HC Deb 14 December 1933 vol 284 cc767-87

5.18 a.m.

Mr. MAXTON: I beg to move, in page 3, line 17, after "guarantee" to insert:

Question put, "That the Chairman do report Progress, and ask leave to sit again."

The Committee divided: Ayes 26; Noes 139.

Division No. 37.] AYES. [5.9 a.m.
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.
Cocke, Frederick Seymour McGovern, John TELLERS FOR THE AYES.—
Crippe, Sir Stafford Maclean, Nell (Glasgow, Govan) Mr. John and Mr. Groves.
Daggar, George Mainwaring, William Henry
NOES.
Adams, Samuel Vyvyan T. (Leeds, W.) Griffith, F. Kingsley (Middlesbro', W.) Peto, Geoffrey K. (W'verh'pt'n, Bilst'n)
Agnew, Lieut.-Com. P. G. Grimston, R. V. Pickering, Ernest H.
Allen, Lt.-Col. J. Sandeman (B'k'nh'd.) Guinness, Thomas L. E. B. Raikes. Henry V. A. M.
Aske, Sir Robert William Gunston, Captain D. W. Ramsay, Alexander (W. Bromwich)
Baillie, Sir Adrian W. M. Hannon, Patrick Joseph Henry Ramsay, T. B. W. (Western Isles)
Baldwin-Webb, Colonel J. Holdsworth, Herbert Held, James S. C. (Stirling)
Beaumont, M. W. (Bucks., Aylesbury) Hore-Belisha, Leslie Renwick. Major Gustav A.
Beaumont, Hon. R.E.B. (Portsm'th, C.) Horsbrugh, Florence Robinson, John Roland
Beit, Sir Alfred L. Howard, Tom Forrest Ropner, Colonel L.
Bernays, Robert Howitt, Dr. Alfred B. Rots Taylor, Walter (Woodbridge)
Betterton, Rt. Hon. Sir Henry B. Hudson, Capt. A. U. M. (Hackney, N.) Runge, Norah Cecil
Birchall, Major Sir John Dearman Hudson, Robert Spear (Southport) Russell, Alexander West (Tynemouth)
Borodale, Viscount Hunter, Capt. M. J. (Brigg) Rickarde, George William
Bossom, A. C. James, Wing-Com. A. W. H. Salmon, Sir Isidore
Bowyer, Capt. Sir George E. W. Joel, Dudley J. Barnato Sandeman, Sir A. N. Stewart
Boyce, H. Leslie Ker, J. Campbell Scone, Lord
Broadbent, Colonel John Kerr, Lieut.-Col. Charles (Montrose) Shaw, Helen B. (Lanark, Bothwell)
Brocklebank, C. E. R. Lamb, Sir Joseph Quinton Smith, Sir J. Walker- (Barrow-In-F.)
Brown, Ernest (Leith) Law, Richard K. (Hull, S.W.) Southby, Commander Archibald R. J.
Burghley, Lord Leckie, J. A. Spencer. Captain Richard A.
Burgin, Dr. Edward Leslie Leech, Dr. J. W. Storey. Samuel
Campbell, Sir Edward Taswell (Brmly) Leighton, Major B. E. P. Stourton, Hon. John J.
Caporn, Arthur Cecil Llewellin, Major John J. Strauss, Edward A.
Chamberlain, Rt. Hon. N. (Edgbaston) Lockwood, John C. (Hackney, C.) Stuart. Lord C. Crichton-
Chapman, Col. R. (Houghton-le-Spring) Loder, Captain J. de Vere Sugden, Sir Wilfrid Hart
Christie, James Archibald Mac Andrew, Capt. J. O. (Ayr) Sutcliffe, Harold
Colman, N. C. D. MacDonald, Malcolm (Bassetlaw) Tate, Mavis Constance
Cooke, Douglas McKeag, William Thomas, James P. L. (Hereford)
Crookshank, Col. C. de Windt (Bootle) McKie, John Hamilton Thompson. Luke
Crookshank, Capt. H. C. (Gainsb'ro) Macmillan, Maurice Harold Thomson, Sir Frederick Charles
Cruddas, Lieut-Colonel Bernard Mallalieu, Edward Lancelot Thorp. Linton Theodore
Davies, Maj. Geo. F. (Somerset, Yeovil) Margesson, Capt. Rt. Hon. H. D. R. Titchfield. Major the Marquess of
Dickie, John P. Marsden, Commander Arthur Todd. Capt. A. J. K. (B'wick-on-T.)
Duncan, James A. L. (Kensington, N.) Mayhew, Lieut.-Colonel John Touche. Gordon Cosmo
Eastwood, John Francis Mills, Major J. D. (New Forest) Tree, Ronald
Edmondson, Major A. J. Mitchell, Harold P. (Br'tf'd & Chisw'k) Ward, Lt.-Col. Sir A. L. (Hull)
Elmley, Viscount Molson, A. Hugh Elsdale Ward, Irene Mary Bewick (Wallsend)
Emrys-Evans, P. V. Monsell, Rt. Hon. Sir B. Eyres Waterhouse, Captain Charles
Entwistle, Cyril Fullard Morris, John Patrick (Salford, N.) Weymouth, Viscount
Essenhigh, Reginald Clare Muirhead, Lieut.-Colonel A. J. Whyte, Jardine Bell
Fleming, Edward Lascelles Nation, Brigadier-General J. J. H. Williams. Herbert G. (Croydon. S.)
Fraser, Captain Ian Nicholeon, Godfrey (Morpeth) Wills, Wilfrid, D.
Fremantie, Sir Francis Nunn, William Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Gluckstein, Louis Halle O'Donovan, Dr. William James
Goff, Sir Park Palmer, Francis Noel TELLERS FOR THE AYES.—
Goldie, Noel B. Penny, Sir George Mr. Womersley and Dr. Morris Jones.
Goodman. Colonel Albert W. Perkins, Walter R. D.
Graves, Marjorie Pethorick, M.

"provided that the consent of the House of Commons has first been given for such guarantee."

The purpose of this Amendment is very obvious, and I do not think I need take up very much time in explaining it. The Clause, if amended as suggested, would read: 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, provided that the consent of the House of Commons has first been given for such 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.

I take it that the Financial Secretary is taking the necessary steps to enable him to accept this Amendment. If he is accepting it I will sit down at once and save the time of the Committee. His sphinx-like smile leads me to believe that his answer on this occasion is not going to be different from the answers he has given on previous Amendments. It is getting near his last opportunity of establishing his reputation as a Minister who is big enough to make concessions. If he does not do so now, there will be only one or two opportunities left. I am sure the hon. Member for Gorbals (Mr. Buchanan) and myself are grievously disappointed because on many occasions in the days before prosperity had presumably gone to the Financial Secretary's head, we on these benches were his allies. He knows how difficult it is for me to stand here as his opponent after many fights as allies. If there is any reasonable chord left in his heart and if all the milk of human kindness has not been sapped out of his soul by those with whom he is now associated now is his chance.

I would point to one very great and important element in this particular Amendment that may influence him in coming to a decision; he can grant this without any expenditure of money; it will not cause him a half-penny to make this concession. Considering that the Bill recklessly throws away a very handsome sum and that he has here an Amendment which is not going to add anything to that sum, it should receive reasonable consideration from the Government. This is a serious point. If the hon. Gentleman accepts the Amendment, we recognise that that would necessitate a Report Stage, which we could use for a more adequate discussion of the provisions of the Bill than has yet obtained. But we would forgo our rights of discussion on that Report Stage and allow the Bill to go through without further discussion until we came to the Third Reading. I think that is a fairly decent offer after the fighting talk handed out on the Motion to report Progress. For me to come now offering concessions shows that I, at least, have the temperament that can rise above the feelings of trivial revenge.

I see that my hon. Friend the Member for Moseley (Mr. Hannon) has returned to his place and that he is in good health and able to say "Hear, hear". The hon. Member may not know that in his absence I expressed great fears as to his condition. I am glad to see him back and taking an intelligent interest in the proceedings, which I was afraid he would not be able to take in any proceedings.

Mr. HANNON

I thank the hon. Member for his solicitude.

Mr. MAXTON

I am very gratified by the recovery of the hon. Member. The Moseley Division would be a bad Division for us to fight a by-election. The purpose of this Amendment is to secure that the House will exercise a reasonable prudence. It is in order that we may know when the payment of principal or interest is to be made. We shall be informed as to the methods and as to how it is to be done. We are giving in this Bill very substantial powers. We are not merely taking them away from the Newfoundland Legislature, but from this Legislature, and we are putting them into commission. Let us have some assurance that we are not merely being made the victims of interested parties, that there is a concern both for the resources of this nation and for the resources of Newfoundland that transcends mere money market considerations.

I have been through late and all-night sittings, and I know that at certain points in the night an element of rivalry comes into the whole proceedings—an element to which I do not object and an element which I enjoy. But my own sense of humour and my own appreciation of the chaff that goes on does not blind me to the importance of the task that we are performing here. I have tried from the first moment this issue came before the House twelve months ago—I have watched this whole business with the gravest concern at every stage—I have tried to put a check to what I think are bad and reckless methods, and I do so with long and intimate knowledge of the Dominions Secretary. I regret he is not here. If Members on that side of the House knew him as well as I know him, they would not be so ready to swallow, holus bolus, what he puts before them.

Members are apt to think that Measures produced by the Treasury Bench are the last word in political wisdom. We discover afterwards the great flaws in many of them. At the time they were going through the House we did not give the serious consideration to them which we were entitled to give. I know also that every Measure which comes before this House receives the close attention only of a minority. Every Bill is in that position. We do not pretend that we scrutinise every Measure brought in. There are some in which we are closely interested in and some in which we are not. We do not bother about the details of the ones we are not closely interested in; we listen to the Debate and follow what is said by those who have studied the proposals. In our view, we are throwing away carelessly in this Bill a lot of powers that we ought to have guarded carefully. We ask the House to accept this Amendment and to retain this measure of control.

5.31 a.m.

Sir S. CRIPPS

I understand that in the view of the Chairman it would be convenient if the subject matter of an Amendment in my name were discussed with this Amendment, and that the two Amendments be divided on separately.

The DEPUTY-CHAIRMAN

I was not proposing to select the hon. and learned Member's Amendment.

Sir S. CRIPPS

I am sorry. I had been misinformed. However, I can make my point on this Amendment, although it will take rather a long time, as it is a complicated matter. As the Amendment raises the question of whether or not a control should be retained by this House or whether the matter should be allowed to become a charge on the Consolidated Fund without any control from this House, it raises a matter of very great importance. The Bill says in Clause 3, Sub-section (1): 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. If hon. Members will turn to the second Schedule, which sets out the Loan Act, on page 7, it is in this form: The provisions of this Act, shall, except as otherwise expressly provided in this Act, come into operation on the date of the commencement of any Act of the Parliament of the United. Kingdom of Great Britain and Northern Ireland authorising the Commissioners of His Majesty's Treasury in the said United Kingdom (in this Act referred to as "the Treasury") to give a guarantee in respect of the stock the issue of which is authorised by the next succeeding section of this Act. Of course, the guarantee referred to in that first Section of the Newfoundland Act is the guarantee with which this Amendment is concerned, and, according to the Amendment, must have the consent of the House of Commons. The conditions under which loans thus guaranteed, or stock issued subject to guarantee, may be made, will be found in the second Schedule of the Act: The Governor-in-Council shall have power to issue on the credit of Newfoundland, at such time or times as he thinks fit, such an amount of stock in pounds sterling (in this Act referred to as "stock") as is required for the purposes— Then there are set four purposes which I must read to the Committee, because it is very important to appreciate what they are. The first purpose is: (a) of giving to the holders of any of the securities specified in the First Schedule (in this Act referred to as "the deferred securities") the option to surrender the securities held by them in exchange for a nominal amount of the stock equivalent to the nominal amount of the surrendered securities on the basis of one pound of the stock for every one pound sterling or four dollars and eighty-six and two-thirds hundredths of a dollar of the surrendered securities; The first Schedule appears on page 11 and sets out a number of different kinds of bonds and stock which have been issued by the Newfoundland Government and are dated for redemption at various dates. The notice is added: All bonds of the Newfoundland Government which confer on the holder the option of payment either in sterling or in dollars at par of exchange (that is at $ 4.86⅔ to £1) or at any rate equivalent thereto. As far as all these in the first Schedule are concerned, the, holders are entitled to have given them in exchange an issue which is to be made by the Governor-in-Council on the credit of Newfoundland, guaranteed as stated in Clause 3 of the Bill. Paragraph (b) deals with the purpose: (6) of giving, in the case of any of the obligations of Newfoundland (other than those represented by the deferred securities) selected by the Governor-in-Council for the purposes of this paragraph with the concurrence of the Treasury, the option to holders of any securities held in respect of such obligations to surrender all or any such securities held by them in exchange for such nominal amount of the stock as he may determine; As regards that second class, which this Clause is asking the Committee to give the Treasury leave to guarantee, the Governor-in-Council, with the concurrence of the Treasury, has the power to select—

Mr. A BEVAN

As hon. Members opposit have not got the Schedule would it not be better to read it.

Sir S. CRIPPS

I am sure hon. Members can follow the argument I am putting. The Governor has not only the right to select the stocks to which this will apply, but also the right to determine the amount of stock they will be given in exchange for the amount of existing stock. In other words, he can say, "I will only give you £50 of new stock for £100 of old stock." The Treasury have to put into force both these powers of selection. These powers of selection are both extremely important and are given in effect to determine the liability of this country as regards capital, interest, and sinking fund, and this, I should have thought, is a matter which this House must retain within its own competence. This House is making the country responsible for these payments, and all these powers of selection which have to be exercised will be exercised without any control from this House whatever, if this charge is allowed to remain on the Consolidated Fund without any supervision by Parliament. It really is a matter of great importance because time after time in this Bill and other Bills the House is quite calmly handing away its financial control. It started when it set up the Tariff Commission, which was the greatest constitutional change since the time of the Stuarts. This is just another example of giving the Treasury, in association with the Government, not only absolute, auto- cratic, and uncontrolled power, but power also to carry through very large financial transactions which will be a charge on the people of this country in certain events without any control of this House as to why that power is used. I will continue to deal with paragraph (c) of Clause 2 (1) regarding the issue of stock by— raising sufficient money to discharge any of the obligations of Newfoundland (other than those represented by the deferred securities) selected by the Governor in Council for the purposes of this paragraph with the concurrence of the Treasury. I do not know whether the people realise the extraordinary power that is going to be given to the Treasury under this paragraph. It is going to give the Treasury power to make a charge on this country for money to discharge any of the obligations of Newfoundland. They are obligations, not to bondholders but to banks, and may be any trading obligations of any sort, kind, or description. Anyone who has read the Budget speech of this year knows that one of the troubles of Newfoundland is that they are accumulating a mass of debts by reason of the corrupt government of the past, and we are here giving a blank cheque to the Treasury to raise money by loan on which we are to guarantee the capital, interest, and sinking fund in order to pay off these debts incurred by admittedly corrupt governments of all sorts. That, I should have thought, was a matter which this House desired to keep under its own control.

I will now turn to paragraph (d), which deals with the raising of: sufficient money to defray the expenses of and incidental to the issue of the stock and the effecting of any such exchange or repayment as aforesaid." This is merely for the costs and charges of raising the money. In paragraph 2 (2) it proceeds to say that: the principal moneys and the interest secured by the stock and the payments to be made to the sinking fund to be established under this Act shall be chargeable upon, and payable out of, the revenues and assets of Newfoundland, with priority, except as otherwise expressly provided in this Act, over any charges thereon not existing at the date of the passing of this Act. I would like the Financial Secretary to explain just what that means. I am not quite certain what are the other charges not existing at the passing of this Act. This Act imposes a prior charge on the assets and revenues except for charges not existing at the date of the passing of this Act. Is it contemplated that the Governor in Council will have power to raise sums with a priority over these issues which are guaranteed by the British Government, or will they have any definite priority of charge? This is obviously a matter of very great importance when one considers the question of the guarantee. Then there is the provision in paragraph 2 (4) that: The Governor in Council may, in advance of the issue of the stock, borrow temporarily on the security of the revenue and assets of Newfoundland, for any of the purposes specified in paragraphs (c) and (d) of sub-section (1) of this section. The Committee will notice that paragraph (c) is one which gives him power to raise money to discharge any of the obligations of Newfoundland, so that he has the power not only to issue stock, but to pay off any obligations, and he has the power to raise money in advance of the issue of stock. The sum mentioned is about £2,500,000, so that we are not dealing with small, insignificant sums, but with large sums running into millions. It sets out in paragraph (c) the conditions as regards the issue of the stock, sinking fund, and the management. I need only say that these are the ordinary provisions for the issue of 3 per cent. stock. In Section 4 (i) the Governor in Council is given power to determine the conditions of issue of the stock, including the rates thereon, and: to determine the conditions upon which any option of exchange is to be given under that Act, including the determination of the date as from which interest on the stock to be taken in exchange is to accrue, not being a date earlier than the first day of July, 1933; and to regulate the commencement, management and application of the sinking fund to be established under this Act. In paragraph 4 (2) it says: The Bank shall have power, subject to the provisions of this Act and with the approval of the Governor in Council, to regulate the mode of issue and the management of the stock, with power in particular, but without prejudice to the generality of the foregoing words, to regulate the manner in which the stock may be transferred, the issue of stock certificates to bearer, and the manner of payment of interest and of moneys payable on redemption or repayment, and to apply the general practice of the Bank to the matters aforesaid and to any other matters arising in giving effect to the provisions of this Act. The next paragraph, No. 5, deals with the postponement of certain securities and provides that No payment of any interest on, or of any principal of, the deferred securities shall be made, and no interest shall accrue thereon … during the period commencing with the first day of July, 1933, and ending on the thirty-first day of March, 1934; or … at any time in any financial year of the said United Kingdom, if before the first day of January in that financial year an estimate is laid before the Commons House of the Parliament of the said United Kingdom providing for the making of an advance to Newfoundland, whether by way of grant or of loan. I wish the hon. Gentleman would explain what that provision means. Does that cover the exchange of the deferred securities for the new issues, and, if so, does that mean that under paragraph (b) if in any year a grant or loan is made to Newfoundland, the holders of those deferred securities cannot get any exchange or any payment of interest? It is no doubt my own fault, but I cannot explain the logic of why the holder of deferred securities gets nothing because a grant has been made to the Government of Newfoundland. Perhaps the hon. Gentleman would be so good as to explain that rather important provision.

Thirdly, the holder doe* not get any payment so long as there exists any liability of Newfoundland to the said United Kingdom arising from the making by the Treasury of any payment on account of a guarantee given by the Treasury in respect of any securities of Newfoundland or from the making by the said United Kingdom of any advance by way of loan to Newfoundland. That raises exactly the same point. Perhaps the hon. Gentleman will explain that too. The Section then deals with the priority of charges on the assets and revenues of Newfoundland—charges in respect of (a) any of the securities specified in the Second Schedule to this Act. Then there is the much larger list of four classes of inscribed stock which are all trustee securities and which are therefore dealt with separately.

The Bill says: Any of the securities (other than the stock) issued for the purpose of raising money to be applied in repayment of, or for the purpose of being offered in exchange for, any of the last mentioned securities on the maturity thereof; shrill, notwithstanding anything in" subsection (2) or subsection (3) of section two of this Act, have effect in priority to any charges on those revenues and assets in respect of"— the matters there set out. Then the Bill proceeds: accordingly if any payment of any sum in respect of which a charge having priority under this section exists is not made on the due date, no payment of any sum in respect of which a charge postponed under this section exists shall be made until the first mentioned sum has been paid or tendered. I imagine that if such an event arose, the guarantee of the Treasury would be called upon, and it would be on such an occasion that the Treasury would have to pay up either capital or interest in order to satisfy the securities in the priority under which the money was due. It must be obvious to anybody who studies the Schedule that very wide discretionary powers are given as regards the selection of these various securities which can be dealt with. In order to understand the effect of this power, we must consider to some extent the actual position as regards the public debt of Newfoundland, because it is a public debt. That is being dealt with in this Bill in the Second Schedule, and the issues are on the credit of Newfoundland, which we are asked to guarantee. The question as to whether this House has control of that guarantee or not, arises by reason of the repayment of those various issues which had formerly been made. On page 70 of the Report there is a short summary of the position as regards this debt. Paragraph 187 says: As will be seen from the full statements in Appendices F and G, Newfoundland's public debt falls broadly into eight categories:—

(1) Sterling loans which were raised before 1900 and are not Trustee Stocks in the United Kingdom £3,331,000
(2) Sterling loans which were raised between 1900 and 1914 and are Trustee Stocks in the United Kingdom £1,590,500."

There are, of course, the ones in the Second Schedule to the Newfoundland Act on page 11 of the Bill. Paragraph 187 continues:

"(3) Sterling loan raised after the War and ranking as a Trustee Stock in the United Kingdom £423,500
(4) Sterling - dollar bonds raised after the War which are not Trustee Stocks in the United Kingdom £5,651,300."
Mr. HANNON

Could not the hon. Gentleman take them as read?

Sir S. CRIPPS

There are many hon. Members who have not got copies of the Report. It continues: (5) Gold-dollar bonds raised in New York after the War … $31,500,000. I would draw the attention of hon. Members to this, that there is a very large sum in respect of which we are going to be asked, without any control of Parliament, to give the Treasury powers of selecting for repayment, on such a basis as the Treasury, with the Governor in Council, likes to decide. A sum of $31,500,000 gold bonds is presumably held by Americans and was issued to Newfoundland at some time after the war. Then there is a curious No. (6) which has the odd name of The 'Prosperity Loan,' 1932, and other internal dollar issues $3,354,650. Then comes No. (7), which is: Advances by the Canadian Banks operating in Newfoundland. They seem to have operated to some tune. These amount to $6,256,000 Lastly: Advances by the United Kingdom Exchequer (including a war-time advance of £400,000) £1,000,000. That, I understand, is the sum of which we are making a gift to Newfoundland. Apparently the Canadian Banks are not as charitable as we are. Paragraph 188 says: It is thought that of the bonds coming within categories (4) and (5)— these are sterling-dollar bonds raised after the war which are not trustee stocks in the United Kingdom, and gold-dollar bonds raised in New York— about half are held in the United States of America and half in the United Kingdom. That is to say, of the total of roughly £11,000,000, half is in the United States and half in the United Kingdom. The sterling stocks coming within categories (1), (2) and (3), which are trustee stock are pre-1900 non-trustee stock, are thought to be held almost entirely in the United Kingdom. Then the Report goes on to deal with the Colonial Stock Act. Paragraph 190 says: In the case of the dollar bonds issued since the War, the holder has an option of payment in sterling or in dollars (United States or Canadian). I should like the hon. Gentleman to tell us whether in this case we are going to perform that magnificent act of charity which we performed in the case of the 20-years 5½ per cent. gold bonds, i.e., not to pay back the people in United States dollars, as we are entitled to, but in full gold value at par, which we no longer need to, but which we have done in the case of these bonds. I should like to know whether we are going to impose on the people of this country the same self-denying ordinance with regard to these bonds which can be paid either in sterling or in dollars.

The bonds raised in New York, i.e., those falling within categories (4) and (5), and representing about three-fifths of the whole debt, contain the gold clause, the Report continues. Those raised in London, Canada or Newfoundland do not contain that clause. As I understand it, the bonds raised in New York contain the gold clause. That would be the clause that has now been abrogated by the legislation of the United States of America. This is a typical instance of the absolute necessity of control by this House. Now supposing in this case it is decided to issue or repay these gold dollar bonds, the Chancellor of the Echequer will be able to take one of two courses as he could have done with the. twenty-year bonds. He can repay either in paper dollars or in gold. If he repays in paper dollars, he will save us nearly £1,000,000. If he repays in gold, it will cost this country eventually something like £1,000,000. I believe there are many Members of this House to whom £1,000,000 means a lot. That is one of the causes why we quite seriously suggest to the Committee that it is really important that the Committee should face up to this question of the control of finance. Here is another cause. The House is going to hand over what may be very large financial operations with a very large latitude as regards the matters that may be done without any controlled action by the Treasury.

Mr. MCKEAG

It would be helpful to the Committee if the hon. and learned Gentleman could indicate to the Committee those paragraphs of the Report which he does not intend to read.

Sir S. CRIPPS

I could do that quite easily, but it would take rather a long time. If the hon. Member will tell me which clause he would like me to start on, I would go through the paragraphs and give the details. Paragraph 191 deals with the rates of interest, which are set out there. I would like to point out that here are stocks bearing from three to six-and-a-half per cent. in rate of interest. Someone has got to decide, when the question of the issuing of this guaranteed stock comes, the ratio which is to be applied between the six-and-a-half per cent. dollar bond and the new three per cent. dollar stock which is going to be issued. That is a task which will fall to the Treasury. If it is fixed at 50, it will cost so much, and if it is fixed at 40, it will cost so much less. All that is a matter which is going to determine the amount of guarantee and is being left entirely outside the control of this House. These loans were issued at or near par and the rates are true, effective rates. The average rate is just under 5 per cent. We are going to exchange for a guaranteed loan of 3 per cent. or less. Someone has got to estimate the difference in security between Newfoundland credit on the debt and the issue of British Government credit. That is a matter which should be supervised by this House and should not be allowed to go by default. There is an interesting passage which just gives a picture of the whole. It sums it up in paragraph 192, which says: The total debt amounts to just under $101,000,000., or £20.746,000 at par of exchange. The total interest charge amount to some 34,860,000, £1,000.000 at par of exchange, to which must be added S140,000, or £28,000 per annum for sinking fund. The provision for debt service in the current Budget is §5.200,000, a figure which allows for exchange fluctuation and for the premium on interest payments in New York. 'The Prosperity Loan, 1932' (category (6) and the Bank and Government loans … are repayable at any time. In the case of the other loans there is no provision for repayment pending maturity. The Report also refers to certain tables which reflect the trend of Newfoundland's credit in London since the War. I hope I have given the Committee sufficient information to enable them to arrive at a decision on this extremely important matter. It is a matter which, if it had been debated in an earlier Parliament, would have raised a most profound constitutional issue. We have passed from the stage when the majority in this House have any interest whatsoever in what happens to the money which the taxpayer pays. They are no longer concerned in how it is squandered, so long as they have some opportunity to get some remission of direct taxation or so long as it is not spent in social services or public works. When it comes to squandering money in Austria or America, or in other places outside these islands, they are uninterested in what happens to the money. Here we are dealing with what is to be put up and guaranteed for a loan which may exceed £20,000,000. We are going to guarantee the interest payment on that loan, which will amount to about £300,000 a year. We arc going to guarantee a sinking fund. The amount of our ultimate liabilities will fall to be determined by various selections and decisions made by the Treasury. If we pass this Clause without the Amendment, we are going to part for ever from any contol of these matters. I do ask the Committee to consider very seriously the insertion of some words which will retain for this House the contol over these very large financial operations.

6.10 a.m.

Mr. HORE-BELISHA

No doubt the reply to the hon. Member for Bridgeton

(Mr. Maxton) is that he has rightly claimed for himself the large part he has played in these discussions. He has been consistent, ingenious, and good-humoured. He now moves an Amendment that any guarantee should receive the approval of the House of Commons and that a statement should be made to the House of Commons. That is exactly what this Clause assures him. A guarantee, of course, in its very nature can only be given once. That is at the time of the issue of the stock. It is not a recurrent, guarantee, but is given once and comes into effect automatically in the event of a loan not being met. Therefore, there is no other occasion on which the House of Commons can be consulted except on this occasion. By this Clause we are authorising the British Parliament to give the guarantee. In order, however, to ensure that the House of Commons shall be acquainted with the circumstances in which the guarantee comes into effect, there is Sub-section (3), providing that it shall be laid before the Houses of Parliament. I therefore suggest that if this Clause is passed, hon. Members will secure the desideratum of securing the consent of the House of Comons before the guarantee is made.

Captain MARGESSON rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 139;, Noes, 26.

Division No. 38.] AYES. [6.15 a.m.
Adams, Samuel Vyvyan T. (Leeds. W.) Christie, James Archibald Guinness, Thomas L. E. B.
Agnew, Lieut.-Com. P. G. Colman, N. C. D. Gunston, Captain D. W.
Allen, Lt.-Col. J. Sandeman (B'k'nh'd) Cooke, Douglas Hannon, Patrick Joseph Henry
Aske, Sir Robert William Crookshank, Col. C. de Windt (Bootle) Hartington, Marquess of
Baillie, Sir Adrian W. M. Crookshank, Capt. H. C. (Gainsb'ro) Holdsworth, Herbert
Baldwin-Webb, Colonel J. Cruddas, Lieut-Colonel Bernard Hore-Belisha, Leslie
Beaumont, M. W. (Bucks. Aylesbury) Davies, MaJ. Geo. F. (Somerset, Yeovil) Horsbrugh, Florence
Beaumont, Hon. R.E.B. ('Portsm'th,C.) Dickie, John P. Howitt, Dr. Alfred B.
Beit, Sir Alfred L. Duncan, James A. L. (Kensington,N.) Hudson, Robert Spear (Southport)
Bernays, Robert Eastwood, John Francis Hunter, Capt. M. J. (Brigg)
Betterton, Rt. Hon. Sir Henry B. Edmondson, Major A. J. James, Wing-Corn. A. W. H.
Birchall, Major Sir John Dearman Elmley, Viscount Joel, Dudley J. Barnato
Borodale, Viscount Emrys-Evans, P. V. Ker, J. Campbell
Bossom, A. C. Entwistle, Cyril Fullard Kerr, Lieut.-Col. Charles (Montrose)
Bowyer, Capt. Sir George E. W. Essenhigh, Reginald Clare Lamb, Sir Joseph Quinton
Boyce, H. Leslie Fleming, Edward Lascelles Law, Richard K. (Hull, S.W.)
Broadbent, Colonel John Fraser, Captain Ian Leckie, J. A.
Brocklebank, C. E. R. Fremantle, Sir Francis Leech, Dr. J. W.
Brown, Ernest (Leith) Gluckstein. Louis Halle Leighton, Major B. E. P.
Burghley, Lord Goff, sir Park Llewellin, Major John J.
Burgin, Dr. Edward Leslie Goldie, Noel B. Lockwood, John C. (Hackney. C.)
Campbell, Sir Edward Taswell (Brmly) Goodman, Colonel Albert W. Loder, Captain J. de Vere
Caporn, Arthur Cecil Graves, Marjorie MacAndrew, Capt. J. O. (Ayr)
Chamberlain, Rt. Hon. N. (Edgbaston) Griffith, F. Kingsley (Middlesbro',W.) MacDonald, Malcolm (Bassetlaw)
Chapman, Col. R. (Houghton-le-Spring) Grimston, R. V. McKeag, William
McKie, John Hamilton Raikes, Henry V. A. M. Sutcliffe, Harold
Macmillan, Maurice Harold Ramsay, Alexander (W. Bromwich) Tate, Mavis Constance
Mallalieu, Edward Lancelot Ramsay, T. B. W. (Western Isles) Thomas, James P. L. (Hereford)
Margesson, Capt. Rt. Hon. H. D. R. Held, James S. C. (Stirling) Thompson, Luke
Marsden, Commander Arthur Renwick, Major Gustav A. Thomson, Sir Frederick Charles
Mayhew, Lieut.-Colonel John Rickards, George William Thorp, Linton Theodore
Mills, Major J. D. (New Forest) Robinson, John Roland Titchfield, Major the Marquess of
Mitchell, Harold P. (Br'tf'd & Chisw'k) Ropner. Colonel L. Todd, Capt. A. J. K. (B'wick-on-T.)
Moison, A. Hugh Elsdale Ross Taylor, Walter (Woodbridge) Touche, Gordon Cosmo
Monsell, Rt. Hon. Sir B. Eyres Runge, Norah Cecil Tree, Ronald
Morris, John Patrick (Saltord, N.) Russell, Alexander West (Tynemouth) Ward, Lt.-Col. Sir A. L. (Hull)
Morris-Jones, Dr. J. H. (Denbigh) Salmon, Sir Isidore Ward, Irene Mary Bewick (Wallsend)
Muirhead, Lieut.-Colonel A. J. Sandeman, Sir A. N. Stewart Waterhouse, Captain Charles
Nation, Brigadier-General J. J. H. Scone, Lord Weymouth, Viscount
Nicholson, Godtrey (Morpeth) Shaw, Helen a. (Lanark, Bothwell) Whyte, Jardine Bell
Nunn, William Smith, Sir J. Walker- (Barrow-in-F.) Williams, Herbert G. (Croydon, S.)
O'Donovan, Dr. William James Southby, Commander Archibald R. J. Wills, Wilfrid D.
Palmer. Francis Noel Spencer, Captain Richard A. Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Penny, Sir George Storey, Samuel
Perkins, Walter R. D. Stourton, Hon. John J. TELLERS FOR THE AYES.—
Petherick, M. Strauss, Edward A. Captain Austin Hudson and Mr.
Peto, Geoffrey K. (W'verh'pt'n, Bilston) Stuart, Lord C. Crlchton- Womersley.
Pickering, Ernest H. Sugden, Sir Wilfrid Hart
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

Question put accordingly, "That those words be there inserted."

The Committee divided: Ayes, 26; Noes, 140.

Division No. 39.] AYES. [6.22 a.m.
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
NOES.
Adams, Samuel Vyvyan T. (Leeds, W.) Crookshank, Col. C. de Windt (Bootle) Hore-Belisha, Leslie
Agnew, Lieut.-Com. P. G. Crookshank, Capt. H. C. (Gainsb'ro) Horsbrugh, Florence
Allen, Lt.-Col. J. Sandeman (B'k'nh'd.) Cruddas, Lieut.-Colonel Bernard Howard, Tom Forrest
Aske, Sir Robert William Davies, Maj. Geo. F. (Somerset,Yeovil) Howitt, Dr. Alfred B.
Baillie, Sir Adrian W. M. Dickie, John P. Hudson, Capt. A. U. M. (Hackney, N.)
Baldwin-Webb, Colonel J. Duncan, James A. L. (Kensington, N.) Hudson, Robert Spear (Southport)
Beaumont, M. W. (Bucks., Aylesbury) Eastwood, John Francis Hunter, Capt. M. J. (Brigg)
Beaumont, Hon. R.E.B. (Portsm'th, C.) Edmondson, Major A. J. James, Wing-Com. A. W. H.
Belt, Sir Alfred L. Elmley, Viscount Joel, Dudley J. Barnato
Bernays, Robert Emrys-Evans, P. V. Ker, J. Campbell
Betterton, Rt. Hon. Sir Henry B. Entwistle, Cyril Fullard Kerr, Lieut.-Col. Charles (Montrose)
Birchall, Major Sir John Dearman Essenhigh, Reginald Clare Lamb, Sir Joseph Quinton
Borodale, Viscount Fleming, Edward Lascelles Law, Richard K. (Hull, S.W.)
Bossom, A. C. Fraser, Captain Ian Leckie, J. A.
Boyce, H. Leslie Fremantle, Sir Francis Leech, Dr. J. W.
Broadbent, Colonel John Gluckstein, Louis Halle Leighton. Major B. E. P.
Brocklebank, C. E. R. Goff, Sir Park Llewellin, Major John J.
Brown, Ernest (Leith) Goldie, Noel B. Lockwood, John C. (Hackney, C.)
Burghley, Lord Goodman, Colonel Albert W. Loder, Captain J. de Vere
Burgin. Dr. Edward Leslie Graves, Marjorie MacAndrew, Capt. J. O. (Ayr)
Campbell, Sir Edward Taswell (Brmly) Griffith, F. Kingsley (Middlesbro', W.) MacDonald. Malcolm (Bassetlaw)
Caporn, Arthur Cecil Grimston, R. V. McKeag, William
Chamberlain, Rt. Hon. N. (Edgbaston) Guinness, Thomas L. E. B. McKie, John Hamilton
Chapman. Col. R. (Houghton-le-Spring) Gunston, Captain D. W. Macmillan, Maurice Harold
Christie, James Archibald Hannon, Patrick Joseph Henry Mallalieu, Edward Lancelot
Colman, N. C. D. Hartington, Marquess of Margesson, Capt. Rt. Hon. H. D. R.
Cooke, Douglas Holdsworth, Herbert Marsden, Commander Arthur
Mayhew, Lieut.-Colonel John Reid, James S. C. (Stirling) Thomas, James P. L. (Hereford)
Mills, Major J. D. (New Forest) Renwick, Major Gustav A. Thompson, Luke
Mitchell, Harold P. (Br'tf'd & Chisw'k) Rickards, George William Thomson, Sir Frederick Charles
Moison, A. Hugh Elsdale Robinson, John Roland Thorp, Linton Theodore
Monsell, Rt. Hon. Sir B. Eyres Ropner, Colonel L. Titchfield, Major the Marquess of
Morris, John Patrick (Salford, N.) Ross Taylor, Walter (Woodbridge) Todd, Capt. A. J. K. (B'wick-on-T.)
Morris-Jones, Dr. J. H. (Denbigh) Runge, Norah Cecil Touche. Gordon Cosmo
Muirhead, Lieut.-Colonel A. J. Russell, Alexander West (Tynemouth) Tree, Ronald
Nation, Brigadier-General J. J. H. Salmon, Sir Isidore Ward, Lt.-Col. Sir A. L. (Hull)
Nicholson, Godtrey (Morpeth) Sandeman, Sir A. N. Stewart Ward, Irene Mary Bewick (Wallsend)
Nunn, William Scone, Lord Waterhouse, Captain Charles
O'Donovan, Dr. William James Shaw, Helen B. (Lanark, Bothwell) Weymouth, Viscount
Palmer, Francis Noel Smith, Sir J. Walker- (Barrow-In-F.) Whyte, Jardine Bell
Penny, Sir George Spencer, Captain Richard A. Williams, Herbert G. (Croydon, S.)
Perkins, Walter R. D. Storey, Samuel Wills, Wilfrid D.
Petherick, M. Stourton, Hon. John J. Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Peto, Geoffrey K. (W'verh'pt'n, Bilst'n) Strauss, Edward A. Womersley, Walter James
Pickering, Ernest H. Stuart, Lord C. Crichton-
Raikes, Henry V. A. M. Sugden, Sir Wilfrid Hart TELLERS FOB THE NOES.—
Ramsay, Alexander (W. Bromwich) Sutcliffe. Harold Captain Sir George Bowyer and
Ramsay, T. B. W. (Western Isles) Tate, Mavis Constance Commander Southby.

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

Major NATHAN rose—

Captain MARGESSON rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 137; Noes, 26.

Division No. 40.] AYES. [6.30 a.m.
Adams, Samuel Vyvyan T. (Leeds, W.) Guinness, Thomas L. E. B. Peto, Geoffrey K. (W'verh'pt'n, Bilston)
Agnew, Lieut.-Com. P. G. Gunston, Captain D. W. Pickering, Ernest H.
Allen, Lt.-Col. J. Sandeman (B'k'nh'd) Hannon, Patrick Joseph Henry Palkes, Henry V. A. M.
Aske, Sir Robert William Hartington, Marquess of Ramsay, Alexander (W. Bromwich)
Baillie, Sir Adrian W. M. Holdsworth, Herbert Ramsay, T. B. W. (Western Isles)
Baldwin-Webb, Colonel J. Hore-Belisha, Leslie Reid, James S. C. (Stirling)
Beaumont, M. W. (Bucks., Aylesbury) Horsbrugh, Florence Renwick, Major Gustav A.
Beaumont, Hon. R.E.B. (Portsm'th,C.) Howard, Tom Forrest Rickards, George William
Bernays, Robert Howitt, Dr. Alfred B. Robinson. John Roland
Betterton, Rt. Hon. Sir Henry B. Hudson, Capt. A. U. M. (Hackney, N.) Ropner, Colonel L.
Birchall, Major Sir John Dearman Hudson, Robert Spear (Southport) Ross Taylor, Walter (Woodbridge)
Borodale, Viscount Hunter, Capt. M. J. (Brigg) Runge. Norah Cecil
Bossom, A. C. James, Wing-Com. A. W. H. Russell, Alexander West (Tynemouth)
Bowyer, Capt. Sir George E, W. Joel, Dudley J. Barnato Salmon, Sir Isidore
Boyce, H. Leslie Ker, J. Campbell Sandeman, Sir A. N. Stewart
Broadbent, Colonel John Kerr, Lieut-Col. Charles (Montrose) Scone, Lord
Brocklebank, C. E. R. Lamb, Sir Joseph Quinton Shaw, Helen B. (Lanark, Bothwell)
Brown, Ernest (Leith) Law, Richard K. (Hull, S.W.) Smith. Sir J. Walker- (Barrow-In-F.)
Burghley, Lord Leckle, J. A. Southby, Commander Archibald R. J.
Burgin, Dr. Edward Leslie Leech, Dr. J. W. Spencer, Captain Richard A.
Campbell, Sir Edward Taswell (Brmly) Leighton, Major B. E. P. Storey, Samuel
Caporn, Arthur Cecil Llewellin, Major John J. Stourton, Hon. John J.
Chamberlain, Rt. Hon. N. (Edgbaston) Lockwood. John C. (Hackney, C.) Strauss, Edward A.
Chapman, Col. R. (Houghton-le-Spring) Loder, Captain J. de Vere Stuart, Lord C. Crichton-
Christie, James Archibald MacAndrew, Capt. J. O. (Ayr) Sugden, Sir Wilfrid Hart
Colman, N. C. D. MacDonald, Malcolm (Bassetlaw) Sutcliffe, Harold
Cooke, Douglas McKeag, William Tate, Mavis Constance
Crookshank, Col. C. de Windt (Bootle) McKie, John Hamilton Thomas, James P. L. (Hereford)
Crookshank, Capt. H. C. (Gainsb'ro) Macmillan, Maurice Harold Thompson, Luke
Cruddas, Lieut.-Colonel Bernard Mallalieu, Edward Lancelot Thorp, Linton Theodore
Davies, Maj. Geo. F. (Somerset,Yeovil) Margesson, Capt. Rt. Hon. H. D. R. Titchfield, Major the Marquess of
Dickie, John P. Marsden, Commander Arthur Todd, Capt. A. J. K. (B'wick-on-T.)
Duncan, James A. L. (Kensington,N.) Mayhew, Lieut.-Colonel John Touche. Gordon Cosmo
Eastwood. John Francis Mills, Major J. D. (New Forest) Tree, Ronald
Edmondson, Major A. J. Mitchell, Harold P. (Br'tf'd a Chisw'k) Ward, Lt.-Col. Sir A. L. (Hull)
Elmley, Viscount Molson, A. Hugh Elsdale Ward, Irene Mary Bewick (Wallsend)
Emrys-Evans, P. V. Monsell, Rt. Hon. Sir B. Eyres Waterhouse, Captain Charles
Entwistle. Cyril Fullard Morris, John Patrick (Salford, N.) Weymouth, Viscount
Essenhigh, Reginald Clare Morris-Jones, Dr. J. H (Denbigh) Whyte, Jardine Bell
Fraser, Captain Ian Muirhead, Lieut.-Colonel A. J. Williams, Herbert G. (Croydon, S.)
Fremantle, Sir Francis Nation, Brigadier-General J. J. H. Wills. Wilfrid D.
Gluckstein. Louis Halle Nicholson, Godfrey (Morpeth) Wilson, Lt.-Col, Sir Arnold (Hertf'd)
Goff, Sir Park Nunn, William Womersley, Walter James
Goldie, Noel B. O'Donovan, Dr. William James
Goodman, Colonel Albert W. Palmer, Francis Noel TELLERS FOR THE AYES.—
Graves, Marjorie Perkins, Walter R. D. Sir Frederick Thomson and Sir George Penny.
Grimston, R. V. Petherick, M.
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.
Cocke, 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

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