CLAUSE 2.—(Power of Secretary of State to make advances to Newfoundland.)

HC Deb 14 December 1933 vol 284 cc701-67

12.30 a.m.

Mr. McENTEE

I beg to move in page 2, line 37, to leave out "and the service of the public debt".

It is perhaps the more necessary to move this Amendment because when the Clause itself comes to be discussed there is the possibility that we may be subjected by the Dominions Secretary to the sort of treatment which I do not like to see, and we may not get any opportunity, to which some of us at least think we are entitled, of discussing the Clause itself and of having some adequate reply from the Minister. The Amendment is one which ought to appeal to all the Members of a House which has traditions such as this House. It will be acknowledged by everyone that whatever may be the traditions in other parts of the world we here have proud traditions which we desire to maintain. It will be admitted on all hands that people who are proved to have been wilfully negligent in the management of the affairs of the Dominion over which they have control should be the people to be punished if punishment is to be given to anyone.

There is an old saying in this country, which is worthy of consideration, that a receiver is as bad as the thief. I cannot help feeling that these bondholders to whom the Chancellor of the Exchequer made reference the other day and who live in various parts of the world, but mostly, I should imagine, in Canada, when taking opportunities to invest money which they presumably had to invest, ought at least to have made some inquiry from some of those international organizations which issue certificates of merit or otherwise in connection with financial matters as to the conditions under which their money was being invested and as to the probability of their having it returned under the conditions of the bond they were entering into. In fact, they appear to have taken no such steps at all. It has been stated in the House to-day and also in the Report itself that there was great anxiety on the part of the bondholders concerned to invest their money and that, in fact, they ran at these investments without any adequate inquiry at all.

The result, of course, is due to the dishonesty of the people responsible for the Government of Newfoundland at that time and because of the fact that the Governor at that time does not appear to me, at any rate, to have taken any steps at all. I think he was present as Chairman at the Government meetings at which many of these transactions went through, but he seems to have taken no trouble to understand them at all. If he did understand them, he certainly did not take any trouble to inform the Government at home of the nature of the trans- actions or, if he did inform the Government, they on their part did not take any steps to acquaint the House of the gross dishonesty which had taken place.

We are asked in this Bill to guarantee the people who made bad debts and who were almost criminal in their negligence to make any adequate inquiry in regard to the security for the money which they were investing. The probability is that in many cases, at any rate, those who actually made these bad debts were not investing their own money but the money of various corporations with whom they were associated. They were, therefore, investing other people's money, and the investment they made was of such a character that had it not been, as the Chancellor of the Exchequer said, that the Government in this country decided to come to their rescue, practically all the money invested, both of their own and of those people for whom they were acting would have been lost.

That is the position, and I have to ask myself what real interest the taxpayers in this country have in paying money to those people who took so little interest in their own affairs and in the affairs of the people for whom they were trustees. Why should the taxpayers of this country be called upon to meet debts in respect of money which was due from the Newfoundland Government? Frankly, I do not see any reason why I, as a taxpayer, should be compelled by the Government to contribute any part, however small that part may be, to meet these bad debts made with people who were definitely dishonest. I see no reason why I should pay any part of that debt at all. I owe these bondholders nothing, and I know of no reason why I should be compelled to pay them.

12.36 a.m.

The DEPUTY-CHAIRMAN

I am loth to interrupt the hon. Member, but I am not very clear as to the purpose of the Amendment which he is moving. As I understand the phrase, as used in this country, "service of the public debt" is interest due on the National Debt. The capital is not covered by that phrase, and, in point of fact, if I am right, it is covered by Clause 3 of the Bill and not Clause 2. I shall be glad if the Minister will confirm me in this, for I wish to know exactly what the limitations are.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha)

Of course, if these words were struck out, the service of the public Debt would not be met by moneys provided by Parliament. Under Clause 3 most of the service of that Debt would be met out of the Consolidated Fund. That would be the effect of the Amendment.

Mr. McENTEE

The point I wanted to raise was that the taxpayers of this country should not be called upon to pay either interest or capital. To me it appears dishonest that we should compel our people by law to meet these bad debts that were incurred by people who took no interest in their own affairs.

The DEPUTY-CHAIRMAN

I am now fairly clear that the Amendment which the hon. Member is moving is far more limited than that. The question as to whether this country should be responsible or not for the debt, arises on Clause 3 which deals with the guarantee. On that, it would be in order to argue that we should take no responsibility. The point is, if I understood the Minister rightly, that if the Amendment were carried, instead of the service of the debt—that is the interest—being met out of moneys provided by Parliament, it would be taken out of the Consolidated Fund. I must ask the hon. Member to confine his argument to that point.

Mr. McENTEE

Perhaps I was even more confused than you were, Captain Bourne, as to the meaning of the words. I was under the impression that I was perfectly in order, but, if you say it would be better discussed on another Clause later on, I accept your ruling without hesitation.

The DEPUTY - CHAIRMAN

The further the Amendment is discussed the more I am convinced that it is out of Order. I regret I did not see it in the first instance. If the fact is, as the Minister says, that: t would be putting a charge on the Consolidated Fund, it is putting a charge which is outside the scope of the Resolution. The hon. Member's point is a perfectly clear one. I had not realised it, but I am afraid I must rule him out of Order.

Mr. ATTLEE

There is a subsequent Amendment to cut out, the words "out of the Consolidated Fund." Therefore, the effect of the two Amendments is that there would be no charge at all.

Mr. HORE-BELISHA

May I point out that the hon. Member in this Amendment is moving that the service of the debt should not be paid out of moneys provided by Parliament. When we come to Clause 3 under which these moneys would then fall to be paid out of the Consolidated Fund, if the hon. Member moves an amendment which means that they should be paid out of moneys provided by Parliament, then the two Amendments together would bring us to a state of complete confusion.

The DEPUTY-CHAIRMAN

I am afraid I cannot accept the suggestion of the hon. Member for Limehouse (Mr. Attlee) that because there are two Amendments down in not the same names they are part of one Amendment. The Amendment now strikes me as being distinctly out of Order.

12.40 a.m.

Mr. RHYS DAVIES

May I just ask for further information, because I had intended to say a word or two upon this Amendment. I am not quite clear on the explanation given by the hon. Gentleman. I hardly think he was entitled to turn to another Amendment to torpedo this one.

Mr. HORE-BELISHA

It was at the request of the Chair.

Mr. DAVIES

Before deciding whether this Amendment is in Order or not, let us read what the Clause says: So long as the administration of Newfoundland is vested in the Governor acting on the advice of a Commission of Government constituted in accordance with the said recommendations, the Secretary of State shall have power, with the approval of the Treasury, to make, out of moneys provided by Parliament, advances to the Government of Newfoundland for any of the purposes of the administration of Newfoundland, including the defraying of the expenses of the public services and the service of the public debt. What is the service of the public debt? The right hon. Gentleman the Secretary of State for Dominion Affairs will know that the service of the public debt is in the main the interest.

The DEPUTY-CHAIRMAN

That is why I have decided against this Amendment. If the hon. Member moved the moneys for defraying the administrative services it would be in order; to move the moneys provided by Parliament to the Consolidated Fund is clearly out of order. That is clearly out of Order because it restricts hon. Members of this House from reducing the payment. This is clearly an Amendment to increase the charge.

12.42 a.m.

Mr. ATTLEE

If the service of the debt is not provided under Clause 2, it comes under Clause 3.

The DEPUTY-CHAIRMAN

That is correct. It cannot come under a section if no provision is made. It may be made afterwards by Amendment. Consequential Amendments have to be made here to the Amendment if the charge is transferred from Clause 2 to Clause 3.

Mr. ATTLEE

Clauses 2 and 3 relate to debt subjects and to the services of the public debt. That is the service of the existing public debt of Newfoundland. In Clause 3 we have the guarantee of certain securities of public debt—certain issues of a sort to be guaranteed. That is an entirely different question. What we are complaining of is the service of the existing debt. This is simply taking a liability and giving certain new securities to be brought in through a new administration.

12.43 a.m.

Major NATHAN

It seems to be clear on the face of the document itself and Clauses 2 and 3 deal with entirely different subjects. I would suggest that the carrying of this Amendment, so far from imposing an additional charge upon the moneys provided, would exclude the possibility of funds being provided by this country. That refers to the public debt under Clause 2. Clause 3 relates to the issue of stock. It provides for the guarantee of interest and the guarantee of the sinking fund. It states that these shall be charged on the Consolidated Fund, so that if the point made by the Financial Secretary to the Treasury is correct the only point would be to bring Clause 3 exclusively into operation—the debt on the Consolidated Fund upon which it has been put by the precise provisions of Clause 3. I think it is sufficiently clear that Clauses 2 and 3 deal with entirely different subjects.

12.45 a.m.

Mr. McENTEE

May I submit with regard to the Amendment which I have been moving that Clause 2 deals with two specific things which the Secretary of State may do. All my amendment suggests is that the power conferred upon him shall be limited, and that only one instead of these two powers shall be vested in the Secretary of State. It has got nothing to do with the other matter referred to by my hon. Friend. I submit that my Amendment should be ruled to be in order and that the interpretation given by the Financial Secretary to the Treasury is an entirely wrong one.

12.46 a.m.

Sir S. CRIPPS

May I refer to page 246 of the Report. That is the public debt dealt with under Clause 2—the existing and issued public debt. Clause 3 deals with provisions which allow the Treasury to make new issues of stock and not existing public debt. Whether these powers will be used to redeem some of the existing public debt makes no difference. The charge for the existing service of the public debt is dealt with under Clause 2 and could not, under any interpretation of this Bill, fall under Clause 3. There could be no authority for the Treasury under Clause 3 to make any payments towards the interest for the existing public debt. It is only under Clause 2 that that is possible and and the elimination of this item would relieve this country, and this Parliament, from these charges, and they could not be put on any other funds.

12.48 a.m.

The DEPUTY-CHAIRMAN

This is really a very difficult and technical point. I have no desire to deprive any hon. Member of any opportunity of raising it. It seems that loans issued under the Loans Act, 1933, of Newfoundland, must be regarded as part of the fund. That is a technical matter, and I would be very pleased if the Minister would give his views on this point. The placing of this debt on the Consolidated Fund would increase the charge. If it does, it is not in order.

Mr. HORE-BELISHA

I would be most ready to meet the point if it were advanced in debate, and the Amendment were proved to be in order. I submit that your Ruling is perfectly correct. The new loan to be raised by the British Government is to be guaranteed and is to be used for redeeming a debt either in cash, or by the issue of new stock for those who desire to have it. That is the short position. The effect of this Amendment would be that in the first place we should be empowered to make advances for any purposes of administration of Newfoundland, excluding the services of the debt itself. But to the extent to which the debt is excluded by the Amendment here moved, it would be covered by Clause 3, and the only effect of the Amendment would be that it would be paid out of the Consolidated Fund. When we come to that Clause, hon. Members opposite are moving an Amendment that it should be paid out of moneys provided by Parliament.

12.51 a.m.

Sir S. CRIPPS

May I point out that the public debt of Newfoundland at the present time does not include anything issued under the Loan Act of 1933. Nothing has been, or can be now, issued except by the Commission or in accordance with its decisions when it is set up. Of course, the Second Schedule has nothing to do with anything with which we are concerned in this House, but is merely a recital without any operative force whatever. The position is that all existing debt of Newfoundland is dealt with in Clause 2—that is, the Schedule which occupies pages 246 to 252 in the report of the Commissioners, For the service of that debt the money—

Mr. SPENS

May I ask why the hon. and learned Member suggests that Clause 2 is confined to the existing debt? It is for the service of the public debt here and ever after. That is the point.

Sir S. CRIPPS

If the hon. and learned Member will allow me to go on with my speech, what I am suggesting is that the service of the public debt under Clause 2 means money for which the Government of Newfoundland is indebted.

Mr. SPENS

Or may be indebted.

Sir S. CRIPPS

No. The hon. and learned Member is wrong, because it cannot become indebted in any further sums except under Clause 3. The provisions now are that the Governor of Newfoundland cannot issue any more loans. The only person who can issue them is the Treasury under Clause 3, and in accordance with the Loan Act of 1933 which is one of the Schedules in this Bill. The provisions for which any such issue as can be made are entirely in Clause 3. No other issue can be made.

Mr. SPENS

Under Clause 2 of the Loan Act the Governor in council, that is to say, the future Government of Newfoundland, is going to issue the stock guaranteed by the British Government. The concluding words of Sub-section (1), Clause 2, are that the British Government is to have power to advance money out of moneys provided by Parliament for the present and future expenses of the administration of Newfoundland, including the defraying of the expenses of the public services and the service of the public debt.

Sir S. CRIPPS

I am completely at issue with the hon. and learned Member on this point. Clause 2 is providing the means of providing money out of moneys provided by Parliament. That is to say, it is not out of the Consolidated Fund and for the service of the public debt which has so far been incurred by the Government of Newfoundland. As to the administration or ordinary budget expenses, money is to be provided by Parliament. On the other hand, under Clause 3 a complete system of providing money out of the Consolidated Fund for all future issues is made. If the construction of the hon. and learned Member is right, this provides two methods of paying interest on the same issue. He nods his head, but it is so. It says that if at some future date an issue is made under Clause 3 it will be made part of the public debt of Newfoundland, and therefore service can be provided under Clause 2. Therefore, there are two completely different ways of serving the public debt. If the construction of the hon. and learned Member is right, there is a double provision for the payment of interest on the same amount of public debt out of two different funds. That is an interpretation which clearly could not conceivably be put on a Bill or Act of Parliament—that you have two provisions with no direction by Parliament as to which of them may be used.

Mr. HORE-BELISHA

In so far as this money is not met out of moneys provided by Parliament, it is provided by the Consolidated Fund. The Consolidated Fund only comes into operation if interest is not met and the guarantee falls to be met. Clause 3 says: The Treasury may, for the purposes of any issue of stock by the Government of Newfoundland under the provisions of section two of the Loan Act, guarantee, in such manner and on such conditions as they think fit, the payment of the principal of, and the interest on, the said stock, and the payments to be made to the sinking fund to be established under the Loan Act. That means the whole thing—capital, interest, and sinking fund. Any sums required by the Treasury in fufilling the guarantee are to be charged on the Consolidated Fund, and, as soon as may be after the guarantee is given, the Treasury shall lay a statement of the account before the House. That means that if the Treasury are going to pay up anything as a result of their guarantee it has got to be out of the Consolidated Fund. Then they cannot provide it with moneys provided by Parliament for the service of the public debt.

Sir S. CRIPPS

There is no direction as to which way Parliament shall find the money.

Mr. HORE-BELISHA

If they did not provide it the guarantee would fall to be met.

Sir S. CRIPPS

Parliament cannot say to the Treasury, "Here are two funds out of which you can meet this single charge of interest, and we give you no direction out of which you are to meet it." That means that there is an indefinite, indeterminate position. Is the Treasury coming to Parliament to ask for this money or not?

Mr. HORE-BELISHA

The hon. and learned Member will agree that we are only seeking to discover the truth in this matter. This does not contemplate that there will be a charge on the finances of Newfoundland for 40 years. The Government may change in Newfoundland, and to the extent to which they are not met by funds of Parliament they will be met under Clause 3 out of the Consolidated Fund if the guarantee fails.

Sir S. CRIPPS

Further to that point, what the Government are guaranteeing is made quite clear in the Second Schedule. It is the credit of Newfoundland. It is not its own payments under Clause 2, and it is only when the credit of Newfoundland falls short that under Clause 3 the Government guarantee it. They cannot do the same thing by making a subscription to Newfoundland under Clause 2, because otherwise the hon. Gentleman would be asking Parliament to give him two alternative ways of doing the same thing without any direction as to which he is to use.

The DEPUTY-CHAIRMAN

I have listened to this very carefully. It is obviously a very intricate point. I am prepared to allow the hon. Member for West Walthamstow (Mr. McEntee) to proceed on the strict understanding that the service of the debt is limited to interest entirely.

1.2 a.m.

Mr. McENTEE

I thank you, and I shall try not to transgress. At the point I was speaking when the question arose I was endeavouring to point out that, taking myself as an example, I know of no reason why I should be compelled to guarantee to the bondholders of Newfoundland stock the interest on the money that they lent to Newfoundland. In the same way, I argue that I know of no reason why any British taxpayer should be compelled to pay his taxes for that purpose. After all, one is, I think, naturally inclined to ask if we are to agree to this guarantee and if we are to meet the interest on this money that has been lost by the bondholders to the Newfoundland Government, what return do we British taxpayers get, and for what purpose are we asked to make these loans to pay this money? I know of no reason at all, and I have heard the speeches of the Chancellor of the Exchequer and the Dominions Secretary, and neither of them so far as I heard even gave the slightest reason why the British taxpayer should be compelled to meet what would have been the bad debts of the Newfoundland Government for those who lent money to them.

We have a right to object, and I think, personally, it ought to be the duty of every member of this House who represents the taxpayers in his constituency to object to this ramp, because it is nothing short of a ramp. I cannot help feeling that there is a sort of brotherly feeling between bondholders in this country and other countries, and when one is attacked, in whatever country it may be, then the brotherhood of bondholders or the freemasonry of bondholders comes into play, and they are prepared to sacrifice other people's money so that their money may be secured. This is what we are doing. We are prepared to sacrifice the money of the people of this country to what would have been a bad debt to the bondholders. I am protesting against this on behalf of the people in my constituency.

If the bondholders themselves had admitted that they were poor people, that the loss would be very heavily felt by them, and that their condition might be as bad as the people in Newfoundland, one might be prepared to concede that, from the humanitarian standpoint, some concession might be made to them along the lines of this Bill. Most of them are people who have, apparently, a considerable amount of spare money for investment, and when they make investments they ought to take the risk of the ordinary investors. Those who have money to invest in this country are expected to take the risks on their own investments and those who have no money to invest are expected by this Bill to take the risks and responsibility of making good the losses of those people who lent money to Newfoundland. I think, frankly, that this is disgraceful to our people, many of whom are in a very poor state. I have heard a good many Members some of whom are now sitting on the Front Bench talking about the poor widows. We have heard a good deal about the poor widows. We are not considering them, but large corporations.

The DEPUTY-CHAIRMAN

The hon. Gentleman is really going beyond my ruling. It seems to me to be really a question of loss of money that comes under the guarantee. It is a simple question whether an estimate would be provided for the service of the public debt, and I must ask the hon. Gentleman to keep close to that point.

Mr. McENTEE

I think it was interest with which I was dealing. There is no difference between money paid in interest or principle. I am objecting to both. I submit that it is in perfect order, if the taxpayers of this country are being called on to pay that interest, and it is against that that I am raising my objection. I submit that the poor people in this country are being taxed more heavily than they ought to be taxed so that interest may be paid on debts incurred by people, many of whom are foreigners, and I make the strongest possible protest against it. I hope the Committee will give it serious consideration in the interests of the people in their own constituencies, and that they will refuse the sanction for which the Government are asking in this Bill.

1.8 a.m.

Mr. RHYS DAVIES

This is the first occasion in which I have intervened in this very important Measure, and I do so not with the intention of prolonging debate at all. The main reason I move the deletion of these words is a very simple one; it is to show the difference in the attitude of His Majesty's Government towards the interest on the Newfoundland debt and the attitude of the same Government towards the debt on our own Unemployment Fund. Quite frankly, it is a very serious difference. People in Newfoundland whom we have never seen say to the Government when they have contracted a debt that we must come to their aid and guarantee the interest and pay their debt, while our own people at home who are unemployed have to find the money themselves to meet the interest and the capital expenditure upon the debt incurred by the Unemployment Fund. I say there is a distinction to be drawn in that connection.

I now turn to something which is very much more intimate in this connection. I should like to know, first of all, what is the interest now payable on the several debts to which this Clause relates? When I turn to the description of the public debt on page 246 and onwards I find no reference at all to the amount of the interest. Hon. Gentlemen on the other side must not imagine that because we are Labour men we know nothing at all about finance. Some of us happen to have had to do with money on behalf of our societies, and we know something of the value of interest payable on investments. I ask the hon. Gentleman in charge of the Bill to tell us what is the rate of interest on each of the several items of the Newfoundland debt, and what rate of interest is going to be guaranteed to people out of moneys provided by Parliament under this Clause? This is a strange state of affairs. Hon. Members may be interested to learn that I have actually read this Report from cover to cover. It is the most amazing document I have ever read. You would imagine we were dealing with a, country in the Balkans, and not one within the British Empire. Everything that happens in Newfoundland is happening in the Balkans every year, and I should have expected something better in relation to public debts and the interest thereon within the British Empire than is here disclosed.

I ask the hon. Gentleman, therefore, to answer one or two questions. As far as I can gather from this document, the public debt is roughly 100,000,000 dollars. I take it that the value of the dollar in Newfoundland is approximately the same as the dollar in the United States and in Canada? Some hon. Members have been in Newfoundland. The nearest approach I have made to that country was to pass it on the left when going through the Belle Isles and the St. Lawrence River. I do not know very much about the internal affairs of Newfoundland, but it would be very interesting to find out what rate of interest was contracted in respect of these debts. There is going to be a difference in the interest payable on the debt, as it is transformed under this Clause, in comparison with the interest on the debt now under discussion. I have no title to quarrel with learned Members who practice at the Bar, but I quite understand it is the intention of the Government, under this Clause, to see the whole debt of Newfoundland converted into one new debt at a lower rate of interest than is 'at present payable. The old practice of conversion would be brought into operation in this connection. I say this to prove to hon. Members that Labour understands just a little about finance.

I pass on to analyse the type of debt that we are going to deal with, and the amount of interest thereon. We have a few hundreds of thousands of dollars in these items here. The first is 480,000 dollars, another is 320,000 dollars, then there is 60,000 dollars, and so on, but there is no indication against these figures as to where the debt has been contracted. In all the docu- ments issued from Government Departments in this country, and in almost every other country in the world, when you have items of debt set out, there is at least an indication as to where it lies. None of us ought to owe a pound without knowing to whom we owe it. Let us see what the Newfoundland Government has done in the past in relation to the contraction of debts. First of all, there is a debt of 973,000 dollars to repay debentures and floating liabilities to English and local banks. Hon. Gentlemen below the Gangway have been very eloquent, and I have applauded them all along in their attack on bondholders. This is an item which definitely plays into their hands; it is contracted with English banks. If it had been contracted with Scottish banks, probably hon. Gentlemen would not have said quite so much about it.

Mr. BUCHANAN

I could give reasons why we should have said more.

Mr. DAVIES

Will hon. Gentlemen below the Gangway explain to us why they object so much to paying English bondholders in particular? [HON. MEMBERS: "Are there no Welsh bondholders?"] No. Welsh people would never lend money to a country like Newfoundland. They know too much about the Governments of these countries to lend them any money whatsoever. I wish the Dominions Secretary were here, because nearly all this money which constitutes the Newfoundland debt is a debt on railways. I do not know whether the right hon. Gentleman, being an ex-railwayman, would be able to tell the Committee a little more as to why nearly all this money has been lent on railways. The most amazing thing of all in connection with the railways of Newfoundland is that 5,000 acres were given free as a gift to the builder of the railway for every mile of railway he constructed. In the end, I suppose, there was not enough land in the whole of Newfoundland to give away. The purchase of the Newfoundland railway—and this is the present debt—has cost them 1,500,000 dollars. Just imagine a country like Newfoundland purchasing a railway within its own territory. One would have imagined that this railway would have belonged to the Government of Newfoundland from the beginning. There is another item I do not understand. Perhaps the Financial Secretary to the Treasury will enlighten me. This particular item is the repurchase of railways for 2,500,000 dollars. That seems to indicate to me that the State of Newfoundland had owned their railway once upon a time and sold it to a private company. They repurchase it. That is a terrible state of affairs.

The CHAIRMAN

I have only just come into the Chair. I have difficulty in understanding what this has to do with the service of the debt.

Mr. DAVIES

The real point I am trying to raise is that the service of the public debt is the interest payable on that debt, and the administrative cost of dealing with the payment of the interest. On the debt with which I am dealing the interest is to be payable in future out of moneys provided by this Parliament I hope to find that I am in order.

The CHAIRMAN

I am afraid the hon. Member must explain; I do not see how this relates to public debt.

Sir S. CRIPPS

The public debt is made up of the items on pages 246 to 252 at the end of the Report. That gives the items on which the various loans have been expended. I think the hon. Member is entitled, in dealing with the desirability of this Parliament defraying the interest upon that debt, to comment on the items making up the debt and the desirability, or otherwise, of guaranteeing it.

The CHAIRMAN

I cannot see at present how the hon. Member covers the point.

Sir S. CRIPPS

The debts are specific sums raised for specific purposes under specific Acts of Parliament which authorise the expenditure of the money upon certain specific purposes and, therefore, the debt is identifiable with the purposes for which it was raised. That appears on page 246, which gives sums for Newfoundland railways. The money was raised for that purpose, and upon it the interest is now chargeable, that being one of the provisions under Clause 2, the service on which is being provided out of moneys to be provided by this House in the future. I suggest that the hon. Gentleman is entitled to comment on whether it is desirable we should pay the services of the debt.

The CHAIRMAN

Perhaps I will let the hon. Member proceed with his speech, but with the warning that I do not quite agree with the hon. and learned Gentleman's contention. I do not think we can go back on details of the expenditure, but must deal with the loans the services of which are covered.

Mr. DAVIES

I do not want to wander down the whole of the list. I would like to give one or two illustrations to show what we are asked to do in the way of shouldering payments out of moneys provided by this Parliament. Let me give one case. Really the hon. Gentleman must give us an answer to one or two of these. The more I look into the debts the more terrible the situation appears. There is a debt of a municipality of 100,000 dollars. We are going to shoulder the responsibility of the interest on the debt of that municipality. As far as. I can see, it does not own its tramways, and I do not know whether it owns it own water supply. I feel that the Government are in a serious difficulty in helping to solve this Newfoundland problem. We ought to have more details about these debt charges than have been given to us up to now. How does it come about that we are asked to pay the interest, through our own taxpayers, when we are told that the personal savings of these people amount to 26,000,000 dollars? We are told by the Commission's report, I think, that the Newfoundlanders regard these savings as sacred. If people hold that view, we ought to turn round and say that our savings are sacred too. We ought to have some information from the hon. Gentleman how it comes about that we are called upon to undertake this responsibility when the people of Newfoundland—only 260,000 of them—have personal savings amounting to 26,000,000 dollars.

The CHAIRMAN

I am afraid that that is too remote for me to allow.

Mr. DAVIES

The issue seems to be a very narrow one. I must conclude by pointing to one other item which I do not quite understand. After all, we are shouldering this particular responsibility along with other responsibilities because of the finances of Newfoundland. That is on account of the way they have mismanaged, and the way the Government there have conducted themselves. I have always thought that the economic condition of a country could be measured very largely by its capacity to meet public debt services, and that this depended mainly upon the volume of imports and exports. The figures on that store in the Royal Commission's Report are not very much worse than our own and, if that be a factor in the economic condition of Newfoundland, we ought to consider twice before we shoulder its responsibilities. For these reasons I have no doubt that we are incurring a grave responsibility indeed, and I have no hesitation in supporting the deletion of these words.

1.29 a.m.

Sir PERCY HARRIS

We should have made clear the answer to one or two financial points. I take it that this is a comparatively narrow point. It is that our liability is to make good the failure of the revenues of Newfoundland to meet its expenses for the ordinary current work of the Government and the interest on the national debt. Clause 2 uses the words that there shall be working balances the Treasury consider adequate to meet the liabilities, in so far as the revenues fall short of the amount required. Are we entitled at this stage to ask the Financial Secretary what estimates his advisers have made as to the deficit; whether it is likely to be larger next year, and on what figures they base their estimate?

The CHAIRMAN

I am afraid the hon. Member is discussing the whole subject of the Clause rather than the particular Amendment regarding the question of the services of the public debt.

Sir P. HARRIS

I think I can make my point perfectly clear. We are discussing an Amendment that we should leave out the words "defraying the expenses of the public debt."

The CHAIRMAN

The hon. baronet is wrong. The Amendment is to leave out the words "and the service of the public debt" not "defraying the expenses."

Sir P. HARRIS

"defraying the expenses of the service of the public debt"—if we leave out those words our liability will be decreased.

The CHAIRMAN

I think I am right. "Defraying" applies to two things—(1), expenses; (2), service of the public debt. We are now discussing service of the public debt and not expenses.

Sir P. HARRIS

The service of the public debt must be found by revenue in one form or another. Surely we are entitled to find out what our risk and liability is if we keep these words in.

The CHAIRMAN

The hon. baronet means that he wants to know what the expenses of the public services are.

Sir P. HARRIS

Yes

The CHAIRMAN

Then he is not in order.

Sir P. HARRIS

I want to know by what we shall economise by eliminating these words. The Financial Secretary to the Treasury must have an estimate. If these words art omitted, we want to know whether our liability will be changed. If the revenue is not likely to be large enough to meet the service of the public debt, we are justified in hesitating to pass these words.

1.33 a.m.

Major NATHAN

I support the Amendment, but I approach it from a rather different angle. I object to the British Parliament finding out of British funds the service of these loans for these reasons. In the first place, we are asked by this Bill to provide moneys from Parliament—that is, from the pocket of the British taxpayer—for the service of loans in Newfoundland which have been raised for purposes for which public loans of that character are not allowed to be raised in this country—for example, railway loans, and loans for other public works and services. That seems to me to be a very substantial reason why we should not provide money from this country for the service of loans in another country. Certainly it is very unlikely that the present Government would introduce such a loan. In the second place, I think it must be assumed that when lenders lend money they do so having looked at all the surrounding circumstances and make their bargain accordingly: and the reason why an investor put money into Newfoundland was because he liked the look and liked the credit of Newfoundland better than, say, Peru. He had a free choice of investment all over the world and chose Newfoundland. The investment has turned out badly. But that is no reason why the British taxpayer should accept responsibility. If every time I made a bad bargain I could ask the British Government to make good my mistakes I should be a much happier man.

There is another objection. It is about time that the public at large understood what is the meaning of a trustee security and realised that it is not a guarantee by any Government, but simply a protection of a trustee against losses incurred by an investment. It is a safeguard and not a guarantee either of capital or interest. It is really time that that was understood by the public. Also, it is doubtful in a very grave degree whether many of the securities coming within the provisions of the Colonial Stock Act, and thereby becoming trustee securities, should be there at all. I want to know whether, if it had not been Newfoundland but had been Australia with an infinitely larger public debt—and there were grave apprehensions not long ago that such a situation would arise—would the British Government have proposed the service of the Australian public debt to be borne by the British Parliament? Is it not rather a bad precedent to set? It is said that you ought to provide this money for the purpose of maintaining the credit of the Empire. I am very anxious that the credit of the Empire should at all times be maintained. But it has been destroyed by Newfoundland. You are not maintaining the credit of the Empire by saying that the British Government will come to the rescue, unless you are prepared to go one step further and say that you will come to the rescue of every defaulting part of the Empire. Is the Financial Secretary to the Treasury prepared to say that the British Government will accept that very heavy responsibility? Unless he does, there is no justification for this provision in the Clause.

1.39 a.m.

Sir S. CRIPPS

I am rather at a loss to know just what the liability is that we are accepting. Under Clause 2 the provision is made for defraying two things—the expense of the public service and the service of the public debt. Looking at the Budget speech for this year made last June, on pages 26 (3-271, I find an estimated deficit of 2,145,267 dollars for the current year, in the middle of which this Commission will presumably take over the financial provision. That sum, as I judge from the statement on page 264, is arrived at after balancing the receipts and expenditure, the expenditure including an item of interest on public debt for 5,200,000 dollars. This is roughly half the total expenditure on all services in Newfoundland. Take the loss of 2,145,000 dollars, which is less than the interest on the public debt. In other words, if there were no interest to be paid on the public debt, there would have been a surplus of 3,000,000 dollars, and that very surplus could have been expended to the extent of nearly 60 per cent. on the services in Newfoundland. If we eliminate this item of the service of the public debt, we shall thereby, as I understand, enable the money we contribute from this country to be utilised for the extension of the various social services in Newfoundland. It is an alternative, given a certain sum of money. Assuming we make up the deficit of 2,145,000 dollars, and we can eliminate this item of the service of the public debt, then we can give that entirely towards an increase of social services.

The CHAIRMAN

Does the hon. and learned Gentleman suggest that by leaving these words out, there still remains an obligation upon this country to provide the whole of the deficit, including these services?

Sir S. CRIPPS

No. Sir.

The CHAIRMAN

Then I am afraid he cannot discuss what would be done.

Sir S. CRIPPS

On that point, I am trying to argue as to the effect of the omission of these words. At present, Parliament is giving authority to the Treasury to make an advance to the Government for all purposes. I am pointing out that if we give only the grant of money that will be voted by Parliament, and say it is not to be used for the service of the public debt, but only for expenditure under the other heads, then there will be a larger sum available for expenditure in Newfoundland. I am canvassing the relative merits, assuming that Parliament would be prepared to vote the given sum—I take 2,000,000 dollars as an example—and allowing that to be expended on public services only, that would be the effect of the amendment we are proposing. I would point out that these various expenditures on the public services which amount to 5,764,000 dollars can by that device be made more ample without incurring any further charge upon Parliamentary funds in this country. That is to say, by our not supporting the foreign bondholders, we can give a similar or equivalent amount of money to increase the expenditure on the public services, and anyone who reads through the Budget speech will see how extremely starved the whole of these public services are. Time after time the Minister regrets the insufficient provision for the public services education, poor law maintenance and the other public services, and were we to adopt this Amendment we should then, at the same expense, divert money to assist Newfoundland, and not make payment to the bondholders. This would enable more education to be given, and better poor law relief which is absolutely at the rock bottom at the present time. If there were a referendum in this country at this moment as to whether we ought to contribute to the bondholders or devote the money to public services, I am sure that the people would be unanimous to devote it to the public services.

Let me look at this from another angle. It is a very striking thing that the Government should select as beneficiaries the people referred to in the proposal. The first thing one noticed is the large sums in temporary loans bearing interest at a high rate. I should be glad if the Financial Secretary would throw light on these loans. All these temporary loans are by Canadian banks, and not British Banks. I really do not understand why the people in this country should pay interest on loans made by Canadian banks in order that the Government of Newfoundland should pay interest on its public debt, because that is all these loans were for. These sums which form part of the public debt of Newfoundland are held entirely in Canada—Canadian bank loans—and not by residents in this country. There was the Bank of Montreal, the Bank of Nova Scotia, the Royal Bank of Canada and so on. They allowed these overdrafts to the Government of Newfoundland, knowing, as they must have known from the years 1931 to 1933, what the state of Newfoundland was. Now, having made bad loans like banks here might have made to Hatry, they come and ask through the Government of Newfound- land that we should guarantee the services of these loans. I very strongly object—

The CHAIRMAN

I think that if the hon. and learned Gentleman looks, he will see that that would come in on Clause 3.

Sir S. CRIPPS

On that point, may I point out that the Deputy-Chairman was quite sure that to discuss as far as interest was concerned was in order.

The CHAIRMAN

The services of loans are what we are dealing with, not the guarantee.

Sir S. CRIPPS

I am not dealing with the guarantee but with the services, and whether it is necessary to pay interest on these sums which Parliament is undertaking to provide. I am referring to the money to be paid for the interest on these Canadian loans. There is another matter to which I wish to draw the Financial Secretary's attention. One of these loans in respect of which we are going to pay the services was raised in Canada in 1932. It amounted to 2,500,000 dollars, when it was obvious that everybody knew what the state of Newfoundland was, and the rate of interest was 5½ per cent. Well, 5½ per cent. in 1932 was a very high rate for anything like a good security, and therefore the speculative nature is shown by the high rate of interest at which it was issued. Again, there was the debt issued to mature on 30th June, 1947—the Canadian Fund it is called. I do not see why these Canadian people should take highly speculative investments at a high rate of interest in Newfoundland in 1932, and then be provided with moneys out of funds provided by Parliament. There are other loans as recently as 1930. The last loan was for 5,000,000 dollars. I do not know whether it was issued in London or in Canada, nor indeed, can I tell from these loans at all where they were issued. I do not know whether the hon. Gentleman has any information to give us as to where they are held. They were all in dollar amounts, but I presume that where they were issued in sterling they have been translated into dollars. Where it says they were merely gold or Newfoundland bonds, I do not know whether they were issued locally or not. It is a matter of some importance that if one is going to be kind to bondholders, one may as well be kind to British bondholders. I see no reason why one should give any further donation to the New York bondholder. He had his dollar last summer when he got £5,500,000 from the Chancellor of the Exchequer. It is not his turn now to come round with the hat again just yet.

This matter, also, has some reflection on the liability of Canada for taking on some portion of this burden which we are asked to assume. For these reasons we feel that this Amendment should be made. It would then have the effect of seeing that any money which Parliament is prepared to provide should not go either to the American or Canadian bondholder who has speculated in Newfoundland. Unfortunately for him, he has come off badly, but I daresay in other speculations he has come off well, and what he has lost on the swings he has made up on the roundabouts. Instead, it should go to the people in Newfoundland—in the social services, such as relief of the poor, education, better facilities of all kinds, to which, as I understand the speeches of the Government, are what they really wish it to go. We are here providing the Government with a very convenient means of giving expression to what which they profess to be their desire.

1.54 a.m.

Mr. HORE-BELISHA

The Amendment has been viewed from two aspects, one a purely technical aspect presented by the hon. and learned Gentleman, and the other the broad question of whether or not we should allow Newfoundland to default. On the technical point, I think the hon. and learned Gentleman will appreciate that if we did not meet the service of these loans out of moneys provided by Parliament, we should have to meet them out of the Consolidated Fund under another Clause. I agree that there may be something in his point of view that some portion of the public debt might perhaps be excluded, but I think he will meet me by admitting that, as regards the major part of it, it is now to be guaranteed, and will therefore fall to be paid out of the Consolidated Fund if there is any default on interest. I should not think he would dispute that point.

Anxious as I am to admit that there may be something in the case he presents, I think at any rate he will agree that the whole purpose of this Bill is to enable Newfoundland to balance her Budget, and to enable her to meet her debts, and thus free her from the necessity of default. If we are not going to help Newfoundland to that extent, of course the whole Bill falls to the ground, and there is no purpose in the discussions which we have been having the whole of this sitting and on previous occasions. I cannot tell—nobody can—in exactly what fashion each of the debts raised in Newfoundland in the course of the long past has been employed—whether honestly or dishonestly. I am dealing now with the point made by the hon. Member for Westhoughton (Mr. Rhys Davies), who asked a question about the railways. I could not be expected to answer that. I am dealing, on behalf of the Government, with a very broad question: Should we, or should we not, meet the obligations of Newfoundland and guarantee a loan for that purpose? I think we should; and the Government think we should.

The Government further think that the onus of default would be felt not only on the shoulders of the bondholders, but on the shoulders of the population of Newfoundland. The Royal Commission have pointed out with great eloquence the sorry consequences of default, and they have definitely stated that if the country were not in a position to raise the money, the standard of living of the whole people would be decreased. Yet, in spite of that, hon. Gentlemen to-night have said that the money in the savings banks ought to be first to be employed before any assistance is given to the country. I would point out, in order to remove misconception, that all those who apply for relief in Newfoundland arc required, before relief is given, to sign an affidavit that they have no resources.

Mr. McGOVERN

What about the bondholders?

Mr. HORE-BELISHA

The hon. Member will appreciate that I am dealing with one point at a time. It has been stated to-night that there is money in the savings banks, and I am merely pointing out, in reply, that all those who apply for public relief in Newfoundland are completely destitute and resourceless. If everything in the savings banks were distributed among the population, it would only amount to eighty dollars a head.

Mr. McGOVERN

DO the bondholders have to sign that?

Mr. HORE-BELISHA

No. The hon. Gentleman and myself disagree about the bondholders. I have put the point of view that if Newfoundland defaults—and, indeed, if any country defaults—on its obligations, the people who suffer are the poor because no further money can be borrowed for public works or any other purpose. You have to make up your mind—and this is the whole issue: Are you going to be a country which meets its debts or are you not? Hon. Gentlemen opposite think that there is some advantage to be obtained from default, and we, on the other hand, think otherwise. That is the true issue. I pass from that to answer certain specific questions put to me about the cost of meeting these obligations. As the result of guaranteeing the obligations of Newfoundland and enabling her to borrow on a lower interest basis, namely, at 3 per cent., we shall save her £350,000 a year. The precise treatment to be meted out to each category of bondholder is laid down in full detail in the White Paper, and I hardly think the Committee would expect me to go through these particulars again. The hon. Gentleman selected certain loans provided by the Canadian banks and asked me what percentage of interest was charged. I think it was 5½ per cent. for the year 1933.

Sir S. CRIPPS

5½ per cent. for the year 1933.

Mr. HORE-BELISHA

I am sure the hon. Gentleman with his experience will agree that these loans were presumably made, by the Canadian banks before this Bill was introduced. They were asked to provide certain moneys to a State in difficulties, and they lent money which was secured upon the Customs. Part of the effect of our proposals will be to relieve these assets. The Canadian banks will be paid off as well as other secured loans. I am sure the hon. Gentleman will appreciate that they are dealt with in the White Paper, and he would not expect me to go over them again. If there is any specific information required I shall be only too happy to supply it.

Sir S. CRIPPS

Why should we accept this responsibility in this country for these Canadian banks and bondholders?

Mr. HORE-BELISHA

I thought I had answered that question in this way: At a certain point, a critical juncture, we offered to take over the obligations. We had no say in the contraction of these obligations. If we had been the borrowers, lower rates would have been paid. We came to the assistance of the daughter country and, whatever the terms on which she may have borrowed, we are prepared to meet the obligation. I agree that this is an occurrence without precedent. This is a Dominion surrendering its independence and coming to this country, proud in the desire not to default, and asking us to take over her administration. I do not think that can be considered a precedent. I think Newfoundland has acted in a way with which we can all sympathise, and we have performed an action of which, although it may cost us up to 1936 £2,000,000, we have no cause to be ashamed.

2.5 a.m.

Mr. ATTLEE

There is one reason why the hon. Gentleman should say that this is not a precedent. This is not the first time in the last two years that we have been asked to shoulder the probable losses made by capitalists and speculators. It is not very long since we had to shoulder a loan in which we transferred from the Bank of England to the shoulders of the people of this country the loans made to Austria. Why should we take the whole of the burden. Newfoundland is part of the British Empire, and we are going to pay debts all over the world. We do not know who the people are to whom we are going to pay this money. If they are all in the British Empire, the hon. Gentleman might make an appeal to them to help. I think that Canada might have paid her own nationals. I am rather suspicious of this business altogether. We know that we have had a series of extremely corrupt Governments in Newfoundland, and I should have liked to have known a great deal more about the rest of these loans. I should have liked to have known who holds the stock.

We had an extremely illuminating parallel case last June. We had then an extraordinary case in which the Chancellor of the Exchequer came forward to help people who had speculated in 5½% gold Bonds. We asked who were the recipients of the dollars, and he said some might be in the City of London. I put down a question, and the House will recollect, that the cost was about £7,000,000. I found that nearly 55,000,000 dollars of that was held in New York. In that case we had the satisfaction of making a present of a good many millions to the citizens of the United States of America who were suffering because of the action of their own Government in repudiating their own obligations. That kind of generosity is becoming a characteristic of the present National Government. It is international, so far as advances are concerned. We are being asked in every possible way to pay up the debts of other people. There is a parallel case of this. We are going to meet the services of public debts under the Ottawa and other agreements. We are actually to pay money for the payment of the services of the public debts of Australia, New Zealand and the Argentine.

We have put down this Amendment because we do not agree with the hon. Gentleman that this is the way to do it. We believe that it would be much better frankly to say that Newfoundland had gone bankrupt. I believe then you would have taught a useful lesson to the other Governments overseas. That would also be a useful lesson to investors. We would then be free of the unjust obligations of the bondholders for the service of the public debt. You could then have started to make experiments in giving Newfoundland decent government and administration arid a decent economic system. We are giving encouragement to everybody to think that if they invested their money in any part of the Empire it does not matter. It does not matter how much the Chancellor of the Exchequer or the Dominion concerned say that this country is not responsible. The Imperial sentiment will always mean that if the boy is brought up in court the old man will foot the bill. That is the position between ourselves and the Dominions, and the hon. Gentleman says that it is not a dangerous precedent, or he says that it is not a precedent. He does not realise that the feeling for the Mother Country is the same as that of the boy who writes home and desires money. I have always seen in the Imperial Conference an extraordinary readiness in this respect. This is an extraordinary encouragement to any part of the Empire to think that it can spend its money as it likes, and that the honour of the Empire means that in the long run the Mother Country will foot the bill and that, if it is a Conservative Government here, it will put it on the backs of the workers.

2.10 a.m.

Mr. MAXTON

I wish the hon. Member who has just spoken had explained to the House what happens when all the peoples of the world come and ask father to pay his own debts. Then will come what is known as the "show down". I have never taken the view, in the whole course of these discussions, that we should allow Newfoundland to default. I have always assumed that it was not practical politics to suggest that to the present Government. But surely there is some middle course between complete default and acting in a foolish profligate manner. I support the Amendment, because in the last 12 months I think we have deliberately not merely stepped in to prevent reforms but to boost the value of bad stock on the market. It is at a premium now. We not merely intervened to an extent to prevent default, but we made Newfoundland stock have an entirely fictitious value in relation to the resources of the country. It is one thing to say we cannot have these bonds becoming wastepaper in the stock markets of the world, but it is an entirely different thing to say that we will boost them up to the sky by giving them a backing which we would not give to any investment in this country, whether municipal, local authority, public undertaking, Electricity Commission, or any other body inside this country—a one hundred per cent. guarantee that the resources of the nation would be behind them.

I protest against this particular item in Clause 2 which places the responsibility for the whole service of that debt on this nation and boosts that debt to a maximum point in so doing. We are entitled to ask from the Government that their Imperialistic sentimentalities shall not carry them into the region of doing things that are absolutely stupid from the business point of view. We gave the Chancellor of the Exchequer £3,000,000 to play with to keep our credit right in the markets of the world and our currency on a sound basis. He could have had the whole of this debt eight months ago for about two-thirds of its market price of what we are pledging ourselves to to-night if we allow this Clause to go unamended. It is preposterous that a Government having at its call the best financial expert advice should handle the affairs that it does handle on the worst possible basis for this nation. When this debt comes right back to us we shall have it at an enhanced value that nothing in Newfoundland justifies but is only given to the stock by the actions of this House at this moment. You are adding to Great Britain's indebtedness something in the region of £5,000,000 because of the fact that at a quarter-past 2 in the morning to-day the average member of the House of Commons is not sufficiently wide awake—[Interruption]—I am not now referring to the shift which has just come from bed, but to those who have been on the job all day. If that does not apply to my hon. Member opposite, then his case is just a case of gross carelessness. The House of Commons, quite irresponsible at a quarter-past 2 o'clock in the morning, is not prepared to apply its mind to realising that it is possibile to be an Imperialist and have a strong objection to financial default without acting like a spendthrift and profligate. I know it is no good appealing to men who will say: "We know our Dominions Secretary, his political reliability, his high business capacity, that he is a financial expert, and that anything he asks us to do we will do." That is the mood of the House. Therefore, I do not attempt to impress a few commonsense arguments against that mood. Fortunately, I am a free man who can walk into the lobby and oppose it and will not have it on my conscience.

2.20 a.m.

Mr. BRACKEN

I do not want to intervene in this Debate, but there was an observation made by the Financial Secretary when he said that a country which defaulted on its obligations could not obtain credit. I really must ask him if he is expressing the view of the Government in this matter, for France has defaulted in its War debt payments to the United States of America.

The CHAIRMAN

I think there must be some misunderstanding for the hon. Gentleman was talking about Newfoundland.

Mr. BRACKEN

In his reply he used the general example of a country which defaulted on its obligations, and could not obtain any credit in any part of the world.

Mr. HORE-BELISHA

I think my hon. Friend could not have been conscious of the fact that I was relating my statement to what appeared in the. Report on Newfoundland.

Mr. BRACKEN

I now see what the hon. Gentleman means. He should have used more correct language.

2.21 a.m.

Mr. E. WILLIAMS

We cannot accept what the Financial Secretary has said that the people of Newfoundland are likely to have some benefit. There is no evidence that the people of this country have had any benefit from this ré gime, and there is no prospect, as far as we can see, that the people of Newfoundland are likely to obtain any benefit. At a time when the conversion was going through the House of Commons, the rate of interest was reduced to 3½ per cent. We know now that the loan over there was at the rate of 5½ per cent. There ought to be some investigation into that matter, and before we can agree to this Bill we ought to know the result of that investigation. I do not think it is right to pay interest on a loan at 5½ per cent. while 3½ per cent. was being paid over here.

The CHAIRMAN

I think that this is an opportunity of warning the hon.

Gentleman, and also other hon. Members, that, owing to the way in which the Debate has proceeded, we have been discussing very fully a question which, as I reminded the hon. Gentleman on the front Bench, comes on the next Clause. I only want to remind hon. Members of that.

Mr. WILLIAMS

I do not want to press this matter, except to make a very sincere protest. Perhaps later in the morning we shall be discussing the Unemployment Bill, and, of course, the grant to distressed areas. That is an indication of the generosity of the Government of this country to its own people compared with what they do for bondholders. We had no knowledge of where these people live or their necessities, and we cannot conclude from the speech of the Financial Secretary that the poor people who are living in the distressed areas of Newfoundland are likely to have any benefit from this money. We arrive at this conclusion from the action of the Government to the poor people of this country, such as the people in the distressed areas in South Wales and other parts who are reduced to great distress.

The CHAIRMAN

I must warn the hon. Member that he is going far from the subject.

Mr. WILLIAMS

I accept your ruling, Sir Dennis.

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

The Committee divided: Ayes, 152; Noes, 27.

Division No. 33.]	AYES.	[2.26 a.m.
Adams, Samuel Vyvyan T. (Leeds, W.)	Burgin, Dr. Edward Leslie	Essenhigh, Reginald Clare
Agnew, Lieut.-Com. P. G.	Campbell, Sir Edward Taswell (Brmly)	Evans, David Owen (Cardigan)
Allen. Lt.-Col. J. Sandeman (B'k'nh'd.)	Caporn, Arthur Cecil	Fleiden, Edward Brocklehurst
Aske, Sir Robert William	Cayzer, Maj. Sir H. R. (Prtsmth., S.)	Fleming, Edward Lascelles
Baillie, Sir Adrian W. M.	Chamberlain, Rt. Hon. N. (Edgbaston)	Ford, Sir Patrick J.
Baldwin-Webb, Colonel J.	Chapman, Col. R. (Houghton-le-Spring)	Fraser, Captain Ian
Beaumont, M. W. (Bucks., Aylesbury)	Christie, James Archibald	Fremantle, Sir Francis
Beaumont, Hon. R.E.B. (Portsm'th, C.)	Colman, N. C. D.	Gilmour, Lt.-Col. Rt. Hon. Sir John
Beit, Sir Alfred L.	Cooke, Douglas	Gluckstein, Louis Halle
Bernays, Robert	Crookshank, Col. C. de Windt (Bootle)	Goff, Sir Park
Betterton, Rt. Hon. Sir Henry B.	Crookshank, Capt. H. C. (Gainsb'ro)	Goldie, Noel B.
Birchall, Major Sir John Dearman	Cruddas, Lieut.-Colonel Bernard	Graves, Marjorie
Borodale, Viscount	Davies, Maj. Geo. F. (Somerset, Yeovil)	Griffith, F. Kingsley (Middlesbro',W).
Bossom, A. C.	Dickie, John P.	Grimston, R. V.
Bowyer, Capt. Sir George E. W.	Duncan, James A. L. (Kensington, N.)	Guinness, Thomas L. E. B.
Boyce, H. Leslie	Eastwood, John Francis	Gunston, Captain D. W.
Broadbent, Colonel John	Edmondson, Major A. J.	Hacking, Rt. Hon. Douglas H.
Brocklebank, C. E. R.	Elmley, Viscount	Hannon, Patrick Joseph Henry
Brown, Ernest (Leith)	Emrys-Evans, P. V.	Harbord, Arthur
Burghley, Lord	Entwistle, Cyril Fullard	Hartington, Marquess of
Harvey, George (Lambeth, Kenningt'n)	Mitchell, Harold P. (Br'tf'd & Chisw'k)	Southby, Commander Archibald R. J.
Holdsworth, Herbert	Molson, A. Hugh Elsdale	Spears, Brigadier-General Edward L.
Hore-Belisha, Leslie	Monsell, Rt. Hon. Sir B. Eyres	Spencer, Captain Richard A.
Horsbrugh, Florence	Morris, John Patrick (Salford, N.)	Spens, William Patrick
Howard, Tom Forrest	Muirhead, Lieut.-Colonel A. J.	Storey, Samuel
Howitt, Dr. Alfred B.	Nation, Brigadier-General J. J. H.	Stourton, Hon. John J.
Hudson, Capt. A. U. M. (Hackney, N.)	Nicholson, Godfrey (Morpeth)	Strauss, Edward A.
Hudson, Robert Spear (Southport)	Nunn, William	Stuart, Lord C. Crichton-
Hunter, Capt. M. J. (Brigg)	O'Donovan, Dr. William James	Sugden, Sir Wilfrid Hart
James, Wing-Com. A. W. H.	Palmer, Francis Noel	Summersby, Charles H.
Joel, Dudley J. Barnato	Penny, Sir George	Sutcliffe, Harold
Ker, J. Campbell	Perkins, Walter R. D.	Tate, Mavis Constance
Kerr, Lieut.-Col. Charles (Montrose)	Petherick, M.	Thomas, James P. L. (Hereford)
Lamb, Sir Joseph Quinton	Peto, Geoffrey K. (W'verh'pt'n, Bilst'n)	Thompson, Luke
Law, Richard K. (Hull, S.W.)	Pickering, Ernest H.	Thomson, Sir Frederick Charles
Leckie, J. A.	Pybus, Percy John	Thorp, Linton Theodore
Leech, Dr. J. W.	Raikes, Henry V. A. M.	Titchfield, Major the Marquess of
Leighton, Major B. E. P.	Ramsay, Alexander (W. Bromwich)	Todd, Capt. A. J. K. (B'wick-on-T.)
Llewellin, Major John J.	Ramsay, T. B. W. (Western Isles,)	Touche, Gordon Cosmo
Lockwood, John C. (Hackney, C.)	Reid, James S. C. (Stirling)	Tree, Ronald
Loder, Captain J. de Vere	Renwick, Major Gustav A.	Ward, Lt.-Col. Sir A. L. (Hull)
MacAndrew, Capt. J. O. (Ayr)	Robinson, John Roland	Ward, Irene Mary Bewick (Wallsend)
McCorquodale, M. S.	Ropner, Colonel L	Waterhouse, Captain Charles
MacDonald, Malcolm (Bassetlaw)	Ross Taylor, Walter (Woodbridge)	Weymouth, Viscount
McKeag, William	Runge, Norsh Cecil	Whyte, Jardine Bell
McKie, John Hamilton	Russell, Alexander West (Tynemouth)	Williams, Herbert G. (Croydon, S.
Macmillan, Maurice Harold	Rickards, George William	Wills, Wilfrid D.
Mallalieu, Edward Lancelot	Salmon, Sir Isidore	Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Margesson, Capt. Rt. Hon. H. D. R.	Sandeman, Sir A. N. Stewart
Marsden, Commander Arthur	Scone, Lord	TELLERS FOR THE AYES.—
Mayhew, Lieut.-Colonel John	Shaw, Helen B. (Lanark, Bothwell)	Mr. Womersley and Dr. Morris-Jones.
Mills, Major J. D. (New Forest)	Smith, Sir J. Walker- (Barrow-In-F.)
NOES.
Adams, D. M. (Poplar, South)	Davies, Rhys John (Westhoughton)	Mainwaring, William Henry
Attlee, Clement Richard	Edwards, Charles	Maxton, James
Banfield, John William	Grenfell, David Rees (Glamorgan)	Nathan, Major H. L.
Batey, Joseph	Griffiths, T. (Monmouth, Pontypool)	Tinker, John Joseph
Buchanan, George	Grundy, Thomas W.	Williams, Edward John (Ogmore)
Cape, Thomas	Hall, George H. (Merthyr Tydvil)	Williams, Thomas (York, Don Valley)
Cocks, Frederick Seymour	Logan, David Gilbert	Wilmot, John
Cripps, Sir Stafford	McEntee, Valentine L.
Daggar, George	McGovern, John	TELLERS FOR THE AYES.—
Davies, David L. (Pontypridd)	Maclean, Nell (Glasgow, Govan)	Mr. John and Mr. Groves.

The following Amendment stood upon the Order Paper:

In page 2, line 37, at the end, to insert: Provided that any such payments in respect of the service of the public debt shall only be made to individuals after a committee, set up by the Treasury, shall have made full investigation into the needs of such persons to receive such payments in accordance with a standard set forth in regulations made by the Treasury."—[Mr. Buchanan.']

The DEPUTY-CHAIRMAN

This Amendment is outside the scope of the Bill. I call upon the hon. Member to move his next Amendment.

2.30 a.m.

Mr. BUCHANAN

I beg to move, in page 3, line 9, to leave out "thirty-six," and to insert "thirty-four."

I am sorry, but I thought an Amendment dealing with a means test for bondholders was in order. It would have saved a good deal of money, and I know the Financial Secretary to the Treasury takes a great deal of interest in that. I knew, too, that I should get the support of the hon. Member for Leith (Mr. E. Brown) on a means test. The Amendment I am moving is a simple one. Indeed, 'all the Amendments to-day have been couched in most moderate terms, and we on this side have adopted a moderate attitude. We form moderate opinions, and we tell the Committee to look at it in the same reasonable way. We are proposing to put 1934 in place of 1936. As the Bill stands, until 31st December, 1936, any sum that is given will be by way of grant. We propose to limit the granting of money to 31st December, 1934, and we think the procedure outlined in the Bill should start to operate as from the end of 1934.

The Bill proposes that any sum granted is by way of grant, but that after 1936 any sum granted can be by way of loan, or under such other conditions as the Treasury may in their wisdom seek to impose. We think that if they are given up to the end of 1934 for grants, that is a sufficient burden on the ordinary taxable capacity of this or any other country, and that thereafter they should not be put in a privileged position of receiving grants. After 1934, they should be put on the basis which the Bill suggests should operate after 1936. I would like the Financial Secretary to say why it is that such a long period is given for the purpose of grants, and why it should not be limited in the way we propose? We can quite imagine that one of the difficulties of the Financial Secretary is that of Parliamentary procedure, but I cannot see a reasonable man like he is refusing it. I remember that when he was in Opposition he often got annoyed at the Government not accepting his reasonable propositions, and I look forward to hearing him say that he will not do, as a member of the Government, the things of which he complained when in Opposition.

The only reason he could have for not accepting this Amendment is that it would mean a Report stage for the Bill, 'and that the Government do not want to occupy any more Parliamentary time at this period. If, however, the hon. Gentleman will give an assurance that he will get our Amendment moved in another place, we will accept it, because we know he is an honourable man and will not break his word. Therefore, I move my Amendment, the object of which is, briefly, that whereas under the Bill grants would be up to the end of 1936, and that thereafter there could be loans under conditions specified by the Treasury, we think that if they receive a year of grants it is ample, and that thereafter any moneys so used should be obtained by way of loans or under conditions that the Treasury may see fit to impose.

2.40 a.m.

Mr. McGOVERN

I desire to associate myself with the Amendment which has been moved. I think it is an extremely moderate request and one which might be complied with by a Government which is pledged to economy. I have watched the proposals made in this House from every angle, and I have not seen very much headway being made, or many concessions being given by the Government. I am always told by the older and wiser people in politics that the way to ap- proach Governments is to be moderate in your requests and gentlemanly in your conduct; that you should plead with them, and that then you will always get your reasonable desires. I have never been convinced of it, but I am. willing even at this late hour to be convinced that with a moderate request and gentlemanly conduct you can get concessions in this House. If that is so, I am prepared to practice that. We have been here from a quarter to four up to the present time of a quarter to three, and I have not seen one single attempt to hand the olive branch, or grant any concession, to the Members moving Amendments.

There is a general desire on the part of the Government to use their might and power to force through this Bill in its entirety. Clause after Clause and line after line they stand by it. They say that we have got to accept it. They remind me of the play "Bunty Pulls the Strings" where the father comes down and demands of his daughter that she should study the Bible. She says: "Father, I don't understand it." He says "Who expects you to understand it." In that method the Government approaches their supporters. The Government say that this is the last word in wisdom, and they are prepared to use their power and might to force through this Bill. On this Amendment, and the previous Amendment, we approached the Financial Secretary to the Treasury and asked him to accept a modest request made by my colleagues and myself. There is a change in the personnel of the Treasury Bench, but there is no change in attitude or mind regarding the Bill. One might at a quarter to four have agreed to the whole of the Bill, and every Clause in it without a division, because Parliamentary time and manoeuvring is wasted on the people who occupy the Treasury Bench. At the same time, I support the Amendment as being reasonable in desiring to limit the period to one year, after which there would be a review of the whole circumstances. The grants should finish at the end of one year. That would have shown economy to the poorest section of the workers of the country and not how you should protect the banks and the bondholders.

2.45 a.m.

Mr. HORE-BELISHA

I wish I had had the good fortune to be convinced by my hon. Friend the Member for Gorbals (Mr. Buchanan). The proposal is that we should do the most generous act possible by making a free grant of the advances up to 1936, so that there shall be no further accumulation of the national debt of Newfoundland. We do not want to pile up debt at the very moment we are initiating proposals to decrease it. Hon. Members wish to reduce the period during which there shall be a free grant, thereby increasing the national debt of Newfoundland. That would be an indisputable fact. Our proposal is a free grant up to 1936. The hon. Member says he will only make a free grant up to 1934; thereafter it will be added to the debt.

Mr. MAXTON

I did not say so. The hon. Member said he would make a grant for one year and then consider whether it was necessary to make a further grant.

Mr. HORE-BELISHA

I am not trying to make a false point. We make our grant up to 1936. It certainly will be a free grant up to that period. The hon. Member says he will make it up to 1934. We have selected a period of three years because we think that is a reasonable time in which Newfoundland may recuperate. She has to rehabilitate herself and start a new system. We think that the period of three years should be allowed to her in which there should be no further addition to her burden. If the hon. Member is as honest with me, as he desires I should be with him, he will admit there is something in our action.

2.48 a.m.

Mr. MAXTON

My immediate reaction is that that quite unsatisfactory. The proposition is that Newfoundland is in a bad state because of maladministration. We secure that their credit shall not be destroyed in the markets of the world. That is the Government's case. Then they send out a Commission to reorganise their financial and economic affairs. It is the duty of that Commission to make the Budget balance. This question of the finance of a nation going wrong is not one which is limited to Newfoundland. There has been a fairly general experience of it. A nation either balances its Budget in the first year or it does not do it at all. We send out a Commission, and they either balance their Budget in this forthcoming year, or they go further to the bad. You are not going to continue doing it indefinitely. We are not asking for a reference to Parliament or anything else. We are asking that in 1934 the Government shall review the extent to which the Commission has managed to put the affairs of Newfoundland in order. Having regard to the state of the finances of the country, after the Budget they shall review the position and consider whether further assistance to Newfoundland, in the subsequent years, shall be in the nature of a grant or a loan. Remember this, that this 1934 grant that we are allowing for in the Amendment is not the first one. We have been carrying this obligation now for 12 months. In two six-monthly periods we have given grants. The two loans this country passed are automatically under this Clause turned into grants, so that it is two years definite subsidising that we are doing here. All we are asking is that you do not give a three years' guarantee of grant, but a one year guarantee of grant and a promise to reconsider the situation at the end of one year, and, if the condition of Newfoundland is such that you require further grant, then let us make further grant. If the Commission is going to do anything in Newfoundland, it will do it in the first twelve months or it will never do it.

I see another difficulty. The Financial Secretary to the Treasury is not master of the situation. I presume that when his supporters withdrew to their "dug-outs"—or is "funk holes" the word?—he was left with a very general but definite instruction, and, if he got it from the Dominions Secretary, I can imagine the actual wording of it: "Not an inch! Not an inch!" And I can see that that is an almost insurmountable obstacle to a concession by the Financial Secretary, but I am quite sure that if he could meet his chief to-morrow morning and say, "I got through the night without any further trouble and without having to disturb your sleep and I only made one small concession, the Dominions Secretary would grasp him by the hand and quote scripture: 'Well done my good and faithful servant; you have been faithful in many small things, and you will now have many opportunities of doing more difficult jobs for me.'" I appeal to him to face the responsibility and see the Dominions Secretary to-morrow morning.

3.5 a.m.

Mr. D. GRENFELL

I would invite your guidance, Captain Bourne, I have handed in a manuscript Amendment to leave out the word "either," in page 3, line 11, because we find it would be necessary to do that in order that the subse-

Question put, "That the word 'thirty-six' stand part of the Clause."

The Committee divided: Ayes, 148; Noes, 25.

Division No. 34.]	AYES.	[2.55 a.m.
Adams, Samuel Vyvyan T. (Leeds, W.)	Grimston, R. V.	Peto, Geoffrey K. (W'verh'pt'n, Bilston)
Agnew, Lieut.-Com. P. G.	Guinness, Thomas L. E. B.	Pickering, Ernest H.
Allen, Lt.-Col. J. Sandeman (B'k'nh'd)	Gunston, Captain D. W.	Raikes, Henry V. A. M.
Aske, Sir Robert William	Hacking, Rt. Hon. Douglas H.	Ramsay, Alexander (W. Bromwich)
Baillie, Sir Adrian W. M.	Hannon, Patrick Joseph Henry	Ramsay, T. B. W. (Western Isles)
Baldwin-Webb, Colonel J.	Harbord, Arthur	Reid, James S. C. (Stirling)
Beaumont, M. W. (Bucks., Aylesbury)	Hartington, Marquess of	Renwick, Major Gustav A.
Beaumont, Hon. R.E.B. (Portsm'th, C.)	Harvey, George (Lambeth, Kenningt'n)	Robinson, John Roland
Belt, Sir Alfred L.	Holdsworth, Herbert	Ropner, Colonel L.
Bernays, Robert	Hore-Belisha, Leslie	Ron Taylor, Walter (Woodbridgt)
Betterton, Rt. Hon. Sir Henry B.	Horsbrugh, Florence	Runge. Norah Cecil
Birchall, Major Sir John Dearman	Howard, Tom Forrest	Russell, Alexander West (Tynemouth)
Borodale, Viscount	Howitt, Dr. Alfred B.	Rickards, George William
Bossom, A. C.	Hudson, Capt. A. U. M. (Hackney, N.)	Salmon, Sir Isidore
Bowyer, Capt. Sir George E. W.	Hudson, Robert Spear (Southport)	Sandeman, Sir A. N. Stewart
Boyce, H. Leslie	Hunter, Capt. M. J. (Brigg)	Scone, Lord
Broadbent, Colonel John	James, Wing-Com. A. W. H.	Shaw, Helen B. (Lanark, Bothwell)
Brocklebank, C. E. R.	Joel, Dudley J. Barnato	Smith, Sir J. Walker- (Barrow-In-F.)
Brown, Ernest (Leith)	Ker, J. Campbell	Southby, Commander Archibald R. J.
Burghley, Lord	Kerr, Lieut.-Col. Charles (Montrose)	Spears, Brigadier-General Edward L.
Burgin, Dr. Edward Leslie	Lamb, Sir Joseph Quinton	Spencer, Captain Richard A.
Campbell, Sir Edward Taswell (Brmly)	Law, Richard K. (Hull, S.W.)	Storey, Samuel
Caporn, Arthur Cecil	Leckle, J. A.	Stourton, Hon. John J.
Cayzer, Ma). Sir H. R. (Prtsmth., S.)	Leech, Dr. J. W.	Strauss, Edward A.
Chamberlain, Rt. Hon. N. (Edgbaston)	Leighton, Major B. E. P.	Stuart, Lord C. Crichton-
Chapman, Col. R. (Houghton-le-Spring)	Llewellin, Major John J.	Sugden, Sir Wilfrid Hart
Christie, James Archibald	Lockwood, John C. (Hackney, C.)	Summersby, Charles H.
Colman, N. C. D.	Loder, Captain J. de Vere	Sutcliffe, Harold
Cooke, Douglas	MacAndrew, Capt. J. O. (Ayr)	Tate, Mavis Constance
Crookshank, Col. C. de Windt (Bootle)	McCorquodale, M. S.	Thomas, James p. L. (Hereford)
Crookshank, Capt. H. C. (Gainsb'ro)	MacDonald, Malcolm (Bassetlaw)	Thompson, Luke
Cruddas, Lieut.-Colonel Bernard	McKeag, William	Thomson, Sir Frederick Charles
Davies, Maj. Geo. F. (Somerset, Yeovil)	McKie, John Hamilton	Thorp, Linton Theodore
Dickie, John P.	Macmillan, Maurice Harold	Titchfield, Major the Marquess of
Duncan, James A. L. (Kensington, N.)	Mallalieu, Edward Lancelot	Todd, Capt. A. J. K. (B'wickon-T.)
Eastwood, John Francis	Margesson, Capt. Rt. Hon. H. D. R.	Touche. Gordon Cosmo
Edmondson, Major A. J.	Marsden, Commander Arthur	Tree, Ronald
Elmley, Viscount	Mayhew, Lieut.-Colonel John	Ward, Lt.-Col. Sir A. L. (Hull)
Emrys-Evans, P. V.	Mills, Major J. D. (New Forest)	Ward, Irene Mary Bewick (Wallsend)
Entwistle, Cyril Fullard	Mitchell, Harold P. (Br'tf'd & Chisw'k)	Waterhouse, Captain Charles
Essenhigh, Reginald Clare	Molson, A. Hugh Elsdale	Weymouth, Viscount
Fleming, Edward Lascelles	Monsell, Rt. Hon. Sir B. Eyres	Whyte, Jardine Bell
Fraser, Captain Ian	Morris, John Patrick (Sallord, N.)	Williams, Herbert G. (Croydon, S.)
Fremantie, Sir Francis	Muirhead, Lieut.-Colonel A. J.	Wills, Wilfrid D.
Gilmour, Lt.-Col. Rt. Hon. Sir John	Nation, Brigadier-General J. J. H.	Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Gluckstein, Louis Halle	Nicholson, Godfrey (Morpeth)	Womersley. Walter James
Goff, Sir Park	Nunn, William
Goldle, Noel B.	O'Donovan, Dr. William James	TELLERS FOR THE AYES.—
Goodman, Colonel Albert W.	Palmer, Francis Noel	Sir George Penny and Dr. Morris-Jones.
Graves, Marjorie	Perkins, Walter R. D.
Griffith, F. Kingsley (Middlesbro', W.)	Petherick, M

NOES.
Adams, D. M. (Poplar, South)	Edwards, Charles	Mainwaring, William Henry
Attlee, Clement Richard	Grenfell, David Rees (Glamorgan)	Maxton, James
Banfield, John William	Groves, Thomas E.	Nathan. Major H. L.
Batey, Joseph	Grundy, Thomas W.	Tinker, John Joseph
Cape, Thomas	Hall, George H. (Merthyr Tydvil)	Williams, Edward John (Ogmore)
Cocke, Frederick Seymour	John, William	Williams, Thomas (York, Don Valley)
Cripps, Sir Stafford	Logan, David Gilbert	Wilmot, John
Daggar, George	McEntee, Valentine L.
Davies, David L. (Pontypridd)	Maclean, Nell (Glasgow. Govan)	TELLERS FOR THE AYES.—
		Mt. Buchanan and Mr. McGovern.

quent Amendment on the Paper may read. I would like you to inform me whether I should proceed to debate the manuscript Amendment or the two Amendments together.

The DEPUTY-CHAIRMAN

The manuscript Amendment is to leave out the word "either," and it is quite obvious that unless that word is left out, the second Amendment would not make sense. Therefore, the two Amendments are really one.

Mr. COCKS

Do you think that at a quarter-past three a manuscript Amendment should be handed in? No one has even seen it.

The DEPUTY-CHAIRMAN

The question whether or not a manuscript Amendment is accepted is entirely within my discretion. On this occasion it appears to me designed to enable the wish of the hon. Gentleman to be put more clearly before the Committee.

Mr. GRENFELL

I beg to move, in page 3, line 11, to leave out "either".

Under the Clause we find that advances may be made by the Dominions Secretary with the consent of the Treasury to meet certain contingencies for Newfoundland, those being the expenditure of the administration of Newfoundland, and they may be added to the charges for the service of the debt. We propose in this Amendment that after 1936, the period for which grants may be made, grants should no longer be considered, and whatever assistance may have to be given to Newfoundland should be made by way of loans. I am quite conscious of the inconsistency of my speech to-night with the speech I made two days ago, and so it requires some explanation from me, having regard to the fact that I advocated default or a termination of this liability on the part of Newfoundland. But there is a limit to which the taxpayers of this country should be called upon to make good this liability, and, having already accepted the liability to make advances by the rejection of the last Amendment to meet expenditure, including the service of the debt, we think that this is just as far as the taxpayers of this country should be called upon to go.

I will now give figures which are of some interest to the Committee. The capital debt of Newfoundland stands at over £20,000,000, and we find that the interested just over 5 per cent. of that figure. But the interest has not been paid. In recent years it has been found quite impossible for the community of Newfoundland to meet these interest charges, and part of the outstanding capital is the capitalised deficit on arrears of interest payments. If Newfoundland has found it impossible in recent years to pay the expenditure on her social services and carry the heavy debt charges, then it is quite open to believe that she will find that difficulty maintained for some period. The Government are contemplating making arrangements to relieve her of them until 1936, and there is a possibility that even after that they may go on doing so. Unless this Amendment be accepted, this country may be called upon to continue to pay interest on the whole of the capital debt of Newfoundland, should that administration find itself unable to pay any part of the service of the debt.

We on this side of the Committee think that that is asking too much of the British taxpayer. After all, this payment is to be made to the bondholders, and it is not to be made to the people of Newfoundland. We should rather relieve the people of Newfoundland from the liability of paying bondholders this sum of money. There is no reason at all why we should put the people who hold bonds in this exceptional position, that they have to be guaranteed against loss whatever happens, and that if Newfoundland fails to prosper then the people of this country must carry the burden. If Newfoundland is only to share a measure of prosperity and the surpluses accumulated in that country will be required for the services of this debt for years to come, there is no one who could say that for Newfoundland there is hope to do anything more than to pay her way, and to find this additional sum required for the service of the debt. It is really the wrong way of dealing with the Island by making arrangements to keep its burdens and maintain the bondholders in their secured position. I think that the bondholders should be made to realise that there is no perfect guarantee even for them.

If the grants are open to be made after 1936, any subsequent assistance required will have to be met by way of loans. Then the bondholders will find that the value of their bonds will be reduced in a corresponding degree to the additional loans that may be required for the benefit of the community. If this £26,000,000 remains in Newfoundland until 1936 or 1937, and Newfoundland is then unable to maintain her annual balance, it will be necessary to give an advance by way of loan, and then the security of the present bondholders will be reduced to the extent of these loans. I do not think that is unfair at all. Those of us who know the history of these bonds know well enough that the present bondholders may not be the same people that held the bonds 12 months or two years ago. It is well known that during this year, since the Government's intention was made known, these bonds have increased in value by something between £3,000,000 and £5,000,000. This gift has been made to certain people who hold the bonds, and the marketable value is higher to that extent. That is an indisputable fact which should be taken into consideration.

It is not the concern of this House to maintain the high value of those bonds. The only way to reduce the value and to bring the bonds to a reasonable comparison with the value of 12 months ago—and so reduce the advantages gained by the bondholders by reason of their previous knowledge of the Government's intentions—is to increase the amount of liability on the Newfoundland people. When I say that, I know I am inconsistent bearing in mind that what I said before, and it may be thought to show some lack of sympathy with Newfoundland. I am perfectly conscious that the burden of the Newfoundland people is already too high, and I believe that there should be a willingness, or some disposition, to compromise on the part of the bondholders, who should be brought to a willingness to negotiate. That measure of compromise or reduction of their claims would follow the need of the Newfoundland community for additional borrowings and the spreading of the liability over larger ground. Hon. Gentlemen know quite well that this burden and the spending liability of the Newfoundland people is a thing which will prevent eventually all their plans for reorganising the industrial and economic life of the country. Whatever may be gained by improved efficiency in production or distribution in Newfoundland will be impeded as long as this large burden remains and the high level which will be required to meet the interest charges. There will be no margin for improving the standard of life of the Newfoundland people.

While we are not prepared to ask the people of this country to shoulder the burden, we are certainly not prepared to give to the bondholders a guarantee that they can get, through the Dominions Secretary with the approval of the Treasury, unlimited advances by way of free grants to guarantee the interest they demand. A good deal has been said about the potential wealth of Newfoundland, and that there is a vast measure of wealth in her fisheries. The most valuable cod fisheries in the world are there. Let me warn the hon. Gentleman that if the Government persist in championing the claims of the bondholres, and refuse to attend to the representations made by us on behalf of the people of Newfound and. they will find retribution following them. A political Nemesis will overtake them some day, and their personal stock, as well as the Government's stock, will fall lower than the stock of Newfoundand.

Mr. E. WILLIAMS

Is it not possible to have the Dominions Secretary here? We are having no explanations at all, and certainly the Minister responsible ought to be here in order that we may know exactly what we are doing. Otherwise we shall be obliged to move to report Progress.

3.17 a.m.

Mr. HORE-BELISHA

I am sorry that the hon. Gentleman deplores the absence of the Dominions Secretary. This is purely a financial matter which is within the ambit of the Treasury, and I hope I shall be able to satisfy hon. Members. I can assure the hon. Member I will do my best to answer any financial points which arise on this financial Clause. The hon. Member for Gower (Mr. D. Grenfell), who is always candid, said frankly that his attitude on this Bill was inconsistent. I do not in the least reproach him for that. I will confine myself to dealing with the merits of his actual proposal. He has proposed that everything paid by way of advance to 1936 should be by way of free grant. The Committee decided that point in the last Division. We are now confronted with what is to happen after 1936. As no one in this Committee can foresee what actually the situation of Newfoundland will be after 1936, we say that any advances made after that date shall be either by way of grant or loan, as the conditions of the time may require. It will be for Parliament at that time, in the light of the circumstances then prevailing, to decide whether it is more appropriate to continue these advances as grants, or to make them as loans.

Sir S. CRIPPS

Would the hon. Gentleman be good enough to indicate the part of this Bill which says that Parliament can determine it? I understood it was the Treasury.

Mr. HORE-BELISHA

One assumes that a Vote has to be presented to this House before any money can be spent, and Parliament will therefore determine it. It is not necessary to put in the Bill that Parliament will determine it, but that will be, of course, the situation in 1926. It is precisely because I do not know what the situation will be that I am resisting the Amendment. I am sure the House of Commons of that day will review all the factors of the situation, and make up its mind what the best course will be.

3.20 a.m.

Sir S. CRIPPS

There is a question which arises on which I would ask the Government to give information. This Sub-section, which deals with the advances after 1936, covers advances in Clause 2 (1). We are dealing with the advances to the service of the national debt. The other type is the advances for defraying the expenses of the public services. I am not at all certain as to the position with regard to services of a capital nature. The hon. Gentleman will realise that in the past a good deal of capital expenditure has come in the Budgets of Newfoundland. In looking through Budget speeches, one finds items of a capital nature coming in. Will the advances which are made under this Clause, which will be advances substantially to balance the Budget, be of a nature to cover capital items, or will they be only advances for the purpose of defraying current expenditure? In the suggestions of the Royal Commission there are a very great number for which capita] is required. They include such things as an efficient local marine, fishing, agriculture and all sorts of things. In paragraph 503, where they deal with assistance by foreign capital, they recommend this type of expenditure. There is the proposal which I may describe as one to sell Newfoundland to an American corporation—a corporation to take over and develop Newfoundland. It is unthinkable that in these days any Government with a sense of responsibility could grant a series of monopolies on essential articles and place the wellbeing of its people in the control of a private company, even if such a company should contribute from its own resources the capital necessary for the propects in view.

Have the Government considered the question of what sort of advances and what amount of advances are likely to be required? The hon. Gentleman's Department must have estimated the likely amount of capital expenditure which would have to be made by the Government for the development of all these various services which we find dealt with in the course of the Report, both before and after 1934. There must, of course, be some planned programme with regard to the finances of Newfoundland. We are anxious to know whether these sums will be in part or in whole expended upon the development of Newfoundland.

The DEPUTY-CHAIRMAN

I think that the hon. and learned Gentleman is quite entitled to ask the Government whether they propose to make such advances by grant or loan, but I do not think that on this Amendment he can go into details.

Sir S. CRIPPS

The question whether they should be a grant or loan depends largely on the reason for which funds are given. We have been told over and over again that remunerative expenditure is very wise, that is, expenditure which is going to bring back some return by the development of some natural resource. It might well be, if some large part of this expenditure were going to be for that purpose, that we might feel inclined, in view of the explanation, to give way on this Amendment. If these were the circumstances, we might not exclude the possibility of guaranteeing them. If we understand that these moneys are merely to be advanced for paying interest on bonds, then we do very strongly object to their being made a grant. If it is a question between the bondholders and the taxpayers of this country, we are all in favour of the taxpayers. If it is a question of remunerative development of Newfoundland and the taxpayer here, it might be a different story.

We are anxious that we should get an explanation from the Government as to the type of advance they have in mind, and whether they contemplate that the major proportion, or the whole, shall be advances for the payment of interest or current expenses, or whether they con- template there shall come into these advances considerable sums with regard to development for the different interests and agriculture in Newfoundland. Until we get that explanation, and until we are satisfied that this money will not be used

Motion made, and Question proposed, "That the Clause stand part of the Bill."

for the bondholders, we shall feel obliged to insist upon this, after 1936, being made by loan, and not by grant.

Question put, "That the word 'either' stand part of the Clause."

The Committee divided: Ayes, 145; Noes, 25.

Division No. 35.]	AYES.	[3.29 a.m.
Adams, Samuel Vyvyan T. (Leeds, W.)	Griffith, F. Kingsley (Middlesbro', W.)	Perkins, Walter R. D.
Agnew, Lieut.-Com. P. G.	Grimston, R. V.	Petherick, M.
Allen, Lt.-Col. J. Sandeman (B'k'nhd.)	Guinness, Thomas L. E. B.	Peto, Geoffrey K. (W'verh'pt'n, Bliston)
Aske, Sir Robert William	Gunston, Captain D. W.	Pickering, Ernest H.
Baillie, Sir Adrian W. M.	Hacking, Rt. Hon. Douglas H.	Raikes, Henry V. A. M.
Baldwin-Webb, Colonel J.	Hannon, Patrick Joseph Henry	Ramsay, Alexander (W. Bromwich)
Beaumont, M. W. (Bucks., Aylesbury)	Harbord, Arthur	Ramsay, T. B. W. (Western Isles)
Beaumont, Hon. R. E. B. (Portsm'th, C.)	Hartington, Marquess of	Reid, James S. C. (Stirring)
Beit, Sir Alfred L.	Holdeworth, Herbert	Renwick, Major Gustav A.
Bernays, Robert	Hore-Belisha, Leslie	Robinson, John Roland
Betterton, Rt. Hon. Sir Henry B.	Horsbrugh, Florence	Ropner, Colonel L.
Birchall, Major Sir John Dearman	Howard, Tom Forrest	Ross Taylor, Walter (Woodbridge)
Borodale, Viscount	Howitt, Dr. Alfred B.	Runge, Norah Cecil
Bossom, A. C.	Hudson, Capt. A. U. M. (Hackney, N.)	Russell, Alexander West (Tynemouth)
Bowyer, Capt. Sir George E. W.	Hudson, Robert Spear (Southport)	Rickards, George William
Boyce, H. Leslie	Hunter, Capt. M. J. (Brigg)	Salmon, Sir Isidore
Broadbent, Colonel John	James, Wing.-Com. A. W. H.	Sandeman, Sir A. N. Stewart
Brocklebank, C. E. R.	Joel, Dudley J. Barnato	Scone, Lord
Brown, Ernest (Leith)	Ker, J. Campbell	Shaw, Helen B. (Lanark, Bothwell)
Burghley, Lord	Kerr, Lieut.-Col. Charles (Montrose)	Smith, Sir J. Walker- (Barrow-In-F.)
Burgin, Dr. Edward Leslie	Lamb, Sir Joseph Quinton	Spencer, Captain Richard A.
Campbell, Sir Edward Taswell (Brmly)	Law, Richard K. (Hull, S.W.)	Storey, Samuel
Caporn, Arthur Cecil	Leckie, J. A.	Stourton, Hon. John J.
Cayzer, Maj. Sir H. R. (Prtsmth., S.)	Leech, Dr. J. W.	Strauss, Edward A.
Chamberlain, Rt. Hon. N. (Edgbaston)	Leighton, Major B. E. P.	Stuart, Lord C. Crichton-
Chapman, Col. R. (Houghton-le-Spring)	Llewellin, Major John J.	Sugden, Sir Wilfrid Hart
Christie, James Archibald	Lockwood, John C. (Hackney, C.)	Sutcliffe, Harold
Colman, N. C. D.	Loder, Captain J. de Vere	Tate, Mavis Constance
Cooke, Douglas	MacAndrew, Capt. J. O. (Ayr)	Thomas, James P. L. (Hereford)
Crookshank, Col. C. de Windt (Bootle)	McCorquodale, M. S.	Thompson, Luke
Crookshank, Capt. H. C. (Gainsb'ro)	Mac Donald, Malcolm (Bassetlaw)	Thomson, Sir Frederick Charles
Cruddas, Lieut.-Colonel Bernard	McKeag, William	Thorp, Linton Theodore
Davies, MaJ. Geo. F. (Somerset, Yeovil)	McKie, John Hamilton	Titchfield, Major the Marquess of
Dickie, John P.	Macmillan, Maurice Harold	Todd, Capt. A. J. K. (B'wick-on-T.)
Duncan, James A. L. (Kensington, N.)	Mallalieu, Edward Lancelot	Touche, Gordon Cosmo
Eastwood, John Francis	Margesson, Capt. Rt. Hon. H. D. R.	Tree, Ronald
Edmondson, Major A. J.	Marsden, Commander Arthur	Ward, Lt.-Col. Sir A. L. (Hull)
Elmley, Viscount	Mayhew, Lieut.-Colonel John	Ward, Irene Mary Bewick (Wallsend)
Emrys-Evans, P. V.	Mills, Major J. D. (New Forest)	Waterhouse, Captain Charles
Entwistle, Cyril Fullard	Mitchell, Harold P. (Br'tf'd & Chisw'k)	Weymouth, Viscount
Essenhigh. Reginald Clare	Molson, A. Hugh Elsdale	Whyte, Jardine Bell
Fleming, Edward Lascelles	Monsell, Rt. Hon. Sir B. Eyres	Williams. Herbert G. (Croydon, S.)
Fraser, Captain Ian	Morris, John Patrick (Salford, N.)	Wills, Wilfrid D.
Fremantle, Sir Francis	Morris-Jones, Dr. J. H. (Denbigh)	Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Gilmour, Lt.-Col. Rt. Hon. Sir John	Muirhead, Lieut.-Colonel A. J.	Womersley, Walter James
Gluckstein, Louis Halle	Nation, Brigadier-General J. J. H.
Goff, Sir Park	Nicholson, Godfrey (Morpeth)	TELLERS FOR THE AYES.—
Goldie, Noel B.	Nunn, William	Sir George Penny and Commander Southby.
Goodman, Colonel Albert W.	O'Donovan, Dr. William James
Graves, Marjorie	Palmer, Francis Noel

NOES.
Adams, D. M. (Poplar, South)	Davies, David L. (Pontypridd)	Mainwaring, William Henry
Attlee, Clement Richard	Edwards, Charles	Maxton, James
Banfield, John William	Grenfell, David Rees (Glamorgan)	Nathan, Major H. L.
Batey, Joseph	Grundy, Thomas W.	Tinker, John Joseph
Buchanan, George	Hall, George H. (Merthyr Tydvil)	Williams, Edward John (Ogmore)
Cape, Thomas	Logan, David Gilbert	Williams, Thomas (York, Don Valley)
Cocks, Frederick Seymour	McEntee, Valentine L.	Wilmot, John
Cripps, Sir Stafford	McGovern, John
Daggar, George	Maclean, Nell (Glasgow, Govan)	TELLERS FOR THE AYES.—
		Mr. John and Mr. Groves.

3.37 a.m.

Mr. McENTEE

Before the Committee agrees to the Clause we ought to have some move information from the Financial Secretary to the Treasury or from the Dominions Secretary, if he can be induced to come back to the House. There are one or two points about which we want further information. This Clause is an important Clause, dealing with the expenditure of public money provided by the taxpayers of this country in the interests of the people in our oldest Dominion. The purpose of the Clause is to enable our taxpayers, when certain forms have been gone through, to defray the expenses of the public service and the service of the public debt in Newfoundland. What public services are to have their expenses defrayed, and in what manner? Our experience in regard to the defraying of public expenses does not warrant us in having confidence in the way in which those expenses have been paid in the past, and I think we are entitled to have same real assurance in regard to the methods and the limits of expenditure in the future.

I am not quite sure as to just what those public expenses cover. Are we to make ourselves responsible for the whole of the Civil Service expenses in Newfoundland in the future, and are we to make ourselves responsible for the additional staff that will not doubt be entailed by the new Commission taking over control, and by the new Governor who will act as chairman of the Commission? Is no limit to be placed on the numbers of the staff employed, or on the salaries to be paid to that staff? If there are to be such limits, what are they? After all, we are committing ourselves here to an expenditure that is not defined, and I think we are entitled to be able to give assurances to our people that there is some limit to the expenditure to which we may be committing them. Expenditure in our own experience in this country when Commissioners were sent in has been very heavy in many instances. Very high salaries have been paid, particularly when they have been sent down to supersede public assistance committees. It appears to me to be becoming a habit of the present Government to pay out so much more—

The CHAIRMAN

I must draw the attention of the hon. Gentleman to the fact that I do not think that what the hon. Gentleman is saying refers to Clause 2.

Mr. ATTLEE

On that point, are not these advances for the development of the public services? My hon. Friend is putting forward the argument that we should know what the amount should be. We cannot know that unless we know the kind and size of the public service.

The CHAIRMAN

The hon. Member in the earlier part of his speech was in order.

Mr. McENTEE

I was merely giving an illustration of the experience we have had over here, but if you rule that it is not in order, I accept your Ruling without any further question. It does not in any way alter the fact that certain public services are to be made, and we have heard nothing as to what the expenses are likely to be. We know to a little the expenses of the Governor and the Commissioners, but we have no information as to what the cost of the staff is going to be. We have not heard whether the old civil servants, who, in some way, were responsible for the corruption of the past, are to be continued to be employed, or whether their numbers are to be decreased, and also we have no information as to the number of new appointments to be made. I venture to hope that the Financial Secretary will give us more information before he asks us to pass this Clause.

3.45 a.m.

Mr. BUCHANAN

The grants under this Clause are, I understand, for the purpose of making good any deficiency that cannot be met by the local population. These grants are made out of public money raised in this country. They are grants and not loans, and there are no conditions attached to the grants. Public money granted to people ought to be scrutinised in the same way as Poor Law relief. In every case this money will be paid to assist people, and there ought to be a specially careful scrutiny by the Treasury, so as to safeguard the interests of the taxpayers in this country. This money was being handed over without any explanation as to what people will receive it, and I wish that the first charge on this money should be the deserving population of Newfoundland, who are finding things most difficult now. I say that deserving people should be the first charge on the service. We say that it was the Treasury's duty to safeguard this money, and to propound proposals to safeguard it. We must vote against this Clause because we think it is handing out public money, and that in view of the history of Newfoundland, its mal-administration and its record, we may find this money falling back into the same corrupt hands. We make a strong indictment of the Government for not having safeguarded the use of public money and taken precautions to see that it was spent in the best interests of the taxpayers here and of the poor people of Newfoundland.

3.47 a.m.

Mr. WILMOT

I hope that the Committee will pardon me for intruding in this discussion at this late hour [Hon. Members: "No—early hour"], when it is desirable that business should be facilitated, subject, of course, to proper scrutiny of legislation of this importance. I appreciate that it is riot usual for a new Member of the House to be heard at this hour in a discussion on such revolutionary changes as are proposed in this Bill. The point which caused me to rise was that I noticed on page 253 of the Report—and it is a point which is very much concerned with the Clause under discussion—the second largest item in these loans is for deficits on current account, including railways. I think it is very important that some investigation should be made and some definite understanding come to in regard to these debts.

The CHAIRMAN

The hon. Member is a new Member, and perhaps I may remind him that there is a Standing Order against the repetition of arguments which have been used in a previous Debate in this Session on a different matter.

Mr. WILMOT

I bow to your ruling, Sir. My difficulty, of course, is that of a new Member faced with a somewhat complicated procedure. I hope you will bear with me. The point I was trying to make is that these deficits include deficits which were incurred on the running of the railways in Newfoundland. When I went through the Schedules to see the nature of these railway debts, I was reminded of the statements made by the Chancellor of the Exchequer when we were dealing with the Unemployment Insurance Bill. He had some very severe things to say about deficits on current account and about Governments, past and present, who carried them on. He went on to point to the deficits of the Unemployment Fund—and I am stating this by way of comparison with the procedure laid down in Clause 2—and said that when deficits of this kind were incurred on current account for specific purposes, as these evidently are, they should be borne by that section of the community for whose benefit they have been incurred. Following on that line of reasoning he claimed that he was justified in charging the unemployed persons in this country with the deficit which had been incurred during the years 1921 to 1931. It was said from these benches that in our view, having regard to the fact that it was a national crisis in which the country had been involved, in the same way, possibly, as the crisis which has given rise to this legislation—

The CHAIRMAN

The hon. Member is now offending against another Standing Order in regard to references in the same Session of Parliament to a Debate on a different matter

Mr. ATTLEE

With great respect, I submit that in this House that rule has never been pressed so far that when one is discussing a matter of debts or finance, one is ruled out from referring to any parallel matter of finance. I submit that if one were to rule it strictly, all references to past policy would be out of Order. I understand that the ruling is not intended to suggest that one is not allowed to draw a parallel of the inconsistency of the Government—that it is generous in one respect in its finance and penurious in another. I submit that that was never intended to stifle debate in this House.

The CHAIRMAN

That is right and I allowed the hon. Member considerable latitude in that respect, but ultimately I thought it necessary to call his attention to the Standing Order.

Mr. WILMOT

Am I entitled to refer to the course of policy in this House in the same Session?

The CHAIRMAN

Yes, the hon. Member is entitled to do that, but he is not entitled to refer to another Debate in the same Session of Parliament on another matter. If there is only a refer- ence to the policy can that be done. The hon. Member was referring specifically to a certain Debate in this House on another matter.

Mr. ATTLEE

On that, Sir Dennis, I should like you to define the word "matter." You have two matters here: one is the matter of Newfoundland, and the other certain deficits in Newfoundland.

The CHAIRMAN

There is a distinct difference here between the matter of this Bill or any part of the Bill, and the matter of another Debate dealing with unemployment deficits in this House.

Mr. ATTLEE

The point is: Is the question of the method of meeting the deficit the "matter," because, if so, I suggest with great respect that you can compare the methods of meeting deficits in respect of particular funds. I quite agree that there is a difference between a deficit on the Unemployment Fund and a deficit in the case of a State like Newfoundland, but I submit that within the meaning of this Order the same matter must be the same general category of subject as the matter under discussion, and that there has been in this House very frequently in the last 10 years a habit of referring and comparing—when you take the matter in that form. I submit, with great respect, that certainly I have never heard in 10 years this rule given such a wide extent as it has been in this Session in ruling out allusions to previous debates.

The CHAIRMAN

I did not refer to the matter in the sense which the hon. Gentleman has. I referred to a Debate upon a different matter. I did not think the hon. Member's argument was in order.

Mr. WILMOT

I wish to direct the attention of the Committee to a difficulty which is going to arise for the Government by reason of the very marked inconsistency of their policy—between the policy shown on another occasion recently and the policy with regard to the Clause now under discussion. The Government's policy on a recent occasion was that the deficit incurred for a specific purpose should be liquidated by being made a charge upon that section of the community for whose benefit the deficit had been incurred. In this case, the deficit was incurred on current account, and a very large part of the deficit has been incurred by reason of the mal-administration of the railways. One has only to turn to the Report, page 67, to see that this railway was run at a loss, and was in fact in a state of bankruptcy when the Government purchased it. They paid a sum of no less than 2,000,000 dollars, and, after having paid exorbitant sums for a bankrupt enterprise, the railway was run by the Government every year at a loss. These deficits were not met by adjusting the railway tariffs, or even by taxation on the community, or a section of the community. We are to be made to pay that loss, and it is proposed under this Clause to deal with this loss by advances, notwithstanding that a large part of this deficit was incurred for the benefit of the railway stockholders. I ask if the hon. Gentleman in his reply would give some indication of whether it is proposed, as a condition of taking over the funding of this deficit, to insist that some provision is made for recouping the public exchequer from those for whose benefit this provision is being made?

4.2 a.m.

Mr. ATTLEE

I want to raise a point with regard to the expenditure on the public services. We have been given to understand in the Report that some 76 per cent. of the people of Newfoundland are unfortunately having to be supported out of public funds. We have heard that provision is to be made for the administration of Newfoundland, including the defraying of the expenses of the public services and the service of the public debt. It has already come out in discussions that the moneys to be provided by this country come from the people of this country, and we are here setting up a precedent. What might happen in the case of a country like New Zealand which has a high standard of life? If hon. Members will follow out this principle, we may come to such a pass that we may actually be reducing the standard of life in this country in order to maintain a higher standard of life in another country in the Empire. Our Treasury and the Secretary of State are to have authority in this matter, and whether they will have power to lay down an Empire standard, and whether it is to be laid down on a Newfoundland, on a British, or a New Zealand basis, does really open up a matter of profound Imperial policy. I think the Government have stumbled into this Bill, without considering the extraordinary repercussions, by taking responsibility for Newfoundland. One has seen one Clause rather in the light of a breaking up of the Empire. In the other we may be entering into a new integration of the Empire on the basis of a definite Empire standard.

There is another point on which we want to get an answer from the Financial Secretary. Unless we know something of the standard of administration of Newfoundland, we cannot understand what liability we are to get under this Clause, and what advances the Secretary of State is going to make. In this case we give the power up to 1936 and thereafter we may go on not only by way of grants, but also by loans. I should like to know from the Financial Secretary how he envisages this matter from the point of view of Newfoundland? If he continues with loan after loan, we are never going to get Newfoundland out of her indebtedness. If you are going on with the principle of grants, she may soon be in a position to regain her status as a fully-fledged member of the Commonwealth of Nations. She may get back her Dominion status. It is vital that we should know the policy of the Government in this respect. I do not think it is clear in Clause 2 whether this country should keep Newfoundland in, so to speak, a condition of debt, and continue to administer her affairs for a whole series of years—in which case all the talk about the honour of Newfoundland and getting her out of debt does not apply. It only means we put her into debt to us instead of the previous creditors. If the policy of Clause 3 is to be applied, we want to know how soon Newfoundland will be put back in a self-supporting condition, and what is likely to be the cost to this country.

I submit that the kind of power we are giving here is something far bigger than the Dominions Secretary has had. He has certainly been little more than a letter-box. Now we are giving him a far greater say in the future, not only of Newfoundland, but in the composition of the British Empire itself. We do not know how long he will be in his office or how long he will hold any particular views. Nor do we know the political outlook of the Government. We are going back, it may be, to the time when the mother country was surrounded by a number of dependencies which will be held to her by subsidies and loans, or perhaps we are going to be very generous and pay the debts of those other parts of the Empire, and so lay the foundations of the whole new British Commonwealth of Nations. We have not had any real explanation of policy.

4.11 a.m.

Mr. MAXTON

I have only one point to make on this Clause. Besides being a Member of Parliament, I am a taxpayer of this country. As a taxpayer, I resent very much being called on to provide out of my not very lavish resources sums of money to make good the dividends of people who may be 10 or 100 times better off than I am. But I would not grumble more than I have already done at that aspect of it if I were satisfied that the money I am sending out to Newfoundland through the agency of the Dominions Secretary were spent in improving the status of men who are infinitely poorer than I am. Now the powers of the Secretary of State are added to, in order to decide what the social services of the island shall be. The Governor is the direct appointment of the Dominions Secretary, and, therefore, this country, through the Dominions Secretary, the Governor, and Commission, can decide what part of the Newfoundland budget is to be devoted to social services. I think we have a right to some assurance, because the whole plea for this Bill was sentimental. I am entitled to ask, before this Clause is passed, for some undertaking that, when the Commission goes out, there shall be an instruction given to see that the sentiments which waved this House in passing this Measure, be given effective expression to in the actual internal affairs of Newfoundland. I read in the Report that, in the relief of the able-bodied unemployed, Payments are made in kind, and mostly take the form of rations of tea, flour, pork and molasses. Generally speaking, it represents a maximum of 1.80 dollars a month. The Financial Secretary to the Treasury tells us that it is only payable after an affidavit that the people are destitute. I want from him a statement on behalf of the Government that, although it is not specifically included in this Clause, there will be some instruction to the Commissioners, on behalf of the Government, that these standards shall be raised from that miserable level to some level that we here can defend. The Commission themselves say, "We are satisfied that if the grant is to be made at all, it cannot be made on a lower basis." I ask that the Government shall regard it as a first duty on the part of the Commission to put the social services of the island, particularly those dealing with the able-bodied unemployed, in a position that is at least comparable with what is done for the masses of unfortunate people in our own land. That is a very small assurance to ask. I know I canot get it included in Clause 2, but at least some statement from the Treasury Box would I am sure have some influence on the future administration of the island.

4.19 a.m.

Sir S. CRIPPS

May I ask the Financial Secretary to the Treasury a question arising out of a little difficulty we had in the Committee as to whether certain matters came within the first Amendment moved? Obviously, many Members were in great doubt as to the meaning of this Clause. I have asked the Financial Secretary whether he will take an opportunity in another place to see that this Clause is at least so drafted that such eminent persons as the Chairman can clearly understand it, because your predecessor in the Chair said that he was in grave doubt as to what its meaning was. The second point is this: When this question of paying the expenses of the service of the public debt arises, I would like to ask whether the Government are prepared to institute an inquiry into those public debts in order to see whether all of them are of equal merit and equally deserve to have the service paid on them?

There are suggestions that there has been a certain amount of wangling—to use a colloqualism—as regards some of the financing in Newfoundland. I think it would be of great advantage to the future of Newfoundland, and it also might be of assistance in finding out exactly who were the guilty parties if an inquiry into its public debts could be held in order to ascertain the circumstances in which they were raised, and the purposes to which they have been put, and whether, in fact, everything spent was as proper as one would wish it to be. I should like to know whether the Commission, as soon as it gets over there, will institute an inquiry into the whole question of public indebtedness with a view to seeing whether something can be saved. There is another aspect to which I would ask him to make an inquiry, and that is to have an inquiry to find some basis for distinguishing between one part of the debt and another. In the Schedule to the Newfoundland Act in Section 2 (c), the Governor in Council has power to issue stock for the purpose of raising sufficient money to discharge all the obligations of Newfoundland selected by the Governor in Council for this purpose with the concurrence of the Treasury. Obviously the Governor is in a position to select certain of the obligations of Newfoundland for discharge, and therefore he is in a position to say as regards to some obligations, "We will not discharge them, and, as regards others, we will discharge them."

There is also a provision by which the Treasury can advance money under Clause 4. Will the hon. Gentleman consider an inquiry into the needs of the holders of these securities so that a selection may be made on the basis of need? If one went through the list of the bondholders, and could find everybody with an income under £100 a year, then they should be selected first, and, thereafter, if there were more money available, persons with an income of £200 a year could be selected. It seems to me that that might be a useful way to enable the Governor in Council to discharge this liability of selection which he has in paragraph (c), and it would also have the effect of making a sound and proper basis when the money was being distributed in this way. I shall be glad to know from the hon. Gentleman if it is; part of the policy of the Government to institute these two inquiries, first of all into the circumstances of the raising of these loans, and, secondly, as to the needs of the bondholders in order that the principle which the Government have imposed in relation to the Poor Law may be applied to the bondholders in this case.

4.25 a.m.

Mr. HORE-BELISHA

This Clause merely deals with the situation in any financial year in Newfoundland when it is more than probable that the revenues of that year will, after provision has been made for such working balance as the Treasury may consider adequate, fall short of the amount required to meet any liabilities incurred. That is the situation with which this Clause deals, and, should such a position arise, power is taken to make advances for defraying the expenditure of the public services and the service of the debt from money provided by Parliament. I cannot forecast what particular item will be in any Budget, and I cannot tell if capital sums will be included, or whether ordinary items of expenditure should be included, but I do know that part of the trouble in Newfoundland is caused by the fact that capital expenditure has been included when only normal expenditure should have been incurred. In future it is going to be put under proper administration, and proper scrutiny will be observed in all transactions.

Sir S. CRIPPS

The hon. Gentleman has very nearly answered the question I put to him some time ago. Is it going to be the policy of the Government not to pay any of these capital sums out of current revenue?

Mr. HORE-BELISHA

Certainly, in this sense the Budget in Newfoundland

will now be put under proper supervision. The British Treasury principles will prevail, and I think that will be a sufficient safeguard. The hon. Member for Gorbals (Mr. Buchanan) was particularly anxious on this point. I can assure him that there is to be a Comptroller and Auditor-General in Newfoundland, and, in addition, the whole of the accounts will be reviewed in the Dominions Office, and again in this House. The hon. and learned Gentleman asked me whether there would be a means inquiry into the resources of the individual bondholders. He knows that even if such an innovation were desirable, it would be impracticable. [Interruption.] We are dealing not only with our own nationals, but with investors in the British Empire, and in many parts of the world, and we would not for a moment contemplate such a thing.

Mr. COCKS

I have been looking through the Report, and, if the hon. Gentleman will look at page 131, I would like to ask him what is meant by the suggestion to purchase 12 schooners of the banking type. I should like an assurance from the hon. Member as to exactly what that proposal means.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 141; Noes, 26.

Division No. 36.]	AYES.	[4.32 a.m.
Adams, Samuel Vyvyan T. (Leeds, W.)	Crookshank, Capt. H. C. (Gainsb'ro)	Howittt. Dr. Alfred B.
Agnew, Lieut.-Com. P. G.	Cruddas, Lieut.-Colonel Bernard	Hudson, Capt. A. U. M. (Hackney, N.)
Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)	Davies, Maj. Geo. F. (Somerset, Yeovil)	Hudson, Robert Spear (Southport)
Aske, Sir Robert William	Dickie. John P.	Hunter. Capt. M. J. (Brigg)
Baillie, Sir Adrian W. M.	Duncan, James A. L. (Kensington, N.)	James, Wing.-Com. A. W. H.
Baldwin-Webb, Colonel J.	Eastwood, John Francis	Joel, Dudley J. Barnato
Beaumont, M. W. (Bucks., Aylesbury)	Edmondson, Major A. J.	Ker, J. Campbell
Beaumont, Hn. R. E. B. (Portsm'th, C.)	Elmley, Viscount	Kerr, Lieut.-Col. Charles (Montrose)
Belt, Sir Alfred L.	Emrys- Evans, P. V.	Lamb, Sir Joseph Quinton
Bernays, Robert	Entwistle, Cyril Fullard	Law, Richard K. (Hull, S.W.)
Betterton, Rt. Hon. Sir Henry B.	Essenhigh, Reginald Clare	Leckie, J. A.
Birchall, Major Sir John Dearman	Fleming, Edward Lascelles	Leech, Dr. J. W.
Borodale, Viscount.	Fraser, Captain Ian	Leighton, Major B. E. P.
Bossom, A. C.	Fremantle, Sir Francis	Llewellin, Major John J.
Bowyer, Capt. Sir George E. W.	Gluckstein, Louis Halle	Lockwood, John C. (Hackney, C.)
Boyce, H. Leslie	Golf, Sir Park	Loder, Captain J. de Vere
Broadbent, Colonel John	Goldie, Noel B.	MacAndrew, Capt. J. O. (Ayr)
Brocklebank, C. E. R.	Goodman, Colonel Albert W.	McCorquodale, M. S.
Brown, Ernest (Leith)	Graves, Marjorie	MacDonald, Malcolm (Bassetlaw)
Burghley, Lord	Griffith, F. Kingsley (Middlesbro', W.)	McKeag, William
Burgin, Dr. Edward Leslie	Grimston, R. V.	McKie, John Hamilton
Campbell, Sir Edward Taswell (Brmly)	Guinness, Thomas L. E. B.	Macmillan, Maurice Harold
Caporn, Arthur Cecil	Gunston, Captain D. W.	Mallalieu, Edward Lancelot
Chamberlain, Rt. Hon. N. (Edgbaston)	Hannon, Patrick Joseph Henry	Margesson, Capt. Rt. Hon. H. D. R.
Chapman, Col. R. (Houghton-le-Spring)	Hartington, Marquess of	Marsden, Commander Arthur
Christie, James Archibald	Holdsworth, Herbert	Mayhew, Lieut.-Colonel John
Colman, N. C. D.	Hore-Belisha, Leslie	Mills, Major J. D. (New Forest)
Cooke, Douglas	Horsbrugh, Florence	Mitchell, Harold P. (Br'tf'd & Chisw'k)
Crookshank, Col. C. de Windt (Bootle)	Howard, Tom Forrest	Molson, A. Hugh Elsdale
Monsell, Rt. Hon. Sir B. Eyres	Ropner, Colonel L.	Thomas, James P. L. (Hereford)
Morris, John Patrick (Salford, N.)	Ross Taylor, Walter (Woodbridge)	Thompson, Luke
Morris-Jones, Dr. J. H. (Denbigh)	Runge, Norah Cecil	Thomson, Sir Frederick Charles
Muirhead, Lieut.-Colonel A. J.	Russell, Alexander West (Tynemouth)	Thorp, Linton Theodore
Nation, Brigadier-General J. J. H.	Rickards, George William	Titchfleld, Major the Marquess of
Nicholson, Godfrey (Morpeth)	Salmon, Sir Isidore	Todd, Capt. A. J. K. (B'wick-on-T.)
Nunn, William	Sandeman, Sir A. N. Stewart	Touche, Gordon Cosmo
O'Donovan, Dr. William James	Scone, Lord	Tree, Ronald
Palmer, Francis Noel	Shaw, Helen B. (Lanark, Both well)	Ward, Lt.-Col. Sir A. L. (Hull)
Perkins, Walter R. D.	Smith, Sir J. Walker- (Barrow-In-F.)	Ward, Irene Mary Bewick (Wallsend)
Petherick. M.	Southby, Commander Archibald R. J.	Waterhouse, Captain Charles
Peto, Geoffrey K. (W'verh'pt'n, Bliston)	Spencer, Captain Richard A.	Weymouth, Viscount
Pickering, Ernest H.	Storey, Samuel	Whyte, Jardine Bell
Raikes, Henry V. A. M.	Stourton, Hon. John J.	Williams, Herbert G. (Croydon, S.)
Ramsay, Alexander (W. Bromwich)	Strauss, Edward A.	Wills, Wilfrid D,
Ramsay, T. B. W. (Western Isles)	Stuart, Lord C. Crichton-	Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Reid, James S. C. (Stirling)	Sugden, Sir Wilfrid Hart
Renwick, Major Gustav A.	Sutcliffe, Harold	TELLERS FOR THE AYES.—
Robinson, John Roland	Tata, Mavis Constance	Sir George Penny and Mr. Womersley.
NOES.
Adams, D. M. (Poplar, South)	Davies, David L. (Pontypridd)	Maxton, James.
Attlee, Clement Richard	Edwards, Charles	Nathan, Major H. L.
Banfield, John William	Grenfell, David Rees (Glamorgan)	Tinker, John Joseph
Batey, Joseph	Grundy, Thomas W.	Williams, Edward John (Ogmore)
Bevan, Aneurin (Ebbw Vale)	Hall, George H. (Merthyr Tydvil)	Williams. Thomas (York, Don Valley)
Buchanan, George	Logan, David Gilbert	Wilmot, John
Cape, Thomas	McEntee, Valentine L.
Cocks, Frederick Seymour	McGovern, John	TELLERS FOR THE AYES.—
Cripps, Sir Stafford	Maclean, Neil (Glasgow, Govan)	Mr. John and Mr. Groves.
Daggar, George	Mainwaring, William Henry

4.40 a.m.

Mr. ATTLEE

I beg to move, That the Chairman do. report Progress, and ask leave to sit again. I make this Motion in order to ask the Government what their intentions are in regard to the proceedings this morning. It is now 20 to 5, and we have made very fair progress. I hope by now the Government realise that such important measures as the Newfoundland Bill and the Unemployment Resolution ought not to be put down on the same night. It is asking the House too much. [HON. MEMBERS: "No !"] Well, we are quite fresh and ready to go on, whereas there are signs of obvious sleepiness on the Government benches. We have seen one Minister retire for refreshment, and we do not want to overstrain another Minister. I suggest to the Financial Secretary that if he gets this Newfoundland Bill in the course of time, we might easily take the other business on Monday or Tuesday. [HON. MEMBEBS: "No !"]

4.41 a.m.

Captain MARGESSON

I can agree with the first part of the hon. Gentleman's statement. It is twenty minutes to five. I do not agree with the second part of his statement—that we have made good progress. My view is that progress has been very slow. It would not be right that those Members of the House who have sat so faithfully should not go through with their allotted task so that the programmes announced at Question Time should be carried out. He told me some four hours and ten minutes ago that the Bill could be completed in two hours—that was before something had happened to change his mind. I think that, with a little perseverance, all of us working together in the same spirit of cc-operation, we should be able to succeed in accomplishing the task.

4.42 a.m.

Mr. MAXTON

One good thing has been achieved by the late sitting to-night. It has raised the Patronage Secretary to heights of eloquence with which none of us had associated him in this House or had ever seen him attain before. I shall look forward with pleasure to his speech when he moves to report Progress about a quarter to eleven. But the general of an Army, however willing his troops, should not put an undue strain on them, no matter how loyal and enthusiastic they may be. There are some Members I have watched—among them the hon. Member for Moseley (Mr. Hannon) with some alarm. I did not know at what moment any one of us might have to rush across to his assistance. I would like to suggest this to the Patronage Secretary—that the by-elections have not been going well in the country for the Government, and I think it would be inadvisable to pursue recklessly a course of attack which might lead to a considerable number of by-elections. I want to remind him that while courage is a great virtue it is important that the leader should always temper his courage with prudence. I would suggest to him that, although he has the power and the courage together with loyalty among his supporters which would enable him to go on, such an action of courage should be moderated by prudence. All of us might fall into the error of sheer confounded pig-headedness and true courage. We have a long Session in front of us. We have any amount of time after Christmas. We go into the New Year during the recess, and we all hope that year will be a brighter and better than this one. I suggest that we should leave the programme until after the recess during which we would all have made new resolutions and thus be able to come back fresh and invigorated to start the New Year's task in a new spirit. For these reasons, I ask the Patronage Secretary out of pure friendship and in response to his appeal for co-operation that he should accept the proposal of the Opposition and report Progress.

4.47 a.m.

Mr. TINKER

I have sat here the whole of the morning. My colleagues of the Opposition want toleration from the other side, and if they do not get it they prefer to work and fight as long as possible. We are acting more like school children than grown-up men. That is the position all round. Both sides have their backs up and neither side will climb down. I do not think anyone wants to sit until eleven o'clock. We are being driven into this sort of thing by retaliation. If he could get an assurance that we will get the Financial Resolution through very quickly Monday or Tuesday, I think some understanding could be reached. I think that common sense should prevail. I do not want to stop. It is a kind of false courage. If it comes to hard work, we are the men to do it. If I may, I would like to appeal for the ladies, too. I know the ladies say that they do not want it, but they look like washed-out rags. There is nothing gives me more bad feeling in an all-night sitting than seeing women here. They cannot stand the arduous task of an all-night sitting. Whatever qualities women may have—

An HON. MEMBER

They are not all-nighters.

Mr. TINKER

I am making an appeal. I am tired, but if it has to be a long drawn-out night I will stick it as well as anyone.

4.51 a.m.

Mr. McENTEE

I think that if any appeal would move anybody it is an appeal like that of the hon. Member for Bridgeton (Mr. Maxton), and the even more moving appeal of the hon. Member who has just spoken (Mr. Tinker). Those appeals ought to have some impression on the House. The Parliamentary Secretary to the Treasury appealed for cooperation, but I do not think he went the right way to get it. Apparently he wanted to give his drooping followers a stimulant, but it is only a stimulant, and one cannot live on stimulant very long.

I am one of the people who have had to work all day and all night on many occasions, at much harder work than this, but it does appeal to me to ask whether this is sensible. We are in the position that we are in now because the Government endeavoured to impose on the House an impossible task to which the Opposition could not agree. We were compelled to sit on by the action of the Government through the Prime Minister earlier in the day and the Dominions Secretary later in the evening. Had it not been for that we would undoubtedly have made greater progress.

The only effect of the decision of the Government is that we shall be here till 11 o'clock. A Bill in which many Members are interested and which is practically non-controversial and might have been placed on the Statute book will be held up. The Government will probably have laid up feelings in the minds of some of us on this side of the House that will encourage similar proceedings on other occasions. Since this Parliament was first elected the Government have not been subjected to anything in the nature of obstruction, but if they are subjected to it in future it will be entirely their own fault. I am making an appeal to sensible instincts in the Government. The Government seem to imagine that because they have a big following they can ride rough-shod over those whose following is very small. Practically all the Members on the Government side of the House have been sleeping.

Sir GEORGE PENNY (Comptroller of the Household)

Some of your Members have been sleeping all the time.

Mr. McENTEE

They have at least had the decency to go out of the House. I ask the Parliamentary Secretary to the Treasury to reconsider his decision, and to consider that it does not apply only to to-night. I believe in good sense, and 99 per cent. of the Members of the House would agree with me in an appeal to good sense. (Interruption.) Hon. Members opposite are shouting against their courage. I have discussed the matter with at least a dozen of them and everyone of them has said that it is ridiculous to carry on as we are doing. Let there be more consideration for the feelings of the Members of this House. We should not be asked to do impossible things.

6 a.m.

Sir S. CRIPPS

May I just add one word? We all know that the Parliamentary Secretary, aided by the Government majority, can do what he likes. We also know why we are sitting late to-night. I did, of course, say that the proceedings would be a little late in order to mark our views of the programme of the Government. There was at an early stage a certain incident which made everybody rather irritated, and as a result we determined to mark our disapproval. The only question to be decided by the House is whether we are going to continue this for another two or three hours, or whether, having made the best of the business, we are to discuss the Financial Resolution in a reasonable spirit. I have been asked to cooperate with the Parliamentary Secretary. I am making a suggestion as regards cooperation. I think it is perfectly possible to arrange for this Financial Resolution to be disposed of on Monday or Tuesday. I think that if that course were adopted all would feel better, if they could get at least an hour or two's sleep. Some of us have to start work at 9 o'clock in the morning. If that cannot be arranged, if both sides are not prepared to give way, may I suggest that the side which has 550 Members would find it easier to give way than the side with 50? Then we might all get away from here soon.

Captain MARGESSON

I regret very much, after the appeal which has been made to me and the lecture given to me by the hon. Member for West Waltham-stow (Mr. McEntee), and also the appeal made to me by the hon. and learned Gentleman who has just sat down, that I cannot accept the proposal. I must point out that the incident to which he referred was amply apologised for almost as soon as it happened, and the House accepted the apology and the hon. Gentleman concerned also accepted it. Therefore, to make that an excuse for five hours of organised obstruction—

Mr. COCKS

On a point of Order. Is is not out of Order to say that anyone is obstructing?

The DEPUTY-CHAIRMAN

That is so.

Captain MARGESSON

I withdraw it.

Mr. COCKS

Will the right hon. and gallant Gentleman withdraw the remark?

The DEPUTY-CHAIRMAN

I think he has already withdrawn it.

Captain MARGESSON

To have such a. long sitting seems to be hardly justified by the events that took place just after eleven o'clock, and despite the appeal made to me we must go on.

5.5 a.m.

Mr. COCKS

I agree entirely with what the right hon. Gentleman says and I agree with the appeal for co-operation that has been made in discussing this question. I wish an appeal for co-operation had been made to the Members of the Cabinet. Where is the Home Secretary? Where is the Foreign Secretary? Where is the Secretary of State for the Colonies, and where is the Secretary of State for the Dominions? The only Cabinet Minister I see is the First Lord of the Admiralty, and we know that the Navy is always on duty. Apart from him, where is the Prime Minister or even the Lord President of the Council? I am willing to cooperate with the Patronage Secretary, and I am willing to give to this Measure the deepest and most sympathetic consideration. Every word shall be carefully weighed before it passes my scrutiny, and every phrase and paragraph will have to be carefully discussed before it passes this House. I will co-operate with him to make it so good a Measure, even if we have to go on to the time where there is a legal end of our sitting.