Commons Sitting of 14 May 1930

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Derby Corporation Bill,
Order for consideration of Lords Amendments read.
Mr. CHARLES WILLIAMS: May I have an explanation of these Amendments I think the House is not justified in passing a Bill of this kind until we have had an adequate explanation of it.
Mr. SPEAKER: If the hon. Member objects to its being taken, it must be postponed.
Consideration of Lords Amendments deferred till to-morrow.
Maidstone Corporation (Trolley Vehicles) Provisional Order Bill,
Pier and Harbour Provisional Order (No. 1) Bill,
Read a Second time, and committed.

ORAL ANSWERS TO QUESTIONS.

  FOREIGN PORTS (MEDICAL INSPECTION).
  Mr. DAYasked the Secretary of State for Foreign Affairs whether he has any information of cases in which English women and girls are subjected to medical examination on arrival at foreign ports; and can he give particulars?
  The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Dalton): I would refer my hon. Friend to the reply given to a similar question put by the hon. Member for Leith (Mr. E. Brown) on the 14th April.
  Mr. DAY: Has my hon. Friend's attention been drawn to the fact that certain
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  ladies at South American ports have had to expose their vaccination marks, even when they have been on the lower limbs, without the presence of a nurse or a lady attendant?
  Mr. DALTON: No. My right hon. Friend's attention has not been drawn to this fact, but we shall be very glad, if my hon. Friend will send us particulars, to look into them.
  Mr. MATTERS: Is my hon. Friend aware of the fact that the South American officials accept the certificate of vaccination of the vaccination medical officer?
  Mr. DALTON: I am glad to have that additional information, and perhaps my hon. Friend will send me some further particulars.

  RUSSIA.

    RELIGIOUS SITUATION.
    Sir KINGSLEY WOODasked the Secretary of State for Foreign Affairs the nature of the cases of religious persecution in Soviet Russia which he has brought to the notice of the British Ambassador to Soviet Russia?
    Mr. DALTON: In addition to the case of certain Soviet citizens, members of the Baptist Church, which formed the subject of a question by the hon. and gallant Member for East Lewisham (Sir A. Pownall) on the 24th of March, my right hon. Friend has communicated to His Majesty's Ambassador, in accordance with the ordinary routine, such information with regard to the question of religion in the Soviet Union as has been brought to the notice of His Majesty's Government.
    Sir K. WOOD: What action has been taken arising out of the information that has been given to the hon. Gentleman?
    Mr. COCKS: Are these cases of the same nature as the cases of religious and political persecution which take place in English country villages at the instance of the party opposite?
    Sir K. WOOD: The hon. Gentleman has told us that he has had communications with the British Ambassador

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    enumerating various items in this matter and various cases of religious persecution; what action has followed? What course have the Government taken?
    Mr. DALTON: Those Members of the House, including, I have no doubt, the right hon. Gentleman, whose desire in this matter is to protect persons of whatever nationality from suffering anything that could accurately be described as religious persecution will, I think, recognise that it would not be to the advantage of such persons if detailed answers were given in this House on matters which might concern them, and His Majesty's Government, as my right hon. Friend has on more than one occasion pointed out, have taken the course which, in their judgment, is most likely to promote religious liberty; and I may say in advance that I am prepared to add nothing to this answer.
    Sir K. WOOD: Inasmuch as the hon. Member's right hon. Friend has taken action and has brought these matters to the notice of our own Ambassador, what general action is being taken? I am not asking with regard to action in particular cases.
    Mr. MARJORIBANKS: What is the real justification for silence in this matter?
    Mr. CHARLES WILLIAMS: Is the hon. Gentleman negligent of the interests of Christians, as is his chief?
    Mr. MARJORIBANKSasked the Secretary of State for Foreign Affairs if he can now state to what penalties foreigners are liable under the laws of the Soviet Union who contravene the law against the teaching of religion in Russia?
    Mr. DALTON: I would refer the hon. Member to the answer which I gave to exactly the same question the day before yesterday, to which at present I have nothing to add.
    Mr. MARJORIBANKS: The hon. Gentleman replied that he had not yet received a certain letter which contained the information. Will he now state when he expects to receive that letter, and, if he does not get it, will he make inquiries?
    Mr. MATTERS: I would like to ask the hon. Gentleman with regard to these questions on Russia in general, whether he will be good enough—
    Mr. SPEAKER: We cannot deal with questions on Russia in general.

    TRADE DELEGATION (DIPLOMATIC IMMUNITY).
    Sir AUSTEN CHAMBERLAINasked the Secretary of State for Foreign Affairs if he will inform the House exactly what privileges are accorded to the Soviet trade representative under the recently concluded modus vivendi; in particular, whether they include freedom from rates and, if so, for what premises; and whether they include freedom from customs examinations and duties and, if so, within what limits?
    Mr. DALTON: As a member of the staff of the Soviet Embassy, the Soviet Trade Representative will enjoy the usual exemptions and reliefs which are accorded to members of the Diplomatic Body generally, with the nature of which the right hon. Gentleman is, of course, familiar. No special arrangements with the Soviet Government having yet been concluded, on the lines of those which His Majesty's Government is in the habit of concluding with other foreign Governments, the above mentioned privileges do not include any customs exemptions or any relief from local rates. As regards the latter, I would refer the right hon. Gentleman to the answer given to the hon. and gallant Member for Chippenham (Captain Cazalet) on the 5th May.
    Mr. MARJORIBANKS: Would a breach of contract by one of these gentlemen he subject to diplomatic representations?
    Mr. DALTON: That would appear to be a question to put on the Paper.
    Captain CROOKSHANKasked the Secretary of State for Foreign Affairs whether, as a result of the Russian trade agreement, any form of diplomatic immunity will extend to the premises of Arcos; and, if not, what steps he proposes to take to see that the offices of Arcos will be kept separate from those of the Russian trade commissioner?
    Mr. DALTON: The answer to the first part of the question is in the negative. As regards the second part of the question, Article 2, paragraph 2 of the Temporary Commercial Agreement defines the offices of the Soviet Trade Delegation to which immunity attaches, and my right hon. Friend has been furnished with details of the rooms in Bush House actually to be occupied by the delegation.
    Captain CROOKSHANK: Is it true, as stated in the papers, that there are 25 rooms?
    Mr. DALTON: No, Sir, that statement, like many others that appear in the "Morning Post," is false.
    Lieut. - Commander KENWORTHY: Can the hon. Gentleman assure me that Bush House is not going to be the subject of a raid?
    Commander Sir BOLTON EYRES MONSELL: Apply the third degree!
    Sir K. WOOD: Are you going to put them through the third degree?
    Captain CAZALETasked the Secretary of State for Foreign Affairs whether the diplomatic privileges, including rate rebate, given to the Soviet trade delegation will extend to any other buildings or offices occupied or rented for trade purposes other than the head administrative offices at Bush House?
    Mr. DALTON: The answer is in the negative.
    Captain CAZALETasked the Secretary of State for Foreign Affairs whether the diplomatic privileges extended to the Soviet trade delegation cover the entry of goods imported into this country only for the personal use of the personnel or extend to all goods invoiced to the trade delegation?
    Mr. DALTON: The Soviet Ambassador, or in his absence the Chargé d'Affaires, alone enjoys free entry of goods, for his personal use only.
    Captain CAZALET: Will the diplomatic privileges extend only to the administrative offices, or to all the rooms rented in Bush House?
    Mr. DALTON: I am not quite clear whether my hon. and gallant Friend is referring to the question of immunity of
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    premises or to the freedom of entry of goods, but there is a later question on the Paper, which I think will answer more fully the point that he has in mind, and perhaps he will care to put a supplementary question on that.
    Mr. SMITHERSasked the Secretary of State for Foreign Affairs how many foreign countries have trade representatives in this country; and how many enjoy diplomatic immunity for their representatives and for their premises?
    Mr. DALTON: Except in the case of the Union of Soviet Socialist Republics, no foreign Government maintains in this country a trade representative regulating and carrying on trade generally on behalf of his Government. Other foreign Governments from time to time establish official agencies in this country in connection with various commercial transactions, but, without longer notice, I am not in a position to give particulars. The Union of Soviet Socialist Republics is the only country whose trade representative enjoys diplomatic privileges.
    Mr. SMITHERS: Does not the hon. Gentleman think that it is rather unfair that the trade delegation—
    Mr. SPEAKER: It is not a question of what the hon. Gentleman thinks. Question 15.
    Mr. GODFREY LOCKER-LAMPSONasked the Under-Secretary of State for Foreign Affairs whether the grant of diplomatic immunity for the offices of the Soviet trade delegation was first made on the initiative of His Majesty's Government or whether the Soviet Government made a request for it?
    Mr. DALTON: I am not prepared to disclose details of the negotiations which resulted in the Temporary Commercial Agreement of the 16th of April.
    Mr. LOCKER-LAMPSON: Can the hon. Gentleman say whether, when this exceptional privilege was given to the Soviet Government, His Majesty's Government demanded a pledge from the Soviet Government that the Third International would discontinue their hostile activities against this country?
    Mr. DALTON: That has nothing to do with the question on the Paper.
    Mr. HAYCOCK: May I ask whether the agreement as to propaganda was mutual and whether we agreed not to carry on hostile propaganda?
    Mr. DALTON: Yes, Sir, the undertaking was mutual.
    Captain EDENasked the Secretary of State for Foreign Affairs why the provisions governing diplomatic immunity laid down in the 1921 Trade Agreement were not embodied in the Temporary Commercial Agreement recently negotiated?
    Mr. DALTON: I would refer the hon. and gallant Member to the answer which I gave to a question by him on this subject the day before yesterday. The 1921 Agreement, providing for the grant of certain immunities for the British and Soviet official agents appointed there-under, was made at a time when there were no diplomatic relations between His Majesty's Government and the Soviet Government. An arrangement which may have been appropriate in the conditions of 1921 requires to be reconsidered and more precisely defined now that diplomatic relations have been formally resumed.
    Captain EDEN: Why did the hon. Gentleman say then, that there was no departure from the proposal of 1921, as he has now admitted that there was a departure? May I ask why the departure was made?
    Mr. DALTON: If the hon. and gallant Member will look up the answer which I gave the day before yesterday he will see that I said:
    "I am not aware that there has been any departure from the principle inherent in the 1921 agreement."—[OFFICIAL REPORT, 12th May, 1920; col. 1436, Vol. 13.]
    To that statement I adhere.
    Captain EDEN: Does the hon. Gentleman still maintain that there is no difference at all between immunity for buildings and immunity for persons? If not, there must have been a departure.
    Mr. DALTON: I said that I did not admit that there had been any departure in principle. [HON. MEMBERS: "Oh!"] If the hon. and gallant Member's Friends will allow me to give a fuller answer to this question perhaps I may add that, now that we have a Soviet Ambassador
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    in this country, the immunity of buildings follows as a consequence from the establishment of that Ambassador as the head of the Diplomatic Mission. The definition of the actual buildings to enjoy immunity under the Trade Agreement is of a limiting character, because if that provision had not been inserted it might have been possible for the Soviet Ambassador to claim immunity for all buildings he had hired or claimed that he was using. In fact, the limitation to clearly defined premises in Bush House is a limiting condition which I should have thought would have been welcome to the hon. and gallant Member rather than otherwise.

    BRITISH EMBASSY, MOSCOW (CHAPLAIN).
    Commander SOUTHBYasked the Secretary of State for Foreign Affairs, whether there is a chaplain attached to the British Embassy in Moscow who is permitted to minister to the spiritual needs of British subjects resident in Soviet Russia?
    Mr. DALTON: There is no chaplain attached to the Embassy in Moscow, but, as my right hon. Friend informed the hon. Member for Eastbourne (Mr. Marjoribanks) on the 27th of January, arrangements were made with the Soviet Government at the beginning of the present year for a British chaplain to visit Moscow and Leningrad from time to time in order to hold religious services.
    Commander SOUTHBY: Can the hon. Gentleman tell the House why there should be any difference in the régime of the Embassy which is now in Moscow from that of the Embassy which was in Russia under the Tsarist régime?
    Mr. MARJO RIBANKS: Are we to understand that it is not safe— —[Interruption.]
    Mr. THURTLE: Has the hon. Gentleman any evidence that the British residents in Soviet Russia are in acute need of any spiritual assistance?

    PROTOCOL.
    Captain PETER MACDONALDasked the Secretary of State for Foreign Affairs the names of the members of the joint committee of experts established for the purpose of examining the bases of settlement of the questions outlined in paragraph 1 (3) of the Anglo-Soviet Protocol of 3rd October, 1929?
    Mr. DALTON: I would refer the hon. and gallant Member to my reply to a practically identical question by the hon. Member for Chislehurst (Mr. Smithers) the day before yesterday.

    BRITISH CLAIMS AND COUNTERCLAIMS.
    Mr. SMITHERSasked the Secretary of State for Foreign Affairs, in view of the declared policy of the Government that a recognition of agreements regarding the payment of debts is of the essence of civilised relationships, and in view of the fact that His Majesty's Government obtained a definite commitment from the Soviet Government that negotiations shall take place immediately on the resumption of full diplomatic relations under the Protocol of 3rd October, 1929, if he will state if these conditions are still the policy of His Majesty's Government; what are the causes of the delay in the settlement of debts and claims; and will he stated what material progress, if any, has been made to that end?
    Mr. DALTON: The present position was described by my right hon. Friend on the 5th of May. There has been no departure from the procedure laid down in the Protocol of the 3rd of October. Moreover, in view of the complexity of the questions involved and the need for a careful approach to the question of debts, claims and counterclaims, His Majesty's Government cannot admit that there has been any avoidable delay in the negotiations.
    Mr. SMITHERS: Does not the hon. Gentleman think—[HON. MEMBERS: "Order!"] Is it not a fact that these questions of debts and claims are perfectly simple questions to decide and—
    Mr. SPEAKER: That is a matter of opinion.
    Mr. H. GIBSON: Was anything done in this matter between the years 1924 and 1929?
    Sir WILLIAM DAVISONasked the Secretary of State for Foreign Affairs whether his attention has been called to the claim made by the Russian Soviet Government on China in respect of debts due to the late Tsarist Government in connection with the Chinese Eastern Railway; and whether he has brought this matter to the attention of the Soviet
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    Ambassador in connection with his negotiations for the payment of debts due to British creditors, and with what result?
    Mr. DALTON: I have seen Press reports of the nature to which the hon. Member refers in the first part of the question. The reply to the second part of the question is in the negative.

    PROPAGANDA.
    Sir K. WOODasked the Secretary of State for Foreign Affairs whether he has given consideration to the orders recently passed by the executive committee of the Comintern to the Communist party of Great Britain and published recently in "Pravda," the official Soviet organ, to organise the workers for violent assaults on the authorities of Great Britain, and particularly that India and India's millions offered one of the most promising fields for breaking the power of Great Britain; and what action he is taking in the matter?
    Mr. MILLS: Before this question is answered, I wish to raise a point of Order regarding it. I presented a question to the Clerk at the Table which concerned Russian affairs and a newspaper was mentioned and that was deleted by Order of the Table. I had to amend that question four times before it was accepted, and it was understood that no future questions would be allowed which depended on statements in the newspapers of other countries.
    Mr. SPEAKER: I have not seen the question to which the hon. Member refers.
    Mr. MILLS: It concerned the Lena goldfields.
    Mr. DALTON: I have not been able to trace the alleged orders in the copies of the "Pravda" so far received, although I have seen references to them in certain organs of the London Press. The second part of the question does not, therefore, arise.
    Sir K. WOOD: Is the hon. Gentleman going to make some inquiries into this very considerable matter, as it affects the Treaty and the Obligations of a so-called friendly nation?
    Mr. THURTLE: Further to the point of Order which was raised just now. Does

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    it not appear that this question was founded on a paragraph in a newspaper, and has the right hon. Gentleman any right to put on the Paper a question for which he has no better authority than that?
    Mr. MILLS: I was ruled out.
    Mr. SPEAKER: In this instance, the paper is regarded as a Government publication.

    PRESS TELEGRAMS (CENSORSHIP).
    Sir W. DAVISONasked the Secretary of State for Foreign Affairs whether the British Press representative in Russia has the same facilities for transmitting news to this country as the Soviet Press representatives in London have for transmitting news to Russia, or whether there is any censorship of his communications?
    Mr. DALTON: As my right hon. Friend informed the right hon. Gentleman the Member for Wood Green (Mr. G. Locker-Lampson) on the 24th of February, Press telegrams in Soviet Russia are subject to official censorship. There is, of course, no such censorship in this country.
    Sir W. DAVISON: In view of the special privileges given to Russia in this country, does not the hon. Gentleman think that at any rate—
    Mr. SPEAKER: I have already ruled out questions as to what the hon. Gentleman thinks.

  EAST AFRICA (LEPROSY).
  Lieut.-Colonel FREMANTLEasked the Secretary of State for Foreign Affairs if his attention has been drawn to a recent report by the medical secretary of the British Empire Leprosy Relief Association on his visit to the Sudan to the effect that advanced and infectious cases of leprosy are prevalent, that the disease is spreading into British East African territories from the Belgian Congo, that at Yubo as many as 23 per cent. of contacts acquire the disease, and that further spread of the disease can only be arrested by active and enthusiastic development of technical education and administrative action with the concurrence of native opinion, which
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  is well disposed to it, by both missionary and Government agencies under skilled supervision; and what action he proposes to take in the matter?
  Mr. DALTON: No, Sir. I have not as yet seen a copy of the report to which the hon. and gallant Member refers. I will, however, draw the attention of the Government of the Sudan to it. I understand that Dr. Cochrane, secretary of the British Empire Leprosy Relief Association, recently visited the leper colonies at Wau, Tembura and Yambio, and discussed the position with the officials of the Sudan Government.
  Lieut.-Colonel FREMANTLE: How is it that the hon. Gentleman has no knowledge of this report? Has he communicated with the Colonial Office in the matter, and can he say whether the medical officer of the Colonial Office is on that association and has knowledge of the report?
  Mr. DALTON: I shall be glad to make further inquiries into the matter, which is obviously of great importance. The inquiries which I have made so far have been limited to the information at our disposal at the Foreign Office, and it is on that information that I based my reply, but I shall be very glad to follow up the investigation further and to ask the Colonial Office to see if they can give us any additional information.

  LEAGUE OF NATIONS COVENANT (AMENDMENTS).
  Sir A. CHAMBERLAINasked the Secretary of State for Foreign Affairs whether he can now state the attitude of the Government towards the amendments to the Covenant of the League of Nations proposed by the League Committee on the Covenant and the Paris Pact of Peace?
  Mr. DALTON: His Majesty's Government are generally in favour of the proposed amendments of the Covenant, and, after seeking the concurrence of His Majesty's Governments in the Dominions, will support the adoption of the amendments at the next meeting of the Assembly of the League of Nations. If they are accepted by the Assembly, an opportunity will be given for discussion in this House before ratification.
  Sir A. CHAMBERLAIN: The hon. Gentleman, in his opening sentence, said "are generally accepted." Does he mean by that that there are particular provisions or that there is a particular provision to which His Majesty's Government propose to take exception, or does he mean that they accept them subject to the discussion at Geneva?
  Mr. HERBERT GIBSON—
  HON. MEMBERS: Answer!
  Mr. GIBSON: Is it not the object of this amendment to close the gap? [interruption.]
  HON. MEMBERS: Answer!
  Mr. DALTON: If hon. Members opposite will extend the same courtesy to my hon. Friend behind me, I am perfectly prepared to answer the right hon. Gentleman—[HON. MEMBERS: "Get on!"]—but I am not prepared for my hon. Friend behind me to be howled down.
  Sir A. CHAMBERLAIN: On a point of Order. I asked a supplementary question, to which you, Mr. Speaker, called upon the hon. Gentleman to reply. Is he entitled to use the opportunity which you have given him to attack the conduct of Members here in a matter in which they are subject to the directions of the Chair alone?
  Mr. SPEAKER: I always try, if I can, to give the original questioner the privilege of putting the first supplementary question. I think it is very much more convenient and more acceptable to the House in general that he should receive a reply without interruption from another hon. Member.
  Mr. MACLEAN: On a point of Order. Has it not been the practice of hon. Members opposite already this afternoon to jump in and ask supplementary questions before the original questioner has had an opportunity?
  Mr. SPEAKER: I am not referring to any particular side of the House.
  Mr. MACLEAN: Further to that point of Order. The matter at present before the House that is being taken exception to is on this side of the House only.
  Mr. SPEAKER: That happens to be the case. I cannot help that.
  Mr. DALTON: Replying to the supplementary question of the right hon. Gentleman, the phrase which I used "generally in favour of," was based upon a statement made by my right hon. Friend the Foreign Secretary at the Council of the League of Nations at Geneva. I conceive that it would be improper for me to endeavour to enter into minutiœ of interpretation in view of the fact that my right hon. Friend will be back in the House next week—[An HON. MEMBER: "Thank Heaven!"] I refrain from expressing my view of the courtesy of the hon. Gentleman. I interpret the phrase used by my right hon. Friend to mean a somewhat less precise acceptance of the text of these amendments that if the word "generally" had been omitted. I understand, in other words, that my right hon. Friend is reserving liberty to consider amendments of detail which would not be in conflict with the general purpose of the amendments which he has approved on behalf of His Majesty's Government at the meeting of the Council at Geneva.
  Sir A. CHAMBERLAIN: I must express my thanks to the hon. Gentleman for the answer, and say that I shall be very glad to see the Secretary of State back. I will put a further question to him on the subject as soon as he returns.
  Mr. GIBSON: Is not the object of these amendments to close the gall in the Covenant with a view to preventing private war?
  Mr. DALTON: Yes, Sir; that is the object of these amendments, and it was with a view to securing amendments to the Covenant in this sense that my right hon. Friend the Foreign Secretary, and also the Prime Minister, spoke on this subject at the last Assembly of the League of Nations at Geneva. It is part of the policy of His Majesty's Government to complete the legal provisions, which at the present time exist, in order to make war an international crime.
  Mr. G. LOCKER-LAMPSONasked the Under-Secretary of State for Foreign Affairs when copies of the report of the committee on the suggested amendments of the Covenant will be available for Members?
  Mr. DALTON: As I stated on Monday last, I will represent to my right hon. Friend, on his return from Geneva, the

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  desire in certain quarters of the House that additional copies of the report of the committee should be made available to Members. In the meantime I have caused six printed copies of the report—all that are at present available—to be placed in the Library of the House.
  Major ELLIOT: Do we understand that no more reports will be available until after the return of the Secretary of State from Geneva?
  Mr. DALTON: No more reports can be made available by the Foreign Office until more reports are received by the Foreign Office and, in order to meet the convenience of hon. Members, I have taken steps to secure that these six copies, which are the total in the possession of the Foreign Office, and which are printed—since I understand that objection was taken to reading typewritten copies—are placed in the Library. Obviously, no further action can be taken until we receive more copies, or until my right hon. Friend decides in what form, if any, he will gratify the wishes expressed by hon. Members for the greater availability of the document. With regard to the question of the White Paper, there is, I think, no precedent or very few precedents—I think there are none—for the issue as a British White Paper of a League of Nations publication. I recall that when I sat on the other side of the House, and the right hon. Gentleman the ex-Foreign Secretary occupied a seat on this Bench, I asked him on one occasion, if not on more than one, to issue a White Paper containing a report of a League of Nations Committee—[HON. MEMBERS: "Circulate it!"] I am going to finish what I am saying—[Interruption.] I recall—and this is relevant to the answer—that the right hon. Gentleman on that occasion pointed out—[HON. MEMBERS "Circulate it!"]—that the question—
  An HON. MEMBER: We do not want reminiscences!
  Mr. ERNEST WINTERTON: On a point of Order. I wish to call your attention to the fact that the Under-Secretary of State was asked a question about the White Paper by the Front Bench opposite and that when he proceeds to answer it he is interrupted.
  Lieut.-Commander KENWORTHY: On that point of Order. It is quite impossible for us on these benches to hear, owing to the cries of "Circulate it!" from the other side. Is it in order for hon. Members opposite to prevent us from hearing Parliamentary answers?
  Mr. SPEAKER: The answer which was being given was a long one. I would remind hon. Members that there are 73 questions on the Paper and that we have reached only 13.
  Sir NICHOLAS GRATTAN-DOYLE: Would not all this trouble be obviated if the hon. Member dropped his superior tone?
  Mr. SPEAKER: If hon. Members who put questions will confine themselves to trying to get information and if Ministers will confine themselves merely to stating facts, we shall get on better.
  Major ELLIOT—
  Mr. SPEAKER: We cannot spend the whole afternoon on this one question.

  DIPLOMATIC SERVICE.
  Mr. MANDERasked the Secretary of State for Foreign Affairs if it is the policy of the Government to make appointments from the consular and commercial diplomatic services to the Diplomatic Service; and how many have been made in each of the last three years?
  Mr. DALTON: Officers of the consular and commercial diplomatic services are appointed from time to time to be heads of diplomatic missions when such appointments are considered to be in the public interest. One such appointment was made in 1928, one in 1929, and two have been made in the present year.
  Mr. MANDER: Were not these appointments all minor appointments, and is it proposed to make any major appointments?
  Mr. DALTON: These are all appointments as heads of diplomatic missions abroad; for example, the two appointments which have been made this year are those of Sir Andrew Ryan to be His Majesty's Minister at Jedda and of Mr. Dickson to be His Majesty's Minister at Bogota.
  Mr. MILLS: Will the Under-Secretary take into consideration the changed conditions now obtaining in the representation of this country in other countries, and that, in place of the old forms of social etiquette, a knowledge of international trade is required, and that for that reason consular knowledge is essential.

  MALTA.
  Mr. SHAKESPEAREasked the Secretary of State for Foreign Affairs whether he will lay papers with reference to recent correspondence between himself, the Vatican, and the Prime Minister of Malta?
  Mr. DALTON: Yes, Sir. Papers will be laid shortly, as I informed my hon. Friend the Member for Shoreditch (Mr. Thurtle) on Monday last.
  Mr. THURTLE: Can the hon. Gentleman say when these Papers will be laid?
  Mr. DALTON: I hope next week, but it will be necessary for my right hon. Friend to return before he can give his approval. [Interruption]. It is so obvious to hon. Members, that I must apologise for mentioning it. It will be necessary before publication, for my right hon. Friend to give his approval to the final revise of the White Paper which is now being prepared at the Foreign Office.

  LONDON NAVAL CONFERENCE.
  Sir GEORGE PENNYasked the Secretary of State for Foreign Affairs what was the daily cost to public funds of the meetings of the Naval Conference in London; and what this amounted to in the aggregate?
  Mr. DALTON: The daily cost of the Conference, which is charged to the Foreign Office Vote, is estimated at, approximately, £85, and the total charge on this Vote in respect of the Conference at about £7,500. I am informed that the cost of the Conference falling on other Votes amounts to £9,100, making an aggregate of £16,000, which is at the rate of £182 a day for the period of 91 days.
  Mr. T. WILLIAMS: Can the Under-Secretary give any estimate of the actual savings effected by the Conference?
  Mr. DALTON: The First Lord of the Admiralty will deal with that matter.

  BOARD OF ADMIRALTY.
  Sir G. PENNYasked the First Lord of the Admiralty whether the term Board of Admiralty when used in its official sense, invariably includes the Sea Lords?
  The FIRST LORD of the ADMIRALTY (Mr. A. V. Alexander): I would refer the hon. Member to His Majesty's Order in Council of the 5th November, 1929, which lays down the membership of the Board of Admiralty and also defines the responsibilities of its respective members. The term Board of Admiralty used in a collective sense means all the members mentioned in the Order in Council. In an administrative sense, it means either the First Lord, acting after consultation with the whole Board or the appropriate member or members of the Board, or the appropriate member or members of the Board acting with the expressed or implied approval of the First Lord. Questions of high policy affecting the Navy are thus only decided after consultation with and (normally) the concurrence of the Sea Lords, but circumstances may conceivably arise in which a decision has to be taken without their concurrence. The decision would still be officially that of the Board of Admiralty, but obviously it would not be so described in circumstances where it would be misleading to do so.
  Sir G. PENNY: Arising out of that answer, will the right hon. Gentleman dispel the doubt which exists in the minds of many hon. Members of this House, and say when the phrase was used in another place the other day to the effect that the Board of Admiralty agreed to the Naval Treaty, did it include the Sea Lords?
  Mr. ALEXANDER: I think an opportunity will arise for the position to be made quite plain in the Debate tomorrow, but I would like to say, in fairness to the Noble Lord who made the statement in another place, that it was really inadvertent, and, if you read the text, you will find that he said,

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  "I propose to read presently a statement made by the First Lord of the Admiralty,"
  but unfortunately he did not proceed to do so.
  Sir G. PENNY: May I have an answer to my question as to whether the Sea Lords did concur?
  Mr. ALEXANDER: I am very anxious not to make long answers. I have said that there will be an ample opportunity to-morrow to make the position quite plain.
  Lieut.-Commander KENWORTHY: On a point of Order, Mr. Speaker. May I ask whether it is in order for hon. Members opposite to quote speeches made in another place.
  Sir A. CHAMBERLAIN: It was a Minister who quoted it.
  Mr. SPEAKER: If it was a declaration of policy in another place by a member of the Government, reference can, of course, be made to it.

  ROYAL NAVY.

    SINGAPORE BASE.
    Captain EDENasked the First Lord of the Admiralty whether any decision has yet been come to as to the outcome of the Naval Conference to proceed with work on the naval base at Singapore as agreed by the Imperial Conference of 1926?
    Mr. ALEXANDER: I regret I am not yet in a position to add anything to my previous statements on this subject. The question is still being considered.
    Captain EDEN: Why this further delay? We were told, originally, that there would be a decision after the Conference, and, now that the Conference is over, cannot the right bon. Gentleman announce the decision?
    HON. MEMBERS: Speech!
    Mr. ALEXANDER: The hon. and gallant Member is difficult to satisfy. He is very anxious that the Dominions should be consulted, and it is therefore very important that we should examine the whole of the facts in connection with the Conference.

    SUBMARINE SALVAGE.
    Mr. DAYasked the First Lord of the Admiralty whether any recent practical experiments of submarine salvage have taken place; and whether the Admiralty are considering adopting the new protection which has recently been adopted by the United States Navy?
    Mr. ALEXANDER: Experimental work with submarine salvage fittings is proceeding. As I informed the House in November last (OFFICIAL REPORT, 13th November; column 1993), all personnel serving in submarines are being supplied with the Davis Submarine Escape Apparatus and arrangements are being made also to train them in its use.

    PERSONNEL.
    Mr. C. WILLIAMSasked the First Lord of the Admiralty what effect the Naval Conference will have on the personnel of the Navy; and what is the total reduction in personnel of officers and men that it will affect?
    Mr. ALEXANDER: The necessary examination of the various aspects of the matter has not yet reached a stage at which it is possible to say definitely what will be the ultimate reduction in naval personnel resulting from the Naval Conference. It is clear, however, that owing to the reduction of capital ships by five over a period of two years a substantial saving in officers and men may be anticipated. The reduction may amount in all to about 2,500 and can be effected without recourse to special measures.

    PAY AND RETIRED PAY (EX-MATES).
    Captain W. G. HALLasked the First Lord of the Admiralty whether lieutenant-commanders (ex-mate) promoted under the original mate scheme regulations are allowed to count any of their time served as ratings for retired pay purposes?
    Mr. ALEXANDER: The answer the negative.
    Captain HALLasked the First Lord of the Admiralty whether lieutenant-commanders (ex-mate) are able to obtain the maximum retired pay of their rank if they serve till the age for compulsory retirement; and, if so, what is the rate per annum?
    Mr. ALEXANDER: Lieutenant-commanders (ex-mate) promoted under present regulations are able to obtain the maximum retired pay of their rank if they serve till the age for compulsory retirement. That rate from the 1st July next, until further review in the light of the cost of living, is £418 10s. Officers promoted to mate under regulations in force during and before the War at a somewhat older age cannot always attain the maximum rate of retired pay, but those retired since the War have been granted retired pay of at least £383 per annum.
    Captain HALLasked the First Lord of the Admiralty whether, seeing that, under the revised pay regulations of 1925, lieutenants (ex-mates) draw less per annum than lieutenants (ex-cadets) who are junior to them, he will say what steps he proposes to take to remedy the matter?
    Mr. ALEXANDER: The new rates of pay introduced in 1925 were applied only to officers who entered the service or were selected as mates after the 5th October, 1925, including naval cadets who had not then left Dartmouth. The effect is that there are officers serving on the old rates of pay, while other officers who are of the same seniority but who were entered or selected later are receiving the new rates of pay. This was appreciated at the time and it is not proposed to make any change.
    Captain HALL: Can the right hon. Gentleman say when the Departmental inquiry which he spoke of some months ago is going to sit?
    Mr. ALEXANDER: If my hon. Friend means my own inquiry as to the conditions of promotion from the lower deck, the inquiries are proceeding.
    Lieut.-Commander KENWORTHY: Will the First Lord, in considering this matter, take into consideration the fact that these promoted ex-mates Are mostly matured men, who are married, and is this one of the subjects of his inquiry?
    Mr. ALEXANDER: I will certainly undertake to keep that matter under my observation, but I cannot state, with my present information, that the rates of retired pay for these men are inadequate.
    Mr. MACQUISTEN: Will the right hon. Gentleman refer to the parable of the labourers in the vineyard?

    HIS MAJESTY'S SHIP "BIRMINGHAM."
    Commander SOUTHBYasked the First Lord of the Admiralty whether His Majesty's ship "Birmingham" is now on the sale list; and, if so, on what date she was placed upon that list?
    Mr. ALEXANDER: The reply to the first part of the question is in the negative, and the second part does not therefore arise.

    DARTMOUTH COLLEGE.
    Mr. AYLESasked the First Lord of the Admiralty the number of boys in the Royal Naval College, Darmouth; the number of masters, attendants and other members of the staff; the cost per scholar for the upkeep of the college; the percentage of boys that enter the Navy; the percentage that go into professional or commercial life; and whether, amongst other things, a pack of beagles is kept for the boys to hunt with, and, if so, at what cost, if any, to the State?
    Mr. ALEXANDER: The present number of cadets at the Royal Naval College, Dartmouth, is 508. The total staff of the college, including naval officers, masters, instructors, attendants, labourers, etc., is 442. The average all-in cost per cadet for the current year is estimated at £311. Towards this cost, a contribution averaging £124 per cadet is paid by the parent or guardian. Ninety-two per cent. of the cadets who enter Dartmouth pass out and proceed to sea. The 8 per cent. who do not proceed afloat leave the naval service for various reasons—death, medical unfitness, withdrawals, etc. Nothing is known of their subsequent careers. The pack of beagles at the Royal Naval College, Dartmouth, is not maintained at public expense.

  KENYA.

    EDUCATION.
    Mr. CHARLES BUXTONasked the Under-Secretary of State for the Colonies in view of the fact that the estimates for 1929 passed by the Kenya Government allow for £52,658 to be spent on European education, as against £80,591 on African and Arab education, and £26,153 on

    1865
    Indian education, how much of the £52,658 is met from special taxation paid by the European community and how much from the general revenue?
    The UNDER-SECRETARY of STATE for the COLONIES (Dr. Drummond Shiels): The actual expenditure (exclusive of overhead expenditure) on European education in Kenya in 1929 was £49,360 recurrent and £1,082 non-recurrent, making a total of £50,442. Revenue to the amount of £14,016 was derived from school fees, the net expenditure, therefore, being £36,426. The amount paid by the European community in 1929 in the shape of taxation specially imposed for meeting the cost of education, viz., education tax and wines and spirits consumption duty, was £36,821, or £395 more than the net expenditure on European education in that year.

    NATIVE TAXATION.
    Mr. C. BUXTONasked the Under-Secretary of State for the Colonies whether the Governor of Kenya has yet furnished the figures which he was requested to supply in February last, showing that the proceeds of Native taxation in Kenya are spent on Native reserves, and setting forth for the past five years the amount of such direct Native taxation and the amount spent on direct Native services in the Native reserves, respectively; and, if so, whether such figures have been supplied or examined by the chief Native Commissioner?
    Dr. SHIELS: Figures relating to the year 1929 were telegraphed in February. A full explanatory despatch has now been received, and I will have a copy of the despatch placed in the Library of the House for the information of my hon. Friend and other Members who may be interested in the matter. Figures relating to the previous four years have not been worked out, and, as this would mean a large expenditure of time and labour, my Noble Friend does not wish to put the Government of Kenya to the trouble which would be involved.
    Mr. BUXTON: Can my hon. Friend say whether the despatch to which he has referred bears out the statement that the proceeds of native taxation are spent on the native reserves?
    Dr. SHIELS: I think it does, but I have no doubt that my hon. Friend will be able to confirm that from the despatch, which I expect will be in the Library this afternoon.

    LAND (SALE TO EUROPEANS).
    Major GRAHAM POLEasked the Under-Secretary of State for the Colonies what is the present position in regard to the decision of the East African Appeal Court that the Government of Kenya is not empowered to restrict the sale of residential plots to Europeans?
    Dr. SHIELS: The matter is still sub judice, as leave to appear to the Privy Council has been granted.

    TAX ARREARS.
    Sir ROBERT HAMILTONasked the Under-Secretary of State for the Colonies whether the £20,000 arrears of hut tax not collected in 1929 on account of famine in Kenya has been included in the budget of the Colony for collection in 1930?
    Dr. SHIELS: Provision was included in the Kenya Estimates for 1930, as passed, for arreas of native tax not collected in 1929 on account of famine. My Noble Friend has called for a full report on the matter, and, in the meantime, he has requested that no action shall be taken as to the collection of these arrears.

  WEST INDIES (SUGAR INDUSTRY).
  Sir K. WOODasked the Under-Secretary of State for the Colonies whether he can make any further statement in reference to the present position of the West Indian sugar industry; and whether the Government have any further proposals to render assistance to the industry?
  Dr. SHIELS: I can only refer the right hon. Member to the statement made by my Noble Friend in another place on the 7th May, to which I am not in a position to add.
  Sir K. WOOD: Cannot the hon. Gentleman reply to the last part of the question? Does not the Noble Lord authorise him to state whether the Government have any further proposals for rendering assistance?
  Dr. SHIELS: As far as I am aware, no other proposals are contemplated, but the Government, of course, are keeping in close touch with the situation.
  Sir K. WOOD: Does the last part of the hon. Gentleman's reply mean anything, or nothing?
  Dr. SHIELS: I do not think it is necessary for me to comment on that question.

  HONG KONG (MUI-TSAI SYSTEM).
  Mr. GRAHAM WHITEasked the Under-Secretary of State for the Colonies when he expects to receive a further Report upon the efforts of the Government of Hong Kong to bring about the total abolition of the mui-tsai system and the liberation of the mui-tsais; and whether such Report, when received, will be published?
  Dr. SHIELS: My Noble Friend has asked the Governor of Hong Kong to report after six months' experience of the working of the new Measures which came into operation on the 1st December. The question of publication will be considered when the Report has been received.

  NIGERIA.
  Mr. HORRABINasked the Under-Secretary of State for the Colonies if his attention has been drawn to the statement by the district officer of Owerri province, Nigeria, that after the recent disturbances six men were sentenced to three months' imprisonment, including three hours daily in the stocks in the market place; under what legal authority this punishment was inflicted; and whether he proposes to take any action in the matter?
  Dr. SHIELS: I have seen a statement to that effect in the Press, but, as the Commission of Inquiry cannot yet have reported or published the evidence given before it, I have no means of saying whether the statement in question is in fact correct. Inquiry will be made of the Governor.
  Miss WILKINSON: Does not the hon. Gentleman think that exposure under the blazing sun for three hours causes unnecessary suffering?
  Dr. SHIELS: I am sorry that I did not hear the hon. Lady's question.

  FIJI.
  Sir R. HAMILTONasked the Under-Secretary of State for the Colonies whether the Report has been received from the Governor of Fiji regarding the conference convened by him on the franchise question; and what the present position is as to the vacancies in the Legislature created by the resignation of the Indian members?
  Dr. SHIELS: The Report of the proceedings of the conference has been received. According to the latest information available, the Governor, having issued writs for the election of Indian members to the seats on the Legislative Council vacated by resignation, and no candidates having come forward, is awaiting an indication that candidates will be forthcoming before issuing further writs.

  PALESTINE.
  Colonel HOWARD-BURYasked the Under-Secretary of State for the Colonies what answer has been returned to the representations received from the French Government in Syria and from the Iraq Government, protesting against the death sentence being carried out on the Arabs sentenced to death; and what steps he has taken in consequence of these representations?
  Dr. SHIELS: I am not aware of any representations having been made on the subject by the French Government in Syria. The Prime Minister of Iraq wrote informally to the High Commissioner on the subject a few weeks ago. His views will receive due consideration. As regards the last part of the question, I do not think that I can add anything to the reply which I gave the hon. and gallant Member on the 16th April.
  Colonel HOWARD-BURY: Is the hon. Gentleman aware that both Governments are very much worried as to the effect that it will have on their countries if these sentences are carried out?
  Dr. SHIELS: As I have pointed out, this matter is in the discretion of the High Commissioner, and I have no

  1869
  doubt that he will take into consideration such facts as the hon. and gallant Member has mentioned.

  SOUTHERN RHODESIA.
  Mr. C. BUXTONasked the Under-Secretary of State for Dominion Affairs whether, in view of the further consideration which has been given, he can now state whether and, if so, in what manner the colony of Southern Rhodesia will be represented this year at the Colonial Office Conference, the Imperial Conference, or the Imperial Economic Conference?
  The UNDER-SECRETARY of STATE for DOMINION AFFAIRS (Mr. Lunn): Arrangements have now been made for Southern Rhodesia to be represented by an observer at the Colonial Office Conference this year. As regards the Imperial Conference, the matter is under discussion, but I am not in a position to make any statement yet.
  Mr. BUXTON: Can my hon. Friend say anything as to the Imperial Economic Conference?
  Mr. LUNN: The second part of my answer applies to that.

  TRADE DISPUTES BILL.
  Sir G. PENNYasked the Prime Minister whether any decision has yet been come to as to when the Trade Disputes Bill will be introduced?
  Mr. ALEXANDER: My right hon. Friend asks me to express, to the hon. Member and to the House, his regret that urgent business prevents him from attending here to-day. In reply to the hon. Member's question, I would refer him to the answer which the Prime Minister gave on Thursday last in reply to a question by the hon. Member for Colchester (Mr. O. Lewis).
  Sir G. PENNY: May I ask the right hon. Gentleman whether it has occurred to the Prime Minister or his Ministers that it may, perhaps, be inadvisable, after all, to proceed with this Measure?

  EMPIRE MARKETING BOARD (GRANTS).
  Sir N. GRATTAN-DOYLEasked the Under-Secretary of State for Dominion Affairs the amounts and purposes of the grants made by the Empire Marketing Board, out of the Empire Marketing Fund, to Government Departments?
  Mr. LUNN: The great majority of the grants for scientific research from the Empire Marketing Fund are made through Government Departments at home or overseas. I could not undertake, within the limits of a Parliamentary reply, to give details of the grants, numbering over 80, so administered, but full details of these grants will appear in the Board's Annual Report. This is to be published next month, and I will arrange for a copy to be sent to the hon. Member.
  Mr. SKELTON: Is the hon. Gentleman satisfied that these grants are usefully employed?
  Mr. LUNN: I am satisfied that they are very carefully considered by a Committee of the Empire Marketing Board, and they are confirmed by the Board; and I have no reason to doubt that they are used in a satisfactory manner.

  AVIATION.

    DEMONSTRATION FLIGHTS, BUENOS AIRES.
    Mr. MATTERSasked the Under-Secretary of State for Air whether he can arrange for one of the Schneider Cup seaplanes to be sent to Buenos Aires for demonstration flights in conection with the British Empire Manufactures Exhibition to be held in the Argentine capital next year?
    The UNDER-SECRETARY of STATE for AIR (Mr. Montague): I stated in my reply to the question asked by the right hon. Baronet the Member for Chelsea (Sir S. Hoare) on 2nd April, that it might be found possible to lend these seaplanes on the terms then stated for the purpose of taking part in the Schneider Trophy contest in 1931, and the Royal Aero Club have now been informed that they are available for that purpose. Until it is known whether they are wanted, it is not possible to make any arrangements for their being exhibited as suggested by hon. Friend.
    Mr. MATTERS: Will the hon. Gentleman take into consideration the fact that, as I understand it, an aircraft carrier is to be sent out there and that these proposed demonstration flights will give a considerable impetus to the sale of British aircraft in South America?
    Mr. MONTAGUE: I quite agree that that would be the effect, but, of course, it is a matter for the Admiralty.
    Captain CAZALET: Is it not a fact that this country never has sent an aeroplane of any kind to the Argentine while almost every other European country has done spectacular flights there?

    AIR MAILS (DELIVERY BY PARACHUTES).
    Mr. MANDERasked the Under-Secretary of State for Air whether any experiments are being carried out at the present time with various types of parachutes for the delivery of mails by aeroplane; and what success has so far been obtained?
    Mr. MONTAGUE: Trials with a special parachute for dropping air mails and with another parachute device which is a modification of that known as the standard supplies dropper are in progress, but I am not yet in a position to make a statement on the results of these trials. In addition, two methods of delivering air mails other than by means of parachutes or the landing of aircraft are being examined.

    LIGHT AEROPLANE CLUBS (SUBSIDY).
    Mr. EVERARDasked the Under-Secretary of State for Air which light aeroplane clubs to which no subsidy has been given in the past have applied for subsidy under the new regulations; and in which cases these application have been approved?
    Mr. MONTAGUE: The hitherto unsubsidised clubs from which applications have been received are Leicestershire, Northaanptonshire and Southern Aero Clubs and the Household Brigade Flying Club. The applications of the two first-named clubs have been approved.

  ROYAL AIR FORCE.

    DISPLAY.
    Mr. MANDERasked the Under-Secretary of State for Air whether the
    1872
    programme for the Royal Air Force display has now been settled; and whether it includes any incident, based on requirements under the Covenant of the League of Nations as now affected by the Kellogg Pact, similar to the one that took place last year?
    Mr. MONTAGUE: Yes, Sir, the programme has been settled and as I informed my hon. Friend the Member for Central Southwark (Mr. Day), on 3rd March last there will again be a set piece, illustrating air action undertaken by this country against certain pirates in full conformity with, though not arising out of, its obligations under the Covenant and the Kellogg Pact.

    ABBOT'S INCH AERODROME, GLASGOW.
    Mr. MACLEANasked the Under-Secretary of State for Air whether he can state the price that the Air Ministry are paying for the acquisition of Abbot's Inch aerodrome; whether any conditions are imposed by the sellers; and, if so, whether he can state the conditions of sale?
    Mr. MONTAGUE: No, Sir. The negotiations in connection with this transaction are not yet complete.
    Mr. MACLEANasked the Under-Secretary of State for Air whether he is aware that the Glasgow Corporation had earmarked the ground at Abbot's Inch for a municipal aerodrome, and that it is the only ground in the vicinity of Glasgow suitable for this purpose; whether he can state the reasons that have led the Air Ministry to select this place as an aerodrome for the Auxiliary Air Force; and whether he is prepared to reconsider the decision taken?
    Mr. MONTAGUE: As regards the first two parts of the question, I would refer my hon. Friend to the reply given to the hon. Member for Springburn (Mr. Hardie) on 19th February. As regards the last part, my Noble Friend, while he has every desire to help the corporation and has interested himself personally in the correspondence in which various suggestions for meeting the difficulty have been made by the Air Ministry, considers nevertheless that it is his duty to retain Abbot's Inch for the use of the Auxiliary Air Force.
    Mr. MACLEAN: Since the hon. Gentleman has informed the House, in reply to a previous question, that the sale is not yet completed, will he reconsider allowing the ground to remain in the possession of the Glasgow Corporation, as it is the only ground that can be used to develop civil aviation in Glasgow?
    Mr. MONTAGUE: I am not sure that I can accept the latter part of the question. The decision, I am afraid, is fairly definite.
    Mr. MACLEAN: Will the hon. Member be prepared to receive a deputation to put the situation before him?
    Mr. MONTAGUE: I am prepared to receive a deputation if there is any alternative suggestion.

    PLAIN CLOTHES.
    Colonel HOWARD-BURYasked the Under-Secretary of State for Air whether, in view of the discontent of members of the Air Force at not being allowed the privilege of wearing plain clothes, he will put them on the same basis as non-commissioned officers and men of the Army with regard to the privilege of wearing plain clothes?
    Mr. MONTAGUE: The present regulations in the Royal Air Force in regard to the wearing of plain clothes approximate to those of the Navy. In view, however, of further representations which have been made to him recently, my Noble Friend proposes shortly to bring the whole question again under review.
    Colonel HOWARD-BURY: Will the hon. Gentleman look into the matter from the point of view of bringing them on to an equality with the Army? They are a land force to all intents and purposes.
    Mr. MONTAGUE: The whole question conies under review during the month of June.
    Mr. THURTLE: Will the hon. Gentleman bear in mind that there is a very general desire in the Royal Air Force that this concession should be made?
    Mr. MONTAGUE: We have borne that in mind, and we have had representations on both sides on the matter.

    AIRSHIP R.101.
    Mr. WHITEasked the Under-Secretary of State for Air if he can state the total cost of upkeep, maintenance, and repairs of the R.101 since the date this airship was commissioned?
    Mr. MONTAGUE: The expenditure, including overhead charges, on airship R.101 from the date she left her shed for flight trials up to 31st March, 1930, was approximately £34,000, of which £21,000 was in respect of modifications for the purpose of improving the airship's performance.
    Sir G. PENNY: Does that include the flight given to Members of Parliament?

    SINGAPORE BASE (AIR DEFENCES).
    Mr. WHITEasked the Under-Secretary of State for Air if any estimates of the final cost of the construction of the Singapore Base submitted to Parliament have included any sums in respect of the estimated cost of the air defences of the base?
    Mr. MONTAGUE: I would refer the hon. Member to the provision made for the cost of the Singapore Base in Vote 4, Air Estimates, 1930, pages 89 and 92–93. The most recent summary of the total estimated cost of the base, including the Air Base, was given by the Chancellor of the Exchequer in answer to a question in the House on 17th December last.

  LONDON TRAFFIC BILL.
  Major NATHANasked the Minister of Transport if he can state the position as to the projected London Traffic Bill?
  The MINISTER of TRANSPORT (Mr. Herbert Morrison): I have as yet nothing to add to the replies which I have already given to the hon. and gallant Member and to other hon. Members on this subject.
  Major NATHAN: Has any progress been made in the matter?
  Mr. MORRISON: Yes, certainly. The steps I indicated are in active progress, and certainly progress is being made in the preparation of the scheme.

  INDIA (SITUATION).
  Sir A. CHAMBERLAIN(by Private Notice) asked the Secretary of State for India whether there is any further news as to the Indian situation?
  The SECRETARY of STATE for INDIA (Mr. Wedgwood Benn): In regard to the general situation, I have nothing material to add to what is already in the possession of the House. As regards the North-West Frontier, however, and particularly the tribal aspect of the situation, I can give the House the following information which has not, I think, appeared in the Press. In the Peshawar District, on the borders of the Mohmand country, after the air action taken on 11th May against the Haji of Turangzai, of which the House already knows, the inhabitants of certain villages in British territory which have been in communication with the Haji were disarmed by Frontier constabulary supported by troops. Several leaders have been arrested. The lashkar collected by the Haji's son was attacked by the Royal Air Force again on the 12th. In Northern Waziristan, on 11th May, a Waziri lashkar some 400 strong attacked the Tochi Scout Post at, Datta Khel. One scout sepoy was killed. The Royal Air Force attacked this lashkar, but desultory firing on the Post continued during the night of the 11th. On the 12th the lashkar was reported to be dispersing and, therefore, no further action took place. On the night of the 12th, however, Datta Khel Post was again attacked, and air action was again necessary on 13th May.

  QUESTIONS TO MINISTERS.
  Captain BOURNEasked the Prime Minister which Minister in this House replies to questions addressed to His Majesty's Paymaster-General?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence): The Financial Secretary to the Treasury replies to questions in this House on behalf of His Majesty's Paymaster-General.
  Mr. HANNON: May I ask you, Sir, on a point of Order, whether anything can
  1876
  be done in the House at Question Time to facilitate the process of questions on the Paper? There were to-day only 73 questions on the Paper, and it will be in your recollection that we have frequently disposed of a Paper of that size. Might I submit that you should give some advice to the House as to how we can get through a larger amount of business at Question Time? Might I also submit that it might be advisable for you to convey in some manner to Members on the Government Bench that they should not use the offensive manner that was used by one Minister to-day?
  Mr. McSHANE: By a curious coincidence, I was going to raise exactly the same point. I wanted to draw your attention to the fact that every Monday and Tuesday, on account of the extraordinary number of questions asked with regard to Russia, we seldom get beyond No. 55. Might I ask whether it would not be possible in some way to limit the number of questions with regard to Russia?
  Mr. SPEAKER: With regard to the first point of Order, as to how questions could be hastened up and whether I could give any advice, I am constantly giving the House advice on that point. I do my best to get through the questions on the Paper, but this is a matter which is in the hands of the House itself. There is only a limited time for a large number of questions, and, if hon. Members ask many supplementaries and expect answers, naturally the time is taken up before all the questions are reached. As regards the latter point of Order, I do not propose to be the judge of what particular matters hon. Members think of importance and upon which they wish information, and ask questions. All I can do is to see that the questions are in order that are put on the Paper.
  Mr. MACLEAN: Is it usual to take advantage of a point of Order to cast reflections upon Members of the Government?
  Mr. SPEAKER: That is another point of Order to which I have often had to give a reply. I always say I do not think any hon. Members ought to cast any reflections on anyone.

  KINGSBRIDGE AND SALCOMBE WATER BOARD BILL (CERTIFIED BILL).
  Reported, with Amendments; Report to lie upon the Table, and to be printed.
  Bill, as amended, to be considered To-morrow, pursuant to the Order of the House of 11th December.

MESSAGE FROM THE LORDS.
That they have agreed to,—
Amendments to—
Wakefield Corporation Bill [Lords], without Amendment.
Ministers' Remuneration,—That they give leave to the Viscount Hailsham to attend in order to his being examined as a witness before the Select Committee appointed by the Commons on Ministers' Remuneration, his Lordship consenting.

SELECTION (STANDING COMMITTEES).

  STANDING COMMITTEE B.
  Mr. Frederick Hall reported from the Committee of Selection; That they had discharged the following Members from Standing Committee B (added in respect of the Local Authorities (Enabling) Bill and the Playing Fields (Exemption from Rating) Bill: Captain Crookshank and Sandham; and had appointed in substitution: Mr. Macquisten and Mr. McShane.
  Report to lie upon the Table.

ORDERS OF THE DAY.
  SUPPLY.
  [7TH ALLOTTED DAY.]

  CLASS VI.
  Considered in Committee.
  [Mr. ROBERT YOUNG in the Chair.]

CIVIL ESTIMATES, 1930.

  BOARD OF TRADE.
  Motion made, and Question proposed,
  "That a sum, not exceeding £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."—[NOTE: £105,000 has been voted on account.]
  Sir HENRY BETTERTON: The presentation of these Estimates gives to the right hon. Gentleman the President of the Board of Trade one of the most important opportunities he has in the whole year to give a survey of trade. The function of the President of the Board of Trade is not only that he is the protector of British trade and commerce and the custodian of British trade interests, but he is the official mouthpiece of the Government to express the view of the Government when dealing with these all important matters. I take it that the right hon. Gentleman will be the very last person to pretend that the survey which I hope he will make in due course will be regarded as satisfactory. The condition of trade as we see it to-day is one, perhaps, which causes the greatest anxiety in every part of the country and in almost every trade. Speaking for myself, I have always regarded that one is doing a great disservice in this House or elsewhere if he gives the impression that British industry and trade is on a permanent and progressive decline. It is equally wrong to give the impression that the peak of our prosperity has necessarily been passed and that all we can look forward to is the black and gloomy prospect of ruined industry and permanent trade depression. I do not believe that that is true. I think that
  1894
  the remedy lies largely in our own hands. It may be true, and it often is true, that we are rather prone to advertise our woes with more success than we advertise our wares, but, none the less, I think it is doing the greatest disservice of all to refuse to face facts and to refuse to profit by experience, and, above all, to allow our trade and our trade policy to be inspired either by prejudice or pedantry.
  What is the position disclosed to-day? I only mention the very disquieting returns which appeared in the papers yesterday in order to give the right hon. Gentleman an opportunity—no doubt he will take it, anyhow—to make some comments upon them, but the fact remains that they are, and must be, after making all allowances and adjustments, of an extremely discouraging character. British exports were down by £13,000,000 or 22 per cent. as compared with the previous 12 months, and imports had fallen by £20,000,000 or 19.4 per cent. We find that in one of the most important basic industries of all, namely, the steel industry, our exports fell by something like £1,000,000. In addition to that, we have the unemployment returns which appeared in the papers this morning. The figures show that there is at present a larger number of people on the live register than there has been at any time during the last eight years. They amount to the appalling figure of over 1,700,000. I have estimated—it is necessarily a rough estimate—that the cost on the Insurance Fund of the maintenance of these 1,700,000 must amount to something like £84,000,000 or £85,000,000 a year, which is very nearly as much as the whole annual expenditure of the country at the time when I first began to take some interest in politics. If you look further into this report, you will find that there are something like 580,000 more unemployed than at this time last year and that they have increased since the beginning of the year by 233,000. These figures are staggering in their magnitude. The most sinister feature of the returns which appeared this morning is that contained in the first paragraph published in the "Times." It reads thus:
  "It is estimated that on 28th April, 1930, there were approximately 9,798,000 insured persons in employment in Great Britain. This was 89,500 fewer than a month before, and 448,300 fewer than a year before."

  1895
  4.0 p.m.
  You have in those two processes, side by side, an immense increase in the number of unemployed and a progressive decrease of those actually at work. In addition to that, there is the deficit on the Fund itself. I forget whether the present Government have had already to bring in two Bills in order to increase the Fund, but it is obvious that before this Session closes at the end of July there will have to be a further Bill, because the amount of overdraft on the Fund now amounts to something over £41,000,000. At the present rate of progress of these figures—again, I am only using such knowledge as I have received from the Ministry of Labour—I estimate that the deficit is piling up at a rate of something not very far short of £500,000 a year. From the financial point of view, therefore, this situation is one of extreme disquiet. Apart from all that, we have just had presented to us a Budget, which whatever its demerits or merits, undoubtedly imposes new and very heavy taxation upon industry. That was accompanied by a financial statement by the Chancellor of the Exchequer which not only threatens one of the few prosperous industries which we have got with grave injury as soon as he is in a position to inflict it, but it also condemns, and will lead to the extinction of, one of the important industries of the country. In addition to that, you have—it would not be in order for me to elaborate it, and I only mention it in passing—at the same time legislation now going through Parliament which, whatever else it does, is going to increase the cost of production of one of the great basic industries in the country, namely, the steel industry. The other day a Member of the Government in the House of Lords was quite clear on this point, and made no bones at all about it. Lord Russell, speaking in another place, said:
  "It may well be that the iron and steel industries will have to pay more for their coal."
  So far as the iron and steel industries are concerned, no doubt they will have to pay a little more for their coal, and, therefore, their steel will be a little dearer. That, taken in conjunction with what I have already pointed out, appears to me, at any rate, to present a very
  1896
  gloomy prospect to one of our principal basic industries, and I mention it in order that the right hon. Gentleman will give us, as I sincerely hope he will, a little encouragement. Looking at the Ministry of Labour Gazette for the last month, I find that of the 100 trades which are specified in the Ministry of Labour Gazette, with three trifling exceptions, there is not a single trade in the country where unemployment has not gone up, and, in many cases, it has gone up very seriously since this time last year. Apart from the textile trades, where there are trade disputes, or, rather, in addition to them, you find, as you always find in every depression, that the first industries to suffer most are the heavy industries, and that is exactly what you find in the figures which are to be seen in the Ministry of Labour Gazette.
  I wish, however, to call the attention of the Committee to an industry which, I firmly believe, is threatened with extinction by the action of the Government. I want to remind the Committee of the history of that industry, in which I am interested in the sense that I know it well. I have lived amongst the people who carry it on, and, therefore, I claim to have some knowledge to enable me to speak about it. They are satisfied—and I will give the reasons for their view—that they are, for political reasons, being sacrificed to the prejudice of the Chancellor of the Exchequer. They believe, also, that they have not had—and I will give their reasons—the assistance of the right hon. Gentleman the President of the Board of Trade to which they were entitled. They think, too, that in this respect there has been an unfair discrimination against them in favour of industries which are much more powerful both in numbers and political influence.
  I will state the facts as clearly and as briefly as I can. [HON. MEMBERS: "What is the industry?"] Lace. This industry is an old industry. It has been in existence for something like 100 years. It is very closely identified with Nottingham; it is in Nottingham and in that district that it had its origin, and where it has been carried on, and, thanks to the skill of its operatives, and thanks to the enterprise of its manufacturers, it has obtained a very wide reputation which has benefitted not only Nottingham but the surrounding districts. This industry, like

  1897
  other industries, has had its ups and downs. It has had its good times and its bad, but, up to the end of the War, it had held its own, and looked forward with confidence to the revival which it hoped would take place after the War. This was not one of those industries which, by reason of the War, made large profits which enabled it to create large resources which it could use after the War, because, with the possible exception of mosquito nets, there was not a single branch of the industry which did not suffer most severely by the War.
  After the War and after the short boom which took place, the state of the industry became one of the most profound depression, and I hope that the Committee will believe me when I say that no one who did not constantly visit the centre of that industry, or live there, has any idea of the state of depression and gloom in which that industry was placed. It is sufficient to say that at that time something like a quarter of the male workers in it were out of work, and a very large proportion of women, too. When I was in the Ministry of Labour, I heard over and over again appeals made, always in moving and touching language, from those who represented depressed areas. I heard them from hon. Members who come from South Wales, Scotland and Durham, and I would ask them, if I might, to spare one thought of sympathy for an industry, small in comparison with theirs, with little political influence, which has suffered the depression which they suffered. The recollection of those years will never fade, and now they see a chance of once again being plunged into depression. Hon. Members from Lancashire know the demoralising result of unemployment in the textile industries. That is exactly what we fear for those engaged in the lace industry.
  In these circumstances, in 1923, my right hon. Friend the then President of the Board of Trade set up, under the Safeguarding procedure, a committee to inquire into the state of this industry. The chairman was Sir George Barnes. There was a member of the Labour party, highly respected by all of them, Mr. Arthur Pugh, and a lady, Dame Gwynne-Vaughan. They went very fully into the whole of the labour conditions. They took an immense amount of evidence. Amongst other evidence they heard that
  1898
  of the Parliamentary Committee of the Co-operative Congress. Shortly afterwards, the Government, as we know, fell, but before we went out, in 1923 the Committee issued an interim report. Then when we came back in 1924 the Committee was reconstituted, and issued a final report.
  Upon the findings in that report, the lace industry bases its case to-day. The report, which, of course, is available for any hon. Member who likes to see it, says that this great depression in the lace industry was due to a variety of causes. One was, of course, the extreme changes of fashion, but there were other causes, such as the great increase in foreign tariffs, and the Fordney Tariff which had just come into operation in the United States. It was due also to the prohibition or control of certain imports by some foreign countries, and it was due, most of all, to the much lower wage standards which prevailed in other countries. It is a fact to-day that whereas our lace workers are protected and, I think, rightly protected, by a trade board, the cost of production in France is not more than about 60 per cent. of what it is in this country. The report contains this very significant statement:
  "Unemployment in the lace industry is due to the combination of a number of causes."
  These are the causes to which I have already referred.
  "Any one of these would be serious alone. The cumulative effect appears to be producing a psychological reaction in the Nottingham lace industry which renders the sense of depression still more acute, and the consequences may be nothing short of disastrous. We feel that the industry is drifting into a position from which recovery will be impossible."
  They then proceed to make a recommendation which was accepted by the Government of that day—a duty of 33⅓ per cent. on lace and on certain kinds of embroidery, but it is significant that in their recommendation they say that the duty of 331 per cent. ad valorem, should be imposed for at least five years. It does not say "for five years," but that five years is to be the minimum, with the obvious implication that if it were successful in helping the industry, then that duty should be retained. From that day to this, while there has never been anything like a boom in this industry, there has been steady and persistent improvement

  1899
  both in employment and in the industry itself. With regard to the numbers—and I think I have seen this point challenged both in the Press and by some hon. Members inside and outside the House, though there can be no doubt about this, because the facts are perfectly clear and on record—those actually engaged in lace-making, that is to say, at the machines, in the June quarter of 1925 were 1,217, and those engaged in the March quarter of last year were 1,628. That is an increase of 33 per cent. Those are the numbers of those actually engaged at the machines. There are, of course, in addition, a very considerable number of persons who are engaged in the necessary and ancillary trades of lace-making, such as finishing, boxing, preparing goods for sale and so forth, and with regard to those the position is this: that, whereas in 1925 they were working, a large number of them, on short time, they are now working, with very few exceptions, on full time.
  Mr. WALLHEAD: I would like to ask if the figures the hon. Gentleman is now giving, refer to Nottingham itself or to the whole of the lace trade, because this trade has extended outside of Nottingham?
  Sir H. BETTERTON: The whole of the trade. The sales of lace made on leavers machines, which is the industry on which this inquiry rests and on which the report is based, show that, as a result of the action which we took, the sales in the home market during the first year increased 23 per cent.; in the second year 90 per cent.; in the third year 125 per cent.; and in the fourth year 162 per cent. These figures were put to the right hon. Gentleman yesterday, and he said that he did not accept them as presenting a true picture of the result, so far as sales in the home market go, of Safeguarding, and he said that the figures were incomplete because they did not include some important branches of the industry. I have taken the opportunity to find out, so far as I can, and to supplement the information which I have given, and I have in my hand a letter from one of the greatest firms in the lace producing industry in which they tell me that the increase on the basis of lace made, taking 100 as the unit, in 1923, had gone up from 100 in that year to 278 for
  1900
  last year. With regard to another branch of the trade, the curtain trade, I have obtained information from one of the largest makers of curtains, and he says that his average increased turnover since the duty was put on, is not less than 27 per cent.
  One or two astonishing statements have been made with regard to the figures of imports and re-exports. An attempt has been made to show that one result of this duty has been an enormous diminution on the re-exports passing through this country. To anyone who will look at the figures the explanation is clear. Whereas before the duty was put on those goods came into this country on a through bill of lading and were entered in the statistics of the Board of Trade, they now go through in bond and are not entered in the statistics of the Board of Trade. Therefore, you are comparing, so far as re-exports are concened, two different things. Another statement has been made that the number of retained imports are either, substantially the same as before the duty was put on, or that they are so little different as not to justify any argument based on those figures. The answer again is clear. Before this duty was put on a large amount of embroidery came into the country classified as lace. Afterwards it became necessary to put lace and embroidery in their proper classification, and the figures for embroidery show that the retained imports fell from £2,037,000 in 1924 to £570,000 in 1929. It is clear the moment you have completed a fair classification between these two classes of goods that the criticism with regard to these retained imports entirely falls to the ground. There is one other point which I want to make. To those engaged in the lace trade it is quite clear, beyond any doubt whatever, that this duty has saved the trade and that the taking of it off will ruin it.
  Mr. HOLFORD KNIGHT: Do we understand from the hon. Member that the number of workers concerned was 1,600?
  Sir H. BETTERTON: No, the number of persons actually engaged on the leavers machines.
  Mr. KNIGHT: Can you say what is the number of workers concerned in this industry?
  Sir H. BETTERTON: About 1,600, but that is a very misleading figure, because it is a figure taken from the Ministry of Labour. There are many industries which are analogous and closely connected with lace-making appearing under heavy textile workers in the Ministry of Labour figures. Therefore, those figures under lace in the Ministry of Labour returns do not cover all who are concerned directly or indirectly with lace-making; for instance, there is dyeing.
  A short time ago there was a proposal by the United States Government to increase very largely the duties on imported lace. The proposal was to put up on some kinds of lace a duty of something like from 250 per cent. to 300 per cent. Such a duty would have completed the destruction of this industry. Over and over again we asked the right hon. Gentleman whether he had made a protest to the Government of the United States, and whether, on behalf of the lace workers, he would do his utmost to see that the duty was not imposed. The answer was that no protest had been made and that things must take their course. What surprises those engaged in the lace industry is that, whereas protests have been made under similar circumstances by the Government in respect of other industries which are more powerful and have more influence behind them, when it comes to lace, this industry is left to take its chance. I will give an illustration of what I mean. The other day, on the 9th April, a question was put by my hon. Friend the Member for Farnham (Mr. A. M. Samuel), who asked the Secretary of State for Foreign Affairs if he had requested the Brazilian Government to reconsider their import duties and bunker duties upon coal to Rio de Janeiro amounting to a total of 10s. 10d. per ton, and the Secretary for Foreign Affairs replied:
  "Yes, Sir. Viscount D'Abernon discussed these duties with the President of Brazil in September last. His Majesty's representative in Rio de Janeiro subsequently again drew the attention of the President and the competent Brazilian authorities to the desirability of reconsidering the duties. I understand that the matter is receiving the attention of the Brazilian Government."—[OFFICIAL REPORT, 9th April, 1930; col. 2136, Vol. 237.]
  1902
  Not long ago a question was put to the Secretary of the Department for Overseas Trade on the same point, and he said:
  "Representations have frequently been made to the Brazilian Government in regard to the effect of the Brazilian tariff on British trade."—[OFFICIAL, REPORT, 7th April, 1930, col. 1742, Vol. 237.]
  Many lace makers live in neighbourhoods in which there are many of their friends engaged in the coal industry and they ask why if representations are made on behalf of a large and powerful industry like coal—which incidentally has already received one of the largest measures of protection ever given—the right hon. Gentleman should profess himself unable even to protest to the Government of the United States in respect of a matter which means death to the industry in which they are concerned? They are wondering if this is another of the effects of the Naval Conference. But, whatever the result, I am entitled to ask why no protest was made. This story does not end there, because France, which would have been equally affected, protested with a threat of retaliation, and informed America, clearly and firmly, that, if they put duties on French lace, France would retaliate by putting duties on something America sent to France. That was successful, and the duties were never put on. Now, say the lace people, "we are indebted for this, not to any action by our own President of the Board of Trade, but we have been saved by the action of the French Government."
  The other day a writ was moved in this House with respect to the Central Nottingham vacancy. Last Friday, there was a large deputation of lace workers from Nottingham, and yesterday the right hon. Gentleman announced, after previously refusing to do so, that he was now prepared to receive a deputation from them. If he receives this deputation, as he has promised to do, they are entitled to ask and he ought to say that, before these duties are allowed to lapse, there shall be an inquiry which will make quite clear the truth of his statement and will put once again into clear perspective the position of the industry. Having first refused and then agreed to receive this deputation, I do not see how he can do other than grant this inquiry. If he does, they will at once say, "We know your action has been prompted, not

  1903
  by a, desire to do justice to a harassed and anxious trade, but in order to avoid an electoral disaster."
  The only other point to which I desire to call the attention of the Committee is the most remarkable change in the attitude of certain of the great trade unions of this country. The Transport and General Workers Union is one of the most powerful in the country, and has a combined membership of something like 400,000. It has representatives in this House, men who are highly respected and who exercise a very great influence in the party opposite. There is the hon. Member for Rotherhithe (Mr. B. Smith) who is Treasurer of the Household, who is described as the organiser of this powerful union. There is the hon. Member for Whitechapel (Mr. Gosling), whose absence and the cause of it we so deeply deplore. There is the hon. Member for Rochdale (Mr. Kelly), whose absence we also deplore. Then there is the hon. Member who is one of the most experienced Labour leaders of the country, the hon. Member for North Salford (Mr. Tillett), and who has held high and important positions in the Trade Union Congress. These hon. Members have been brought face to face with the problem of unemployment; they know the question and what it means as well as anyone in this House. I hold a leaflet in my hand which reads:
  "Transport and General Workers Union, Trinity Buildings, Trinity Square, Nottingham.
  Lace makers and auxiliary workers section; men and women.
  Do you want to protect your wages and working conditions? Yes. Then join our union at once. Do it now. By joining our union and supporting safeguarding is the wily way you can hope to protect your wages and working conditions. Contributions, men 6½. per week; women, 3½. per week."
  Lieut. - Colonel WATTS - MORGAN: Who is that signed by?
  Sir H. BETTERTON: It is signed by "organisers, W. P. Boyle and J. W. Woodman."
  Lieut.-Colonel WATTS-MORGAN: thought we were going to get the names the hon. Member mentioned.
  Sir H. BETTERTON: If there is any doubt about it I will put it to hon. Gentlemen who represent that union in
  1904
  this House: are they prepared to go down to Nottingham now and say, "By joining our union and supporting safeguarding is the only way you can hope to protect your wages." If they think so it is their business to go to Nottingham and say so. If they do not, then, with all respect, they are taking money by false pretences. They cannot take 6½. per week from a man and 3½d. per week from a woman while the election is on and repudiate the whole policy the moment the election is over. The position is perfectly clear, either they must support it or repudiate it. If they wish to repudiate it, they must not wait until after the election but repudiate it now. I can promise them the reception they will get if they repudiate the statement that safeguarding is the only means of protecting wages and working conditions. One final word. I am bound to say that the greatest service which the President of the Board of Trade has rendered industry and which may help to restore confidence in the business community and in industry as a whole has been his failure in his tariff truce at Geneva. We can only congratulate ourselves that he was not free to fetter British industry with these burdens for a fixed period of years.
  Brigadier-General Sir HENRY CROFT: I do not propose to detain the Committee for more than a short time on the subject which has been opened in such an interesting way by the hon. Member for Rushcliffe (Sir H. Betterton). In the course of the Budget Debates I asked the Chancellor of the Exchequer a few questions which have not been answered. Unemployment to-day has reached a tragic figure which hon. Members in all parts deplore. There is even a change of heart in the Liberal party on this subject, because a day or two ago we were told that they are prepared to consider arrangements with regard to agriculture even if they included protection. We have moved along so far that we can now quite frankly ask ourselves, how and in what manner can we possibly stop this appalling position. The questions I put to the Chancellor of the Exchequer in the course of the Budget Debate were these. In his decision to allow the Safeguarding Duties to lapse could he give any reasons to the House why he was taking that course? I asked, was it be-

  1905
  cause employment in the safeguarding industries had not increased? Was it because production had not, increased Was it because prices had gone up in any single industry except one, and that a very insignificant industry? Was it due to the fact that exports in safeguarded industries had gone down? Was it because we had not restricted imports, and was it because there had been any adverse results on any other industry? Unless it can be proved that these duties have had a detrimental effect upon the trades concerned I submit that with the present unemployment figures we have no right to gamble with the lives of those who are interested in the safeguarded trades.
  The hon. Member for Rushcliffe referred to the appalling state of trade but there will not be time for us to go into the condition of all industries concerned. I want to remind the Committee that the lace industry, which I suppose we must consider at this moment, is probably the one industry in the whole land which requires a continued form of safeguarding if it is to exist. Every figure given by Professor Ramsay Muir and others in their interesting letters to the Press and in their speeches show conclusively that the lace industry, above all others, ought to receive the help of the State through legislation. I should like to endorse what the hon. Member for Rushcliffe has said with regard to the Committee. It was not a Tory ramp. The Committee was composed of distinguished gentlemen. One was connected with the Civil Service, and his name is above criticism. Mr. Pugh was also a member. He is, I suppose, one of the leading figures in the trade union world. He has held the highest offices and is a respected official in the Confederation of iron and steel industries. It also contained Dame Helen Gwynne-Vaughan who is a, social worker of great knowledge. That Committee came to the decision that to save the industry it must be safeguarded; and hon. Members opposite will remember that this is the report not of a, Tory Committee but of a committee against whom the-2e can be no kind of criticism.
  I am very surprised to find strong free traders saying that this duty has failed. They tell us that it has failed because we are not selling so much lace abroad. Anybody who has made even the most
  1906
  perfunctory study of this industry will realise that the purchases of fancy lace are down throughout the world. It is idle to argue that point in this Committee because it is a fact which is generally well known. It would be indecorous to go into the reasons for the change of fashion, though perhaps we could consult some of the lady Members of the House in confidence, and they might be able to explain what we cannot discuss on the Floor of the House. The fact is that there has been an enormous decline in the world purchases of lace, and especially is this true of our largest customers, the United States of America. Therefore, whatever improvement took place in Great Britain we were bound to lose in our export trade of fancy lace. This has been going on for some years. Formerly it was a really great industry employing about 42,000 persons. To-day I suppose we should call it a medium trade. The numbers employed have been going down by an average of 1,000 a year, and when the Committee made its report the numbers had decreased to something over 15,000.
  The result of the imposition of the Lace Duty was that the rot and decline was immediately checked, and from the day it was imposed we found a change in the whole industry. Machines which had been out of work for years were started up again; there was increased production in every direction. The production for home sales showed a really astounding increase, even during the years of depression, and what is far more important from the point of view of the lace worker, we have the overwhelming evidence of the total sales for home and overseas consumption. If you take home and export sales combined, with the datum line at 100, for the year ending 30th June, 1925, you find that the figure of production for total sales, home and export, had gone up in 1929 to 163.5 per cent., or an increase of 63.5 per cent. in production—not a, bad result. Hon. Gentlemen of the Liberal party alone tell us that in this connection the Duties have failed.
  I want now to refer to the question of imports. Our opponents say that the Duty has failed because there have been imports still coming in, and they point to a small increase in fancy lace imports. I think the figure has been given us

  1907
  £9,000. It is true, as was said this afternoon from the Front Bench, that before the Duty was imposed these commodities were all mixed up very much together, and that the figures are therefore—not intentionally, of course—quite misleading. We find that a great quantity of lace was coming in as embroidery. Immediately the Duties were imposed that embroidery, which was previously included in the total, came down by one-half, and the imports of embroidery are now reduced by £1,464,000. If you take embroidery and lace together the imports have decreased by £1,452,000.
  There is another point. It is a small one, but one must answer it because statements have appeared from the pundits of the Liberal party from time to time, and people who do not study the subject may think that they are correct. A very considerable amount of imports of lace of this description came in by post prior to the imposition of the duty. If hon. Gentlemen will take the trouble to read the Report of the Lace Committee they will find, by averaging out the figures, that something like £100,000 worth of this particular form of lace came in in that way. It is, therefore, not true to say that the imports have not been restricted. If it is really a criticism of the Lace Duties that they have not succeeded in keeping out imports, surely the answer is not to repeal the duties but to increase them. [Interruption.] The fact remains that that is the principle which is accepted by every other country in the world. Why should we not sometimes take counsel with the Labour parties in every other country in the Empire, all of whom would adopt that plan if they had the same trouble with which to deal?
  Then there are the arguments of the opponents of the Lace Duty concerning exports. If there is a decline in exports and it is due to the duty, I challenge anyone to deny that it can be only because it is assumed that the price of the article has gone up. I am happy to be able to inform the Committee that that is not so, and that therefore that cannot be an argument. When opponents say that exports have declined, I ask, have they ever studied the figures of exports of the other countries of the world? Our really serious competitor is France. Have her exports declined? Four-fifths of the total
  1908
  decline in the purchases of the United States are lace goods from France. That, I suggest, is a complete answer to the point. If exports are affected by Safeguarding Duties, how is it that in the other lines of exports—silk, lace and artificial silk lace—you find such astounding rises? In 1926 we exported £66,000 worth of silk lace, but in 1929 the figure had risen to £225,000. For artificial silk lace the figure in 1926 was £181,000, and for 1929 it was £517,000. That is really a remarkable increase. Let me say one word with regard to employment, as to which a certain amount of capital has been made.
  Mr. GEORGE OLIVER: Will the hon. and gallant Gentleman say something about retained imports?
  Sir H. CROFT: They do not matter in this connection. I am more concerned with the employment of my fellow-countrymen. I would rather see 10 men manufacturing goods than one man handling them. Those who try to make capital out of the employment figures do not mention the enormous decline of employment until the duty was imposed. Neither do they say that in the case of every other safeguarded industry employment has gone up. What would have happened to employment in the Nottingham district if the duties had not been imposed, seeing how previously the numbers were being reduced? Are hon. Gentlemen aware that short hours at the time the report was issued were 5½ per week throughout the industry, and that they have been reduced to 1½ hours, at any rate until the time of the Chancellor of the Exchequer's threat regarding the duty? A simple arithmetical calculation will show that this means the equivalent of the employment of an additional 1,300 workers in the industry. There has been no continuous record of the average earnings in this industry, but the Minister of Labour has held two inquiries. One was in October, 1924, and the second in October, 1928. It was discovered that the position had very much improved at the latter date. Of the 26 clothing and textile industries into which inquiry was made it was discovered that employment in this industry had improved most. It is very interesting also to find that the earning powers of people in this industry have gone up by over 10 per cent.
  Mr. OLIVER: I put a question to the Minister of Labour on that point less than two months ago. I asked whether wages had increased in the lace industry, and his reply was that there was no record of any increase whatever.
  Sir H. CROFT: I am very glad to hear that the hon. Gentleman has been taking an interest in the question. It is about time that the whole of his party did so. I also asked a question of the President of the Board of Trade, and he said that short-time, which was 5½ hours in 1925, had come down to 1½ hours last year.
  The PRESIDENT of the BOARD of TRADE (Mr. William Graham): I did not say that.
  Sir H. CROFT: I shall be very glad to give the right hon. Gentleman the information that was given to me. It may have come from the Minister of Labour. Certainly it was given by one of the right hon. Gentleman's colleagues on the Front Bench, in answer to a question in this House. I will supply the right hon. Gentleman with the facts tomorrow. It was found that the increase of earnings was 10.4 per cent. With the exception of the glove trade, which is also safeguarded, and the millinery industry, which is partly safeguarded, that increase is the greatest in all the 26 textile and clothing industries into which inquiry was held. That is a remarkable fact. We heard yesterday of the decision of the President of the Board of Trade to receive a deputation from the lace trade. I may be very unwise when I say that I am delighted. Some of my political friends may be distressed to see this repentance on the part of the Government. But the livelihood of these people is at stake, and I rejoice at the right hon. Gentleman's decision. Even if he is going to win the election at Nottingham I congratulate him on the courage of the step he has taken.
  After all, this is much bigger than a mere political point. It concerns the employment of a very large number of persons in an industry, 14 trade unions of which have appealed to the Government to delay the repeal of the Duties. When they first made their appeal it was in this simple form—Before you take the Duties off, will you not submit our case once more to an inquiry in order to decide whether there have been any ill-
  1910
  effects from the Duty? At that time the request was absolutely refused. I congratulate the right hon. Gentleman on considering the employment of the people first. I beg him to take immediate action so that Nottingham shall not be reduced to despair, and so that this industry may be given a chance to live against the sweated conditions with which it is still having to compete.
  Mr. HARRIS: When I heard that the official Opposition had selected one of the days of Supply for discussion of the Board of Trade Vote, I assumed that they were going to have a complete survey of our foreign trade. Apparently hon. Members of the Conservative party have very little vision beyond one small industry, the lace industry, and so the whole of the discussion this afternoon is to be concentrated on that one small item of the great foreign trade of this country. I took part in the discussions in the last Parliament on Safeguarding, and I am not one of those who ever suggested that if an industry is protected with a high duty it does not get some advantages. But I do not want to be drawn into a discussion of lace. My main criticism of the case that has been presented is that it has been exaggerated and over-stated. Anyone who knows or has studied the lace industry in all its phases knows that it is a very much larger industry than those sections of it which get the advantage of the Safeguarding Duty. Probably the biggest items in the industry are the lace curtain trade and the net trade—industries that are quite capable of standing on their own feet and have never really asked for Protection. They had a very big output before the Duty was imposed, and are very little affected by the Duty. They are carrying on their trade now very much as they did before the Duties were imposed.
  5.0 p.m.
  There is the question of the change of fashion. I do not know whether the hon. Member for the Rushcliffe Division (Sir H. Betterton) ever goes to a dance. Probably he does not, and is too concentrated on his duties here. If he has been to dances he will have noticed the change in fashion. Before 1924 lace was very little used in the form of dresses. Now what are technically known in the trade as all-overs have come into fashion. That means a very much larger use of lace. Apart from the Safeguarding

  1911
  Duties, there has been a certain amount of revival in the net trade and in the general use of lace. Dame Fashion cannot be controlled by a Protectionist Chancellor of the Exchequer. Dame Fashion is a very wayward person and whatever duties may be imposed they cannot larely affect the demand for articles where fashion is concerned. The hon. and gallant Member for Bournemouth (Sir H. Croft) laboured very hard to explain away the decrease in the exports. He went to some trouble to show that that was due to fashion, but, with great respect, I would suggest to him that during the last three or four years there has been a revival in the demand for lace and that, in the meantime, the manufacturers have largely concentrated on the home trade and have been inclined therefore to ignore the export trade. What I really wish to impress upon the Committee and upon the hon. Gentleman who opened the Debate, is that we are not going to restore British industry by concentrating on home trade.
  Anybody who knows anything about the industry of this country knows—I am sure no one knows it better than the hon. Gentleman—that the problem at present is the problem of foreign trade and the difficulty of finding markets for our goods. [HON. MEMBERS: "Hear, hear!"] Of course that is so. There is no secret about it. It is general knowledge and we ought to devote ourselves to finding ways and means of encouraging foreign trade. While we are talking so much about imports, while we are concentrating on putting on or taking off duties, we ought to realise that our exports of manufactured goods are on a much bigger scale, in almost every single article, than our imports. I have looked up the trade returns for 1929 and I find that the export of manufactured goods was £573,000,000, while the imports were £334,000,000. It is to be remembered that these imports are c.i.f. so that they are actually very much less than the figure I have mentioned, when duty insurance and freight are deducted.
  Sir H. CROFT: Is it not the fact, however, that the import of manufactures represents sufficient labour to absorb the whole of the unemployed in this country?
  Mr. HARRIS: Obviously, if you drop imports, you must drop exports. That may be regarded as very old-fashioned but it is a very sound principle. Of course the hon. and gallant Member may say that he wants to keep out these foreign goods, that he wants to keep out even food. Why should he not say at once, "Let us have a Chinese wall all round this country and stop our trade and sink all our ships." That would be an intelligible proposition if we wanted to do away with our foreign trade but if we want foreign trade, if we want to have a mercantile marine we must have imports. If we stop imports by one means or another, we stop exports. The great staple trades of this country, such as cotton, iron and steel, machinery and the others, could not live for one week without an extensive foreign trade.
  Then when one comes to analyse these imports, of which hon. Members are complaining so much, one finds that most of them are semi-manufactured goods which have to be put through some secondary process here. Lace has to be manufactured into garments by British workers, and one of the industries which has developed very largely since the War has been the garment trade. Thousands of men and women are employed in the garment trade and I have been told that the tendency is for London to become the centre of fashion, at any rate for the cheaper end of the trade, in preference to Vienna, Berlin and Paris. If you are going to tax imports you will make it more difficult for this trade to get the materials which it requires for the manufacture of garments and consequently you will make it more difficult for that trade to compete.
  The same thing, of course, applies to other manufactures. I noticed that the largest item of imports coming under the category of "Manufactured goods" is "Oils in vats," and the next item is "Non-ferrous metals." These metals are subject to some secondary process affording employment in British factories, and helping trade in the iron and steel industry, especially foreign trade. I ask hon. Members to consider the case of shipbuilders. I used to think that hon. Members were proud to sing "Rule Britannia" and proud of the fact that the Union Jack was to be found on every

  1913
  sea and in every port. That was largely because we are a seafaring people but also because we were able to produce ships better and cheaper than any other country in the world. If hon. Members are going to put a tax on iron and steel, as many hon. Members desire to do, they are going to handicap seriously the shipbuilders of this country. It is true that the shipbuilders at present are going through a very lean time, but they are facing their troubles with courage and imagination. They do not ask for protection; they do not ask for any privilege; they only ask to be allowed to carry on their trade without any Customs harriers, or any interference by the President of the Board of Trade or the Chancellor of the Exchequer in the imposition of duties. When one starts to impose duties, it is difficult to stop. I am quite frank with the Committee in saying that one of the great objections to the proposals of certain hon. Members in this respect is that if you give a privilege to one industry, other industries will come along and ask for privileges.
  Sir H. CROFT: As the hon. Member is looking towards me may I ask him if it is not a fact that the shipbuilders of this country at the present moment are using 90 per cent. of British steel under the rebate scheme?
  Mr. HARRIS: It may be, but they can still get the 10 per cent. from abroad whenever they require it, and that prevents the formation of trusts and combines to keep up prices. It enables them to have a free market; but another of the results of tariffs is the formation of combines to raise prices against the consumer. At any rate I believe that the hon. Gentleman who opened the Debate is barking up the wrong tree. Let him concentrate on foreign trade if he wants to help employment and restore prosperity to this country. We have heard a lot to-day about Nottingham. It is common knowledge that things are bad in Nottingham in spite of Safeguarding and in spite of the tariff on lace.
  There are many other industries in Nottingham besides lace. The hosiery industry, for example, is very badly hit. The hosiery manufacturers have lost the Australian market. It is practically closed to them by a prohibitive tariff. I have here a copy of the Australian tariff
  1914
  list which has just been sent over to me, and it practically closes Australia which was a very big and important market for British manufactures. I am Imperialist enough to desire to have trade with the Dominions overseas. We speak the same language, we have the same customs, we follow the same fashions, and it is but natural and right that we should exchange goods with each other. We give them an open market. They can dump their goods, their meat, their wool, their butter, produce of all kinds, into this country untaxed. We encourage the sale of those commodities by advertising and pushing and boosting them in this country, yet the Australian Government has put up a prohibitive tariff which badly hits the Nottingham hosiery trade, rendering many people out of work.
  In this discussion on the Board of Trade Vote, we have not heard a single word about that matter yet. I am going to say something to the President of the Board of Trade about it. I hope that he is up and doing. I hope that a protest is being made. We have a distinguished visitor here, a very able and competent representative of the Commonwealth of Australia. I hope that he is going to put in a good word for the Nottingham hosiery manufacturers and workers. I say so because I recognise that this was a valuable market for us and I submit that we have a special claim because Australia belongs to the Commonwealth of Nations known as the British Empire and because we give them such favourable terms for their goods here.
  Major COLVILLE: Can the hon. Gentleman say how much Australia bought from us last year?
  Mr. HARRIS: That is my complaint. She is one of our biggest customers. [HON. MEMBERS: "The biggest!"] No, not the biggest. The biggest is India and I do not know why hon. Members always seem to ignore India and to wish to belittle India, our largest and best customer. The fact remains, however, that last year Australia was a very big customer of ours, and that now she has put up a prohibitive duty. That is my complaint. It may be information to hon. Members who only use the Dominions for purposes of political propaganda that in the new Australian tariff there is a whole list of goods in the production of which British labour is employed. I have

  1915
  a list of the duties here, and while I do not wish to trouble the Committee by going through it in detail, I shall be pleased to supply the particulars to any hon. Members. The duties were 50 per cent. on British goods. It is true that there was another 10 per cent. on goods from foreign countries. [HON. MEMBERS: "Hear, hear!"] Hon. Members are very pleased with small mercies, but on top of that 50 per cent. they have put another 50 per cent. It is common knowledge that hundreds of orders have been cancelled in consequence and that Australia is to be regarded as practically a closed market for British goods of many kinds, especially hosiery and ready-made garments. [HON. MEMBERS: "No!"] I have some knowledge of the subject and I can assure hon. Members that it is so. Let them go to Nottingham and ask the hosiery manufacturers and they will find that I am right.
  I am glad that Australia has been referred to as our most important market because I wish to emphasise the importance of ndia. India, as I have said, is our largest customer. India buys £84,000,000 worth of goods from us every year, and it is a country with infinite possibilities of development. From the point of view of industry it may be said to be only primitively developed and there are great possibilities of expansion. I should say that it is a wise policy to develop that market as much as possible. There is a common phrase now to the effect that "it pays to advertise." I do not think that we can do too much advertising of the right kind in India and I hope that as a result of the Simon Commission a good understanding will be brought about with our fellow-citizens in that part of the British Empire. I know the depreciation which has been going on during the last two years about the claims and ideals of India and that it has done much to injure our trade in that great country. Nothing is more serious than the anti-British propaganda which is going on, very often taking the form, unfortunately, of the boycott of British goods. That is bound to do great harm.
  The right kind of propaganda should be carried on by this Government, by earning the good will of the great Indian Empire, and we can do much more in that way to assist trade and prosperity than by
  1916
  spending hours in the discussion of Safeguarding. Keen as I am on the Empire, I think it would be most unfortunate if we confined all our energies and efforts to restoring British trade with our own Dominions. This country, as a manufacturing country, depends on world markets which can have no limits and no bounds. We must have a large outlook. There are markets with infinite possibilities. One of the best things which the present Government has done—though I do not think they claim the entire responsibility and they may have inherited the idea—has been to send Lord D'Abernon's mission to South America. I suggest that hon. Members should study the report of that mission, which is full of wise advice and interesting information.
  I am not sure that some of the propaganda which has been going on for the last few years, about the necessity for developing British trade with our own Dominions, has not to some extent prejudiced our trade in South America and some of the new countries not under our flag. I suppose some hon. Members consider it unpatriotic to trade with South America, but there we have countries in which vast sums of English capital have been invested. Lord D'Abernon points out that over £1,000,000,000 have been invested in great public utility services—in railways, in particular—in South America. There is no part of the world where the people are better disposed to us than in the South American States; they are willing buyers. In certain industries we still hold our own, but since the War it is common knowledge that the United States of America have stolen a march on us and have captured a great part of that trade, not because they produce better or cheaper goods, but because their Government have looked after their interests better. Their publicity department has been stronger, their organisation has been more effective, and, as this Report rightly points out, their methods have been a little more up to date.
  There is no reason, if our Government mean business, that a great part of that trade cannot be recaptured for us. Some hon. Members who believe in Safeguarding may be interested to know that last year the Argentine alone in six months imported over 50,000 motor cars, very few of which came from this country. I am going to say, though I am afraid it is

  1917
  bold to say it, and I hope it will not annoy hon. Members above the Gangway, that I believe that was partly due to Safeguarding. We were concentrating on the home market and not realising our duties as suppliers of the world. We were, in the first place, constructing cars to go on our own roads, suitable for the flat roads of this country, but not for the rough roads and hilly country of our Dominions and of South America. Secondly, we made the mistake of placing a tax on horse power and concentrating on the production of cars of low horse power, and with those two forms of protection we have allowed the world markets to go west.
  The motor trade is a new trade. Hon. Members above the Gangway always talk as if it was an old trade restored entirely by the Safeguarding Duties, but it is a new industry. With better organisation and better publicity, and by dropping some of our old, conservative methods of industry, we can recapture some of the South American trade. Lord D'Abernon points out various ways in which our manufacturers are handicapped. The cable rates between the United States of America and the Argentine are very much lower than between this country and South America, and the postage is less. The Post Office is really the agent of our traders, and I would ask the President of the Board of Trade to discuss with the Chancellor of the Exchequer and the Postmaster-General whether it is not wise, at a time when we want trade, to bring our postage in line with that between the United States and the Argentine.
  Then our freights are high. It is common knowledge that it is cheaper to send goods from South America to Germany than from South America to London, because of preferential rates for German goods. The President of the Board of Trade ought to be active in that matter. [An HON. MEMBER: "Free Trade!"] It is a ring, a combine. Our British shipowners, unfortunately, have got together in a combine and have come to an agreement, patriotic people as they are, with the German shipowners, whom they have allowed to give preferential rates on condition that their ships should not compete with this country in South America. [Interruption.] It is very unnecessary to indulge in personalities.
  1918
  These are serious matters adversely affecting our trade and employment. We cannot ignore a market like South America, and this is the only occasion we have in the whole year to discuss the trade of the whole world.
  There are two other things mentioned in the D'Abernon Report. The first is the importance of languages. Language plays a very big factor in trade. I was in Holland the other day, and I found not only a low tariff, much lower than we have in Australia, New Zealand, and Canada, but that the traders were very well disposed to the manufacturers of this country. The trade of Holland is falling to the Germans, who speak Dutch where, in too many eases, the Englishmen speak no language but their own. The same thing applies to South America. The training in foreign languages of our traders and of young men who are to become traders is of vital importance if we are to recapture the great South American market.
  There is one other suggestion made in the Report, and I should like to know what progress has been made in regard to that proposal of bulk purchases. The Government of the Argentine are prepared to make large purchases from our big manufacturers, especially in those industries that are depressed at the present time, in return for large purchases in their country in the way of meat, grain, and other products. That is a practical proposal, and I should like to know what has been done in that direction. If transactions of that kind, which I assume the Socialist Government view with special favour, could be carried out, you could help to stimulate industry at a time of great need. I am afraid that I have been drawn a long way from lace, but I hope I have raised the Debate to a higher level. I hope it is not quite so parochial as it threatened to be, and I suggest that on this occasion we should realise that our trade is a big trade and that its future prosperity depends not on narrow parochial views, but on world markets.
  Mr. JAMES HUDSON: The hon. Member for South-West Bethnal Green (Mr. Harris) made reference to the fact that we seemed to have moved rather far from lace, at any rate during that part of the discussion for which he was responsible, and may I congratulate him

  1919
  upon that fact? After all, this is a big Debate upon the trade of the country as a whole. The Safeguarded industries constitute altogether only some eight or nine out of the 50 industries that made application for Safeguarding, and of those eight or nine the total imports and exports amount to only 1 per cent., or 2 per cent. at the most, of the total imports and exports of the land. One therefore would have expected to hear from the Conservative party, had they been genuinely concerned about the trade of the country in its present difficulties, some further reference to the issues of business than that for which the hon. Baronet was responsible, for he devoted the whole of his speech practically to the question of the lace industry of Nottingham.
  One understands why this is so. The Tory party is thinking, not about the trade of the country, but about a passing political advantage which is, as they think, to be obtained in a by-election that is proceeding. They use an important occasion like this, on which arises consideration of the whole of the work for which the President of the Board of Trade is responsible, merely to grind a political axe and for a purely temporary advantage. I do not object to them taking that line. The hon. Member for Rushcliffe (Sir H. Betterton) made some references to the necessity of certain of my hon. Friends going down to Nottingham. He seemed to think they would learn much if they went down. I agree that they will. I have the honour to come fresh from Nottingham, where I spoke last night, and I recommend as many of my hon. Friends to go there as can go. They will have a very good time if they do.
  Major the Marquess of TITCHFIELD: You are wiser now?
  Mr. HUDSON: I am very wise indeed. I have learned, in a large meeting that I had the pleasure of addressing last night, that there is a considerable body of opinion in Nottingham that is prepared to look at the national interests as a whole, and not as the Tories do, try to snatch a temporary political or economic advantage for themselves. I got that from Nottingham, although the ex-Presi-
  1920
  dent of the Board of Trade sneers, or at any rate expresses his dissent from what I am saying.
  Let me say a word about a great industry with which I are vitally concerned. The woollen industry of Yorkshire is at this moment in the midst of a tremendous dispute. The charge lies against that industry—and this Committee is concerned with the charge—that for years it has been badly organised on both its industrial and commercial sides. The Balfour Committee exposed it particularly in its relationship to foreign markets, and other committees have shown in their turn how that, in point after point, that industry fails to take for itself the advantages which it could take in the great world competition which it now has to face. Very often it is run under the aegis of families, who persist in keeping in the industry their relatives; fathers appoint sons, sons appoint brothers and cousins, and there is an industrial nepotism in that industry, as in many other industries, that makes it very difficult for it to hear the burdens that international competition now enforces upon it.
  If we were dealing with these issues during this Debate, I could understand the Debate going by the name of a Debate upon British trade, but we concentrate all our attention upon the Safeguarding question. Look at the issue of Safeguarding in Yorkshire in relation to the woollen trade. An attempt was made by Yorkshire employers to get Safeguarding for that industry. They put their case before a committee, and the report of that committee was about due when the last. General Election took place. They have stated that for certain types of cloth, particularly the lighter 11-ounce cloths, Safeguarding was absolutely necessary in order that they might extract a price for their cloth upon the market which would enable them to increase their trade. [An HON. MEMBER: "Like coal!"] Whatever it may be like, that was the case which they put.
  The committee fortunately turned that suggestion down, but before the report was published, the workers of Yorkshire had an opportunity to give a decision upon the matter. All the Safeguarding candidates in industrial constituencies in Yorkshire at the last

  1921
  election were swept out and in their place the constituencies selected candidates who support my right hon. Friend the Chancellor of the Exchequer in the policy against Safeguarding which he is now pursuing. [An HON. MEMBER: "What have they gained by it?"] At this moment the employers of Yorkshire as a whole are endeavouring to impose upon the workers of Yorkshire a 9 per cent. reduction of their wages. All these employers are holding together in a tight ring against the workers. During the late Safeguarding inquiry Huddersfield, the Colne Valley and the district round about did not make out the case for Safeguarding in the way that the Bradford employers tried to make it.
  They said that Safeguarding was required for the 11-ounce cloths. Huddersfield and the Colne Valley were not so much concerned with those cloths, and if Safeguarding had been given, and if the inquiry had gone in favour of Yorkshire, the manufacturers who would have gained would have been the Bradford manufacturers. An undertaking was given to the Yorkshire workers at the time that, if they would not object to the proposal but support their employers, no reduction of wages would be asked for. At this moment the Huddersfield and Colne Valley employers did not need to ask for any reduction. I doubt whether the Bradford employers needed to ask for a reduction.
  Mr. HAMMERSLEY: Is it not a, fact that the reduction for which the employers are asking is one which has been approved by impartial arbitration?
  Mr. HUDSON: It was not an award, but a decision given by a man who took three days only to investigate the conditions of one of the most complicated industries in this land, and if the hon. Gentleman regards that as a satisfactory impartial judgment, I leave it to him.
  Mr. BRACKEN: Does the hon. Gentleman say that Lord Macmillan's Report is entirely erroneous, and if he does say that, what are the Government doing to reverse the decision?
  Mr. HUDSON: I am prepared to join with the hon. Gentleman in asking the Government what will be their best step with the woollen industry, which Lord Macmillan himself discovered to be in
  1922
  need of reorganisation. His Report has been taken by the employers for their own ends and for the purpose of reducing wages. I hope and expect—indeed, I have had considerable encouragement from what the President of the Board of Trade has said—that we are now going to get in the woollen industry of Yorkshire a searching inquiry that will be far better able to judge the merits of the Macmillan Report than anyone is at the present time. This is one of the main complaints that I want to make about our industries. Most of the discussion about Safeguarding and wages is badly supported by the facts, for the employers will not let us know the real truth about the industries which we discuss in this House. The hon. Baronet has been telling us something about the lace industry. He fell foul of some of my hon. Friends when he came to the question of wages. He tried to give some facts with regard to wages, but he does not know what the facts are, for the lace industry has been careful to keep from Members of the House a full account of what is the present condition in that industry.
  Some time ago, while the Conservative Government were in power, a distinguished civil servant from the Board of Trade, one of the principal assistant secretaries, went to Nottingham and addressed the Nottingham Chamber at Commerce. He warned the Nottingham employers—at a time when the Tory Government were in power to supervise him in the warnings that he gave—that with the inadequate statistics Which the trade was presenting to the Government and to the House of Commons, they would not be able to expect any Government to continue Safeguarding. He drew their attention to the fact, which is frequently forgotten in this House, that the Nottingham lace manufacturers some years ago deliberately gave information regarding the production in their trade, which, when it came afterwards to be investigated by the Balfour Committee and the Committees on Production, was proved to be false. I am quite sure that the hon. Baronet, who always makes interesting speeches in this House, believes the facts which he places before the House, but many of those facts came from the same sources which in the past were condemned for giving false information.

  1923
  I, and I am certain, all my hon. Friends, would like to know to what extent all the advantages which it is said that the lace trade has obtained from Safeguarding have gone to the workers of Nottingham. The case is made out that the production for the home market has gone up two and a half times. If the total number of lace workers has been decreased—at any rate, those who are insured have gone down from 20,000 to 16,000—and the wages have not considerably increased, who has got the advantage of that great increase in the production?
  Sir H. BETTERTON: The answer is perfectly clear. In 1925, or just before the duty was put on, the amount of short time worked was infinitely greater than it is now. With regard to wages, I have never made any suggestion, nor have my hon. Friends, that the rate of wages has been increased, because it has not, but the aggregate amount paid has been increased because full time has taken the place of short time. The aggregate has increased by about £30,000 a year in one particular branch of the trade in which men and women work at the machines themselves.
  Mr. HUDSON: I stick to what I am saying. Taking the trade as a whole:, there is no reliable evidence that there has been any considerable increase of wages; and even taking into account the increase in time worked, it does not explain where the advantage represented by a two and a half times increase in production for the home market has gone. I know where it has gone. It has gone mainly to the employers, as in the case of most protected industries. That is why the party opposite are such faithful friends of Protection and Safeguarding. We are asking, and I am certain the Nottingham workers will ask before they have finished with this proposal, for such an inquiry into the lace industry as will make clear in all its details exactly how such advantages have been distributed among those concerned. We make the same demand for all industries. Let us have the books of the employers opened. Let us know the full facts regarding their profits. When we know these things, we shall be in a vastly better position for deciding the pros and cons in the
  1924
  Safeguarding issue than we are at the present time.
  The late Government found themselves pushed stage by stage from 9he safeguarding of the industries to which they had applied their minds to the greater industries, particularly iron and steel. They had to consider whether they would allow the iron and steel trade to be considered for the purposes of Safeguarding. What happened? Instead of allowing the trade to be examined by a Safeguarding committee, the Government sent it to the Committee of Civil Research. The Government took the report of that Committee, and the prime Minister announced to the House that the repercussions of safeguarding a great industry like iron and steel on other industries that used the commodities of the iron and steel trade in further production, would be such that it might carry them to a point where they would not be able to keep their pledge against a general tariff. That is the position to which the Tory party to-day are trying to drive us. They pretend to discuss Safeguarding in Nottingham, but in reality they are discussing the great ramp by which they hope to impose on the major part of the industries of this country a Protectionist system as bad as the Protectionist system of the United States.
  Look at what they have got from Protection in the United States. I am glad that the hon. Gentleman in his opening remarks referred to the terrible nature of the unemployment that assails other countries. How does it compare with the position in the highly protected States of America, or with the position of Germany, where Protection and Safeguarding so largely rule? Their problems of unemployment are even more pressing than ours. Estimates of the number of unemployed in the United States vary from 4,000,000 up to 6,000,000 people, and one leading State official in New York said recently: "We have got to a position that will become revolutionary unless the Americans can take some satisfactory steps to deal with it" Why pretend that you will help us out of unemployment by a rapid extension of Safeguarding up to the point that brings us to a general tariff? The point I put to Nottingham workers last night was this: If the Yorkshire woollen workers had had the advantage of a Safeguarding Duty it might have

  1925
  been—it might have been—that a temporary advantage would have been attained by it. It is not the business of a Free Trader to deny that advantages are given by the imposition of tariffs. You do give advantages—into the wrong pockets and at the expense of the community as a whole. The late Prime Minister knew that when he was confronted with the proposal to tax iron and steel, and had to speak about the dangers of that policy as it would work out in relation to industries using iron and steel.
  Major COLVILLE: Has it not been already said that the late Prime Minister did not go further with the proposal to put a duty upon iron and steel because he had given a pledge that he would not extend the policy? It was not a question of danger, but the fact that he had given a definite pledge; and our party is a party which regards pledges as sacred.
  Mr. HUDSON: He gave a pledge, but he showed why he had to keep it.
  Major COLVILLE: Because he had given it.
  Mr. HUDSON: Really, I gave way to the hon. and gallant Member and expect the courtesy of being allowed to reply to his statement. He gave the pledge because he realised that a tax which would benefit the iron and steel industry would affect the products of that industry used by other industries, and would have such repercussions that he felt he must keep his pledge. That is the truth. It is still true at the present time. If you put a duty upon commodities, that duty tends to fall upon other industries and increase their difficulties in general trade in the world. I will go back to the woollen industry. The woollen industry might have won a temporary advantage for themselves by a Safeguarding Duty, but the workers of the woollen industry preferred other methods. They knew that in the long run their interests and their success are bound up with the interests and the success of the nation as a whole: and I put it to the Nottingham workers last night that if they think about Britain as a whole, and the interests of Britain's trade as a whole, as the Yorkshire woollen workers did at the last election, they will think less of the temporary advantage the Tories promise but never give, and will join with the other
  1926
  workers in resisting a set of proposals whose only consequences in the long run will be greater obstacles upon our industry and greater poverty for our workers.
  Marquess of TITCHFIELD: Very nearly all that I wanted to say has been said in the two excellent speeches made by my hon. Friend the Member for Rushcliffe (Sir H. Betterton) and the hon. Baronet the Member for Bournemouth (Sir H. Croft). I think all of us on this side are disappointed to find that the Chancellor of the Exchequer is not in his place this afternoon. He is the evil genius of this Debate. He is a very cunning politician. He ought to have come to the House this afternoon to face the bombardment which we are directing at the Treasury Bench over the forth-earning repeal of the Lace Duties, but instead of coming here he has put up to face our bowling probably the most popular Member in the House of Commons to-day the right hon. Gentleman the President of the Board of Trade, whose charm, I am certain everyone will agree, soon turneth away all wrath. But I have not come here this afternoon to plead with the Chancellor of the Exchequer. One might as well plead with the Sphinx. I have come here to give him a friendly warning of the damage he is about to do to the lace hands in my native City of Nottingham.
  There is no possible doubt that the Safeguarding Duties have meant everything to the lace trade in that town. First of all Safeguarding has enabled employers to increase wages by more than £30,000. If hon. Members will examine the amount of wages paid in the year 1925 with the amount paid in the year 1929, they will see that £30,000 more was paid to the lace hands in Nottingham in 1929 than in 1925. Further, since Safeguarding has been in operation the lace output has increased from 320 rack units to 780. I have that figure on very good authority, the authority of Mr. Burrows, the Secretary of the Lace Federation in Nottingham. I am talking about one section of the lace trade which is known as the leavers lace section. As more than one Member has already said, production in the lace trade of this country for the home market has grown by 162 per cent., and, in spite of the fact that our export trade has fallen off a good deal, the total increase

  1927
  of output in Nottingham since the Safeguarding duties were put into operation is more than 62 per cent. Further, the cost of lace, taking it on the whole, is lower now than it was in 1925. Surely those are very good reasons why the lace trade should retain this duty.
  I have not been able to get the exact number of men employed in Nottingham. I have put a question on the Paper for to-morrow, and hope that I shall get some light on this point; but I have been able to get the statistics for Long Eaton. I understand that Long Eaton is represented in this House by the hon. and gallant Member for South Derbyshire (Major Pole), and I wish he were in his place, because he would be able to support these figures. In 1926, there were 1,396 persons casually employed in the lace trade in that town. In 1928, instead of there being 1,396 casually employed, there is the happy state of affairs that 1,627 people are regularly employed, not casually employed. It is perfectly true that the number of firms making lace in Nottingham has been reduced from 101 to 72, but—
  Mr. CHARLES BROWN: May I point out to the Noble Lord that the figures he has given are exactly the same figures as the hon. Baronet the Member for Bournemouth (Sir H. Croft) gave for Nottingham?
  Marquess of TITCHFIELD: I am giving the figures for Nottingham now.
  Mr. BROWN: You gave the figures for Long Eaton.
  6.0 p.m.
  Marquess of TITCHFIELD: I gave the numbers employed in Long Eaton, but not the number of firms producing. I was going to say that although there are fewer firms producing lace in Nottingham there is very much better employment with those firms. If you ask employers who have been in the lace trade in Nottingham all their lives what effect the Safeguarding duties have had on the lace trade of Nottingham, every one will tell you that if it had not been safeguarded there would not be any lace trade in Nottingham to-day. I would rather take the opinion of people who have had immense practical experience of the trade than the opinion of some of my hon. Friends opposite who have probably never been into a lace factory in their
  1928
  lives. Paris, I understand, dresses all the smart women of the world to-day. [An HON. MEMBER: "Come to Blackpool!"] In the old days we used to send quite a quantity of lace to Paris, but we cannot do that now, because the French have put up the tariff against our lace. Calais is a competitor with Nottingham, first, because Calais is situated about half way between London and Paris, and, secondly, because the exchanges have been against us ever since the War, and, further, the lace workers in Calais are paid 40 per cent., and in some cases 50 per cent., less than the lace hands in Nottingham, a very unhappy state of affairs which I am sure we should all like to remedy. As the French are putting up the tariff against our lace going to Paris, it is absolutely essential that we should have the run of our own own market in this country. When the Chancellor of the Exchequer addresses this House, he always gives the impression that he thinks himself the foundation of all wisdom, but I can tell him here and now that if he takes away the Lace Duty from Nottingham, he will have made one of the worst blunders of his life. To-day, the right hon. Gentleman is faced by a solid block of opinion in Nottingham. The hon. Member for Huddersfield (Mr. J. Hudson) says that he was in Nottingham last night. He is a very lucky man to have the honour of going to that town, and perhaps he was rather lucky to get away again last night. The hon. Member talked as if he knew all about Nottingham when he had been there only once for a few hours. I have spent 36 years of my life in Nottingham, and I think I know the lace trade of Nottingham even better than the hon. Member opposite who has only been there once. In Nottingham, employers and employed are of one opinion, and that opinion is that the Lace Duties should be continued. We have had five years' practical experience of them, and the people of Nottingham are perfectly determined that those duties shall be kept on.
  The President of the Board of Trade has heard of the meeting at the Albert Hall, Nottingham, on Friday night. That was not a fudge meeting. It was a wonderful meeting, and I wish the hon. Member opposite had been there. The hall was filled to overflowing, and overflow meetings were held outside. There

  1929
  were processions a mile long and at that meeting the mayor was in the chair, and enthusiasm was at fever pitch. Resolutions were unanimously passed at all those meetings against the decision of the Chancellor of the Exchequer. I hope that the President of the Board of Trade will take that meeting as a warning, and I think he may also take it that the lace hands of Nottingham—to use the elegant phrase of the Prime Minister—will stand no monkeying. It is perfectly true that there were some people in Nottingham who were not in favour of Safeguarding, and did not believe that it was a wise precaution, but there are none there who believe that at the present time. The people in Nottingham, as will be proved on the 27th of this month, are 100 per cent. safeguarders. I understand that the Chancellor of the Exchequer intends to go down to Nottingham to address a meeting there, and I congratulate him upon his courage, which, I think, is greater than his wisdom. The right hon. Gentleman will have to face such a political buffeting as he has never had to face before in his life.
  My old town of Nottingham has been famous in the past for its bowling, and I am sure the political bowling of the lace hands in Nottingham will worry even the Chancellor of the Exchequer. When the future history of this country is written, the Chancellor of the Exchequer will go down in history as the champion unemployment bowler of the world. The past record of the Chancellor of the Exchequer shows that for every minute he has been in office another British citizen has been added to the total of the unemployed in this country. "We are adhering to the principles of Mr. Cobden, and what does it matter if people are thrown out of employment?" says the right hon. Gentleman to himself. After all, somebody must be sacrificed to the gods of Free Trade.
  Not only will this act of folly upon the part of the right hon. Gentleman affect the lace trade, but it will affect a good many more subsidiary trades as well. For instance, it will affect the coal trade. You cannot run lace machines without using fuel. The same argument applies to the artificial silk trade, which is a very important trade, and one which is now weltering and withering owing to the policy adopted by the right hon. Gen-
  1930
  tlemen on the Front Ministerial Bench. It will also affect the cotton trade, the stationery trade and the cardboard-box trade, and those are all trades which employ a good many hands.
  The men employed in those trades are to be offered up as a sacrifice to the gods of Free Trade and the Chancellor of the Exchequer, by taking off these Safeguarding Duties, will put thousands of my fellow-citizens in Nottingham out of work; and he is going to leave a trail of misery across the Midlands and the northern counties of this country. The right hon. Gentleman says that the Free Trade god must be fed, and what matters the consequences? The Chancellor of the Exchequer has threatened several times to go to Nottingham to speak, and I am glad he has decided to go dawn there, and when he leaves Nottingham, I am sure that he will leave a sadder but a wiser man.
  Mr. W. GRAHAM: The Debate this afternoon has been devoted for a large part of the time to the safeguarding duties, and, in particular to the Safeguarding Duty on lace in Nottingham. Only a small part of the time so far—I trust it will be remedied later in our proceedings—has, been devoted to the wide question of the admittedly difficult trade position, which is of such great importance to an island country like our own. My duty this afternoon is to try, first of all, at not too great length to reply to the various points which have been made with regard to Lace and Safeguarding Duties, and then to give the Committee a fuller review of the trade position in the light of all the facts which are before us at the Board of Trade or any other Government Departments.
  No one, of course, can take the slightest exception to the kind of speech in which the hon. Member for Rushcliffe (Sir H. Betterton) opened this Debate, or indeed to any of the speeches which have been delivered with much enthusiasm, if not always with discretion as to the facts. Certainly during the 12 years for which I have been a Member of the House I have never questioned the sincerity of hon. Members opposite, who urgently believe that a remedy is to be found for a part of our industrial distress in the introduction of some system of protective duties in this country. I cannot

  1931
  share their views, but their enthusiasm is certainly beyond dispute.
  Let us consider the position for a minute or two in regard to these Safeguarding Duties in general before we come to this particular case. There have been discussions in various Parliaments up to 1929, but it should be the first and the common duty of the House in a matter of this kind to put the problem in proper proportion. There have been no fewer than 49 applications since the White Paper procedure was introduced, but in only 21 cases did they reach a committee, and, following the investigations in accordance with the White Paper, in only eight cases were duties of varying amounts introduced, but amounts which I am obliged to remind the House were, generally speaking, much larger than were ever contemplated in the old days of Tariff Reform in this country, or indeed in most of the Protectionist controversy of our ime.
  Of course I well remember that hon. Members opposite always criticised the conditions which had to be fulfilled under the White Paper; but whatever view may have been taken of those conditions, some of them were certainly very relevant—the bearing of these duties upon other industries in this country for instance, whether there was a retention of imports in Great Britain in abnormal quantities, and some kind of effort to find out how far it was all related to the depreciation of the exchanges and so on. Hon. Members opposite were restless; they wanted the committee system abolished, and a free hand in order that they might try again with Protection on a much larger scale. We have had these eight duties, but let us remember that the cumulative effect of those eight duties, which are in force, relates really to less than 2 per cent. of the imports into this country and to less than 1 per cent. of the exports of this country in the field of articles wholly or mainly manufactured. Therefore I would suggest, first Of all, even if I were a Protectionist, that that is a very limited and wholly inadequate field in which to build up any kind of case for Protection as applied to British trade.
  Let us now come to statistics in connection with these duties, and observe the kind of information that we get. We
  1932
  have no statutory basis for the information in the sense of compulsion. My hon. and gallant Friend the Member for Bournemouth (Sir H. Croft), who has courteously informed me that he has had to leave the House, has been advocating or recommending a Bill, which I dare not do more than mention now, to ensure the regular and complete supply of all the relative statistics in relation to Safeguarding of Industries, and I think we shall generally agree that it is important that we should know exactly what is happening in industry and commerce in this country. For the time being at all events we have only a limited amount of information. There are one or two cases in which the information is more complete, as for instance in the case of gas mantles; but in that case the application of the duty was followed by the allocation of the market to British manufacturers, and the suppression of the German supply. What was happening, therefore, was something in the nature of a monopoly in an allocated or agreed market and an exception to the general protectionist case; but in other industries, generally speaking, you do not get anything like full information. I am not making any reflection upon these safeguarded industries, but am only stating the fact when I say that, notwithstanding our best efforts at the Board of Trade within recent times, we have been quite unable to get anything like a full review, and I am not surprised that even hon. Members opposite should be conscious of the weakness of that part of their case.
  Let us apply that to the subject which more immediately concerns us to-day. This Safeguarding Duty on lace, which is the first that is due to expire, on the 30th June of the present year, was introduced in 1925, after the Committee's investigation to which my hon. Friend referred; but that investigation made it perfectly plain that the members of the Committee did not consider that there was an abnormal retention of imports of lace in this country, and I always thought that it was a most extraordinary non sequitur in that report that they should recommend a Duty on the kind of evidence that was tendered, and having regard to certain views that they expressed on that evidence. In any case they had a limited field of facts, and

  1933
  there was that central point brought out by the Committee itself. The duty was applied at the rate of 33⅓ per cent., a very high rate.
  Admittedly there have been difficulties in this industry, but the great weight of the evidence tended to show that these were largely attributable to changes in fashion, which were notorious to every student of what I suppose would be included under the heading of social habits. During that time we have had to rely, in public departments, on such information as has been put up by the industry, and let us observe the field that that information covers. Yesterday, in reply to a question as to how far there had been an improvement in the sales in the home market, I was obliged to remind the House that we do not get returns from, probably, more than 50 to 55 per cent. of the industry. Since 1925, when the duty was introduced, the number of concerns has admittedly been reduced. It has fallen, I think, in the field of those making returns, from about 101 to 72. These are, if I remember aright, the actual numbers of which we have some official or semi-official knowledge. The number has fallen in the limited field making returns, and that shows the very grave danger of any hon. Member of this House, whether Free Trade or Protectionist, and certainly if he were a Protectionist, building up an argument for a tariff case on that very slender foundation. As regards the Duty, I question very much if that field is worth anything at all. In my view, the statistical information is not valid for perhaps more than a quarter of the dutiable field. What Member of this House, in the name of elementary common sense, would ever say anything final one way or the other if a Protectionist Duty were put before us on that basis? In spite of that, and in spite of the fact that it is a reasonable inference that the industry would put up the very best case that it could for the duty, am bound to say that, taking a line through the firms from 1925 to the present day, the statistics are against this duty and not for it.
  Just consider the position. I have looked at these figures, and I think we can exclude the argument attributable to the fall in prices, or at all events, to be perfectly fair, we can make a limited
  1934
  allowance under that head, because the position, I take it, is not affected by the manifest slump—I do not know how far it has extended to lace, but the great slump in the very recent past. During that time, these figures, on balance, show that the exports have diminished, and that is one of the characteristics of many of these safeguarded industries; whatever happens in the home market, the export trade seems to suffer. In the next place, I would remind the House that the Committee considered that there was not an abnormal retention of imports in this country, but it is true, again, on these figures, that the retained imports of lace in Great Britain during the currency of this duty have increased. My hon. and gallant Friend the Member for Bournemouth ruled that out when he was interrupted from this side, but surely it is a relevant consideration, and one of great importance. Again, it does not seem to be disputed, and, indeed, an hon. Member opposite, in the course of his speech, frankly admitted that the entrepôt trade had suffered very severely indeed—another characteristic of these duties, and one which we cannot divorce from our shipping, to which I will make reference later, and the plight of our shipbuilding yards at the present time. All these things move through easily ascertainable stages in our industry and commerce, and they are all bound up together, as the population is, in one great enterprise under this head.
  These things appear to be beyond dispute. When I pass to the amount sold in the home market, which is particularly the point on which hon. Members opposite fastened this afternoon, I have the very greatest difficulty in understanding for one moment, on such official figures as we have, how they arrive at the conclusion that there has been an advance of 162 per cent., for that is the percentage which they give as applicable to the increase of the home demand for the different classes of lace. I want to be perfectly fair, because the House would not gain if anyone holding the position which I occupy gave other than what he believed to be the facts, and I ought to have reminded the Committee at the beginning that there has been a variation in the classification of lace as compared with 1925; and the position at the other end is complicated slightly by the pretence of silk, and of what I think is called rayon.

  1935
  These factors, however, do not appreciably alter or affect the argument I am making. Indeed, on a reasonable computation, if the figure of 162 per cent. for the increase in the home market were a fact, the aggregate volume of this industry must be more than £9,000,000 at the present time, and it is my firm belief, on such facts as I can get, that the industry could never prove that that was anything like the state of affairs today. Did any hon. Member ever hear a more remarkable story applied to a safeguarded industry?
  Let us take the numbers employed, for that is, of course, of the very essence of the Protectionist case. I have gone into that in the most careful fashion possible, and I find that in this industry in 1924, before the application of the Duty, there were employed rather more than 20,000 people. These were the insured people in the lace industry; I will qualify the figures in a moment as regards the actual numbers engaged. At the present time it is not disputed that the number of these insured persons has fallen to a little less than 17,000; there has been a fall in the insured lace population of about 3,500. The numbers engaged in 1924, that is to say the number actually working, was about 16,000, putting down the number out of work at about 4,000. The number actually engaged to-day appears to have fallen to about 15,000, so that there is a slight decrease, as I understand it. In any event, however, my case is that there is not an advocate of Safeguarding, apart from the point which my hon. Friend made, who can suggest that the number engaged in the industry has increased at all. I do not think that, except within rather narrow limits, any of that can be attributed to the introduction of general efficiency methods or to vigorous rationalisation so far as lace manufacture is concerned. That is the conclusion which I am driven to put to the House—
  Mr. HANNON: Does the right hon. Gentleman seriously say that there has been no increase of employment in the safeguarded industries?
  Mr. GRAHAM: I have given the figures, and, so far as I know, those figures have never been effectively challenged in this industry.
  Sir H. BETTERTON: Is not a certain proportion of this modification due to the fact that now there is a very considerable number of men engaged in the lace trades over the age of 65, who are not included in the figures now, but who were included previously, the reason being that very few boys came into the industry at the time of the slump, there has been a very great shortage of skilled hands, and men have worked probably until a greater age than usual?
  Mr. GRAHAM: That is a perfectly fair point, but I do not think my hon. Friend would suggest for a moment that it would modify the figures more than very slightly. The broad facts, I think, remain exactly as I have stated them this afternoon. I know that this question divides the two sides of the House, and no doubt it will continue to divide the House until the next General Election; but there was a great majority, beyond all question, for Free Trade principles and the freest exchange of commodities that can possibly be secured, at the last General Election, and the Government took the proper course, and in my view the sound economic course, in stating that they would allow these duties to lapse, or at all events in making no promise that they would continue them. I wish to refer in that connection to the speeches made by the Leader of the Opposition when he was Prime Minister. He made it perfectly plain in several speeches that, while these industries, according to his view, were entitled to a five years' experiment, yet, if they could not put their house in order or make some kind of progress in that time, he indicated quite plainly that they were not entitled to further support under Safeguarding. I suggest to hon. Members opposite that it is no reply on their part to say that that declaration of the right hon. Gentleman was directed to the key industries part of the legislation, because that is not very much in dispute in any part of the House. It was really applicable to this Safeguarding legislation, of which these eight duties are illustrations.
  Accordingly, we rest upon what we believe to be a principle entirely in the interests of the industry and commerce of this country, and not the negative principle that hon. Members opposite so frequently describe. Free Trade, in my

  1937
  judgment, is not a negative principle; it is a great positive force, because freedom has a very active positive influence, and the more we restrict in these matters the more we add to the volume of unemployment.
  An hon. Member asked me what kind of representations I made to the United States of America, if I made any at all, in this connection, and it was suggested that France, because of her possession of a power of retaliation by tariff, was able to get consideration that would never have been shown to us. I must make it perfectly clear that several of these questions rest upon a plain misapprehension. These duties are not imposed, as is suggested, in the United States of America, by Government, but by Congress, and we must bear clearly in mind, in relation to the position of this country in making representations such as are suggested, that that in practice, in this matter, would involve representation to the President as to his power of veto. We have made representations from time to time in every appropriate case in other countries. In the ease of America we have supplied information through our Embassy in Washington to the appropriate Committees of Congress, or rather, we have given our support to the trade interests in this country in supplying this information. I want to tell the Committee to-day that that, in my judgment, is the limit in a great many cases to which the Board of Trade under any Government can go, because, if we were to make representations to a Government which we knew would not be effective, it would seriously weaken our position in any representations we had to make in other matters and very often with no lack of reasonable hope in much larger fields. The real underlying suggestion of hon. Members in making that proposal is this. They are beating about for a retaliatory tariff, and the whole suggestion is that we should have a weapon in our hands, as they put it, to negotiate with. If that is their policy, they must try to convert the people of the country to it. All I can say is that, in so far as I understand British industry and commerce, that would be just about the very worst weapon we could use and the damage that would be done over the whole range of our overseas commerce and to our treaty position
  1938
  in most-favoured-nation treatment would, in my judgment, be intolerable. It would be simply disastrous to the great leading industries on which this country has depended and will continue to depend as a great exporting country and to the entrepôt trade and to those insurance, shipping and invisible services on which the employment of such a large number of our people depends.
  I want to turn now to the trade position, and perhaps the Committee will bear with me if I try to outline the facts, because they are of critical importance at this juncture in our industrial history. I will try to put them as briefly as I can and with as few figures as may be because, generally speaking, the figures have been supplied to Members in the published returns of the Board of Trade and on specific points they have been given at great length in tabular form in reply to innumerable questions in the House. What is the situation that confronts us to-day? The Armistice was in November, 1918. We are now getting nearly to the middle of 1930. That is 12 years from the cessation of hostilities. For about two years after the War had concluded we had an artificial boom carried over from the War period and within the United States and the Far East and over Europe and in this country; then came the slump, and we settled down to eight or nine years of industrial depression—perhaps rather more. At the peak point unemployment reached 2,000,000, at its best point it was round about 900,000, and to-day it is up to a figure which we all deplore—1,700,000 registered as out of work.
  I am not going to say anything about Government policy to-day because that would be inappropriate on this Vote. We can defend or explain it on other occasions. But this is true, that, particularly since the autumn of last year, we as a country, irrespective of party, have been exposed to a series of events which have had a profoundly adverse influence on our industry and commerce. Let me try to summarise them. There has been the new tariff discussion in the United States with very high tariff proposals, there has been the unrest and disturbance in India and the proposal for new duties—which have great importance for Lancashire—under which we get a certain preference on certain classes

  1939
  of goods, but which, nevertheless, may make things very difficult indeed for Lancashire manufacturers. We are dealing in that case with an industry which, in spite of all the depression, still exports some £135,000,000 year by year, which employs 550,000 people, but which is, of course, a very vulnerable spot when you get a tariff change of that kind or a suggestion of boycott or political unrest in what was the great market for Lancashire goods. Side by side with that, we have the unrest in China and the development of home manufactures in Japan; in short a concentration of attacks, to some extent, it is true, before we took office, but greatly increased within recent times, which everyone admits has raised a very large question in what is still the greatest exporting industry in Great Britain. That is America with the new tariff, India, Japan and China.
  Coming for a moment to Australia, every student of Australian conditions within recent times is well aware that the effects of the large-scale borrowing by the States are now coming home to roost. They have a very large external debt and they have to pay the interest on it, a very high sum annually for little less than 6,500,000 people to meet by exporting all the goods they can. They have had certain industrial legislation which has had great influence on their cost of production, and now they have tried, or are trying, under a very high tariff, to restrict the imports into their country, to encourage all the exports they can, and to try to make good the situation. Of course, that again is of first class importance for Great Britain, and it is also a very difficult problem for Australian trade. I mentioned a minute ago that the population of that vast Continent numbers under 6,500,000. Let me give the Committee this impressive figure, which I took out to-day. Australia, in the eight months ending February, 1930, exported about £64,000,000 worth of goods. In the corresponding period of the previous year she exported £96,000,000 worth—a loss of more than £30,000,000 over eight months in the corresponding periods of two adjacent years, the latest period I could take, a loss applicable to some 6,500,000 people. I have only to men-
  1940
  tion that to show the profound importance of that in oar connection with Australian trade; and it is a very important market for Great Britain just as we are an important market for Australian exports. So I could go on.
  There is in the case of Canada, fortunately, a rather more hopeful outlook. Within recent years there has been very considerable penetration of Canadian industrial effort by United States capital, and it has been suggested that that might operate to the detriment of Great Britain. I think it is a fair comment to suggest that Canada, perhaps because of the very high American tariff now proposed, is looking to us and to markets that are free, and I acknowledge with gratitude the preferences that are given in the new Canadian tariff to Great Britain. I should describe that as one of the hopeful features not only in our inter-Imperial relations in trade but for our industry and commerce as a whole. I believe rather more than 500 headings are affected—I am speaking now of the general statistics of the new Canadian tariff proposals—and probably in about 270 of these there will be concessions to Great Britain in preference or some form of advantage, and only in about 11 or 12 a disadvantage to this country. That is a very great gain. I know that certain hon. Members from Lancashire are anxious regarding the present preference to Lancashire cotton goods as regards the content of the materials and labour produced within the Empire. That is the 50 per cent. basis to which the right hon. Gentleman the Member for Darwen (Sir H. Samuel) alluded in yesterday's Question. We have taken such steps or made such appeals as are possible, but in any event this is at the moment a bright spot. It is a contribution to that downward movement of tariffs in the Empire and in the world which, I am bound to say, hon. Members opposite do not appear to welcome to any appreciable extent but which I should have thought was, nevertheless, quite consistent even with Protectionist doctrine. If they will impose tariffs, that is if they succeed in getting a majority, let them try at any rate to obtain the greatest measure of freedom in commerce that they can possibly secure.
  If I pass for a moment to the position of specific industries, what do we find? Beyond all question the outlook is very

  1941
  difficult, but I refuse to give way to any form of gloom or pessimism. I entirely agree with that part of the speech of my hon. Friend the Member for Rushcliffe, and also in the conclusion that there is great underlying strength on which we can build in Great Britain if we go the proper way about it. Take, for example, cotton. There our exports have very largely declined and, unfortunately, they continue to decline. We are still exporting £135,000,000 per annum, but the difficulty is acute. That industry has been reviewed in very great detail by what is now a committee of the Economic Advisory Council, and I am able to tell the Committee that its report will be available almost immediately. The Lord Privy Seal indicated that the various interests in Lancashire with which we have been in constant contact since we took office will be consulted and in due course the Government will make a statement to the House.
  Sir HERBERT SAMUEL: The right hon. Gentleman says the report will be available. Does he mean to the public?
  Mr. GRAHAM: On that I could not pronounce to-day. A very large part of the evidence has been tendered in strict confidence. I have always promised the House such a summary as I could give of the results and, until the report is available, I hope hon. Members will not press me beyond that point. In Lancashire cotton a certain amount of what is called rationalisation or reorganisation has been proceeded with. The work of the Lancashire Cotton Corporation covers a large field. It has been attended with very great difficulty owing to the deep-seated segregation of the different sections of the industry from the raw material to the spinning, and then the weaving and the finishing and the wholesale and retail sections of the trade. It may be that anyone considering this problem will have to consider how far in order to try to save the largest export industry of the country, these factors can be brought together as they have never been brought together in the past in a common effort. I leave that problem to the Committee.
  In the case of coal, we can point to a rather better position in 1929. The aggregate coal output of Great Britain climbed in that year to 258,000,000 tons. That is
  1942
  certainly smaller than the pre-War period and smaller than certain periods after the War, but it was an improvement of 20,000,000 tons in the aggregate output of this country. I am glad to think that one-half of that improvement in the aggregate output went to the export trade, and that we are now beginning to win our way back into the Scandinavian markets and to some extent into markets in France and Belgium and other parts of the Continent, where our export trade in coal has suffered a great deal in recent years. I must not say anything to-day about the Coal Mines Bill, but whatever view we take of that legislation, it gives, at all events, a hope that this industry will be reorganised on such lines as to maintain its strong appeal to the home market and to the export trade. The industry has one encouraging fact, that a part of the increase—I think a substantial part—in the home market last year was attributable to an advanced demand from iron and steel.
  That leads me to make a reference to that great industry. It also is suffering at the present time, and there again the report of a committee of the Economic Advisory Council is almost due. The exports of iron and steel are still in the vicinity of from £68,000,000 to £70,000,000. That is about half of the annual volume of cotton exports from Great Britain. It may be that there again the committee will deal with the whole question of the size of plant, how far the industry can be treated on an area basis in Great Britain, what is the view on Protection and Safeguarding. Safeguarding was considered by a sub-committee of the Committee of Civil Research under our predecessors, in which, I think, someone said publicly in this House that nine Cabinet Ministers were involved. But in any event, they were quite unable, following that, to recommend a Safeguarding Duty, as they recognise that it would plunge them into the whole tariff field.
  I should like to make a reference to shipping and shipbuilding. I think that in the period immediately before the War the shipping which belonged to Great Britain was about 18,900,000 tons and to-day it is over 20,000,000 tons. The figure in 1929 is rather better than the figures just before the War, but unfortunately our percentage of world tonnage has decreased. It has fallen from 44 per

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  cent. before the War to about 31 per cent. at the present time, or to 36 per cent., if we take it on an Empire basis. That has been due to the development of the mercantile marine of the United States of America and of Japan and certain other countries. In short, it is another illustration of that great change in post-War economic conditions which again has had a profound effect on the industrial and economic strength of Great Britain, either by the provision of their own resources for dealing with their trade or, as the Balfour Committee pointed out, by the development of their local manufactures compelling us to face a very greatly changed state of facts. Shipbuilding, fortunately, was better in 1929 than perhaps many hon. Members of this House appreciate. It is one of the rare bright spots. We produced 1,600,000 tons which is something approaching the 1,900,000 tons of 1913. I allude to the two great industries of shipping and shipbuilding because of their vital importance in relation to our export trade. I pause for a moment to agree with hon. Members on that side of the Committee, and, I think, in other parts of the Committee that we should not in any way underrate our home market. As far as we are concerned, we shall do everything in our power to encourage the purchasing power of our people and the sale of goods at home, but it remains true that for an island community like Great Britain we shall for all time be bound up—unless we contemplate something like isolation and self-sufficiency, which I think is economic suicide—with the markets of the world, and these great shipping and shipbuilding services require at all times our most careful consideration.
  That is why, or partly why, we have done our best since we took office to try to secure reductions in tariff rates. I make no apology for alluding to them this afternoon at the conclusion of this speech. My hon. Friend opposite rejoiced at the fact that, as he regarded it, we had suffered a reverse in the discussion at Geneva. I have not regarded it as a reverse. On the contrary, I regard it in all the circumstances—and I want to put it generally—as a very satisfactory beginning in a remarkably difficult problem. The right hon. Gentleman the Member for St. Ives (Mr. Runciman)
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  was associated with the review of the circumstances in great detail by the Economic Conference of 1927. There you had a great body of commercial opinion, irrespective of party, which pointed to the disastrous results to European trade following the War by the growth of this economic nationalism and restriction, and their emphatic condemnation of tariffism. There was the unanimous conclusion of that conference not in favour of Free Trade—I must not misrepresent them—but in favour of freer trade, and they certainly suggested that every step should be taken to get these tariffs reduced to a lower rate. The hon. Gentleman the Member for the Honiton Division of Devon (Sir C. Morrison-Bell) produced a model showing these tariff walls all over Europe, which impressed every Member of this House. I confess that it impressed me with this fact, namely, how in the face of that did we carry on any industry or commerce at all? It was literally a miracle that we should get British goods over those barriers.
  The choice before us is perfectly plain. Either we are going to plunge into retaliatory proposals or we are going to pursue a course towards as much freedom as we can possibly attain. For myself I make not the slightest apology. Indeed I rejoice in the fact that during our term of office, from the time of the Tenth Assembly of the League of Nations at Geneva in September last right down to the last hour it is open to us, we shall do our best by way of reduction in the European tariff field.
  What is the nature of the preliminary agreement that we have obtained? Hon. Members seem to suggest that we tied our hands behind our backs. We had several weeks of discussion in a conference representative of a large part of Europe, and one or two other countries, and there never was any difference of opinion during those discussions as to the fundamental importance of trying to get those tariffs reduced. I agree that those countries were obliged to refer to their position in agriculture which was in profound depression and difficulty. They were also under obligations in certain of their treaties which they could not easily gat out of. They had been engaged in provisional negotiations with certain countries prior to the 24th March, 1930,

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  the date of the signature of the preliminary document. Certain reservations were made, but, at all events, they were willing, and they did something. Treaties then in existence were to be retained in force, and duties were in general not to be increased. We on our side preserved our freedom regarding our fiscal duties, but undertook to introduce no protective duties or new tariffs. And all parties came under the general understanding or agreement that if any new protective duties or increased duties were introduced, notice should be given and every effort should be made to maintain the existing equilibrium, that is, either bilateral between one country and another or generally among countries if one or more countries happen to be involved. I have always made it clear to the House that while that fell short of the tariff truce upon which we embarked following the speeches at the Geneva Assembly, it was valuable in supplying the environment in which the more important negotiations for the next year or two are to proceed.
  What is the form that the negotiation will take? I think that it will possibly take the form very largely of trying to deal with great groups of commodities. I do not think we should gain very much by taking individual commodities here and there and embarking on everlasting debates and negotiations over them. But suppose for a moment we were able to go to a number of these countries which require agricultural implements which are fundamental to agricultural produce, or iron and steel goods or anything of the kind and see how far and over as large a field as possible, they were prepared to give reductions. Is not that worth investigation? What is the objection to a policy of that kind? If hon. Members opposite carried their plans they themselves would be driven to some kind of negotiation of that description some day and I imagine sooner rather than later. I propose to get into it now and see what we can do to get rid of as much as possible of this economic nationalism which has retarded European recovery and has had the most adverse influences on British trade.
  7.0 p.m.
  One final word of an optimistic character. A great deal of the Debate to-day about world trade suggests that it has declined. That is not true. World
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  trade to-day is about 20 per cent. Greater than what it was in 1913, but we have lost our place to some extent and it is to recover that place that we must pursue every kind of international co-operation and national effort we can possibly exercise. We had about 13.9 per cent. of world trade before the War and it sank to less than 10 per cent. after the War, and it is now perhaps round about 11 per cent. In any case, it is much short of the 13.9 per cent. figure at the present time. We are fighting a very hard battle, for the reasons which I have given, in innumerable world markets, but there are encouraging features. I would in a sentence or two indicate what are those encouraging features. I believe from all the evidence at my disposal, that the effect of the shake-out in Wall Street and in the United States of America will not be so bad, perhaps, as was at one time thought. The moral influence of a disturbance of that kind is unfortunately considerable but I am encouraged to believe that in important sections of industry and commerce it is not going to have a direct or a permanently disadvantageous effect. It will be a warning against undue speculation, I trust, if I may say so without offence, on the other side of the Atlantic and I trust also, remembering our boom period of a year or two ago, on this side, because our industrial distress has been aggravated by certain sets of people who have lent their names to prospectuses which should never have been issued and to businesses which have collapsed involving many millions of capital, which, in my opinion, should never have been subscribed. That is one encouraging feature. The next encouraging feature is, that although commodity prices have fallen very dramatically since the autumn of last year, I think we are now approaching rock bottom. I do not think honestly that they can go much lower and, if the price fall is arrested and begins to improve, then there will be encouragement for the industries of other ocuntries and the industries of Great Britain. In the third place, I believe that we are going to gain by the measure of re-settlement which is going forward in Europe owing to the transition from the Dawes Scheme to the Young plan. It was always economically one of the disadvantages of the Dawes plan that it never fixed the

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  German liability for reparations. The Young plan has reduced the aggregate amount payable by Germany, fixed the payments year by year and adjusted for 10 years on a diminishing scale the deliveries in kind. I think that we can look forward there to a considerable contribution to the recovery in Central Europe and encouragement for our industry and commerce.
  That brings me to cheap money. In Great Britain there may be a disposition to start again in certain pursuits which have been delayed, because of the high rates within recent times, until the Bank Rate fell, as it has done within recent months. During the past fortnight alone, £16,000,000 of new capital has been authorised or raised for overseas investment, and so I trust the process will continue. With that hope, I would leave this thought with the Committee that, dark and difficult as the circumstances are, we are perhaps just now beginning to turn the corner. What we must all avoid is writing down the skill and enterprise of our people and underrating the power of our industry. Let us concentrate on its inherent strength and, given a fair field for the next year or two, we shall progressively re-absorb large numbers of our fellow-men into employment and rebuild the prosperity of our country to something greater than the pre-War period.
  Mr. HANNON: I am sure the whole Committee will congratulate the right hon. Gentleman on the speech he has just made, but there will be profound disappointment, notwithstanding this admirable disquisition on the trade condition of the country, that he did not give us hope of dealing immediately with our economic situation. At the close of his speech he called attention to the figure of our trade before the War in relation to the trade of the world. He said we were round about 13.9 then and had now fallen to something like 10. If he will reflect on the change which has taken place during the same period in the United States, he will find that the trade we have been steadily losing all over the world is gradually being gained by the United States. He eloquently urged that every step was being taken to restore this country to its economic vitality, and that his Government would do everything possible to strengthen the
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  purchasing power of the people and to enable us to deal with our present discontent. I ask him how he is going to do it in face of the highly intensified organisation of industry in the United States, which aims day after day at getting as large a proportion as possible of the world market now occupied by our trade? In spite of all he did at Geneva and of his efforts there, which I regard as a serious menace to the safety of our trade in this country, he cannot put forward much hope of the lowering of these tariff barriers in the near future to facilitate the access of our trade to European countries.
  The fact remains that this obsession of the right hon. Gentleman and his friends is leading this country more and more into the morass of misery year after year. The Free Trade policy which has been pursued so long and with so much sincerity and devotion—although I always gave him credit for a great deal more intellectual perspicuity than to be bull-dosed by some of the theories of his colleagues—has resulted in our being led from year to year into a situation more difficult and more embarrassing than we have had to deal with before. During his time at the Board of Trade he has seen the unemployment figures rise; during the time his Government have been in office we have added to the unemployment of this country at the rate of one man per minute of time. Look back on that record and on the condition of the industries in this country at the time this Government came into office. It was steadily improving, unemployment was just over 1,000,000, there was a general air of confidence in the country, people were looking forward to better times, contracts were coming into industries with which I am associated, and there was a general air of hopefulness all round. Ever since, because of the unsettling of the mind of the industrial community, because of the disturbing statements of the Chancellor of the Exchequer at the beginning of his term of office, we have had a steady decline in the condition under which industry is carried on. Manufacturers cannot give forward contracts, cannot give undertakings for the continuous purchase of raw materials over a long time, and manufacturers who desire to make contracts a long way ahead have been placed in a hopeless position. All that the right hon. Gentleman can

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  say this afternoon, after that period of time, is that he still has confidence that the country has foundations on which to build against the most highly organised competition from every quarter of the world.
  In every city we have in its stores thousands of articles poured in from every country, made at wages far below the wages of the ordinary skilled workman in this country. Has he made any suggestion in this Committee to deal with that problem? What is the good of talking about the future? What we want, what the working people want from the President of the Board of Trade, is to know what the Government are going to do in order to safeguard the nation from this assault from abroad. Under the sun to-day we are, in the eyes of the world, the most foolish community that ever existed, from the point of view of saving our own people. He talks about the small percentage of industries which have been safeguarded, the 2 per cent. from the point of view of imports, and the 1 per cent. from the point of view of exports. That is not the question with which he should concern himself, examining meticulously the extent of these industries from that point of view, but with how many people are being displaced from employment in this country and what steps are to be taken to restore these men to employment. Are we to continue to see European countries grow rich at our expense and maintain their populations while our men are walking the streets? I go into New Street and Corporation Street, in Birmingham, and look at, the great shops packed with goods from Belgium, Czechoslovakia, France, every one of these countries safeguarding the labour of their own people, and I ask what steps His Majesty's Government are taking to give British workmen working in Birmingham workshops a fair chance against their foreign rivals putting their goods into our markets.
  I know that the right hon. Gentleman himself is really serious, and nobody in this House has a greater respect for him than I have. Indeed, on this side of the House we regard everything he says as that of a sincere and earnest advocate of the welfare of his country. How is he going to face the future by allowing our fiscal policy to remain as it is? Has he
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  observed the attitude of the new President of the United States towards the development of American industries? Into every market of the world to-day, highly organised American salesmanship is directing the products of the United States. The right hon. Gentleman knows that the markets of Latin America were practically ours for more than a generation. To-day the United States of America have put into every country in Latin America an organised body of men, service to deal with motor cars, and every phase of organisation in relation to the extension of their trade which can be devised. What are we doing? Is the right hon. Gentleman satisfied to allow that state of affairs to continue? He talks in a deprecatory way about retaliatory tariffs. How are we to make bargains of any kind with competing countries in our own markets unless we have some means of retaliation? Every country in the world that has made a success of industrial development in recent times has used these tariffs. Let me just recall what happened a few days ago in relation to his own tariff conference at Geneva. He will find that the German Government to-day propose to put a series of increased tariffs on Polish goods coming into Germany in order to safeguard German industry. That being so, where do we stand? It would be much more important to the Committee and to the course of this Debate if the right hon. Gentleman could tell us what proposals he will make within our own Empire in order to develop our markets for the exchange of our goods and assist the development of inter-Imperial trade. I know that some of his colleagues look with considerable indifference on the projects we have for developing the trade of the Empire. If he would tell us they are taking measures to concentrate and develop Imperial trade against the tariff barriers of Europe on the one side and of the United States of America on the other, then we would begin to think that there was some element of constructive statesmanship in the party to which he belongs.
  This question of dealing with Safeguarding in this country is one which, in the realm of common sense, cannot be challenged. As the hon. and gallant Member for Bournemouth (Sir H. Croft) pointed out, in every single test of time

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  in the industries brought under Safeguarding, we have succeeded in establishing our case. He has not given any complaint from any section of the community that Safeguarding has inflicted injury on any section of our people. I challenge him to say that any industry, productive or distributive, has made a single complaint that any of the safeguarded industries has inflicted injury on them. Increased production, increased employment, increased wages have all had valuable repercussions in developing the purchasing power of the people. I do not propose to keep the Committee any longer except to say that His Majesty's Government, in taking the steps they have done, are not merely inflicting a grievous evil upon the industries immediately affected, but are giving a lead of economic policy which will place us in the hands of foreign rivals and strengthen their competitive power against us in every quarter of the world.
  The very fact of this action being taken by His Majesty's Government, in the way that they have done it, and the fact that they have exposed themselves to the whole world by their attitude in regard to tariffs at Geneva, has made our industrial efforts in this country almost a laughing-stock throughout the world. The President of the Board of Trade, who is competent to render great service to this country, is in an unfortunate position in the statement that he has made with regard to industry, by merely expressing a pious hope and not making one constructive or hopeful suggestion how to restore our economic strength in our present depressed condition. What is the good of expressing great hopes in regard to the future unless we do something practical to help the revival along? The only means whereby that can be accomplished is by giving the workman of this country protection for the continuity of his employment, by giving the manufacturer protection for the continuity and maintenance of the efficiency of industry, and giving the people as a whole some permanent outlook on a Government policy which will give them adequate fighting power in the economic world against their rivals in every quarter of the globe.
  Mr. MANDER: I do not propose to follow the hon. Member for Moseley (Mr. Harmon) in the very interesting discussion of a subject which lies so near to his heart. I desire to raise another question, of which I have given the right hon. Gentleman notice, of great importance to the future of trade and industry in this country, and that is, the administration of the Cinematograph Films Act, and the position of the cinematograph films industry as it exists at the present time in this country. The Cinematograph Films Act was passed with the definite object, I understand, of creating a powerful British film industry in this country but, unfortunately, the experience of its operation in the last three years has shown that it has not only failed lamentably but it has done a great deal of harm to the film industry of this country. Under the Act there was to be a British quota of films rising from 7½ per cent. in 1929 up to 20 per cent. in 1936 as the quota of distributors and exhibitors. Unfortunately, nearly all the distributors in this country are controlled or owned by American interests, and they are using their position to damage the British film industry to the utmost of their power. The percentage is so small that they are able to cause to be produced films of very low quality and to foist them upon the exhibitors, and to have a certain number of British films shown in this country which get the name of being British and bad. I have no hesitation in saying that that is the deliberate policy of the American interests controlling the film industry in this country.
  To show the Committee how far-reaching is the influence of the Americans on the film industry in this country, I would point out that they control, directly or indirectly, the following cinemas in the West End of London: the Tivoli, the New Gallery, the Marble Arch Pavilion, the Plaza, Carlton, Empire, Capitol and the Rialto. It is astonishing to find that all the principal cinemas in London are, directly or indirectly, under American control, and the Americans are using all the power which they possess through this limited quota of deliberately getting British films a bad name. I would ask the right hon. Gentleman what action he is proposing to take in circumstances of this kind. I know that he has an Advisory Committee

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  which is supposed to represent British interests but, again, I believe that Committee is dominated by American interests, although it is supposed to represent the purely British point of view. If he looks very carefully into the matter he will find that that is so and that the Americans may be trusted to oppose to the utmost of their ability any attempt to build up a film industry in this country, for which there is a unique and passing opportunity at the present time.
  The propaganda value of the films of any country is enormous. I understand that recently a Committee has been appointed in the Department of Overseas Trade to inquire into this matter and see what can be done from the British point of view. As showing the enormous propaganda value of films, I should like to quote a paragraph from a report that was sent by our representatives in America to our Government with regard to the importance of foreign trade:
  "There is another side to the value of foreign film showing which cannot be lightly discarded—the effect of American motion pictures upon other forms of American exports. The motion picture present a graphic illustration of American products, automobiles, radios, fashions, musical instruments, &c. With these pictures finding their way into every corner of the world, and garnished for popular acceptance by glamour and appeal, it can be readily appreciated that American 'movies' represents an important agency for international advertising. It is estimated by the Department of Commerce that the moving pictures produced in the United States promote foreign trade at the rate of a dollar a foot. In other words, the 201,000,000 linear feet exported during the first nine mouths of last year increased the country's trade by about 201,000,000 dollars. Accordingly, the success of our moving pictures abroad is of importance to business generally as well as to the motion picture industry of this country."
  There are 40,000,000 or 50,000,000 people every day of the year visiting cinemas in different parts of the world, and 95 per cent. of the pictures which these people see are American. There are 57,000 cinemas in the world, 20,000 in America, 4,000 in this country and the rest in other parts of the world. Those cinemas that are not in America are getting day by day to the extent of 95 per cent. American propaganda for American goods, to the exclusion of British goods. I think this matter requires the most earnest and most serious attention of the right hon. Gentleman.
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  There is another part of the Act which is affecting seriously the development of the British film industry, and that is the part that lays it down that 75 per cent. of all the salaries and expenses in connection with the production of a British motion picture must be paid to or expended upon British personnel, and that the scenario must be written by a British subject. If that law were enforced in the United States it would break up the film industry in that country and it would break up Hollywood, because it would mean that the particularly eminent and distinguished people who have to be employed, and who cannot be found in any one country would not be available. Clive Brook, Charlie Chaplin, Emile Jannings, Pola Negri, Lubitsch, Lily Damita, Dolores Del Rio, Von Stroheim, and many other film stars would, if there was a law of that kind in force in America, not be able to take part in the production of American films. That, again, shows how seriously we are being affected in an adverse manner by the way in which the Act is operating in this country at the present time.
  There is a much more serious situation than that to which I have referred. The introduction of the talkies has revolutionised the film industry in this country and in the world, and there is a unique opportunity at the present time of getting the talking film industry established on a permanent basis in this country for all time, but unless something is done in the next few months, the chance will have gone, and will have gone for ever. The position is that, whereas Hollywood was an admirable centre when you were dealing merely with non-talking pictures, because you could use any language there, the Americans now are at a great disadvantage, because they use the original English language for production, and then the work has to be done all over again in five different languages—French, German, Spanish, Italian and Swedish [HON. MEMBERS: "And English!"] The original is done in English—[HON. MEMBERS: "American English!"] Well, the American branch of the English language.
  It is obviously a very difficult and a very expensive thing for the Americans to take over from Europe to Hollywood the people who can do this work, and

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  they are endeavouring to get over that difficulty by establishing the European side of their production in Paris. They do not want it to come to England if they can possibly prevent it, because they realise that that would mean the end of Hollywood. The obvious place and the most natural, the most economic place in the whole world for the establishment of a multi-lingual film industry is London, because there is here the greatest market—the English talking or the American talking market—on the spot, and you can at short notice and at small expense get people from France, Germany and the other countries to come to London to do the talking in the different languages.
  It is quite clear that we have very special advantages which no other country possesses, but the opportunity is one that will not recur and requires to be seized at the present time. There are some people who suggest that this industry does not employ a great many people, but I would point out that the film industry in the United States is the third most important in that great country. I do urge the right hon. Gentleman to give this matter his most serious and constant attention, and see whether on a non-party basis we might approach this important national question, and try in the few months that remain to get established for all time a great multi-lingual film industry in this country.
  Mr. BENSON: The Noble Lord opposite remarked that he was extremely sorry that the Chancellor of the Exchequer was absent from this Debate. I feel sure that the Noble Lord was not speaking for the rest of his party, because I have watched the party opposite, very frequently, when the Chancellor of the Exchequer has been speaking, and I have never noticed any sign of joy or happiness at the Chancellor of the Exchequer's presence. I have looked across at the opposite benches on such occasions and my general impression has been that when the Chancellor of the Exchequer has finished speaking, the tails of the Tory party were hanging very disconsolately between their legs. The suggestion was that he might have been here in order to meet the fast bowling that was to come from the opposite side. We
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  have been waiting for three and a half hours for the fast bowling to arrive, but it certainly has not come yet.
  The attitude of the supporters of Safeguarding, far from being in the nature of an attack has been almost on the defensive. The hon. and gallant Member for Bournemouth (Sir H. Croft), in asking for a further inquiry into lace, would go no further than to suggest that this inquiry would show that the Safeguarding Duty on lace had done no harm. If that is the best case that can be put up for Safeguarding, that it has done no harm, I think that the attempt to bull-dose the electors into voting against the Government in the coming by-election will fail. We know that this Debate is very largely due to the by-election in Nottingham, and is an attempt to influence it. If the best that can be said for Safeguarding is that it has done no harm, the attempt that is being made to stampede the voters of Nottingham will be useless.
  The figures for which the hon. and gallant Member for Bournemouth asked would be of little value; we could base no conclusions upon them. If there had been any improvement at all in the industries which are safeguarded—and one would imagine that Safeguarding would produce some result—it would not be an argument in favour of general protection; it would have no bearing on the subject. What you are doing by taking a handful of small and comparatively insignificant industries and safeguarding them is to give those industries the best of both worlds. You are giving them protection against foreign competition and at the same time allowing them to retain all the advantages of a Free Trade market. They can buy all their raw materials in a, Free Trade market and they get the added advantage of Protection. The only interest of hon. Members opposite in Safeguarding is to use it as a stalking-horse for a general tariff. The conditions of an industry which is protected so far as its sales are concerned and which is allowed the advantage of buying its raw materials in a Free Trade market are entirely different from the conditions of the industry under a general tariff.
  Hon. Members opposite will not deny that they are after a general tariff. The safeguarding of particular industries is

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  utterly indefensible unless it is going to lead to a general tariff. There is no possibility of any Government maintaining a policy of picking favourites and saying to one you shall have Protection and to another, you shall not have Protection. If Protection is allowed to one industry there is no doubt that we shall have a general demand for Protection. About nine industries have been given Safeguarding, and there were 49 industries which demanded it. If Safeguarding is allowed as an integral part of our fiscal system it will be utterly impossible to resist the steady clamour and demand from other industries for the favours which have been granted to some, and we know that if hon. Members opposite ever come into power again they will grant a general protective tariff just as soon as they dare. The hon. Member for Rushcliffe (Sir H. Betterton) referred to the Coal Mines Bill as Protection, and suggested that this great basic industry has been given a particular form of protection by the Labour Government. He also suggested that the disastrous result might arise of an increase in prices.
  Surely the whole basis of the protective policy of the party opposite is to raise prices. There is no advantage in Protection if it does not raise prices. We have only to look abroad to any country which has a high protective policy to realise that prices rise, and rise very considerably. The hon. and gallant Member for Bournemouth suggested that it would be well if we consulted our Colonies as to their views on the matter of Protection. That is an excellent idea. Let me take Australia. The President of the Board of Trade has already referred to the extraordinary decline in Australian exports, far greater than is the case in this country, and if we want to know the reasons we have the very excellent address which was given within the precincts of this House about a fortnight ago by Sir Norman Kater, ex-President of the Graziers Association of New South Wales. He made the following statement:
  "There is not a single secondary industry the product of which we can export at a profit."
  He was asked by the hon. Member for Loughborough (Mr. Winterton):
  "Did I understand the speaker to say that secondary industries, although protected, could not export their products?"
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  and Sir Norman Kater said:
  "That is the fact.…Because prices are too high. The wages and costs are so high under our protective tariff that I do not think we can produce a single article beyond our primary products which can be sold anywhere outside Australia at anything but a considerable loss."
  Sir NAIRNE STEWART SANDEMAN: Does the hon. Member object to wages being raised?
  Mr. BENSON: No, but I strongly object to wages being raised to such an extent that Great Britain cannot export any of her manufactured articles except at considerable loss. It is no use raising wages to such an extent that an intolerable burden is placed upon industry, a burden so great that industry cannot bear it; which is what Australia is getting at the present time.
  The DEPUTY - CHAIRMAN (Mr. Dunnico): The hon. Member is getting dangerously near to a discussion of the merits and demerits of a general tariff. That is not permissible under this Vote. The Debate must be restricted to existing Safeguarding Duties.
  Mr. BENSON: Let us look at this question of wages under Safeguarding. Take the question of lace. Hon. Members opposite say that the reason why we cannot meet French competition is because wages in France are barely 60 per cent. of the wages in this country. France is a protectionist country! It is only Where you have low wages, as in a protectionist country, that you can export your goods. I have no objection to wages being raised. I want to see them raised, but the imposition of Safeguarding Duties is not the method for increasing wages. You have the experience of Australia, and hon. Members opposite have given the facts with regard to France. Safeguarding is only likely to be effective in helping us if at the same time wages are driven down in order to compensate for the increased cost of production under Safeguarding, and it is because I want a rise in wages, not a decrease, that I strongly oppose the principle of Safeguarding and also support the Chancellor of the Exchequer in his attitude in allowing the present Safeguarding Duties to lapse when the time comes.
  Lieut.-Colonel ACLAND-TROYTE: I beg to move to reduce the Vote by £100.
  I do not propose to follow the last speaker in his dissertation on general tariffs, but I must say that he has completely misunderstood the policy of the Conservative party and has completely misrepresented it in its results. May I point out to him that the United States of America have a high tariff, but pay also the highest wages in the world? There is not the least doubt that Safeguarding has proved successful wherever it has been applied. There have been no complaints from any other industry, and it is certain that no industry which has been safeguarded has applied for the duty to be taken off. I am glad that the President of the Board of Trade ended his speech on a note of optimism. I hope that it will be realised, but I am rather doubtful with the present Government in power. It cannot be a mere coincidence that from the moment the present Government came into power unemployment has started to increase and has continued to increase. We all view this with the greatest concern, and we wish the right hon. Gentlemen the best of luck in anything they might do to reduce the amount of unemployment. We have our views on that problem, and they have theirs; and they do not agree.
  I want to give the Committee specific reasons why I think this Vote should be reduced. In my constituency there is a lace factory which is in a very flourishing condition, or was until the present Government came into power. I hope it is firmly enough established to be able to survive the results of the present administration, but its future will be greatly jeopardised by the loss of the Safeguarding Duty on lace and if the Safeguarding Duty on silk is removed. Under the benefit of these two duties this factory has been able to increase its employment, to increase its exports and to pay good wages. In fact, the wages paid have increased by over £1,000 per week since Safeguarding was put on and, in addition, last year the factory paid a bonus to its employ·s of £24,700. That is not an actual increase in wages, but it has exactly the same effect, and answers the remarks of the hon. Member opposite that in no case has Safeguarding increased wages. It has also been able to
  1960
  build up its export trade, and one country to which it has exported large quantities of goods is that of the United States. The United States put an import duty of 90 per cent. ad valorem on some of the goods produced by this factory, but they are so good and the benefits derived by the factory, owing to Safeguarding, are so great that they are able to get over that tariff wall and send their articles into the United States. Lately it has been proposed to increase the duties on those goods in some cases up to 140 per cent. Such a huge tariff practically amounts to prohibition and they will not be able to send their goods into America, neither will their European competitors.
  This fact would be serious in any circumstances, but the fact that the Government propose to allow the Safeguarding Duties to lapse, makes the condition much more serious than it otherwise would be, because these markets would be barred to our foreign competitors. That means that the French would not be able to dispose of their surplus produce. They would therefore dump all or a large part of that surplus produce on to our market, and would shut our own people out of that market. As has been said the wages paid to these French lace workers are very much lower than the wages paid to our workers—about 40 per cent. lower. One would have thought that in such circumstances the President of the Board of Trade would have been only too anxious to help the British lace industry, especially as it is threatened by a great increase in the tariff of another country. But the right hon. Gentleman refused to do anything at all. I do not know whether he received any representations on the subject from the trade itself, but I made representations to him on two or three occasions and asked him to make representations to the United States Government. He did nothing. It is true that in his speech he made some sort of excuse, but it was a very unsatisfactory one.
  In his speech he showed a little less frankness than is usual when he addresses the House. I did not mind whether the representations are made direct or to some committee, but the right hon. Gentleman refused to make any representation to any one. He even refused to back up the French Government in the representations which the French

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  made. The French were able to back up their representations by threats of retaliation, and the result was that the United States Government did not increase the duties. It seems to me a most disgraceful thing that our manufacturers should have to thank the French Government for having helped them in a foreign market while our Board of Trade is supine and hopeless and helpless and does absolutely nothing. That is sufficient reason for moving a reduction of the Vote. The inaction of the right hon. Gentleman is especially surprising because any action that he took would be entirely in keeping with his Free Trade principles. A great part of his speech was occupied in condemning his own lack of action. He said he wanted to encourage freer markets and reduce tariffs. After all that is the whole object of the one-sided and unnecessary tariff truce which the right hon. Gentleman tried to negotiate.
  Everyone wishes to see tariffs on our imports into other countries reduced. One would have thought, therefore, that the right hon. Gentleman would have been only too anxious to get a reduction made. But for some unknown reason he did nothing at all. We should very much like to know why he refused to do anything to help the industry. Was it because he was over-worked? If so, it was some excuse. We know that he had the Coal Bill, the Consumers Bill and one thing and another in hand. Was it because he did not regard it as his duty to make representations to other Governments about these things? It is without doubt the duty of the Board of Trade to do everything possible to foster and help our trade. I cannot believe that it was because the right hon. Gentleman agrees with the Chancellor of the Exchequer's spite against any trade which is safeguarded. There are some people who are so annoyed and disgusted by the fact that safeguarded trades are able to make profits and able to give more employment, and are entirely disproving Free Trade theories, that they are prepared to do anything they can to damage those trades, not caring whether they increase unemployment or not. I cannot believe that the President of the Board of Trade is animated by that feeling. This lack of action on his part, this refusal to raise a little finger to help an industry, fully justifies a reduction of the Vote, and I
  1962
  hope that the Committee will back me up in carrying the reduction.
  Mr. JOHN BAKER: The hon. and gallant Gentleman the Member for Tiverton (Lieut.-Colonel Acland-Troyte) seems to think that we on this side do not understand the policy of the party opposite on this question of tariffs. Let me assure him that if we do misunderstand hon. Members opposite, the misunderstanding is not deliberate. I am trying to understand. I listen to hon. Members' arguments. It seems to me that most of the arguments that they adduce in favour of their position cancel each other out. They cannot blame me for that. They must blame their own ineffective statement of their case. The hon. and gallant Gentleman is moving what is in effect a Vote of Censure on the President of the Board of Trade because the right hon. Gentleman did not enter into a tariff war with the United States. On this side of the House we do not believe in war; we do not think that it is a reasonable method of settling either international or industrial disputes.
  Lieut.-Colonel ACLAND-TROYTE: I did not suggest that the President of the Board of Trade should start a tariff war, but that he should make friendly representations with a view to getting a reduction of the tariff. That is quite a different thing.
  Mr. BAKER: I am afraid that bon. Gentlemen opposite do not see the implications of their assertions. That makes it rather difficult to argue with them. The assertion has been made twice to-day—it was made by the hon. Member for Rushcliffe (Sir H. Betterton)—that the lace trade of this country was saved by France, because France threatened the United States. The hon. and gallant Member for Tiverton made the same assertion, and I notice that he now nods assent. That is a declaration of war. I would not like to charge hon. Members opposite with being so obtuse that they cannot see that if they threaten someone they are likely to get into trouble. Nor would I like to charge them with being so obtuse that they cannot see the implication of their argument. First, we should destroy the friendly relationships that we have with the United States and other countries the moment we adopted the attitude which hon. Gentle-

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  men opposite describe as bargaining power. It is not bargaining power only that they want, for they go a step further and say that they want to be able to retaliate, the sublime assumption being that we can do as we like and other people will not retaliate on us. It is perfectly ridiculous that intelligent and educated men should put themselves into that position.
  Another argument used this afternoon has been that industries that have been safeguarded have not increased prices, that as a matter of fact they have reduced prices. But during the period that the Safeguarding Duties have been in operation there has been a fall in world prices. Surely if prices all over the world fall they ought to fall in Britain too, and the test is not whether prices have fallen or whether they have risen, but how much they have fallen. The great fear of hon. Members opposite that the Safeguarding Duties are to be allowed to lapse is proof positive that in their mind they believe that prices will fall much lower than they are at present in this country, and they are therefore being kept up to an artificial level by these very duties. That the duties have failed was virtually admitted by the hon. and gallant Member far Bournemouth (Sir H. Croft), who said that the consumption of lace all over the world had fallen. What is the promise that is always made by hon. Gentlemen when they want safeguarding? They always ask for it in the interests of the working man; they say it will give him more work and will increase his wages. Here we have had a four years test of one tariff, and the very High Priest told us to-day that it has not succeeded in stimulating the lace trade in any country in the world to the extent of absorbing the unemployed in that trade.
  Yet hon. Members would go on and apply it to other trades. They would extend it, for instance, to the iron and steel trades. Unfortunately I had to leave the Committee while the hon. and gallant Member for Bournemouth was speaking, but I would be amazed if told that he escaped a reference to the iron and steel trades. I want to give to hon. Members opposite a few figures that ought to be useful to them in their propaganda. In 1913 we exported over 1,000,000 tons of pig iron; and we im-
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  ported 200,000 to 300,000 tons. In 1927 we exported 330,000 tons, and probably about the same amount in 1929. Do not bother with the figures. Get the picture that our exports of pig iron have gone down to about one-third of what they were in 1913. But our imports have increased. I suggest seriously to hon. Gentlemen opposite that if they can get that picture in their mind they will see that they are doing an immense amount of harm with this constant demand for tariffs, because they are filling the minds of the British capitalist with the hope that if he cannot get a tariff to-day he will to-morrow, and that he has need to put his house in order.
  Major COLVILLE: Will the hon. Member say whether the imported pig iron comes from protected countries or not?
  8.0 p.m.
  Mr. BAKER: I am going to say a lot of things, and that among them. In times past we on this side have been told repeatedly that we are a disturbing element in the industrial world, and that because of that the capitalist dare not launch out, dare not do this, that and the other, and has to go very carefully. Day after day the Chancellor of the Exchequer has been asked what he was going to do with Safeguarding and with the McKenna Duties, because the industrialists of the country were not prepared to carry on in a condition of doubt and wanted to know exactly where they were. The Chancellor of the Exchequer was even blamed for the trade depression through which we are going. One would be out of order in analysing the reasons why we are in that trade depression, but if hon. Gentlemen opposite would pay as much attention to that question as they do to tariffs, they would find a solution, and they would find that they themselves are to blame. They are to blame in this matter of advocating, tariffs as much as in anything else. A number of stunt artists have been going up and down the country saying, "We want tariffs" and indulging in mere assertions, and they have filled the minds of the employers with such ideas that the employers are not prepared to launch out on new enterprises as their fathers and grandfathers did because they hope to get a, tariff which will enable them to retain their out-of-date equipment.
  The DEPUTY-CHAIRMAN: I have not heard the whole of this discussion, but it seems to me that it is now developing into a discussion on the merits or demerits of a general tariff. On this vote we must confine ourselves to the Safeguarding Duties with which the Board of Trade is specifically concerned. We cannot go into the general question.
  Mr. BAKER: Unfortunately, I used the word "tariff" when the Safeguarding and McKenna Duties were in my mind. Hon. Members opposite have been arguing that those Duties have increased employment in the industries to which they apply. The hon. and gallant Member for Tiverton instanced one case in which he said that more individuals were getting wages as a result, and he declared that that was an advantage. I agree, if his reasoning as to that one case is true as regards all cases, but I am afraid the hon. and gallant Member's logic is not sound, even as regards the one case which he quoted. I believe that all those who are urging the extension of Safeguarding Duties are really helping to retain in this country out-of-date equipment, which would have been replaced long ago but for the hopes that have been encouraged that if the employers only wait until they get Safeguarding, they need not bother about these things, as they will be able to make just as much profit with the old equipment.
  The DEPUTY-CHAIRMAN: What I wish to make perfectly clear is that any advocacy of the extension of Safeguarding Duties implies legislation and would be out of order on this Vote.
  Mr. BAKER: I do not wish to get out of order, but I would like to test the matter. I am dealing with the statements made by hon. Gentlemen opposite. I am taking the very words used by hon. Gentleman opposite and I am simply showing that one argument used by hon. Members opposite has cancelled out another and that they have killed their own case. Their statements apply to industries other than those which are safeguarded. They are using arguments about increased output, increased imports and increased exports. Those statistics which we have heard do not apply to the iron and steel trade. That
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  trade is in a difficult position because it has not advanced with the rest of the world in improving its appliances for getting output, particularly in the pig-iron section of the trade. I have already given figures to show that the exports have fallen and the imports have increased. Safeguarding will not alter that condition of things. The fact is that our blast furnaces cannot compete with foreign blast furnaces. We have blast furnaces with a weekly output of 350 tons, but Germany has blast furnaces with a daily output of 1,200 tons. How can we compete in those circumstances? If we analyse the position in that trade, we find that the steel manufacturer has been compelled to import scrap and pig iron to secure enough material to get his turnover, and he has increased his output per man employed. As prices have gone, however, very few steel manufacturers are making a profit.
  Wages to-day are becoming one of the minor costs in these trades, and capital charges and maintenance charges are rapidly becoming the chief costs of production. Therefore, all the arguments about cheap labour in other countries do not apply but the arguments about improved appliances and increased output do apply. It is not restrictions that we want. We do not want to make trade a hurdle race. Hon. Members opposite who ask for restrictions also talk about improving our shipbuilding trade. They want ships built to carry the trade which, if they have their way, is not to be allowed to enter this country. That does not appear to be a solution of any problem but a mere act of folly. I hope that this Vote of Censure on the President of the Board of Trade will be defeated because I believe that the right hon. Gentleman is pursuing a wise policy in urging a truce in tariffs instead of seeking to enter into a tariff war with other countries, as hon. Gentleman opposite would be pleased to see him doing. We ought to enter into a truce until we can make some arrangements for reducing, if not abolishing these hurdles. The disturbance caused by this kind of thing is illustrated by the news that the United States is going to lose £45,000,000 worth of trade a year because of the alteration in the operation of the fiscal system in Canada. We do not mind that, because we think that that trade will come to us but surely it is had for the world, if we

  1967
  happen to get a benefit from a bad thing, and rejoice about it, instead of trying to find a way of getting rid of the bad thing altogether.
  Mr. OSWALD LEWIS: Knowing the capacity for work of the right hon. Gentleman the President of the Board of Trade I should be the last person to complain of his not being in his place at this moment, but I regret the fact because, in the remarks which I propose to make, I am going to stick pretty closely to the right hon. Gentleman's own personal action. The President of the Board of Trade is recognised as one of the outstanding protagonists of Free Trade in the House of Commons. Of course he has his weak moments. If, for example, he happens to be supporting a Coal Mines Bill or a Consumers' Council Bill, there is no man more eager than he to introduce severe and widespread restrictions on trade in all its stages. He has a happy faculty for forgetting as an administrator what he has said as a legislator, and, in the field of administration, he can, I think, with justice claim that he is in all respects an austere Free Trader. Indeed it would be fair to say that he is one of that select little band to which the Chancellor of the Exchequer belongs, and to whom the fiscal experience of the last 16 years has taught nothing whatever. In pursuit of his fiscal theory the President of the Board of Trade has endeavoured to bring about what he describes as a tariff truce. I was afraid this afternoon that he was not going to mention it at all in his speech, and I was glad when he did make a passing reference to it, because it used to be his favourite child. I fear that of late it has become the Cinderella of his family. Those ugly sisters, the Coal Mines Bill and the Consumers' Council Bill, are now getting all the limelight and the tariff truce is thrust into a dark corner. I think this is a reasonable moment at which to ask that a little light should be shed upon it.
  I am sure that its author would not dispute for a moment the statement that the prime object of the tariff truce was to reduce tariffs all over the world. The words "all over the world," I am sure he would also agree, are of importance in that connection. But a very large part of the world refused to take the Presi-
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  dent of the Board of Trade seriously, and refused to make any effort to negotiate. The United States, Brazil, and China, which, between them, have a population of about 600,000,000—a very large slice of the total population of the world—were not prepared to negotiate at all. They sent observers. When the Conference opened at Geneva on 17th February it is true that there were 30 delegations present, but out of those 30 delegations only eight considered the proposal of the right hon. Gentleman sufficiently important to have full powers to negotiate. What was the attitude of our own fellow countrymen in different parts of the Empire? The right hon. Gentleman urged them to support his efforts, but the Governments of Australia, Canada, New Zealand, South Africa, and India one and all refused to support his proposals.
  The right hon. Gentleman, however, is not a man to be turned aside lightly. It does not cost him any great intellectual effort to conceive that he is right and everyone else wrong, and so he pursued his path and endeavoured to get the Conference to agree to a tariff truce. Let us consider what has happened as a result of those efforts. The first point, which I challenge any hon. Member to contradict, is that as a result of those efforts there has been no reduction in tariffs in any foreign country. On the contrary, when the proposal was brought forward, in a number of cases foreign countries hastened to put up tariffs in case some bargain was come to as to the status quo. Not only so, but if hon. Members will study the agreement, such as it is, that was come to, they will find that foreign countries reserve the right under certain conditions to increase their tariffs. Therefore, we have, on that side of the account, no tariff reductions in foreign countries, certain tariff increases directly attributable to the action of the President of the Board of Trade, and the possibility of further increases to come under certain conditions.
  What benefit have we gained to put against this? What about ourselves? We are to bind ourselves not to place any additional protective tariff on goods coming into this country, no matter how severe foreign competition may be. I would direct the particular attention of those supporters of the Government—

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  and there are many in this House—who have devoted a large part of their lives to the furtherance of trade unions to the important fact that the President of the Board of Trade would have us bind ourselves not to impose any protective duty even against the product of sweated labour from abroad. Many hon. Members of this House have striven in their time to prevent sweated labour in this country, and rightly so, but I challenge any eminent trade unionist who supports the Government in this House to rise and enter a protest against the President of the Board of Trade seeking to bind this country not to protect itself against sweated labour from abroad.
  The attitude of supporters of the Government seems to be that while their consciences are pricked at the thought of sweated labour at home, they do not mind if English working men and women are thrown out of employment by sweated labour abroad. The President of the Board of Trade has made it perfectly clear that this country is to bind itself not to take action of this kind, no matter how severe unemployment may be in this country, and he has still further strengthened the position, into which he had already got himself, that he cannot even take steps to retaliate against bounty-fed imports from abroad. The Committee will remember that there was an International Convention for the Abolition of Import and Export Prohibitions and Restrictions, and that that Convention was signed by the late Government, subject to the condition that 18 countries should have ratified by 30th September, 1929. When I say they signed subject to that condition, I mean that that condition was part of the Convention.
  During the summer it suddenly became obvious that agriculture in this country had found a new enemy, the imports of wheat and oats from the Continent, which were sent in under what amounted to bounty-fed conditions; that is to say, they had a certain financial advantage from their own Governments. Towards autumn this threat became increasingly serious, and it looked as if the late Government had put us in rather a fix by signing the Convention, but when the 30th September came it was found that 18 countries had not ratified, that there was not the number that was required. Therefore, there
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  was nothing to prevent the President of the Board of Trade refusing to be bound by the Convention, instead of which, in the face of the new peril that had sprung up of the importation of bounty-fed cereals into this country, he wantonly confirmed that Convention; and now at Geneva he tells the whole world that, in his opinion, this country should not put a duty upon any article coming from abroad which is bounty-fed.
  Mr. HERBERT GIBSON: Did not the International Convention only concern itself with wheat?
  Mr. LEWIS: The Convention was concerned with all import and export prohibitions and restrictions.
  Mr. GIBSON: But would it not have dislocated several other industries if the Government had refused to sign in 1929?
  Mr. LEWIS: Not at all. What the Government would have done would have been to refuse to confirm, and they would then have been free, had they wished, to tackle the case of the bounty-fed articles to which I have referred, or other bounty-fed articles which possibly the hon. Member has in mind. To sum up, the result of the personal activities of the President of the Board of Trade in the field of tariffs may be seen in these few facts: Since 1st January, 1930, additions to or increases in tariffs have been made by France, Germany, the United States of America, Italy, Rumania, Poland, Portugal, Austria, Finland, Peru, Algeria, and Egypt; and, according to the President of the Board of Trade, we are to be powerless, we are definitely to bind ourselves not to put on any duties which we may desire to put on at a future time.
  That shows that the right hon. Gentleman is not concerned with the question of competition from labour working under inferior conditions abroad, that he is not concerned with that or any other form of competition from which manufacturers and their employ·s suffer in this country owing to our unrestricted imports system. There is only one exception that I know of where he can be thought to have shown an interest, and that is the case of lace, where we understand he has decided to receive a deputation on the subject. The Committee is aware that this coincides with a by-election in Nottingham. I put

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  it to every Member of this Committee, Is there any man, whether he supports the Government or opposes it, who really believes that, once that election is safely over, whatever that deputation may say, the President of the Board of Trade will go to the Chancellor of the Exchequer and say, "Please keep the duty on lace"? Everyone in this Committee knows that the President of the Board of Trade has long since made up his mind on the subject.
  Mr. J. BAKER: On a point of Order. Is it in order for hon. Members opposite to charge the President of the Board of Trade with deliberately deceiving deputations which may call upon him?
  The DEPUTY-CHAIRMAN: I did not hear what the hon. Member said, but I should deprecate any such charge.
  Mr. LEWIS: I will repeat what I said. I said, in the first place, Is there any hon. Member of this Committee who believes that, when the by-election in Nottingham is over, no matter what the deputation may say to the President of the Board of Trade, the President will go to the Chancellor of the Exchequer and say to him, "Please restore the Safeguarding Duty on lace"? I do not believe that there is any Member of the Committee who believes that.
  Mr. BAKER: That is not my objection; the hon. Member is now asking me a question, but when he says that the President of the Board of Trade has long since made up his mind, when he has not heard the deputation, I think he is unfair.
  The DEPUTY-CHAIRMAN: The hon. Member is quite entitled to make a deduction as to what might follow, but he would not be entitled to charge the Minister with deception.
  Mr. LEWIS: I do not wish for a moment to do anything of the kind. I only regret that the right hon. Gentleman is not here in order that I may ask him a straight question as to whether he has made up his mind, but in his absence, I unreservedly withdraw a remark which I think has been misconstrued. The President of the Board of Trade holds his office for the encouragement of trade in this country, and we have never had a President who, whatever he may have
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  desired, has done so little for the good and so much for the harm of the trade of this country.
  Mr. PRICE: The hon. Member who has just spoken made certain statements with regard to the attitude of Members on this side of the Committee and of the Government in regard to the competition of labour under inferior conditions from which British industry has to suffer. I understood him to charge us with being entirely indifferent to the effects of that competition and to the fact that British men and women are unemployed in consequence of it. I would like to remind the hon. Member that the Government have already shown that they are vitally interested in this matter, but they approach the problem from an entirely different angle from that of the hon. Gentleman and his party. Many of us believe in protection of a certain kind, that is, protection of labour, and not protection of capital. With this object in view, I believe that the Government have taken steps towards the ratification of a Convention concerning international labour standards and hours of labour, which the late Government persistently declined to do.
  It may also be interesting to know that the Trade Union Congress and the Labour party have from time to time drawn up reports and issued pamphlets and publications, one of which is entitled "Imports and Sweated Labour," which went into the whole question of levelling up the labour standards in the chief industrial countries of Europe. It went so far as to hint at a threat of economic sanctions and prohibitions on sweated goods coming into this country as an attempt towards raising the labour standards elsewhere. It is a pity that the Debate has so much hinged on the question of Safeguarding, particularly the Safeguarding of lace. The industries which are safeguarded do not represent more than a very small percentage of the production of this country; the President of the Board of Trade quoted figures to that effect. The safeguarded industries work mainly for the home market, but this country is a great exporting country. More than any other industrial country in the world, we have to live on exports to a great extent in order to pay for the large amount of topical produce, such as cotton, and raw materials for our Indus-

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  tries in the north, which can only be paid for by the export of manufactured goods or by investment of capital abroad.
  The whole argument against Safeguarding and tariffs on imported goods is that the great staple industries of the north of England, such as those in my constituency, which are largely working for the export market, cannot possibly in the long run derive any benefit from a tariff which will merely protect the home market and be of no assistance to the export markets at all. A tariff on imported iron and steel goods will not help those trades which are working the South African, Indian, Far Eastern and South American markets. All it would do would be to divert the surplus production of France, Belgium and Germany to those markets abroad which we are trying to serve, and thereby merely intensify competition. Hon. Members opposite fail to see the general trend of international trade. There has been a tendency since the War on the Continent of Europe towards the creation of international agreements. There is now operating on the Continent a great international steel consortium which overrides tariffs, and fixes quotas of exports of manufactured iron and steel goods between Germany, France, Belgium and Luxemburg. It would be possible for this country to enter into similar arrangements if the industries were organised in the way in which the industries on the Continent are organised.
  The strongest argument against any sort of taxes on imported goods of this kind is that in the last resort it is a sinister attempt to depress the wages of the working classes in this country by raising prices. If prices were not raised, the tariffs would obviously have no effect. It is an anarchic attempt to counteract the deflation in prices caused by international competition. Protection is merely a bad attempt at inflation, which brings the profits that may accrue to capital and not to labour. The almost continuously steady decrease in wholesale prices which has been observed since about 1921, both in this country and throughout the world, has bad a most serious effect on the trade not only of this country but of every other country, including protected and safeguarded countries.
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  As a result of this decline in prices, all sorts of quack remedies have arisen in various countries, and not the least in this country. We have our Empire Free Trade "stunts," we have attempts to create a close tariff wall round the British Empire—to create an atmosphere which would make that possible regardless of the fact that figures show that the British Empire is becoming increasingly involved in the economic trend of world developments. The inter-Imperial trade of the British Empire increased by 2 per cent. during 1929, but world trade grew by 8 per cent. in the same period, which tends to show that the different parts of the British Empire are coming into the economic system of the world outside the British Empire, an opposite tendency to that which hon. Members on the other side and some of those outside the House who are carrying on this agitation believe to be the case.
  I have just pointed to the fact that prices have been falling since shortly after the War, but what is peculiar to the present situation is that while prices have been falling production has been increasing throughout the world. That is a phenomenon which has not been observed hitherto. In a period of industrial boom, with an improvement in general trade, the tendency usually is for prices to increase, but while we had in 1925 and in the autumn of last year a tendency to improving trade throughout the world, and while there was in the United States a big speculative boom and a large increase of production, this state of affairs has been accompanied by a steady fall in prices. That is something new and indicates a crisis coming in world economy such as has not been seen before. Take the world production of staple commodities. Between 1925 and 1928 there was an increase in world production of wheat of 14,000,000 tons, an increase of 11,000,000 tons of potatoes, of 4,000,000 tons of tea, of 12,000,000 tons of pig iron; and even coal, in which the depression has been so marked, has shown an increase of 29,000,000 tons. Taking the index figure of production in this country at 100 in 1924, the index figure was 111.6 in 1929. While that increase of production was going on, the prices of those articles on the world market fell by an average of 15 per cent.,

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  and in this country there was a fall in wholesale prices of about 20 per cent.
  What is the cause of this curious and remarkable phenomenon? There has been an enormous investment abroad of the capital of the United States and of this country—more, probably, than this country can afford or ought to afford. Since the War the United States have been financing Canada, the South American Republics, Central America and even countries further afield, pouring capital into those countries and enormously increasing production there. This country has been making investments abroad, the investments amounting to about £150,000,000 in 1929. The question arises: Is this production beyond the power of the world to absorb? Personally, I think there is a very strong reason to believe that mere overproduction is not by any means the sole cause. It may be that science has gone so far forward that it has increased production of certain classes of goods temporarily beyond what markets can absorb, but that it is the general case I would strongly deny.
  While wholesale prices have been falling steadily retail prices have fallen by nothing like the same amount. Between 1925 and 1929 wholesale prices, taking the world as a whole, fell by about 22 per cent. and are now 20 per cent. above pre-War, but retail prices have fallen by only 5 per cent. and are now about 60 per cent. above pre-War. In other words, there has been a very large spread between the prices which consumers are asked to pay and which the industrialists receive for the goods at the factory. Those persons in this country and in other countries whose capital is invested in industry and in industry alone have not derived the same profits as have been gained by those who are occupied only in handling the goods in their passage from the producer to the consumer. The distributive trades, the middlemen, have gained, but consumers have not derived the benefit they ought to have obtained from the fall in wholesale prices. I know it is out of order to refer to the legislative matters in this Committee, but we must all be glad that the President of the Board of Trade has produced a Bill in this Session which, I think, will do something towards meet-
  1976
  ing that problem. I think that question certainly repays study. There is another factor which I should like to refer to and it is the fact that the production of commodities is related to the production of gold throughout the world. Here there is a serious discrepancy which I think will repay study and something ought to be done in regard to it. It is the fact that the world production of food and raw materials between 1923 and 1927 rose by about 3 per cent. This rise of 3 per cent. should not, one would think, be sufficient to cause a fall of 20 per cent. in wholesale prices.
  There is another factor at work which is probably the cause. During those years the actual gold stocks of the world rose by 1¾ per cent. and the production of commodities was nearly double the production of gold. Another factor operating in this direction was that the gold reserves of the countries making up the British Empire decreased during this period by 10 per cent., whereas the United States gold reserve increased by more than double during the same period, and in the case of France the increase was about 10 per cent. In other words, we have got a situation throughout the world that there is a less increase in gold than in commodities, and consequently another factor is introduced tending towards decreasing wholesale prices.
  There is another factor which is to the disadvantage of the British commonwealth, namely, that the gold reserves of that commonwealth are lower than all other countries, with the exception of Germany. Therefore, it seems to me that it is time we considered this question, not merely of safeguarding lace and industry in Nottingham, but we should look upon this question from a broader standpoint, and one which I am sure the President of the Board of Trade will do his utmost to deal with, because we have in Europe to-day, as a result of the negotiations arising out of reparations and the coming into force of the Young Plan and the Bank for International Settlements, an international state of things which might be used ultimately towards making a contribution to solve this problem. Therefore, I hope the Government will look into this matter, and realise that there are great and important world trends which must be dealt with, and which I hope will be ultimately solved to the advantage of this country.
  Sir J. SANDEMAN ALLEN: While I have listened with much interest to the speech which has just been made by the hon. Member for Whitehaven (Mr. Price), I feel that the Committee would prefer that hon. Members should concentrate to a certain extent on the work of the Board of Trade. I desire, therefore, to speak on that question before dealing with the more general subjects which have been raised in this Debate. First of all, I would like to say that those of us who have come across the President of the Board of Trade and the Parliamentary Secretary, not only in the House, but in connection with their administrative work, would like to take this opportunity of saying how much we appreciate their sincerity of purpose and their devotion to the work of their Department, of which they have a remarkable grasp, combined with an urbanity of manner and approachability which of necessity is appreciated by all who come in contact with them. If, therefore, in any remarks I may make I may appear to criticise any of their work, it is solely because I believe the interests of the nation and its trade must be paramount, and therefore nothing I say must be taken as personal.
  I would, first of all, refer to the Marine Department, and I would like to say that I am expressing the feelings of the shipping and trading community as a whole when I say how much we appreciate the careful way those interests are watched and protected by the Department. I am sure this country ought to be proud that the work of the Board of Trade is in the hands of the able men who manage the various Departments so efficiently. I propose to refer to one or two minor points, and I should like the Parliamentary Secretary to take note of them. The first thing I want to refer to is the Lighthouse Fund.
  The DEPUTY-CHAIRMAN: I am afraid that the hon. Member will not be able to raise the question of the Lighthouse Fund on this Vote. He must raise it on Vote 3 and not on Vote 1.
  Sir J. SANDEMAN ALLEN: I was proposing to refer to this question in connection with shipping.
  The DEPUTY-CHAIRMAN: I am afraid that is also a matter to be raised on Vote 3.
  Sir J. SANDEMAN ALLEN: Then I will confine myself to the general questions which I desire to raise. I would like to deal with the international policy of the Board of Trade. The President of the Board of Trade has such a charm of manner, such a grasp of figures, and such a great capacity for pouring out facts mixed with a, certain amount of sophistry, that he undoubtedly bewilders and certainly in many cases carries a certain conviction to the minds of those who are not as well informed as the right hon. Gentleman, which it is very difficult for most people to be. What I fear and what many of us fear is the influence that seems to be at work in the Government as a whole in regard to international questions. The desire to arrive at an international understanding seems to be paramount, and very often it is apt to blind people to the danger of sacrificing far more than is gained, by sacrificing national interests. Gestures may be all very well, but when they become one-sided concessions they are not merely useless but injurious. It is important that we should bear in mind, when we are discussing this latest convention, that no country in the world has ratified so many conventions as this country, and every convention that we have ratified we have lived up to in the letter and the spirit. We must bear in mind, when we are making agreements, that we should be satisfied that they are so clear that countries which are not quite so much in the habit of living up to the letter of their agreements should realise what the letter means, and live up to it.
  Attention has been called to-day to the Commercial Convention published in Command Paper 3539. The discussion at Geneva included all arrangements for future action, and I am most anxious that the President of the Board of Trade should realise that every one of these subjects has been very fully studied by business men, in the International Chamber of Commerce and elsewhere, for years past, and they have made considerable progress on such questions as uniformity of tariff nomenclature, arbitration, double taxation, and transport. Every one of these questions is of the utmost importance, and some of us who have been working at them on the Danube and elsewhere know how great

  1979
  has been the gain to international trade through these international arrangements. Therefore, I suggest that any action taken in these matters by the Board of Trade should be taken in consultation with those in the business world who are living with these difficulties day by day, and who are continually thrashing out these points with their opposite numbers throughout the Continent. It is not a question of going to a conference at Geneva once in a way, but of working all the time at these matters. The Conference expressed the desire:
  "to arrive speedily and by the means which may seem most appropriate at the abolition of indirect protection in all its forms. It desires that the work undertaken in this connection by the economic organisation of the League should be successfully carried out."
  That sounds very pretty to doctrinaires, but those who have been facing these questions for some time know what it really means. It means a deliberate attack on what this country is doing. Objection is raised to the marking of goods with their source and origin, and there is also very strong objection to the practice of many municipalities and others protecting the workpeople of this country by stipulating that contracts shall be submitted only by British firms. These points, and others of the same kind, are distinctly laid down as some of the main points that they wish to discuss, and if we agree we shall find our own position injured. It is just as well that we should face that at once, and should understand, in dealing with these international questions, that the other nations of Europe and of the world are not necessarily governed entirely by the same forces of sentiment as ourselves, but that underneath they have a cold business determination to get the best they can out of us or anyone else.
  9.0 p.m.
  With regard to the Commercial Convention, I feel that it is a most one-sided and injurious arrangement. I remember that three or four years ago at the Economic Conference we came to the conclusion that it was worth trying to get some arrangement to stop any further raising of tariffs, and a pious resolution to that effect was passed; but the other countries went away and put up their tariffs at once in every direction. Watching and discussing these events, business
  1980
  men in this and other countries came definitely to the conclusion that it was hopeless to try to do any good in that direction, as it would only tie our hands and keep down our tariffs but not those of others. Therefore, the whole idea was given up. The country must not imagine that this is a new move. It has already been thrashed out and tried by business men, and discussed at the League of Nations, but the result has been harm instead of good, and tariffs have been raised.
  There is one striking point, which may be deliberate, about the Convention, and that is that it is only this country and three or four others who are tied in this way, namely, Great Britain, Denmark, The Netherlands, Norway and Portugal, and when we come to the definition of what they are tied to, we find it laid down that in particular they will not apply any fiscal duties which have as their object the protection of national production against foreign competition. My reading may be wrong, but it seems to me that that is what is provided in this recent Convention. Moreover, the Convention, as I understand it, does not merely run for a certain time from the 1st April next, but it runs on every six months until it is denounced. I speak subject to correction, but that is how I read it. I see no gain, but only a very serious loss, as the result of that, and it has been done in face of the experience and views of the business community of this country, who have been working at these matters for some time. I trust that in this matter the President of the Board of Trade will take them into consultation more freely and fully.
  With regard to Safeguarding, there are some in this country who have been accused of being doctrinaire Free Traders, but many of us have been brought up with the general idea, of the advantages of Free Trade, and have imagined that it was Free Trade and Free Trade alone that made this country's trade and progress and prosperity what they have been during the last 50 years before the War. How many of us, however, have realised, as we study the position to-day, that the real trouble is that markets are closing down? Why are they closing down? For 50 years we were keeping ahead of the rest of the world, and at the

  1981
  start we were the leading industrial nation. We were also the leading trading nation, and we became the leading financial nation. The world, however, has been opening up, although, as one country after another shut its doors upon us, we did not feel it, because new countries, new demands, new markets arose in the world, which we were able to open up, and it was not until just before the War that we began to feel any real draught. Then came the War, and everything changed. We find that to-day to a very large extent the world has opened out, the demand has been reduced, and we are in a very different position.
  Every one who has any real insight into these questions must admit that the only sound principle of trade is free exchange of commodities, and we have to look where we can get a free exchange of commodities. We cannot get it to-day, and, although we have been thinking all along that these principles were developing our trade, it was not developed by these principles alone. I cannot, on the other hand, accept the principle of those who seem to think that all that is necessary is to run up a big tariff wall all round. I cannot believe it. What is more, we are not a self contained, self feeding and self supporting country. The world is the only field large enough for our goods. It is for us undoubtedly to remember that we are in a different position from others. On the other hand, if we are going to progress in our export trade, on which we must necessarily depend, it is folly to ruin our home market at the same time, and that is what I see as a most appalling state of affairs to-day. I may be wrong but my view—and it is held by many—is that the steady increase in the unemployment register is not in any way divorced from the steady flow of imported manufactured goods. The imports of foreign goods have increased by 60 per cent. in the last five years, and see how unemployment has gone up!
  The fact is that this country needs to have a big share in the home market in order to be able to reduce overhead charges and produce goods in face of the heavy—some of us think the unnecessarily heavy—taxation we have to bear. If we could only have a proper share of our home market, as America and other countries have, we should be better able to produce more cheaply and more exten-
  1982
  sively and at the same time serve our own people to the very best advantage. That is a vital point that we should have in mind at present, because it is on that very issue that we must stand or fall. We have experience of certain parts of the world where everyone has equal commercial opportunity. In the whole of Central Africa we have equal opportunity for every nation. This country is the last to complain of the opportunities it has, because no work can compare with that of the British workman. Even in certain foreign countries and colonies where we have equal opportunity we have to find some means of beating the other man by reducing our charges, and we can only do that by developing our own home industry.
  I am, therefore, driven, like many others, and I believe, whether they admit it or not, by the majority of people, to this conclusion. Many of us cannot accept the principle of a general tariff wall, and we have to admit that there is no possibility of maintaining what we believe to be the sound principle of the free exchange of commodities. Let us study how, in any way and every way that is open to business men, on business lines, throwing aside any theories, whatever they may be, and realising the changed conditions, we can stop the rot. Let us remember that charity begins at home. Let us see how far we can bring more employment to our own people without taxing their pockets. Let us study various trades, and take them separately, and see how far we can develop the country, instead of throwing everything out of the window for the sake of theories which have been proved to be utterly valueless.
  Mr. PHILIP OLIVER: The hon. Member will excuse me if I do not follow him in his interesting remarks about the International Convention, although I was glad to hear that one of the countries that is bound by it is our ancient and gallant ally the Republic of Portugal. I also have no desire to enter into the general merits of the discussion on Protection and Free Trade, but there are some matters dealing with the administration of the Key Industries Act which I should like to bring before the Committee. It has not been in dispute to-day, but there are certain matters arising out of it which are of interest and im-

  1983
  portance. It was passed in 1921 and the duties were imposed for a period of five years only, but, as the infant industries refused to grow up on this pabulum of Protection, they were reimposed in 1926 for a period of 10 years, so that the Act remains in force until 1936. This Parliament will not be in existence then. It is possible that the duties may lapse under a Liberal Government in 1936, but until 1936 we are saddled with this Measure, and we cannot discuss it from the legislative aspect to-day. But the Key Industry Duties are somewhat different in their scope from the others, because there are certain duties imposed upon certain articles that are set out in the Schedule, and in Clause 1 (5) these remarkable words appear:
  "For the purpose of preventing disputes arising as to whether any goods are or are not any goods chargeable with duty under this part of this Act, the Board may from time to time issue lists defining the articles which are to be taken as falling under any of the general descriptions."
  So we have the remarkable position that the Board of Trade, now and at any time, is able to issue lists of articles that are to be taxed as coming under certain general descriptions which appear in the Schedule to that Act. That is a form of taxation by a Government Department which has to be very closely scrutinised. It is true there is the protection in the Act that anyone may complain of any article that is included in the list if he makes his complaint within six months of the publication of a list. The figures that were given us a short time ago with regard to the imports retained under this Measure are very remarkable. These are the figures with regard to chemicals. In 1922, the first year after the imposition of the Duty, £384,000 was imported. In 1926, the last year before the re-imposition, the figure had increased to £493,000, in 1927 to £552,000, in 1928 to £567,000 and last year there was a tremendous leap up to £777,000. It so happens that there is a considerable new industry that has grown up in Lancashire which employs di-calcium phosphate as its raw material. In 1921 di-calcium phosphate was placed upon one of the lists. A great many people did not know that it was on the list, and between 1921 and 1928, thousands of tons of this material, on which no duty was levied, were imported
  1984
  at Manchester Docks. This was due, apparently, to some misapprehension or mistake on the part of the importers, or the Board of Trade, or the Customs and Revenue officials. A few years ago certain mills started using this substance as their raw material.
  This raw material has been subject to a tax of 33⅓ per cent., and 33⅓ per cent. on their raw material takes away the whole of their profit and makes the business an unprofitable one. It so happens apparently through the finding of some official, that this raw material is only dutiable if it answers a special test of purity. If it is pure it is taxed; if it is impure it is not taxed. Somebody in some Government office had laid it down that the test of purity or impurity is 1.44 per million of arsenic. If the di-calcium phosphate contains more than 1.44 it comes in free of tax, and if it contains less it is taxed 33⅓ per cent. Recently large consignments of this article have been coming in—I have seen the list—from the same source of origin, some of it coming in duty free and some of it being taxed 33⅓ per cent. The line of distinction between dutiable and non-dutiable is very fine. No one can tell whether the raw material is to be taxed or not until some two or three months afterwards.
  Mr. REMER: Can the hon. Member say for what purpose this material is used?
  Mr. OLIVER: It is used, among other things, for baking powder, and in connection with a great many articles of food.
  Mr. REMER: Do I understand the hon. Member to say that the increased cost of this article has run away with the whole of the profits?
  Mr. OLIVER: I have been so informed by the manufacturers, and I can give the hon. Member, in private, the name and position of the works. The works are, in fact, in the constituency of the hon. and learned Gentleman who sits next to me above the Gangway. If the tax is imposed, it makes the whole business unprofitable and these manufacturers have been considering, whether they should close their works. They are not the only firms in that position. This is really an impossible position. Hon. Gentlemen above the Gangway have complained very

  1985
  bitterly of the uncertainty which, they say, has been caused by the Chancellor of the Exchequer. They do not know whether this taxation is to be put on next year or not. Here you have a far greater uncertainty. These people do not know from day to day whether their raw material is to be taxed to the extent of 33⅓ per cent. or not. It is a, most mysterious matter upon which, probably, the President of the Board of Trade may be able to enlighten us. I have been in communication with him, and also with the Chancellor of the Exchequer, and with the Customs and Revenue authorities, and I have been referred from one to the other. At present, I believe most of the consignments are coming in duty free.
  I should like to suggest that under Subsection (5) of Section 1 of the Principal Act it is left to the Board of Trade to issue lists from time to time defining the articles which are to be taken as falling under any of the general descriptions set out in the schedule. It does not say that these lists, once issued, are to be the law of the land until the Act is wiped off the Statute Book. The lists are to be issued from time to time, and I submit that they can be revised from time to time, and that if it is seen that injustice and harm are being done through the taxation of this raw material, and seeing that the distinction between what is dutiable and what is non-dutiable is so fine, new lists should be issued and the raw material of this obviously useful industry be allowed to come in duty free.
  Sir NAIRNE STEWART SANDEMAN: I do not propose to detain the Committee for long. I believe that if you have anything to say, unless the subject is one something like the Budget, and you cannot get it off your chest in about 10 minutes, there is something wrong with you. I will get rid of Safe-guarding straight away. Everybody knows that I have been a safeguarder, and even worse, all my days, and I do not propose to go into the subject at any length now. I saw enough of the late Mr. John Bright when he was teaching his Free Trade stuff to realise that there must be something wrong with him. We had the most wonderful salmon fishing on the Tay and Mr. John Bright used to like free fishing. If he liked free fishing he was welcome to it, but we used to pull his leg about Free Trade.
  1986
  I am going to talk about something which is not in the least contentious but constructive. It is a subject which needs to be aired properly, and I am not going to put it forward in any spirit of antagonism to the United States of America. It is the question of the film industry, which was raised by the hon. Member for Wolverhampton, East (Mr. Mander). I have always had an eye on the main chance. I can remember being told by a man to go and look at a talking film. I said, "What is that?" and he replied, "They have got them speaking now." I saw the film and it was wretched and pretty bad, but I said that I would help, because I believed that it would be of very great interest to this country if we could develop that side of the film industry. I have been connected with the industry ever since, and it has cost me a great deal of money. So far I have not got anything out of it, but there is a chance and a slight chance. It is not because of this fact that I desire to bring this matter forward. It does not matter if I lose. I desire to do what I can to help that which may help the industry of this country. I think that the best way to deal with this question is probably to go back to the old days when this country was not worrying very much about films. I know that the Americans have been worrying about films ever since films started. They considered that films were the very best propaganda they could possibly have for the United States of America. They succeeded in getting the atmosphere of the United States in every country in the world. There is not a single country in the world which shows films which does not recognise the American influence, the American environment, and the American surroundings. They have plenty of money and they went right into it. The hon. Member for East Wolverhampton said perfectly rightly that every foot of film they export to other countries brings in a dollar of trade that has to be exported. Had we had the sense to do that in this instance I am not sure we should have been in the position that we are in now with so many unemployed.
  The position to-day has changed very much. The talking film has come to stay, and there is no doubt about that. It is the best method of advertising, for it interests people, but it is a chance for us. The whole of the picture industry

  1987
  is in a state of flux, and this is our chance to get in on it. You may divide the film industry into two parts, the mechanical part where you provide projectors and so on, and the film part. I propose to deal with the film part first. In the old days, before the talkies started, the American used to send here about 75 per cent. of the films shown in the cinemas of this country. If the Cinematograph Films Act which was passed in 1927 goes by the board, we shall again be in the position of the Americans having captured the whole of the film trade in this country, with all the advertising that it carries and the chances of boosting American goods and the American-English tongue to which we none of us cares to have to listen.
  It is the most wonderful propaganda that you could possibly have, and the Act of 1927 made it illegal for the Americans not to have an English quota in this country. It has not turned out as good an Act as we thought, and the reason is that the talking film was not developed to the extent then that it is now. If it had, I am perfectly certain the President of the Board of Trade would have made an absolute cinch of it, but we were a little bit in front of the times. It is no use being mealy-mouthed and trying to cover it up. The Americans have the best films and talking-pictures in the world. They have to get a British quota. They can go to India and buy a film that is shown there to the Indians, whose cinemas open at seven in the morning, so that they can sit there and see them until 12 at night. The Americans go and buy these films, and they act as a quota. Another thing they can do is to go to the small producer here and say, "Look here, I must have my 10 per cent. for quota purposes, but it has to be the cheapest thing you can possibly give me. Give me anything that is British made, and that is all I want." All this takes place, and when these films are shown in our theatres, films made in this country on the cheap, the people who go say, "What a rotten English film!" The Americans are accomplishing two things by that; they are decrying our productions, and they are also getting a further hold on the audience which goes and watches the films here. I believe we can force the Americans to come to this country. I do not see why they should
  1988
  not. They talk about Paris, but this is surely the natural place for them to come to, and we have to make it perfectly easy for them to come here.
  This film question involves £30,000,000 for the Americans. They make a talkie at Hollywood which costs, say, £30,000. They know perfectly well they can put it on round the whole chain of theatres and get their money back, and anything further that they get is absolute profit to them. Then they send it over here and make more profit. What happens to any decent film we make in this country and send to America? You cannot do the same thing. It is taboo at once, and these important houses will not send it round the theatres. If you call that Free Trade and not Protection, I do not agree with you. I believe we can get the Americans to come over here. We have certain restrictions about certain people not being allowed here, but I would like them to bring in the people to make the films, and have the scenario and so on, here, as long as they have a British company from which the Chancellor of the Exchequer could get a bit. I am sure he would touch them, because I think it would pay him.
  I am perfectly certain that, if the Americans produced such films here, they would be sent to America and go round the chain of theatres, because it had cost £40,000 to make them. It would be the best advertising we could possibly get for British life. Instead of American films coming here, it would be English stuff going there, and it would suit America to do it, because, after all, when you have this bi-lingual stuff going on, this country is far nearer the Continent, and the source of supply of the various voices which they have to put on the edge of the films. This suggestion should appeal to the Chancellor of the Exchequer, because he badly needs more money. I have told you that probably we sent £30,000,000 a year to America, although the figures are very difficult to get, and instead of paying £30,000,000 a year for their films, I would very much rather that the Americans came here so that they would be employing British people to the extent of 75 per cent. at least.
  I want to touch for a moment on the question of the projector side. You cannot teach the Americans very much about how to get away with it. I know

  1989
  perfectly well you can make as good a projector in this country, but you will get complaints from the theatres, though I do not know how they are inspired. You will get complaints about the quality, though it is not fair, because I do not personally believe that the Americans can make better projectors or electrical appliances than we can make in this country. They have some subtle influence on the various picture palaces in this country by which American films are taken and British films are not. I would ask the President of the Board of Trade whether he can possibly by any means give us statistics of the attendances during the year at cinemas in this country? It would be a very interesting thing for us to know. I know we can get certain statistics from the Entertainments Duty, but seats under 6d. are not taxed, and it would probably only be an estimate.
  I should like to know whether the President of the Board of Trade grasps the enormous importance of the cinema trade to trade and industry in this country and what can be done by sending our films abroad to the Dominions and other countries. We do not want Australia and New Zealand Americanised. They are only getting American films. We want to get something done here. I am not suggesting legislation, because that would not be in order to-night. I want to get, first of all, information collected about the subject, and something done for the cinema industry in this country. It is not for the cinema interests. I do not care a rap about the cinema interests. I do not believe in that sort of power being too much in anyone's hands, but I want to see this country using every single opportunity in its power to create more demand for our goods, and, by using the cinema properly, to take advantage of the propaganda that we have in our hands. It is not impossible if we can get the Americans to come. I again ask the President of the Board of Trade whether he cannot do something to help us along these lines?
  Mr. H. GIBSON: In this Debate, which was opened in such a commendable manner by the hon. Member on the Front Bench opposite, I have notice that in nearly all the speeches that have been delivered from the Conservative benches
  1990
  in defence of Safeguarding there has been an implication that they want Safeguarding because, behind their minds, they imply that they love their country more than we do. [HON. MEMBERS: "No!] Yes. One can almost tell that in the posters that are going about, such as "Home and Empire"—as if the Conservative party are more concerned about the development of trade for our own people than we are. I love my country just as much as anybody in this House loves his country, and I love my country for the same reason that I love my home; it is a natural instinct, and because I love my home and my country I am opposed to the idea of Safeguarding. Safeguarding is the only thing that Conservative Members have brought forward in connection with the cure for unemployment. They see everything through a narrow view.
  When I was listening to the speeches of hon. Members opposite I could not help remembering an address by one of our finest writers, Mr. G. K. Chesterton, in Manchester. He spoke on what he considered to be the most important thing about any man or woman. After speaking brilliantly for an hour, he finished up in this way:
  "I consider that the most important thing about any man or any woman is their point of view and their mental attitude. I consider a person's point of view so important that when I go on my holidays I do not say to the landlady: 'What kind of food do you provide, or what kind of rooms have you to let?' I always say one thing. I always say: 'Madam, what view of the universe have you got?' If she has a narrow view, I never allow politeness to interfere with plain speaking. I simply say: 'Madam, Your house will not do,' because I believe that the most important thing is a wide view."
  We have not had that wide or broad view from the Tory benches to-night. We specially need that broad point of view in connection with the cotton industry. I am interested in cotton, like the hon. Member for Stockport (Mr. Hammersley), because I have always lived in Lancashire. When you speak of Lancashire, you really mean cotton. The cotton trade is an exporting trade. Four-fifths of the products in the cotton industry are exported, and only one-fifth are for the home market. Just prior to the War we were exporting over 6,000,000,000 yards of cotton goods, and last year we exported 4,500,000,000 yards

  1991
  of cotton goods. In other words, we lost one-third of our trade, although in the period when we lost one-third of our trade the world consumption of cotton had gone up by 10 per cent.
  Hon. Members opposite may ask what I consider to be the reason for that state of things. I believe that the reason for the loss of one-third of our export trade is, in the first place, psychological. The employers in the cotton industry in Lancashire mistake stubbornness for strength. They will not get together. The second reason is that there are too many middlemen in the cotton industry in Lancashire. To prove my point I will quote a figure that was given by the hon. Member for Middleton (Sir N. Stewart Sandeman). He said that he had seen a piece of cloth that cost 4s. 3d. to produce and that it was offered for sale in a shop window in London at 16s. 11d. I would like to know where the difference between the 4s. 3d. and the 16s. 11d. goes. We can never get any direct answer when we ask a question of that sort. If hon. Members opposite say that Safeguarding will alter that, I say that they are talking moonshine, because it will not. No Safeguarding will affect a position like that. In Lancashire, we have 3,000 different firms competing one against the other for the world market. It is capitalism run riot, and we cannot get any suggestions from them how to improve the situation. That is why I welcome the remark of the President of the Board of Trade that in a very short time we shall be getting the report on the cotton industry. We badly need that report in order to show some line of approach for the prosperity of Lancashire.
  If hon. Members ask me how I would improve matters, I would say that we should eliminate middlemen and take a lesson from Japan. In Japan, broadly speaking, they have one selling agency, which we have not here. The Japanese have introduced the latest form of machinery. They have reorganised on new lines. That is one of the things that we shall have to do in the cotton industry in Lancashire. We shall also have to get the four sections working together for the interests of the largest exporting trade in this country. I believe that it will be along international
  1992
  lines that action that will have to be taken in order to resuscitate the cotton trade. The younger men in this country are taking a different view from the older men. The younger men are taking a view in which they regard the world as one economic unit. Listening to the speeches from the opposite benches to-night one would not take that view. Hon. Members opposite are taking the narrow view. The narrow view will not appeal to the younger men and the younger women, who are seeing the world as one economic unit. They take the view that if a thing can be grown better in one section of the earth planet than in another, let it be grown there for the benefit of the people who are on the whole planet; an international view. Therefore, I welcome the statement made by the President of the Board of Trade that he will do all that he possibly can to reduce the tariff barriers, because as we are an exporting nation we must have a world market before we can have true prosperity.
  Mr. ATKINSON: The hon. Member for Mossley (Mr. H. Gibson) has asked us to look at the case for Safeguarding on broad lines. I will try to present the case as I see it and to keep it on as broad a line as I can. He also spoke about the point of view. There is a difference in the point of view. Perhaps we on this side of the House are far more deeply impressed with the importance of productive industry than many hon. Members opposite, otherwise, how can one explain the continual imposition of fresh burdens on industry with a complete absence of anything to assist industry? What is the problem which this Government or any other Government have to face? It is the problem of finding employment for its people, and it is not an easy one, for two reasons. To begin with, we are a very densely populated little country. If you put everybody in the whole world into the United States of America, that country would not be as densely populated as England and Wales.
  That is one reason, and there is another reason. There are three important manufacturing areas in the world: the United States of America, Central and Western Europe and Great Britain. In the United States You have the industrial East backed up by the huge agricultural industry in the West. In

  1993
  Central and Western Europe you have the two fairly evenly balanced; but in this country you have nine-tenths of the people trying to live on manufacturing industry. One has only to state those two facts to realise the magnitude of the problem with which we are faced. We look to industry to find work for the people, to produce the wealth of the country and, in the main, to pay the bill for the food and raw materials we have to import.
  I agree, and it is an element of truth in the Free Trade case, that the world can only take our goods if we can sell cheaply, and that it is important we should be able to buy our raw materials in the cheapest market. I concede all that. I do not admit that Safeguarding on a broad scale will prevent you buying your raw materials cheaply. I was brought up for many years as a convinced Free Trader, but my experience under Safeguarding has driven me steadily but certainly to a firm conviction in the advantages of Safeguarding on a very wide scale. What is the outstanding fact to-day? It is this, that the freedom to buy our raw materials in a Free Trade market has not enabled us to sell as cheaply as other people.
  We have to face that fact. We are being undersold throughout the world. Take the three markets. Take the home market first. Last year £330,000,000 worth of goods wholly or partly manufactured, all of which we could have made ourselves, came into this country. Why? Because they were underselling us; they were selling more cheaply than we can produce them. Take the foreign market. Business there is made more difficult every year by tariffs, but more serious than all is the Empire market. If you look at the figures there you will see that the Empire is importing 64 per cent. of its imports from foreign countries and only some 36 per cent. from Great Britain. These figures refer simply and solely to manufactured goods, in 1928 Canada took from the United States £130,000,000 worth of manufactured goods, and only £26,000,000 worth from us.
  Why is it that we are undersold throughout the world? The conclusion I have come to is that it is because we are up against protected large-scale production wherever we go, and this ability to
  1994
  work to capacity is the most important element in the cost of production to-day. This protected large-scale production, which is of comparatively recent growth, has completely changed the problem with which we have to deal. It is the dominating fact in modern competition. I have come into contact with many of these industries. I know the French worsted industry, having been through two inquiries. There you have an industry working to capacity. Our own industry, at the first inquiry, was not working to 60 per cent. capacity, and it is much less now. No industry that is working to half capacity can compete with an industry which is working to full capacity, other things being equal. But other things are not equal. Sheets, towels and yarns, in all these we are being undersold in this country by Belgium simply because they are working to capacity and we are not. It makes all the difference in the world.
  I ask: Why are they able to work to capacity and we cannot? First of all they have all got a secured home market; and a, large-scale home market. Belgium is a very substantial market, it is a densely-populated country. They have a protected, secured, large-scale market. But they have more than that. That in itself would not enable them to work to full capacity. They have in addition the free market here which we provide for them, on which they can all dump their surplus production. These two things working together are very important. Let me give one illustration; a French manufacturer making a particular kind of cloth. The cost of his wool, of his raw material, 2s. a yard; wages, 1s. a yard, overhead charges, that depends on his production. At full capacity, producing 1,000 yards a, week, his overhead charges come to 1s. per yard, and he produces at 4s. per yard. The home demand is 500 yards. If he is producing 500 yards his overhead charges come to 2s. a yard, and his cost of production to 5s. a yard. Having a protected market he is perfectly certain of being able to get rid of his 500 yards, and he says, "Why should I stop on half production I will go to full production," and at full production of 1,000 yards, it will cost him 4s. a yard instead of 5s. a yard to produce the goods. He will continue to sell in his home market at the same price as before.

  1995
  He knows he can get rid of the other 500 yards in Great Britain, and can afford to sell here at much less than his cost of production and still multiply his profits. That is the effect of working full capacity and where you have a dumping market ready to hand. You can reduce your cost by going to full capacity, knowing that you can dump your unsold surplus goods upon the open market.
  By leaving our market open we are doing two things. First of all, we tend to put our own people on part-time production, and in the next place we enable our opponents, our enemies, our competitors, abroad to go and to remain on full capacity production. It is not merely here that we feel the effects, we feel it in the competition throughout the world. An hon. Member spoke about our export trade being of vital importance. Why are we being beaten in the export trade? It is because our competitors, working full capacity, are able to beat us in the world markets. There is no question about it. Take Japan. They sent to India 367,000,000 square yards of ordinary cotton cloth last year. They are able to undersell us because they are working double shift; they are working to full capacity. Therefore, broadly speaking, the case for Safeguarding is this: That you secure your home market for yourself, you prevent your market being a dumping ground for your competitors, and therefore you tend to get to full capacity for production, and the nearer you get to that, the lower becomes your cost of production. Those are principles which, I suggest, it is very difficult to contradict.
  What is going to happen when you kill these Safeguarding Duties? I will take as an illustration the nail industry. We are importing 1,000 tons of nails a week. The Belgian price is 10s. to £1 below our own price. Our own wire industry is one of the industries that are at the very lowest ebb. If it was working at full capacity, it could get rid of the 10s. to £1 excessive price. It has been carefully calculated by one of the most eminent men in the trade that the making of one ton of nails here would find employment for 3½ men a week. That statement includes collieries, steelworks, the rolling mills, the drawing plant and the nail factory. The thousand tons of nails per
  1996
  week would, therefore, employ 3,500 men. We pay those men now £4,000 to £5,000 a week in unemployment benefit. In other words, for every ton of nails that comes into this country we are paying at least £4 in unemployment pay. That is what the country pays for free imports.
  But suppose that these nails were being made here and that the 3,500 men were employed on making the 1,000 tons of nails a week. Instead of drawing 18s. to £1 a week, they would be drawing £3 a week. You would have £10,000 a week being paid in wages, every penny of which would be immediately spent in buying other commodities that could be made in this country. We talk about subsidies. If we are to subsidise, why we should subsidise unemployment instead of employment, I do not know. A subsidy of £1 a ton would enable us to get all this nail trade, and we would save £3 a ton in unemployment pay, besides getting rid of unemployment by the extent of the increased earning power of the workers.
  Someone said, how does all this help the cotton industry? One quite agrees that merely protecting the home market would not solve the difficulties of the cotton trade. That is where the beauty comes in of the idea of Empire Free Trade. If you can turn your home market into an Empire home market, it would be a very different story. For my part I cannot see why we should not run Kenya on that principle. Last year we did not send a single yard of unbleached cotton cloth to Kenya. It all came from Japan and India. Even a protected home market would do something for the cotton industry. We imported nearly 100,000,000 yards of cloth last year. If you had general Safeguarding throughout the country, if you really tackled your problem of unemployment and had your industries busy, as they would be if there were Safeguarding, you would be having a great deal more money spent on the ordinary necessities of life, which would all benefit the cotton industry. If in the nail industry we had the 3,500 men employed and earning £10,000 a week, is it supposed that some of it would not be spent on cotton goods? Of course it would. I remember a manufacturer of cotton blouses in Manchester telling me that he always knew when a battleship was laid down on the Tyne because there

  1997
  was a lot more wages to be spent, and it was spent to a great extent on cotton blouses and cotton goods of various kinds. If you really could get rid of a substantial part of your unemployment and if more money were spent in this country, the cotton trade would benefit like any other.
  10.0 p.m.
  We in the North are familiar with the way in which sheltered industries have formed price rates—the bleachers, dyers, finishers, wool combers, packers and so forth. All these sheltered industries tend to produce price rings, and other industries suffer in consequence. There are two conditions which I would lay down as applicable to any extended system of Safeguarding, and I believe that if they were adhered to, they would answer any criticism that could be suggested. One is that I do not think any duty should be imposed on anything in the nature of raw material unless the home market is capable of supplying the home demand. Does anyone suggest that we cannot do it with regard to steel or cotton goods or lace or coal? If you extend your home market to the Empire market, you very largely increase the number of raw materials which you could safely tax, but there are a great many for which the home market is perfectly capable of supplying the demand. I would lay down the negative proposition that I do not think you can safely impose duties on raw materials where the home market cannot supply the home demand.
  The second thing is that wherever you are dealing with raw materials, any industry which is protected ought to accept the obligation of supplying the home market at a fair price, having regard to the world conditions. You have a very good example already in the price committee that regulates the price of dyes. We have become accustomed to that ever since the dye industry became more than a protected industry, because import was forbidden except under licence. I think that by this method all possible risk of having to pay more for raw material would be removed. Always remember that in the Irish Free State that was the principle adopted by President Cosgrave. If an industry really has the home market secured to it and it cannot produce at a fair price, having regard to world conditions, then there is something
  1998
  wrong with the industry. I do not believe in protecting inefficiency. We want efficiency if we are to secure the home market for any particular industry, and therefore my proposal would be to safeguard everything the demand for which on the home market can be supplied and safeguard everything where the industry concerned will accept the obligation to supply at fair prices. Do that and you will tend to achieve full capacity production; you will increase your competitive power throughout the world, and instead of the unemployment figure mounting higher every day, it will begin to decrease.
  Mr. STRACHEY: I wish to call attention to those passages in the speech of the President of the Board of Trade in which he dealt with the condition of our export trade. I think the Committee will agree that the review which the right hon. Gentleman gave was of the most sombre description. We on these benches, at any rate, feel the greatest anxiety about that matter because the Government have made it clear that they pin almost their entire hopes of alleviating the unemployment problem, their general hope of curing our economic ills, to a restoration of our export trade. Some of us on these benches do not share that view, but as the Government are deeply committed to it, according to their leading spokesmen, it is with peculiar anxiety that we have heard the right hon. Gentleman's sombre analysis of the situation. While many of us take the view that the present situation is undoubtedly one of peculiar crisis, and that there will be some improvement from the acute slump which we are experiencing at present, yet the general trend of events over a long period makes it quite impossible to hope for any material increase in our export trade—an increase, at any rate, which will give us any hope of absorbing a large number of the unemployed. I do not think that anyone who examines the figures can possibly come to any very different conclusion.
  Our export trade to-day is about 29 per cent. of our production and it has fallen to that figure from about 33 per cent. before the War and 30 per cent. in 1924. There is a steady long-term decline in the proportion of our production which goes abroad, compared with the proportion which is consumed at home. I be-

  1999
  lieve that if we try to reverse that process and to get back to a higher proportion of our production going in export, we shall find that we are merely knocking our heads against a brick wall. Of course we must do everything possible to increase the efficiency of our export trades in order to hold our own, in order to hold that £700,000,000 of export trade which we have at present. I believe, however, that a figure in that neighbourhood, if we can maintain such a figure, is perfectly adequate to pay for our imports. After all that is the only purpose of export trade, and if we maintain it at the present level, that, together with our foreign investments, is a perfectly adequate meeting of the bills which we have to meet for essential imports. Therefore I would ask the President of the Board of Trade in the administration of the Department to turn the attention of the exceedingly able experts whose services he commands, or a great part of their attention, to the problem of what I may call the reconstruction of our home market.
  The right hon. Gentleman said one thing which I think astounded and very much disturbed Members on these benches. In a peroration which unfortunately we have become accustomed to from Ministers of all Governments recently, he told us that we were at this very moment on the eve of the turning of the tide and that in another week or a few days perhaps we should see favourable symptoms. He mentioned what he regarded as premonitory signs of those favourable symptoms, and one of them was the fact that in the last fortnight £16,000,000 had been raised on the London money market for investment oversea. I cannot say that that seemed to me a matter for congratulation. It seemed to me that at the moment when our heavy industries ale crying out—so they tell us—for capital for reconstruction; when we are told that any development of Government activity, any attempt to employ men on useful work, on extensions of services which are in Government hands cannot be carried on for lack of capital, it does not seem an unmitigated matter for congratulation that in the last fortnight we have lost £16,000,000 of the small store which we are told is inadequate for our needs. Of
  2000
  course, it is true that, in the long run, this export of capital will increase the purchasing power of the world, and may, through many deviations, come back to benefit the trade of the world and therefore our trade. But how doubtful and vague is that benefit compared with the benefit which would have been derived by the expenditure of that £16,000,000 in wise and useful home development.
  I cannot possibly develop the subject of the reconstruction of cur home market this evening, but I say advisedly that if necessary behind some system of shock absorption between our home market and the rest of the world, we should have some method whereby we could regulate our imports and exports, our foreign trade with the rest of the world consciously and at will. It cannot be done by a system of tariffs which is just as indiscriminate as any other. It cannot be done by an entirely useless system of tariffs, of Which we have seen examples all over the world, and which has always failed to give the results claimed for it, but by a system of conscious regulation of our foreign trade. The organisation of the home market by the diversion of capital resources towards home development; the regulation of our foreign trade by national planning so that we can make our nation a consciously-planned economic unit—it is along those lines that many of us see the only possibility of a real turn of the tide, and of real signs of what we are all looking for, namely, better economic conditions in this country.
  Sir PHILIP CUNLIFFE-LISTER: The Committee has just listened to two very interesting speeches by Members who by tradition—I might almost say hereditary tradition—have been brought up in the strictest doctrines of Free Trade. Yet both, facing present-day facts in the light of present-day experience, though they arrive at different conclusions, commend to the Committee a policy wholly different from that advocated by the President of the Board of Trade. Before dealing with the review which the right hon. Gentleman gave, I wish to mention a subject raised by the hon. Member for East Wolverhampton (Mr. Mander) and the hon. Member for Middleton (Sir N. Sandeman). I am certain that it is impossible to exaggerate the importance to British trade of a prosperous British film industry. I need not elaborate that. It

  2001
  was the whole basis of the argument which I presented to the House when I moved the Cinematograph Bill, and I am glad to find that there is one Member on the Liberal benches at any rate who is now converted to that point of view. I was particularly interested in the suggestions which were made, because, as a matter of fact, they largely followed the original proposals which I made to the different sections of the industry.
  I think the position is unsatisfactory to-day. I think it calls for inquiry and for review. My original proposal to the industry was that the quota should be put on the renter and the distributor, because by doing that you gained the interest of the distributor to make successful British films in this country, and making those films in this country became a condition of his renting other films. I also recommended to the House, not completely with success, that we should not be too strict in the conditions which we applied in testing what was a British film, that we should be wise to draw upon the experience, the talent, and the enterprise of the foreign producers, the foreign technicians, and so on in the producing of our films. Just as you might want to draw on foreign patents and processes in establishing a factory here, so, without the least prejudice to the British character, environment, and atmosphere of a British film, you could safely draw largely upon foreign talent. I am sure that to-day there is a case for inquiry, whether it be by the Advisory Committee at the Board or by the President himself. I would beg him to give that his consideration, and if, as a result of inquiry, he came to conclusions somewhat on the lines that I have very briefly outlined, I believe he would find a very large measure of support in all parts of the House in any action which it might be necessary to take. I very strongly recommend that to him.
  Now I come to his speech. He gave us a gloomy account, though it is true that, at the end, infected perhaps from another quarter, he saw the light breaking over the hills and thought the darkest hour before the dawn had come. I can well remember how often, before an election and at it, if any change in world conditions took place which adversely affected British industry, it was the fault of the Government of the day. Without making a dialectical point, is not his
  2002
  policy at all responsible for the condition which obtains in British industry at the present time? Just let us look at some of the facts, which I think he rather slurred over in his review.
  He has just published a comparison of the trade, in volume, which is a fair test, between the first quarter of 1924, our basic year, and the first quarter of 1930. Imports of manufactures are 60 per cent. up in the first quarter of this year, as compared with 1924, and exports of manufactures are only 4 per cent. up. Steel imports in the first quarter of this year were 93 per cent. greater than they were in the first quarter of 1924. I ask the hon. Gentleman to take notice of these figures, so that, if I make any mistake, I may be corrected. Then the April figures are the worst figures of trade that have been produced in this country since 1926. The exports of manufactures were £10,500,000 down as compared with April a year ago.
  I always look at the imports of raw material, because they are the test of the future. What has been exported relates to the past, but the imports of raw material are some indication, perhaps the best indication, of the trade that is going to be done. Our imports of raw material are £10,000,000 down as compared with April a year ago, and, allowing for a fall in prices, that is a pretty serious diminution. Unemployment is 600,000 up. The hon. Member for Aston (Mr. Strachey), spoke of the importance of the home market, though he underestimated it. I think that he said export was 29 per cent. As a matter of fact, the President of the Board of Trade gave an estimate a few weeks ago that almost 80 per cent. of our production is absorbed in the home market. That is a tremendously important figure. Observe that 80 per cent. of our production is absorbed in the home market, although at the same time the imports of manufactures have gone up by 60 per cent. Unemployment also has gone up by exactly the same percentage—imports 60 per cent. up, unemployment 60 per cent. up. Is there not perhaps some connection between those similar increases?
  As the President said, we are not getting our share of the world trade. We might be consoled a little if the world trade were sagging, and we were sharing the disasters that have befallen everyone,

  2003
  but that is not the position. As he said, the aggregate overseas trade in the world is much greater to-day than it was before the War, and yet our export trade is 17 per cent. less. We were doing some 13 per cent. of the whole trade of the world. We are now doing about 11 per cent., probably nearer 10 per cent. Take steel as an example. The world production of steel has gone up enormously. I cannot give the figures, but I think that it is tens of millions of tons. Before the War I think that we did about 10 per cent. of the world production of steel. To-day we are doing about 8 per cent., and yet there is a great increase in the production and consumption of steel in other countries. Where has that trade gone? The foreign trade is bigger, imports have come here in ever-growing quantities. Who is cutting us out? The trade is going to the protected countries with a secure home market.
  The President of the Board of Trade said that it is no part of the Free Trade argument to say that you cannot benefit an industry here and there, but that it is the exports, which matter so much to this country, that you hit by duties. But it is not true. The export trade of the world is going up, and our share of it is going down, and we are losing it to those countries which have protected their home markets and which have, therefore, a larger-capacity production. I entirely agree with the hon. Member who said just now that it is the volume of production which governs the cost in every industry to-day. The hon. Member for Aston referred to foreign investments, and the President of the Board of Trade drew great encouragement from the fact that we were now investing largely overseas. Some of the money is invested in the Empire, and I welcome that, but one cannot help drawing this deduction, that today the tendency is to invest overseas. We are sending British capital overseas, not only to the Empire, but very largely into foreign countries, because capital believes that in the industry in foreign countries it will have a better chance. The Chancellor of the Exchequer tells British industry to have more pluck. What is the good of saying that when you refuse that industry any help and handicap it wherever you can?
  Let us have a test. The hon. Member for Huddersfield (Mr. J. Hudson) was
  2004
  very much shocked because Nottingham and its lace industry were introduced into a Debate on the Vote of the Board of Trade. He said he wanted to discuss wider issues. I daresay he did; but I understood that a whole General Election was fought on the issue of trade and employment. He will have an opportunity of making the appeal, large or small, on the question of trade and employment in the contest which is now going-on, and I very much doubt whether hon. Members opposite will convert the citizens of Nottingham to the conviction that they would best serve the wider interests of citizenship by reducing the unemployment level of Nottingham to the level established in other parts of the country. The right hon. Gentleman challenged the figures about the lace industry, and there is much to be said on that point. He said, "We have not got complete figures," but if that is the case, is it not better to pay some attention to the judgment and the experience of the people who are in the industry, masters and men? [Interruption.] And who are interested! Well, really—
  Mr. KINGSLEY GRIFFITH: I did not say "interested." I said who were responsible.
  Sir P. CUNLIFFE-LISTER: That is a very poor answer, and the hon. Member had better go to support his candidate at Nottingham with that answer. [Interruption.]
  Mr. HOLFORD KNIGHT: I won a seat in Nottingham on that plea.
  Sir P. CUNLIFFE-LISTER: Yes, and you will lose it next time. Without question employment is better, initiative and enterprise in that trade have been encouraged, and we have held up a trade which is a diminishing trade all over the world and which, but for the duty which was put on, would be almost in extremis at this moment. [Interruption.] I know there is a slight trend of fashion to-day. [Interruption.] Well, I will prove it. French exports are a very good test. When there was a fashion in lace the United States were great importers of lace. In 1922 the United States took 8,000,000 dollars' worth of French lace, and last year, I am told, they took only about 2,500,000 dollars worth of lace. Why? Because the lace trade was diminishing. Therefore, what

  2005
  we have done here is to succeed in holding up a trade and keeping people in full time employment who otherwise would undoubtedly have been thrown upon the streets.
  What a record the Government have in this matter! They refused to consider any representations until there was a by-election. They refused to make representations to the United States. A proposal was made in the United States to raise the duty on lace. The President of the Board of Trade said he could not make representations because the proposal was made by Congress, and it was not made by a Minister. What difference does that make as to the desirability of representations? The real answer was the reply which the right hon. Gentleman gave the other day at Question time, when he said that it is no good making representations if you know that they cannot succeed. Why could they not succeed? Because the right hon. Gentleman had absolutely nothing to offer. There was another Government which was not handicapped, namely, the French Government. They made representations and their representations were successful because they had a weapon with which to negotiate in their foreign trade. Yet, the President of the Board of Trade says, "You must not retaliate because it is so dangerous." [Interruption.] shall take rather less time to make my speech if hon. Gentlemen opposite will not interrupt me. If I am out of order, the Chairman will put me right.
  The President of the Board of Trade will not be able to rely so much in future upon the chance representations of foreign countries, and I will tell the Committee why. We may get an advantage this time under the most-favoured-nation treatment, but the whole trend certainly in Europe to-day, and I think all over the world, is against a general most-favoured-nation treaties, and for practical ad hoc bargains with people who have something to give. I think that the right hon. Gentleman will be able to rely upon that less and less.
  Why cannot the President of the Board of Trade grant an inquiry into this trade? That was what the Balfour Committee recommended, and the President of the Board of Trade surely is not going to shirk the appointment of a Committee.
  2006
  We hear a lot of talk about committees. I do not know how many committees the right hon. Gentleman has set up. He seems to have a positive mania for committees. There is a committee inquiring into almost everything, and why cannot he set up the one committee which the Balfour Report said would be a wise thing to do. It would not be a breach of the tariff truce to do that, and it is about the only power that I can see is left to the right hon. Gentleman. Let him do that because it might even help him a little at the election. Then the right hon. Gentleman came back to his tariff truce, the one sheaf which he was able to bring. What are the first fruits of his truce which has been condemned by every trade and business organization in this country. The President of the Board of Trade said the truce was the outcome of the Economic Conference, and many business men and trade organisations had taken part in that conference. Is it not true that every one of those who took part in it are dead against the tariff truce which the right hon. Gentleman has concluded?
  What are the first fruits of it? The first fruits are that some other countries have already put up their duties. I put a question to the President of the Board of Trade the other day and I asked him specifically whether this country under this tariff truce is as favourably treated as other countries. I think the answer is bound to be "No." The countries under the truce are divided into two classes, A and B, and those which come under Clause 4 and Clause 2. We find ourselves under Clause 4 and we are one of the countries with the lowest duties—one of the countries which has not put up the duties. We are to be placed in a penal position under Clause 4 because in no circumstances shall we be able to increase our duties at all.
  Those countries, however, which do not consolidate their tariffs, those countries which have raised their duties, which have high duties, which are highly protected, and which ought to be barred if anyone is, are the countries which are absolutely free, under the right hon. Gentleman's Tariff Truce, to put their duties up as high as they like, and the only power he has under his truce is to denounce it. But he says he will not do that; he has given it all away in

  2007
  advance. He has said to them in the name of freedom, while putting his fetters on British industry, "I warn you in advance that whatever happens, however badly you treat me, however high you put your duties up, I at any rate shall do nothing against you."
  With all the good will which I know he has, with all his good intentions—and he knows what road is paved with those—the President of the Board of Trade is, in fact, a very industrious commercial traveller for our competitors. The people with whom he makes his truce put up their duties. The one exception, the one bright spot, is Canada, which refused to have anything to do with this Tariff Truce, which refused to be a party to it, which warned him in advance. Canada is reducing her tariffs all along the line, covering some £40,000,000 of imports, in British interests. If the President of the Board of Trade would seek the interests of British industry, he would turn his mind away from the Tariff Truce, he would cease to make gestures at Geneva, but would make them to his own people—he would make offers to his own countrymen here and in the Empire.
  The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. W. R. Smith): In rising to conclude this Debate, I feel that my task is rendered somewhat light, because I think that the points which have been raised, both in regard to the initial question of the Safeguarding of the lace industry, and in regard to the general question of tariffs so far as it has been discussed, have been very largely, if not entirely, met by the speech of my right hon. Friend earlier in the Debate. [Interruption.] I think my right hon. Friend was able to show that scarcely one of the points that have been sought to be made in justification of the arguments put forward would stand the test of close examination. One of the points was that the Safeguarding of the lace industry in the Nottingham district had been the means of substantially increasing employment, but, when the figures are examined, and compared with those before the duty was put on, the figures, in so far as they are available, show that the number employed is smaller to-day than it was previous to Safeguarding; while, as regards the increase of 162
  2008
  per cent. in earnings, nobody has yet been able to produce any figures in confirmation of that statement.
  It is rather significant that one of the great arguments always used in connection with the policy of Safeguarding is that it means more employment and better wages, and these are the two points upon which it is sought to justify that policy. The figures quoted by my right hon. Friend have already shown that, on the question of increased employment, the argument fails, while in regard to increased earnings the challenge has been issued on quite a few occasions, to those who support the policy, to quote a single instance where the rate of wages has been increased in the lace industry, as evidence that Safeguarding is a means of increasing wages.
  Sir H. BETTERTON: I never made, or tried to make, the case that the rate of wages had increased. What I said was that the aggregate pay had increased.
  Mr. SMITH: I was coming to that point. If the policy of Safeguarding produces the results that its advocates claim for it, that it is the means of producing better wages, it is not an unreasonable point to submit that the better wages ought to be shown in a higher rate of earnings for those engaged in the industry. [Interruption.] Obviously then, we have an entirely different point of view on this side of the House from hon. Members opposite as to what constitutes real prosperity so far as the worker is concerned. That is how we view it and, seeing that those points have not been substantiated in the discussion, I think the claim that is put forward really fails under the two substantial heads on which this policy is sought to be justified. The point was that there was an average loss of 5½ hours per week previously and that has been reduced to 1½ hours per week. Taking the statement as it is presented, it would indicate that the average hours of work have increased by four per week as the result of this policy. If that is to be the test by which to judge the merits of Safeguarding in regard to this industry, just as much would be proved in connection with other industries to which the policy of Safeguarding does not apply. Just the same could be proved. As a matter of fact, that is one of the difficulties in this respect.

  2009
  I remember, when at the Ministry of Agriculture in 1924, being rather anxious to facilitate any means that could be found of dealing with the very great difficulties we had then in regard to foot-and-mouth disease. Various specifics used to be brought forward and I used to consult the chief veterinary officer. He always wanted to know whether the result that was claimed for a particular specific or policy would have been obtained even if that specific had not been used or that policy had not been pursued. That is the real test. If all you can show is, not that there has been an increase in the rate of earnings, but that there has been a little better average employment for those connected with the industry, although the numbers have been reduced from 20,000 to 16,000, then the aggregate amount of employment has been really less and not more. Therefore, I think they have failed to make out the case.
  Let us take an industry which has been quoted several times and which has been a subject of consideration in connection with the policy of Safeguarding, namely, iron and steel. Let us take the figures of production there. They can be taken as having some relation to the extent of employment that is provided in the industry. In 1925, the monthly average of production of pig iron was 521,800 tons. In 1929, it was 631,600 tons, or 110,000 tons more in 1929 than in 1925. Surely, one is entitled to argue from those figures, just as hon. Members opposite have argued, that the figures in connection with the lace trade prove and justify the policy of Safeguarding, that the policy of absence of restrictions or interference with the industry in this respect proves that prosperity can equally be achieved. Take the case of the production of steel ingots and castings. In 1925, the monthly average production in this country was 615,500 tons, whilst in 1929 it was 804,600 tons. That means that there is an increase of 189,000 tons per month in 1929 over 1925. I suggest that those figures in themselves can just as much be taken as convincing evidence to prove that the policy of Safeguarding is wrong in connection with that industry.
  Mr. D. G. SOMERVILLE: Is it not a fact that the world production of lace has gone down whereas the world production of iron has increased?
  Mr. SMITH: It is always very difficult to make exact comparisons in these matters. I thought that in taking iron and steel I was taking the industry around which there had centred a big controversy as to whether it was an industry that ought to be safeguarded and subjected to this policy. Therefore I think that I have shown that there is an unanswerable case and just as convincing a case and that it is just as conclusive in its result as any argument or evidence put forward in regard to the other matter.
  I want to answer one or two points which have been raised in this Debate. The hon. Member for Aston (Mr. Strachey) was rather critical of my right hon. Friend in regard to statements he had made and one of his criticisms was that my right hon. Friend relied too much on exports. I think that he could not have followed the statement which the President of the Board of Trade made when he was reviewing the situation, because the one thing which was emphasised very clearly and very emphatically in his observations was the importance of the home market. It is true to say that the Government have, from the first day they took office, given the very closest and most careful consideration to the posibility of developing the home market. [An HON. MEMBER: "What have the Government done?"] I can give evidence in that respect. Criticism has been offered about the tendency of the Government to set up inquiries. Surely, after all, if you want to evolve a policy which is going to achieve desired results in regard to any problem you want, first of all, to examine the nature of that problem in terms of what is the best and most proper thing to be done. The inquiries which have been set up to investigate the conditions of the cotton industry as well as the conditions appertaining to the iron and steel industry in themselves indicate that it is the desire of the Government to do what is possible in the development of the home market and of the home industries so as to give them a greater measure of prosperity than now obtains.
  In regard to the criticism levelled as to the £16,000,000 namely, that it would be more desirable if that could have been transferred to home production, there is this much to be said, that that £16,000,000 would go out in the

  2011
  form of goods. These financial arrangements are not carried out by the passing of £16,000,000 in cash, but on the basis of trade by exporting goods. There ie another question which has been overlooked in this Debate, but which must have an important effect upon the issue, namely, our investments overseas. Whether it is a good or a bad thing for this country that we have developed the policy in past years of investing so much capital overseas, I need not argue to-night. The fact remains that we have very large investments overseas amounting to about £6,000,000, producing an income in the form of interest of £285,000,000 annually. That can only come into this country in the form of goods. We have as a nation developed a policy of endeavouring to be the carrying nation of the world. We have not entirely succeeded, but at least the services rendered by the shipping industry represent £131,000,000 a year. That added to the £285,000,000, plus £65,000,000 for commission and interest, creates a situation which must be reflected in the imports of this country. That money can only be paid to those who are entitled to it in the form of imparts. In the economy of a nation it is absurd to imagine that these factors can be set aside and that you can take a separate industry and examine it in detail and say simply because you can work out a certain policy in regard to a certain industry that necessarily must be the right policy for a nation.
  One word about the Tariff truce. It is very remarkable that when Debates of this description take place, even the most rabid Protectionist will say that he would believe in Free Trade if he could get it. Yet when an effort is being made by the President of the Board of Trade, in the case of a Tariff truce, to develop such a policy—whether it will ultimately succeed or not is more or less immaterial at the moment, for it is the purpose and motive behind which really matter—and when efforts are being made towards endeavouring to lead Europe back to the position and relationships in trade which hon. Gentlemen opposite declare to be the best thing, if you can only get it, then they say that is wrong and they advocate a policy in the opposite direction to what they say would be the best
  2012
  thing if they could only get it. There is absence of logic about them.
  Sir P. CUNLIFFE-LISTER: I asked the hon. Gentleman one specific question which I repeated at Question Time the other day and I have had no answer yet. I asked him, is it a fact that under Article 2 the high tariff countries are free to put up their duties whereas under Article 4 we are absolutely bound not to put up any of ours?
  Mr. SMITH: I am afraid it is impossible in the few minutes which remain to me to go into a detailed argument. With regard to the question of cinematograph films, while it is not possible to promise, at the moment, the inquiry which the right hon. Gentleman asked should take place, the suggestion will be watched, because we recognise the great importance of the position that has developed so far as the cinemas are concerned. The hon. Member for Wolverhampton, East (Mr. Mander) stated that the whole position of the industry was drifting into the hands of the Americans. I am afraid that it will be very difficult for any Government to prevent capital spreading and developing in the way that American capital spreads so far as the cinema industry is concerned. I think he is mistaken when he says that the advisory committee which has been appointed under the Act, and which sits fairly regularly at the Board of Trade, is a body that is under the influence and control of American capital. The Department has no reason to think that that is so.
  One of the great difficulties in dealing with an industry of that description is that it is a very changing industry. When the Act was passed we were dealing with a class of film which has almost entirely passed out, and we have an entirely new industry which has come along with the talkies. I am not without hope, as a result of information which has been received, due very largely to the fact that the American accent is not very welcome so far as the talkies are concerned, that there is a big possibility of this industry developing in London, and that London may become a centre of progressive activity and a serious competitor to Hollywood, in time. So far as that question is concerned, the Government will, as soon as possible, render what help they can as a means of facilitating and developing

  2013
  this important industry, so that its propaganda value, which has been referred to, may be used in the interests of British trade and industry instead of, as has been suggested, in the interests of American trade.
  I will say a few words in regard to the tariff truce. One right hon. Gentleman opposite said that we were seeking to make it possible for any kind of sweated goods to come into this country. That is not the policy of the Government. The Government would seek to make that kind of thing impossible by ultilising to the fullest possible extent the offices of the
  League of Nations and of the International Labour Office to standardise on a healthy basis the labour conditions of all countries. We believe that that as a policy is better and more efficient and would give better results if it were pursued than the erection of barriers between nations, on the lines which hon. Members opposite desire.
  Question put, "That a sum, not exceeding £101,641, be granted for the said Service."
  The Committee divided: Ayes, 171; Noes, 209.

  Division No. 296.]

  AYES.

  [11.0 p.m.

  Acland-Troyte, Lieut.-Colonel

  Falle, Sir Bertram G.

  Nield, Rt. Hon. Sir Herbert

  Ainsworth, Lieut.-Col. Charles

  Ferguson, Sir John

  Oman, Sir Charles William C.

  Albery, Irving James

  Fermoy, Lord

  Peake, Capt. Osbert

  Allen, Sir J. Sandeman (Liverp'l., W.)

  Ford, Sir P. J.

  Percy, Lord Eustace (Hastings)

  Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

  Forestler-Walker, Sir L.

  Peto, Sir Basil E. (Devon, Barnstaple)

  Atholl, Duchess of

  Fremantle, Lieut.-Colonel Francis E.

  Pownall, Sir Assheton

  Atkinson, C.

  Gault, Lieut.-Col. Andrew Hamilton

  Ramsbotham, H.

  Baillie-Hamilton, Hon. Charles W.

  Gilmour, Lt.-Col. Rt. Hon. Sir John

  Reid, David D. (County Down)

  Balfour, Captain H. H. (I. of Thanet)

  Glyn, Major R. G. C.

  Remer, John R.

  Balniel, Lord

  Gower, Sir Robert

  Rentoul, Sir Gervals S.

  Beaumont, M. W.

  Grace, John

  Richardson, Sir P. W. (Sur'y, Ch'ts'y)

  Bellairs, Commander Carlyon

  Graham, Fergus (Cumberland, N.)

  Roberts, Sir Samuel (Ecclesall)

  Betterton, Sir Henry B.

  Grattan-Doyle, Sir N.

  Rodd, Rt. Hon. Sir James Rennell

  Birchall, Major Sir John Dearman

  Greaves-Lord, Sir Walter

  Ross, Major Ronald D.

  Bird, Ernest Roy

  Greene, W. P. Crawford

  Ruggles-Brise, Lieut.-Colonel E. A.

  Bourne, Captain Robert Croft

  Gretton, Colonel Rt. Hon. John

  Russell, Alexander West (Tynemouth)

  Bowater, Col. Sir T. Vansittart

  Guinness, Rt. Hon. Walter E.

  Samuel, A. M. (Surrey, Farnham)

  Bracken, B.

  Gunston, Captain D. W.

  Sandeman, Sir N. Stewart

  Braithwaite, Major A. N.

  Hacking, Rt. Hon. Douglas H.

  Sassoon, Rt. Hon. Sir Philip A. G. D.

  Briscoe, Richard George

  Hall, Lieut.-Col. Sir F. (Dulwich)

  Shepperson, Sir Ernest Whittome

  Brown, Brig.-Gen. H. C. (Berks, Newb'y)

  Hammersley, S. S.

  Simms, Major-General J.

  Buchan, John

  Harvey, Major S. E. (Devon, Totnes)

  Sinclair, Col. T. (Queen's U., Belfast)

  Buckingham, Sir H.

  Haslam, Henry C.

  Skelton, A. N.

  Bullock, Captain Malcolm

  Heneage, Lieut.-Colonel Arthur P.

  Smith, Louis W. (Sheffield, Hallam)

  Butler, R. A.

  Hills, Major Rt. Hon. John Waller

  Smith, R. W. (Aberd'n & Kinc'dlne, C.)

  Cadogan, Major Hon. Edward

  Horne, Rt. Hon. Sir Robert S.

  Smith-Carington, Neville W.

  Carver, Major W. H.

  Howard-Bury, Colonel C. K.

  Smithers, Waldron

  Castle Stewart, Earl of

  Hunter-Weston, Lt.-Gen. Sir Aylmer

  Somerville, A. A. (Windsor)

  Cautley, Sir Henry S.

  Hurd, Percy A.

  Somerville, D. G. (Willesden, East)

  Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)

  Hurst, Sir Gerald B.

  Southby, Commander A. R. J.

  Chadwick, Capt. Sir Robert Burton

  Iveagh, Countess of

  Spender-Clay, Colonel H.

  Chamberlain, Rt. Hon. N. (Edgbaston)

  Jones, Sir G. W. H. (Stoke New'gton)

  Stanley, Lord (Fylde)

  Chapman, Sir S.

  Kindersley, Major G. M.

  Stanley, Maj. Hon. O. (W'morland)

  Christie, J. A.

  King, Commodore Rt. Hon. Henry D.

  Steel-Maitland, Rt. Hon. Sir Arthur

  Churchill, Rt. Hon. Winston Spencer

  Knox, Sir Alfred

  Stewart, W. J. (Belfast, South)

  Cobb, Sir Cyril

  Lamb, Sir J. O.

  Stuart, Hon. J. (Moray and Nairn)

  Colfox, Major William Philip

  Lane Fox, Col. Rt. Hon. George R.

  Thomas, Major L. B. (King's Norton)

  Colman, N. C. D.

  Law, Sir Alfred (Derby, High Peak)

  Tinne, J. A.

  Colville, Major D. J.

  Leighton, Major B. E. P.

  Todd, Capt. A. J.

  Courthope, Colonel Sir G. L.

  Lewis, Oswald (Colchester)

  Train, J.

  Crichton-Stuart, Lord C.

  Liewallin, Major J. J.

  Tryon, Rt. Hon. George Clement

  Crookshank, Cpt. H. (Lindsey, Gainsbro)

  Locker-Lampson, Rt. Hon. Godfrey

  Turton, Robert Hugh

  Croom-Johnson, R. P.

  Locker-Lampson, Com. O. (Handsw'th)

  Vaughan-Morgan, Sir Kenyon

  Culverwell, C. T. (Bristol, West)

  Lymington, Viscount

  Wallace, Capt. D. E. (Hornsey)

  Cunliffe-Lister, Rt. Hon. Sir Philip

  MacRobert. Rt. Hon. Alexander M.

  Ward, Lieut.-Col. Sir A. Lambert

  Dalkeith, Earl of

  Maitland, A. (Kent, Faversham)

  Wardlaw-Milne, J. S.

  Davidson, Rt. Hon. J. (Hertford)

  Makins, Brigadier-General E.

  Warrender, Sir Victor

  Davidson, Major-General Sir J. H.

  Margesson, Captain H. D.

  Wayland, Sir William A.

  Davies, Dr. Vernon

  Marjoribanks, E. C.

  Williams, Charles (Devon, Torquay)

  Davison, Sir W. H. (Kensington, S.)

  Mason, Colonel Glyn K.

  Wilson, G. H. A. (Cambridge U.)

  Dawson, Sir Philip

  Meller, R. J.

  Windsor-Clive, Lieut.-Colonel George

  Duckworth, G. A. V.

  Merriman, Sir F. Boyd

  Winterton, Rt. Hon. Earl

  Dugdale, Capt. T. L.

  Monsell, Eyres, Com. Rt. Hon. Sir B.

  Wolmer, Rt. Hon. Viscount

  Eden, Captain Anthony

  Moore, Lieut.-Colonel T. C. R. (Ayr)

  Womersley, W. J.

  Edmondson, Major A. J.

  Morrison, W. S. (Glos., Cirencester)

  Wood, Rt. Hon. Sir Kingsley

  Elliot, Major Walter E.

  Morrison-Bell, Sir Arthur Clive

  Erskine, Lord (Somerset, Weston-s.-M.)

  Muirhead, A. J.

  TELLERS FOR THE AYES.—

  Everard, W. Lindsay

  Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)

  Sir F. C. Thomson and Sir George

  Penny.

  NOES.

  Adamson, W. M. (Staff., Cannock)

  Harris, Percy A.

  Picton-Turbervill, Edith

  Aitchison, Rt. Hon. Craigle M.

  Hastings, Dr. Somerville

  Pole, Major D. G.

  Alexander, Rt. Hon. A. V. (Hillsbro')

  Haycock, A. W.

  Potts, John S.

  Arnott, John

  Hayday, Arthur

  Price, M. P.

  Aske, Sir Robert

  Henderson, Arthur, Junr. (Cardiff, S.)

  Pybus, Percy John

  Attlee, Clement Richard

  Henderson, W. W. (Middx., Enfield)

  Quibell, D. F. K.

  Ayles, Walter

  Herriotts, J.

  Ramsay, T. B. Wilson

  Baker, John (Wolverhampton, Bilston)

  Hoffman, P. C.

  Raynes, W. R.

  Baldwin, Oliver (Dudley)

  Hollins, A.

  Richards, R.

  Barnes, Alfred John

  Hopkin, Daniel

  Richardson, R. (Houghton-le-Spring)

  Barr, James

  Hudson, James H. (Huddersfield)

  Riley, F. F. (Stockton-on-Tees)

  Batey, Joseph

  Isaacs, George

  Ritson, J.

  Bellamy, Albert

  Jenkins, W. (Glamorgan, Neath)

  Roberts, Rt. Hon. F. O. (W. Bromwich)

  Benn, Rt. Hon. Wedgwood

  John, William (Rhondda, West)

  Romeril, H. G.

  Bennett, Capt. E. N. (Cardiff, Central)

  Johnston, Thomas

  Rosbotham, D. S. T.

  Benson, G.

  Jones, F. Llewellyn- (Flint)

  Rowson, Guy

  Bentham, Dr. Ethel

  Jones, Henry Haydn (Merioneth)

  Runciman, Rt. Hon. Walter

  Birkett, W. Norman

  Jones, Rt. Hon. Leif (Camborne)

  Salter, Dr. Alfred

  Blindell, James

  Jones, Morgan (Caerphilly)

  Sanders, W. S.

  Bowen, J. W.

  Jowett, Rt. Hon. F. W.

  Sawyer, G. F.

  Bowerman, Rt. Hon. Charles W.

  Kedward, R. M. (Kent, Ashford)

  Scrymgeour, E.

  Broad, Francis Alfred

  Kennedy, Thomas

  Scurr, John

  Brooke, W.

  Kenworthy, Lt.-Com. Hon. Joseph M.

  Shaw, Rt. Hon. Thomas (Preston)

  Brothers, M.

  Knight, Holford

  Shepherd, Arthur Lewis

  Brown, C. W. E. (Notts, Mansfield)

  Lansbury, Rt. Hon. George

  Shield, George William

  Brown, Ernest (Leith)

  Lathan, G.

  Shiels, Dr. Drummond

  Brown, Rt. Hon. J. (South Ayrshire)

  Law, Albert (Bolton)

  Shillaker, J. F.

  Burgess, F. G.

  Law, A. (Rosendale)

  Short, Alfred (Wednesbury)

  Buxton, C. R. (Yorks. W. R. Elland)

  Lawson, John James

  Simmons, C. J.

  Buxton, Rt. Hon. Noel (Norfolk, N.)

  Lawther, W. (Barnard Castle)

  Sinkinson, George

  Caine, Derwent Hall-

  Leach, W.

  Smith, Alfred (Sunderland)

  Cape, Thomas

  Lee, Jennie (Lanark, Northern)

  Smith, Frank (Nuneaton)

  Carter, W. (St. Pancras, S. W.)

  Logan, David Gilbert

  Smith, Rennie (Penistone)

  Charleton, H. C.

  Longbottom, A. W.

  Smith, Tom (Pontefract)

  Clarke, J. S.

  Longden, F.

  Smith, W. R. (Norwich)

  Cluse, W. S.

  Lovat-Fraser, J. A.

  Snell, Harry

  Cocks, Frederick Seymour

  Lowth, Thomas

  Snowden, Thomas (Accrington)

  Daggar, George

  Lunn, William

  Sorensen, R.

  Dallas, George

  Macdonald, Gordon (Ince)

  Stamford, Thomas W.

  Dalton, Hugh

  MacDonald, Malcolm (Bassetlaw)

  Stewart, J. (St. Rollox)

  Davies, E. C. (Montgomery)

  McElwee, A.

  Strachey, E. J. St. Loe

  Davies, Rhys John (Westhoughton)

  McEntee, V. L.

  Strauss, G. R.

  Day, Harry

  MacLaren, Andrew

  Sullivan, J.

  Dickson, T.

  McShane, John James

  Sutton, J. E.

  Dukes, C.

  Malone, C. L'Estrange (N'thampton)

  Taylor, R. A. (Lincoln)

  Duncan, Charles

  Markham, S. F.

  Taylor, W. B. (Norfolk, S. W.)

  Ede, James Chuter

  Marley, J.

  Thurtle, Ernest

  Edmunds, J. E.

  Marshall, Fred

  Tinker, John Joseph

  Edwards, E. (Morpeth)

  Mathers, George

  Tout, W. J.

  Elmley, Viscount

  Matters, L. W.

  Townend, A. E.

  Evans, Capt. Ernest (Welsh Univer.)

  Melville, Sir James

  Trevelyan, Rt. Hon. Sir Charles

  Forgan, Dr. Robert

  Mills, J. E.

  Turner, B.

  Gardner, B. W. (West Ham, Upton)

  Milner, Major J.

  Viant, S. P.

  Gibbins, Joseph

  Montague, Frederick

  Walkden, A. G.

  Gibson, H. M. (Lancs, Mossley)

  Morgan Dr. H. B.

  Walker, J.

  Gill, T. H.

  Morrison, Herbert (Hackney, South)

  Watkins, F. C.

  Gillett, George M.

  Moses, J. J. H.

  Watson, W. M. (Dunfermline)

  Glassey, A. E.

  Mosley, Sir Oswald (Smethwick)

  Watts-Morgan, Lt.-Col. D. (Rhondda)

  Gossling, A. G.

  Muff, G.

  Wellock, Wilfred

  Gould, F.

  Muggeridge, H. T.

  Welsh, James C. (Coatbridge)

  Graham, D. M. (Lanark. Hamilton)

  Nathan, Major H. L.

  White, H. G.

  Graham, Rt. Hon. Win. (Edin., Cent.)

  Naylor, T. E.

  Whiteley, Wilfrid (Birm., Ladywood)

  Greenwood, Rt. Hon. A. (Colne)

  Newman, Sir R. H. S. D. L. (Exeter)

  Williams, Dr. J. H. (Llanelly)

  Grenfell, D. R. (Glamorgan)

  Oldfield, J. R.

  Williams, T. (York, Don Valley)

  Griffith, F. Kingsley (Middlesbro' W.)

  Oliver, P. M. (Man., Blackley)

  Wilson, C. H. (Sheffield, Attercilffe)

  Griffiths, T. (Monmouth, Pontypool)

  Owen, Major G. (Carnarvon)

  Wilson, R. J. (Jarrow)

  Groves, Thomas E.

  Palin, John Henry

  Winterton, G. E. (Leicester, Loughb'gh)

  Hall, G. H. (Merthyr Tydvil)

  Paling, Wilfrid

  Hall, Capt. W. P. (Portsmouth, C.)

  Parkinson, John Allen (Wigan)

  TELLERS FOR THE NOES.—

  Hamilton, Mary Agnes (Blackburn)

  Perry, S. F.

  Mr. Charles Edwards and Mr.

  Hamilton, Sir R. (Orkney & Zetland)

  Phillips, Dr. Marion

  William Whiteley.

  Original Question again proposed.
  It being after Eleven of the Clock and objection being taken to further Proceeding, the CHAIRMAN left the Chair to make his Report to the House.
  Committee report Progress; to sit again To-morrow.
  The remaining Orders were read, and postponed.

  ADJOURNMENT.
  Resolved, "That this House do now adjourn.—[Mr. T. Kennedy.]
  Adjourned accordingly at Fourteen Minutes after Eleven o'Clock.