financial facilities are to be accorded to finance Russian orders, those orders should come to this country, and not to the Skoda Works.


The President of the Board of Trade cannot stop the investment of capital in the company referred to. The hon. Member must address his remarks to questions affecting the administration of the Board of Trade.


I was dealing with the economic principles which the President applies to the administration of his Department, and one of them is the desirability of the investment of British capital in the industries of foreign countries.


That may be the opinion of the hon. Member, but the President of the Board of Trade has no control over the investment of capital abroad.


I will leave that point although I feel that the question of the need of capital in this country should be debated. We hear a good deal of talk about the necessity of insulating our industrial machine. I think in the future that we have to exercise such a control over our economic life as will secure not only British work for British hands, and British goods for British consumers, but also British capital for British plant.


I am sure we have all listened with interest to the comprehensive speech which has just been delivered by the President of the Board of Trade, and we all wish him success in his negotiations at Geneva. I think his efforts show that he is trying, at any rate, to do something to reduce the tariff walls about which the Members of the Conservative party is so much concerned. The President of the Board of Trade did not seem to be very cheerful about the condition of our export trade, and he spoke about the remarkable accumulation of adverse factors. I am one of those engaged in export trade, and I wish to confine my remarks to that subject. The most depressing thing is that our export trade in volume is only about 80 per cent. of the pre-War volume. If you take the cotton trade we find that its volume is only about one-third of pre-War days. In the woollen trade there has been an inquiry at which it was stated that that trade is bleeding to death.

As regards the export of machinery, including motor cars, the President of the Board of Trade has supplied me with some very interesting and alarming figures concerning exports from this country. They deal with the exports of the United Kingdom, the United States and Germany in the years 1925 to 1929 respectively, and they show that during those six years the total exports of those three countries were increased roughly by something like 50 per cent. The exports of the United States during that period increased by 64 per cent., and Germany by no less than 80 per cent., whereas in this country we have had a miserable increase of 6 per cent. These figures show that we have been completely outstripped by our competitors in regard to the export of machinery. In 1925 we were exporting more machinery than Germany; but in 1929 Germany beat us by over £30,000,000. I think that is an alarming state of things, because machinery is one of the industries on which we always prided ourselves in this country, and to allow other countries to outstrip us at that rate is exceedingly alarming.

Personally, I happen to be connected with a trade which has to compete with Germany. I know the nature of German competition which places us in a very difficult position. Germany has a highly protected home market, and during the inflation after the War she very largely wiped out her capital charges. The German people work longer hours than we do in this country. This applies not only to manual workers but to other workers, and often they work on Sundays as well. Technical education of the university grade is far more effective in Germany than it is in our country. Every big engineering firm there has a number of doctors of science in its ranks, and I cannot see a single direction in which we have an actual advantage in competing with them. On the top of all this, their wages are between 25 and 30 per cent. lower than ours. It clearly follows that, with equal efficiency as regards brains and management, their cost of production must be something in the neighbourhood of 20 per cent. less than ours, and it seems to me that that clearly accounts for the very alarming way in which we have been losing trade to them, or, rather, in which the gain has been entirely on their side, while our gain has been, relatively, almost negligible.

This state of affairs is the more perturbing because we have a much longer established trade than they have. We have a good-will connection abroad which is worth a great deal to us, first of all in the Empire, where actual preferences are given to us by Australia, Canada and other Dominions, and, secondly, in other countries where British capital is invested. The chief example of this is that of the Argentine Railways, which place very large orders for machinery with us on patriotic grounds, without any competition from foreign countries. In spite of these advantages, we are losing trade in relation to both Germany and the United States. That, as I am sure the House will agree, must be regarded as a very serious state of affairs, and I find it difficult, under these conditions, to share the moderate optimism which some previous speakers have shown.

The depression in our trade is due to two quite separate causes. The first is the world depression to which the right hon. Gentleman referred in his concluding remarks; and he said, quite rightly, that it is also probably due largely to the reduction of wholesale prices, and that the House cannot expect him to deal with that matter which cannot be dealt with by any individual Government. In that connection we look forward to the report of the Macmillan Committee, which we hope will give us some guidance on that matter. Apart from that, as regards the world markets for machinery, the serious matter is that our share of those markets is decreasing, and it is in regard to the loss of our share in the export markets that we hope for some guidance from the right hon. Gentleman. I read the other day a remarkably interesting and important article by Sir William Beveridge, dealing with the question of unemployment, and unemployment, after all, is only the obverse of employment, which we are discussing this evening. Sir William Beveridge, who is, I think it will be agreed, one of the greatest authorities in this country on that subject, puts down our loss of trade in relation to other countries to the fact that we have in this country to-day a "disequilibrium," as he calls it, between wages and productivity. The price at which it is possible to sell depends, on the one hand, on the wages paid, and, on the other hand, on the efficiency of management, or productivity, as Sir William Beveridge calls it; and he states categorically that: With the present levels of industrial efficiency and wages, severe unemployment cannot be avoided. That is a very important statement, coming from so high an authority. It means that we cannot hope to get back the trade we have been losing. Put bluntly, in ordinary language—and this is a matter on which there seems to be almost a conspiracy of silence, both in this House and in the country—the question is whether our productivity and management are such as to enable us to pay the present level of wages in certain industries. Sir William Beveridge's statement comes to this, that, on our present efficiency, wages are too high, or, rather, if wages remain at their present level, and productivity remains at its present level, we must continue to have severe unemployment.

He goes on to say that, clearly, there are two remedies. The one is to reduce wages, and the other is to increase efficiency, and, until we adopt one or other of those remedies successfully, we cannot hope to increase employment, and we cannot hope to regain that share of world trade which we are losing. A very interesting illustration of the effect that too high a level of wages may have, or, anyhow, one explanation of it, is furnished by the woollen industry. In that industry, between 1924 and 1929, wage rates remained constant. In 1924, the amount of wages paid was £26,000,000, while in 1929 it was only £18,000,000, that is to say, the amount of wages paid dropped by one-third, although the wage rates per hour and per week remained constant. That was simply due to too high a cost of production, and consequent loss of markets, owing to the wage level on that level of efficiency. It is at least conceivable that, if wages during that period had been reduced by, say, 15 per cent., we should not have lost those markets, and the total amount paid in wages would have been actually higher in 1929, if the wage rate had been somewhat lower.

These are the two possible lines of action, according to the authority of Sir William Beveridge. We must either be content to stay as we are, with enormous unemployment, or we must in some way reduce wages. Of course, there are all kinds of ways of doing it. Hon. Members on the Conservative Benches would do it by a Protective system which would reduce, not nominal wages, but real wages, by leading to an increase in prices. The Government have been working vigorously at the question of rationalisation, and we have heard various reports on that subject; while the late Lord Privy Seal was working hard at rationalisation in connection with the City. We do not know what has happened since. There have been changes in organisation, and we do not know whether rationalisation has now gone back to the Department where it belongs, namely, the Board of Trade, and what policy is going to be pursued, or whether the policy of co-operation with the City, through the Bank of England and the other sections of the City, is to be continued, and whether the negotiations which have been begun in that way are going to be pushed on. I hope to hear that that is the case, and it would be very interesting if we could know whether that work has been taken up by the Board of Trade and what policy the Board of Trade is going to pursue on this matter. Is the conclusion of Sir William Beveridge right, that we cannot hope to get back to an increasing export trade unless we either increase efficiency or reduce wages; and, if so, what is the policy of the Board of Trade on that matter, and how are they going to carry it out?


Would the hon. Member say what is his answer to that question?


Unfortunately, I am not in a position to take action like a Government in the matter. The important thing is not to know what my policy is, but what the policy of the Government is. As the House is aware, in the woollen trade certain reductions were made, and one hopes that they will be effective in producing an increase in the total wages paid. Naturally, the main object should be to apply all possible energy to increasing efficiency.

I want to deal with one other aspect of our export trade, and that is the trade of this country with the Argentine Republic. During the year a report, which has not been referred to to-night, has been made by the D'Abernon Mission, which went out to the Argentine in, I think, October last. I happened to be in the country just afterwards. This morning there is an imporant article in the "Times" by Sir Malcolm Robertson, who was until recently our Ambassador in the Argentine, and I should like to take this opportunity of paying tribute to the vary valuable work that he did during his period of service there in improving trade relations between this country and the Argentine. In his article he points out that the current talk about Empire Free Trade and Import Boards is causing considerable perturbation in the Argentine, and he goes so far as to suggest that, if anything of that sort is done, the Argentine should be regarded as a part of the British Empire for the purpose of trade arrangements.

The House will be aware of the importance of our trade with the Argentine. We exported to that country this year goods of the value of about £30,000,000, and we purchased from the Argentine foodstuffs of the value of about £80,000,000. In addition to that, we have something like £500,000,000 of British capital invested in the Argentine Republic—more than in Canada. It is very perturbing that the course of our trade with the Argentine during the last 15 years can only be characterised as highly unsatisfactory. Comparing 1928 with 1913, the volume of British exports to the Argentine actually decreased from about £56,000,000 to £40,000,000. During that period the volume of exports from the United States to the Argentine was multiplied by nearly three; so that, whereas in 1913 our exports to the Argentine were double those of the United States in value, last year the United States sent 50 per cent. more than we did. These figures are exceedingly unsatisfactory. The interesting thing is that the Argentine is extremely friendly inclined towards us, largely due to the work of Sir Malcolm Robertson. They gave a very warm welcome to the D'Abernon Mission, and that Mission was able to sign with the Argentine Government quite a new form of trade agreement, under which they undertook to purchase from us during the next two years £9,000,000 of goods which we should not otherwise have sold to them, for the State railways and so on, while we on the other hand undertook to purchase from them £9,000,000 worth of foodstuffs, which we should in any case have bought. That was an indication of their desire to trade with us, and it is interesting to find that they have adopted the slogan, "Buy from those who buy from you," while their agricultural society is doing all that it can to co-operate with us.

I should like to ask the right hon. Gentleman what has happened to that trade agreement. Unfortunately, I believe it has been held up in the Argentine Congress, and, although it has been signed, it has not yet been ratified. I venture to suggest that this question of trade with the Argentine is very important, and, before concluding, I want again to refer to the uneasiness which has been felt in Argentine circles owing to the reports that our trade is going to be confined largely to the Empire. It has been put to me by a trading authority in the Argentine that, if any Government were to start an import board here, the result, as regards wheat, would be that they would give a first preference to the British farmer, a second preference to the Colonial farmer, and that by the time that was done there would be nothing left, so that it would result in a prohibition of any import of Argentine wheat at all. That is the kind of impression that talk about import boards is creating in certain Argentine circles, and, naturally, if anything of that sort were done, it would be a very unpleasant day for the £500,000,000 of British capital that is invested in the Argentine. The Argentine could hardly expect to depend upon us for their market for foodstuffs if action of that sort were taken, and I hope it will not be suggested. I hope that some assurance will be given that there is no intention of doing anything of that sort.

I desire to draw attention to the words of the D'Abernon Mission. They said that they felt that the reason that we are losing trade there is because Great Britain has not made a skilful use of her influential, and in some cases dominant, position as a buyer of South American goods. They say that in their opinion, whatever may be the general policy of His Majesty's Government, real advantage could be derived from continued negotiations, and that reciprocity might become an essential feature of our economic policy in South America, each country endeavouring to assist the other by facilities. They say they look forward with more confidence to an expansion of trade in the Argentine than in any part of the world. We are regarded with exceptional favour there. There are unequalled opportunities for expansion of trade in that country, and I hope that the Parliamentary Secretary, when he replies, will tell us what is happening to the agreement which was then signed, but which has not yet been ratified, and whether anything has been done, on the lines suggested by the D'Abernon Mission, to take advantage of the opportunities in the Argentine for an increase of our export trade with that country.

8.0 p.m.


I cannot help but realise, in all these trade debates, we seem to find ourselves in a kind of cul de sac. I believe the business of trade and commerce is to meet the needs of the community, and that is just what trade and commerce is not doing at the present time. That is where it has failed. The President of the Board of Trade sums the matter up when he says we have the power to produce enormously, and there are vast numbers of people ready and waiting to consume the things that we have power to produce, and we cannot bring the two forces together. I never heard finer speeches on this theme that those of the late Mr. Wheatley, and I never heard any of his arguments met by anyone on the Opposition Benches. They were so sound. He stated on many occasions that in the last 150 years we have increased our producing capacity by at least 50 times, but we still have the spectacle of thousands starving in the midst of it all. We are told by the hon. Member for Withington (Mr. Simon) that what we should do is to increase our efficiency. He usually follows that argument up by talking about mass production, that is his avenue of increased efficiency; but, I ask, what is the good of mass production if you are not going at the same time to link with it mass consumption? You are not getting out of your difficulty in that way, and it is because we are not facing up to what I consider that most important problem of linking the two together that we never seem to get anywhere in these trade debates. Some talk about reducing the cost of production and, when that line is followed up, we always get the hint that wages have to be reduced.

Instead of concentrating so much upon wage reduction, if we were to increase our efficiency at the top of industry we should be on a far better line. I believe we have, especially in the cotton industry, of which I know a little, great inefficiency at the top. The industry is not directed in the way it ought to be. That is not only my opinion and it does not only apply to the cotton industry. It applies to nearly every one of our large industries. I only need to quote the Leader of the Conservative party in the other House, who said not very long ago: If Lord Beaverbrook wants to know why we cannot compete in the markets of the world, let him read the Balfour Report, and he will find that the essential cause is the out-of-date equipment and organisation of our factories and a low standard in their higher control. The higher control in that case is not the Labour Government, but those responsible for the management and direction of industry. Lord Salisbury went on to say: or let him read the D'Abernon Report, and he will find that British merchants show a want of adaptability and enterprise. Lord Salisbury is backed up in this respect by the leader of the Conservative party in this House. I will quote his words on the same point: I say of my own experience that, since the days when private industry gave place to joint stock companies, there have battened on the joint stock companies large numbers of men connected with management and directors who are parasitical to industry, and nothing but parasitical. That is one of the main difficulties with the cotton industry. We have an enormous number of merchants who could be done without. We have an enormous number of middlemen who could be done without; we certainly need the four sections of the industry drawing together, we certainly need these middlemen eliminated, and we certainly need to introduce this efficiency that has been spoken of by the hon. Member for Witherton, but we need something else. We need to realise that, if we do not reorganise and introduce efficiency upon a co-operative basis instead of upon a competitive basis, as the industry has been run in the past, we shall find no way out of this difficulty. I think I can speak for all on these benches when I say our chief division with those on the benches opposite is that the disaster in which the cotton industry finds itself is due in the last analysis to the competitive system, and we believe we will never build a new Jerusalem upon the foundation of Sodom and Gomorrah. I do not believe the directors of the industry have adaptability. I do not like to use the word, but they will have to be forced to take action, and the sooner we realise that the better it will be for the industry and for Lancashire. The patience that the cotton operatives have shown is nothing less than heroic, and it is scandalous and wicked that they should be guided by such inefficient directors.


I propose to confine my remarks to the cotton report and the situation in Lancashire. I am always pleased to listen to the right hon. Member for Darwen (Sir H. Samuel), because he talks good, sound common sense. He says the trade union representatives have a responsibility in the present circumstances. I quite agree, and they will face that responsibility. They asked for this inquiry, and they are not shirking any of the recommendations. I am sorry I cannot say the same about my hon. Friend who has just spoken. He says the technical equipment of Lancashire is not of a very high standard, and the mentality of the employers is of a low standard. If he had had as much experience in negotiating on wage questions and other matters as I have had, he would change his outlook as to the mentality of the employers.


That is an opinion that has been expressed by far higher people in the cotton industry than the hon. Member or myself, and it is widely held that their mentality is such that it does not do credit to themselves or to the industry with which they are connected.


I will say no more. What I have said I have said. I can compliment the Cotton Committee on their statement of the conditions that prevail to-day, but I do not see that they offer any constructive proposals, and there are one or two statements that may be misconstrued. They say the evidence supplied to them was that double shifts would improve the trade. I know the Committee does not recommend it, but the idea is gaining ground that they recommended double shifts and longer hours, and this is certainly opposed in Lancashire. They say that, owing to longer hours and low wages, the Indian is competing successfully with Lancashire. I have investigated the conditions of the textile mills in India, and I am satisfied that the cost per unit for wages is equal to, if not more than in Lancashire. Where they do gain is that they are generally bleachers, dyers, merchants, spinners and manufacturers all in one, whereas in Lancashire we are all split up into small sections, one competing against the other. It is certainly not wages and not long hours that are responsible for the success of either India or Japan. The report recommends cheaper cotton, and ring spinning in place of mule spinning.

Two or three years ago a committee was set up to inquire into the results of using this kind of cotton in Lancashire and its detrimental effect on the health of the workpeople. It has not reported yet, though I understand it has completed its labours. The cotton that is used in India can be, and has been, used in this country, but we want to be satisfied as to its effect on health. I do not believe that it can be so much cheaper. When I was in India the prices for American cotton and for Indian cotton suitable for the same trade were about the same. They recommend ring spinning in the place of mule spinning. In India, there are 52,000 ring spinners and 2,500 mule spinners. In Lancashire it is the reverse. Of course, we spin higher counts and higher qualities than are spun in India, but ring spinning is no new thing. It has been here for 50 years, and it is gradually increasing because it entails cheap labour. Women are employed as ring spinners. Skill is not required to the extent that it is required in mule spinning, and it is a question of cheap labour. If they carry out the recommendations, probably 90 per cent. of the men in the spinning rooms will be displaced.


Perhaps my hon. Friend can kindly explain the position? Surat cotton for ring spinning yarns, as far as I understand the matter, is not suitable for Lancashire spinning yarns, and that accounts for their not being able to use it.


I do not want to go into the technical details of spinning. I think it is a much broader question than a technical one. I was somewhat surprised that the committee made no reference to the question of the artificial raising of prices by short-time working at the mills. We have to recognise, whether we like it or not, that about one-third of the trade is specialised spinning, and we might as well face the position once and for all that some of this trade is permanently lost and that it would be better in the interests of the trade if certain firms were to close down permanently. The trade might form some scheme such as has been formed in the Egyptian section to compensate those firms which were closed down and the workpeople at the mills. In 1927, when in India, I wrote in our report as follows: Lancashire goods are being raised above basic prices by artificial means, namely, restricted production, especially of yarns, with the result that Japan is doing trade formerly done by Lancashire. Taking trade in the bulk, both countries trade through the same shippers, and when prices fluctuate they change over to the cheapest producer. That is an extract from a report which I have in my pocket. I have also an extract from a report which I saw only yesterday, and I want hon. Members to notice the similarity between the two. This was taken from the report of the Department of Overseas Trade for 1927, and it is in page 23: Any attempts to maintain rates artificially above what India can afford to pay can only result, in the future as in the past, in stifling demand, in bringing about the substitution of cheaper Indian mill cloths of lower quality, and playing into the hands of Japan and Italy. Those are almost identical ideas. I regret that Lancashire is suffering very much from depression and unemployment. I have the honour to represent Bolton, and I live in Blackburn. The right hon. Gentleman the Member for Darwen (Sir H. Samuel) is sandwiched between, and, when he was speaking of the number of unemployed in Blackburn and of the number receiving unemployment benefit, I said to myself, "Yes, and you can add on to that what we as trade unionists are paying out of our trade union funds in order to let them have a little more comfort." This money was not contributed for that purpose, but for the purpose of defending the rights of the workers in their struggles for better conditions. That money goes with the Unemployment Fund, and still, I am sorry to say, many of the people in Lancashire are suffering more than people realise. We do not shout about it, but nevertheless it is true. We have 42.2 per cent. of unemployed. Sometimes, however, we forget that unemployed workers in the cotton trade may obtain employment in some other trade. We should not always picture the black side. The decline in spinning is in large measure due to the use of artificial silk. Other firms such as Courtaulds are employing people who have been displaced from the spinning mills.

Therefore, we want to look at this matter all round. Nevertheless, we have the 42.2 per cent. of unemployed. In Oldham, a spinning centre spinning medium and coarse counts, there is 55 to 60 per cent. of unemployment, and in Bolton 40 to 50 per cent. By the way, Bolton, a fine spinning centre, has done better than any other district of Lancashire, but it is now feeling the effects of two things, namely, decline in trade, and the fact that other districts formerly dealing with American cotton and knowing that the Egyptian section was better has changed over from American cotton to Egyptian cotton, with the result that they are now pulling down the Egyptian section to the level of the American section. In Blackburn there are 28,315 unemployed upon the register, 1,170 of whom are juveniles. I have heard a good deal about training centres and what can be done to find employment for women. You can put men on to the roads or to other forms of manual labour, but there is no possibility of finding employment for young girls and women. We ought to see to it that the young boys and girls of Lancashire have a training in their craft, to fit them for employment should such revival of trade come that I hope will come in the near future.

During the War we had what was known as the Cotton Control Board. Out of that Board emerged the Cotton Reconstruction Committee. The Cotton Control Board had a certain amount of authority, and I hope that some other similar body will have authority, before very long, to implement whatever decisions the trade may come to, because, human nature is human nature, and unless there is some authority to enforce the decisions arrived at by the majority of the trade, the minority will reap where they have not sown. The Cotton Control Board or the Reconstruction Committee had £1,500,000 left, and there is now, I believe, £400,000 or £500,000 remaining.

I suggest that the trustees of that fund, along with the Minister of Labour and the President of the Board of Education should form a committee and open experimental mills in Preston, Blackburn, Oldham and other places. I have had conversation with a gentleman who is probably the largest cotton manufacturer in the world, who owns mills in Blackburn, Preston, Darwen and other places, and I believe he would be willing to manage one of the mills as a training centre. I do not suppose that these mills as training centres would make as good material as is made to-day in the weaving sheds, but the point is, that they would be doing something useful and their product could be used by the Public Assistance Committees, who could supply it to the people at a very cheap rate. I believe that the gentleman in question would, if he were approached, see if some scheme could be devised to start at least one mill as an experiment.

I agree with what has been said in regard to the political situation in India and China. If we can get the Indian situation settled, we shall be a long way towards the recovery of the cotton trade. I was sorry that the President of the Board of Trade concluded on such a pessimistic note. I am not so pessimistic. I believe that there are signs even to-day that the cotton trade is improving. When I went home last Saturday I received reports of several mills where our members had started work on the Monday of last week, or were to start work on Monday of this week, and there were prospects of three or four mills in our town resuming employment. I hope we shall not be so pessimistic, but that we shall all co-operate and endeavour to "Paint the clouds with sunshine."


The hon. Member for Bolton (Mr. Brothers) says that he sees signs of improvement in the cotton trade. That is not the information that has been made available to any of us on this side of the House, and I think the hon. Member will not find that his information is general at the present time. From reports that have been available from the cotton industry during the last few weeks the position has been increasingly depressing. The President of the Board of Trade gave us a very interesting but a very pessimistic and very gloomy view of the trade position of the country. Throughout his speech he never made a constructive proposal of any sort as to what he is doing or intends to do to ameliorate the position. That is what we complain of day in and day out on this side of the House. We all know that the trade position is very bad, and we all know, as he said, that one of the main difficulties is due to falling commodity prices, and the difficulty of relating consumption to production. We all know that clearly enough.

What we are not clear about, what we are waiting for and what we have waited for in vain so far is a gleam of a constructive suggestion or proposal on the part of the Government to alleviate the situation. Some of us feel very strongly that it is a monetary cause that is primarily responsible. Therefore, we are all the more anxious to know the recommendations of the Macmillan Committee. We were hoping to hear from the right hon. Gentleman when that Committee is likely to report. Could he not put pressure upon the Committee, so that we can get its report at the earliest possible moment, because it is a matter of great urgency. Meanwhile, are the Government not going to take any action upon their own initiative? The President of the Board of Trade was extremely pessimistic about the recent international conference, which so far has been completely abortive—the Economic Conference at Geneva. There seems to be some reason to suppose that for the immediate future broad economic agreement internationally is not likely to be realised. We have to face up to that fact. That is why hon. Members on this side of the House attach such tremendous importance to the forthcoming Imperial Conference. I would ask the Parliamentary Secretary whether the Government propose to raise at the Imperial Conference any of the questions to which the President of the Board of Trade attached so much importance, or whether if international agreement so far as tariffs and also so far as gold breaks down, we may not be able to arrive at some agreement between ourselves within the British Commonwealth of nations.

If we can get mutual agreement upon tariffs, upon the rationalisation of industry, upon coal, upon the things which the right hon. Gentleman said were so very desirable, and upon which he is apparently unable to obtain agreement at Geneva in the international field; if we can get agreements upon these subjects at the Imperial Conference, I believe it would do not only as much good as an international agreement—which it would probably be very difficult to work, at any rate in the earlier stages—but probably far more good, and would make international agreements between large economic units of the world very much easier in the future. That is why we on this side attach so much importance to agreements within the Empire, and that is what lies behind the Imperial Economic campaign, or whatever you like to call it.

There was one subject to which the President of the Board of Trade rightly attached more importance than to anything else, and that was an international agreement so far as the coal industry is concerned. I want to ask what practical steps the right hon. Gentleman proposes to take to further this international agreement in the near future, or whether he proposes to take any steps at all? I see the Secretary for Overseas Trade in his place and I should like to direct his attention to one aspect of that matter. If I asked him a direct question I should not get an answer, because no one has obtained an answer from this Government for the last 14 months. The point to which I desire to draw the attention of the Secretary for the Department of Overseas Trade is this. I do not want to deal with the political aspects of the Russian question, but there is no doubt that if we could extend our trade with Russia, especially in the article which is produced in my constituency, cured herrings, that we should do a great deal to assist large numbers of the working-class population in the North of England and in the North-East of Scotland. In this case the Government are dealing with a Government monopoly, and as far as trade relations with Russia are concerned it is a very special sphere for the activity of the Government. You can hardly expect private traders on their own initiative to do much to extend trade with Russia when there is a Government monopoly on the other side.

I am not dealing with the merits of the political case, but the fact remains that political relations exist between this country and Russia, and so long as that condition of affairs continues it is obviously desirable that we should do as much trade as we can with the Russian Government. The position is not satisfactory so far as cured herrings are concerned, and there is no indication at the moment that we are likely to recover anything like the pre-War market we had in Russia for cured herrings. We must secure substantial foreign markets if this industry is to survive, and I beg the Secretary for Overseas Trade to see whether it is not possible, either by direct negotiations with the Soviet Government, or by some other means, to facilitate and extend the trade in cured herrings with Russia in the near future, otherwise I am afraid the outlook for our herring fishermen on the North-East coast of Scotland will continue to be bleak.

I was rather surprised that the President of the Board of Trade never mentioned the question of machinery, and I want to know whether he is satisfied with the machinery which is at his disposal in the Department. Is he satisfied in particular with his statistical department? There is an immense field in the realm of pure administration before the right hon. Gentleman. You have only to look at what President Hoover did when he was Secretary of Commerce in this respect. His enormous activity permeated all the industries of the United States, and through his initiative and desire he was able to give impetus to the process of rationalisation, and effect immense savings right throughout industry. Enormous importance was attached to his advice by all industrialists in the United States. Exactly the same thing applies in Germany. Every one will realise how lamentably behind we are in this respect. We have no adequate statistics to give to traders in this country with regard to the home position on foreign markets. We do not make anything like sufficient effort to sell our goods at home or abroad, quite apart from tariffs or anything of that sort.

We do not advertise our goods or wares; and that is one of the causes why we are losing markets. But our industrialists and traders can really say that they are not given the help which is due in the administrative field by the Board of Trade or the Department of Overseas Trade. I suppose when they are asked for advice that some information may be forthcoming after a long period, but that is not the way to set about it. That is not the way in which Mr. Hoover tackled the problem. He brandished the information in the face of the traders and industrialists in the United States and ultimately they had to adopt his plans and carry out his ideas over a large field. If the President of the Board of Trade had adequate machinery at his disposal, if he had an adequate statistical department, he could have done by simple administrative measures, and by meeting the leaders of industry in the same way as Mr. Hoover met them, when he was Secretary for Commerce, immense service in the process of rationalising industry in this country. If that had taken place during the last few years the cotton industry, about which we have heard so much, and the iron and steel industry would be in a more efficient condition than they are at present. These are the only observations I wish to address to the Committee, but it is rather unfortunate that we have had so little of a constructive character from the President of the Board of Trade.


No one can say that we have had a cheerful debate, and in rising at its close I want to provide the one cheerful note, because I desire to draw the attention of the Committee to one market at any rate in which we have made substantial progress during the last half-year. The hon. Member for Mid-Bedford (Mr. Gray), who opened this debate, said that during the last half-year we have lost about £54,000,000 worth of export trade. That is almost entirely accounted for by the fall in prices. It does not represent a fall in the volume of trade, but still it is a fall of £54,000,000 in the value of our export trade. Surely at such a time it is rather notable that in one market we have increased our exports. That market is, of course, the Russian market. During the last nine months we have increased our exports to Russia from 6.1 million pounds to 13.4 million pounds. That really is a very notable increase and it does not represent anything like the potential increase which is possible, but it does give us some idea of what can be done. During 1930 it is almost certain that we shall export to Russia at the rate of £20,000,000 per year, which is a very considerable amount and places Russia within the first half-dozen of our most important customers—a very notable fact which is not realised at all in this country. It shows that any pooh-poohing of the Russian market is entirely misplaced.

It is appropriate, in view of the fact that we are exporting to Russia at the rate of £18,000,000 to £20,000,000 per year, to recall the scorn which was poured on the idea that we could possibly export to Russia at anything like that rate. One of the great financial pundits of the party opposite the right hon. Member for Sevenoaks (Sir H. Young), as late as last February, informed us that our export trade with Russia before the war was about £13,000,000 a year, and he said: That is the very maximum—that is the whole field of posibility in foreign trade, which we are considering to-day."—[OFFICIAL REPORT, 5th February, col. 1940, Vol. 234.] It is rather amusing that within five months of the right hon. Gentleman making that remark that the trade figures show that our exports to Russia have exceeded that amount by several million pounds. Financial pundits are usually wrong, but it is rather remarkable to find them proved so grossly wrong in such a short time. The right hon. Gentleman went on to tell us that even this pre-War level of trade of exports to Russia of £13,000,000 would never he reached again. He said: What is the prospect of our ever being able to get back to the figure of pre-War trade with Russia? There is very little prospect indeed. There are many strong reasons why we shall not be able to do so."—[OFFICIAL REPORT, 5th February, 1930; col. 1941, Vol. 234.] And the right hon. Gentleman went on to describe what he considered to be the parlous state in which Russia is in to-day. It is a notable fact that within five months of his making that speech in this House we find ourselves exporting to Russia at the rate of at least £18,000,000 a year. I think it will be shown that by the end of the year the figure will be over £20,000,000, because the rate is expanding very rapidly at the moment. The rate of manufactured exports, such as machinery, is increasing even more rapidly—in the nine months from £2,000,000 to £6,000,000. During the same time and as a direct result—we can claim that quite definitely—of the Government's trade treaty with Russia, the Russian Government, which before that treaty was moving its foreign trade to the extent of 75 per cent. in foreign ships, is now moving it to the extent of 75 per cent. in British ships—a very considerable and useful contribution to the shipping industry, which finds itself in such very great difficulty to-day. During the same period, and in addition to the figures that I have just given, we have had three very large long-term contracts signed between the trade organisations of Russia and this country—the Metropolitan-Vickers contract for the supply of £1,000,000 worth of electrical machinery, the Imperial Chemicals contract for £3,000,000 worth of goods, and the Associated Machine Tool Manufacturers contract for the supply of about £200,000 worth of their products.

The next point of interest in the matter is to see how match of this trade has been assisted by the Government. We come to the surprising result that only £2,000,000 out of this £13,700,000 of Russian trade has passed through the contracts under the Export Credits scheme. That leads us very strongly to the conclusion that, as it is worked at present, with the present, rates and the present restrictions put by the Committee on the Export Credits scheme to Russia, it is making but a slight contribution to this increase in trade. I would like the Parliamentary Secretary to the Overseas Trade Department to tell us what the Government view is on the question of the Export Credits scheme in relation to Russia. We have got this very considerable increase in Russian trade from £6,000,000 a year to £13,000,000 in nine months. There is no doubt that if we like to provide the credit—


The hon. Member is now discussing something that is not included in this Vote.


I was under the impression that the Overseas Trade Department was included in the Board of Trade.


There is a separate Vote for the Overseas Trade Department. The subject does not come under this Vote at all.


I am sorry for my error. There is the broader question of the whole extent to which we like to use the credit of this country for developing Russian trade. We cannot develop the trade unless we use that credit. If we use credit and capital for that purpose we shall not have it available for other purposes. It is a business question, as to whether it would pay us to do it. I suggest to the Government that a very strong case exists for the use of a good deal more of our credit for developing the export trade with Russia. When we develop our export trade with any undeveloped country, with the Argentine or the Dominions or Africa, we always have to use our credit to do it, and always give loans to these countries. All undeveloped countries in fact buy on credit, though usually by the method of long-term loans. I ask the question whether the risk of doing that is not a smaller risk than the risk of leaving our industries in the condition in which they are to-day. We have had from every side of the Committee to-day this extremely gloomy survey of the trade situation, of our export trade throughout the world. Here unquestionably is a market which we can develop to a great many millions a year. It is increasingly important for the Government to weigh up the rival advantages and disadvantages of doing this and to come to some conclusion on this development.


I am sorry that the right hon. Member for Darwen (Sir H. Samuel) is not in his place, because at last I agree with him on one subject.


He has been here for five hours.


I have been here for two hours, but that is not five. I am not going to say anything nasty about the right hon. Gentleman. I agree with him on the question of the people in Lancashire who are out of work. The one thing that they are wanting is work. They are not wanting doles. How are we to get them work? To consider that seems to me to be the duty of every Lancashire Member in the first place, and of every Member of this Committee in the second place. The right hon. Gentleman was extraordinary subtle about dyes. I asked him a question about them. He did not admit it in so many words, but what he virtually meant was that the dye trade had been made through Safeguarding. The right hon. Gentleman wants to take off Safeguarding. He said that he had had a hand in the making of the conditions which brought the trade into the prosperous state in which it is now. He cannot possibly have it both ways; he cannot be an absolute exclusionist in the case of all foreign dyes, and then say, "We want to take the tariff or prohibition off." That is exactly what he said, and he took credit for it.

As a Member for a cotton constituency which is probably having a worse time than any constituency in the country, in Lancashire certainly, I wish to say a few things about the cotton report. The cheering thing about the report is that is gives a sort of indication that the employers and the trade unions are coming together to arrive at some arrangement by which they can co-operate for the betterment of the trade. That is a very great step. Otherwise the report contains nothing new whatever, nothing that is going to give us any hope, and nothing that we did not know a year ago. I am certain that if many of the Lancashire Members had been consulted a year ago they could have written that report. We have wasted a whole year doing nothing and seeing our friends up in Lancashire getting into a worse and worse state. However, there is nothing so bad that it could not be worse. I think that this dreadful time that Lancashire is having has had the effect of making the employers in Lancashire begin to think. So far as I can make out the Lancashire employer is the most independent person in the world, although I might couple him with the Scottish employer.

The Lancashire employer wants to run his own show. He loathes any interference, but the good people there who run good shows are beginning to feel a draught. The weak ones are going out, and the good ones are beginning to feel the effects of unemployment and lack of orders, and they are beginning to think. The more sensible employers, the good employers, who are really the brains of Lancashire and who have been very independent in the past, are beginning to think that now when things are so bad, it is necessary to get into touch with the other people. They are saying, "Let us get together and try to evolve a scheme by which there will be not only a return on capital, and something for the Exchequer, but first and above all some work for the employés." That is what we want and nothing else. We want work for the people and decent wages instead of doles.

I have said that there is nothing new in the cotton report. Most of us knew long before the report was written that what we wanted was vertical combines. We have to get the trade unions working along with us to get these vertical combines going, and I think that after this report we may see the big merchants and the spinners—there has to be a certain amount of the horizontal in it—the weavers, the dyers and finishers and other branches of the industry combining. We shall see the merchants, who are the distributors, coming in the vertical combines, and I would rather see two or three vertical combines, than a single great vertical combine, because I believe that competition has a great deal to do with making trade better. I believe that Lancashire will proceed on these lines. The Government may have to threaten them with something, just to keep them moving along down the avenue, but I believe they will move in that direction. They have so much common sense and so much realisation of how vital this matter is to the country that they would be quite prepared to combine together so as to get the costs of production down and cut out the middleman.

In my own constituency, as I say, they are having a bad time, and I have just read in the newspapers that one works there which employed a great number of hands is closing down this week. This concern made polished cotton goods, used mainly in connection with cables, and the only reason for closing down is Continental competition. Is it not cheaper for us to pay a little more for the polished cotton which we use to put round cables, than to have so many people doing nothing and receiving the dole? What are the fellows displaced from these works going to do? I can see nothing for them except going on the dole. That illustrates how the trend of things has changed all over the country. Things are very different now from what they were long ago, when it was, perhaps, cheaper to get in foreign goods, and workers who were displaced had the chance of going on to some other kind of job. Now they have no chance of doing anything except going on the dole. Surely, it is better to pay more for cables than to have unemployment increasing like a snowball. Surely it is only common sense to say that it is cheaper to pay a little more for polished cotton yarn than to put hundreds of people on the dole.

9.0 p.m.

There is one other question which I wish to mention, and which relates not only to the cotton trade but to other trades. That is the question of the very bad selling in this country. I have a great deal of experience of selling and the more I go about and the more I see of it the more I am convinced that when we hear of currants and raspberries and things of that kind coming in here at a penny and three-halfpence a pound and under-cutting the price here, it is all due to bad selling. I am certain that from cotton goods down to currants, anywhere you like to take it, the producer has to get hold of the neighbouring producer, and find out some method by which they can get the full price for their goods in order that they can pay the people who are working for them a better wage. I have no hesitation in saying that, in practically every trade that I know, the selling is extraordinarily bad, and until this country begins to find out that selling is just as important as buying raw material, or as the cost of production, we shall fail to turn the corner or make any sort of headway.

Before concluding, may I mention the question of the talking picture industry. It is all very well for some hon. Members to say that I am interested in that trade. I have been interested in it since 1922, and I am going to lose an awful lot of money in it. What do we find to-day? The Germans and Americans have put their heads together and arrived at a, method of rationalisation. The Americans and the Germans have arranged the parts of the world which they are going to control in this industry, and the Americans, if you please, have arranged that they are going to control the making of all talking picture instruments that come into this country. Are we going to stand it? I have nothing against the Americans, but I have no brief for them. We should compel the Americans to come into this country and manufacture these instruments and then, at least, we shall secure something. We shall secure wages and work for our own workers. If they drive out the British capitalists who are making these instruments now, it will cost us hundreds of thousands of pounds which could be used in keeping our own electricians, and training new electricians. But simply because the Americans consider that they are in a practically unassailable position, in reference to patents and matters of that kind, we are to be shut out. Why should we be shut out in this way? It should not be difficult to find some method whereby, at least, we may be able to compel the Americans to come into this country and manufacture all that machinery here. I do not care if they make a profit on it themselves, if we have work for thousands of our people, and surely that is what we are all aiming at. We ought to pull together in order to help the working people. I hope I have not transgressed too long on the time of the Committee, on account of what is to happen later. I hope that what. I have said may bear some little fruit. I hope that it will be reported in Lancashire and that the people in charge in Lancashire will put their heads together and try to evolve some scheme of the kind which I have indicated, lest worse befall them.


I shall not detain the Committee long, because I see the Prime Minister is here and I understand there is some important business which he wants to get through. I think the cotton inquiry report can very easily, from many aspects, be blown sky high, but I will not go into that matter now. I intended to raise the question with the Under-Secretary of the negotiations with other countries in regard to the Plimsoll load line. I may not be in order in doing so, and I do not wish to develop it, but I do want to raise it with him, and I give him notice now that I intend, at the first available opportunity, to raise with him the question of his negotiations with other Powers on the load line, and to get from him a statement as to how far those negotiations have proceeded and what the effect will be on the merchant ships of this country.