HC Deb 08 November 1932 vol 270 cc197-265

Order read for resuming Adjourned Debate on Question [4th November], That this House views with concern the present volume of unemployment, and will welcome all proper measures for dealing with it."—[Mr. Lansbury.]

Question again proposed.


We have now reached the third day of the Debate upon this very important topic, and I cannot hope at this stage that what I have to say will be of special interest in comparison with the speeches which have already been made. The right hon. Gentleman the Leader of the Opposition, however, by the form which he has generously given to this Debate, has invited everybody, even the most modest among us, to contribute, and the Prime Minister in his speech yesterday seemed to encourage "thinking aloud" in the House upon this question. Accordingly, with the permission of the House, I venture to collect some of my wandering thoughts upon this subject and to present them to hon. and right hon. Gentlemen from an angle which I think differs somewhat from that taken up to now.

I wish to say, in the first place, that, since all the nations of the world are suffering as we are from this distress of unemployment, the problem is not one which can be solved by any one country, by isolated action, but is one which will require, in the end, for its complete solution, the co-operation of all the nations. But that is not to say that each individual country by itself cannot take some action in regard to its own local problems, which nay give some ease and perhaps also put that country into a position, by reason of its own experiment and experience, to contribute in a. more valuable way to the general discussion at an international conference.

It is a platitude now to say that in the midst of a world of plenty vast numbers of mankind are in a, state of destitution and distress. There are those who think that this difficulty arises from overproduction, but I am not one of those who feel that they can entirely subscribe to that view. I can imagine over-production of one or two or three commodities, but I find it difficult to imagine an over-production at one and the same time of all commodities. That would seem to indicate a situation in which there would be so much more wealth in the world and so much more of each commodity to exchange for other commodities that mankind would be in a better position to take advantage of the fruits of nature and the results of man's invention. This view would seem to be borne out by the illustrations which we get in the extraordinary devices adopted in various countries to meet present difficulties. For example, when you find Brazil bartering a cargo of coffee for a cargo of wheat from the United States of America it is an illustration of the fact that the difficulty does not he in overproduction of these commodities, so much as in the difficulties of exchange.

If we probe back a little further into the matter we find confirmation in multifarious directions. We discover that there are many people who wish to sell goods in various parts of the world. They have customers who would readily take those goods, but who are not able to pay for them, not because they have not adequate wealth, but because the Governments of their countries refuse to give them those facilities of exchange which are necessary to order to make payments. We readily see then that if we could put the exchanges of the world right we should render the best service possible to the trade and industry and commerce of the world. What are these countries doing? They are, one and all, trying by restrictions upon exchange to preserve such holdings as they have of gold. They are doing that because they have certain debts which they must pay to the gold-holding countries in gold, and they are nervous of allowing any diminution of the quantity which they hold for that purpose. That brings us right up to the fact that while there is a vast amount of gold in the world—though not too much—three-quarters or nearly three-quarters of it is now in the hands of two countries, while the other countries are denuded of the necessary supplies. Accordingly, I think, upon that short resumé, it must he apparent that the problem before us has certainly as one of its great factors the problem of international monetary exchange.

Now, if I may turn for a moment to our more immediate local situation you find a position which is almost equally fantastic. You find that we are living in a day of what is called cheap money, and this supply of cheap money has had one very great effect. It has enabled to be carried out the greatest conversion scheme which the world has ever known, and while there are directions in which I could not entirely agree with, and would even take the liberty of criticising some of the authorities who manage our finances, I would desire to-day to pay my meed of admiration to the skill with which these great operations have been conducted. It has required no little foresight, no little manipulation, to bring about a conversion of debt which is going to make a great change in the economic history of the world, and those who are responsible for it, I think, deserve not only our congratulations, but our gratitude.

But you have, as a result of this period of cheap money—and do not let us call it a glut of money, because that would be exaggerating the situation; there is no such glut or plethora of money in the country to-day as would not very readily be taken up if trade once resumed its normal operations—but this cheap money period has had certain results which you can find in the figures of the banks. You will find, for example, that the deposits of the joint stock banks with the Bank of England have risen since the month of February from £70,000,000 to £85,000,000, and recently to £100,000,000. I do not wish to lay too much stress upon this figure of £100,000,000, because I think it is probably temporary, but let us assume a rise from £70,000,000 to £85,000,000. That is an increase of £15,000,000, which, according to ordinary banking practice, would enable the joint stock banks to grant increased credits among their clients to the extent of £150,000,000. You find also that the deposit accounts of the banks have risen very greatly. They have risen, taking all the banks together, from something like £1,658,000,000 to about £1,865,000,000, or slightly over £200,000,000. You find at the same time that the investments of the banks have increased to the extent of a little over £100,000,000.

On the other hand—and this is the disquieting feature of the whole situation— you find that the loans to customers, what are called the advances, have decreased also by £100,000,000. That is to say, trade is not taking from the banks the amount of money which is there and available for it. There is a certain qualification to be made here, however. The situation given is not just as bad as would appear upon the surface because the extra investments which the banks have made do gradually percolate down into trade, for this reason: When the banks buy Government securities as investments there is somebody selling them. The person who is selling those securities is, in general, somebody who wants to get a little better yield on his money than he can get out of Government securities. He is perhaps going to buy debentures or preference stocks in some good company, and the people who are selling those again are people who desire to find some more lucrative investment for their money, though probably more risky. They may be investing in common stocks, and those who are selling common stocks are buying something else, probably commodities; and in this way, in the end, you get down to a position in which trade is ultimately benefited. But that is a very slow process, as everybody has seen who has been following what has taken place in America, and our problem of unemployment, as I take it, is immediate.

We have in front of us what the Prime Minister described yesterday as a very hard winter, and I am not sure he did not describe it as a very hard and bitter winter. I do not think any words can exaggerate the distress with which our people are confronted in the months that are to come. Therefore, what is demanded of the House at the present time, as I take it, is that we should try to suggest something which can be put into operation quickly, which shall be some relief to the poignant distress now being suffered and which is likely to get worse in the course of the winter months. If that be the problem, is there anything that the Government can legitimately do which will not have any snag attached to it, which will not, as the Americans say, have a string to it, that will not, as some of the illustrations given by the Prime Minister yesterday showed, bring in its train some worse effects, some disadvantages greater than the immediate advantages that may be gained?

As I dare say the House knows, I am one of the people who have always been against extravagant Government expenditure. That is my view as the effect of it is high taxation, and high taxation is the worst thing for business, and the worst thing for business is the worst thing for employment.


When you were Chancellor of the Exchequer you put it up with a rattle.


I put up taxation with a rattle? I am the only person living who ever reduced the Income Tax by a shilling in the pound. I am surprised that my hon. Friend should challenge me upon this matter because it was regarded as a mark of incompetence on my part that I saved £100,000,000 in one year. It was said that I had made a bad estimate of my revenue when in reality I had reduced expenditure. Whatever be my own personal position the problem is much bigger than anything which concerns any individual an as I see the situation, I am persuaded—and what the Prime Minister said yesterday indicates the same point of view—that money is much better spent ordinarily by the individual who is looking after his money than it is spent by the municipality or by the State.

The illustrations which the Minister of Labour gave on Friday in opening the Debate were sufficient to show that there has been an enormous waste in the expenditure of money placed at the disposal of the Government. That is a thing which one wants to avoid, and I ask myself this question, which I would venture to put to the House: Is there any form of aid by the State to industry carrying out its ordinary operations which would bring employment at such a time as the present without undue cost to the State; without, indeed, when looked at from the point of view of the balance, any cost to the State? My mind goes back to a period more than 25 years ago, when the Government of this country lent to the Cunard Steamship Company a large sum of money at 2¾ per cent. for 20 years. That was a rate at which the company could not have borrowed money for themselves. The result of the loan of that money was that there were built the "Lusitania" and the "Mauretania," ships of great name and reputation. It gave work to the people who built them, and it did not cost the Government a shilling for the whole of the money was paid back. In addition to that, it kept up the pride and prestige of Britain upon the Atlantic Ocean bringing as a consequence orders to the shipyards of this country. I ask myself whether some such operation is not possible at the present time. Of these two great ships, the "Lusitania," sank upon a fateful occasion, and in sinking saved Europe, because it brought America into the War. The "Mauretania" is still the fastest ship which Britain owns upon the oceans of the world and is proudly carrying the flag of her country in a race from which the present generation by now might have been expected to relieve her.

Is there anything we can do now similar to that which the Government did in the early part of this century? What is the situation to-day? The Cunard Company is anxious to build two ships. One of them, on which work was stopped, was alone employing 3,500 men, and there were being indirectly employed a vast number of men who were preparing the fitments which go to the building of a, great ship of that kind. The Government are paying in dole contributions a very large sum of money every week to support the people who would have been engaged in working upon that ship or upon its fitments. It is an utterly bad bargain for the State. It is a case where economy becomes waste. I am perfectly sure in my own mind that, whether by such an arrangement as the Government made in the early part of this century, namely, a loan of money at a low rate of interest or by some other device such as a guarantee, the Government can regard themselves as legitimately safe in giving this help. I believe that they can do it without the cost of a penny to the State. On the other hand it would result in saving the State a great deal. After all what is costing the country most money at the present time, next to the interest upon our Debt, is unemployment. It is costing £120,000,000 a year. Everything that can be done to reduce the amount of the cost of unemployment goes to the reduction of taxation. It aims at the very object which the business, industry and commerce of this country is constantly directing the attention of the Government.

It is not only the particular results in money that have to be taken into account in connection with this problem, because to anybody who knows what is going on in the shipping industry it must be a cause of great perturbation that increasingly the traffic of the Atlantic is going to two fast German ships. People who never travelled by anything but a. British ship in their lives are, for the sake of saving a few days time, compelled to travel by the faster ships. It is not merely that you are directing people's attention as passengers to these ships but you are directing the attention of the whole world to the fact that the supremacy of Britain on the ocean is waning, and that her place is being taken by other nations. That cannot but have a detrimental effect upon the industries of this country. It goes directly down to the question of unemployment.

I would not have ventured to make this speech in the House upon that question so strongly had the Government still to face their conversion schemes. I can well imagine that the Chancellor would have said that for the Government to go into the market either to borrow money or to advertise themselves as giving a guarantee, would have some effect upon the view which the market might take of the value of money. Now that these great conversion schemes are over, however, and the Chancellor of the Exchequer's course is clear for a very considerable time to come, I say that, in my judgment, there is here a great opportunity involving no risk to the national finances; on the contrary, to the benefit of the Exchequer and to industry and employment, if the Government will only face this problem afresh.

That is only one instance, but it serves to illustrate my general proposition. I do not know what other cases there may be, but there must be some of a similar character. It does not involve waste and expenditure. It involves work given in the ordinary way in which the business of the country is carried on. It involves the employment of men at jobs on which they are skilled instead of wasting their craftsmen's hands on road making. It preserves the skill and self respect of the men who are employed when they know that they are being employed as craftsmen on jobs for which they are fitted.

4.0 p.m.

For all these reasons, I think that some inquiry ought to be directed to find out similar instances in which the Government can help in a way that would be really effective and would be no detriment to anybody in the country. For that reason, and with that view, I venture to suggest that the Trade Facilities Committee should be set up again. There may be criticisms of that committee and comments upon the work that it did, but it performed a very useful function and it created a good deal of employment. If the Government were to appoint again a body of experts I am perfectly certain that they would be able to devise legitimate and proper ways in which the credit of the country could be used in order to help industry. They would not be extravagant, for they would know that the state of the finances of the country would not allow of extravagance; and they would approach the problem with all the circumstances of the times in their eyes. With all humility, I venture to make that suggestion to the Government. Turning to another topic, let me suggest to the Chancellor of the Exchequer what I am sure is already in his mind, that it would be well to get rid of the embargo upon new issues as early as possible. That is a matter which, un-doubtedly, is somewhat oppressive to the people who are eager to take advantage of present opportunities for business, and the sooner that embargo can be removed, the better.

There is another matter of a somewhat different character which I would like to bring before the House, if the House will bear with me for a litle time. It is commonly said to be the fault of the banks that the cheap money which is available at the present time is not being used to advantage, and I would like for a moment to say what seems to me is the position of the banks. It is perfectly true that the banks are in possession of more money at the present time than they have been for the last two or three years, and it is also true that the rates for money taken all over are cheap. But what is the position of a bank when it comes to lend? I ask the House to remember that it is only an infinitesimal portion of the bank's funds which belongs to the shareholders. The money they have to lend out is, in the main, the money of their depositors, and, of course the de- positors expect to take their money out at any time they desire. If the bank could not comply, it would be regarded as having failed to meet its obligations.

Accordingly, the bank must always hold large sums of spare cash to meet any demand that may be made upon it, and the consequence is an appreciable proportion of the bank's fund earns no interest at all. Another large portion is lent out at very low rates from day to day, frequently, as has recently happened, at 10s. and 15s. per cent., and again on longer term bills for three months at very, very small rates indeed. The result is that the bank must lend the remainder of its funds at higher rates, and that is why you sometimes see a complaint with regard to the rates which the bank charges a person upon his overdraft. I wish to say, further, that the ordinary practice of banking does not legitimately allow of long-term loans, because that might make it difficult for the banks to meet the demands of their depositors at any time the depositors choose to make them. Accordingly, it is the usual banking practice not to make loans which cannot be recalled within a year.


Will the right hon. Gentleman answer this question after his apologia of the banks? Is he aware that many joint stock banks at the present time are not only not concerned with increased lending but are greatly concerned with withdrawing money they have lent this year?


I beg the House not to believe that I am making any apologia. I am giving an explanation. I should imagine that while it is true that certain clients, no doubt, are asked to repay their overdrafts, the consideration given by the banks in a great mass of cases would perhaps startle the House. But the point which I wish to make and which arrives at the practical question with which I am concerned is this: I have indicated that the banks cannot, in the ordinary way, allow loans for more than a year. At the present time the trouble, I think, with the bulk of the people who wish to get money from the banks is not the rate of interest which they charge but the conditions of the loan. The men who are wanting money to rebuild their factories, to get new equipment, to extend their machinery, are people who ordinarily have no hope of paying back this year. They want the money, perhaps, for five years or even ten years and the banks of this country, going on the very sound principle which I have described, are not prepared to grant loans for any such period. They could not, consistently with the position in which they stand to their depositors, and what is missing at the present time in our economic structure, is the kind of organisation which would give loans of moderate sums for a period of from five to ten years to people who have perfectly good businesses, and who could be trusted in the ordinary course of business to pay back at the end of the period.

At the present time there is nothing between the banks and the large issuing houses. The large issuing house does not deal with the kind of cases to which I am referring. It only deals with the case where the issue is large enough to justify the expenditure. The Macmillan Committee dealt with this question, and put forward the suggestion that some arrangements should be made to fill this gap in our economic structure. From my personal experience, I know it to be one of the necessary things to be done at the present time. Yon may say that this is something which people ought to get together and do at once by themselves, and in a general way at ordinary times I could assent to that point of view. But these are not ordinary times, and you have got to galvanise things into action because of the necessities of the country. I think the help of the joint stock banks in this matter could be very great, and I am perfectly certain that they would be willing to give it. They could give a very great deal of advice as to the character of these loans, and I am not sure that they would not be able to give active monetary help if the matter were put before them in a way which the Government might devise.

I have consulted nobody about this, and I am only putting forward a suggestion of my own, but I venture to propose to the Chancellor of the Exchequer that he might reasonably get in touch with the heads of the joint stock banks and discuss this problem. At the moment it is tragic that so much money is available and the method of taking advantage of it is not open to the ordinary trader. This is a thing upon which, it seems to me, the Government could give great help. I would go even as far as to say that if in order to begin the first of these organisations—because I think it would be followed by many others—it was necessary for the Government to give some guarantee for the original capital, it would be well worth while to do it. I believe it would help industry in this country at the present time more than most things you can devise.

I turn from that particular side of this problem to another which is more in the future and less germane perhaps to the immediate question before the House. The Government have perpetually said—and I think rightly so—that one of the first objects of our economic policy must be to raise prices. I think that a similar view is held in practically every country in the world at the present time, and I do not think that you will find any body of economists who would dissent from that point of view. We discussed this matter in an earlier part of the year. I ventured at that time to suggest ways in which it could be done, and while the methods have not been carried as far as I would like to see them, nevertheless the Bank of England has undoubtedly been buying Government securities and extending credit and, as we all know, the House of Commons passed a Resolution increasing the fiduciary issue of the country by £15,000,000. In that connection I should like to direct the Chancellor's attention to the fact that the Act authorising that extension expires, I think, in a few months and I hope sincerely that the permission granted by that Act will be prolonged and not be allowed to terminate.

But what we are facing to-day is strange when we consider all that has been done. Instead of prices having risen since we first debated this matter in this House, gold prices have steadily fallen. Sterling prices to-day are practically at the same level as they were when we went off the Gold Standard, in spite of the great fall there has been in sterling, and the fact is that sterling to-day purchases more in commodities than it did in the year 1927. That ought to be sufficient evidence to anybody that they need not be perturbed about the fall that has taken place in sterling, or even if it went further. If you have regard to the prices of 1927, the relative level of sterling measured as people measure it in dollars would be something like three dollars in stead of $3.30 cents. as it is to-day. Nobody therefore need be anxious, as I have said, about the fall that has already taken place. But now what has been done to raise prices? Cheap money has evidently not raised them, and we do not know how long it will take to raise them. I agree that cheap money in the process of time will ultimately have the effect of putting up prices, but, as I have said, it is a slow process.

If I may diverge for a moment, will the House remember that price is the sum of money in cash or credit which you pay for a unit of goods or services? It follows that average prices depend, on the one hand, upon the amount of available money, and, on the other hand, upon the amount of available commodities. You can raise prices by restricting or diminishing the quantity of commodities or by increasing the amount of money available. I am leaving out of account the question of the velocity of the circulation of money which would only complicate the matter. People have been trying for some time to restrict the output of commodities and we know what a great failure attempts to raise prices by that means have proved. Therefore, we turn with a little more hope to the other side of the picture, namely, the question of increasing the amount of money. This has particular significance at the present time. In the first place I think everyone is agreed that the segregation of gold in France and America to such an enormous extent has lessened the amount available as a basis of credit in the rest of the world and has had the effect of depressing prices; and again we have to keep in mind the fact that both the gold delegation at Geneva and the Macmillan Committee have laid it down as their opinion that by 1940, looking to all the prospective gold that one may anticipate, there will not be enough gold in the world, no matter how well distributed, to do the world's business.

Are we then, in the future, to go through the same poignancy of distress as we have recently experienced from lack of available money for the business of the world; are we going to have again the same sort of hardships as were twice en- dured in the last century which were cured in each case by the discovery of new goldfields? Surely some way out must be found by intelligent human nature in dealing with a problem of this kind which has beset man many times before. We have all the experience of those years; is there nothing that we can devise in order to meet the situation? At the present time certain very important factors have emerged. The two great gold hoarding countries in the world are America and France. What is the message we get from America at the present time? Two parties there are struggling for victory to-day. The Republican party were so impressed with the question of the necessity of supplementing gold by silver that they have, according to their own declaration made through President Hoover, insisted upon the question of the remonetisation of silver being put upon the agenda of the Monetary Conference which is to assemble next year. On the other hand Mr. Roosevelt, who may by to-night have been elected President of the United States of America, has gone much further. He has declared boldly for the remonetisation of silver and has indicated that he thinks it is a first necessity for increasing the trade of the world. He said in an interview which he granted last week that through the remonetisation of silver he wanted, amongst other things, to make it much more easy for the debtors of the world to pay their debts.

If, next, we look across the channel to France we find that last week M. Caillaux, who, I should say, is, without exception, the most eminent amongst all the authorities on national finance in Europe, declared in a speech that the first necesity of the situation was to supplement the gold of the world by the remonetisation of silver. What does that mean? It means inflation; but I do not think that by this time anybody is afraid of the word inflation. The operations I have described which were undertaken by the Bank of England are very good examples of inflation and to increase the money supply of the world by the remonetisation of silver would not differ in principle from the discovery of a new goldmine. Can it be suggested that even the most ardent anti-inflationist would protest against a goldmine being opened up on the ground that it was going to add to the money of the world? Silver would add to the money of the world in precisely the same way.

I hope the House will forgive me if for a few minutes I describe what the history of this matter has been. Some people talk as though they thought that Great Britain had always been on the Gold Standard. The truth is that the world has been served far more by silver than by gold. For centuries silver was the ruling currency of the world, being much more in use than gold. I quoted the other day a passage from Shakesspeare which indicates how it was in Shakespeare's time. In the Merchant of Venice Bassanio refers to Gaudy gold, hard food for Midas and speaks of silver as: Thou pale and common drudge 'tween man and man. That was the situation as between the two metals. Silver did the ordinary business of the ordinary man and gold was for the wealthy. Great Britain was on a bimetallic standard down to 1816 and France down to 1873. The other nations of the Latin Union—Switzerland, Greece, Belgium, and Italy—were also upon a bimetallic standard. The United States of America used both gold and silver as monetary standards down to 1873. All that long period of industrial progress in the first three-quarters of last century was based upon both gold and silver, because although it is true that we in this country deserted silver we got the full advantage of the bimetallic standard in all those other countries and in our exchanges with the silver countries using always the known ratio which the bimetallic countries had set up. Trade between the silver using countries and Great Britain as a gold using country worked perfectly smoothly and was facilitated by the fact that there was a known ratio between the silver currency and the gold. But after 1873, when these other nations abandoned silver, we had a very different situation.

Why was silver abandoned? Germany, after conquering France in the Franco-Prussian War of 1870 stipulated that the indemnity of £200,000,000 payable to her by France should be paid in gold. Having obtained all this gold Germany abandoned her silver standard and proceeded to throw all her surplus silver into the mint of France, and France realising that in this way she was paying her indemnity twice over felt compelled to close her mint to silver, and she was followed by the other nations of the Latin Union and afterwards by America. That is the completely adventitious reason why bimetallism was given up at that period of time. Anybody who has studied the commercial and industrial history since 1873 will realise the great misfortunes and vicissitudes that were endured and were very largely due to the fact that the amount of money in the world had been lessened, whereby prices dropped and commodities became in some instances unsaleable. It was that which led to the great bimetallic agitation here in the 'nineties when the late Lord Balfour was the great protagonist of the remonetisation of silver. At that time I was a student of economics and became a partisan of that view which I have never deserted. The bimetallic agitation of that time was really only defeated in the end by the immense new discoveries of gold in the Rand. The world, being once more supplied with a vast quantity of money, was able to carry on with prosperity and to get prices up to such a level as would enable humanity to live. Now again we are facing vicissitudes greater even than they were then.

There is one thing to which I wish to draw attention. The result upon the East of the abandonment of silver by these great countries was catastrophic. China and India have hoarded silver for centuries. It is computed that there is in China now a stock of silver amounting to at least 2,000,000,000 ounces and in India a hoard of silver amounting to 6,000,000,000 ounces. That was hoarded during long periods when the price of silver was never at the level it is now. For a long period silver was worth roughly 4s. an ounce and it rose to 7s. 6d. an ounce in the War, when we had to buy silver from America in order to pay for the goods we had bought from India. Curiously we paid under the Pitman Act a dollar an ounce for silver which the Finance Minister in India is to-day selling at 1s. 2d. or 1s. 3d.–1s. 6d., I believe it is now. Recently silver got down to as low as 1s. Since we went off the Gold Standard it has been worth about 1s. 6d. in sterling. I ask the House to imagine the effect on all that vast horde of people in the East, representing half of the whole world's population, thousands of millions of people whose savings have been so depleted, cut down in value to a third of what they were previously worth. What do you imagine is the effect with regard to the purchasing power of these people who used to buy so much from the West? It is the greatest deterrent from which our trade has suffered and every country is suffering. It is recognised in America that their trade with China has been cut in half because the value of the hoard of silver in China has been so greatly depleted.

4.30 p.m.

The situation has been brought about really by artificial causes. People talk as if gold were somehow immutable and always of the same value while silver is a fluctuating thing. If we were to demonetise gold to-morrow we should find as big a fall as we have seen in the case of silver. It is due to the fact that the central banks of the world undertake to pay a certain price for all gold brought to them that gold keeps its value, and if we remonetise silver there will be no difficulty in keeping it at such a ratio to gold as may be determined. To-day I do not wish to put before the House any complete scheme of bimetallism. Personally I believe that ultimately the world will come to that solution, but if the nations do consider this problem I do not wish them to waste time in fighting about what the ratio of silver to gold is to be. Therefore I would venture to put forward this plan for the consideration of the Chancellor of the Exchequer, in view of the fact that very soon he has to meet envoys from other States upon this question. The nations should agree. It would be quite sufficient if Britain and America and France agreed—indeed it would be quite sufficient if only Britain and America agreed. The Chancellor of the Exchequer should put before the Conference a proposal that the nations, whoever they are, should agree to take into their metallic reserves a certain percentage of silver at the market price. Assume that we have to-day £142,000,000 of gold. I think that that roughly is the amount that the Bank of England holds. Assume that we were to have 20 per cent. of that in silver. That would represent metallic reserves in white metal of between £20,000,000 and £30,000,000, and it would release from reserves that amount of gold which would be free to add to the general basis of credit for the world. If America and Britain and especially America and Britain and France, were to adopt such a plan, it is quite obvious that there would no longer be this very rigid position in regard to gold, which has so deflated prices. It might also be stipulated that, in the same proportion as silver was held in the metallic reserves of the various countries, debts could and should be paid in a similar amount and in a similar ratio. It is a very significant thing that even after we went off the Gold Standard, the Bank of England still kept a certain amount of silver in order to discharge its obligations by the issue of silver bullion, and there is no reason why again a similar practice should not be followed.


Does the right hon. Gentleman mean that we should pay in silver for the payment of gold debts?


I have not the slightest doubt that what Mr. Roosevelt said in the interview to which I have referred, as to the action that America was prepared to take, would apply to England. He said that American debts should be paid partly in silver, although American debts are gold debts. It would be a very great relief to all the nations of the world to discharge their gold debts to America partly in silver. It would give great relief to the exchanges, the position of which is causing great dislocation at the present time.

I apologise to the House for taking so much time. I only venture before sitting down to say that, a plan of the kind which I have suggested would have an immediate result upon our trade. I am not suggesting that this proposal with regard to silver is going to solve the whole problem. I do not make any such claim as that. I say that it would have an immediate effect upon the trade of the world. I beg the House to remember the report that was made by the British Economic Mission to China a few years ago. They said: Great Britain has so large an interest in China's trade that we trust she may be among the foremost to take action with a view to ascertaining what can be done by international agreement to raise the value of silver. We should be among the first to endeavour to arrive at an international understanding for re-establishing silver as a standard basis of credit. In another part of their report, they said: There exists in China to-day one outstanding problem which faces all nations desirous of selling their goods in the China market. The deplorably low silver values, and the consequently much reduced buying of the vast populace are factors contributing to restrict the increase of imports into China from foreign countries. We all know how Lancashire and South Wales have been affected. Just one further quotation, from a speech made recently in Bombay by Sir Osmond A. Smith, Governor of the Imperial Bank of India, which is the governing bank of India. Sir Osmond Smith, not many months ago said, at the annual meeting of his bank: When one realises that the teeming millions of India and Asia are half starved and less than hale clad, one can scarcely agree that there is any over-production in regard to requirement, but there is certainly over-production relative to purchasing-power. If this is conceded, the question then arises as to how purchasing-power can be stimulated, and one answer readily presents itself. By the rehabilitation of silver through reasonable stabilisation of its value in relation to gold. If this could be accomplished, I feel sure the improvement would be immediate and lasting, and it would not be long before surplus commodities were absorbed and some measure of prosperity restored. That is the problem which T put before the House. I am convinced that of all the things that could be done—I will not put this forward as a permanent panacea to solve the whole problem—to put silver once more in a proper place in the monetary systems of the world would do more to start trade and industry going again than any other single device you could adopt.


More than a year ago, in June of last year, before the crash, when things were beginning to go, I said in this House—or rather the previous House—that either costs must come down or prices must go up; that costs could not be brought down, so that therefore prices must go up, and that to bring about that, something had to happen. Something had to go, and that it had better be the currency. That was an unorthodox view at that time; almost prophetic. When I sat down, in silence, the right hon. Gentleman the Member for Hillhead (Sir R. Horne) waved his magic hand and made me respectable, and blessed the views that I expressed. It is true that a few days later he ate his words in the "Times" but for the moment there was that agreement between us as of those who stand alone against the world.

In the first half of the speech delivered to-day by the right hon. Gentleman I said to myself: "Here again is an unorthodox man in advance of his time." He was so unorthodox that I must try to show that his unorthodoxy is also prophetically right. He was not arguing for the expenditure of money on the Cunarder on orthodox lines. As an orthodox economist he would know perfectly well, even as the Treasury know perfectly well, that if it were an economic project, money would be forthcoming for it. He argued for the expenditure, and for wise spending of public money on that project, because he is a convert to the view that at the present time wise expenditure of money, whether public or private, is to the advantage of the economic position of this country. He is not the only one who thinks like that. It is the new creed, with followers for the last two years at any rate. Even while he was Chancellor of the Exchequer, constant deflation was the aim and end-all of the Treasury.

That was a time when I was more rigidly orthodox, and I accused him of not properly making his Budget balance. I want now to congratulate him upon the fact that he brought down the Income Tax instead of balancing his Budget. Unorthodox as that was, it was right. Now that he advocates wise spending, I think he is right again. We shall have to reshape our ideas. Deflation is still the god of the hon. Baronet the Member for Farnham (Sir A. M. Samuel). Deflation has been the orthodox creed throughout, and we now have the very difficult job of trying to show that it is not the best in the present world. We came off gold. That was a heresy and a terror to every one of the orthodox economists. Yet now, every one knows that we did the right thing in coming off gold and that coming off gold is a blessing. Every one knows that we shall never return to it. I must regretfully inform the right hon. Gentleman the Member for Hillhead that we shall never return to it, even in conjunction with silver. Leave silver and gold alone. What we want is stability of prices and not a metallic basis for prices.

I do not think that we shall ever re-return to either gold or silver, but if it is a question of returning to something solid in the Bank of England on which to build our credit, let us choose Wedgwood china. [Interruption.] Wedgwood china has about the same value as silver, and it is made in this country instead of being made in Nevada and Colorado. I will not follow the argument used by the right hon. Gentleman the Member for Hillhead that the re-monetization of silver would benefit the silver-owning countries. It would. They would again be buying our goods, and we should be buying their silver above its market rate. That would send up the price of silver, which would benefit every country which had hoards of silver at the expense of other currencies. The benefit would be to some extent out of the pockets of those who, like ourselves, have no silver. We ought to banish from our minds any hope of putting either gold or silver, or anything that is a monopoly of any other country, or if not a complete monopoly, a limited monopoly, as the basis of the present system, or of thinking that it is so important that we cannot do without it. We have come off gold but prices still go down, though not so much here as elsewhere. Even money that is new capital has become cheap. In other words, deflation still continues.

It appeals to common sense that money, our standard of value, should possess a fair stability of purchasing power. Since 1929, gold has undergone a great rise, which our departure from the Gold Standard has not yet served to correct. Here, as elsewhere, though less here than elsewhere, prices, even measured in sterling, have continued to fall. Deflation still continues. I want the House to understand that. We who are arguing for reflation have seen things constantly going on in the direction of deflation, even though the common sense of the country as a whole has come round to the opposite policy. All are now agreed that we must, if we can, reflate prices—say to the 1928 level. I think that that is more or less common agreement.

Inflation—horrible word!—can be intended and done deliberately, or it can be, as in 1931, unintended, surprising and fearful. One would avoid, if possible, a repetition of that general surprise and fear which produced this House of Com- mons. Those of us who saw and understood, like the right hon. Gentleman, and a few on this side also, were neither surprised nor afraid. I should like here to say one word about the perpetual blaming of the Labour Government for this. They inflated, or led to inflation; they did not know what they were doing; it came about as if it were a bolt from the blue. On the whole, inflation was desirable, and, although it may be true that my right hon. Friends here did not know what was coming when this wise expenditure of the Labour Government was going on just at the time when the Labour Government was broken up, it was broken up by Mr. Citrine and Mr. Bevin, who did know perfectly well, and who were advocating inflation and the leaving of gold exactly as the right hon. Gentleman the Member for Hillhead and myself were. They, too, knew that an ordered, understood reflation meant a scaling down of debts and a scaling up of prices, and the revivification of industry, which no one wants more than the trade unionists.

The kind of inflation called reflation means deliberate action by the Government to bring about an upward movement of all wholesale prices. To-day that is the principal need of industry—to keep prices up, to bring prices up. This Government madly fly, without any guiding principle whatever, from quotas to tariffs, and from subsidies to madness, to do that which ordered reflation would bring about in an intelligent manner, and a manner satisfactory to other interests besides those who want the prices up. While they do this, unemployment surges to and fro. If unemployment in the agricultural industry is reduced by bringing meat imports down, our exports go down too, and the pottery trade suffers. If, then, protection is given to the pottery trade, and prices go up in the pottery trade, immediately some other trades will suffer as the result of that protection. You get this mad surging to and fro of unemployment due to pressure upon the Government to protect one industry or one interest, one after another, whereas, if you got your prices up by ordered inflation—


What is that? Would the right hon. and gallant Gentleman explain what he means by reflation?


I would, but I do not want to be too long. As a matter of fact, I can refer the hon. Member to something which will satisfy him perfectly. If we want to bring prices back to the 1928 level, we have in favour of that policy the Macmillan Report, we have Sir Arthur Salter, we have the economists who wrote a letter to the "Times," and I might also mention that we have a number of statesmen in this House many of whom have had to recant all their previous "doxies." We have the ex-Chancellor of the Exchequer—the right hon. Gentleman the Member for Hill-head; we have the right hon. Gentleman the Member for Epping (Mr. Churchill); we have the right hon. Gentleman the Member for Sparkbrook (Mr. Amery). Indeed, all the statesmen who have been thinking about this matter are in agreement with the economists on this point, and, best of all, the "Times" newspaper on Friday published a special article on its "splash" front page—an admirable article. I wonder how many of those hon. Members opposite who are supposed to be guiding this country to-day have even read that article. [Interruption.] I should not suppose that my hon. Friend would; ho is not responsible for government. That special article in the "Times" not merely showed that reflation would bring back prices, but it showed how to bring reflation about, and that is the point that I particularly want to emphasise.

Before discussing the definite proposals made in this article, let me state one or two other facts. Sir Ernest Benn, prince of economy, is now driven to the necessity, owing to the pressure of Christmastide, of trying to distinguish between the expenditure of private money and the expenditure of public money. He wants everyone to spend money which they have not got in buying Christmas presents, so that trade may benefit. When he is reproached with the fact that this is extravagance, and not economy, he replies: "This is private money. I would never think of allowing the Government to spend a halfpenny; by all means let them cut salaries and everything else; but the private person must really break his bank in order to continue his expenditure." We all know perfectly well that it makes no difference whether it is the Society of Friends who find the money for that valuable work of providing allotments in colliery districts, or whether the money is found by the Government. That makes no difference to the economics of the country whatsoever. It is wise expenditure. It may not be economic expenditure in the sense of returning a dividend, but it is wise expenditure, and it makes no difference at all, as regards any of such expenditure—whether it be on the new Cunarder, of on the pulling down of slums and the rebuilding of decent property in their place, or whether it be on the making of new roads—so long as it is wise expenditure, whether it is got from the taxpayers' money, or whether it is got by voluntary contributions, or whether it is got by societies or trusts; it has the same effect in employing people who would otherwise be idle, and in doing good work.

I want, therefore, to clear away altogether the idea that it is good for private people to spend money and is bad for the public to do so. What happens is this: Supposing that I absolutely run out of clothes and order some new ones, I employ labour. It is quite possible for all of us here to order some new clothes—[Interruption]—I do not say pay for them, but order them. But what happens when the private individual does that indefinitely? If I go on doing so, what will happen will be that I shall become bankrupt; I shall not be able to pay. That is what happens when you have this wise expenditure of private money. But what happens when you have similar wise expenditure of public money? The State does not go bankrupt, but sterling goes down and prices go up. Wise expenditure leads to reflation of the currency, a reduction in the value of the pound, and a rise in the price of commodities. Reflation involves higher prices, but not necessarily higher costs, and it involves a margin of profit to tempt adventure. It also involves a lowering of the value of sterling, and, therefore, a restriction of imports, which is exactly what all hon. Members opposite are clamouring for. Also, the lower value of sterling means a bonus on exports, which is what the export trade wants at the present time; and, finally, it involves a writing down of the purchasing power of all rents, debts and fixed charges, and a sterling increase in the return of taxes. That is the result of reflation. Is it worth it? Yes. I think every hon. Member will say that it is worth it. How can it be done? The "Times" article gives a clear policy.

In the first place, it points out that we need a clear policy for the International Conference that is coming. It is no use the Prime Minister saying, as he did yesterday, "Wait till we have the International Conference, and then we will put things right." It is no use his saying that, unless he knows what he is going to propose to that Conference. The House heard the Prime Minister speaking yesterday, but I would defy any Member to say that he came away, after listening to that speech, knowing what was in the Prime Minister's mind so far as this Conference is concerned. There are two alternatives. If, on the one hand, he had a clear idea of what he was going to do, and if it was a policy of reflation, he was wise and right to keep it dark, because, if we are going to do that, it is just as necessary to keep it dark till the last moment as it was in the case of the Conversion Scheme, which was so admirably kept in the shadows in this House. On the other hand, if he has not a scheme, if he is not clear as to what he is going to do, then I say that his continued direction of the affairs of this country is a national disaster. We really must have governors who think these things out. Whether they come to a right conclusion or a wrong conclusion, let us have some conclusion of their own, and not a conclusion which shields itself perpetually by the pathetic remark that there are experts on both sides. A country which, like ours, is not on gold, can reflate independently, and could do so before the Conference. So says the "Times." The "Times" article advocates the formation of a reflation fund. It says that: The allocation of existing expenditure to the fund would pro tanto relieve the Budget and the taxpayer. Fresh expenditure on development schemes, whether undertaken by the Government or autonomous bodies, should also be financed from it. It is suggested that the fund itself should be raised by short-term loans, and it is pointed out that: It would enable the banks to expand credit and pump fresh money into circulation on whatever scale is required to restore prices. It would enable the Government to undertake to impose no fresh taxation during the reflationary period, and even to remit existing taxation where that presses hardest. It would be a visible sign that the Government was taking the policy of reflation seriously. This would check the ravages of private deflation and give the business world confidence that a further fall in the general price level would not be allowed to occur. 5.0 p.m.

There you have a definite plan of how to carry out a policy advocated by all the economists. I am not satisfied that a fund need be established at all. It seems to me that, if wise expenditure were taken up by the Government, and if the Budget was left unbalanced, if, therefore, there was a reflationary policy carried out, sending down sterling and sending up prices, we should get the greatest blessing from the traders of the country, and at the same time we should not get that extravagance and waste which comes from the indiscriminate unchecked inflation. You can stop such reflation as soon as prices reach the 1928 level. Then and not till then the taxpayer must meet the bill and balance his budget; but give the taxpayer a chance, give business chance, by allowing the pound to go down, with all the drawbacks that that has to the fixed chargers. Allow the world to build up our civilisation once more upon a sound financial basis, a smaller pound tied no longer to gold or silver but to purchasing power based on the productive capacity and foreign trade of the country itself.


I am venturing to address the House because we are all making what contribution we can and putting forward our ideas upon this very difficult subject. I represent a constituency which even in these difficult times is seeing the advent of new industries. Various factors have helped to bring new industries to Middlesex. For one thing there is the proximity of the great London market, with easy access to the Continent. Again there is the general movement of industries southwards, perhaps hurried on by difficulties such as the excessive rates in the more depressed areas of the North. Again, there is the change in the character of industry, I. mean the change from the heavier to the lighter trades, which means that industry is less dependent than before upon the coalfields. But the thing that has helped us most in Middlesex has been the change in fiscal policy. We felt the benefit of tariffs so far back as 1928, when the right hon. Gentleman the Member for Epping (Mr. Churchill) imposed a duty upon foreign motor tyres. I do not know whether the right hon. Gentleman who has just spoken would class that as a measure of inflation or of deflation. At any rate, it helped us considerably, because almost immediately an American concern came and placed a factory within our boundary which is giving us employment for between 800 and 1,000 hands.

But that is not the only thing. It goes beyond that, because you get all the benefit of bringing in raw materials, for instance, cotton from Egypt, spun arid woven in Lancashire before being supplied, rubber from Malaya, which is brought up the Thames, again giving employment to the transport industries and also to an Empire industry. In addition there is all the contribution to rates and taxes This is no mere transfer of employment from the United States to this country. It goes further than that, because we are now beginning not merely to supply the British market but also the Continental market, which was recently supplied from the United States direct. No one has been damaged, prices have not risen and the only effect has been to increase employment in that district.

That is only one example. There are many others. I am informed that one of the great railway companies has had no fewer than 607 inquiries in the last year from firms wishing to set up factory sites. About half that number come from foreign firms and no fewer than 68 factories have have been actually established on that one company's system within the last year—a very remarkable figure. In the area to the West of London we have starting up, in places like Park Royal, Slough and Brentford, American, German, Dutch and French firms. In fact we are becoming quite international. I will refer to one in particular on the borders of my own constituency, a world famous firm of French manufacturers of scent who are now, as a result of tariffs, in process of putting up a new factory, which will soon be employing at least 200 people. That is the home market, but equally important is our export trade, and I have, in my association with the Department of Overseas Trade, had an opportunity of observing something of the export side of industry. It is obvious that foreign countries are now anxious to increase their purchases of British goods and to preserve a share of our market. I had occasion recently to go to Copenhagen, where an exhibition was taking place, and I formed the opinion that, good friends of ours as the Danes have always been, there would not have been quite as many Union Jacks hanging in the streets had it not been for the change of our fiscal system.

Some people have held that our export trade will be damaged and unemployment increase by the termination of the Russian Treaty. I was recently also in Russia and I observed there a similar anxiety to preserve a share of the British market, and I believe now for the first time, as a result of terminating that treaty, we shall have an opportunity of discussing with the Russians on level terms the trading possibilities between our two countries. After all, is there anything unfair in suggesting that we should have the same selective power in dealing with Russian imports as they have in dealing with ours? I believe that, if it is handled on sound business lines, far from our trade with Russia being diminished, in the long run it will actually be increased.

If industry is to go ahead, I would beg the Government not to embark on wide and expensive schemes. We tried it before. We had vast expenditure on roads and on unemployment, and the Minister of Labour very adequately dealt with the value of those proposals in his admirable speech last week. Still there are some people who will never learn by experience and we still have eminent economists telling us that we must urge local authorities to spend still more public money upon buildings and undertakings generally. I have heard that certain animals, when they are hard pressed, as a last resource on occasion take to the water, which may account for the fact that these learned people are so anxious that local authorities should build swimming baths, of all things. The vast majority of Members declared for tariffs at the last Election. For a long time we have given Free Trade a run. I would beg of them in the interests of employment to give tariffs an equally good and fair chance. If you do that, and do not crush us down with still more taxation, I believe that we m these new areas will be able in return to help you by absorbing more people in our new industries and at the same time, by purchasing materials—coal, steel and machinery—lend a helping hand to areas which are less fortunately placed than we are.


This has been an exceedingly interesting Debate and may well prove to have been a very useful one. We have all agreed to put aside all question of the rivalry of party programmes. We have drawn a discreet veil over each others past commitments or alleged inconsistencies, and we have eschewed the ordinary controversial discussions which have so often proceeded during this Parliament. I shall not be tempted to follow the hon. Member who has just spoken, who has made out an able case for the Protectionist system, a case which would be open to easy reply, but I shall forgo my opportunity in that regard. The House wishes to get to close quarters with the unemployment problem, to see it, gaunt and stark, as it is, and to make up its mind what is to be done now. The fact that to-day the statistics of unemployment show a welcome improvement will not be regarded, I think, in any quarter of the House as a reason why we should relax our efforts in dealing with the whole problem.

I think there is also universal agreement in the House that, given the present economic system, there is no alternative, in solving that employment problem, to the restoration of ordinary trade. I think right hon. Gentlemen on the Front Bench opposite will agree to that and, indeed, the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) said as much yesterday. The Prime Minister strongly emphasised that view and those of us who have advocated large enterprises for national development have never said they were anything more than a supplement to the development of ordinary trade. On every occasion when I myself have spoken in the House or in the country I have declared that the sole full remedy for unemployment is the restoration of ordinary trade.

Many of the proposals that have been made and discussed, dealing with housing, land settlement, allotments, meat control, whatever it may be, useful as many, possibly almost all of them, may be in their several measures, must be regarded, in relation to the vastness of the problem that faces us, as minor factors. The unemployment problem of nearly 3,000,000 out of work can only be solved by setting to work great economic factors which will deal with the situation as a whole. I would give one illustration on this fact. The only time when the figures of unemployment have shown a really large decrease in a short period was immediately after this country went off the Gold Standard. The departure from the Gold Standard was open to many grave disadvantages. I am not arguing whether it was on the whole a good or a bad thing, but the effect within a few months was that there was a great demand for our exports through the depreciation of the pound. Manufacturers who had been seeking orders in vain for months and years suddenly found them forthcoming. Factories in the North of England and elsewhere had a stimulus and were kept busy, and between September and December of last year the number of the unemployed went down by 300,000, whereas in the previous year in the same period it had gone up by 500,000. That stimulus was only of brief duration. Half the world has now gone off the Gold Standard. Other causes have come into operation and the result has not been continued. If we wish to deal in this matter of the unemployed, not with 5,000 here, 10,000 there or 50,000 in another place, but on a scale of hundreds of thousands and of millions, it can only be achieved by the operation of world-wide economic forces.

The depression, or the present intensification of it, came from America. As the weather forecast says, the depression was travelling eastward across the Atlantic, and the causes of it, reduced to the simplest elements, are now known universally to have been these: America, having to receive large sums in payment of interest and sinking fund on debts and lending large sums also in capital to Europe, had become a creditor nation instead of a debtor nation as she was before the War. At the same time, not realising this or the consequences of it, she raised gradually her Customs tariffs, with the result that the inflow of goods to the United States was made exceedingly difficult. France, also, was in much the same position, and the result was that there was an economic vacuum, and those two countries sucked up most of the gold of the world. As long as America continued to lend capital to Europe after the War the effect of these events was masked, because she left in Europe in the form of loans a large part of the money being paid to her by her debtors. Furthermore, the lending of capital continued to help to stimulate American exports and all went well, America was exceedingly prosperous, and the rest of the world not so very unprosperous. Then there came a sudden change with the failure of a great Austrian bank, and it was discovered that a large part of Europe was, from the American point of view, not creditworthy. The lending of capital stopped quite suddenly, and with it there was a great fall in American exports, and, as a consequence of that fall, American production was suddenly diminished.


May I interrupt—


Let me finish my argument. The dividends which were being paid by American firms were imperilled, the Stock Exhange values of a great number of American companies collapsed, banks failed almost all over the United States and the great depression, of which we are now all the victims, took place owing mainly to those causes. About the same time the Federal Farm Board was established—one of those experiments continually made in various countries in the interests of farmers, to try to keep up prices artificially—with the consequence that immense stocks of wheat and of cotton were collected in America, overhanging the market, causing not the maintenance of prices, but the most catastrophic fall of the prices of wheat and cotton which has ever been known. How often it occurs that Parliaments, undertaking measures of this sort with the best of intentions, secure results exactly the opposite of those which they desire. The consequence of all this has been what we now see, namely, that in America and all over the world there are 30,000,000 of workers idle, and the results may be seen in the back streets of any of our industrial cities.

For my own part, I doubt whether there will be any great relief of the world-wide depression unless it begins in the United States of America, and the relief must travel eastwards across the Atlantic as the depression originally did. It is not for us to express any opinion upon the domestic policy of another country, but it may be that to-day's event which is taking place in the United States may indicate a change of policy that may bring opposite results. In the meantime we are on the eve of the World Economic Conference, summoned, be it remembered, by the League of Nations, but on the initiative of this country and the United States, and therefore enlisting the full co-operation of the American people and Government. We have learnt now to regard nations as units, but we have still not fully learnt in these economic matters to regard the world as a unit. The hon. Member for Stockton (Mr. Macmillan) made a thoughtful speech a few days ago in this Debate in which he dwelt upon the necessity for world planning and viewing its problems as a whole. The World Economic Conference gives us the opportunity to do that very thing, an unequalled opportunity, and we earnestly trust—and I am sure that it is the desire of the whole House—that that opportunity will be taken to achieve definite results in the sphere of tariffs and other restrictions, monetary questions and other matters which are of world wide importance, for by this means, and by this means only, are we likely to secure an early restoration of prosperity and an end of the unemployment difficulty which faces us all in these days.

Meanwhile the Experts Committee of the League of Nations has been meeting in order to prepare the work of the World Economic Conference. We all know what they will say, or one of the chief things they will say. They will say, what every international conference and committee—and there have been many of them—has said unanimously throughout the last five years, that the restrictions upon world commerce, tariffs, quotas and exchange restrictions, are mainly responsible for the present state of the world. But unhappily the countries pay little attention to the reiterated opinions of every one of those bodies whenever they have met. Each country, owing to its immediate problems—the hon. Member for Brent-ford (Mr. Mitchell) said that some foreign factory had been put up in his constituency, and that "it is admirable; let us have more tariffs and so attract foreign firms, and all will be well"—always says "The international advice is sound if all the world would follow it. That should be the rule, but we in this particular country"—(whatever the country may be)—"must make a temporary exception in view of our exceptional local circumstances." So that while invariably the delegates at the conferences recognise interdependence and pass resolutions in favour of freer trade, the Parliaments at home, all of them, pass legislation imposing greater restrictions. Unfortunately it is not the resolutions that matter but the legislation.

This Parliament has in recent months been more engaged probably than any other in the world in doing these things. While hon. Members here, discussing the problem as a whole, see the necessity of freeing the channels of world trade, upstairs in the Committee rooms Members meet in scores and even in hundreds pressing the Government to impose in every direction fresh quotas, fresh tariffs and fresh restrictions. The conclusion, therefore, is that we should endeavour to use the opportunity of the World Economic Conference to secure a measure of simultaneity in the removal of restrictions. We all hold that you cannot secure a measure of disarmament by unilateral action alone. It must be simultaneous and international. And so, many Members hold that you must secure, not unilateral, but simultaneous action in bringing about reductions of tariffs and of restrictions.

Let the Chancellor of the Exchequer and his colleagues endeavour as far as they can, the scope being somewhat limited by the Ottawa Agreements, to do what in them lies to secure this result on that occasion. But it will be necessary, in my view, that before entering the World Economic Conference they should definitely make up their minds what policy they are going to pursue, with regard especially to the mostfavoured-nation-clause in the commercial treaties. For that is really the governing question in dealing with the possibility of securing regional agreements, or agreements among various selected groups of nations for a reduction of tariffs and of quota restrictions. I agree wholly with Sir Walter Layton that it will be useless to attempt to deal with treaties as a whole unless, first, you decide whether the most-favoured-nation-clause in treaties should be supplemented by an equal-treatment-clause permitting partial arrangements to be made for Free Trade or freer trade among particular groups and nations.

That is the first and foremost of the proposals. The House should impress upon the Government that the World Economic Conference should be used as an occasion for making headway against the economic nationalism which is now ruining the world, to get rid of restrictions, to solve finally the problem of War debts and to deal with the monetary causes of the depression which have been discussed so fully already this afternoon. Furthermore, if the Disarmament Conference at Geneva could simultaneously be brought to a successful conclusion, and if we could obtain a striking success there, I think that it would go very far to encourage the whole world to progress into a better economic condition. If there could be also a European détente, such as M. Herriot is working for in the relations between France and Italy with great wisdom, courage and foresight, if there could be a political détente between the various Powers among whom there has been friction hitherto—that also would have results in the economic sphere—it would help to solve the difficulties from which we are suffering. These are the most important points the House can discuss on a Debate on unemployment. Other means may be useful, but by comparison they are insignificant.

Secondly, there is the question of our own financial policy. I hope that the Chancellor of the Exchequer when he speaks this evening will tell us—I have no doubt he will—something on that matter. Nothing can be worse in the interests of the unemployed than to take any action which would upset our financial stability again. To maintain the stability of the pound, to adopt any currency changes with the utmost care so that it should not shake financial confidence, to abstain from borrowing from the Unemployment Fund, to impose no increase in the dead-weight burden of the rates and taxes—those must be the prior conditions of any action taken for national development or for any other purpose. Such suggestions as those published to-day in the Minority Report of the Royal Commission on Unemployment would be likely to lead this country to sheer disaster. We were nearly drowned in a financial morass a year and a quarter ago. We have struggled out, and our first care must be not to be pushed back into it again.

5.30 p.m.

Subject to that one overriding consideration, I suggest to the Chancellor of the Exchequer that the time has now come to re-examine the possibility of remunerative investment of the capital now lying idle. In this matter we have been passing through three stages. In the first place, in the time of the previous Labour Government, the policy was adopted of spending freely on development, and not on useless work—I personally object to the use of the term "relief works"; they were not relief works—but upon works of development., without examining very closely whether they involved a direct financial loss or how great that loss might be. Next, after the crisis in the summer of last year, we came to a, second stage when it was realised how great was the danger of borrowing large sums of money. The money market, and the credit of the Government, were at such a point that it was dispensable to cut off borrowing, and it was done suddenly as with a knife. Perhaps it was done too completely, but still the restriction had to be carried out at that time. Now we are entering into what may prove to be the third stage. As a result of the restoration of the national credit, through the restriction of new issues, and through the stagnation of trade, money has become very cheap and the rate of Government borrowing has been reduced from 5 per cent, to 3 per cent. I suggest to the Chancellor of the Exchequer that the policy of the Government might now recognise that we have passed through the second stage and are now emerging into the third stage, and that the use of capital might be made a great deal more free than it has been during the last few months. The application of this principle is a matter of detail, but there is a definite issue of principle to be decided by and properly discussed in this House. The House should make its opinion heard that there should be freedom for the money market to assist private enterprises and, further, that State activity, so far from being discouraged, should be encouraged, providing it involves no financial loss or no serious loss more than balancing the immediate advantage gained by taking people off the unemployment register.

The Debate has shown that there is a great body of opinion in the House that desires the question of housing to be considered afresh. With money on a 3½ per cent. basis instead of a 5 per cent. basis, the right hon. Member for Wakefield (Mr. Greenwood), an ex-Minister of Health, told us that that makes such a difference in housing as would enable houses to be let at from 2s. 6d. to 4s. per week cheaper than has previously been the case. It should also be possible under present conditions largely to reduce building costs. I would strongly urge the Government to reexamine afresh the whole of this problem and to see whether a great housing development movement cannot be set on foot, not only without loss but with a real gain in national equipment from the point of view of the housing of the working classes and also from the point of view of a reduction in the numbers on the unemployment register.

Thirdly, trade depends on the efficiency of our industries, and upon the low cost of production, and it appears to me to be the height of folly—I do not want to refer to fiscal disputes—at this time, of all times, to put taxes upon the raw material of manufactures imported into this country. Further, it is necessary to promote the reorganisation of our industries. We were told that the iron and steel industries were to have protection only for six months and that it would not be continued unless they reorganised themselves. They have in fact done nothing except to form a combination to keep up prices, and yet the Import Duties Advisory Committee are extending the protection for a period of two years. That is exceedingly disappointing. Fourthly, there is the great problem of agriculture, which was so fully debated yesterday. We have not yet had time to study the meat restriction scheme which the Minister of Agriculture announced last night but, as the right hon. and learned Member for Hillhead (Sir R. Horne) said this afternoon, it has -been remarkable how the schemes of restric- tion of supplies have failed—rubber, coffee, sugar, oil; they have all failed. It appears to be necessary, if these schemes are to succeed to control all the world-wide operations from production right up to the retail sale, before we can be sure of success. Meanwhile, if the Government take the responsibility, as they do under these measures, to secure that the price of meat shall not be too low for the producer, they also take the responsibility for ensuring that it shall not be too high for the consumer.

A further proposal which has been under discussion is in relation to smallholdings. We had an eloquent and indeed a passionate speech from the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) pleading strongly for the settlement of smallholders. I am absolutely convinced that my right hon. Friend is fundamentally right in his advocacy of that cause. In Denmark, Belgium and Holland they have large numbers of peasant cultivators, who prosper and succeed without any tariffs. Those countries are Free Trade or quasi Free Trade countries. In his opening speech the Leader of the Opposition said that what was wanted in this country was to adopt the Danish system, which has brought that prosperity to Denmark. That statement was received with cheers from all quarters of the House. There is unanimity of opinion as to the desirability of that course. My memory goes back 40 years, when I was a candidate in an agricultural constituency. Then everyone who was interested in agricultural politics advocated the adoption in this country of the Danish system. Everyone has been advocating it ever since. One could make a collection of hundreds and thousands of pamphlets and articles which for a whole generation have been urging upon British agriculture the example of Denmark and the desirability of adopting the same method, but very little has been done, and the present plight of British agriculture is mainly or largely owing to that fact.

Such smallholdings as there are, a few thousands of them, are succeeding better than the large farms. A report was published only a few days ago, which may be seen in the Library, from the Land Department of the Ministry of Agriculture for 1931. That report says: From reports received from the Ministry's Land Commissioners it is apparent that, generally speaking, smallholders are so far weathering the present agricultural depression in a remarkable way and that in all parts of the country they have been doing better than the large farmers. That is an independent and impartial report from a Government Department. They go on to say: It is true that if the present low prices continue much longer there are indications in several parts of the country that the smallholders will be severely tried. But that statement does not alter the fact that at the present time the smallholdings have stood the test of this most grave depression better than the large farms. It should be easier now to secure land settlement, since land, buildings, and capital are all much cheaper than they have been in former years. I should like to ask the Government whether any action has been taken to carry vigorously into effect the Agricultural Land (Utilisation) Act which was passed in the late Parliament? On that the Minister of Agriculture said nothing last night.

These are the main proposals which we would advance in relation to the present situation. They touch the causes of unemployment and the means of getting people into ordinary work rather than the suggestions that have been made from many quarters for finding temporary occupations for those unfortunate people who are out of work. That, however, is by no means unimportant. We heard much at the general election of the "doctor's mandate." A doctor in treating his patient would be a very poor adviser if he dealt only with the symptoms of the illness and did not try to reach and to cure its causes. Infinitely more important is the cure of the causes than the treatment of the symptoms. At the same time, it is always a doctor's duty to relieve or assuage painful symptoms while the more fundamental cure is being effected. So it is in regard to unemployment.

The figures that w ere published to-day show that nearly half a million, 480,000, of the unemployed have been out of work for a year or more. It is true that the individuals who form part of these vast statistics change. People go into employment and go out of it again. Therefore, it would be untrue to say that the whole body has been continuously unemployed, but it is a tragic fact that close upon half a million people, an enormous total, for a whole year have been in complete idle- ness, and many of them for much longer than one year. The right hon. Member for North Cornwall (Sir Francis Acland) in a very powerful speech yesterday pleaded strongly, from his own personal knowledge, the value of the allotment movement and other similar movements for finding temporary employment. He also referred to what is being done in Germany, along other lines, not only in relation to allotments but other industries.

I would suggest respectfully to hon. Members that if they have an opportunity they should read the very informative article which appeared in the "Times" of 24th October, which showed how actively this matter had been taken up in Germany and how very far ahead they are of this country in the matter. They have adopted all over the country great numbers of schemes of employment which do not encroach upon the ordinary labour market, finding work which could not be done at ordinary rates and supplying commodities for consumers who have not the money to buy similar commodities, if there were any, in the shops. I suggest to the Government that they should give very special attention to this matter and, if necessary, appoint a special committee to deal with it, that they should give guidance to the municipalities who may be called in to assist and also to voluntary organisations, and that they should speedily present to Parliament and the nation a special report upon this aspect of the matter arid indicate the lines on which it might proceed. It is a question not only of financial profit and loss but also of human profit and loss, for the demoralisation which is taking place is a grave national danger. But let me urge strongly that it would be a profound error for this House or the country to concentrate upon temporary measures. They should never be diverted by relieving the symptoms from trying to discover the cause and to apply a cure.

We have been for three days engaged on a survey of the whole problem. When one reads the records of Parliament one finds that frequently in earlier centuries the House of Commons, when it was impressed by grave conditions in the country, would resolve itself into a Committee of the Whole House on the State of the Nation. We have been endeavouring to act as such a committee during the past few days. It is for us to deliberate on these matters and to suggest, to urge, and even insist, but the Government are the executive committee of the House of Commons and it is for them and not for us to act. I can summarise what I have said, in the following definite suggestions, in which I am sure a large number of hon. Members will concur, some of which have already been made by hon. Members. First, and most important, I suggest that the opportunity should be seized at the World Economic Conference to arrive at definite results in removing the restrictions on trade, dealing with the mostfavoured-nation clause by common agreement, in solving the question of international debts, and in trying to arrive at a solution by common agreement of the monetary problem; (2), that the Government should remove wholly the restrictions on the use of capital for private enterprises, and should encourage State enterprises which do not involve a dead weight burden upon rates and taxes and particularly, if it is found feasible, in relation to housing; (3), that they should not relax' the pressure upon our great industries, particularly iron and steel, to secure efficient reorganisation; (4), that every endeavour should be made to increase the number of smallholdings rapidly in all suitable parts of the country, and to carry out the Agricultural Land (Utilisation) Act which was passed by the late Parliament; (5), that they should promote an extension of temporary occupations for the unemployed, especially on allotments and in other ways such as those adopted in Germany and elsewhere.

In such a policy there is hope, there is vision. Where there is no vision the people perish. Some people have suggested that we are here as an impotent Government with a bewildered Parliament in the presence of a suffering and disillusioned nation. It need not be so. The House and the Government should join together and say to the people: "We know what needs to be done, and we are resolved to accomplish it."


I have listened during the last few days to many speeches in this House in connection with the unemployment problem, and I must confess that I am not surprised that the country is in the deplorable state it is to-day. The right hon. Member for Darwen (Sir H. Samuel) has delivered a very nice oratorical speech and has tried to show how with a little reform here and there the present system of society can be carried on, but he wants nothing to be done in any shape or form which will endanger the present order. We can take that from his statement in connection with the "dole" report. It is easy for the man who, if he had the power, could consume a thousand dinners during the day to tell us that as a nation we cannot afford one decent dinner per day to the individual who is unemployed. But the right hon. Member for Hillhead (Sir R. Horne) is much concerned about the gold and silver standard and the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) proceeded to congratulate him here and there, and then to administer rebukes; to put him on the right road where he thought the right hon. Gentleman was wrong. I am satisfied that if Mr. Montagu Norman does not know where he is as the Governor of the Bank of England we should replace him by the right hon. Member for Hillhead or the right hon. and gallant Member for Newcastle-under-Lyme. The nation is suffering in not having the ability of these men transferred to the Bank of England. I am not interested in the gold and silver standard, I am interested in the bread and butter standard of the working classes.

I listened to the Prime Minister's speech yesterday and really it was the greatest wet blanket that was ever applied by any leader of any country in any part of the world. I have read that his doctors have been consulting him as to whether they should order him to bed. I think they should have ordered him to bed before he made that speech, because he was not in the mental and physical condition to appear in this House as the leader of a National Government which is going to solve the unemployment problem. The right hon. Gentleman told us that he was thinking aloud. I can assure him that there is no danger even if he happens to think aloud in his dreams, because he will not give anything away to those who may be in the room. I watched the faces of the supporters of the National Government, those spirited colts who came here 13 months ago ready to jump the national economic hurdles and bring prosperity to the nation. They came here with the spirit to do something to justify their expenditure in the constituencies, and in the eyes of the people who have entrusted them with power. But I could see first a look of amazement which later on developed into despair as the Prime Minister went on with his speech. In fact his speech was a statement that it was no use doing anything at all, that the position was hopeless, and that we had, like Mr. Micawber, to wait for something to turn up.

That has always been the attitude of the right hon. Gentleman. He differentiated between public works, what he called relief works, and employment of a normal economic character. He tried to get the cheers of his supporters by pointing out that we had to wait for the ordinary normal flow and development of trade as the only means of finding employment for the people of this country. Afterwards he told us one or two interesting things. He said that the Labour Government worked hard to produce works of public assistance. That was the time for praising the Labour Government. The other day, as the "Daily Express" pointed out, he was engaged in administering body blows to himself all the time, knocking himself all round the ring. At the moment he is determined to praise Ramsay during these discussions. It is said that for every £1,000,000 spent in providing work only 4,000 men are engaged, but later on, because of mechanical appliances, that number was seriously reduced, and it is estimated in some quarters that only 2,000 men are employed for every £1,000,000 spent.

One can understand the difference between relief work, as the Prime Minister terms it, and employment of a normal economic character. I am not in favour of engaging men to make roads simply because you regard it as a disaster for them to be idle. If you are going to spend money I am anxious to see it spent in giving maintenance of a decent character to these men to the extent of keeping them idle rather than putting them to the making of roads for which there is no demand. I have heard complaints from some of the hunger marchers that the roads were not too good. If your system is going to continue I would suggest you should put the roads in a better state because the numbers of un- employed and hunger marchers will be constantly growing and they will have a better and easier access to London if you provide them with better roads.

This Debate has been somewhat useful in the sense that it has provided a medium whereby those who are in disagreement with the Government on its monetary policy and its agricultural policy can discuss the actions of the Government without the obligation of having to vote against them. In that regard the Debate has been useful, but I am satisfied that these three days' discussion will not fill the empty stomach of a single unemployed man. The Members of the National Government applauded the right hon. Gentleman the Member for Pinhead to-day when he spoke about our monetary policy. The attitude of hon. Members opposite reminds me of the successful business roan who had no very great musical taste. On the invitation of his family he went to the opera. He thought it right, being a successful business man, that he should go to the opera. After the singers had finished he applauded and cheered because he thought it was the right thing to do. He knew nothing about the music, he did not know whether it was good or bad, but he thought it was his duty to cheer. And hon. Members opposite think it right and are prepared to cheer the right hon. Member for Hill-head when they know very little about the monetary system in any shape or form. There is a story told of a man on the Glasgow Town Council who, when it was suggested that in order to beautify the River Kelvin they should have one or two gondolas, said, "Yes, I am in favour of anything to beautify the place. We could have a dozen of these gondolas, and allow them to breed." That is the type of mind of a large section of the people in this House.

The Socialist point of view has not been put at all during this Debate. Many reforms have been suggested as to how the present economic system can be made to carry on, how it can be made tolerable, and certain schemes have been suggested in order to satisfy the people. You are not going to satisfy the people by these schemes nor are you going to assist the continuance of the present order. Some people talk about the monetary system and some about the World Economic Conference. There is only one world conference which can be of any effect, and that is one which would transfer the ownership of the means of life from the few people who now own it into the hands of the whole people. That is the only method which will give any reasonable chance of an ordered world. The man out of employment cannot get work because there is a glut. He cannot get wages because he has no work. He has no money to buy goods and, therefore, the employer cannot employ him because he cannot get rid of his surplus goods. Here is a world glutted with a surplus of goods and the workers who require these goods cannot get them because they have not the purchasing power. And they have not the purchasing power because they have no employment. You go round in a circle, and that is the inevitable result of the present order of society.

6.0 p.m.

It is no good trying to make the country believe that you have the power to solve the problem. Instead of people going out to Egypt to look for mummies, and things like King Tot's tomb, they should come to this House where they will find a big enough collection of mummies and corpses without going any further. There is an army of living dead men in this House; men who from the neck up are in cold storage. They came down to the Labour benches and try to make us believe that they are going to solve the problem. It is really wonderful the ideas which spring from them when they are out of office; it is amazing the ideas which they develop. I am absolutely amazed at them. The late Lord Privy Seal suggested in his newspaper last week that one method of dealing with the situation is to develop the national estate for tourist and travel and health purposes, to erect guest-houses with sleeping accommodation and good food, to open the angling lochs and rivers, to cut out the penal charges that drive American tourists to Germany and France and Italy. We have reached a fine stage when the best that the Socialist movement can suggest is that we must make Scotland suitable for the parasites who are living on the ill-paid labour of the worker in America. There is nothing said about getting the tourists off our backs, nothing about getting the dead weight off the backs of the working classes. If there were a transfer of real power into the hands of the common people, if ownership and control were in the hands of all mankind instead of in the hands of the few, if every person were contributing in some way to a decent society, something could be done. I as a member of the building trade could then go back to the building trade, from a dishonest livelihood to an honest livelihood. So also many Members of this House could go back to the bench and take part in their ordinary trades and callings.

Hon. Members talk here—endless talk with no intention of doing anything, every party playing its part in the game of humbug and hypocrisy that is going on. The Liberal party tell you to adopt the Yellow Book, the Labour party say that you should adopt, "Labour and the Nation." But when the Labour party got to the Government side of the House they hid "Labour and the Nation," and put it into a safe until votes were required from the working classes at the next election. The Tory party have been at least honest in this; they have carried out their policy of tariffs. I make no complaint about that. The country approved of their tariffs. Yes, but what the Tories did was to protect the interests of the people who are immediately concerned and to attack the interests of the working classes who put, the Government in office.

I am satisfied that no good result will come from this Debate. It is not our job, it is the Government's job to try to find a solution of the unemployment problem. The Government cannot find a solution. So long as the present order of society goes on they are going to have the job. I am not in favour of any other persons coming along and attempting to make the country believe that if they had the opportunity they would deal better with the capitalist system than the capitalists themselves are dealing with it. I am not going to admit that the Labour party can do the capitalist job better than the capitalists themselves. I want to see the country completely rid of the private ownership of the means of life. We must go on propagating and stimulating thought and activity in the country. Our aim must be not to transfer another political party to the other side of the House so that it can get the plums, but to see that working-class energy is used for uplifting the common people by concerted, intelligent and reasonable action. I am convinced that the transfer of ownership from private to public hands is the only means of ending the unemployment which is keeping the people in poverty. We shall not achieve anything by tempering with the problem and carrying on our work in the spirit of make-believe, or by telling the people that there will be an end of their sufferings if they merely transfer power from one party to another.


The hon. Member who has just spoken has no doubt an honest plan, but I would have been better satisfied if he had not taken five minutes of my time. I remember the end of a tragedy on Thursday last, the passing of Free Trade and the curtain being rolled up on a new system. Our three days' truce is coming to an end. The truce may have been useful; I do not know. Candidly I have no faith in it. But still there have been professions of faith on both sides of the House. The power lies with the Government. We have to wait and see whether they will do anything regarding what has been said in these Debates. I hope they will do something for the nation, because I am convinced that if this so-called National Government does nothing as a result of these deliberations people outside will have no time for any form of Government whatever. I am convinced of that from what I hear among the people I have met. Discussions on bimetallism or the purchasing power of silver in India, or the Gold Standard, are a. complete waste of time in our present position. The Motion before the House says: That this House views with concern the present volume of unemployment and will welcome all proper measures for dealing with it. That resolution means something immediate, and "immediate" means now, something that can be put into operation without any Acts of Parliament. I had occasion to speak in this House a few months ago on the subject of shipping. It is very remarkable that nearly a day has been given to the question of agriculture, and that the questions of shipping and engineering and coal, important factors in the country, have received very little attention. One would imagine that the House was unaware that these problems remained to be dealt with. I remember well that when I sat on the Government side of the House, and when the Labour Government were in office on sufferance, we were told that we had done nothing, and that the salvation of the country would certainly come about if a Tory or National Government got into power. Hon. Members opposite are now in power. They have been in office over 12 months. Yet the nation to-day is hearing the same parrot cries as were heard when the Labour party were in office.

I hold no brief for any party that sells the people. I am here to represent a constituency with a certain demand. Whether it be a Liberal party, a Tory party or a Labour party, if it goes back on its promises to the people I have no time for it. I come here in pure honesty to represent the people with whom I am associated. I am glad of the three days' truce if it should mean that honesty of expression will earn attention. I claim no indulgence far asking the National party to consider what they are going to do, if they are as anxious as they profess to be for the future of the country from an Imperial standpoint. We are told that they are anxious to keep the British Empire intact, that they want trade within the Empire to develop, and that they want to bring about a unity that will add prestige to the name of the British. If that is their intention, by action rather than by speech they must implement their word.

I ask them, what are they going to do with British shipping? The hon. and gallant Member for Bournemouth (Sir H. Croft) told me the other day that if I went to the south of England I would see glasshouses springing up as a result of tariffs. My reply to him is that if he went to the north of England he would see grass growing in the engineering works, he would see desolation and ruin in the industrial centres. We have heard about the foreigner stepping in and about the necessity for Protection here. There are in this House shipowners who boast of the British Empire, and who to-day are carrying aliens, foreigners, on their ships. I ask the Government, when are they going to deal with the question of shipping? When are they going to deal with the blacks, the Lascars, the aliens who are taking the places of British seamen on British ships? These British seamen are men who went out to the War, who faced the terrors of the deep. They are now standing at the street corners, workless.

I am out for the protection of the British race. It is a tragedy to me to walk along the streets of our great seaports and to see the men who risked their lives on the sea during the War no longer wanted because cheap labour is preferred, because curry and rice takes the place of roast beef and plum pudding, and because we cannot bring the Britisher down to a curry and rice diet. It is abominable outrage in this nation. I know thousands of men who gave all but their lives for the freedom of this country. It is despicable that hon. Members can sit in this House and be roused to enthusiam by dissertations on bimetallism and the Gold Standard, but can show no enthusiasm when the question of human life is under consideration. In all seriousness I ask the House for once to take into consideration British supremacy on the seas, to consider the case of those who fought at sea for the name of Britain. No better spirited or greater men ever sailed the seven seas. Let the Government get back to reality and give these men a right to a livelihood on ships that fly the British flag. If that be done there will have been something in the three days' truce that we have had. But if at the end of this truce we are going to have only words and not deeds, then, I am afraid the House of Commons is worth very little and all we have heard is only specious arguments. National rejuvenation can never be brought about unless we have a contented people and it is on that ground that I ask the Government, in all honesty and sincerity, to remember the British seamen and to see what can be done to better the conditions of a class which has done so much for the British race.


In attempting to sum up this discussion from the point of view which we hold, I do not propose to go into the questions of bimetallism which have been spoken of this afternoon, nor to enter upon any analysis of the present world situation such as was given by the right hon. Gentleman the Member for Darwen (Sir H. Samuel). But I may make one criticism upon that analysis which is, perhaps, pertinent. The right hon. Gentleman traced all our troubles to the American collapse of 1928 and 1929, but he must have overlooked the fact that, prior to that date, we had already for many years had a large accumulation of unemployed and we had been entirely unable to get rid of the problem. It is not right therefore that we should regard this problem as one which has arisen solely out of the international and American situations. We must regard it also a domestic problem.

The object of this Debate was that various Members of the House might suggest to the Government methods for assisting the unemployed, more particularly in the coming months of this winter and that avenues of suggestion might be opened up, without any fear of the consequences—even to the Government's own supporters—of criticising His Majesty's Government. This Debate places a grave responsibility upon the Government. They are the people who have to act, if action is to be taken. The House of Commons has attempted to lay before the Government all those suggestions which they think might be fertile of immediate assistance to the unemployed. Now that those suggestions have been offered, it will be for the Government to consider them and to take the responsibility of saying "Aye" or "No" as to whether any of them shall be carried into effect. Hon. Members all have their different views on what the right hon. Gentleman the Member for Darwen called the cure of the disease. We believe and always have believed that the cure must be a fundamental one; that it must be one which will, eventually and effectively, eliminate the element of private profit-owning in the production of commodities. It would be unprofitable for me to go into that question tonight however, and I desire for the present, to proceed on the basis of the facts as they are to-day—that we find ourselves with a capitalist system, with tariffs and with a Government which has a vast majority, great power and, it is alleged, great prestige. Great power and great prestige bring with them great responsibilities and great possibilities of doing things which other Governments might possibly be afraid to do.

Much has been said about the World Economic Conference. I agree with the right hon. Gentleman the Member for Darwen and the right hon. Gentleman the Member for Hillhead (Sir R. Horne) as to the vast importance of that Conference and also the vast importance of the British Government having some definite objective in that Conference. I do not suppose that the Chancellor of the Exchequer in his reply to-night is going to dwell upon that subject and I do not propose to deal with it in detail, because I believe that, however much our economic situation is bound up with that of other countries—as it must be—we are still able to do something at least to assist our unemployed, within our own competence, and without coming to arrangements with other countries to that end. I wish to suggest, mostly by way of summing up what has already been said, some means by which those 3,000,000 people who are to-day looking to this House for their salvation may get some message of hope before they have to pass through the very terrible time which is before them this winter.

We cannot weigh up this problem in pounds, shillings and pence. Far greater and deeper questions are raised than mere questions of finance. However difficult the question of finance may be, there is something far deeper and more serious in the situation which meets us than the issue of whether this or that, is profitable or not. The hon. Member for North Cornwall (Sir F. Acland) gave us a dramatic and effective description of the moral dissolution which is taking place all over the country among the unemployed, especially in those areas where the hope of employment has almost died out. In great areas like South Wales and Durham we have village after village in which, apparently, there is no prospect of the ordinary wheels of industry revolving and bringing these men back to employment again. No doubt we would all agree that, if it were possible, the healthiest and best way of reabsorbing the unemployed is to reabsorb them into the normal industries of the country. The picture which has been drawn by the Prime Minister must convince us, however, that, anyhow for a year or two, there is no possibility whatsoever of that reabsorption.

If that be so, are we to take up the attitude, that, with no possibility of the reabsorption of the unemployed in the ordinary channels of trade, we are to stand by and say to the unemployed, "You must wait"; or, are we to say, "This is a, great Government with great prestige and we are coining to your assistance even though it may cost the country something to do so. We do not look upon you merely as so many pawns in a financial game. We look upon you as human flesh and blood who must be saved even at a cost." I feel certain that every Member of the House were he asked to consider this matter from his own private point of view, would be prepared to make the greatest personal sacrifices to that end. Cannot we bring the same element of willingness to sacrifice into the deliberations of the House and the determination of the Government—because it is only the Government who can act on behalf of the nation. They alone can transmute the sympathy of the nation into action which will help the unemployed. The idea that it can be done by voluntary societies, good though that work may be, is, in view of the vastness of the problem, an obviously wrong idea. This is a problem which must be tackled by means of the whole national organisation and the whole national force, if it is to be tackled at all.

The suggestions which have been put forward fall roughly under three main heads—first, the undertaking of public works; second, the stimulation of private enterprise, and, third, agriculture and land development. I wish to deal with these three, and then to deal with the fundamental financial question which lies behind all forms of Government assistance. The general position so far as the unemployed are concerned is that the problem is one of industrial unemployment. We heard a great deal yesterday about the agricultural situation and everybody must realise the extreme necessity of taking steps to prevent the agricultural situation getting any worse and to remedy it if we can. But the problem of the 3,000,000 people with whom we are immediately concerned, is not one mainly of agricultural unemployment, but of industrial unemployment. The problem for the moment is that of dealing with the people in particular industries, if we can, through those industries, instead of trying to force them out of their industries on to some other work—to try to provide them with some work which will maintain their artisanship, to give them both employment and hope.

6.30 p.m.

Many long-term methods of dealing with this problem have been suggested, such as a higher age in education, a lower age for pensions, stopping pensioners working in industry, shorter hours—to remedy the position in which one portion of the population is working long hours while others are idle—a redistribution of leisure and work, and so on. These are things which, though they are essential in our view, are not so easily or rapidly applied as remedies to the immediate situation. Let me come to the question of public works. This is not a question, in our view, of relief work at all. There is a vast quantity of work undone in this country the necessity for which is urgent. First there is the question of the resumption of the normal work of local authorities. Last October, as everybody knows, that work was shut down to a great extent and, even in order to preserve normal progress, or the normal maintenance of properties by local authorities, a great deal more work must be done than is being done at present. That alone would find a field for many persons, especially in the building trade. Then there are still in this country large accumulated arrears of work which are acknowledged by everybody to be urgent. There is the slum clearance problem and the housing problem. It is admitted on every side that that is work which, some day, must be done. One turns to another area, that of land drainage. Royal Commissions have sat, and we have experienced in the last two years some of the most terrible flooding, due to lack of land drainage, with millions of pounds lost as a result. Nobody can say that that is not work that requires urgently doing in the national interest. That is not relief work, but it is arrears of work, a great deal of which should have been done years ago. In those circumstances, what better time than the present could there be for doing such work? Credit is cheap, materials are cheap, labour is abundant and cheap. What better time than the moment to do essential national work? The right hon. Member for Hillhead made a suggestion that money should be put up or guaranteed by the Government to build a Cunarder. I cannot understand the argument by which it is said that building houses, which admittedly are re- quired, by national expenditure is a waste of money, while it is desirable to advance money to build a Cunarder.

Surely the Chancellor of the Exchequer will agree with this: If it is desirable for private enterprise at this moment to build houses, as it has been said it is, it is just as desirable for municipalities to build houses. It does not matter two pins whether the bricklayer is employed by a contractor who is working for private enterprise or by a contractor who is working for a municipality. It can make no difference. Yet it is said, "We must economise; we must not spend money on municipal housing," but private persons are urged to spend, and I hope the Chancellor of the Exchequer, if he is going to tell us that money spent by private persons is well spent, but money spent on the same objects by municipalities is ill-spent, will explain to us how that comes about, because we believe that there is no time more opportune in the interests of the country for launching a large housing and slum clearance campaign than the present moment.

There are other matters as well, but I will not go through the whole category of them. The Government know them; they have been before them; the plans for them are in the various Ministries; the work is ready to hand, as, for instance, the land drainage schemes. Then there is what I might call an intermediate class of work. One was instanced—I will take it as an example—by the Prime Minister in his speech, namely, the question of the hydrogenisation of coal. That is a matter which has been under discussion by the Government for years. It is a matter which has passed the experimental stage and could be put on a commercial experimental stage immediately, and it is a matter which involves the most tremendous issues for this country. If that industry could be established as a result of commercial experiment, it would give hope again to the miners of England, and surely that is a matter, where you have these vast stagnant populations, that is well worth while.

One of the most important things to notice in those areas is that during the last few months the movement of labour out of those areas has almost entirely ceased. Even a, year ago there was still a small movement out of those areas, a movement which was perhaps just sufficient to give those who remained the hope that one day they might get a job, but that has stopped. They are absolutely stagnant, and the hydrogenisation of coal is perhaps the one suggestion which can be made bringing hope to those areas. During the War, when we were anxious to make engines of destruction, we started out to build plant which bad never before been built in the world. Nobody knew whether or not it would work, and we spent millions of pounds on it as an experiment. Surely, in a matter of this gravity, in an issue which is so important to this country, from the point of view both of the coal areas and of the country as an importing unit for petrol, it is worth bringing to a quick conclusion and coming to a quick determination upon the matter of starting this industry upon its feet.

So much for public works. The Prime Minister said that such stimulation as we could give should be given, but through the ordinary trade channels. I ask the right hon. Gentleman the Chancellor of the Exchequer, apart from the question of tariffs, What is being done to stimulate industry in the ordinary trade channels? What is being done as regards the reorganisation of the basic industries? He himself has within the last few days pointed to the necessity of some measure of reorganisation in one or more of our great basic industries. Everybody admits the necessity, everybody has preached the necessity for the last 10 years, and absolutely nothing has been done. The House will remember that there have been committees, inquiries, reports, all of them recommending that some action should be taken by the industry itself or in some other way, but those industries have done nothing. They have been unable to agree. They say either that they cannot get together or that they cannot get the money with which to reorganise. Whichever it may be, in our view it is the duty of the Government to seize this opportunity for assisting or bringing about those reorganisations. Again, the moment is the most opportune you could have. If reorganisation has to take place, as it has, what better time than when money is cheap, materials are cheap, and labour is abundant and cheap, and what better time, from the national point of view, than when you may save the nation a heavy charge as regards unemployment benefit?

There are other ways besides of stimulating private enterprise. The right hon. Member for Hillhead mentioned the restoration of the Trade Facilities Committee, a restoration which we think would be extremely advantageous. Another means of giving industry the support of the Government is in essential schemes of reorganisation or in essential schemes for rebuilding. An hon. Member mentioned expediting the building of tramp steamers—exactly the sort of problem that was dealt with by the Trade Facilities Committee, and exactly the sort of thing that might give assistance in one of the most depressed areas in the whole country. Then there are export credits. Is it not possible, at a time when it is more than ever essential to stimulate the export trade, because of the dangers that may beset it, for the Government to give some greater measure of export credit, not regarding it purely as a matter out of which the Government must make money, but as an essential feature in the stimulation of private enterprise, which stimulation will assist the Government by reducing unemployment benefit?

If the Government believe, as they do, that the salvation of this country has to come through private enterprise, then surely they must logically adopt some of these methods of assisting private enterprise. We believe, of course, that salvation will come along another line, but if this assistance is given, it is essential, as many hon. Members have already remarked, that that assistance should be upon a planned and considered basis, not haphazard here and there, doing in some cases perhaps more harm than good, as was done, as the right hon. Gentleman may remember, with regard to certain shipbuilding schemes under the Trade Facilities Act. But it is no good waiting for the stimulation of private enterprise by tariffs, which it is admitted, however successful they are going to be, can have no reaction upon industry for a considerable time.

I want to say only one word upon the agricultural situation. The right hon. Gentleman the Minister of Agriculture yesterday handed out a bouquet to the agricultural industry. That may assist agricultural, but it will not assist indus- trial unemployment. The object is to increase the price of meat. If it increases the price of meat by 2d. a lb., which is half what is hoped for, some £7,000,000 a year will be paid by the consumers in increased prices. Let us hope that that £7,000,000 will go to agriculture, in addition to the £6,000,000 which they have had already under the wheat subsidy and the many millions under the beet subsidy. But those hon. Members who yesterday said that the industries and agriculture must pull together, and that the country must be looked at as a whole, must remember that if people are to be asked to give large sums of money to assist agriculture in this country, the unemployed in the industrial areas are entitled to say, "May we not have any money to assist public works, to assist us? Is all the money that is to be given to go to agriculture? Is it not fair that we too should have the financial assistance of the State?" I put that point, not because I want to raise any issue, but because I want the agricultural Members of the House to bear in mind that every concession which they get from the consumers of this country, by means of quota, or taxation, or anything else, entitles those consumers in industrial areas to ask also for their help when it comes to a question of asking for grants for public works. The question of land settlement was raised, but I have not time to deal with that subject.

I want to turn to the question of the financing of these various suggestions. The present position, as has been said by several Members of the House, is that there is available in the City of London a large amount of unused credit or money. Money is cheap. Everybody admits that it would be desirable if we could utilise that money somehow or other so that it should put men into employment. About that there will be no dispute. We have had the experience in the last few years of industry, for some reason or another, whether it be the expense of money or the unwillingness of people to risk money, being unable to get that money in order to carry through essential schemes of reorganisation. In other words, some of the vital blood of the country is unable to circulate through its veins, and the Government as the doctor must devise some means to bring that money into effective circulation so as to give em- ployment. If private enterprise will not take up the money and use it, the Government must do it. There is no reason why, if it be desirable that that money should be used and that it should be circulated, the Government should not either by the direct raising of a loan or by guaranteeing approved loans, get the money into circulation. However much credit is increased, unless that is done, and unless people are prepared to take it up and use it, it is no good whatever.

The trouble at the moment is not that there is a shortage of credit. The trouble is that nobody will use it. The right hon. Gentleman will say, perhaps, that that arises from an essential nervousness because people are uncertain of the situation; they feel that they do not know whether it is the right moment. Surely that is precisely where the Government can step in and take the lead. They can step in and say, "This moment is the wise and right moment for this money to be used. Moreover, if people are nervous, we will see that, if it is used upon approved schemes, it will not be lost. In other words, we put our guarantee behind it." The right hon. Gentleman does not like the method of raising a direct loan, but surely it cannot be beyond the competence of man to devise a system by which, when you have a mass of material waiting to be used, a mass of men waiting to be used, a quantity of credits waiting to be used, and a great number of works requiring to be done, to bring all these together and put men into employment? That is the problem, and we beg the Government to take some means, whatever they think the best means, to get this money back into useful circulation.

The problem with which we are dealing is a critical one. It is not a question of saying, "Let us wait for six months or a year when times may be better for spending money or raising loans." Unless something is done by this House of Commons and by this Government with its vast majority to relieve the situation at present existing in the country, people will turn in disgust from Parliamentary government. People will say, "What is the use of sending people to Westminster?" and they will turn possibly to other and less pleasant means of trying to get what they want. Surely the right hon. Gentleman will do something to- night which may give some measure of hope, even if it be only a small hope, to those 3,000,000 men and women, many of them young girls and young boys, who have at the moment nothing to look forward to, no hope of employment, and who have in many cases already suffered great moral deterioration from a prolonged period of unemployment.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

We now reach the termination of a. Debate which, in some respects, I think is unprecedented, at any rate in our recollection; a Debate in which, following the suggestion of the Leader of the Opposition, the whole House has been invited to make what contribution it felt able to make towards the solution of the most baffling and difficult problem of our generation. The speeches to which I have listened to-day have I think, followed the course pursued in the previous two days, and speakers have with more or less success, endeavoured to suppress any polemical presentation of their views and to give as impartial a character as possible to the suggestions which they put forward. On behalf of the Government, I desire to thank all those who have taken part in the Debate for the spirit in which their speeches have been made, and for the genuine and sincere efforts which they have made to elucidate the problems with which we are faced. If at the end of it all those who naturally are disposed to hold different views upon the way in which we should approach this subject have been unable to convince one another, we may hope, at any rate, that the effect of the Debate has been to carry further different points of view, to indicate how far there is any common ground between us, and, further, to indicate the scope of the suggestions and the proposals which can be put up by Members who have not the responsibility for action.

I have only one matter of disagreement with the hon. and learned Member who has just sat down, and that was in his remark that this Debate had placed a great responsibility upon the Government. The responsibility was on the Government before. This Debate has not placed it there. I agree with him and the hon. Member for Shettleston (Mr. McGovern) that nothing can divest the Government of that responsibility, and that the Government must decide in the event what action they had best take in the interests of the country. I had supposed, from information which came to me through the usual channels, that the discussion to-day would largely turn upon the question of currency and credit. No doubt that was the intention, but man proposes and does not always dispose of the way in which Debates go in this House. As a matter of fact, the discussion has branched off on to more general subjects. Perhaps that may be partly because a good many Members, like the hon. Member for the Scotland division of Liverpool (Mr. Logan), feel that the subject of currency, and the question whether we should be on a managed currency or return to the Gold Standard is something rather remote, and that the bearing of those problems has very little direct influence upon the mass of those who are finding themselves without work and are awaiting anxiously for some message of hope. I do not think that it would be reasonable to expect that the country as a whole should get excited about matters which are so abstruse in their nature and so remote from the ordinary life of ordinary people as these problems of high finance and currency; nevertheless, it must be admitted that they may have a very important effect upon things which are of great moment.

7.0 p.m.

Therefore, while I have a certain sympathy with the hon. Member who desired that we should sweep all that on one side and come down to what he would regard as more practical questions, I do not think that the House ought altogether to put away the consideration of these matters because undoubtedly they are the forces which act in ways which, though not exactly visible to all of us, nevertheless produce actual and visible results. I should like, therefore, to devote a few minutes to a consideration of the observations that were addressed to the House earlier in the day by my right hon. Friend the Member for Hillhead (Sir R. Horne). He made a very interesting speech, as he always does upon this subject. His speech gradually led us us to a definite proposal, which I now want to examine. It is a curious fact that there is no subject upon which those who have given any study to it are more cocksure than this subject of currency. That would be very comforting to those of us who do not profess to be experts if they all said the same thing, but, un- fortunately, they are by no means unanimous in their views, and in the welter of conflicting views it is difficult for the plain man to make up his mind which is the right gospel. That, of course, does not mean that, because the experts differ, the amateur who has a scheme of his own is necessarily right. In this matter there are more amateurs with ideas on the subject than there are experts. I understand my right hon. Friend's proposition to be based upon the assumption that some of the troubles of the world are caused by an insufficient supply of gold for monetary purposes. Now, as he has said, most people are agreed that, if we are to find a way out of the present difficulties through which all parts of the world are passing, we have got some-how or another to bring about a rise in wholesale commodity prices. That rise may be brought about, as my right hon. Friend suggested, either by a, restriction of the supplies of the commodities, or, alternatively, by an alteration in the amount of monetary gold available. That is the standard by which they are valued. He went on to suggest that, inasmuch as there was a deficiency in the available supply of gold, due to the fact that so much of it had been sterilised by its segregation in the reserve of particular countries, we should seek to supplement this supply of gold by bringing into account another metal, namely silver.

Incidentally my right hon. Friend put forward the view, as he has done on previous occasions, that a rise in the price of silver would very much improve our trade with India and China. I think I may perhaps deal with that last point first. I am not going to be dogmatic on that question, because I find it all very confusing and very difficult to be quite certain that any particular view is the last word on the subject; but I see difficulties in the way of accepting the theory that a rise in the price of silver would increase our trade with India and China. Of course, there is the definite difference between them that China has a silver currency and India has not and, therefore, so far as India is concerned, the theory can only be based upon the supposition that a rise in the value of the hoards of silver in India would enable India to do a larger trade with this country. As to that, the largest part of the hoards is not in monetary form. The hoards are in the form of ornaments, bracelets and so forth. Further, one must say that in the past India has steadily added to these hoards and that she has not used these hoards as a means of purchasing goods. She has used them for the purpose of establishing a social status and, if you examine such variations in the price of silver as have taken place in recent years, I venture to say you will not be able to find any evidence in the figures of India's imports that she has utilised her hoards of silver, when the price of silver went up, to buy more goods from other countries.

With regard to China, the position is slightly different. China has a silver currency and, of course, it is clear that if silver goes up the value of Chinese currency goes up. It may be said that China's purchasing power goes up, but on the other hand, one has got to remember that China's selling power goes down. Again, in the case of China I have endeavoured to get some figures, and I do not find they bear out the view that change in the value of silver makes a corresponding difference in the value of Chinese imports. For instance, the price of the Chinese tael in 1929 was 2s. 8d. per ounce. In 1930 it had fallen to 1s. 11d., and in 1931 it had further fallen to 1s. 6½d. That was a very considerable fall. As a matter of fact, if one takes account of the difference in value, one finds that the imports into China fell only 10 per cent. in volume between 1929 and 1930, although the value of the tael had fallen by over 27 per cent. and, similarly, for the figures between 1930 and 1931. Without being dogmatic I am not convinced myself that a rise in the price of the value of silver would have this valuable effect upon the trade of Lancashire with China or India.

Let me come to the question of whether an increase in the available stock of gold, or rather an increase in the available stock of metal, either gold or the equivalent of gold in silver, would so increase the available stock of this metal, or its equivalent, as to enable the wholesale prices of commodities to rise throughout the world. One must remember that the available supplies of gold for monetary purposes have enormously increased. In 1900 they were equivalent to about £1,000,000,000. Now they are £2,500,000,000. They have increased, therefore, two and a-half times in the last 30 years. When you consider the amount of extra gold that would be necessary to make a difference to-day you must consider that extra amount in relation to the available supply of gold in the world. Such discoveries of gold, or such increases in the supplies of gold, as those which took place in the 19th century when the Australian and Californian gold fields were discovered, and the subsequent development of the Rand, produced great effects, but they were great in relation to the then existing supplies of gold. If the supplies of gold are to increase two and a half times every 30 years it is obvious that no productions of gold in the future, even if comparable to those great productions in the past, are going to have a similar effect upon the amount of gold required for monetary purposes. What would be the effect of silver? What amount of silver can we expect to get? I observe that my right hon. Friend put his claim for the advantage of using silver very high indeed. He said that there was no device that you could adopt which would so help our trade and industry as to remonetise silver.


I did not say, or pretend that it would solve the whole problem or make a permanent change. What I did say was that it would be the quickest in its effect of any proposal.


My right hon. Friend is quite right. He said it was not a complete solution or a permanent solution, but that there was no device which we could adopt which would so help trade and industry now. I want the House to consider these figures, because they have a bearing upon the effect on my right hon. Friend's proposal. His proposal was that the nations of the world, or the central banks, should agree to accept a certain proportion of silver at a fixed ratio for gold. He suggested that the price should be the market price. If it is to be the market price, everyone will see it is no particular inducement for the hoards to come out of India and China. They did not come out of India when the price was much higher than to-day. They cannot come out of China because China wants silver for currency—unless silver rises materially in price, and then some silver would come out. If you could raise the price from 1s. 6d., at which it is to-day, to, say, 2s., and supposing you could get by that means, say, 1,000,000,000 ounces of silver—I believe that is an outside figure—to come forward, what will that mean? It will mean an addition of £100,000,000 of gold to the available supplies which are now £2,500,000,000. The thing is too small to have any appreciable effect. And taking 200,000,000 ounces as the annual production, you are not going to add more than.4 per cent. to the existing currency reserves. That seems to me a very great difficulty. I do not see, in view of these figures, how it can be argued that the bringing in of silver to help out gold is, in the present circumstances of the world, going to be any effective help to us. Even supposing we can get, which I cannot suppose we will, an agreement by all the central banks to accept that policy. That being so, I am not very hopeful of assistance from bimetallism in our present difficulties.

I would now like to make some observations upon the further suggestion made by my right hon. Friend, which was repeated in one form or another by other right hon. and hon. Members who have spoken and, in particular, by the right hon. Member for Darwen (Sir H. Samuel) and the right hon. Gentleman who has just spoken. It was put in a slightly different form by different speakers but, I think, I may summarise it by saying that the Government are asked to reconsider in the light of present conditions, in the light of cheap money, abundant money, and abundant labour the prospects of effectively stimulating the ordinary operations of industry by extending facilities in some way, not particularly specified, to remunerative projects. I do not think that the House would expect that the Government should make through my mouth on this occasion a general declaration of a complete policy to deal with this very difficult subject. It would hardly be courteous to those who have put these suggestions before us if we were not to give them that more extended consideration which is necessary before we can finally make up our minds.

That need not prevent me from commenting on one or two of the suggestions put forward and, with regard to this particular one, I would like to say that the Government are not bound by any rigid doctrinaire theory. They have naturally reviewed the efforts that have been made by preceding Governments to stimulate employment by giving State assistance to enterprises of various kinds—through municipal works and through various industrial enterprises in this country, and to traders who are endeavouring to carry on an overseas trade. A review of these efforts has, I think, convinced most of us that it is very easy to waste money in trying to provide employment by inducing authorities or individuals to undertake work which would not be done if it were not that it is a process of finding work to give employment; that a great deal of money has been spent and that the interest on that money is now, and will remain, a burden upon industry for some time to come; that the actual amount of employment at the time was comparatively trifling in view of the total number of the unemployed; and that the number of the unemployed remains the same as, or is even larger than, it was before.

It is, no doubt, the consideration of these facts which has led several speakers to say that there is a measure of agreement throughout the House that the only full, complete and satisfactory solution of this problem of unemployment is to provide an increase of the ordinary operations of trade. The particular class of suggestion which I am considering is, I suppose, a variety of that general consideration—it is the suggestion that the ordinary operations of trade are for some reason or another hanging fire, that the stimulus which is required to start the machine is absent, and that if in some way the stimulus could be given by the Government itself then, when once the start had been made, the machine would continue to run on its own power. Let me say that the Government are not blind to or oblivious of possibilities of that kind, and that if we can find schemes of that sort which are calculated to be remunerative in the sense that they will not be a burden upon industry hereafter, and which are not starting now but which we can start, then, certainly, we shall give to them our most earnest and serious consideration.

But I think it is necessary to warn the House that, in the nature of things, it is not likely that there can be any large number of schemes of that sort, though there may be some, because, after all, if a thing is a profitable enterprise why on earth is it not going on now? It certainly is not the case that money cannot be obtained for it. As has been pointed out, the money is there, there is plenty of it, it is cheap, and industry can have it if it wants it. If industry is not undertaking the enterprise it must be that industry doubts whether money can be profitably employed, and that is why there is all this money lying idle at the present time. It is of no use to borrow money for extensions of factories or the erection of new ones if people do not know whether they can sell their goods. That is the great trouble at the present time, and therefore I am afraid that in reviewing this field while we may, and I hope we shall, find a certain number of schemes that would justify Government action, we shall find most of them fall into one or two categories: either they are schemes which do not require Government assistance, because they are sound in themselves, or else they are schemes which are not certainly going to command the confidence of the general investor or the industrial public, and in that case it is very doubtful whether they ought to have Government assistance. As to whether there is a real difficulty in obtaining the use of money by enterprises which do not require very large amounts, which I understood my right hon. Friend was suggesting, if there is a lack of the proper machinery to coordinate the money which is there waiting for investment and the enterprise which is waiting for the fertilising capital then, certainly, that is a matter which ought to receive the attention of the Government, if it be a case in which the Government can usefully intervene, and I see no difficulty at all about bringing together those who alone could set up the organisation in question.

When I come back to the main problem, I agree with the hon. and learned Gentleman opposite that we must not look at the question of unemployment from too mechanical a point of view. It is a question of men, women, boys and girls, who are human beings, and whom we all desire to treat with the humanity and the consideration which we would desire to give to all our fellow countrymen. We must recognise, as was said by the right hon. Member for Darwen, that whilst we in this country, by schemes which we can put forward here, may perhaps be able to find employment or stimulate works which will provide employment for a few thousands here and a few thousands there, we cannot expect that in the immediate future anything we can do is going to, let us say, cut the present figure of unemployment in half. To deal with unemployment on the large scale we have to remove the causes which have brought it about, and those causes are not confined to any one country, but are causes which have arisen over the whole world and operate over the whole world.

Therefore, I think a logical conclusion to be drawn from that consideration is that while we will do all we can to help the unemployed to find employment in the immediate future, and while we have taken and are still taking steps that we think will give stimulus to industry and will increase the normal operations of trade, and thus gradually reduce the numbers of the unemployed, nevertheless we still have to face the fact that there are going to be a large number—a million or more—of persons for whom we cannot expect to find regular employment in their own trades either this winter or next winter or perhaps for many winters to come. If one faces up to things, that is the conclusion to which we are bound to come; and I submit that once we accept that conclusion, once we agree that, whatever efforts any of us may make, we are still going to have the unemployed with us in large numbers for a long period of time, then, I suggest that as far as they are concerned the unemployment problem takes on a new aspect. It no longer becomes a question of finding some temporary employment which is going to carry them on to the good times coming in a few months. We have to recognise that while we may hope to get an increasing number of them employed in their own trades, there is a large number who are not going to find that employment, and we must make some provision to make their lives happier and more tolerable and to preserve in them their self respect and their fitness to take work if work should be available.

It is in that spirit that the Government are facing this problem. Questions are addressed to us as though we had not lifted a finger to deal with the unemployed problem since we took office. We are asked, "When are you going to do something? What are you going to do now?" Have we not taken steps since we came into office? Have not all the things we have been doing during the past, 12 months been directed to putting the country back into a position when confidence might be restored and when trade could again revive? Have we not given Protection in the home markets to our home industries Are we not taking measures to assist agriculture in its terrible plight? I do not agree with the hon. and learned Gentleman who talks as though the population in the towns were going to bear the whole burden of the assistance given to agriculture. The prices of meat, which are now the great problem of agriculture, have tumbled down in the last two or three months. But what prices are they? They are the wholesale prices. Have the retail prices tumbled down in the last two or three months [HON. MEMBERS: "No!"] Then why should we suppose that because wholesale prices go up again the retail prices should go up too? The country is the greatest market for the town. If the country is going to be bankrupt it will mean a very serious reduction in the amount of work for the towns. The interests of country and town are not antagonistic.

We will not grudge any steps which the Government can take to remedy the present situation. We have taken measures to balance the Budget and to cut down the national expenditure. The conversion operations in themselves are not only producing a saving of interest in the national expenditure but have the effect of cheapening the rate of borrowing right through. I believe the cheapening of money will work down through industry, and will again make another condition favourable for the revival of industry when confidence returns. I do not want to enter upon any controversial matter, but at any rate we believe the Agreements at Ottawa do offer new opportunities for our business men to increase their overseas trade, and we believe the negotiations which are now being opened with foreign countries will give further promise of developments in overseas trade; and whilst anybody who took the figures of unemployment in a single month as a. definite indication of what the trend was going to be for the next 12 months would be rash and foolish to the last degree, yet, when you add to the great reduction in unemployment this month—a reduction unexpected, I think, by most Members at this time of the year—the other items of information which come to one from various sources, I for one do believe that we are beginning to reap the reward of all the efforts we have made over the last 12 months, and that the first steps have been taken towards a better state of things.

7.30 p.m.

But again, I say, we cannot expect to regain prosperity in this country while all the rest of the world is depressed. In that connection I would suggest that we must take into account not merely monetary questions but the financial, political and economic factors which were the subject of discussion by the Economic and Monetary Committee of the Ottawa Conference. My right hon. Friend the Member for Hillhead stressed very sharply the point that attempts had been made to raise prices by the restriction of output. He said that every-one of those attempts had failed. The right hon. Gentleman the Member for Darwen echoed that view. I wonder whether my right hon. Friend has analysed the efforts that have been made to raise prices in that way. If the drop in commodity prices were wholly due to monetary considerations, the fall in prices ought to be equal throughout the whole class of commodities. As a matter of fact, it is not. It is the agricultural commodities, the primary products of the soil, that have suffered the greatest fall. In my belief, that extra fall which has been suffered by agricultural commodities is due to over-production. That over-production was masked for a long time. It began years before it was perceptible or recognised by the great majority of people in the world, because the overproduction was passing into stocks. Stocks were accumulating, until a point came when the confidence that things were going to be better and better and that all those stocks would presently be consumed, vanished, and with the vanishing of confidence the whole structure crumbled and came to the ground.

Prices fell calamitously, and then began efforts to restrict, not production—and this is where my right hon. Friend and I are on different ground. The efforts made were not to restrict production; they were efforts to restrict the amount of commodities that came on to the market, and the result of that restriction was in some cases actually to increase the production, so that the stocks went on increasing until the situation became worse than it was before. Brazil was burning bags of coffee and trying to raise the prices, but was only increasing the plantation of coffee. It was not restriction of output. I put forward the suggestion that, if the schemes failed—the coffee scheme, the wheat scheme, the rubber scheme—it was because they did not go far enough back, and because they addressed themselves to keeping supplies off the market instead of restricting production where the fault really lay. There is one scheme, that for the control of tin, which has gone to the root and which has decreased production. That is the one scheme that has been successful.

These facts and considerations have made me believe that the scheme for the restriction of production in meat will be the most effective scheme to bring about the raising of the wholesale prices of meat, and that is a scheme which, with the co-operation of very few countries outside the British Empire, we can put into operation by our own wish. That experiment—you may call it that if you will—is an experiment the result of which we shall see before long. If it turns out, as I believe it will, that the experiment is a success, we shall have had an object lesson that will be well worth very serious consideration in trying to think how it is possible to raise the wholesale commodity prices of the world.

To sum up, I would say once again that the Government are grateful to those hon. and right hon. Gentlemen who have made suggestions in the course of this Debate. The Government will consider and examine very carefully all those suggestions, and will do so, I think I may say, with an open mind, in this sense, that they agree as to the object we all desire to obtain and that they are going to allow no preconceived notions to prevent their undertaking any plan which seems to them likely to achieve the object. In examining those plans we must not forget the lessons which have been learned during the experiments of past years, and we must be careful in trying to solve the problem of to-day that we are not multiplying the problems of to-morrow. In the meantime, the message of hope, as far as we can give one, that I would offer to the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps) and the House in general, is this: Do not let us be too pessimistic about the present situation, because there are signs in many quarters that the effect of the measures that we have taken is beginning to show itself. For the rest, do not believe that we shall be lacking in those feelings of sympathy, understanding and consideration for those unfortunate fellow-countrymen of oars who, through no fault of their own, are condemned to be unable to find employment during the next period of years in the trades to which they have been or should have been accustomed.

Question put, and agreed to.

Resolved, That this House views with concern the present volume of unemployment, and will welcome all proper measures for dealing with it.