HC Deb 12 December 1933 vol 284 cc209-310

Order for Second Reading read.

3.48 p.m.


I beg to move, "That the Bill be now read a Second time."

There will be common agreement among all sections of political thought, whatever may be our views on these proposals, in deploring the circumstances which have necessitated the introduction of this Bill. The Chancellor of the Exchequer, in moving the Money Resolution, dealt with the financial aspects of the question, and, I therefore propose to deal with the constitutional and general questions involved. My first duty is to pay a tribute to the remarkable work of the Commission. When one remembers that it was a joint Commission appointed by three Governments, that it performed one of the most difficult and unpleasant tasks that could fall to any Commission, when one remembers that the Commission's investigations began in March and ended in October, that the members of it paid two visits to Newfoundland and one to Canada, and that they examined over 260 witnesses, one gains some idea of the thorough way in which they did their work. I was more than delighted that my hon. Friend the Member for Bridge-ton (Mr. Maxton), who earlier this year made what I thought was a very unfair attack upon Lord Amulree, the Chairman, did the magnanimous thing that all of us who know him knew perfectly well that he would do when he knew the facts, by paying a tribute, as I do to-day, to the magnificent work of the Commission. Not the least interesting result of the Commission's work is the fact that, with all the diverse economic interests of Newfoundland, Canada and ourselves, the report was a unanimous report. That is a remarkable tribute to the Chairman.

Let me suggest to the House a short picture of Newfoundland. It is necessary, to understand the situation, to realise what a scattered population Newfoundland has. Newfoundland itself comprises an area of 42,000 square miles. With Labrador included it is nearly three times the size of England. It has mainly a fishing population. Although there are only 280,000 inhabitants, half of that total is settled in one-twelfth of the Island. Thirteen hundred settlements are spread over a coast-line of 6,000 miles. I give those facts to indicate that, while it is true, as the Commission point out, that there has been very bad administration, and while the Commission are very frank in their strictures as to the expense of government, it is only fair also to keep clearly in mind the difficult nature of the country and the consequent expense of administration in those circumstances.

As I have said the main industry is fishing. As in other parts of the world that industry had a boom period during the War. Prices went up, and the Newfoundland people assumed that that condition of affairs would continue. Undoubtedly it was because of that fact that they embarked on expenditure that under normal circumstances could not be justified. It is true to say that no Budget has been balanced since 1920. It will be appreciated that geographical position added very considerably to the difficulties of administration. I do not say that with the idea of minimising in the least the abuses recorded, nor do I minimise in the least the strictures passed by the Coon-mission, but I do feel that when we remember the hardships of these people, the terrible winters that they experience and the arduous nature of their work, some regard should be paid to the courage of the people and to the difficult circumstances of the country.

During the Debates on the Financial Resolution, it was generally assumed that the proposals now before the House were the only proposals considered by the Commission. It is fair to point out, as the Commission point out in their report, that the Commission examined all manner of alternatives. They asked, first, what would be the position if we agreed to a default. The Commission in their report show conclusively that in their judgment that would be disastrous to the people themselves. The Commission then examined the question of the sale of Labrador. The natural purchaser, I suppose, would be Canada, but on examining that suggestion they found that, whatever the people of Newfoundland might say about it, it was a question not only of a willing seller but of a willing buyer on agreed terms. The Commission rejected the idea for the reason that no one was prepared to pay for Labrador the price that Newfoundland felt it was worth.

Then the question arose whether it would not be better for Newfoundland to link with Canada. There are Members in this House who take that view. I suppose, if one looks at the geographical position, that would seem the natural thing to do. But the Commission found on investigation that that was the one thing the Newfoundland people themselves did not desire; they found absolute unanimity against the proposal so far as Newfoundland was concerned. They also found that, so far as Canada was concerned, there was no enthusiasm even from the Canadian side for it. Therefore, having examined all those proposals, they unanimously came to the conclusion that the only practical alternative which would meet the situation was the proposal that they made, and which is embodied in the Bill I have the honour to move.

I give those reasons for the examination of the alternatives, because nothing would do more harm than to assume that all that the Commission had in mind was help from this country. On the contrary, the Commission made every effort, they exhausted all the means open to them to try, if possible, to introduce some other alternative, but, in the end, they were driven to the conclusion that this was the only course open. Therefore, they propose this change temporarily—I hope, and we all hope, not for a long period—to remove the status of Dominion Government from one of our oldest Colonies. The constitution which they propose, and which is embodied in this Bill, is a constitution of six—three nominated by this Government and three by Newfoundland, under the chairmanship of the Governor.

Here let me say that my hon. Friend the Member for Bridgeton, in criticising these proposals, asked how was it possible for a Governor who had been presiding over 12 members, to be more efficient when presiding over six? He also said, how could you expect any real change for the better from a Governor who was responsible with others for the corruption and so on indicated in the Report? Let me remind my hon. Friend and the House that nothing could be more unfair than to connect the existing Governor, who, by the way, only went to Newfoundland in January of this year, and nothing could be more unfair than to associate any previous Governor with the bad administration of Newfoundland, for this very good and obvious reason. It is a difference which my hon. Friend did not fully appreciate. As Governor he had no right to do other than to accept the advice of his Ministers. The status of a Governor with a Prime Minister and a Cabinet is an entirely different thing from the constitution provided in this Bill; in fact, it is the real difference between control and non-control. My hon. Friend may take it that, under the old régime, with a Prime Minister and members of a political party changing from time to time, as they did change in Newfoundland, the obvious duty of the Governor was to take the advice of his Ministers.


Does the right hon. Gentleman forget what happened in one of the Australian Colonies when the Governor-General took exception to the policy of the Prime Minister, Mr. Lang?


The Governor-General in that case was in an entirely different set of circumstances. The difference was that in the case of Mr. Lang, the Governor was not a Governor-General; he was the Governor, and the advice tendered to Mr. Lang was, in his judgment, contrary to the constitution, and he acted accordingly.


Tendered by Mr. Lang.


I agree with my hon. Friend that if he is to criticise the new constitution, he must distinguish between the position of a Governor accepting the advice of his Ministers, whatever his view may be, and the position of a new Governor sitting with six colleagues, three appointed by Newfoundland, and three by His Majesty's Government in this country directly responsible to His Majesty's Government in this country for their action. I put it to him that there is no comparison between the two. But I will go beyond that, having regard to two facts, first, that the present Governor has occupied his position only since January, and, secondly, the latest information I have received in a letter from Mr. Alderdice this morning, paying tribute not only to the magnificent work of the Governor and his wife, but especially emphasising the way both of them have thrown their whole souls into the distressed areas. One thing he emphasised was, Do not let any criticism be directed against them, because both the Governor and his wife are doing all they can in very difficult circumstances, and in the short time certainly have endeared themselves to the people of Newfoundland. I say that because I am quite sure my hon. Friend is not acquainted with the facts.

At all events, I want to emphasise to the House the changed position. In place of the existing constitution, which is temporarily suspended, there will be a Commission of six sitting with the Governor as an executive body making their decisions, three of them appointed by the United Kingdom, and three by Newfoundland. I also observe in this connection that some mention was made during the Debate as to what was the position having regard to the Statute of Westminster.


The right hon. Gentleman said that three of the Commissioners were to be appointed by Newfoundland. Does that mean that they are to be appointed by the Governor in Newfoundland, or what body?


They will be appointed by the Government now in existence in Newfoundland. They will be their nominees. The others will be appointed by His Majesty's Government in this country. Their work will be clearly defined and allocated. The Governor will preside, but the first three Newfoundland representatives will be the nominees of the existing Government.


Has the Governor got the casting vote?


A decision will be a majority decision. There are three and three, so that if there were three on either side, that is, absolute equality on the Newfoundland side and among our own representatives, obviously the Governor in those circumstances would have the casting vote. In those circumstances, four would be a majority.


Is it not a fact that these officials, whether they are nominated by Newfoundland or by us, will be responsible to this Parliament and the right hon. Gentleman?


That is true, but the question asked was, What would be the position in the event of, say, the three Newfoundland representatives taking one view, and the three British representstives taking another? My answer is that it would be a majority decision. There are seven members of the board, and therefore that meets the situation.


Are they removable by you?


That is perfectly true, but I did not want to talk about removing anybody on the Second Heading of the Bill. If, however, my right hon. and gallant Friend puts it in this way—Who in the end is the final authority? it is the Secretary of State for Dominion Affairs. That is perfectly true, but, obviously, I did not want to talk on the Second Reading of the Bill about removing anybody or anything of that kind. I did not, for the reason that one of the greatest tributes to the commissioners' work is the fact that they themselves pointed out that the success of their scheme depended entirely upon the co-operation of the Newfoundland people themselves, and when we remember that, practically within a few weeks of the report being published, the present Prime Minister and his Cabinet not only accepted the report, but themselves petitioned His Majesty in the usual form, that, in itself, is the best evidence that the Newfoundland people themselves are not only in favour of the scheme, but they themselves are satisfied that it is the only alternative. Some question was raised with regard to the Statute of Westminster, and its application to this Bill. When the Statute of Westminster was introduced, it was at Newfoundland's own request that it should not apply to them unless they so desired. They have not desired it, and, therefore, that itself is the answer. So far as the procedure we are now adopting is concerned, it is strictly in accord with the position prior to the Statute of Westminster being introduced.

During the discussion on the Financial Resolution questions were asked as to whether it was intended to appoint Commissioners from inside the Civil Service or from outside it. There is no decision on that point for this very good reason. We want to get the very best men available, and whether they are inside or outside the Civil Service, will not affect the situation in the least. We are. not committed to anyone, either inside or outside the service. I am sure the House will agree that in an experiment of this character, having regard to all the consequences that may follow, the very best men available for this responsible task should be selected and that is the Government's intention. If we cannot find them inside the Civil Service at present, there is no objection to going outside it. I do not want it to be assumed for one moment that the whole thing is cut and dried. There is, as I have said, no definite decision but the matter is being investigated and the best men that we can find for these posts will certainly be given the opportunity of filling them.

In the Debate on the Financial Resolution my hon. Friend the Member for Rothwell (Mr. Lunn) based his opposition to the Resolution upon what I thought a rather flimsy pretext. He said he had looked up the deposits in the local banks of Newfoundland and found that they amounted to 26,000,000 dollars and he argued that these deposits ought to be used before the British Government were called upon to guarantee this loan. I put it to the House that, when we consider the hardships of the people in Newfoundland, when we remember the burdens which they bear, when we remember how those who have deposits are those who are called upon to provide most of the relief that is provided, it is a very dangerous doctrine to put forward that you should confiscate the deposits of people who have savings in savings banks or other banks. I am sure if it were sought to apply such a doctrine to this country there would be great resent- ment. In any case, to assume that by merely taking charge of these deposits you would solve this problem is trifling with the situation.

The short point which the Government had to consider was this. Here was one of the Dominions, one of our oldest Colonies, in a position in which she was unable to meet her liabilities. We could have said frankly to her: "We will do nothing." But does anybody in this House fail to realise that had we allowed Newfoundland to default the first con-sequences to Newfoundland herself would have been disastrous? She would never have been able to borrow again; the whole of her industry would have been crippled and the first people to have suffered would have been those whom we are most anxious at this moment to help. Secondly, the effect of a default in one of the Dominions would, have had its repercussions elsewhere and would have damaged very considerably the trustee position of the stocks of all the Dominions. No one in this House could for one moment suggest that the repercussions which would have followed the default by Newfoundland would not have been far more serious in their financial effect than the cost which we have undertaken in this matter. Thirdly, we must not forget that these hard-working people who are living in the circumstances already described, were not unmindful of their obligations to this country during the War. It would be a very poor response and would show very little gratitude on our part if, in their hour of need, we were unmindful of the contribution which they then made.


There is nothing in this Bill to help them.


That is exactly the difference between my hon. Friend and myself, both in policy and in point of view. He says there is nothing here to help them. My answer is that if we did not undertake the liability, if we allowed default to take place, the credit of Newfoundland would have gone and that would have meant disaster to these people. What is in this Bill to help them? First, we are maintaining their credit and meeting their liabilities—I hope, temporarily. Secondly, we are giving them expert help and advice in administering their affairs and they will have the benefit of the efficiency, ability and experience of those whom we propose to send out there. Thirdly, we are giving them the opportunity to reorganise, to put their house in order, if I may use that phrase, so that the time may not be long delayed when they will have restored to them that status which they are voluntarily giving up at this moment.


But there is nothing of all that in the Bill. All that is in the Bill is directed to relieving, not the distresses of the people of Newfoundland. but the distresses of the people who own Newfoundland stock in the United States and this country.


No one knows better than my hon. Friend that the conclusion to be drawn from that remark is that he takes the view that if this country repudiated its obligations it would make no difference to the mass of the people. We take another view. We take the view that we are rendering the best service to all classes of the people in Newfoundland by the action which we are taking. Therefore, although no one welcomes this Bill—because we all deplore the circumstances which are responsible for it—yet the Government, having reviewed the situation and the Commission, which patiently and exhaustively examined the facts, having come to the conclusion that this was the best road open, we feel we have no alternative but to adopt these proposals and on all those grounds I ask the House to give the Bill a Second Reading.

4.24 p.m.


I beg to move to leave out from the word "That" to the end of the Question, and to add instead thereof the words: whilst anxious to relieve the distress of the Newfoundland fishermen and their families, this House declines to assent to the Second Reading of a Bill which, while imposing an unjustifiable burden upon British taxpayers by the provision of grants and guarantees in the interests of banks, of moneylenders and stockholders, makes no specific provision for substituting the inefficient and vicious system of competitive capitalism, truck, and exploitation by an economic system organised in the interests of the community. On the Financial Resolution we had a speech from the Government which dealt almost entirely with finance. This after- noon, we have had a speech which has dealt almost entirely with sentiment. Neither speech dealt with the economic circumstances of Newfoundland, the economic system which has existed in that country or the economic aspects of what the Government propose to do. We on this side are not opposing the Bill from any lack of desire to help the people of Newfoundland, but we are opposed to giving money to bondholders and moneylenders who have made certain investments, presumably with their eyes open—I shall have some questions to ask later as to how far their eyes were open—and who, having made a bad bargain, are now to be placed in a favoured position by having their interest provided by the masses of the people of this country.

I wish to say something first of the economic circumstances of Newfoundland. It is true that Newfoundland has suffered, like the other food-producing and raw-material-producing countries, from the economic blizzard. It is true according to the report that Newfoundland has had a very corrupt Government. It is also true that, like many other weak and corrupt Governments in the past, that Government found plenty of moneylenders willing to lend them money until they had filled up the cup. But except for one scanty reference the Chancellor of the Exchequer made no allusion to the exploitation of Newfoundland which has been going on year after year. In the report one gets a very full account of the system under which the fishermen in Newfoundland worked. It is described as having been, first, a vicious feudal system, which was replaced later by a more vicious capitalism. Under the feudal system there was at least some obligation on the exploiters to keep the explointed during the winter. But capitalism has always improved on feudalism from the point of view of the masters, by providing ingenious devices whereby they can exploit the workers while handing over to the community their obligations to the workers.

On page 79 of the report we find how that was done and how the position of the fishermen was such that the prices of their fish were fixed for them by the merchants who were their only buyers; the prices of their supplies were fixed for them by the same merchants who were their only suppliers, and the same merchants were the only providers of credit. On page 80 of the report the commissioners have traced the psychological effect of this truck and credit system on the people of the country and they more than suggest that the laxity which led to corruption was bred in that system. Then we have the story common to all areas like this, in which you have the exploiter coming along, a story of the reckless disposal of the assets of the community to financial interests. We find on page 34 the scathing comment of the then Secretary of State for the Colonies, father of the present Chancellor of the Exchequer, over the reckless way in which the future of the Colony was mortgaged to the Reid interests. One reads further that capitalism was not merely voracious but was utterly inefficient. If you look at page 105 of the report, you will find that the system has made for the production, not of good products, but of bad products, that the system has not fostered the use of their own shipping, but the use of foreign steamers. You find that while efforts have now and again been made to get a better system, the merchants have always pursued an extreme individualism. It is stated that: They have insisted on conducting their businesses on a basis of pure individualism without regard to the true interests of the country and without regard to the successes achieved by their foreign competitors. Intent only on outdoing their local rivals in a scramble for immediate profits, they have failed to realise that time does not stand still. It goes on to point out how, by this scrambling and ineffective competitive system, the Newfoundlanders have lost their markets. There is one thing that I miss from this report. I do not get any real details as to who these merchants are. I should like to have known what has happened to all the funds which they have extracted from the workers of New foundland throughout these years. I do not know whether it is represented by stocks and shares, whether they are the creditors of the Newfoundland Government, or whether it is represented by the working capital, as no doubt some of it is, or whether they have laid up their riches somewhere else where they are more safe. What surprises me is that the Government's spokesmen have any amount of righteous indignation against these corrupt politicians, but have nothing whatever to say about these corrupt capitalists and the whole degrading situation of the economic system in Newfoundland.

When one turns to the financial position, one finds a gloomy tale of a long series of deficit after deficit, loan after loan, and I want to know one or two things on this subject. I want to know how long it is since the Dominions Office knew of the financial state of Newfoundland, what steps they took in this matter, whether they warned investors in this country when these constant loans came along, and whether the people in other countries were warned, because a good deal of this borrowing has been from the United States of America, and I do not know why we should be the benefactors of the whole world. When anyone invests any money anywhere and loses it, it has always to be paid by our people. This is only an extension of that wonderful little Measure which the Chancellor of the Exchequer introduced at a time when most hon. Members had departed for their holidays, in which he made up the gambling losses of the gentlemen who had invested in 5½ per cent. dollar bonds.

I would like to know whether the Dominions Office knew about this corruption that has been going on year after year, because it has not been made particularly public. We have had any amount of speeches about our glorious Empire and so forth, and we have had conference after conference, but we have never heard anything about this. In fact, it has generally been held to be out of order to say anything at all rude about any politicians outside this country. They have always been assumed to be sans peur et sans reproche. I should like to know whether this was really known, whether the Dominions Office, looking at the course of events, seeing the conditions in the world, accepted the inevitability of bankruptcy. What is the logic of this report? It is that where you have people who borrow money and borrow again, anyone, the most innocent person, knows what happens. When you go to a moneylender and when you have to keep on borrowing, the day of reckoning comes sooner or later, and—


Your Government always did it, and always would do it.


I will leave that to one of the National Labour Members to answer, but, if the Dominions Office really knew of this inevitability of bankruptcy, did they acknowledge the moral responsibility of this country towards the bondholders? The big question of finance here is not providing something to tide Newfoundland over their difficulty; it is providing something for the people who have lent their money to Newfoundland, and, while you can say that you have a moral responsibility for our brave kinsmen oversea who fought in the War, I have yet to have any definite information as to what the bondholders did in the War.


"Too proud to fight."


This matter, after all, has been put on a high moral ground. It is our responsibility, we are told, though not an absolute legal responsibility, because we find that our Government took particular care in these issues to say that they were issued on the credit of the Newfoundland Government and not on that of the Government of the United Kingdom. I should have thought that anybody who was going to invest in Newfoundland, if they had looked at their annual budgets and read the statements, would have been like the motorist who sees the notice, "You have been warned." They have been warned, but we in this House have not been warned. We have had no reports from the Dominions Secretary about what was going on in Newfoundland, and I want to know exactly what the responsibility of this country is. I think everybody will echo the philanthropic sentiments of the Secretary of State towards these men, who are undoubtedly struggling against grave adversity. We only wish that that sympathy was more widespread. We wish that, beside being sympathetic to those across the Atlantic, they could be sympathetic to those in South Wales.

But we are told that this is a great matter of honour, that it would be a terrible thing if Newfoundland made default. Really, that is a very old nineteenth century attitude to adopt. All the best countries default nowadays. We hear every week from the hon. Member for South Kensington (Sir W. Davison) about Russia, but Russia is not the only country to default. The French did not manage to pay up all they owed, the Italians did not pay back all they borrowed in the War, Germany has not paid, and we ourselves are not paying the United States of America. There was a very interesting point in the discussion the other day, because someone—I think it was the right hon. and gallant Member for Tonbridge (Lieut.-Colonel Spender-Clay) who made such an interesting contribution to the Debate—suggested that they should make a token payment, whereupon the Financial Secretary to the Treasury said: A token payment would, of course, he default if … Then the Chancellor of the Exchequer, who was sitting near, must have warned his colleague where he was going and reminded him that, after all, we were making a token payment; and we are always assured by those who know that we have no intention of paying, yet our honour is quite unhurt. It was an eloquent aposiopesis.


I hope the hon. Gentleman is not also going to make an aposiopesis, but will read the whole passage.


I will. It reads: Mr. HORE-BBLISHA: A token payment would, of course, he default if … Lieut.-Colonel SPENDER-CLAY ; The hon. Member has not asked these people whether they are prepared to accept conversion.


If you make a token payment which is not agreed to by the bondholders, that is default."—[OFFICIAL REPORT, 7th December, 1933; col. 1908; Vol. 283.]

It is very difficult to find out exactly where we stand, because I find that it is apparently honourable to make a default to a Government, but dishonourable to make a default to a private individual. If we had raised money from our taxpayers here and lent it to the Newfoundland Government, and they could not pay, the right hon. Member would have got up and said that blood was thicker than water, and so on, and, of course, they could not be expected to pay. There is no question of honour about that, but the real people in whom they are interested are the individuals who have invested their money, and that is where we find the real springs of action of this Government. I am not inclined to think that they are really sobbing their hearts out so much for these bondholders as bondholders, but because, if once default begins, where is it going to stop in a world that is in debt? As a matter of fact, this is not the first occasion on which the masses of the people of this country have been asked to pay money, nominally to assist the Dominions, but really to assist the bondholders. There was the case of the Ottawa Agreements. The whole idea was that the consumers in this country should pay sufficiently large sums for the products of the Dominions to enable them to pay interest on the money lent by British capitalists. That, of course, is the basis of the Argentine Agreement.

We are setting here an extremely dangerous precedent. Newfoundland may be only the first in the race. Other Dominions have also been in great difficulties, and if world prices do not rise, we may find any number of them coming hat in hand to our Government. The precedent is, "We are absolutely bound ill honour to settle your debts for you, and fortunately we have in this country a large number of people who were so misguided as to give us a doctor's mandate two years ago." They volunteered to pay for the cost of the breakdown of the money-lending system, and those people are being made to pay for Dominion after Dominion. Are we in this country, as a matter of fact, to be guarantors of the finances of the rest of the British Empire even in cases where we have conceded self-government and where by the latest developments they are called equal partners in the British Commonwealth of Nations? I suggest that if there had been no debt in being to the bondholders, there would have been no Bill. You might have had a small grant, you might have had a Lord Mayor's fund, and you would not have had anything like this money put up for the fishermen. It is put up because we have here a capitalist Government that has worked the Parliamentary machine and the legislative machine in the last two years in the interests of the rentier.

An empire that is largely built up for the benefit of a capitalist rentier class has an extremely insecure foundation, and the way in which the right hon. Gentleman and his colleagues are endeavouring to cement the Empire is just the way to make it crumble. Indeed, it seems to be crumbling rather fast under the right hon. Gentleman's care, especially when he has to come forward as bum-bailiff of the British investor. It is bad in this case, it is bad in the case of the other Dominions, and particularly bad in the case of Ireland. The whole basis of the self-governing British Commonwealth is upset if there is no reality in self-government and if the Dominions are only temporarily separate. They say to us, "Give us the portion of goods belonging to us," and then they go away and fall in with some Capitalist swine; and when they come back to us we have to kill the fatted calf for them. This policy is based on the principle that we must not tarnish the name of trustee securities. It is about time that the Government faced the fact that the world cannot stand the interest demanded by the money-lenders. Because of the mass of indebtedness piled up and of the fall in prices, the burden is too great, and if you say that it has to be put on the back of the working man, you will have some severe trouble.

I may be told that the people who lent money to Newfoundland are themselves making a severe sacrifice. The Financial Secretary said that they were losing 30 per cent. If I made an investment so bad as that of Newfoundland, I should be very thankful to come out of it as well as they did. They have been given a good security in place of a worse one. I cannot see why we should have to meet the losses made by these people, for the bulk of them must have gone into this investment with their eyes open. If they did not, they ought to have been warned by the Dominions Office. What is going to happen? We are going to take over, put the bailiffs in, and run the business of this island for a certain period of years. We are going to put down large sums of money, we are going to accept this contingent liability, and all for what? To hand it back to the capitalists. There are no provisions whatever in this Bill for dealing with the fundamental viciousness of the economic system in Newfoundland, that is to say, the credit system and the truck system. I look at various proposals for the scientific development of the fisheries, and even for co-operation among fishermen, but they all assume the continuation of a system of exploitation by the merchants.

I suggest that the clearest moral that you can draw from the Report of this Commission is the utter failure of competitive capitalism; that the Newfoundlanders are not very experienced; and that their political system has broken down badly. It is a cruel thing therefore to suggest that we should nurse them back to health for a little time and then hand them back quickly to that system. A scheme should be worked out of Newfoundland for the Newfoundlanders. I notice that one of the suggestions is that Labrador should be handed over to a trading company. I thought we had got away from the days of trading companies and that the record of trading companies was enough for us.

But the whole of this scheme is to my mind only of secondary interest to its government from the point of view of what is going to happen to the Newfoundlanders. That is not the primary object of the scheme. The primary object is to try and keep going interest for the rentiers. The whole tendency of the administration of this Government is to put the taxes more and more on to the indirect taxpayer, and therefore the bulk of this burden will fall upon the working-class as the bulk of those subventions which we are paying to other Dominions under the Ottawa Agreements and so on comes from the working-class. Although you may keep the Newfoundland people just going, the net effect of this Measure, as of most of the Measures of this Government, is merely the internal transfer of purchasing power within this community from the poorer to the richer, from the workers to the rentiers.

4.53 p.m.


I do not propose to follow the hon. Member who has moved the Amendment in his search for unworthy motives for the production of this Measure. I regard the reasons given for it as both sound and convincing. I believe that it is a necessary and most salutary measure for protecting British credit at the present moment, and I also regard it, despite what the hon. Member has said, as a Measure which will, if properly administered, bring relief to the distressed Newfoundland population. For my part, therefore, I am going to support it wholeheartedly. I am also convinced by what the right hon. Gentleman the Dominions Secretary said when he moved the Second Reading, that the Commission did its utmost to explore all other alternatives.

It is clear that the question of an arrangement with Canada is outside practical politics at the present moment. It is equally clear that nothing can be done in the way of a sale of Labrador, and that a grant-in-aid from this country is not by itself satisfactory or sufficient. I therefore accept absolutely the argument that, in the conditions that exist, the Government of this country have to take over the government of Newfoundland.

I think, however, that we have to be very certain that the conditions on which we take over the government are fair to the people of Newfoundland and to ourselves. They must be fair in the sense not only of re-establishing the credit of Newfoundland, but of building up a sound economic future for the Newfoundland population. This country has not only to look after the money that is put into Newfoundland—to make certain that we put in no more than is absolutely necessary, and that that amount is well expended—but we have to make certain that we are not creating a very difficult political relationship with a very old self-governing Colony. It is on this point that I feel considerable anxiety. In this Measure the House is taking an entirely new and critical responsibility, a very strange responsibility in the year 1933; and no one, I think, can fail to feel astonishment and surprise at the fact that when a Joint Committee of the two Houses is considering the grant of Parliamentary self-government on certain lines to India we should be actually withdrawing it from a Colony which has enjoyed representative government for over 100 years, and responsible government for at least two-thirds of that time.


They have enjoyed it pretty well, too.


We must see, in taking over this responsibility, that the arrangements made are such that we shall do ourselves credit and emerge successfully from a very trying experiment. What is the system of government that is being introduced in Newfoundland by this Measure? It is not a new system, but a very old system. It is simply Crown Colony government through a Governor and an executive council without a legislative council. I feel, I am bound to say, a certain anxiety at the fact that no provision has been made in this constitution for the representation of public opinion in Newfoundland. I will come in a moment to certain provisions which perhaps qualify that statement, but, broadly speaking, there is no provision for the hearing of expressions of public opinion in this constitution. Whatever may be the fault of the people of Newfoundland at the present moment, that omission will cause trouble in future because feeling on these things changes rapidly. It is against all experience to believe that people will accept a constitution of this kind very long without reacting against it.

In the Debate in Committee on the Financial Resolution, reference was very properly made to Lord Milner's work of reconstruction in South Africa. Lord Milner had autocratic powers, and he used them as only a man of his stuture could, but he was equipped almost from the outset with a Legislative Council which represented all sections of the population, including our late enemies in the two defeated provinces. That Legislative Council unquestionably helped very greatly in the work of reconstruction by keeping the Government in touch with public opinion and by providing reasonable criticism and discussion of the measures proposed by the Government. That was done not only in the Legislative Council, but through bodies like the Inter-Colonial Railway Council, which was of a representative character. Even so, General Botha, General Smuts, and General De la Rey refused to take part in that form of government. They formed themselves into an opposition, which became a very embittered opposition, and in due course they managed to break down that system of government before it had fully accomplished the task of reconstruction for which it was constituted. That is precisely the danger we have to guard against very carefully in Newfoundland. The absence of any measure of constitutional representation for Newfoundland opinion in this emergency Constitution is a very doubtful experiment, on the whole, and against our long experience in various forms of oversea Government.

I now come to two qualifications which, I agree, have to be admitted. The first is in the constitution of what, I think, is called the Fisheries Bureau, proposed by the Royal Commission. The Fisheries Bureau is to contain three exporters, re- presentatives, I suppose, of the commercial interests in the fishing industry. It is also, though I am not quite clear how, to contain representation of the fishermen's interest—I think that is provided for—and that in itself is an extremely interesting experiment in what we are all discussing nowadays—functional organisation and representation. But, of course, it goes a very little way towards providing the Colony with a real channel for discussion of the Government's Measures and criticism of such of its actions as it may desire to criticise. The other qualification arises out of what the right hon. Gentleman said this afternoon. I understand from him that three of the Newfoundland Commissioners are to be appointed by the Newfoundland Government before it expires. This is to be the last act and testament of the Newfoundland Government as we have known it for all these years. It is not clear in my mind, and I gather that His Majesty's Government have not yet decided, whether these Commissioners are to be civil servants or drawn from other branches of the public life.


It will not be correct to Bay that the last act of the Newfoundland Government will be to appoint three representatives, because, in fact, the appointment is to be made by the Secretary of State, but, naturally, the appointment will be made on the advice of those in Newfoundland,


I am obliged to the right hon. Gentleman for that explanation. It makes the position quite clear. Their very last act will be to advise the right hon. Gentleman whom he is to appoint as Newfoundland members of the Commission. But when these Commissioners are appointed members of the Governor's Executive Council, are they to be regarded then as civil servants confined to the functions of civil servants, debarred from making public speeches and defending themselves against public criticism, or are they to be Ministers going about the country explaining their actions? I hope the right hon. Gentleman will enlighten us on that point, because it really is important to know whether these executive councillors are, after appointment, civil servants, or whether they are to be regarded as Ministers and politicians. It is going to make a great deal of difference to the working of the Constitution. If they are to be regarded as civil servants they clearly cannot be representatives; if, on the other hand, they are Ministers, those of them who come from Newfoundland are going to have a very difficult rôle to play. They have got to be loyal to their colleagues inside the Council, and at the same time they have to satisfy opinion outside it that they are duly representing that opinion outside, and also furnishing the Government with criticism. That dual capacity is bound to be very difficult, and seems certain to produce conflict inside the Council at a very early date unless public opinion is given some other channel for criticism and the expression of its feelings. I beg the right hon. Gentleman to consider that possibility.

The Bill as we have it suggests that this system which is being introduced is to be rigid until such time—I think I have the phrase—as "the island may become self-supporting again." Those are the words used. Is that really the case? Are we to understand that this Constitution is to remain unchanged until the island is self-supporting again and is not to be capable of modification? In particular, I would ask the right hon. Gentleman whether the words at the end of Clause 1, Sub-section (1) where the Crown is to have power to issue new letters patent and to make provision for the administration of Newfoundland on the basis of the recommendations of the Royal Commission are to be regarded as limiting any modification, any change, any reform which His Majesty's Government may wish to make in this Constitution in the future. Are they to be tied down by that phrase to the recommendations of the Royal Commission, or can they go outside? Phrases of this sort have a curiously limiting effect in Acts of Parliament, as hon. Members know, and I shall be very glad to know whether that phrase is to be regarded as limiting the discretion and the freedom of His Majesty's Government to alter this Constitution later without coming to the House for fresh legislation. If their discretion is so limited, I would ask the right hon. Gentleman whether he would be prepared to accept an Amendment on this point in Committee.

With a good deal of doubt I would venture to put forward another suggestion. This House, in passing this Measure, is not only providing for the supervision of expenditure from the Exchequer of this country and sustaining British credit, but is doing another thing which is extremely important, that is, it is taking power to fix the taxation in this Dominion and to allocate the proceeds of that taxation. That responsibility is coming away from the Dominion Parliament to this House, and would it not be wise, when we are taking that power from people who, after all, have taxed themselves for 100 years, to provide for some system of representation? I would ask whether, in the circumstances, there is not a case for a complete innovation in our constitutional practice, and for the representation of that Dominion in this Parliament during this period of transition. After all, I do not think Newfoundland contains more voters, of both sexes, than my own constituency, and it might quite well return two Members to this Parliament. The difficulties of the in-and-out system need not be considered, because two Members are not likely to endanger the life of any Government on domestic questions.

There is a precedent in the case of Northern Ireland, which has its own Parliament and nevertheless sends Members to this House. It is true that Northern Ireland has a right to do that because 25 per cent., or something like that, of its taxation actually goes to United Kingdom objects; but the fact remains that we in this House are taking power to tax the people of Newfoundland and to allocate the proceeds of taxation; and if we are doing that we should follow the old principle and, for the time being, while this system endures, give them representation. I believe it would be of great assistance to the Council in Newfoundland, and it would be of great assistance also to this House, in discharging a very difficult responsibility, to be able to hear from representatives of the Newfoundland people exactly what the conditions in Newfoundland are, and what are the feelings of the people about these various and very difficult questions. After all, this experiment has been tried in the French Parliament, and has worked very well, and I do not see why it should not be attempted here. I hope at any rate the right hon. Gentleman will give it consideration.

The Royal Commission have given us a brilliant diagnosis of the present state of Newfoundland, and without wishing to keep the House very much longer I would like to say a word on the economic aspect of their recommendations. The diagnosis is brilliant and exhaustive, but I feel a little less certain about some of the recommendations. After all, this system will be justified by the use which is made of Newfoundland's resources. Everything turns upon that. If we can build up a sound economic system in that island, if we can make it a place of reasonable prosperity for all its inhabitants—well and good, Parliament will have succeeded; but if we fail we are going to have serious trouble. Everything comes back to the proper use of Newfoundland's existing and potential resources.

So far as I can understand, the whole of this responsibility will be put on one commissioner. He will be acting, no doubt, with the advice and counsel of his colleagues, but, nevertheless, the whole responsibility for development is to be given to one commissioner, the commissioner dealing with the Department of Natural Resources. That is the proposal of the Royal Commission, and I understand it was adopted by the Government. Who is that commissioner to be, one of the English commissioners or one of the Newfoundland commissioners? It is very important to know. Again, is he to be a civil servant or a Minister? If he is a civil servant it will be very difficult for him to go about explaining the way in which he is dealing with Newfoundland's resources. If he is a Minister, responsible not only for explaining the action of the Government to outside opinion, but also representing outside opinion to the Government, his position will be still more difficult. I feel that to put the whole responsibility on one Department and one commissioner will impose too great and too direct a responsibility upon this House for success or failure in the discharge of these duties.

As an example of what I mean, take the question of fishing. It is generally agreed that the restoration of the fisheries is the first great step in rehabili- tating the welfare of the island. The Royal Commission suggests a very elaborate organisation for that purpose. It suggests, I think, dividing the fisheries up into 11 districts, putting those districts under 11 officers, establishing an expensive hierarchy to run those 11 districts and to market the proceeds of the fisheries in other countries. There is no estimate of the cost of this organisation. The right hon. Gentleman may perhaps have been harking back to the spacious days when he wrote a book, to which he referred yesterday, and he may have welcomed this experiment in State management. Personally I doubt very much whether it is likely to succeed. Nobody who has been responsible for a Crown Colony system of Government could look at it with anything but apprehension. It is the sort of work, as I believe, which is badly done, on the whole by Government Departments, however efficient their members may be—and very efficient they are, as we all know. It is not really the metier of Government Departments to run this kind of Department. Hon. and right hon. Gentlemen above the Gangway will probably disagree, but I believe one of the troubles is that civil servants cannot have quite what I would call the business conscience which is necessary for success in these things. They cannot feel, in the same way as they would in a busines concern, the necessity of showing a return upon expenditure.

I can give to the House an extraordinary example. I remember that, in the War, I was in Hazebrouck, and in the middle of the night I was looking for something warm to drink, when I came across a little base hospital. Behind that base hospital an orderly was boiling water. We had been rather wondering what to do, and we said, "Good, some coffee," We made for that orderly and his fire, and the first thing that struck me was the fuel that he was using. I looked at it in astonishment, unable to identify it. Then I discovered that it was rationed biscuit. When I asked him why he used rationed biscuit to boil water, he merely said that there was more of it available, and it was easier to get than any other fuel at that part of the Front. That serious indifference to cost is something that creeps into all the management of Government concerns, and it is a danger. What is more serious is that if the Government takes direct responsibility for the reorganisation of the fishing industry the failures—there are bound to be failures—will react directly upon this House.

Therefore I ask the right hon. Gentleman whether he is sure that the old English method of a development company is not the wisest manner of dealing with this problem. We have all heard of the old trading companies. I doubt if what was said from the Front Opposition Bench is a fair account of their history. I should say that all the great development in the Empire has been done by trading companies of some kind, and that, while there are many blemishes on their achievements, they have a magnificent record of development which is there for everybody to read. We can see, at the present time, that a company starts under adequate control and under a proper charter, and that not only commercial interests, but the fishermen, may enter into a co-operative enterprise in which they have proper participation. That does not seem to be impossible, and I would ask the right hon. Gentleman whether we are to regard ourselves as bound in this matter by the recommendations of the Royal Commission, or whether this department must be set up immediately the Bill goes through the House of Commons. We want a little time to consider whether some other method of dealing with these great fisheries is not more desirable and more likely to give the results that we all want. I press that suggestion, not only in regard to the fisheries, but in regard to other commercial resources.

I believe that the land position in Newfoundland is very serious, although the land is not very good—or so I am told. I have been in Newfoundland, but I have no idea of what its resources are. One reads in the report of the commission that the land is not put to any good use, but it may once again be made useful for development. The commission suggest that the land should be taxed by an undeveloped land tax, and that it should revert to the Crown in six months, if the tax is not paid. I have no objection to that. Undeveloped land taxes are a very great stimulus, and they have been so in many parts of the Empire. The commission do not tell us what is to be done with the land when it has reverted to the Crown, as a result of the transfer. They mention the mineral resources not yet exploited by the two great companies who are operating, and they mention other resources. They speak of the other possibilities that there are, including the great possibilities of Labrador. Only in regard to Labrador do the commission mention the possibility of carrying out the work of development through a great trading or chartered company.

That suggestion, which the Commission make in regard to Labrador, could surely be explored in regard to the fisheries and the other resources of Newfoundland. The system would have more than one advantage from our point of view, and, if it were more efficient, of course it would be better. One of the great advantages of it, which the other system would certainly not have, is that, when the time comes for us to relax control, instead of a bureaucratic system which is certain to deteriorate in due course, when political influence comes back again, we should leave to the restored Dominion an efficient and reasonably independent business organisation. Whatever the future of the island, I think that that would be valuable. Provision can always be made for the people of the island to take over their own resources from this company, as people elsewhere have from chartered companies, on proper terms, if they choose to do so. The establishment of a company of that kind—perhaps one, or perhaps more—would enable us to arrive at a gradual relaxation of financial and political control in Newfoundland, without endangering its economic development.

I return now to the main question, and it is my last word. I am convinced that no system of rigid and autocratic control will work long without creating the most grievous conflict in a country which has been so long accustomed to complete self-government. This House certainly must take control, it must take responsibility for our expenditure in Newfoundland, and it must take upon itself the protection of British credit. With all that I agree, but the Newfoundland taxpayer is entitled to a say in what is going to be done during this period, and I hope that when the Under-Secretary replies at the end of this Debate he will pay some attention to these considerations.

5.23 p.m.


I rise to support the Motion for the rejection that has been moved from the Front Opposition Bench. I would have contented myself with a plain Motion to read the Bill on this day six months, but the reasoned Amendment put forward by the Official Opposition is equally satisfactory to me. I am very glad that we have heard the hon. Member for Altrincham (Sir E. Grigg), whose great experience in the work of Government in other parts of the world, makes his intervention in this Debate welcome. The more so, because his speech was a steady criticism of the proposals now before the House. I welcome his speech, because I think that one of the most regrettable features about this House is the overwhelming numbers on the Government side, which develops a state of very gross carelessness. The Government know that, however slipshod their legislative proposals may be, a very indolent majority will put them through on to the Statute Book. The Government therefore know that the weight of those unthinking Members will more than counterbalance any criticism that may be brought by a numerically weak Opposition.

I regret very much that the more representative leaders of the Liberal party have been unable to find it possible to be present in the House. I understand that internal affairs are perhaps more pressing than the needs of Newfoundland. I do not say that in criticism of the two independent-minded Liberal Members—the hon. Member for East Edinburgh (Mr. I). Mason) and the hon. Member for East Wolverhampton (Mr. Mander)—who are on the bench. I only regret it, because I know that their views are not to be taken as quite representative of the 'average Liberal opinion. I am glad that the hon. Member for Altrincham has raised his voice from the ranks of the Government supporters in criticism of these proposals, and I hope that the official Opposition will be able on Thursday to put up a very thorough examination of the Bill on the Committee stage.

I gather from the Prime Minister's statement on business to-day that the Committee stage is to be taken on the Floor of the House. From the amount of business that he put down for that day, he assumes that this matter can be put through in an hour or so. An examination of the Bill leads me to think that it ought to be examined in the closest and most stringent fashion, and that there ought to be submission to something like a Select Committee, where the closest examination could be made of the proposals and witnesses called, not perhaps from Newfoundland but from among former Governors of the island and from those in the Dominions Office who have been closely connected with the Dominion's affairs in the past. Since that has been denied us by the Government, it is the duty of the whole House in Committee to give as close an examination to the proposal as the procedure permits.

The Dominions Secretary, in submitting the Bill, paid a very great tribute to the chairman of the commission, and he also referred to the tribute that I paid. I admit quite frankly that I did, during the discussion of the Financial Resolution, withdraw the reflections that I had cast upon the chairman and say that in my view the report represented six months of hard work. I do not think that I could permit myself to use the words "magnificent report." The magnificence of a report does not depend so much upon the bulk of it, or the quantity of information that it contains. It may show evidence of great assiduity on the part of the members of a commission, but a report is judged by the extent to which the House feels that the needs of the situation to be inquired into are being met. In paying every possible tribute to the work of the commission and its chairman and the others, I feel that the needs of this situation are not being properly met. I cannot remember, since I have been in this House, a Bill being presented to me for examination in a form like this. The Bill consists of some six Clauses. Only two or three of those are effective, operative Clauses; the others are formal.

Then we have several pages of Schedules. The First Schedule is a verbatim statement of an Address presented to His Majesty by the Legislative Council and House of Assembly of Newfoundland. That, presumably, becomes law if this Bill is accepted. I was not going to ask the right hon. Gentleman or the Under-Secretary as to our rights of amendment: I was going to expert opinion on that matter; but, if it is impossible for us to amend this, it seems to me to be an extraordinary new way of legislation that a ready-made Address from some other part of the world should be incorporated in a Bill here and made law. It does not stop there; we come to something new—an Annex; there is not merely a Schedule, but an Annex. This is an extract from the Report of the Royal Commission appointed by His Majesty. A portion is taken out of the Report and shoved within the pages of the Bill; and again, if the Bill goes through, this will become law. It is a very important status to give to a Royal Commission that the words which they may write in their Report are put before this House and become part of the statute law of Great Britain. There is a Second Schedule, consisting of an Act of the Legislature of Newfoundland entitled The Loan Act, 1933. The Newfoundland Parliament have presumably discussed this in detail, they send it over to us, and we are asked, in the course of an hour or two here, to accept it. Then at the end there is a list of Newfoundland's indebtedness—the various loans which have been issued at one time and another, which are still outstanding, and on which Newfoundland is not able to meet its responsibilities.

That is an extraordinary method. My reason for giving it more importance than perhaps other Members in the House would be inclined to give it is that I believe that the state in which Newfoundland finds itself is not the end of this sort of thing. My political theorisings lead me on general principles to a belief in the disintegration of the British Empire. I see evidences of it here and there in other places and in other things that are happening in various parts of the world, and to me it is something more than a coincidence that this oldest Dominion should be first in the queue. [An HON. MEMBER: "The oldest Colony."] The two words have been used interchangeably into reference to Newfoundland, and what we are calling it in the future I do not know. We are certainly taking away from it all the essential things that characterise a dominion. But it is still to remain under the control of the Dominions Secretary, and on that point I am very anxious to know if in the future we are going to be allowed to ask questions here about the internal affairs of Newfoundland, because the alteration of status not merely throws responsibili- ties on the Government, but confers, I imagine, rights on the private Member in this House. These are all general considerations about the difficult nature of the task that we are performing here. It is not a trivial one, and the policy applied to Newfoundland ought in my view to be of such a sort that it could be applied fairly and equitably to any other Dominion or Colony should similar circumstances arise. We cannot rush out and shoulder all the debts of all the distressed parts of the Empire in the way that is being done here.

I cannot understand this; there is something behind it all that mystifies me. We spent practically all day yesterday discussing the question of distressed areas, most of which have far more human beings in them than Newfoundland. The total population that we are discussing here is only a quarter of the population of the city of Glasgow, and only a fraction of that of Manchester or Liverpool. Not only in South Wales, but all our municipal authorities in Britain were up on end about the inadequate provision that was being made by the Chancellor of the Exchequer for relieving their responsibilities and difficulties in connection with unemployment insurance, and yesterday, after prolonged discussion and much hostile criticism from the Government Benches, the Government grudgingly consented to give them £300,000. If I were one of those who thought imperially, as Government supporters are supposed to think imperially, I should realise that Newfoundland is a distressed area just a little bit further away than Glasgow; and the utmost pressure that this House could exert, and the utmost pressure that the municipalities outside could apply, could only open the Chancellor's purse to the extent of £300,000. Nearly every community involved is carrying a huge local debt.

In the case, however, of this distressed area of Newfoundland, the Government come forward and ask us to shoulder the whole of its outstanding debts—because that is what we are asked to do in the Bill. The British taxpayer is to shoulder from now onwards—no limit is placed on it—the responsibility for the whole of the outstanding debt of Newfoundland, and quite definitely for the years ahead to make good any deficit between what the ordinary taxation of Newfoundland can produce and the ordinary expenditure of Newfoundland in meeting debt charges and local administrative and Government charges. The House, after having already given in the last six months two grants—not loans—of £300,000, is asked to do this by the Minister in quite a happy-go-lucky way at eleven o'clock at night. I remember that one night when I was speaking on the subject it was a little past the ordinary time for going home, and, when I insisted on asking some questions about it, the House was terribly impatient at being asked to wait five minutes and discuss where this £300,000 was going and how it was to be spent. To-day we are being asked to agree to that becoming a regular, steady periodical payment. I asked the Chancellor of the Exchequer a question on the Financial Resolution. The proposals contain the date 1936, which suggests that our responsibility would cease or be reduced at least in some way when we reached the year 1936, but, on my questioning the Chancellor of the Exchequer, the furthest he would go was to say that in 1936 the position will be considered, and, if the situation is just the same, we shall go on paying just the same.

As I said on the Financial Resolution, I am rendered tremendously suspicious by the extent to which the sentimental argument is being used in connection with this matter. I am the last man in this House to minimise the importance of sentiment in human affairs; I believe that human sentiments are often better guides than the human intellect. But when I find men who were one day putting up an attitude of hard, businesslike indifference to a sentimental appeal for the man at our door, and saying, "Yes, our sympathies are as great as yours, but we must not allow ourselves to be ruled in these matters by sentiment"—when they resist appeals on sentimental grounds for somebody not two miles away from this House, in the East End of London, who may have a War record just as great as that of the Newfoundland fishermen, then, much as I appreciate and believe in sentiment, I think I am entitled to be very suspicious when the main claim for this Bill is based on a sentimental appeal. The oldest Colony! Why, the youngest Colony has a better claim for support and encouragement than the oldest Colony. The War services of the men are great, but we all know that every Member of this House has in his constituency someone with War service who is living in miserable, abject conditions, and who, as we know, can easily be pushed aside. The basic conception in this Bill is how to meet the needs of the bondholders.

The two cases in which the right hon. Gentleman has acted with speed in the administration of his office are Ireland and Newfoundland. The position in Victoria must not be hurried. It took years of agitation to get it taken seriously, more years to get it inquired into, and longer again to get some relief for the men; and now, when the relief is obviously and clearly inadequate, there is a refusal of action. The men who went to Victoria were war veterans and British citizens. They went out at least on the incitement of the British Government of the day, but it must be long years before they get their grievance considered and, when it is considered, there is only the most grudging payment, insufficient to meet their actual losses.

What was involved in the case of Newfoundland and Ireland? In the one case the interest on the land annuities. I admit that the Irish problem was complicated by a whole lot of other things and has been more complicated since then, but the thing that produced action was not the many political complications hut the necessity of meeting the interest on the land annuities. In the case of Newfoundland we faced exactly the same thing, instant action, immediate action, hurried action, precipitate action, ill—consdered action because the interest on the Newfoundland loans is in danger. I agree with the hon. Gentleman who spoke for the official Opposition. When people go into risky investments the majority of the House believe that this element of risk is an essential ingredient in the working of the system. If that is how you believe the commercial, industrial and financial game is to he played, if you are to go in there on the chance of getting big profits and the results prove that you incur heavy losses, you have to learn to do what I have learned in my relatively small gambling adventures. We do not grumble when we lose though we laugh like anything when we win. We have now got to this stage, that the gambler is only prepared to take the winnings and is not prepared to shoulder any of the losses.

The sentimental appeal to the men of Newfoundland reaches right to the core of my heart. I ask the Dominions Secretary what he is going to do for the suffering poor of Newfoundland? He says he will maintain their credit in Newfoundland, and that will incidentally percolate through in the way of advantages to the suffering poor. The financial standing and credit of the business men in the West of Scotland stands very high indeed. The municipal stock of the City of Glasgow is a sound investment. But the advantages of living in a city like Glasgow, whose credit is sound and whose public reputation is good, does not percolate through to the people whom I represent. Their poverty remains. If the right hon. Gentleman came forward and said, "On the Committee stage of the Unemployment Bill I will introduce an Amendment to bring these men of Newfoundland within the benefits of unemployment insurance," I would support him.


On a contributory basis?


Without contributing anything. If the right hon. Gentleman is prepared to bring forward a Measure to include the widows and orphans of Newfoundland within the benefits of our Widows' and Orphans' and Old Age Pension scheme I will support that. That would be drawing closer the bonds of Empire. It would be making the men out there feel that there is something in being a son of the British Empire after all. This proposal is doing nothing for the people in Newfoundland. It is doing something for people who own Newfoundland stock in London, in New York, and on the Continent of Canada. I wish I could get on the Select Committee that is to examine this Bill. It is not the sort of basket into which people who have a limited number of eggs put them. I wish I could find out exactly the powers who are interested in this, who can abolish a Parliament in the British Empire and can come to this Parliament and present us with a whole collection of decisions and ask us to take the whole of them but never submit them to the Newfoundland people. They had nothing to do with these proposals at all. The Newfoundland Parliament and the Newfoundland Government agreed to it, but the men who form the Government and the Parliament of Newfoundland are the politicians, the men who are responsible for the condition of affairs in Newfoundland, according to the report. They say the present Government is different from all the other Governments that they have had before, but the report does not make any distinctions. It tells us that all the politicians in Newfoundland were well up to the neck in the graft that was going on. I think the most entrancing sentence in the whole report is that there are only two principal political parties in the island, the Liberal and Conservative parties. That should be taken out and written in letters of gold.

It was not right that the future of that Colony should have been decided by the people who are responsible for its past and its present. The Government seem to adopt the public slogan of to-day, "When in difficulties run away from democracy." My attitude is precisely the converse. If a certain amount of democracy has not proved adequate for the proper handling of any situation, let us have more democracy. I believe there are in these Newfoundland fishermen the capacity, the intelligence and the morale to build a new Newfoundland. The fact that not very long ago they chased their Government round the town and locked them up in a room, unfortunately only for a very limited period, is evidence of vital, manly qualities which have not been completely destroyed and, if my voice can reach the men of Newfoundland, as distinct from the Government and the politicians of Newfoundland, I urge them to ignore anything that may be done by this Parliament or by the new governmental in-instrument which is being sent out to extract profit out of their labour, but to take the responsibility for their own lives themselves and take control and direction of their own island. I am perfectly certain that these men who could brave the terrors of the seas and stand the rigours of that climate, if they were told not to trust any of their politicians either home-grown or imported but to take control and direction of their own destinies, could build up a social, economic and industrial life which would be in keeping with human dignity as it ought to be at this period. I have the greatest pleasure in supporting the Amendment of the official Opposition for the rejection of the Bill.

6.0 p.m.


It is very nice to find the official and the unofficial Opposition for once united in their desires. I congratulate my hon. Friend the Member for Bridgeton (Mr. Maxton) upon two remarkable qualities which he is developing. When he commenced his speech he began at the end of the Bill, and pointed out that it was a very curious Bill, that its construction was unique, and that he had never encountered one like it before. But it is not every day that we take away the constitution of a Dominion and set it up in an entirely different way. I congratulate him on his effort, as I have not seen that form of obstruction of a Bill done so vividly since we had a gentleman in the House called Sir Frederick Banbury, who represented the City of London. He was brilliant in picking out things in that way. There are a very large number of cases in this Bill where one might ask the Government to do this, that or the other thing, but I fail to see how the Government in their present position could possibly have done anything other than what they are asking to be allowed do this afternoon.

The hon. Member for Limehouse (Mr. Attlee, in his earlier remarks, said that this might be the first of a series of cases in which we might have to deal with other Dominions in a similar way. I hope that that prophecy will not come to pass. But I would point out that whatever may be the position of Newfoundland to-day, Australia, which was in a very bad financial position, has been able to get back to a 3½ per cent. basis, and has been able to do it by getting rid of a Socialist Government and making it Nationalist, very much on the same lines as the Government here. The hon. Member for Limehouse said something about capitalist swine, and I am not sure whether that quotation could not be turned very aptly towards certain people, but I do not wish to indulge in that kind of conversation this afternoon. The other day the hon. Member for Bridgeton wanted us to look at the matter from the point of view of a cold business proposition. I do not think we can possibly look at it, if we read the Report and look at the figures from a purely business point of view, but must regard it as being all S.O.S. from a portion of our people scattered right away from us in a different part of the world. We have to try to see if it is possible for them to maintain an existence to-day, and gradually to reorganise that existence in such a way that they may once again come back—as I am sure every hon. Member wishes them to do—to the position of being an independent Dominion in our Empire. We were told the other day that the limit of expenditure which the Government would make would be between £1,500,000 and £2,000,000. The amount will not go beyond that as far as we are concerned without further consultation with the House of Commons. I would ask the representative of the Government to give an explanation of the proposals which they are making on some of the matters which must arise out of this Measure.

My hon. Friend below me pointed out that he did not agree entirely with the position laid down in the Report in reference to dividing the various offices between the half-dozen administrators. That is a point upon which we ought to have a very clear understanding. Are the administrators to be really in the position of representatives, or civil servants? We ought to be told on what sort of lines they propose to reorganise the Civil Service in Newfoundland. Would it be possible—I only put this forward as a suggestion—for this country to lend them a certain number of civil servants The position of the Post Office there is almost hopeless, and I should like to know whether it is possible for us to land them for a time a number of our own skilled people—or for them to draw from Canada for that matter—to try to reorganise their Civil Service. We have a right, if the House of Commons is to find the money, to know the directions in which they are to reorganise. We know that there is a very large block of savings in Newfoundland at the present time. Savings always attract the Socialist party. The hon. Gentleman above the Gangway was very worried because they paid no rates. I should rather like to see the hon. Gentleman going around Newfoundland's 6,000 miles of coast collecting rates. I do not think that even his dulcet tones would succeed in getting much out of Newfoundland in the way of rates. There is an interesting proposal in the Report which makes it appear as if the people in Newfoundland have, at any rate, some ideas which they wish to express. On page 182 the Report says: A further suggestion which was sometimes made by witnesses was that an English Bank might be established in the Island. The block of savings, it is clear from the report, are not in very adequate use at the present time. Is it possible, either by means of their own banks or Canadian banks, or even by an English bank, to make use of those savings? Wherever you go throughout the world, the English banking system is always the soundest and best. All other banks are built upon it. That is why the Socialist party invest their funds in this country rather than invest them in Russia. Would the Government look favourably, in the development of the fishing industry in Newfoundland, upon some co-operative system gradually to draw the savings out of the pockets of the people and to use them in industry? It might be possible to get the fishermen to combine and to use their savings in purchasing new boats, or in establishing new canneries or factories for preserving their fish. It is obvious, with scattered populations round the coast, that anything in the nature of the reorganisation of fishing will be very expensive, and unless you can induce the men engaged in the industry to use their savings in its development there cannot be the progressive growth of the industry which all would desire.

I hope that the Government will not follow the suggestions of one or two speakers and try to bring about large schemes of land development in Newfoundland for the purpose of food production. No doubt it might be possible to do it in some respects, but when one remembers the closeness of Canada and America, I do not think that the advice given by the right hon. Gentleman the Member for Sparkbrook (Mr. Amery) to try to bring about large developments on these lines is sound. I ask the Government to assure the House that they will do everything possible to see that both the mining and the timber supplies of the country are developed as far as possible in the immediate future. I particularly hope that the Government will in every way possible develop the mining industry in Newfoundland, because I believe that it is the only real way of bringing in some of our own people. Wherever there have been developments in mining in the Empire they have, sooner or later, absorbed a considerable number of our own people. I am strongly inclined to the belief, as are many other Members of the House when it is a question of making a loan or a grant, or giving a guaranteed loan, as in the case of Austria, to the people overseas, that I could make out as good a case for my own fishermen as any Government could make out for Newfoundlanders.

Although we are willing to make this grant, and to pass the Bill as it now stands, it ought to be made clear in this House that by so doing we are placing additional burdens upon our people and upon our own industries. That fact ought not to be forgotten by anyone in this House. We are willing to come to the assistance of Newfoundland in a state of emergency, and I feel sure that, although it will injure people in our own country, it is only right that we should make this effort on their behalf.

6.14 p.m.


Like the hon. Member for Torquay (Mr. C. Williams), I support the Second Reading of this Bill, and I agree, after reading the very admirable report, that it is essential to carry out the obligations of the Bill. The fishery, as we know, has been the main industry, but, as the hon. Gentleman well said, there are mining and other resources which certainly would give greater security if they were developed on sound lines than if development were almost entirely confined to fishing. I support the Second Reading of the Bill in the main because it is a reversion to the traditional role of this country. The traditional role of this country is that of a great export shipping nation and an international banker. If we study our history, we find that a great deal of our wealth has come from pursuing that role. The income of this country from lending operations amounts to something like £70,000,000 in a normal year. In a normal year also in shipping our income amounts to £130,000,000. Therefore, we derive £200,000,000 from the pursuing of that role. The right hon. Member for Wakefield (Mr. Greenwood), the other day, spoke of the black-coated brigade rotting in suburbia because of the depression and the terribly hard times that many people are experiencing, and he was anxious to widen the scope of the Unemployment Bill on their behalf. I had a great deal of sympathy with what he was saying. He desired to extend the Bill to those with an income running up to £300, £400 or £500 a year.

If we could restore London as the monetary centre and the lender to the world, that would bring business and employment to this country and it would stimulate industry and benefit the working classes, to whom the hon. Member for Bridgeton (Mr. Maxton) referred in his interesting and witty speech. To imagine that the bondholders are criminals and that anyone who has shares in anything is doing wrong is absurd. We all have some shares in something; otherwise, how would industry be carried on? I have been more often in the Lobby with the Labour Opposition than any other Liberal, but I must part company with them to-day when they oppose this Measure. What is their attack on the Bill? They say, in the words of the hon. Member for Rothwell (Mr. Lunn), who attacked the Financial Resolution, that they are Socialists and that Newfoundland ought to be governed on those principles, and left to her own resources. If Newfoundland were a Socialist State, what would be her resources to-day? She has great resources, but the one resource which she lacks is credit. Where can she get credit? If she were a Socialist State she would have to go to some capitalist to get credit. Credit is based upon capital. How is she to get credit? Does the hon. Member seriously suggest that she must not apply to a capitalist country for credit? However much hon. Members may attack capital, they cannot get away from the fact that capital is the basis of credit and therefore Newfoundland comes to Great Britain, which still is a great capitalist State, and asks for credit.

Hon. Members above the Gangway desire that Newfoundland should become a Socialist State, and they are entitled to argue that point, but we are dealing with a concrete case of a defaulting country which is rich in natural resources, which has a manly, vigorous and brave people, few in numbers, a picked race we might say, men who have shown in the War that they were abnormally skilled as seamen, unequalled in bravery, but they are now in difficulties, their country is in difficulties, and one resource which they lack is credit. They come to Great Britain, and Great Britain has placed their securities upon the trustee list. That trustee list extends to the whole of the British Empire. If we allow a default in that list, if we let in a little water or allow one default in one portion of that trustee list, it will affect all the others. It will even affect British credit. To put it on no higher basis than the maintenance of our own credit, it is of the utmost importance that we should not allow any default, in order that we may maintain and improve the credit of the whole.

It is self-evident that this policy is not in the interests of the bondholder only. I have a great deal of sympathy with the bondholder. He holds the security, but that security is dependent upon the credit of Newfoundland. If she has no credit, cannot develop herself and has to come to Great Britain for credit, surely it will not only benefit the bondholder to maintain her credit, but it will help Newfoundland and the general credit of Newfoundland by enabling her to maintain the interest upon her debt, thereby enabling her to engage in further developments, in opening up the resources of the island. If she does not default and we guarantee the interest upon her loans, that will enable her to obtain other capital for developments, and the islanders themselves will derive great benefit as a result of that procedure.

The hon. Member for Altrincham (Sir E. Grigg) made a very interesting speech, and asked that some consideration should be given to the islander who would have to pay taxes. He suggested that some provision should be made for representation being given to the Newfoundland people and said that he was prepared to put down an Amendment to that effect. I agree that if we could give representation to the Newfoundlander in this scheme it would be in accordance with the democratic principle that where there is taxation there should be representation. The hon. Member for Bridgeton said that in supporting the Measure we were pursuing a policy which was the negation of democracy. Surely, if Great Britain is going to make advances to Newfoundland, guaranteeing her loans, that is a species of obtaining money by taxation, and deserves representation. It is not a negation but is a carrying out of the democratic principle that if we guarantee her loans and make advances to Newfoundland we should have representation through our three Commissioners who, with three Commissioners from Newfoundland, are to carry on the government of Newfoundland. I agree that if some provision could be made for the taxpayer in Newfoundland to be represented it would carry out the constitutional principle on a democratic basis.

Those who criticise the Bill suggest that we are devoting ourselves to helping an outstanding Dominion and neglecting our people at home. I yield to no one in support of any measure for the development of our own Islands, any measure of public works that can be carried out reproductively in these Islands, but we have to remember that the number of works that can be started in this country is limited. We may do something for housing and something in public works, but unless we can restore London as a monetary centre and can again begin to lend freely all over the world, we shall not get out of our depression. To get out of the depression we must increase the purchasing power of the people. By merely engaging in palliatives or public works, we do not advance our case, and do not get out of chaos and depression.


Who sent the pound down?


My right hon. and gallant Friend is always thinking about the pound. The policy that I am supporting will improve the pound. I desire to see the pound improved. I desire to see a legitimate rise in prices brought about by the pursuit of the policy that I am advocating. We must lend freely. I do not suggest indiscriminate lending over the Empire or wasteful and unwise lending. Every scheme, this scheme and every scheme, must be considered on its merits very carefully, and the lending should be done with wise discrimination. If we can lend freely and restore London as the monetary centre of the world and begin lending abroad, every loan that is floated in this country will mean—


Surely London is a monetary centre now. Why does the hon. Member talk about restoration?


I mean the restoration of the Gold Standard, so that a bill on London is as good as a; old. If we restore London and restore specie payments—


Is not a bill on London now as good as gold?


No. A bill on London is not as good as gold to-day, but it would not be in order to discuss that now. If we can restore London and increase the applications to London for loans from all parts of the world, it will mean that every loan that is floated in London will go out of this country in goods or services. If a loan is floated in London for an Argentine railway, it does not go out in cash. This Newfoundland loan will not go in cash, but in goods and services. Therefore, if we can increase the facilities for lending in London, and London resumes its ancient role as the great international banker, we shall increase the purchasing power of the people—


London has never lost it.


On that point—

Mr. DEPUTY-SPEAKER (Sir Dennis Herbert)

I hope the hon. Member will remember the remark he made a few moments ago.


The remark about not being in order? I must admit that the remarks of the hon. Member rather stimulate me, but I do not intend to pursue that subject further, except to say that the action incorporated in this Bill will, I believe, if we continue to follow such a line, lead to our getting rid of our depression and to improving the status of the working classes, whom hon. Members above the Gangway particularly represent. We, too, claim to represent the working classes and that we are a working class party as much as hon. Members are. We do not think that they have a monopoly in the representation of the working classes. I believe that there are many Conservatives of the working class.


Hear, hear. Not many Liberals.


We claim that we are entitled to speak for all classes of the community. If we can help Newfound- land now, if we can carefully nurse the country, it will recoup us and will assist the development of a policy of lending freely but with discrimination, which will be of great help in getting us out of the prevailing depression. The commissioners to be appointed will, of course, be men of judgment and capacity, I cannot imagine they will be appointed unless they are, and, therefore, if such a policy is carried out, then in time Newfoundland will find herself worthy of the confidence we have in her, and the House of Commons will live to rejoice that it supported the Second Reading of this Bill.

6.32 p.m.


While there are sentimental reasons why Newfoundland should have one more chance, there is one feature in the Bill for which I have the greatest dislike, a dislike which is, apparently, shared by the party opposite, though perhaps not for the same reasons. When this country, for the best of reasons, admitted the Colonies and Dominions to the Trustee Acts, it entered upon a semi-obligation, not one to be commended and one which, I am afraid, by this Bill we may appear to support. By giving a special privilege to the Colonies and Dominions to be put on the Trustee List, we unconsciously gave investors—I mean ignorant investors—the idea that they were taking no risks in taking up Colonial or Dominion bonds. Since then such investors have had the idea that the British Government in times of difficulties will take over the responsibility for these bonds. For once I agree with the hon. Member for Bridgeton (Mr. Maxton). I am not at all sure that in making ourselves responsible for the whole of the loans of Newfoundland we are not incurring a liability running into hundreds and may be thousands of millions of pounds in the future. It is only a short time ago that some of the Australian States, indeed the Australian Commonwealth, having incurred rashly great liabilities, were quite prepared to contemplate default, and if that had occurred the question was whether we should step in and rescue them from the difficulty.

The same thing might occur with other Dominions. By guaranteeing £17,000,000 under the Bill, we shall quite distinctly lead the public to believe that in times of difficulty we shall be responsible for all of the Dominion's loans. The initial mistake which we made some years ago gave a false cachet to Colonial securities. There are three classes of British securities, first, a direct obligation such as our War Loans and Consols, then there is the indirect obligation, which means that this country had guaranteed a loan like the Irish loan, and there is the third class, such as trade facilities, which we also guarantee. The securities which we guarantee do not fetch quite the same price, they yield a little more than direct securities, and the person who buys them knows that he may have to wait a little longer for his interest, the debtor may fail to pay, and then the British Government will pay. In the case of a large amount of Dominion securities we have given no obligation, but the holders still seem to think that we shall help them out.

These securities of the Dominions are issued at prices which yield the holder considerably more than direct or indirect British Government securities, and the people who buy them know very well what they are buying. The securities of the Newfoundland Government a short time ago stood at 55; they stand at 100 to-day. In the case of Australia, the securities fell to 50; they stand at 100 to-day, because Australia has completely put her house in order, they have met the situation with confidence and pluck and their Government is entitled to all respect. But there may come a time when a Government will come into power there which may play just the same tricks as were played a few years ago, and it may be the case that we shall be asked, in view of what we are doing here today, to get them out of their difficulties. That is the serious risk we are running. I am in agreement with hon. Members of the Opposition that people who hold Newfoundland bonds expected to get a higher return than if they had gone into British Government loans, they ran that risk, and they would have lost their money but for the British Government intervening. It is a bad precedent. The people in Newfoundland are ignorant. They are presumed to have a constitutional Government, but the fishermen rarely read the newspapers and take no interest in their Government. I do not quite know how their Members of Parliament are elected, whether they vote for themselves or who votes for them. But these ignorant people have permitted their financiers and political rulers to get them into this trouble. Nobody has pointed out to these poor people, or, if they have they have not appreciated the fact, that if you have a deficit for 10 years you will have to borrow; that if you lose credit you can no longer borrow to pay the deficit; and that in that way lies ruin.

I feel that the Government will have great difficulty in finding a Governor and three just men from this country and three just men from the other side to serve. The hon. Member for Altrincham (Sir E. Grigg) made a most interesting speech on the difficulties which these seven men will have to face. I agree with him that in certain circumstances a trading or chartered company has done great service in the past, and I think that some such company would be of immense service to the new Governor and his six assistants in carrying through any reforms which will enable Newfoundland to recover. It is a doubtful proposition whether Newfoundland can ever recover in the sense of being able to pay the large debts which have accumulated already or the presents which we are going to make, but I think for sentimental reasons that this House is right in giving the Dominion a chance. The people of this country are under no obligation to take over the bondholders at this juncture and make themselves responsible for the whole £20,000,000 sterling for that purpose, and then to lend new money.

I think that the new money, which I would not stint for the next few years, with good government and capable advisers, would enable the country to be developed and we should then know what it is worth. After that the people of this country would be entitled to demand interest on the advances made and then some arrangement might be made to pay the whole of the £1,000,000 a year. I was pleased to notice that in regard to the difficulty of finding a Governor who could appeal to the poor people of Newfoundland the hon. Member for Altrincham suggested that they might send out two Members from the British House of Parliament. We have one Member who is a most persuasive speaker, one who we know can give good advice and instruction to the poor people, the hon. Member for Bridgeton, who, I understand, is prepared to go out not as Governor, but in some high capacity. With his matchless gift for approaching poor people I commend the suggestion to the Government that they might consider asking the hon. Member to spare us his society here, which we all appreciate, and go out to take up a position in the Newfoundland administration.

6.40 p.m.


I entirely agree with the last few sentences of the hon. Member for the City of London (Mr. E. C. Grenfell). I think it would be an excellent thing to send out the hon. Member for Bridgeton (Mr. Maxton), who would make a much better Governor than many. But really the speech of the hon. Member has been made six months too late. It is all very well for him to say that he agrees with the Labour party in opposing the Bill to-day; why did he not make the speech six months ago when the fatal step was taken? It is too late now. Six months ago we decided to pay, otherwise Newfoundland would have defaulted. That was the moment when the step was taken, and the hon. Member should have protested then. I think it is a very serious step; indeed, much more serious than the hon. Member has made out. This is not a question of taking over the responsibilities of a Dominion, but of preserving the financial honour of bonds not merely across the seas but in this country, for which we have given the sanction of trustee security. Having done this in the case of Newfoundland, how are you going to refuse it to Glasgow?

In this Bill we have, for the first time, something for our money. I am in favour of the Bill. Six months ago we were pledging British credit for all time on the Dominion's loans without getting anything for it. Here we are getting something. We are paying £6,000,000, but we have bought back Newfoundland. Newfoundland has sacrificed self-government in order to restore her credit. I am delighted that they have agreed to this step, because I think people should realise that when bankruptcy stares them in the face they must make some surrender in order to carry on. The real question is, can we make a success of Newfoundland now that we have got it back? I disagree profoundly with the hon. Member for Altrincham (Sir E. Grigg). I do not think that it will be half so difficult to manage Newfoundland with six appointed advisers as it was to manage Kenya with an elected council. The comparison is very close. It is true that in Kenya the white population is only about 15,000, whereas in Newfoundland there are nearly 200,000 people, but in both cases we have passed through times—happily they are past in Kenya—when deficit followed deficit. The hon. Member for Altrincham knows perfectly well the extreme difficulty he had in that country in keeping the finances sound and the country satisfied. It would be easier with six counsellors and without a Settlers Association.


Is the suggestion of the right hon. and gallant Gentleman that the taxpayers should have no representation whatever?


Yes, certainly. Under this scheme Newfoundland has no representation whatever. I wish that Kenya had not either.


What about the natives?


When you give the natives a vote it will be a very different thing. Then I would be entirely with the hon. Member, but until then, no. Here you have the responsibility thrown entirely upon this House and the Secretary of State. I rather demur from the suggestion of the Secretary of State that his power there would be short lived. I do not think he can make a success of it, or that we can, unless there is a considerable number of years for the scheme to run. The first problem is that, however excellent your Governor and your advisers, you are bound to get dissatisfaction among the people in Newfoundland. How can that best be overcome?

I beg the Secretary of State to consider now the point which I brought up before, and that is the urgent necessity of having in this House some representation of Newfoundland or of any other Dominion that comes along in the same way. After all, the position of Newfoundland will not be very different from the position of Scotland. Newfoundland's population will justify one Member here, and if we are to tax them, if we are to make their laws, if we are to know the dissatisfactions that will arise in Newfoundland, it seems to me to be urgently desirable that in this Bill we should arrange for a really great new departure, the beginning of an Imperial Parliament with representation here of those Dominions which through difficult financial circumstances have decided to come back to the Mother Country. I cannot see the slightest objection to it. There is the merely technical objection that a Member for Newfoundland will be passing laws and levying taxation upon the people of this country. So do the Scots to-day. I do not think that that is an objection which anyone in any part of the House would take. We here as a body should welcome the presence of a Newfoundland Member. Observe that in the very tenuous opposition that there was to that resolution in the Newfoundland Chamber, the suggestion was made and was voted on that they should ask for a representative in the. Imperial Parliament to voice the views of the country. It is not embodied in the report of the commission, but there is no earthly reason why we as a sovereign House should not make the change and have here a representative of Newfoundland.


What qualification would a Dominion or a Colony need to have in order to get a seat in this House? Would it be bankruptcy?


I would not make it a qualification, but I would make the circumstances as they are in Newfoundland the excuse for a new departure which I hope might grow. We may see other countries and Dominions in very much the same position. Certainly the pill would be gilt if they could get representation in this House to make up for the destruction of their representative institution.


Would that be after an election in Newfoundland?


As elected by Newfoundland, yes. When we have a general election here include Newfoundland. Why not? I see no reason against it. I should welcome representation of the Channel Islands. We might get them, too. But this is only one element in the possibility of making a success of our government of Newfoundland. It is true that the success of that government depends very largely upon the people you send out. In the first place I would beg the Secretary of State to consider the advantages of having the same type of man as is selected by the Colonial Office, employed in the civil administration and the legal administration of Newfoundland. The Englishman is appreciated in that country. The type you send out would be an advertisement for England. You would get just that beginning of the absolutely impeccable, incorruptible class of Englishman who in the Dominion or Colony which do an enormous amount of good.

Take the case of the Colonial Office servants that we have in Nigeria, for instance. There we have the pick of England considering their job as something really worth while, making their mark on the world and on history, recognised by the natives of the Territory as being their best friends, being indeed the constructors of their new civilisation. I would send to Newfoundland the same type of man to do the same type of work. Send them out young and unmarried. Let them marry out there. Social intercourse is the secret of the whole thing. If you can get, not promoted policemen as in your wretched Protectorates, but this type of Englishman carrying on the government of that Colony, he will be received with open arms there, and that will make for a permanent union between the people of Newfoundland and the people here.

There is another thing. This is not a question just of money. What we really need is to export, not so much English gold as English people. In Newfoundland and Labrador we have a vast undeveloped country. It is said in this country that there is not land enough, but that is absolutely untrue. You cannot say that of Newfoundland and Labrador. Labrador is mostly under snow, I know. So is Scotland. Newfoundland is a country very nearly as large as Great Britain and with a population about that of Bradford. A good deal of the country is mountains and forests, utterly undeveloped. We are not allowed to send our people to Australia and Canada; they are rejected from every one of our own Dominions. Now we have a chance of starting real colonisation schemes which would help our unemployed and at the same time be a permanent bond between Newfoundland and ourselves. That would make for the prosperity of Newfoundland. I am not one of the school which I know is too prevalent on the opposite side of the House—the school which believes that the prosperity of a country varies inversely with its population. I believe that the more people you have in Newfoundland the more prosperous Newfoundland will be. I should welcome a chance being given to people here, to assist emigration in Newfoundland and Labrador. I should regret that it was necessary for them to go there when the land in this country is equally available, if only the price were equally low.


What would they grow in Newfoundland? Of course the right hon. and gallant Gentleman knows the country?


I do not know it.


I do. There is nothing to be grown there. You can catch fish and kill caribou and take salmon, but I doubt if you could grow even potatoes there.


Send them out and they will be like the settlers in South Africa, who could turn their hands to anything. You would get the ordinary English settlers, as I have seen them in South Africa, who would get many things to grow. It is only a question of how much capita] you put in to make things grow. I have seen cabbages growing in asphalt. The application of doses of capital will vary your margin of cultivation in every country. Do not tell me that you cannot grow in Newfoundland things which will keep people alive, seeing that there is a considerable number of people there already being kept alive. At any rate give our chaps a chance. If you give a man a piece of land he will make something of it.

That brings me to the most important section of the report of the Commission, dealing with the land question. The Commission point out that most of the land has been alienated, that it has been bought up by syndicates and companies, of which we hear so much, and by speculators, and that it is lying idle and undeveloped. The whole country has passed into the hands of private persons who cannot use it. This admirably Conservative and sensible Commission reports as follows: We recommend, therefore, that all un-worked land, however held, should bear an annual tax of so much per acre, and that in the event of the tax being in arrears and unpaid for six months the licence or lease should be cancelled, or in cases where land is held in fee simple that the land should revert to the Crown. The proposal includes land situated in Newfoundland and Labrador. For different reasons from those which moved the hon. Member for Altrincham, that seems to me to be an admirable suggestion. Seventy per cent. of the revenues in Newfoundland comes from import duties—a perfect heaven for tariff reformers—and only 30 per cent. comes from indirect taxation or any other source. Here is a chance to get a little direct taxation out of the speculators and people who have grabbed the lands of Newfoundland. Then you will find that that land will come back into the hands of the State, or else that the tax, when paid, will induce the gentlemen who have speculated in the land to get out and allow somebody to use the land which they have hitherto monopolised. The principle applies in this country as well as in that. I ask the right hon. Gentleman the Secretary of State for the Dominions what he is going to do about it. If he leaves it to the Chancellor of the Exchequer to decide, be will never get a penny out of the land of Newfoundland. But are these recommendations going to be adopted? This tax is not an ideal tax, I admit; it is so much per acre on the unused land in order that the price of that land might go down, and it might become available either for the small concern or for the big company, whichever you like.

The alternative to that, I am sorry to say, which was advocated both by the City of London and by the Government of Kenya, is the establishment of these gigantic chartered companies. It is just another form of scuttle; you get rid of your responsibility for governing the country and hand it over to the City of London. I shall be surprised if we do not, but I hope that we shall not do that in Newfoundland. It is merely a form of abdication—the desire to get rid of responsibility and at the same time to establish a chartered company, which is not always so successful as it was in Nigeria. Like the old Government in Newfoundland, a chartered company will go ever more and more bankrupt and will forget its duties to the people of Newfoundland in its anxiety to pay salaries to its officials, and the last state of that country will be worse than the first. No; keep away from chartered companies, keep away from big concessions, and make the land of Newfoundland available both for the people of Newfoundland and for the people of this country. The taxpayers of this country are paying £3,000,000, and that is our justification for saying that we are entitled to increase the population and the prosperity of that country by the organised and even subsidised and supported colonisation of any people who are willing to go out and try to wrest a living from the land of Newfoundland.

I should like to make a small suggestion. It is very important to have the culteured English permanent official in that country. It is almost as important to have stationed in Newfoundland some of our troops. Why Halifax, when it might be St. John's? People spending money there will help to make the place prosperous and will immediately create a permanent vested interest in Nwfoundland itself in favour of retaining the connection with this country.


If I might interrupt the right hon. and gallant Gentleman', there are no British troops in Halifax; they are all Canadians.


Send them to St. John's from. Egypt, then, where they are not wanted. The Egyptians do not pay them in Egypt; we pay them. It is a very useful link to have a representative of the British Army in a colony. Social contact also comes in, and you help to cement the real union between Great Britain and what may be described as the new Empire. This is a precedent, and it is no use either the Government or any hon. Member for the City of London saying that it is not. In Newfoundland the Government has been corrupt. We have done these things for a Government of which no one in this House or in this country could be proud. If the same situation arose in one of our other Dominions would it not have even a stronger claim, and would the bondholders not have a stronger claim? You have to consider your long-range policy. To my mind, the long range policy should be the reconstruction of a smaller British Empire, it is true, but the reconstruction of a body more united than that which we have at present; and this House, with representatives from the new Empire, would have a united and solid responsibility for all parts of it. Hon. Members know that I have urgently suggested that the difficulties in India should be met in somewhat the same way. The possibilities of this scheme for the future development of Great Britain are worth considering, and the first step is to get representation in this House of the unrepresented people of Newfoundland.

7.7 p.m.

Major-General Sir ALFRED KNOX

I am going to support this Bill, but with many misgivings. As explained by the hon. Member for the City of London (Mr. E. C. Grenfell), it is very hard to see where this sort of thing is going to end. I should like to support the last words of the previous speaker. The right hon. and gallant Gentleman spoke about the danger in India; I wonder if in a few years to come we shall not be faced with a similar Bill to help out the newly-appointed Government of India. I can understand an hon. or a right hon. Gentleman rising in this House and pointing out that it is not really the fault of the ryot, the poor cultivator of India, who has been misled by the Indian politician, and that on those grounds we are really responsible for getting him out of his trouble. In a sense I understand that all this trouble has come about in Newfoundland owing to corrupt government. Every country deserves the Government it gets, and many countries get all they deserve. I should, however, like to ask whether any steps have been taken to bring the corrupt politicians of Newfoundland to book? We are going to vote a lot of money which we could very well use in this country. We more or less look after our politicians in this country and prevent this sort of thing from happening, but if we are going to allow a free hand to Dominions and see them through their troubles, surely we ought to demand that the people responsible—in this case the politicians—shall be brought to book and give some account of why these things have happened.


I do not understand what the hon. Member means by the politicians being brought to book. The Royal Commission reported that the fault is not entirely with this Government or the last, but that the trouble has taken place over a series of years; the whole position was corrupt. Does my hon. Friend suggest that the Government should institute a prosecution against everybody? Is it not far better to face the fact that mistakes have been made? We want at least to give Newfoundland a better chance for the future rather than blame her for the past.


I quite agree with what the right hon. Gentleman has said, but surely there is a definite cause to this trouble. It is perfectly well known that Ministers can always get away with it and that no one else can. If an hon. Member puts £100 out of his own money into a bad investment he has to stand the racket, but when a Minister does the same thing, he never has to answer for the consequences. Surely someone should answer for the consequences if Minister after Minister has acted not only foolishly but corruptly.

7.10 p.m.


My right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) has once more justified his reputation of being the best Imperialist in this House. He has spoken strongly in favour of Imperial settlements, and that is what is largely needed at the present time. The hon. Member for Bridgeton (Mr. Maxton) is always interesting, but not as a rule very constructive. This afternoon he has blamed the Government for what they propose to do in Newfoundland, but the solution of the question that he offered is to say to the people of Newfoundland, "Here is your island; make your own of it and do the best you can with it." We know that the people of Newfoundland are at present in a state of misery and suffering; their credit has gone. The hon. Member would make over the island to them in this state, and the result would be that the suffering and misery would be intensified. I sympathise, however, to a certain extent with the argument of the hon. Gentleman when he speaks of the size of the responsibility that we are undertaking and the largeness of the gift—£800,000—that we are making without any guarantee from Newfoundland.

I would remind the Secretary of State for the Dominions that it is very difficult for him to justify such a gift to Newfoundland and then to leave the ex-service settlers in Victoria in the state in which they are. The hon. Member for Bridgeton referred to those settlers. We know the story of those settlers and we know that, as long as their claims remain unsettled, so long will there be an obstacle to migration from this country. We must remember that a gift of £800,000 is being made to Newfoundland because the rulers of Newfoundland have done ill. The settlers in Victoria are in the state in which they are because the Government of this country in 1922 and 1923 practically backed a scheme which was a bad scheme, and which placed a largo number of those settlers on unsuitable land. Now they have been offered settlements at a flat rate without taking into account the various circumstances of each settlement.


I am sorry to interrupt the hon. Member, but I do not think that he is fair. He is not doing himself justice, and he is certainly not doing me justice. He knows perfectly well that he asked me to see a deputation on Friday, himself leading the deputation, on this very matter.


I was on the point of stopping the hon. Member, and telling him that he must not discuss that matter on this Debate.


I apologise to you, Mr. Deputy-Speaker, and to my right hon. Friend. I admit that I went too far in the matter. The hon. Member for Bridgeton referred to the contrast between the treatment that is being given to the people of Newfoundland and that given to the settlers in Victoria, and I had intended to make the same comparison. The hon. Member for Bridge-ton is a severe critic, but he is a less competent builder. He would make over the island of Newfoundland to the people and say, "Make what you can of it." Was it not, however, the people of Newfoundland who chose the rulers who have done so badly? What guarantee would there be that the same misfortunes would not happen again in a greater degree in Newfoundland? The hon. Member for Bridgeton made one observation with which I agree—that human sentiment is often more powerful than human interest in determining affairs. The story of Newfoundland is full of human sentiment and romance ever since the days when Cabot first took possession of the island in the name of the King. It is not the first time that Newfoundland has looked to England for succour. Hon. Members, I am sure, recall the story of Sir Humphrey Gilbert who founded the first colony in Newfoundland and of how that colony failed owing to adverse circumstances and they may also recall the lines: Sir Humphrey Gilbert, hard of hand, Knight-in-chief of the ocean sea, Gazed from the rocks of the New Found Land And thought of the home where his heart would be. We know the rest of the story and how he was lost on the voyage home. Speaking on the Financial Resolution last week my hon. Friend the Member for Roth-well (Mr. Lunn) said he objected to helping people who did not help themselves. Perhaps he ought to have added that his friends would help people who helped themselves at our expense. He will understand the allusion. But I know that he is a good Imperialist and I would ask him in this matter to forget party and to remember the good of the British Commonwealth of Nations. It was refreshing in that Debate to hear the speech of the hon. Member for Orkney and Shetland (Sir R. Hamilton) who. followed the hon. Member for Rothwell. The hon. Member for Orkney and Shetland, as one who understands the Empire, showed himself a thorough supporter of what the Government are doing in this matter. The hon. Member for Rothwell said he was not prepared to believe that the island could be developed by private enterprise, but, as the hon. Member for Orkney and Shetland pointed out in reply, the whole Empire has been developed by private enterprise.

My particular object in rising this evening, however, is to back up the appeal made to the Government by the right hon. Gentleman the Member for Spark-brook (Mr. Amery). He said that there were two alternatives before any Government or Commission which took over the affairs of Newfoundland, either timidly to nurse the island back to solvency or else to undertake a bold policy of settlement. That is what I regard as essential both to the island and the Empire. What we want at the present time is Empire cooperation. Speaking the other night, Mr. Bruce, who so ably represents Australia in this country, asked for the greatest possible measure of Empire cooperation. We want that co-operation in connection with migration, in connection with trade, in connection with education. In all these matters the ablest minds of the Empire ought to be working in unison. We hope that when the new Government take office in Newfoundland they will make it their special business to develop trade and shipping between Newfoundland and this country. In every direction we see the need for protecting our industries. One was glad to read the speech of the President of the Board of Trade last night in reference to our shipping interests. It is a sorry state of things when our shipping lines have to come to terms with the foreigner in order to obtain a share of the transport to the Dominions and to our own Colonies. If the new order in Newfoundland is informed with that spirit of developing that country and developing British interests, it will result in great good both to Newfoundland and to this country.

7.20 p.m.


I feel some doubt as to the wisdom of the Government in dealing with this matter as they propose to deal with it. I cannot help thinking that they have been somewhat extravagant, and I feel considerable sympathy with the views of the hon. Member for the City of London (Mr. E. C. Grenfell) that they have shown too much tenderness in the matter of finance. As a result of our policy, and as a result of administration during the next few years, we may create for ourselves a great deal of odium and in three or four years time I fear there will be no people more unpopular in Newfoundland than the House of Commons and the people of this country. But I wish to deal with one special point to which little referencee, if any, has so far been made and I would ask the Under-Secretary of State for Dominion Affairs to be good enough to deal with it in his reply. Not nearly enough attention has been given to alternative methods of dealing with this matter. There is the question of Labrador. I hope that under the new system the question of developing Labrador, possibly of selling Labrador to Canada or placing it under a chartered company, will be seriously investigated. It seems to me that the possibility of cooperation with Canada, of finding a way out of this difficulty, by associating Newfoundland with Canada rather than with this country, has not been gone into as thoroughly as it ought to have been.


I was very careful to point out that all these possibilities were explored, including that to which the hon. Member refers, and that in Canada and Newfoundland there is no desire for it at all.


I heard what was said by the Secretary of State, and I appreciate his point, but I cannot say that I am satisfied either with what he said or with what the report says, as a reason why we should not explore that question further. My right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) said he would like to see Newfoundland represented in Parliament. So would I, but not in this Parliament. I would like to see them represented in the Canadian Parliament. It is obvious that, from the historical, financial and commercial points of view, that should be the ultimate destiny of Newfoundland. I agree that you cannot force them in and you cannot use undue pressure, but the circumstances are such that a greater effort might have been made and should now be made to envisage possible developments in that direction when the time comes to end the administration of the island from this country.

What is the history of this question? When Canadian confederation came about in 1867 it was anticipated that Newfoundland would join Canada. The Newfoundland delegates agreed to it and it was actually referred to in the Act, but the matter was so long delayed that, when a vote was finally taken in Newfoundland on the subject, owing to controversy and friction which had arisen meantime, the proposal for union was, to the great surprise of many people, rejected. The question arose again in 1895 when there was a financial crisis in Newfoundland, and negotiations took place between the Canadian Government and the Newfoundland Government as a result of which agreement was nearly reached. It was only a question of £1,000,000 which was between the parties. An application was made to the Government of this country to find that sum, but the Government at that time were not willing to do so and the negotiations broke down. In 1928 a debate took place in the Canadian Senate when the general view was expressed that union was desirable if it could be negotiated between Canada and Newfoundland. Negotiations actually took place in, I think, 1930, or shortly afterwards, and it was only owing to the world depression which supervened that those negotiations were postponed.

All this shows that the inevitable and natural tendency has been in that direction. Look at it from the financial point of view. Since 1895 the currency of Newfoundland has been the dollar. All the banking is in the hands of Canadian firms and a great deal of the insurance business also. About 50 per cent. of the imports come from Canada and a great many of the families in the island are getting into the habit of sending their children to Canada for educational purposes. There has recently been a union of the Methodist and other churches in Canada and Newfoundland into the United Church of Canada. Thus there are religious, educational, financial and industrial ties. One of the largest iron ore firms in the Empire, in Belle Isle, is owned by Canadian capital and one of the two large paper mills is owned by Canadian capital. It seems to me that the circumstances when this crisis arose were such as to justify serious negotiations on the basis of Canada coming to the rescue of Newfoundland. I now come to the objections which are raised to that proposal, and I would like in that connection to draw attention to one or two passages from the report. Paragraph 533 states: Now, in 1933, the subject comes again to the forefront and it was urged by some of the witnesses who came before us that the union of the two Dominions would provide a solution of Newfoundland's difficulties and would at the same time lead to the consolidation of an enlarged Canadian Dominion. But it is clear for a number of reasons … that unless the Canadian Government were prepared to offer strikingly generous terms no such solution would be acceptable to Newfoundland public opinion. When you have a Colony in the condition in which Newfoundland is at present, when they have so mismanaged their affairs and indulged in such an orgy of corruption, are they in a position to say, "Our terms are so and so and we will not accept less"? Of course, they will not accept less when they have the offer of a grant from the British Government. Naturally they are not then in- clined to make terms which ordinarily a person in depressed financial circumstances would be inclined to make. I think it has been made far too easy for Newfoundland to avoid entering into serious negotiations with the Canadian Government. In paragraph 540 of the report we find the following passage: Apart, however, from the hostility which proposals for political union might be expected to evoke among certain interests in Newfoundland, it is fair to say that such proposals would at least receive more enlightened consideration and discussion to-day than would have been the case, say twenty years ago. There you have it recorded that there are certain interests in the island, certain financial and industrial interests, who would be disadvantaged by union.


Including the corrupt Ministers.


It does not seem to me that that is any reason to stand in the way of union between these two States—that there are certain vested interests, not very reputable or sound in certain cases, though not in all, taking upon themselves the responsibility of saying, "We object." They are able to get away with it because of the very lucrative offer that is being made by the British Government. Paragraph 542 of the report says: The possible disadvantages which might be felt by a small unit on being absorbed by a large one are apt to be stressed while the positive advantages of such a course are ignored. That is always so but this is the interesting point— Chief among the possible disadvantages is placed the necessity for direct taxation hitherto unknown to the fisherman in Newfoundland. Is that a good reason for not negotiating a union between the two countries—that they might have to pay more direct taxation than they do now? It seems to me a good reason in the opposite direction. I submit we have not yet had from the Government sufficient explanation or justification of the reasons why a more determined effort was not made to find a solution on the lines I have indicated. I hope that, whatever may be said with regard to the past, my hon. Friend will be able to indicate that during this period of months and years that lies in front of us the matter will be gone into with all seriousness from this point of view. I think it would be disastrous if the impression were created that after five or six years of admirable, upright administration by British civil servants and others, as will no doubt take place, we shall simply hand the Colony back to the same people who have made such a terrible mess of it, and there will be no reason why they should not do exactly the same thing again.

I hope, and I think it should be said on the Floor of this House, that we shall use all our good offices in the most friendly and diplomatic way—and I hope my right hon. Friend will use his well known powers in that direction—to bring the two countries together, so that when finally we have set Newfoundland on her feet again, she will find her future destiny, not as an independent unit. She has shown herself too small an area for that, and she has a population, after all, of not much more than one large constituency in this country. I think it would be the wisest policy, not only for Newfoundland, but for this country and for the British Empire as a whole, if she took the position which history, tradition, and her interests at the present time show to be the wisest and soundest, and in the long run the only possible policy for her.

7.32 p.m.


In rising to support this Bill, I cannot help expressing a certain amount of apprehension about the terms of the Bill and sympathising with the hon. Member for the City of London (Mr. E. C. Grenfell) when he talked about the financial position of Newfoundland with regard to the bondholders. I think it has been made far too easy in the past for that country and other countries to borrow money, and unless some steps are taken to inform bondholders that their risk is a real risk, there is every possibility of other countries within the Empire becoming in very much the same position as that in which Newfoundland finds herself to-day. In listening to the speech of the right hon. Gentleman to-day, and in reading the Royal Commission's Report, one cannot help being impressed by the tragic condition of this little island of Newfoundland. If, as the hon. and gallant Member for Wycombe (Sir A. Knox) says, every country gets the Government it deserves, one wonders what poor little Newfoundland has done to deserve the type of politician inflicted upon her in recent years. That politics should become an unclean thing which no self-respecting person will touch, is a very sad reflection upon people who undertake the government of their country.

To my mind, it is the inevitable outcome or consequence of a system which prevails, not only in Newfoundland, but in other parts of the Empire, and I attribute the present position of that country to the absence of a permanent Civil Service. That every time there is a change of Government in the country every holder of office should be swept out by the incoming Government and his position filled by party hangers-on and job-seekers of the other party, is bound to lead to the corruption which has been going on in Newfoundland for a hundred years, and I hope that before any commission that is set up by this Government hands over the reins of government to the people of Newfoundland again, it will make it a condition that there should be a permanent Civil Service, quite outside of party politics, and that there should be somebody similar to our Auditor and Accountant-General, who cannot be dismissed by any Government, but who should be responsible to the Governor-General or to His Majesty. In that way you might ensure a future Government on sound economic lines; otherwise, I see no hope for an island of this size—as the hon. Member for East Wolverhampton (Mr. Mander) said, about the size of an ordinary constituency in this country—ever becoming a sound economic unit in itself. It can only be that if it is developed on broad lines and if it follows a policy of rigid economy and has its finances very carefully guarded, but if you allow successive Governments to take over private enterprises and try to run them on State lines, there is no hope whatsoever for this small island ever becoming a self-supporting unit.

Hon. Members on the Opposition Benches have suggested that this sorry state of affairs in Newfoundland is due to private enterprise, but I submit that those hon. Members have not read the Report of the Royal Commission. If they will read it, they will find that most of the losses are due to State enterprises. Take, for instance, the railway. They state that the cost of the railway, from first to last, has been equal to half the present public debt, and that its upkeep demands an outlay greater than the country is ever likely to afford; and they suggest that the branch lines should be abandoned. It is a State railway, run on uneconomic lines, as all State railways have been throughout the Empire.


It was taken over after the private firm had failed.


But they were in a far more favourable position then than they would have been otherwise, because they did not have to pay the compensation or to pay the bondholders. Therefore, there was every opportunity for the State to run it on economic lines. Take the State hotel in St. John's, which was a private enterprise and always paid while it was a private enterprise, but has never paid since it was taken over by the State. I therefore submit that hon. Members should make a very careful scrutiny of the Report of the Royal Commission before making those suggestions. Another suggestion of the Commission is that the dry dock should be handed over to private enterprise, and I think that is the only hope for that country. I agree with the hon. Member for Altrincham (Sir E. Grigg), who deplored the fact that this country was going to try to run the island on State lines and who suggested that it should be handed over to a chartered company. I cannot, however, see any chartered company taking over bankrupt railways, especially as there is no hope for them to be run on economic lines.

There is another opportunity, and that is in the substitution, as can easily be done, of other means of transport for these railways, such as air travel, and also the development of road transport. If the transport of the island is handed over to a private company, and it is allowed to develop other means of communication on whatever lines it likes—as is being done to-day in this country, where the railways are being allowed to run coach services and so on in substitution for railway transport, and in that way they are flourishing as compared with what they were some years ago—that is the only hope for Newfoundland. They can never make a State railway costing as much as this one, pay.

I do not agree with some hon. Members who say that there is no hope for agriculture in this island. Unless the agricultural industry in the island is developed, there is very little hope of their ever having a favourable trade balance. I have visited Newfoundland, and I have been there when agriculture was much more flourishing than it is to-day. There again it is very interesting to read the Report of the Royal Commission, which says that agriculture in the island is very gravely neglected and which gives a few examples. For instance, in the period from 1921 to 1932 the quantity of cows in the island decreased from 18,000 to 11,800, of sheep from 86,700 to 60,000, of pigs from 14,600 to 5,800, and of potatoes from 529,000 bushels to 447,000 bushels. These are all things that can be grown in the island in far greater quantities, particularly pigs, and as their import of pig products last year was of the value of £500,000, there is no earthly reason why they should not only grow the present quantity of pig meat, but five times that quantity, because we know from our recent experience in this country how rapidly that product can be grown.

I submit that the Minister of Agriculture could give the Commissioners who are going out there some valuable information, not only with regard to the pig marketing scheme, but with regard to other marketing schemes, in order that the markets of the island might be developed. That is very important indeed. If they are to have a favourable trade balance, they must first of all attend to the marketing of their products, which has been shamefully neglected. They must also develop new products and find markets for what they already produce, such as ore, and I am glad the right hon. Gentleman has done as much as he has to try to get the steel manufacturers in this country to take ore from Newfoundland. If hon. Members study the trade returns, they will find that Newfoundland has been having to sell ore to almost every country but this country; and there is great hope there for development.

I think that Canada's misfortune in this connection is Great Britain's opportunity. It gives this country an oppor- tunity to prove to the world that she is worthy of being the centre of a great Empire, and it depends very much upon who the Commissioners are who are sent out to do this very important work. We do not know yet who they will be, but I hope that the right hon. Gentleman will succeed in getting the very best men possible, because it will be a very hard task indeed, and under the best possible circumstances it will be very difficult to bring that small island, with its small population, back even to its former prosperity or to make it a sound economic unit.

There is one feature of this situation that I do not particularly like. The Governor-General is to preside over these commissioners, and there may therefore be the possibility of His Majesty's representative in the island being dragged into conflict with the people. I hope that that may not occur and that there is no danger of any odium on the part of the people falling upon His Majesty's representative in the island, because I think that would be a very deplorable thing. I do not think that the suggestion that Newfoundland should have a representative in this House is very practicable, but I hope it will have some representation in this country while the commission exists. For some time it had no High Commissioner in this country, but I am told there is one here now, and he no doubt will be able to get into touch with the right hon. Gentleman and keep him informed of the public opinion in Newfoundland. I hope that this very fortunate and far-reaching Measure will have unanimous support, that the commission set up by the right hon. Gentleman will be successful in bringing about greater prosperity to that unfortunate island, and that by the time it is handed over to our successors it will be in a far more prosperous state than it has ever been before.

7.46 p.m.


The House will agree that my hon. and gallant Friend the Member for the Isle of Wight (Captain P. Macdonald) has made an interesting contribution to the Debate. He called attention to the Civil Service in Newfoundland, and that is a matter which will at once command the careful consideration of those of us who support this Bill. In the report which was prepared in such an admirable and comprehensive way by a Royal Commission, the reorganisation of the Civil Service was dealt with on page 202, and I should like to draw the attention of the Secretary of State to it. It is almost impossible for Members of this House who are acquainted with the constitution of our own Civil Service in this country and in many of the Dominions to believe that such a condition of affairs could be possible in any part of the Empire. I would make a particular appeal to the Government to instruct to the newly appointed commissioners to make one of their immediate tasks the reconstitution and re-establishment of the Civil Service in Newfoundland on the model of the Civil Service of this country.

The administration of this island is a historic disgrace to the British Empire, and I have the greatest sympathy with the question raised by my hon. and gallant Friend the Member for Wycombe (Sir A. Knox), who asked if any steps could be taken to bring to book the politicians responsible for the appalling condition of affairs which has resulted from their administration. Is there any means of calling to account the politicians who in one Government after another systematically destroyed the interests of their own country for their personal benefit? The story of government in Newfoundland is one of the grossest cases of maladministration that can be produced since the Middle Ages and, if the politicians responsible for it had existed in those days, they would have received very short shrift.

I wish to ask the Under-Secretary whether any arrangement will be made under the new régime for the manufactured products of this country to receive preferential treatment in Newfoundland. Will it be part of the policy of the new Government that, in view of the responsibility to be taken by the people of this country to finance Newfoundland in its exigency, we shall have appropriate preferential treatment as against other countries for our manufactured products?

An important point was made by an hon. Member when he said that the whole question of land settlement and the reorganisation of agriculture in the island should be an immediate part of the work of the commission. The list showing the decay of agricultural pro- duction given by the hon. and gallant Member for the Isle of Wight was very striking, as, indeed, is everything in connection with the social and economic conditions in that island of misery under the politicians who have been ruling.

The House listened with particular interest to the weighty speech of my hon. Friend the Member for the City of London (Mr. E. C. Grenfell), who, with several other hon. Members, made it quite plain that it would be a great misfortune if the disaster which has happened in Newfoundland and which has caused this country with generous instincts to come to its assistance, should be made the precedent for similar appeals to us in similar circumstances. I hope, as has been said by hon. Gentlemen opposite, that the investor in this country who puts his money into a dominion or colonial security will be prepared to take the proper share of risk without looking to any possibility in the future of using the credit and the guarantees of this country for the liability which he undertakes.

I support the Second Reading of the Bill because I believe it is essential to save this Dominion, but I hope that it will be a definite part of the new régime in Newfoundland to reconstruct not merely the finances of the colony, but the whole of its economic structure. It has been a field of ruin and disaster through bad management under malign political influence. It will be the task of the commissioners under, we hope, a wise and competent Governor, to restore the country to a condition of sane and wholesome economic and social life. We are to-night doing an act of great Imperial significance. We are showing our desire to save one of our own Dominions from economic destruction. We are not doing it merely to relieve the people in Newfoundland, but because we believe it is an act of duty to one of the sister nations within our Commonwealth. It is a unique instance in our dominion and colonial legislation, but I hope that it will not be made a precedent.

7.54 p.m.


I agree with my hon. Friend the Member for Moseley (Mr. Hannon) in almost everything that he has said. The main point of the hon. and gallant Member for the Isle of Wight (Captain P. Macdonald) was, as I under- stood it, to point out the complete failure of public enterprise in Newfoundland. I should like him to observe, however, that the Report categorically points to the evil of unregulated enterprise. I think that possibly both hold good. The Under-Secretary and the Members of the Opposition may particularly like certain parts of the Report, whereas I and my friends may tend to throw our main weight on another aspect of it. It is obvious from a careful study of the Report that private enterprise in Newfoundland, particularly as applied to the fishing industry, was successful for many years, but then unfortunately, owing to the absence of any form of regulation or control from the Government and many other causes, it fell into almost complete decay. I think that the advantages of private enterprise may usefully be combined with a certain amount of help and encouragement and even, if necessary, control by the Government, but I may point out to hon. Members opposite one salient fact in the Report. It is that a great deal of the troubles of Newfoundland are due particularly to the fact that the people of the country have been led to look upon the Government as a milch cow and to expect the Government to look after them in any circumstances.

I believe that we may in this country take a very useful example from that. As various hon. Members opposite have had the grace to point out, the two parties in Newfoundland were Conservative and Liberal, but unfortunately the basic policy underlying both parties, whichever was in power, was to encourage the people to think that they could rely upon the Government. Indeed, the whole political system was wrong from top to bottom. Not only were they encouraged to believe that the Government would do everything for them, but Members of Parliament themselves were the channels through which public funds were distributed. I should not care, and I do not think any Members of this House would care, to distribute the largesse which a grateful Government were prepared to shower upon the country. That is what in fact happened in Newfoundland, and if that system obtained on a small scale with the most melancholy results, what would happen if an absolutely unregulated dole were showered upon the people owing to the advent of a Socialist Government? I do not, however, wish to make an attacking speech at this juncture, because I believe that this is a situation which should put us above the purely party point of view.

There is no doubt that for many years there was not only a deplorable political system in Newfoundland, but a very odd factor which entered into the whole life of the island which it is very difficult to assess. That was optimism. For 12 years the Government of Newfoundland had not balanced their Budget. The public debt grew since 1920 by 100 per cent., and the reason was not far to seek. The Government were always able to borrow by pointing to their vast potential resources. Undoubtedly their hidden resources and their frozen assets are very great. They have perhaps the biggest iron ore deposits in the British Empire and there are considerable forests which, if properly exploited, might bring in a considerable revenue. The country mainly depends, as it always will, on fish, but, apart from the fishing industry, most of the island's assets, including Labrador, were frozen. Curiously enough, owing to the optimism of the Governments and investors in Newfoundland, these frozen assets were looked upon as tangible and realisable assets, which, in fact, they were not. If the whole world were extremely prosperous, and the demand for iron ore, wood and fish were increasing constantly, those frozen assets would be of some value, but they are at present, and as far as we can see will remain for some years, in a frozen condition. The Government in this country found themselves faced with the position that the Dominion of Newfoundland owned great assets which it could not dispose of, although in the long run they may come out all right—we hope they will—but was, from the immediate standpoint, in a totally bankrupt condition.

Two very interesting speeches in particular have been delivered to-night. The first was by the hon. and gallant Member for Altrincham (Sir E. Grigg), who, I regret to observe, is not in the House at the moment, who has had great experience in Colonial administration. He brought various criticisms to bear on the Bill and on the Government's policy, and one criticism in particular is worth examination. He felt that during the period of the administration which we are now setting up there should be in Newfoundland some kind of Legislative Council, or some advice given to the commissioners on a democratic basis. I am very doubtful whether that proposal would be advisable. I believe, first, that the commissioners will be able to consult the inhabitants and to get advice from them, and, secondly, I should very much dislike any form of legislative council which would in the least hamper the activities of those six commissioners. Another suggestion which my hon. and gallant Friend put up, which was echoed by the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), was that there should be two Members of the Newfoundland Legislature in this House. Apart from the dislike we all have of interfering with the existing Constitution and the existing numbers of the House of Commons, there is one grave objection to that proposal. Suppose we agree to the entry of two Members from Newfoundland into this House. They would be elected, presumably, by a democratic suffrage similar to that which Newfoundland has adopted for its lower Chamber to-day. I can foresee that those six commissioners are going to have an extremely difficult time, and consequently will be liable to raise a good deal of opposition against themselves. I have talked to Newfoundlanders, who say that it is very tasy to sway, as previous Governments have swayed, the population of Newfoundland, and therefore if we had two Members in the House of Commons we should be most likely to get two Members who were in opposition to the six commissioners out in Newfoundland trying, against considerable odds, to carry on the Government of the country. I think that is a very sound argument against such a suggestion. When I come to the speech of my hon. Friend the Member for the City of London (Mr. E. C. Grenfell) I must confess to a feeling somewhat akin to horror that he should advocate, as I understood it, complete default. Surely that is a very dangerous suggestion from a Member representing the financial centre of the Empire. He said, quite rightly, that the holders of Newfoundland and of other Dominion bonds get a bigger yield on them because they realise, or should have realised, that they are more dangerous and that they are entitled to a bigger yield to compensate for the danger; but when he goes further and advocates, in effect, that because there was danger 'and that danger arrived therefore Newfoundland would have been perfectly right to default, and we should have been perfectly right in allowing her to do so, I am afraid I must join issue strongly with the hon. Member. And not only on account of the bondholders—by no means—because they, I admit, should look after themselves. I also admit that it is 'an extremely dangerous precedent that we should be taking over the administration and the responsibility for the debts of Newfoundland. It is a most dangerous precedent, and I hope my hon. Friend opposite, who is going to wind up, will make it very clear that this must not be taken as a precedent for other bondholders to count upon in the future—that His Majesty's Government will always come in, in the interests of maintaining a security of the British Empire, and get them out of a hole.

I hope His Majesty's Government will make it clear that this case is taken on its merits, and that should there in future be any possible default by a Dominion on its bonds that that case also will be taken on its merits, and that the Government will have regard to the circumstances of the situation at the time and, particularly, the financial condition of this country. I quite agree with my hon. Friend the Member for Moseley (Mr. Hannon) that perhaps the first thing to do is to put the Civil Service on a sound basis. I also agree with Lord Amulree and his colleagues that it is absolutely necessary to reorganise the fishing industry from top to bottom. Those engaged in that industry have to realise that they are up against hot and difficult competition from Iceland, Denmark and other countries, and that it is only by adopting modern methods of grading, packing and marketing, with, if necessary, Government control, Government help and Government regulation, that they can hope, in the present circumstances, to regain a part of the trade they have lost.

There was one aspect of the Report of the Royal Commission which has been referred to by several hon. Members with which I did not agree—most of the others did agree—and that concerns forest control. The report says, in effect, that the forests in Newfoundland are not being properly exploited, and that they are a source of very considerable revenue. In that I entirely agree. They go on to say that where forest lands which are held on licence or under lease are not being exploited the licence or lease, should be cancelled or in cases where land is held in fee simple, that the land should revert to the Crown and they also recommend an annual tax. We have had various examples of that in the United States, and there were curious results from the position of an annual tax on growing forests. In many-cases which I personally know of it was found that the owners or the lessees of forest property were unable to pay the annual tax, and they had to build sawmills and cut down their trees in order to pay. They found themselves making a terrific loss on their forest property, and also a very heavy loss on the sawn wood from their mills which they had exported. Therefore I am doubtful whether, in the long run, that proposal would be advisable for Newfoundland.

Taking the really broad view we have to remember that Newfoundland at present is going through a terribly difficult time. It is not only the merchants and the bankers who are suffering, but the people themselves. Compare the relief granted by way of transitional payments to those who are out of work in this country, which averages something like £l a week, with the relief of 1.80 dollars a month which is the highest relief paid in Newfoundland. It amounts to only 1s. 8d. a week. It is easy to say that in the summer months the people there can grow their own vegetables, and that they may perhaps get game in the autumn and fish during the summer months, but when we remember that in the winter those unfortunate men are getting only 1s. 8d. a week with which to keep body and soul together we must have very great sympathy with them in their sufferings. I quite see the point of hon. Members of the Labour party that we should not be spending the taxpayers' money out of this country, but they say at the same time that the taxpayers' money should be squandered in this country, used to swell the already enormous cost of the social services. Should they not have a little sympathy with people in Newfoundland who are not getting £10 a year a head in social services? If we pass this Bill they will be getting only £3 a head, and out of that £3 only that modest measure of relief which is the least which can be given to keep body and soul together, but at the same time we shall be saving the country from ruin and chaos which would be consequent upon a default.

Many hon. Members have cast doubts on the danger of default and of the ruin which would ensue, but I ask them to look once again at the report of the Royal Commission, at page 179, where they will see the consequences very clearly stated, not the consequences to the bondholders but to the people of Newfoundland. I cannot help feeling that if the Labour party had been the Government, they would have done precisely what this Government have done. I ask them very earnestly to realise that some of us on this side of the House believe that they have a real sense of Imperial responsibility, and not to allow that sense of responsibility to be entirely spoiled by the fact that at present they are in Opposition. I believe strongly that we in this country have a Very great mission to fulfil at the present time. I believe that by passing this Bill and taking over the government of Newfoundland, with all the responsibility which that measure entails, we can strike a great blow for the Empire. We can prove that the Empire really means something. I have always felt that a British subject, in whatever part of the world he happens to be, whether he be in Lime-house, or at Launceston in my own county of Cornwall or in Little River, Newfoundland, is just as much worthy of help and consideration. I hope—although I suppose that it is too much to hope—that hon. Members of the Opposition will realise that they can perform a big action to-night by not dividing against the Government, and that they can show that their feeling of responsibility is great. I am convinced that if they take that action it will have most admirable effects, not only in this country but, in their own interests, throughout the Empire.

8.16 p.m.


I want to assure the hon. Member for Penryn and Falmouth (Mr. Petherick) that we are just as anxious about the people of Newfoundland as are hon. Member in other parts of the House, but we realise that the problem of Newfoundland is not a very easy one to solve. If we adopt the wrong course now, we may find ourselves later on having to retrace our steps and to adopt a different course to attain our object. The report that has been presented to the House has helped every Member very much in understanding the conditions which exist in that distant country.

I had the good fortune of being in Newfoundland over 30 years ago for a few days, and I have never forgotten the impression that that visit conveyed to my younger mind. I left home for the first time, and reached that new country on a Sunday afternoon in the month of October, and my first observation was that there was snow on the hillsides, and that the oat and barley harvests had not been gathered. An important difference between that country and our own is the uncertainty of agricultural operations in the climate of Newfoundland. Upon making inquiries regarding industry and agriculture, as well as about the fishery industry of that country, I discovered that there were & good many complaints about the way in which the economic life of the island was carried on, and strong were the complaints against the political administration. One would find difficulty in going to any country without meeting critics of its Government, but I found no friend of the Newfoundland Government, although we were only two days in the port while on our way to the Mainland. Allegations of corruption and graft were very freely made wherever we went, upon that visit 30 years ago.

The right hon. Gentleman referred to the value of this Report, and indulged in a hurried survey, geographical, industrial and political, as one must do, before one can decide the merits of the Bill and of the Amendment which has been submitted to the House. We are not unmindful of the immense difficulties. The hon. Member for Altrincham (Sir E. Grigg) said that the Report was a brilliant diagnosis of the condition of Newfoundland, but it presents a sombre picture of the conditions there. The diagnosis and the picture of the conditions may be vivid and clear enough, but we are not satisfied, even from the information contained in the Report, that the remedy proposed is the right one. There is no modern parallel to the issue of such a Report. The condition under which the great majority of the Newfoundland population exist is described with great frankness. It is a condition which is not equalled by an English-speaking people anywhere in the world. Greater poverty, hardship and sacrifices have been called for from these people than have been required from any English-speaking people, and we feel very strongly that much should be done in the examination and the assessment of the real responsibility for the distress in the island.

When we discuss this problem, it is no use denying or omitting to stress the evils of past Administrations. At the commencement of the book, the relations between politicians and people are explained almost brutally, to the discredit of the politicians, and to the reproach of the people who suffered the politicians so long. The condition of the Newfoundland Houses of Parliament is described, and I will try to draw a parallel here. We find that there is a qualification for membership of the Assembly which is new to us, and which sounds strange to us in these days. The qualification is a property or income qualification. The island is governed by propertied people in the interests of property. The right hon. Gentleman said something about party changes. That is referred to in the Report, which describes the qualification of members and the franchise. The Report says that "there are two main political parties, Liberals and Conservatives. The latter now hold office." There has been a see-saw in Newfoundland, to my knowledge. The Liberals and the Conservatives have rung the changes alternatively in short periods, and they have had a monopoly of the Administration. There is no other party, and there has never been a substantial prospect of any other party in the island.

One hundred years of Liberal and Tory rule are responsible for the condition of the island and they have brought about the plight which is described so very tragically in the Report. The Report says, on page 81: The evidence tendered to us from all sides and from responsible persons in all walks of life leaves no doubt that for a number of years there has been a continuing process of greed, graft and corruption which has left few classes of the community untouched by its insidious influences. That is not due to Bolshevism or to trade unionism. Hon. Members on the other side, who attribute the decline of industry to Bolshevism, trade unionism or high wages will see that none of those have played a part in the condition in Newfoundland. The workpeople of Newfoundland have been ground too low to offer any effective protest against the exploitation, which has lasted for generations. This indictment which is made against the politicians of Newfoundland is not made against Labour politicians, it is not made against Socialists; it is made against the kinds of politicians that share the Front Government Bench between them—Liberal and Conservative politicians. The people would have scorned to listen to any Communist or Socialist speaker on the Island; they are too patriotic, too religious, too tied to the old political machine to have any other opinion on these matters. The responsibility must be accepted by the old traditional parties here in this country, with their prototypes over in Newfoundland and in other parts of the Empire.

There is an old saying that you cannot indict a nation, and you really cannot indict this community, which, although not a nation, is an old-established community, and a more homogeneous community than can be found perhaps in any other part of the Empire. They belong to one stock—an English stock in the main, with a little Scotch and a little sprinkling of Welsh. They are an entirely English-speaking people, people of one race, the great majority of them born on the Island, the sons and daughters of parents born in the Island; their families have been there generation after generation. As to religion, there are about equal numbers of Protestants, Catholics and Nonconformists. They are one race, and have Newfoundland traditions behind them, but, unfortunately, those traditions are not very strong.

These people, scattered about, as I have seen them, in little villages in the bays and nooks of that inhospitable rock-bound coast, are divided up into small communities; and so ground down have they been by poverty, so divided have they been into these small communities, that they have never yet been able to develop a common consciousness or any sense of national or community pride. We do not indict these people, but nevertheless we in this House are by this Measure voicing our protest against them and their political system and their political machine. Indeed, we hurl against them very strong condemnation and impose penalties upon them—because what is proposed in this Bill is a penalty, viewed from the standpoint of the people of Newfoundland, and these reproaches are the excuse for the penalty which we impose upon them. When we send our reproaches over to Newfoundland, the people over there will blush for the infamies of their politicians and for their own weaknesses. May we not listen carefully for the echoes of those reproaches as they come back to us, and may we not find that the same reproaches will in a lesser degree apply against ourselves and against the political system of this country? This should serve as a warning not only to Newfoundland but also to the United Kingdom and all other parts of the Empire.

An hon. Member has said that we do not share the Imperial sentiments held by him and others. I spent a part of my working life in Canada, and I must confess that I was attracted by that great country. There were features in Canadian life that attracted me very much, and I came to the conclusion, even 30 years ago, that there were very great possibilities in Canada. But I was only too conscious of the grave political defects of the country at that time, and they have not yet been fully repaired. May we not take this as a warning, not only to Newfoundland but to every other Dominion and to ourselves at home, of the certain ruin that follows corruption and insincerity and lack of honesty in politics? The hon. and gallant Member for the Isle of Wight (Captain P. Macdonald) chose to make a party point in referring to us. He said he was quite sure that we had not read the report. But he does not do us full justice. We have read the report, and have tried to understand it. It is exceedingly interesting, and I wish that everyone in the country would read it as a lesson in politics. I would like also to see all the people of Newfoundland read it.

We find that, owing to a bad political system, wrong principles in industry, and faulty administration in the economic life of that country, the land has been very largely alienated. For example, take the 5,000 acres of land that were given for each mile of railway completed by railway contractors. That went on in repeated contracts, the Clause being actually duplicated in one or two cases, until we find that well over 4,000,000 acres of land have been alienated from the Government of Newfoundland and have passed into the control of railway and other contractors. Greed and graft and corruption were responsible for that. The politicians had to be bought with money in order to transfer the land to the ownership of these private people and private companies. It will be found, also, that, of the 42,000 square miles which is the total area of the Island, no less than 25,000 square miles is covered with forest—a very valuable natural resource. There are geographical and trade considerations which determine the value of standing timber, but if not to-day, or tomorrow, at some time those 25,000 square miles of forest will be a very valuable asset in Newfoundland. We find, however, that, of the 25,000 square miles of timber, 15,000 square miles are either owned by or leased or let to private individuals and concessionaires. That is most scandalous; there is no parallel for it in any part of the world favoured by civilised government.

While this has gone on, the people of Newfoundland are intensely poor. That is the information contained in this report; that is the description of everyone who knows. Winter will set in in a week or two all over the Island, and I can well imagine it, because I spent two winters in those latitudes, and know the hardships of winter life when there are not ample supplies of food and fuel, when communications are bad, when people are shut up in their shacks for four or five months without any communication with the outside world. It is a very tragic plight in which these people will find themselves this winter. The people are poor, and the land is lying idle. One hon. Member questioned the possibility of growing food in Newfoundland. It is not an ideal agricultural country, but it does compare, I should say, with Norway or Sweden from a climatic point of view, and even from the point of view of soil. There is no reason why this sparse population should not be getting a very good living, but there has been bad management—no encouragement for the producer but discouragement and obstacles placed in his way from the standpoint of efficiency.

Then the people are poor. There is an almost incredible scarcity of money. There are people who are now old who have not handled as much money in a lifetime as a well-paid British workman handles in one year. Owing to the credit system, people go from year to year without touching any money. The turnover of wages is exceedingly small. Scarcity of money has added to the disintegrating influence of money itself in all societies. Here, because of the exceptional difficulty of finding money, money has been more a temptation to politicians and others than in countries where money is more plentiful. It has become a special object of attraction and has tempted people to devious ways of obtaining it because of the great poverty of the general mass of the people. The low volume of money in circulation and the lack of paid employment is one of the outstanding features in this book. The very small purchasing power is one of the features of life in that country.

This is a lesson to us. The use of money has become subject to the control of what is now nothing more nor less than a money machine. We have evidence of it in the House to-day. Money is not being used to serve the interests of the people in Newfoundland. It is not available for the purposes of the ordinary people. Money in Great Britain is not being put to the use and service of the people here. This indispensable agent of modern life is under the control of people who play with it as if they played a game for their own advantage, and Newfoundland is suffering because she has no resources in money. There is against this small population of 280,000 a capital debt of roughly £20,000,000. Those who are accustomed to the large figures with which we are familiar do not appreciate that £20,000,000 is an enormous burden on the people of Newfoundland. It is roughly £80 per head of the population, some half the amount per head that is represented by our National Debt here. But £80 is an infinitely larger burden for the people of Newfoundland than £160 for the people of this country.

It is contemplated that this capital debt is to be met by the people of Newfoundland. It is proposed at some time to make it fully chargeable upon them. That is an enormous burden with which to weight future generations of this small community living in the conditions in which they find themselves. This enormous debt cannot be paid, and the question has been asked how this community can be saved from default. There may be delay, there may be a small measure of alleviation, but there is no guarantee that there is to be any permanent reduction in this huge burden which has been piled upon the people by the graft of their politicians and those who are dealing with them. Let it not be imagined that all the corruption is in Newfoundland. Those who have made bargains with them knew the conditions of the Newfoundland finances and Newfoundland politics, and there is room to suspect that people who had business deals with Newfoundland were themselves taking advantage of the political impurity of the island in order to do financial business with the Government of that country.

The people of Newfoundland living in these small villages cannot pay this debt within any measurable period of time, and, if they are ever to come into a position to meet the charge, something much more radical than is contained in this Bill must take place. I should expect the right hon. Gentleman to agree with us in our Amendment. We do not believe that this debt can be met by letting British taxpayers pay instead of Newfoundland taxpayers. We are now putting our own people through a course of sacrifice which is very heavy to bear. We are having controversy day after day upon the measure of sacrifice which our own people can tolerate, and it is not fair to impose additional burdens which are only transferred to the poorer classes in this country in order, nominally to assist the poor people of Newfoundland, but in reality to relieve the bondholders who have made the mistake of investing their money in Newfoundland with the knowledge that they had of conditions in that area. There are passages in the report which I should like to read, because they throw more light upon the view that we take of the Bill. There is a chapter dealing with the political and constitutional aspect of the proposals submitted to the Commission. The report says: From the political and constitutional point of view, these proposals fall into three categories, those which postulate a continuance of the present system of government, with such modifications as will be necessary to ensure the permanence of the form of control over expenditure which is now in force, those which postulate a continuance of the present system of government, with such alterations as might conduce to more efficient administration without necessitating a modification of the existing constitution, and those which are based on the assumption that only by a radical change of system for a period of years can the Island be restored in health. Is the radical change in system confined to a change in the method of political control, or does it take us further, to the radical change which we demand in our Amendment, a change in the organisation of the economic life of the people of the Island? The executive action is described on page 199, and there we find that the three commissioners drawn from Newfoundland and the three drawn from Great Britain are to work together as a commission presided over by the Governor-General. The commission will be composed of six members, exclusive of the Governor, three of whom will be drawn from Newfoundland and three from the United Kingdom. The Government Departments in the Island will be divided into six groups. Each group will be placed in the charge of a member of the Commission of Government, who will be responsible for the efficient working of the Departments in the group, and the commission will be collectively responsible for the several Departments. It is very difficult to see how the commission is to work. Is a Newfoundland commissioner who may himself be a member of the present Newfoundland Government, and who may have been a Minister in repeated and consecutive Newfoundland Administrations, to be given charge of a Department on his own responsibility and to be responsible to the commission as a whole and to the chairman who is at the head? Are these people to be paid, and upon what scale are they to be paid? Are they liable to dismissal? Are they answerable to anybody except the chairman of the commission and the Dominions Secretary? Questions have already been asked as to how those people are to carry the confidence, as they must, of the people of Newfoundland. The confidence of the people must be obtained even for this kind of Measure. While they will not find it necessary to elect Members of Parliament, they will have to live day by day under an Administration of which they must approve or disapprove. What opportunities are to be given for contact between the heads of these commissions and the people whose affairs will be administered by them?

We on this side have offered an Amendment. We now come to this. Ignoring for the time being all the machinery, we question very seriously the efficacy of the system proposed and the right of this country to withdraw the right of self-government of a small community, neglected and despised as they are at present. Why should we be asked to make good the loss of these Bondholders? Why do we not face up to the possibilities of default here and now when the country is devastated with all the poverty and hardships endured by the people? There is no surplus from which the bondholders may be paid. If that is the prospect for this island for some time, and if, as we believe, the prospect of improvement must be slow and must be one of constructive building, why should we not declare any default at the present time? By what right do bondholders always stand to win and never stand to lose? If you invest in coal mines in this country you may lose money, as many investors have lost their money. If you invest in steel or in railways you stand a chance of losing. Why should this class be subjected to special Government protection, and why should we and the poor people of Newfoundland be pledged bodily, physically, socially to guarantee the claims of the bondholders? Why should we in this country be pledged to guarantee the claims of a small section of people who ought to stand the ordinary risk, which society has to undergo, such as world depression and changes in world prices? Why should they be relieved from the consequences? President Roosevelt, speaking with satisfac-faction of the partial success of his measures, said: We are now getting money to go where money is needed. That is a very pithy phrase and a very important economic utterance. This is not the way to make money go where it is needed. This money is not going to the poor people in Newfoundland; there is not a penny piece which will go to the poor people. No grant is to be made to them. It is possible that there may be some alleviation because of the assistance given to those people now. We on this side of the House believe that in Newfoundland, as elsewhere, prosperity can only come to the people by the right use of capital and labour in a really constructive scheme for opening up profitable industries in the country. The industry of fishing in Newfoundland must for a considerable time remain one of the main industries, if not the chief industry. Forestry will come later. Mining may be developed in the course of time. But we cannot wait. It should not go forth from this House and as an Act of this Parliament, that the people of Newfoundland should be handed over as living pledges to those people who have invested money in their country and who stand out for their pound of flesh from the inhabitants of this poverty-stricken island.

8.53 p.m.


I have listened to every word which has been spoken in the two Debates we have had upon this subject, and I think that the series of interesting speeches which have been delivered is the best tribute that could have been paid to the Report of the Royal Commission. Those speeches show that the Report has been studied widely and carefully, and I dare say that some hon. Members have had the same experience that I have had with regard to it. I went one day on a three-hour train journey, and I took with me this forbidding looking Blue Book and also a very attractive novel. I decided that I would read this report for about half-an-hour and then devote myself to the other literature which I had brought. But at the end of three hours I found myself still immersed in this Report, which certainly has some of the qualities of those volumes about which the reviewer writes, "I could not lay down this book until I had got to the last page."

I was asked some questions by the hon. Member for Limehouse (Mr. Attlee). He asked, "How long is it since the Dominions Office knew of the financial position of Newfoundland?" and "Did the Dominions Office warn investors in this country that they had that knowledge?" In the first place, no loan has been raised in this country since 1923, but, quite apart from that, Newfoundland is a Dominion, a self-governing part of the Empire, and one of the conditions of the relations between this country and the Dominions is that there shall be no interference from Downing Street with domestic affairs concerning a self-governing country. Therefore, it was no business of ours to interfere in any way in the financial affairs of Newfoundland. In further answer to the question, I would say that the first official intimation that we received as to the financial situation in the Dominion was some time early in 1931, when the then Prime Minister asked whether we could let his Government have a financial adviser, and the Dominions Office, with the Treasury, took immediate action. We sent out straight away a financial adviser, and we did our best to save the situation, while preserving self-government in the Dominion, and it is only because, even after that swift action as soon as we were entitled to come in, of the failure of that partial action, that this legislation is brought before the House to-day.

There is another question to which I should like to refer straight away. A number of hon. Members to-day, as the other day, have expressed their misgivings as to whether this is not a very bad precedent and whether it does not mean that if Australia, or South Africa, or Canada got into similar difficulties we should be bound to come to the rescue of the bondholders, or whoever we are rescuing in this case, in the same way. The only comment that I need make on that argument is to remind hon. Members that an integral part of this whole, comprehensive scheme is that self-government, at any rate for the time being, should come to an end in Newfoundland, and that if we are to take over the responsibility for finance we must also take over the responsibility for the entire government of that Dominion. In the light of these considerations, I cannot see that this is likely to be appealed to as a precedent in the case of financial difficulty in Australia, South Africa or Canada.

So far as Newfoundland itself is concerned, there is a certain amount of common ground between hon. Members opposite and hon. Members on this side of the House. I do not think that anyone has sought to dispute the terrible state of affairs in Newfoundland described in the pages of the Report. The people of the country are, for the most part, wretchedly poor, the economic position of the country is at this moment precarious, and, in fact, an exceedingly dangerous state of affairs has been brought to a head by the inability of the Newfoundland Government to meet the services of the public debt out of Newfoundland's resources. These desperate conditions are features of the problem on which we are all agreed, and those are the facts of the situation with which we are dealing, the undisputed facts. If that desperate state of affairs is true, there are two possible alternative policies between which the Government had to choose. The first was simply to allow things to slide and to allow the Newfoundland Government to default.


Hear, hear.


The tenor of the speeches on the other side of the House would indicate that hon. Members opposite would have adopted that course. Hon. Members have devoted the greater part of their time to criticism of our policy, without offering any constructive alternative. At the end of the Debate my hon. Friend the Member for Gower (Mr. D. Grenfell), whose very fair-minded speeches are always appreciated in this House, was bold enough to declare, without any qualification, for default by the Newfoundland Government.




That is an honest statement of policy. The hon. Member has been equally honest in stating his reason for opposing our policy. He has said that he does not like the policy, and hon. Members have agreed with him, because the first object of the policy is to save the bondholders—the bankers, the moneylenders, the bondholders about whom his Leader spoke earlier in the afternoon. I do not flatter myself that anything I can say is going to disabuse him of that idea. If an angel from heaven came to speak from this Box and said that this Government was not primarily concerned in helping the bondholders, hon. Members opposite would stick to their opinion. [HON. MEMBERS: "Hear, hear."] Yes. All I can say is that their accusation simply is not true. If the bondholders were the only people interested in our saving Newfoundland from default at this moment, the Government would not be going into the intricate and comprehensive policy which is contemplated at the present time. The fact is, as is written on every page of the report, that there are other people concerned, other people interested in our avoiding default by Newfoundland besides the bondholders, and those people are the whole population of Newfoundland. The poor fishermen, the poor agriculturists and the small number of industrial workers would all have heaped upon them even worse distress than they are experiencing to-day if we were to stand by and allow things to slide and allow Newfoundland to default.

My hon. Friend the Member for Gower has elaborated a long policy, with a great deal of which we on this side agree, but it is going to take time to bring its fruits, and in the meantime if we allowed Newfoundland to default the foundations on which we hope to build would have been swept from under our feet. The Royal Commission's Report indicates the processes that would follow upon default. It lays it down that default would shatter the credit of the Island, that that would lead to the impairment of confidence, and that that in turn would lead to the limitation of the trade of an Island which depends very largely on imports for giving the people the necessities of life. That reduction of trade would result in more unemployment and in a general lowering of the standard of life of the people. It is these facts with which the Government are primarily concerned. The report indicates how serious the position is already. It indicates that a large proportion of the population even now are depending upon public relief, and one realises that that proportion would be enormously increased if the disaster of default were allowed to take place.


The report shows that there is a margin of exportable products. Her exports have been 25 per cent. more than her imports. Those exportable products are there, and exchanges could be made without the use of money.


That might help the situation for a short time but very swiftly the full effects of default would come upon the heads of the people of the country and would throw an enorm- ously increased number of the population on to public relief. One is tempted to think that that is the real reason why hon. Members opposite regard that prospect with equanimity, because one of the great differences between them and us on this side is that they believe in work or maintenance, with the emphasis on maintenance, while we believe in work or maintenance, with the emphasis on work. If it is the poor people of the Island of Newfoundland in which hon. Members opposite and hon. Members below the Gangway opposite are interested, then that is exactly the same interest that we have, and it is in their interest that we are trying to avoid default. We are, in fact, avoiding default and so saving them from greater insecurity in their employment and from a lowering of their standard of life. For these reasons we reject the first alternative of default.

There is only one other alternative to avoiding default, and that is to devise means to enable the Government of Newfoundland to meet the services of the public debt. In discussing the different ways of doing that I would emphasise this point, that the Royal Commission did not consider one proposal only and then adopt it and make it their recommendation. They examined a whole series of different possible ways of avoiding default, and it was only after examining every single alternative proposal put before them and turning them down on their merits that they came, rather reluctantly in the end, to make the radical and drastic recommendations that they did. For instance, the question of Labrador being sold to Canada was considered. Hon. Members opposite have suggested that the problem should be met in this way, and the Liberal spokesman has also suggested it as a more convenient way of meeting the problem. The suggestion was fully examined, and the Commission discovered that it was not only a case of forcing Newfoundland against her will to sell Labrador, but it was also a case of forcing Canada against her will to buy Labrador. Therefore, it is not a suggestion which we believe is very helpful; unless the suggestion is that the Labour party should send an international air force across the Atlantic to bomb both Canada and Newfoundland into submission.

The Commission examined a great variety of possible constructive alternatives. It examined first every one that was placed before it to meet the situation and avoid default without recourse to the British Government and British taxpayer. It examined the suggestion that Newfoundland should join in a union with Canada, and after the most sympathetic consideration they found that there were economic and political circumstances which made it absolutely impossible as a method of meeting the situation. Having turned down all possible methods of meeting the case without recourse to the British Government and taxpayer, the Commission went on to examine the different ways in which this country might save the situation. They examined, first, ways of avoiding default which would not involve a sacrifice of self-government on the part of Newfoundland. Again, after the most sympathetic consideration of all these less drastic alternatives they were turned down by the Commission on their merits, and they came finally to the distinct conclusion that this way alone was possible in order to avoid default and save a disastrous situation which would be most unhappy not only for the people of Newfoundland but for the people of the Empire as a whole.

Hon. Members who have studied the Report, and are not prejudiced by the notion that everybody but themselves is anxious to save the bondholders alone, will come to the conclusion, perhaps reluctantly, but nevertheless to the definite conclusion that of all the alternatives this is the only possible one which adequately meets a serious situation. Of course, there are great difficulties. The problem bristles with difficulties, but the British Empire has been built up to its present eminence by our ability to overcome difficulties and by what is perhaps our peculiar genius for solving original political problems. It has been said that it is extremely serious to take self-government away from Newfoundland, and my hon. Friend even went so far as to question our right to do it at all. We have no right to do it against the wishes of the people of Newfoundland, but in this case we are doing it at their request. At any rate, this must be admitted, that the Government of Newfoundland agreed that the Commis- sion should be appointed, and it was appointed with its own representative sitting as a full member of the Commission with the duty of looking primarily after the interests of Newfoundland. The representative of the Government of Newfoundland signed the Report with all its recommendations, and then the Government itself agreed to the Report and, finally, the Parliament of Newfoundland, without a dissentient voice or vote, asked His Majesty to see that the findings of the Commission were implemented. Therefore, we are starting out on this policy at the request and with the approval of the people of Newfoundland.

Of course, there are dangers ahead. An impressive speech was made the other day by the hon. and gallant Member for Tonbridge (Lieut.-Colonel Spender-Clay) which has been echoed a good deal in the interesting speech of the hon. Member for Altrincham (Sir E. Grigg), and also by other hon. Members. They say "it is all very well, you may have the agreement of the Newfoundland people to-day, but wait and see what happens after two or three years. Wait until the urgency of the dangers of the present time are somewhat forgotten, until you start to tread on the toes of some vested interests"—which we intend to do—"wait until political agitators have started to get to work again, and you will find that this new form of government is exceedingly unpopular and that public opinion in the island will be aroused against it." That, I think, is the most powerful argument that can be levelled against these proposals. It is a most important consideration which hon. Members should have in their minds in considering this policy.

Let me make one or two comments on that argument. In the first place, I do not believe that the people of Newfoundland will quickly forget their experience of the last 10 years. In the second place, the argument itself impresses upon us the fact that this is not only an economic problem but a political problem as well, and, therefore, we have to be exceedingly careful in the choice of the six commissioners who are to be appointed. In the case of the three commissioners from the United Kingdom we must not only see that the persons are of great administra- tive ability, that is essential for the work of reconstruction that is contemplated, but also that they are also representatives with political experience in handling political problems.

The hon. Member for Altrincham said it was essential that the commissioners should keep in touch with public opinion in the island. Certainly it will be a part of the duty of the commissioners to make speeches. They are not going to be civil servants bound down by all the rules of the Civil Service. It is contemplated that they shall have contacts with the people of the island, and that they shall take opportunities not only for going around and speaking themselves to the people, and explaining to the people what they are doing and what their policy is achieving, but that they shall also take opportunities of meeting the people and letting the people talk to them, hearing the reaction amongst the population of the island of the policy which this Government by commission are putting into force. But quite apart from the fact that there should be a certain political ability represented in our own three commissioners, of course the other three commissioners who are to be appointed by the people of Newfoundland will naturally be especially valuable in this work of keeping in touch with local opinion and explaining to local opinion exactly what the Government are trying to do and what they are achieving.

The hon. Member for Altrincham said there was one Department which would be more important than any other, and that was the Department under which the greater part of the economic development is to be carired out. He said he wondered whether that Department was to be under the control of one of the United Kingdom Commissioners or of one of the Newfoundland Commissioners. The answer is that one of the United Kingdom Commissioners will preside over the work of that Department. The hon. Member went on to question the wisdom of the Royal Commission in suggesting that the development of the fisheries should be carried out under a Government Department. He said that in his view it would be wiser and more profitable to hand the work of the fishery development to a chartered company, and he asked whether the Government were committed to the Commission's recom- mendation, or whether we would not consider the possibility of allowing a chartered company to go into the Island and take on that work. The Government could not contemplate that latter suggestion. The fisheries in Newfoundland touch the lives of the people of the country at every point, and I believe it would be intolerable to allow a chartered company to have such power in the Island—a chartered company making its own laws and regulations. The hon. Gentleman said that if the Government took over that job it would sooner or later be very unpopular with the people of the Island. I am certain that the people would be far more prepared to tolerate the Government doing that work than a great chartered company, making its own laws and regulations, which would so profoundly touch the lives of the people at practically every moment of the day.

I do not want to detain the House too long as there is other important business to come on; but I would like to finish on this note: It has been urged that the policy of the Government should aim not merely at overcoming the immediate financial difficulty and finding a means of avoiding default by Newfoundland on this occasion, but that the Government should make its policy much more constructive, that it should have as its chief aim the economic and political development of an Island which has considerable national wealth, and of a people who have many fine qualities. That feeling for a constructive development policy has been the prevailing note of the speeches in this House, and is indeed the prevailing note of the Commission's Report. That policy the Government accept. The Government enter upon this task in that spirit, and in fact it would not be worth while taking on this responsibility and putting burdens on the British taxpayer unless we intended to go ahead as swiftly as possible with a policy of development and reconstruction.

My hon. Friends opposite in their Amendment have suggested that we should start that policy straightaway, that it should precede the other matter of avoiding default. We intend to start it straightaway; but as a matter of fact it can develop only comparatively slowly. Hon. Members have referred to the truck system and have asked why should the people of Newfoundland continue to be exploited by that system. The Government would very much like to see that system go. It is a system which we have not tolerated in this country for the last century; we abolished it in this country 100 years ago. But the Royal Commission themselves say that this habit, the truck system, is now so deeply ingrained both among the merchants and the fishermen that an alteration can only be effected gradually. It is in order that that alteration can be effected at all that we are seeking to preserve the safe foundations upon which our constructive policy must be built. We believe in that policy, and the recommendation of the Commission with regard to the improvement of the catching and selling of fish, with regard to agricultural development, with regard to trying to promote the sale of Newfoundland iron ore, with regard to the raising of fur-bearing animals, and so on. The report will be very carefully considered by the new Government, and the first purpose of the new Government will be to push ahead with the policy of development in the interest of the whole population of the Island. The development and construction, of course, must not be economic only. It has to be political as well.

An hon. Member who spoke from the Labour benches last time said quite truly that it would be a fruitless sort of policy if our idea was that as soon as we had got the Island back on to its feet again we should hand it back to the old method of political Government which has brought the Island to the verge of disaster once before. The policy of the new Government will be a policy of political training, political education and political development, as well as economic development. It should be possible, for instance, to develop municipal government. The report of the Commission says that only in the capital is there any municipal government to-day, and it suggests, that the expansion of municipal government in some of the larger outposts is very desirable. That may help in the political training which is necessary.

The hon. Member for Torquay (Mr. C. Williams) spoke about the Civil Service. It is our intention that long overdue reforms in the Civil Service shall be initiated under the new Government. It is impossible now to answer specific questions and to say that we will do this and that with regard to the Civil Service, but our minds will be kept open to any suggestion that we should lend experts in order to help them to put the Civil Service on a sound basis. We shall be open to consider any suggestions which are made to us by the new Government when they have had time to look around and survey the field.

The Government's policy is a policy which bristles with difficulties. It is not going to be a policy which is easily run or easy to achieve success by, but at any rate it is a policy which should com-

mand the good will of every Member of this House, and it is a policy which the Governor and the commissioners and the whole of the people of Newfoundland should be determined to work successfully. So far as this House is concerned—this House on which so many responsibilities already lie—in asking hon. Members to give this Bill a Second Reading I would only remind them that the great imperial reputation of this country will not suffer through her coming generously to the aid of the oldest British Colony.

Question, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 250; Noes, 42.

Motion made, and Question proposed, "That the Bill be committed to a Committee of the Whole House.—[Commander Southby.]


On that Question, I wish to raise a point—

Mr. DEPUTY-SPEAKER (Captain Bourne)

I must remind the hon. Member that the Question, that a Bill be committed to a Committee of the Whole House, must be decided without Amendment or debate.


I wish to raise a point of Order, and not to move an Amendment or to create debate. I wish to ask whether this Bill is not of the character which is defined in the Standing Orders as a Hybrid Bill; whether both public and private interests are not concerned in it; and, if it is Hybrid Bill, is not the correct procedure now that it should be sent to a Select Committee? I wish to have a Ruling on that point.


The hon. Member is too late in raising that point.

It should have been raised when the Bill was introduced and before the Second Reading.

Bill committed to a Committee of the Whole House for Thursday next.