HC Deb 18 December 1933 vol 284 cc931-87

Order for Third Reading read.

3.36 p.m.


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

I think there will be general agreement that we have had both an exhaustive Debate and, to many, an exhausting Debate on this Bill, but there is one thing which clearly emerges from our discussions. Whatever differences there may be as to the proposals submitted by the Government, there is nothing but good will in all parts of the House towards Newfoundland. It may well be that those who criticise our particular methods feel that the Bill was specifically directed to the interests of a particular class, but I want to assure the House that, whatever differences there may be, we honestly believe that all sections of Newfoundland will in the end benefit by our proposals. At all events, it is indeed a consolation, as it must be very gratifying to people connected with our oldest Colony, to feel that, however acrimonious may be our Debates, however strong may be the feelings expressed, in no quarter of the House is there other than a genuine desire to see that this old Colony is speedily restored to her old position. I want to assure the House that, so far as the Government proposals are concerned, there is no question whatever about any dictatorship. We believe that the scheme now submitted to the House is a scheme based upon genuine co-operation, and we hope and believe that the representatives of Newfoundland, whoever they may be, will wholeheartedly co-operate with the British Commissioners to make this scheme a success.

Naturally and obviously, there are many Members of the House who are jealous of our Parliamentary traditions and who are anxious to secure that in the discussions on the administration of this innovation—which, I frankly admit, it is—every opportunity will be given to this House not only to criticise but to make useful contributions to the new régime. That wish has been expressed from all sections of the House. The Government feel, as Members in all parts of the House feel, that this is an innovation, a remarkable change, which may easily be fraught with many difficulties and dangers. There is no disguising that for a moment, and therefore any contribution to minimise the evil effects or to make for the success of the scheme will be welcomed by the Government. As far as it is possible within the limits of Parliamentary control, one can say that there will be the usual opportunity for questions and to challenge the Estimates of the Dominions Secretary, and if any serious occasion should arise when, owing to the policy or the administration, it is found necessary to challenge the Government, I can assure the House that that would not be resented but that every opportunity would be given for it.

Another thing which clearly emerges is the desire expressed in all parts of the House for some real development work in Newfoundland. I do not put the truck system in that category. I would look upon the abolition of that system as a real development, and any efforts that the commission can make for its abolition will certainly be welcomed by me. In the larger field of development I believe there is considerable scope in Newfoundland, and I hope that the commissioners will apply themselves to that all-important side of the problem.

I do not disguise from the House that much will depend upon the commissioners themselves; that is to say, much will depend upon the character and the ability of those entrusted with that great responsibility. No one can give a guarantee in advance, but I will give this assurance to the House, that no political colour or party allegiance or preference of any sort or kind will, be exercised in the appointment of this commission. I give the House an absolute assurance that we will appoint those who in our judgment will, by their knowledge and experience, be guided and influenced by a single-minded desire to do the right thing. No one can say more than that, and no one can go beyond saying that they will undertake a very difficult task with the best wishes of every section of the House.


Will they be allowed to hold directorships of public companies?


I would not like at this stage to lay down hard and fast rules. I do not know what the position of those who may be recommended will be, but I can certainly without hesitation give this assurance to the House, that I would look upon it as a disqualification and not a qualification for them to hold any other office than the one which will be entrusted to them.


The right hon. Gentleman is very specific about the commissioners being free from political bias. Does that mean that political experience will be a disqualification for the men who are to take on this difficult political task?


I will put it in this way, that mere party influence will be a disqualification, but political experience will not be, because, apart from the question of administration, political experience will be very essential—not the political experience that is dealt with in the report, but political experience of government, though not necessarily as defined by the report. I can give that absolute assurance to the House. My right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood), when speaking in an earlier stage of the Debate, expressed a view that found support in many quarters. It was shortly this: Why not avail ourselves of this opportunity to give direct representation in this House to Newfoundland? He based his claim on two grounds. The first, which is very important, was that the people of Newfoundland Should feel that they had in this House direct representation—


The right hon. Gentleman appears to be going rather outside the terms of the Bill. We must confine ourselves on the Third Beading to what is contained in the Bill.


I thought that as there was an Amendment which was ruled out of order, I might deal with it. The second ground of apprehension, expressed in many quarters of the House, especially by the hon. Member for East Wolverhampton (Mr. Mander), was that instead of this country undertaking this responsibility, the natural affiliation was as between Newfoundland and Canada.


May I ask, on a point of Order, whether your Ruling prevents us discussing the question whether this Constitution will not provoke difficulties between ourselves and Newfoundland which could be removed by a particular form of action, and whether the possibility of having direct representation of Newfoundland in this Parliament will not be in order as a method of rectifying some of the difficulties obvious in the conduct of this scheme?


My Ruling is only the old Ruling—that on Third Reading we must not discuss anything which is not in the Bill. I cannot say what the effect of this Bill will be.


From the point of view of considering the situation which this Bill may bring about, should we not be in order in discussing the best means of preventing any evil result from following? Therefore, would not this question be germane to the Bill?


Not if the subject is outside the terms of this Bill.


May I ask whether the right hon. Gentleman is not out of order in discussing an alternative suggestion that Canada should deal with this problem?


I should say, strictly speaking, that he is.


Have not Third Reading speeches always been strictly limited to what is in a Bill, which rules out a repetition of Second Reading and Committee stage speeches?


Second Reading and Committee stage speeches cannot always be ruled out, because they may be relevant to the Bill.


I desire to point out that I have not ignored any of the suggestions made. I must now content myself with discussing the Bill as it emerged from the Committee stage, but I am sure hon. Members in all parts of the House will appreciate that I did give serious consideration to suggestions made both on the Second Reading and in Committee.


But are we to understand that they are turned down, or not?


We must stand by Mr. Speaker's Ruling. I am dealing only with the Bill as it is now presented to the House, and not as several hon. Members would desire it to have been. I come straight away to the two points raised on the Committee stage which I promised to consider between now and the appearance of the Bill" in another place. There was common agreement that one thing to avoid was the creation of any impression that this was other than merely a suspension of the Constitution. The hon. Member for Ebbw Vale (Mr. A. Bevan) emphasised the point that the word "suspend" conveyed an entirely different meaning from "revoke." I answered by saying that all parts of the Bill showed, on the face of things, that it was intended to be temporary, but so that there shall be no misapprehension as to the genuine and unanimous feeling of the House that this is only to be a suspension of the Constitution for a temporary period I have made arrangements, as the House will be pleased to know, for the appropriate words to be inserted as Amendments in another place. Another suggestion with which I strongly sympathise was that the Letters Patent should provide for all changes to be submitted to this House, and in Committee I gave an assurance that that point should also be looked into.


A suggestion was made in Committee that, if possible, some instrument should be included in the Bill by means of which Newfoundland could exercise the initiative in getting a restoration of Dominion status. Has the right hon. Gentleman found that to be possible?


I was coming to that point later, but as the hon. Member has raised it I will deal with it right away. Shortly, the point put is this, Are we going to deal with the situation in such a way that whatever the period may be—and we all hope it will be a short period—an opportunity, I put it no higher, will be given to the people of Newfoundland to say: "We now feel that we ought to be restored to our former position"? It is very difficult in this Bill to frame a Clause to secure that object. I give the House an undertaking that we will go very carefully into the question in an endeavour to work it out, but it bristles with difficulties from many points of view. The first point, which was in the minds of all Members who expressed doubts about it, was that there may be legitimate differences of opinion as to when Newfoundland is in a position to be restored to her former position. What steps are we going to take to enable the people of Newfoundland themselves to express their views about it? I assure the House that, while it is not possible to deal with it in the Bill, that point will not be lost sight of by the Government; it will have to be carefully considered in the future.

I now return to the question of the Letters Patent. Here the suggestion was that every instrument connected with this change ought to be laid before the House, so that the House could debate it and express an opinion. Again, I have made every effort to meet that desire, but the House will appreciate the difficulty of the time factor in the situation. On Thursday of this week the House will adjourn until almost the last day in January. No one can pretend that with the changes contemplated, and the knowledge that their Constitution is in suspense, it would be in the interests of the Government of Newfoundland—or, indeed, of ourselves—that the uncertainty should be prolonged If it is certain, as it is, that this new Constitution must be set up, there will be general agreement that, in the interests of Newfoundland herself, the sooner that is done the better. Therefore, the time factor is the predominant factor; but I do give the House the assurance that the Letters Patent will contain nothing more than the machinery to give effect to the recommendations of the Royal Commission. Had it been possible to exclude the time factor, I would have gone to the extent of arranging in another place for Amendments to be put in, but seeing that the House will not meet until nearly the end of January, if these Letters Patent had to be laid on the Table, with the possibility of a Debate, it would mean somewhat towards the end of February before anything could be done. All Members of the House, whatever their views as to the merits of this Bill, will agree that if we are going to deal effectively with the situation, the sooner we deal with it the better. As it is a practical point and a practical difficulty, I have found myself unable to meet the situation.

Therefore, in moving the Third Reading of this Bill, I want the House to believe me when I say, that whatever differences of opinion there may be as to the procedure we have adopted, we would never have adopted this procedure were it not with the acquiescence and at the wish of the Government of the day in Newfoundland. It has been urged strongly that this is a Bill which gives a guarantee only to one class of people. The answer I give to the House is, that while it may be true that one section in this particular connection benefits, it is equally true, and certainly my judgment, that had we allowed Newfoundland to default, through being unable to meet her obligations, and we had not come to the rescue, the first people to have suffered would have been that section of the community which right hon. and hon. Members are themselves so anxious to safeguard. It would have destroyed the credit of Newfoundland; it would have rendered it- impossible for those poor people even to have continued the miserable existence they have to-day. That, at least, is our opinion, and it is because we are anxious for their interests, because we want to preserve the good name of this old Colony, because we believe that the courage which these people have displayed in the past is the best safeguard for the future, because we believe Newfoundland herself will be the first to appreciate the help of this country, because we believe that those who will be sent to help administer her affairs will be men of wide vision, practical knowledge, and working with a single-minded desire to do the best for her as well as for us, that I commend the Third Reading of this Bill to the House, and I believe that time will justify our action.

4.4 p.m.


I beg to move, to leave out the word "now," and, at the end of the Question, to add the words "upon this day six months."

The right hon. Gentleman has moved the Third Reading of this Bill in a very conciliatory speech—a speech which we much appreciate. He has dealt with some of the points which were raised during the prolonged Committee stage, and—if I might use his words—the exhaustive Committee stage. Unfortunately, the right hon. Gentleman was on that occasion unable to stay the course. He had to hand over the work to his very able assistants, and, may I say, speaking on behalf of my colleagues on this side of the House, we very much appreciate the way in which both of them dealt with the very many questions which were raised during that sitting. It certainly left no bad feeling on this side of the House. We want to meet the position in a conciliatory manner, as the right hon. Gentleman has met it, but not with the intention in any way of concealing our opposition to this Bill. As the right hon. Gentleman rightly said, the Bill is one about which he himself is not happy, that no Government would welcome the introduction of such a Bill and that he did not know of any person who was pleased with the present conditions of things in Newfoundland.

Our attitude on this side can be made quite clear in a few sentences. We have opposed this Bill at every stage, and we shall carry our opposition into the Division Lobby on the Third Reading. Not that we have no sympathy with the people of Newfoundland—we want that to be clearly understood. Almost every Member sitting on these benches is drawn from areas which are called distressed areas in this country, areas, unfortunately, where the people are suffering acutely as a result of the depression through which the country is passing, and owing to unemployment. Seeing that suffering day after day, as we do, we have considerable sympathy with those who are suffering in a similar way, not only in Newfoundland but in other parts of the Dominions, and in every other part of the world. But we maintain that there is nothing in this Bill which is going to relieve the sufferings of the people of Newfoundland.

The right hon. Gentleman, during the course of his remarks this afternoon, made reference again to the truck system. We say that a truck system is one of the most obnoxious systems which could exist for any body of workpeople, and that it is not new in Newfoundland. It was reported upon some 40 years ago. The attention, not only of the Government of Newfoundland but of the Dominions Office in this country, was called to the system which was in operation. Unfortunately, it was continued in operation, and has brought about a condition of things which, the commissioner who then reported upon the matter contemplated would be brought about. Might I ask the right hon. Gentleman why, seeing that the Government of this country are making themselves responsible for the payment of interest upon the loans until the end of 1936, or at least that which will not be recovered from the finances of Newfoundland, some conditions were not applied in the granting of these financial concessions as regards some of the worst labour conditions, including that of truck? Unless some drastic steps are taken to abolish this system, which is reminiscent of medieval days, the system is going to continue.

The same can be said regarding the general conditions of the people of Newfoundland. I am sure that every hon. Member who has read the report of the commission must be appalled at the conditions still existing in that part of 'the British Empire. There are 70,000 people in receipt of public assistance, not including the aged and the infirm, and something like 25 to 30 per cent. of the able-bodied persons in Newfoundland are in receipt of public assistance. May I remind the right hon. Gentleman again that that is no new condition of things? There have been these recurring periods when the major portion of the people of the Island have been in this condition. Much might be said as to what is and who is really responsible. A good deal can be said about the system of government, about the corruption, the graft and all those things which have been talked of during the passage of this Measure through the House. I would that the Dominions Office itself had taken a greater interest in the work that was done by the Government in that Dominion. We must remember that it is not only the conditions of the people from the point of view of their daily requirements, but I must say that I was appalled when I read that a very large portion of the population was without the necessary medical requirements and attendances. One part of the report referred to the fact that 6,500 people, spread over an area of something like 150 miles, were without even the services of a nurse or a doctor, and that the number of doctors in that Island has been reduced by something like 36, or 25 per cent., during the last 25 years. It is not because we have not sympathy with the people of Newfoundland that we have adopted the attitude we have during the process of this Measure through the House.

I would like to put one or two pointed question to the right hon. Gentleman, or his Under-Secretary, who is going to reply. Were the facts which were disclosed in the report of the commission brought to the notice of his office before the commission went out to Newfoundland? Did the Governor, who acted on behalf of His Majesty's Government, or as the representative of His Majesty in that Dominion, make the Dominions Office in this country conversant with the conditions under which the people in Newfoundland have been living for the last 30 or 40 years? Did it know of the terrible conditions of the working people, of the truck system, the maladministration, the corruption, the unbalanced budgets and the continued borrowings? After all, the right hon. Gentleman has occupied his present position for some three years, but it was not until last year that action was taken by his Department in dealing with the difficulties with which this Dominion is confronted.

We should like to ask the right hon. Gentleman the Member for Sparkbrook (Mr. Amery) who was Dominions Secretary for five years, from 1924 to 1929, whether he was aware of the conditions which existed in this island. If he was, why was no suggestion made as to what should be done regarding the proper administration of the island? The Dominions Secretary shakes his head. I agree that the Government could not intervene in the administration, or the finances or any matters pertaining to the government of the Dominion, but I have in mind what I read in the Report of the Commission regarding the advice and suggestions which were made in 1898 by the then Secretary of State for the Colonies, Mr. Joseph Chamberlain. His attention had been drawn to certain concessions which were proposed by the Government of Newfoundland, and without much hesitation he gave his advice as to what the result of those concessions would be, going so far as to say that they would be nothing but graft, and that the condition of affairs which has now arisen would arise.

From then until the present time, advice may not have been sought, but it has certainly not been given. I am not sure whether the Governor of Newfoundland has given information to the Dominions Office in this country as to the conditions prevailing in that Dominion. Only when it was realised that the Government of Newfoundland could not meet their financial obligations did the Government of this country intervene. The Chancellor of the Exchequer, speaking on the Financial Resolution, said that in the autumn of 1932 it had become apparent that Newfoundland would not be able to meet her obligations. To tide over the interval until further investigations had taken place, this country, without any investigation, but simply upon information or upon an intimation which had been received at, I take it, the Dominions Office, undertook, with the Dominion of Canada, to meet the financial obligations which Newfoundland could not meet. Had it not been for the fact that the Government of Newfoundland could not meet those financial obligations, we have no doubt that the conditions about which we complain would have continued until a crisis had arisen, without any attempt by the Dominions Secretary, or any occupant of his office to deal with those conditions.

Some of us are rather alarmed at the extent of the financial obligations which have been undertaken by this country. The Chancellor of the Exchequer said that £550,000, which has, or will be, voted in the near future, is a free gift by the Government of this country to the—an hon. Friend of mine says "bondholders," and I think that that needs no qualification—to the bondholders. Not only is that money to be given to the bondholders, but the financial obligations which have been undertaken under this Bill until the end of 1936 will mean, as far as it is possible to ascertain, something like £2,000,000 to the British taxpayer. That money might very well be used to relieve the distress of the people in this country. If a portion of it went to the relief of the distress of the poor people in Newfoundland, we on these benches would have very little to say, and that will be true, I am sure, of my hon. Friends who sit below the Gangway.

Every penny of the money provided by this Bill will be used for the purpose of paying interest to the bondholders, who must have known of the financial condition of Newfoundland before they loaned their money. The bondholders have done remarkably well as a result of this Measure. One of the hon. Members for the City of London (Mr. E. C. Grenfell), in the course of a very interesting speech, warned the Government as to the precedent which they were laying down, and as to what was likely to happen if the practice were extended in any way. Interested as we know he is in financial problems, he did not hesitate to tell the Government, the House and the country how the bondholders have already benefited by the action of the Government in introducing this Bill. He gave figures to show that the value of the bonds has increased. I have his statement. He said: The securities of the Newfoundland Government a short time ago stood at 55; they stand at 100 to-day.—[OFFICIAL REPORT, 12th December, 1933; col. 258, Vol. 284.] In a very short time the value of Newfoundland securities has nearly doubled. The hon. Member for Rothwell (Mr. Lunn) referred in his speech to the fact that in the very short time of about 24 hours, once the information had got into the City, the value of Newfoundland securities jumped from 71 to about 95. A number of hon. Members of this House to whom I have spoken have wondered how that information got out as quickly as it did. They say that they would like to know how the information percolated through to some of the financial sharks who are always ready to take advantage of anything which is being done by the Government to guarantee security for any loan or any bond with what is really the security of this nation.

The result is that about £1,000,000 has already been made out of the action of the Government in guaranteeing Newfoundland securities. As another of my hon. Friends rightly says, it is a ramp, and one of the worst ramps which we have experienced in this country for some considerable time. We cannot see that the financial proposals of this Bill will assist in meeting the conditions of the poor people of Newfoundland. In his speech this afternoon, the Dominions Secretary said that the Bill was ultimately bound to assist these people, because if Newfoundland went into default, the poor fishermen and workpeople would suffer. I doubt very much whether their conditions, judging from the evidence of the Royal Commission's report, could be reduced by 1 per cent. from what they are at the present time. Information was given by the Financial Secretary to the Treasury in his speech in regard to the cuts in education, expenditure on which has been reduced by something like one half. War pensions have been reduced, and so have the grants from the public assistance authorities. The amount paid in public assistance last year worked out at something like 1.60 dollars per head of the recipients per month.

Commander MARSDEN

It is 1.80 dollars.


I am told it is 1.80 dollars, and yet we are informed that if Newfoundland defaulted the condition of the people might be very much worse. If they lost that, I do not think they would miss very much. The financial responsibility of the Government of this country does not end with the giving of this £2,000,000. I agree with the right hon. Gentleman that there will have to be a period of development, and that the Commission will have no easy task. They will have to settle down to developing the various industries, including fishing, timber and agriculture. Not only have the conditions of the people deteriorated during the last 10 years, but those important industries have either stagnated or begun to decline. The fishing industry is worse than it has been for a very considerable time; agriculture is worse than it has been for years, and there is no possibility of development of the timber or timber-products industry unless something is done to nourish it. That must mean that more money will have to be spent.

We are anxious that the Letters Patent should be laid upon the Table before anything definite is done. We see and appreciate the difficulty with which the Government are faced—the difficulty of time and the urgency—but before Thursday we want the right hon. Gentleman to be able to announce to the House who will be the commissioners to be appointed to undertake the very important work of rebuilding this part of the British Empire. We hope that all interests will be represented, including the working-class interests of the people of Newfoundland. Notwithstanding the difficulties associated with the government of Newfoundland, we believe that people drawn from the ranks of the working people could serve a useful purpose because they are confronted with the difficulties complained of in the Royal Commission's Report. At least one member of the Commission should be drawn from the ranks of the working people, because such a representative would be in a position to give good counsel and advice as to how the development of the country could take place.

In conclusion, I would repeat that our hostility to these proposals is not because we do not desire to assist the people of Newfoundland. The people who are suffering there have our sincere sympathy. But we can see nothing in these financial proposals which will bring any advantage to those people. The people who have benefited already, namely, the holders of Newfoundland securities, will continue to benefit. They will receive the whole of the £2,000,000. The development of the industries of Newfoundland is urgently to be desired, rather than a continuance of the condition of things which has prevailed in that Dominion for the last generation, and we ask that the right hon. Gentleman and those who will be acting with him on behalf of the British Government will see that any money spent will be spent in the real development of those industries, and not ladled out to the speculators who have come in and have left Newfoundland in the condition in which it is at the present time.

We would like to see some of those industries developed by the Commissioners themselves. Private enterprise has brought Newfoundland to its present position—private enterprise which was followed by graft and corruption and greed—and we say that an opportunity should be given for some other form of control and ownership. There are vast possibilities in the industries of cod fishing, deep sea fishing, timber and agriculture, and we believe that, if the right hon. Gentleman and those who will be acting with him desire the good will of the people of Newfoundland, those people must be trusted. They must be given to understand that a new era is to be opened for them, and that, instead of their being dependent upon those who have deceived them in the past—poli- ticians or industrialists—the Government of this country is going to see that they are given a square deal and that their industries will be developed, not in the interests of a few people, but in the interests of the whole of the people of Newfoundland.

4.33 p.m.


I am very glad, as one of several Members of the House who accompanied the delegation to Newfoundland in 1925, to have an opportunity of congratulating the Government on this Measure. I think that anyone who has had the experience of Newfoundland that we had will be glad to give this help, and I was rather surprised to hear the remarks of the hon. Member for Rothwell (Mr. Lunn), as I remember, as no doubt he does, that he offered a good deal of help at that time, and I do not think his remarks now can be construed entirely as expressive of gratitude for that hospitality. As, however, he had recently been Secretary to the Department of Overseas Trade, perhaps he took matters a little more seriously than he does now. During the discussions in Committee a fear was expressed, I think on an Amendment moved by the hon. Member for Bridgeton (Mr. Maxton), that there was a chance of Newfoundland leaving the British Commonwealth of Nations. Personally I would much prefer to look upon Newfoundland as a prodigal child seeking to return to its parents, and I think that that simile much more aptly fits the case.

I am sorry that some hon. Members seem not to look upon it in that way, because I must say I appreciate the fact that Newfoundland is Britain's oldest Colony, and I should like to feel that she would prefer to keep with us instead of going elsewhere. If the people of Newfoundland have better views, I hope they will be allowed to express them. It was this idea which led me to join with the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) in an Amendment—which, however, was ruled out of order—by which we thought we might ensure some representation for people whose Constitution will be for the moment suspended. I am glad that the Secretary of State for the Dominions said that he would give full consideration to that among other matters in the future.

There has been a great deal of criticism on the financial side of this question, and we have heard a great deal about the holders of bonds and others getting benefit. That may be so, but I feel sure that, however much we may criticise those who may be holding a few bonds, none of us would like to see those bonds thrown on the market and go to a price which would sadly deteriorate the credit of the British Empire. It seems sometimes to be forgotten that very often bonds, and particularly English holdings, are held in great measure by people with very small incomes. The sole idea of the Opposition seems to be that these bondholders are necessarily wealthy people, who are making a very good thing out of it. It is true that some of these stocks have appreciated, and questions have been asked as to how the news got out, but, as far as one can see, the financial statement and the Bill itself made it quite clear what was going to happen, and there is no mystery about it. It also seems to be forgotten that a number of these bonds carried a higher rate of interest, and the prices of these have unfortunately dropped. One does not hear anything about that. I feel that, unless Newfoundland is given financial support, we really cannot help its people. They, after all, have taken drastic steps, as we had to do some two years ago. Are we forgetting that lesson? They, however, are not in a position to come out of it as we did, and, therefore, I think it ill behoves the Opposition to criticise the help which the Government are giving. For that reason I cordially support the Government in this Measure.

4.39 p.m.


I do not propose to detain the House for very long, but I want to give the reasons why I cannot support this Bill. As the Dominions Secretary has told us, nobody in the House welcomes the Bill. I certainly do not, and I shall vote against it. I am in favour of giving assistance to the people of Newfoundland, and, if the people of Newfoundland represented the Prodigal Son, as suggested by the hon. and gallant Member for Bootle (Colonel Crookshank), I would not mind killing the fatted calf, but I strongly object to giving money where it is not going to the real sufferers. The real sufferers in Newfoundland from the maladministration which has been going on are the people of Newfoundland, and I notice that both the right hon. Gentleman and the Under-Secretary maintain that this Bill will give help to the people of Newfoundland. We have been told that the Royal Commission has examined every possible alternative, and has come to the conclusion that the course followed in this Bill is the only course possible, and I think the right hon. Gentleman said that, if we do not do this, the unfortunate country of Newfoundland will never be able to borrow again, and its industries will be crippled, apparently for ever.

That is the kind of thing that we have heard many times in this House during the last few years. I remember that we used to hear it in 1931, and I could not help recalling the fact that other countries had faced up to these situations. France, if I remember rightly, repudiated something like four-fifths of her liabilities, but that apparently bankrupt country was the one that helped us out in 1931. We were paying 20s. in the £, and yet we had to go to that country, which had paid 4s. in the £, in order to borrow money; and if France wanted money today I do not now think that the fact that she had repudiated would prevent us from going to her assistance. Italy repudiated, I believe, something like five-sixths, and I hesitate to say what our own position is at the moment; but the fact remains that the industries of the countries which I have mentioned have not been crippled, and their people, on the whole, are enjoying a pretty good standard of life.

I am getting a little weary of this country constantly guaranteeing various sums of money to people in this country who hold certain stocks. We have been told very eloquently of the sufferings of the people of Newfoundland and the burdens that they bear, but I represent a part of this country where a large section of the community have suffered under very heavy burdens for a long period of time. I have in mind in particular the dockyard town in my constituency, which was created by Government. The whole expenditure of that community was incurred because Government had put the community there, but some seven or eight years ago a Government came along and just closed the place down. Unemployment has averaged 50 per cent. ever since that time. Therefore, I think the House will understand me when I say I am getting a little tired of our always coming to the assistance of people outside our own country, and cannot understand why we should keep on doing it.

I have every sympathy with the people of Newfoundland, but this country itself has been very hard hit, and has experienced depression ever since the War. This is the one country in the world that has never participated in the booms that other countries have had. We have had a steady core of unemployment, as we have been reminded so often from all quarters of the House. If we are going to give money—and I personally would like to help in this case—I should like to see it given where it is going to produce the greatest benefit. If one reads th report of the Royal Commission, one finds that the fisheries and the various industries of Newfoundland can be helped directly, and I would prefer to see whatever assistance we make up our minds to give given to those industries, which, after all, represent the potential wealth of the Island.

I should like to refer to another point. Why should the holders of this kind of stock be treated differently, in these hard times, from other people? There are many holders of stock in this country—decent hard-working people—who have been asked in the past few years to forego their interest. Some people, unfor-tunatly, have had their money in companies which were rather like this Island, corrupt, and they have lost, as we all know, millions of money; but the Government do not come; to their assistance, because they take the view that they ought to know what they are doing, and the same thing applies to the holders of stock in this case. But there are other companies which are not corrupt, which have been well handled but, through causes over which they have no control, are not in a position at the moment to meet their interest charges. In this case what happens? The shareholders agree to forego for a time any interest due to them, in the hope that by doing so they will enable the company to weather the storm, because they believe in it and hope that in the future they will get back what they have lost.

The right hon. Gentleman tells us that the only alternative was to do nothing. I do not agree with him. My objection is not to assisting Newfoundland, but to the manner in which it is being done. May I again quote the analogy of the ordinary industrial company. We have seen, especially in the last few years, numerous cases of companies which through no fault of their own are in serious difficulties. They bring forward a scheme of reconstruction. If the assets of the company are of value, they do not have any difficulty in raising money for that purpose, but I think they would have considerable difficulty in raising the money if it was to pay interest to existing shareholders. The money is raised in order to reconstruct the company, to prevent it disappearing altogether, and to enable it to make the best use of its assets, so that in time not only the people who come to its assistance but the original holders may save something from the wreck and in time the normal rate of interest may be restored. Why can you not do the same here? Here you have a country which has enormous assets. That is admitted on all hands. The present shareholders unfortunately have got on to a rotten thing for the moment, but there are enormous assets there. Why not take the money with which you propose to pay interest to existing shareholders and use it in developing the Island of Newfoundland and at the same time do everything you can to assist the distress that is prevalent among the people?

There are two things that we want in our Dominions. The first is a stable and a sound Government. Under this Bill you are taking steps to see that that is given as far as it is in your power to do so. What is the next thing? We know the enormous potential wealth of this Dominion, and, if you want development there, you will get plenty of people to come forward to develop it provided in the first place that you have a sound and stable Government and the assets are there. We know the assets that she has in her soil and in the waters around the coast. I ask the Government why they will not use this money, now that they have arranged for a Government that may be relied upon, to help the cod fisheries, and for research in various agricultural developments, the timber, the mining, and all those things which we know exist under the soil. If they would only do that, they would certainly have my support, and I believe it would be a far greater help in the development of the country and the restoration of its prosperity and, in doing so, I believe they would be founding the prosperity on a basis which would lead, not as the right hon. Gentleman suggested in the beginning, to restoring her—


I am sure the hon. and gallant Gentleman cannot have read the report. How could we take over the Government of Newfoundland except at the request of the Newfoundland Government?


Does the right hon. Gentleman deny that most of this money is going to pay interest to existing holders? He should ask them to forgo it for the time being?


And take over the Government?


You are going to do it. They are asking us for a favour. They are asking us to come to their assistance. Are we to throw money about as if we had so much that we did not know what to do with it? If we are to give them help, we are entitled to ask for some conditions. Or has the Government got in such a state that they will say "Yes' to anyone who asks for anything? You have been asked to assist Newfoundland and you are prepared to do it, but my argument is that you are not doing it in the right way. I would rather help Newfoundland by developing the country so as to increase its assets instead of paying interest, not to restore her to her old position, but to build so that in the future the people of Newfoundland will see a prosperity that they never dreamed of.

4.52 p.m.


I have not spoken during these Debates, but I have followed or read most of the arguments and have voted consistently in support of the Government. I think the Bill is undoubtedly necessary, and I shall support it's Third Reading. The hon. and gallant Member for Pembroke (Major Lloyd George) who has just spoken addressed himself more particularly to its aspect towards the bondholders, or the moneylenders, or those who hope to receive some benefit from the position taken up by the Dominions Secretary in giving assistance so far as the Newfoundland securities are concerned. He asked that certain people should forego interest. He compared the position with that of an industrial company and asked why Newfoundland could not be treated on the same lines. A number of trustee securities are mentioned in the Second Schedule which, I presume, are on what is known as the Treasury List. A Dominion or Colony needing money, which cannot borrow in its own territory, comes along here and says to the Treasury: "If we will conform to certain of your rules under the Colonial Stock Act of 1900, will you allow our loan to go on the Treasury List so that trustees may be allowed to hold it, and, if you will, we shall be able to borrow money in Great Britain for the development of our territory at a much lower rate of interest than would otherwise be the case." The Treasury says, "If you will conform to certain regulations, we will allow you to put it on the Trustee List." That, I take it, is one reason which has not been particularly explained to the hon. and gallant Gentleman by the right hon. Gentleman why we now come in and in some degree help to support the credit of the Colony.

Who are the moneylenders or borrowers who hold these Newfoundland securities on the Trustee List? They are not banks. They are not moneylenders, but especially trustees. I am a trustee for a certain charity, and we hold these securities. They are for the most part held by trustees generally, for deceaseds' estates, for hospitals, and, in some cases, I am given to understand, these securities are held by the great insurance companies. Insurance companies do not hold them for their shareholders, but for policy holders. They are securities in which the premiums of the life policy holders are placed so as to secure them in case of death. Through insurance companies or trustees the bondholders in many cases are people of small means. The stock holders, therefore, have some right to look to the Government which has led them to regard the stock as of trustee quality by allowing the securities to go on to the Trustee List. I do not hold the same view about the deferred list in the First Schedule, and not on the Treasury List. I am not so certain that I would have given them even 3 per cent., because they were not on the Trustee List.

I was in Canada before the War—I have some family connection with the Eastern side of Canada—and I heard then that things were going very wrong in Newfoundland. We have heard in Debate the very ugly word "corruption," and we have been told here that corrupt politicians have taken advantage of innocent hardworking honourable men, a splendid set of brave fishermen. It was not unknown to me or to any Government 20 years ago that all was not right in Newfoundland. I think the Colonial Office and Treasury should have come down earlier with a warning, if not with a heavy hand, and have said: "We are not going to allow this to go on. You are on the Treasury List. If you want to borrow again, we will not allow you to borrow in this country unless you put your finances right." The Treasury would have been faced with the accusation of Downing Street interference. I believe on many past occasions the British Government might have interfered in a friendly guiding way with certain Governments of His Majesty's Dominions across the seas and have said: "When you ask us to put you on the Treasury List, you must enter into an undertaking to do certain things: but you must continue to carry out the spirit of that undertaking so as to keep your financial status as good as it was when yon issued the loans we put on the Treasury List, or we shall refuse permission for you to claim entry to the Treasury List for any further issue on trustee terms, for low rates of interest on the loan." It might have exposed the British Government to an accusation of Downing Street interference. It might have been a justified complaint by the Dominions or the Colonies that we were interfering. But on the other hand the interference would have been justified and in the best interests of Newfoundland and other similar of our sister States. I blame some Colonial Secretary and the Treasury in earlier years for not putting their foot down and saying: "We are not going to allow this unfortunate state of affairs to continue in Newfoundland." We know all about it. Although the report of wrong government is not official; it is in everyone's mouth." Had they done so we should not have had the need of this Bill to-day. That is all I have to say.

The Bill should be a warning to us. I think that what the hon. Member for the City of London (Mr. E. C. Grenfell) said the other day was very just. It has opened a new vista and created a precedent which one day we may have to face. But the remedy is this. Stocks of the Dominions and Colonies are on the Treasury List and receive trustee status. The Dominions are able to borrow their money more cheaply here than they can borrow it at home; they can borrow without stint, let alone at 3½ per cent. or 4 per cent. If they come here and borrow and wish to get on to the Trustee List they must be prepared for having strong friendly Treasury interference with any flaws or maladministration in their finances, in order that they shall not present to the world a series of unbalanced budgets and impair the security of the lenders by allowing conditions to exist different from those in which they obtain entry to the Treasury List of trustee stocks.

5.2 p.m.


I am somewhat shocked at the speech which has just been delivered by the hon. Member for Farnham (Sir A. M. Samuel). He is telling the House now that he knew all about this matter eight years ago.


I did not say eight years ago; I said it was a few years before the War. It was not my secret; it was world-wide knowledge.


The hon. Gentleman must remember that since that time the position has been becoming progressively worse. He says that it was no secret, and he has been Financial Secretary to the Treasury since that time. He said that he wanted to give the House the benefit of his mind this evening on the Third Reading of the Bill. I wish that he had given us the benefit of it some time ago when holding an official position, and then he might have prevented us from having this Bill at all. There is an extraordinary number of people who are wise after the event, and they increase most alarmingly. I should have thought that the hon. Gentleman would have been specially interested in Newfoundland, because, besides having been Financial Secretary to the Treasury, he is well known as an author who has specialised in the study of the fishing problem. He has published and distributed pamphlets, and has even written letters to the "Times" on the question of deep-sea fishing.


No letters.


I may be wrong; it may have been the "Morning Post." His counsel, wisdom and experience, which would have been very valuable to the House eight years ago, have only been given to us at this recent date. May I correct one misstatement which he made? He told us that he had taken part in the previous discussions on this Measure.




Those were his opening words.


I did not say that I had taken part in them.


He followed the earlier proceedings on the Committee stage, but his interest in the Committee stage ceased at 10.40 p.m. I am not criticising the wisdom of the hon. Gentleman in going home to bed, but merely the correctness of his statement that he sat through the previous discussions on this Bill. I do not want to re-fight the fights of the earlier stages. The right hon. Gentleman the Dominions Secretary might have made suggestions at some of the earlier stages which would have modified the final form of the Bill, but he has reserved his remarks to the Third Reading, when they can have no effect upon the final form of the Bill. I must leave him to his own conscience in that matter. Fortunately, my conscience is clear, because I made many good suggestions to the Dominions Secretary between the first introduction of the Measure and the final stages, and I do not propose to go over the previous discussions. The Dominions Secretary, in rising to present the Bill for the Third Reading, asserted very strongly that the Bill is not in the interests of a class, and he asserted with even greater strength that it is not dictatorship. I think that he protested a little too much. It is obviously in the interests of a class and of those who hold stocks. It is interesting that it is only on the Third Reading that we hear the voice of the stockholder raised; it is definitely thanking the Government for coming to the assistance of the stockholder.


I am not a stockholder. I have no direct interest whatever.


You only speak on that issue; you never speak on anything else.


I am not suggesting that the hon. Gentleman is actually a holder of Newfoundland stock, but he is speaking for the stockholders, and he deliberately trotted out the very old argument about the widows and the orphans among the stockholders. I have never heard stock discussed in this House but what it was mainly held by widows and orphans. I should like to find out about the stock in which other people who are not widows and orphans invest. The right hon. Gentleman said that the Bill is not in the interests of a class, and that if the particular step proposed in the Bill had not been taken the first people to suffer would have been the poorer section of the community. If the right hon. Gentleman's legislation had been directed towards relieving the distresses of the poorer section of the community there would have been something in its favour. I do not think that any section of the Opposition has suggested for a minute that nothing should have been done in the case of Newfoundland. No one has made such a suggestion at any stage. When the hon. Member for Aberdare (Mr. G. Hall) was talking about the miserably low status of the unemployed people out there an hon. Member behind me said: "They would have been worse still if the Government had not come in with this Measure." But the Government could have come in with another Measure to double the present unemployment allowance to those people and make it 16s. a month instead of 8s. a month and maintain that rate for a long period of years and still have been spending only a fraction of the money the nation is asked to spend under this Measure. Why talk about the sufferings of those people when nothing is done in the Measure to relieve them in any degree. As far as this House is concerned the unemployed fisherman in Newfoundland is to remain on a pork, molasses and flour ration, and there is no guarantee that that is to be continued. It states in the report that that has been the measure of public relief to the unemployed fishermen.

I say definitely that this Measure was brought forward primarily in the interests of a class, and of a class of people who may not be resident in Newfoundland at all, and who, probably, are not resident in Newfoundland. It is probably an entirely different set of people to-day from the set of people who were holding Newfoundland stock when this legislation was first contemplated. Obviously, there has been tremendous Stock Exchange gambling on this Measure, and presumably since prices have varied so much, stock has changed hands, and the widows and orphans who are to be safeguarded when the Measure becomes law are an entirely different class of widows and orphans from those who were to be safeguarded by this Bill. The right hon. Gentleman says that there is no dictatorship. I ask him honestly, man to man, what else is it? As far as the people of Newfoundland are concerned, it is a dictatorship. It may not be dictatorship relative to this House, but, as far as the people of Newfoundland are concerned, our Government is to walk in and impose a Government upon them. They have no say whatever as to who the Members of that Government are to be and as to how long they shall remain in control of their affairs. They have no power whatever to remove those people from office. It is true that the existing Government of Newfoundland have agreed to this being done. The proposal has never been submitted, and will not be submitted in any shape or form, to the people of Newfoundland.

If that is not dictatorship, I do not know the meaning of the word. Even Hitler has consulted his population. [Interruption.] Well, he may have done it under conditions which make for a very clear answer if not for an absolutely honest answer. He gave them an opportunity. What does the Dominions Secretary do? He knows better than Hitler. He is not going to give them a chance. Hitler took the risk that he might have an answer that he did not want. The Dominions Secretary is not taking any risks of that description. That is dictatorship. The Dominions Secretary has told us that these men who are to go out on this mission are to be the very perfect English gentlemen, perfect gentlemen of the old-fashioned type, and are to be chosen without political influence of any description whatever. I do not know how the Dominions Secretary is to find them or what method he is to adopt, because he will have to do it very quickly. They have to be away on the Atlantic Ocean inside the next three weeks or else all the excuses for rushing this Measure through the House will have gone. Unless they are on the job and working before I come back after my Christmas holidays, I shall want to know what about it.


Did not somebody suggest that the hon. Gentleman himself might go?


Yes, but the hon. Member who suggested it knew perfectly well that I am thoroughly satisfied in the place in which God has placed me. Rather than go out and watch Newfoundland on the spot, I prefer to watch the man who is watching Newfoundland from here. I should like the hon. Gentleman who replies to the Debate to tell us exactly how the Minister proposes to get before him the names of appropriate persons. I hope he is not going to evolve them out of his own inner consciousness. I hope that he will be listening to recommendations from one person and another, and I think the probabilities are that the persons who will be making suggestions and recommendations will be politicians. I am not objecting to the right hon. Gentleman taking suggestions from political people, but I want him to take them from political people of repute whose recommendations can be trusted to be not merely a desire to get a job for a friend.

I should also like to be told—I do not think that there is any mention of it in the Measure or in the report—what salaries are proposed to be paid to the commissioners. Has the right hon. Gentleman in mind an appropriate figure for the remuneration to be paid for this class of work? Can he say whether it is to be a flat rate for the whole six or whether it is to be on a time basis or on a piece basis? I also want to know if the salaries of the three British representatives are to be borne on the Dominions Office Vote, and, if so, will that represent a payment to Newfoundland in addition to what we are undertaking to pay under the Bill? I assume, but it might be well to make it clear, that there is no question of the three locally chosen commissioners being paid for out of the funds of the Dominions Office.

There is a promise that an endeavour will be made to abolish the truck system in Newfoundland. My knowledge of the fishing folk round our own coasts leads me to believe that the whole of this fishing industry while they may not be actually under the truck system are very near it. The risky, gambling nature of the enterprise makes somebody who is going to carry risks and give extended credits almost a necessity in the fishing ports. That person, if he be a tradesman or a shop owner in the port carrying riskB or giving extended credits, is not imposing a definite truck system on the fisherman, but he has certainly a strong claim on their customers' custom. In that way, by having customers tied to him, he is able to extract prices which would not be possible in t'he ordinary open competitive field. Unless there is somebody carrying the fisherman's risk you will never make much headway in getting rid of an open or a concealed truck system. I should like the commissioners to consider whether it is within their province to shoulder the risks of the fishermen which are very great. I am not talking now of the dangers of their trade, but of the financial condition that operates; the fact that when a man gets a poor catch he obtains good prices, whereas if he has a good catch he obtains bad prices. He does not know where he will be as a result of the fishing season until all these things have been added up, with the cost of his boat, and his gear, and prices have been averaged out over the period. That risk has to be carried by somebody, and, if it is to be carried by any private enterprisers, then you do not get rid of the truck system.

The only other point to which I would allude is the promise of the Dominions Secretary that there will never be any attempt made to burk discussion in this House or to refuse facilities for discussion about the future operations of this scheme for rehabilitating Newfoundland. I am glad to have that assurance, although I wish there had been inserted in the Bill a provision by which the whole operations of the commissioners could come up periodically and regularly before this House, so that there would be a routine opportunity of discussion. I know that we are all keenly interested in the affairs of Newfoundland to-day. We all have our minds made up that we are going to watch future developments there with a closer interest, and seize any opportunity to raise any point that we think needs to be given publicity or discussed in this House; but Newfoundland is a long distance away and other things come along to distract our attention. Home affairs and the condition of our own people are very present to our minds, and in the absence of regular correspondence, somebody over there who is interested in having questions raised here, we may lose touch.

It is an extraordinary thing, and it is my experience for the first time, that I have not received correspondence on this subject. Whenever I have prominently associated myself with a particular interest, whether here, in West Africa, in Australia, or in any part of the Globe, communications have come from that particular place, or local newspapers have been sent to keep one in touch with what the people on the spot are thinking; but I have not had one single communication of any description from start to finish on this Newfoundland business, which indicates how completely detached and bound by their Island the people of Newfoundland are, and how very far away they are from having something like a labour and working-class movement over there. That makes me feel that it would have been much better if the affairs of Newfoundland could have been brought before this House in a routine way rather than that it should depend upon me or some other Member of the Opposition taking some particular points that would justify a set Debate.

I suggest to my hon. Friends above the Gangway—I do not know what facilities they have, and probably they are little—that the one way in which I can see democracy preserved under this dictatorship is by the development of some working-class movement in the Island. I hope that interests outside this House who are concerned with working-class organisa- tion will endeavour to stimulate in the Island some movement that will begin to direct attention to the needs of the common people of Newfoundland and direct attention away from the interests of those who have endeavoured to reap the maximum wealth at the expense of the natural resources of Newfoundland and at the expense of the people of Newfoundland. The Bill is about to go to another place, and it will there be accepted as it is. I think it is a bad measure and that it will not produce the results that the Government expect. The problem of Newfoundland could have been handled in an infinitely better way. I do hope and trust that whatever happens out there, the men, women and children in that Island will be relieved from the terrible distress and worries that have hung over their heads for so many years.

5.28 p.m.


I do not intend to keep the House for more than a few minutes, but I want to raise one or two matters, because I had not the opportunity of speaking on the Committee stage. The Dominions Secretary said that he would bear in mind a point that was raised in Committee, to which we on this side attach some importance. I want to italicise the promise that he has made. In the Committee stage great importance was attached to the suspension rather than the revocation of the Newfoundland Constitution, and the right hon. Gentleman has now promised that in another place the word "suspension" will be inserted in place of the word "revocation." A suggestion was also made from this side that some means ought to be provided to enable the people of Newfoundland to put an end to the state of affairs to which this Bill will give rise. The people of India have claimed that at some reasonably accessible date Dominion status should be conferred upon India.

If Dominion status is being taken away from Newfoundland, it is reasonable to ask that the people of Newfoundland should be entitled to claim at some reasonable date in the immediate future that their Dominion status should be restored. The right hon. Gentleman has promised to give consideration to that matter. He has suggested that perhaps he might be able to come forward, not with a new Bill, but in the immediate future with a suggestion by means of which that which is desired can be brought about. I do not want to add to his embarrassment. I listened to the Debate in Committee with great interest, and I understood that many of the arguments against putting a date in the Bill were substantial, in view of the domestic situation in Newfoundland. Nevertheless, we on this side think that the Newfoundland people as well as this House should be allowed an opportunity of exercising the initiative of getting at least a discussion as to whether Dominion status should or should not be restored.

The Dominions Secretary, either in his speech or in an interruption in answer to the hon. and gallant Member for Pembroke (Major Lloyd George), said that it was impossible for us to suspend the Constitution of Newfoundland unless we promised to carry the debt. I do not understand that. He said that the Government of Newfoundland were only prepared for His Majesty's Government to come provided we accepted full responsibility for the debt. That makes the existing Government of Newfoundland as corrupt as previous governments. It was under the aegis of previous governments that loans were contracted and the debt accumulated. The Commission found that their conduct was corrupt in the extreme, and if the present Government insists that the existing debt shall be carried by His Majesty's Government then they represent the bondholders rather than the people of the Island and are. therefore, open to the same charge of graft as previous governments.

It seems to me that the people of Newfoundland would be infinitely better off if the debt were wiped out. It is claimed that if the debt were wiped out the credit of Newfoundland would also be wiped out and that they would not be able to get money for contemporary purposes. Do I understand that the whole of the revenue of Newfoundland is to be spent in Newfoundland, and that it will still be able to carry the whole services of the debt? Of course not. About 60 per cent. of the revenue of the Island is attached for the purposes of the debt. The existing revenue would only be sufficient to support the people if you wiped out this 60 per cent. and devoted the whole of it to the immediate assistance of the people. But the right hon.

Gentleman says that the people of Newfoundland would suffer if the debt was wiped out. His contention is not in accordance with the facts of the case.

I do not understand the policy of His Majesty's Government not only in the case of this debt but in the case of all similar debts. Some time ago the House discussed the Austrian loan, and hon. Members in all parts of the House expressed grave doubts as to whether it was good policy to support such loans. Many people who claim to know something about world finance hold that it is the load of inter-governmental indebtedness which has accumulated since the War which is largely responsible for a continuance of the crisis. In the modern world there has been a great accumulation of certain forms of claims upon wealth; trustee stock, inter-governmental indebtedness of various kinds, insurance lendings, where insurance companies in order to meet the claims of their policy holders have to invest their money in gilt-edged securities; all thsee people, whenever debtors get into difficulties, are so powerful with Governments, and the consequences of default are so grave, that they are able to persuade Governments to come to their rescue and attach the revenues of the State to a particular class of security. That means that borrowers are being kept artificially alive by various Governments and are not in a position to borrow the new money which is necessary if development is to continue and if new markets are to be found.

When the right hon. Gentleman says that Newfoundland would not be able to borrow money if they default on their existing debt, the answer is that the whole history of finance and industry is against him. It has been argued that the medicinal effect of a long period of depression is to wipe out debts on the part of bad borrowers, who then again become credit-worthy, but that if a debt is not wiped out but remains as a dead loan no further borrowings are possible. I do not put this forward as an academic proposition. The hon. Member for Moseley (Mr. Hannon) laughs, but I have heard Conservative speakers in this House and on the platform argue and say, "What are you Socialists complaining about, wealth is not piled up from generation to generation, and periodically there is a slaughter of the financial innocents "—


A slaughter of what?


A slaughter of the financial innocents—


He is not one of them.


—in order to get the system together again. That has-been the contention, and, as a matter of fact, there is a substantial degree of truth in it. But since the War the burden of intergovernmental indebtedness has so increased that the slaughter does not take place to the same extent as previously.


As far as I know no Conservative Member has ever suggested that we should destroy national credit in order to begin over again.

Mr. DEPUTY-SPEAKER (Captain Bourne)

I think the hon. Member is getting far away from the Third Reading of the Bill.


The argument of the right hon. Gentleman is that the Bill is necessary in order to support the credit of the Dominion; that if Newfoundland was allowed to go bankrupt all Dominion stock would fall. That is also the argument of the hon. Member for Farnham (Sir A. M. Samuel), and I submit that my remarks are entirely relevant to that issue. I am arguing that that is not the case at all, and that this kind of legislation is responsible for the continuation of the financial crisis. It sags and sags, and the dead wood is not cut out The borrower is kept artificially alive because the creditor in a post-war world is more influential with governments than he was pre-war. That is the position. I submit that the Chancellor of the Exchequer will support my contention because at the World Economic Conference he said that his financial policy was devoted to world inflation. What is the purpose of world inflation?


The hon. Member forgets that on the Third Reading we can only discuss what is in the Bill.


My recollection is that in the earlier part of the Debate, when we did not have the honour of your presence, a long discussion took place on precisely this point. This Bill is a Measure to come to the assistance of the Newfoundland debt because it is argued it will bo bad for Newfoundland and bad for Dominion securities generally if we do not. My argument is that the Bill is bad because it in fact does this, and that the people of Newfoundland will not be able to raise money for the development of their resources because of this burden of bad debt. I would ask hon. Members to consider what is going to be the position if we are to get a series of Bills of this kind; if the world crisis continues and other raw material producing countries, Dominions or Colonies, fail to meet their debt services. Are we going to come [...] their rescue one after another? We shall have to decide either to carry out of successful policy of inflation and wipe out half their debts or to reconstruct their debts when they fall due, as we have in this case. If we had written down this debt, or adjusted it to its real value, taken the value of the stock a few months ago before there was a suspicion that the right hon. Gentleman was going to come to the rescue, taken it at its market value, or wiped out a large part of it, we should have been doing our duty to the world financial system, and particularly to this country. By this Bill you are treating certain forms of property as favoured.

I agree that under the present financial and credit system it is a serious thing to default upon trustee stock, but it is equally serious for this sort of stock to maintain an indebtedness and thus make it impossible for portions of the world to commence expansion and development schemes and provide markets for our own industries. The Government is pursuing a policy of international deflation and at the same time is supporting the value of the present stock. I do not support the system. Let the whole thing go; it is not our concern. I am pointing out the disaster which will overtake capitalist countries if this sort of policy is pursued. It is not justified by any canons of healthy finance, and certainly not by the traditions of this House. We are setting aside a democratic constitution not for the benefit of the people but against their interests in order that a certain class of property holder may have his securities retained unimpaired. These observations I maintain are relevant to the quesiton; many of them were made in the ease of the Austrian loan. I submit that this sort of financial policy requires the gravest scrutiny. If it is pursued to any length of time this House is going to undertake immeasurable obligations in all parts of the world as one part after another defaults. Such a course of conduct is bound to result in disaster for the system that hon. Members opposite support.

5.45 p.m.

Commander MARSDEN

The last speaker is such a high financial expert that I certainly shall not attempt to criticise him, for equally I cannot follow him. My own financial point of view is much more old-fashioned, much simpler and perhaps easier to understand. It is that one should not default and one should pay one's debts. That, I think, is also the point of view of the inhabitants of Newfoundland, because it is largely for that purpose that they have come to us for assistance. Having compared the points of view of those who support the Bill and those who are opposing it, it seems to me that those who support the Bill wish primarily to assist distressed persons. Incidentally they may be helping the bondholders. The opponents of the Bill are so afraid of helping the bondholders to any extent that they are prepared not to support any measures that we may take to help the distressed people of Newfoundland. They continually say that the money, some of which we have given and some of which we are to give in the next few years, is to be used only for the purpose of helping the bondholders. I do not think that that is quite right. The interest on the various debts is surely a first charge on the income of a country, and consequently you have to meet that charge before any money is available for other purposes; and the money we give is to be a sum over and above the existing income of the country. So it would be more correct to say that the money we are giving will be actually for the purpose of relief and other purposes within the Dominion or Colony of Newfoundland.

The question has been debated so much that I do not wish to overdo it, but as this small amount of relief amounts to only about 3d. per day, I think everyone would wish it to be greatly increased. It has often been suggested that it should be given to the full extent, as in this country. That, of course, would be wrong, because the people who live in Newfoundland have many sources from which they can support themselves without payment of money—sources which are unavailable to the people of this country. In fact if we did so we should follow in the steps of a very bad period of Newfoundland's history when relief was given to such an extent that the Royal Commission in the report state that: Reckless and indolent habits were general, and so general was the distribution of relief that a great majority of the industrial population soon learned to disregard the stigma of pauperism. They claimed public assistance as a private right. It is extraordinary that a year after that all public relief was lifted. Then, because of the greater effort that was necessary, Newfoundland entered upon a fresh era of prosperity. Still that does not mean to say that at the present time I do not favour giving these unfortunate people who need it the utmost relief with the money that we provide. There has been some talk by the hon. Member for Bridgeton (Mr. Maxton) about dictatorship. Surely he appreciates that this is a form of governing the Island which has been asked for by the inhabitants. At any rate they have asked for us to come to their assistance and have practically said that they would accept what we thought desirable. It is equally reasonable to say that when they feel that once again they can govern themselves, we shall not be backward in again ceding to their wishes.

If there was no future for Newfoundland this Bill indeed might be a foolish and reckless Bill, but every word in the Royal Commission's recommendations shows that there is a good future for Newfoundland. It is not that there has been a tremendous deficit in any one year; it is the continual deficits year after year which made the position not so good. In the last 12 years the public debt incurred has been equal to the public debt that accumulated in the 100 years previously. By our taking over the various loans and being able to satisfy the bondholders at a lower rate of interest we shall meet about three-quarters of the deficit as it stands this year. The prospects on the whole, as the commission say, are quite sound. Certainly the fisheries have gone down. The export of codfish has gone down enormously. On the other hand the salmon fisheries are ten times greater than they were 14 years ago. There are the pulp industry and mining and other things which do rather fill one with hope that better times are in store.

There is one paragraph in the Bill which points out that the greater part of the export of fish, although there was an opportunity of exporting by British lines, the Furness Lines, has been shipped by Scandinavian tramp steamers and other foreign lines. It seems to me that a great opportunity may be lost here both for assisting our own shipping industry and also helping the exporters from Newfoundland. If any benefit can be gained here it would do a great deal to satisfy the people of this country, who in the long run have to provide this money.

I must again refer to my hon. Friend the Member for Bridgeton. I gathered that, having freely criticised the Bill, he now realises that in order to help the poor people of Newfoundland he has to assent to this Bill. I understood him to say that in the last few words of his speech. But he seemed to have some misgiving as to the Governor of Newfoundland. I know that gentleman. He was an old shipmate and is a friend of mine, and I cannot imagine anyone more capable of holding the reins fairly, of guiding the Commission and doing his best for the Island. In short we are asked to give relief to one of our poorer Dominions. Whatever criticisms we may have to make, wherever we may think that the Bill falls short of what it might be, surely we in this country are big enough and still rich and generous enough to help Newfoundland in her distress.

5.54 p.m.


I am glad, and I am sure the House must be glad, to hear from the hon. and gallant Member who has just spoken that very high testimonial to the Governor who is to be at the head of the Commission and is to carry on the work in Newfoundland. The hon. Member for Bridgeton (Mr. Maxton) regretted the fact that we shall not have much opportunity of discussing the finance of Newfoundland, but am I not right that these advances are on the Consolidated Fund Bill, and that on that Bill we shall have an opportunity every year of discussing the finances of Newfoundland? The Secretary of State said that he would welcome any suggestions that might be made and that he would consider them. I would draw attention to one fact which has struck me with regard to past finance. According to the second Schedule there were certain advances made by the Canadian banks, and these were specially secured. As I understand the Bill, the second Schedule securities, the trustee securities, are now a first charge. I would like to emphasise that any additional advances that are made should be a first charge, that is to say that the Candian banks cannot come in again and by making advances again come in any sense before any sums that are advanced from this country. In other words all advances, whether they are trustee securities or further advances which may be made from time to time, will be a first charge on the revenues of Newfoundland. We see from the Appendix that the Canadian banks certainly took very good care that they were secured, because they were paid out in cash. No less than 5,600,000 Canadian dollars was repaid in cash to the Canadian banks.

This Bill has been debated fairly thoroughly. The spokesman of the Opposition who moved the rejection of the Bill described it as a ramp. Really I do not think he seriously meant that. Does he suggest that the British Government would be engaged in some dishonourable undertaking? He gave one example. He said that bonds have risen from 55 to par, and that that was evidence of the ramp. He said that the benefit went entirely to the bondholders. Surely he does not seriously contend that that is so. Anything that improves the credit of Newfoundland benefits everyone. This rise helps not only the bondholders, but improves the credit of Newfoundland. There was the improvement in British credit which resulted in the conversion of War Loan to 3½ per cent. All stocks, the local loans of councils included, were affected. Of course that benefited the holders of stocks, but it also benefited this country, to such an extent that the conversion of the debt will lead to a saving to the taxpayers of this country of something like £38,000,000. Is that not an advantage to this country? Must it not equally be an advantage to Newfoundland if her credit is re-established? Will she not be able to borrow on a lower basis for development purposes? Do hon. Members suggest that if Newfoundland had been left to her own resources she would now be able to borrow?


Does the hon. Member not remember that in 1931 this country defaulted for a considerable amount of money, and that two years after the Chancellor of the Exchequer, to his embarrassment, had to explain that too many nations wanted to leave their money here?


I do not think the going off the Gold Standard in 1931 is comparable or analogous. In fact there is no analogy whatever. It was an embarrassment certainly, but it was not by any means a default. If we can restore the credit of Newfoundland, that will facilitate her ability to borrow further sums for development purposes. Reference has been made to the resources of Newfoundland. It is self-evident that if you take the proportion which other securities bear to British credit, from the most speculative to the gilt-edged, in moving up they are in a sense governed by the high standard of British credit. If, by lending our credit to Newfoundland, we are going to help the fishermen, as I understood the hon. Member for Bridgeton to admit at the conclusion of his speech, then that is something upon which we can all agree. I therefore appeal to hon. Members above the Gangway to consider whether a unanimous decision on the Third Reading of this Bill would not be an appropriate gesture on the part of the British House of Commons as showing the spirit in which we extend this aid to Newfoundland.

6.1 p.m.


I associate myself with the hon. Member for East Edinburgh (Mr. D. Mason) in asking the House to give a unanimous decision in favour of the Third Reading of this Bill. As he suggests, it would be a gesture of great moment, not merely to Newfoundland but to the whole Empire, in relation to the establishment and maintenance of this country's credit throughout the Empire. I desire to express my profound regret that the hon. Member for Bridgeton (Mr. Maxton), who would make an invaluable contribution to the reconstruction of Newfoundland if he offered his own services on the proposed Commission, cannot see his way to do so. The benevolent and beneficent influence which the hon. Member could exercise on the people of Newfoundland would, no doubt, bring them to a sense of their duty to their nation and to themselves in connection with the work of reconstituting the country under the new regime


I am on the home mission.


I wish to put one or two questions to the Under-Secretary. First, will he tell the House something more about the personnel of the proposed commission? Who are the persons whom it is hoped to secure to carry out the responsible duties attaching to the new form of government and to what extent will the country be burdened by expenditure on the maintenance of the Commission in Newfoundland? Secondly, will he inform us whether any instructions or advice will be given by the Secretary of State to the Commission in regard to the reorganisation of the Civil Service in Newfoundland. If ever there was a tragedy in Civil Service administration, in the Empire it has taken place in Newfoundland, and I see no hope for the regeneration of that country even under a benevolent administration unless the Civil Service of the island undergoes in complete change. Thirdly, I wish to ask whether any instructions will be given to the new administration to take charge of agricultural organisation. My right, hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood), who is now engaged, apparently, in an interesting conversation on academic economics with the hon. Member for Ebbw Vale (Mr. A. Bevan), is particularly anxious that all schemes affecting Colonial development should have relation to the land. As he may not have heard my third question I repeat it. I am asking the Under-Secretary whether any scheme of re-organisation, in relation to agriculture or land development, is contemplated by the Commis- sion which is to take charge of the affairs of Newfoundland?

In view of what the hon. Member for Bridgeton has said, I wish to point out that loans invested in Newfoundland were invested for the development of its resources and, on the face of the report, those resources are almost incalculable and are capable of immense development. There is no reason to decry the possibility of Newfoundland discharging all its financial liabilities in the future if it is given the opportunity of sane and wholesome government. The object of my right hon. Friend the Secretary of State is to give Newfoundland sane and wholesome government which will enable its resources to be developed to the fullest extent. But I hope that the new administration will so educate the people of Newfoundland that we shall not have any repetition in that country of governments of the quality with which we have been familiar there during the last 12 or 14 years. It would be an everlasting discredit to our Imperial relations if governments of that quality should ever be repeated in the administration of that Dominion. I support the wise and statesmanlike steps taken by the Secretary of State to help Newfoundland in its difficulties. I hope that the appeal of my hon. Friend the Member for East Edinburgh, that the House should not divide on this Motion will be responded to, and that there will be an unanimous decision on this question, which is of such profound Imperial importance. In that connection, I would specially appeal to the hon. Member for Bridgeton, who is one of the kindliest and gentlest characters in this House, and for whom we have all the greatest possible respect notwithstanding the fact that oceans roll between us on certain vital questions. I am sure that he will see the importance of making a gesture of the friendly character which has been suggested, to the people of Newfoundland. Such a gesture will indicate the anxiety of the people of this country to help our Dominions when they are in difficulties.

At the same time, I hope that the measure of relief contemplated in the Bill will not be taken as a precedent in dealing with difficulties in other Dominions. [HON. MEMBERS: "Why not?"] I hope that investors in this country will under- stand that when they put their money into a trustee security in a Dominion, they have to take a certain part of the risk themselves, and that the British taxpayers will not be called upon again, should maladministration in any other Dominion bring about a state of affairs such as has arisen in Newfoundland. It should be made clear that there can be no repetition of this sort of arrangement as regards other Dominions. It is not to be taken that a precedent has been created in this case which will be followed. But I hope that the House will unanimously give a Third Reading to the Bill, as an act of generosity and consideration to the people of this Dominion in their difficulty.

6.8 p.m.


I am in a difficult position. I cannot make up my mind how to vote. Not even the speech of the eloquent Member for the Moseley division of Birmingham (Mr. Hannon) solves my problem. It is true that by this Bill we are enormously improving the security of money invested in Newfoundland. We are improving the credit of Newfoundland, but in so far as we are doing so we are injuring our own credit.




We are injuring our own credit to an indefinite extent. Suppose some other Dominion, which shall be nameless, is in difficulties next year or the year after, a Dominion whose Government has not been corrupt, a Dominion which has been driven by the low prices of its raw materials to default, how will it be possible for any Government to refuse the proposition that that Dominion should be treated as Newfoundland has been treated?


Will it give up self-government?


That is one of the prices. But take another case. How will it be possible for a Government to resist an appeal on similar lines from any of our municipalities? Their stocks are trustee stocks and the main argument for the Bill is that we must now allow default on trustee securities. This is not an academic point. This is a frightfully dangerous precedent which we are creating. It is no use saying that we hope this kind of thing will not occur again, because, whatever Government is in power in future, this precedent will be used against them to force their hands. I said I was in some difficulty as to how to vote. I am in that difficulty because this precedent was created, not by the introduction of this Bill or the report of the Commission—it was created when we stepped in six months ago and prevented default. It was then that stocks rose, and no wonder. The real danger is that by improving credit at one spot, pro tanto you diminish your own credit.

Let me come to the second argument—that this is being done for the benefit of the people of Newfoundland. Of course, it is not being done for their benefit. The people would be just as well off if they defaulted. That is the lamentable lesson that we have learned. Every country has defaulted in turn. Every time they defaulted not only the hon. Member for East Edinburgh (Mr. D. Mason) but other people, including myself, thought that their default must have all the results of bankruptcy, and that they would never be able to borrow again. But to-day, although France defaulted on four-fifths of her debt, she can borrow more cheaply than we can. The people of Newfoundland will not be injured economically nor will they be improved economically by this change—unless the administration is a better administration. This is a question of what are we going to get for the money. As I work it out we are paying about £12,000,000 of the British taxpayers' money as security. [HON. MEMBERS: "More."] What we are getting for it is a vast undeveloped territory. I want to know whether the property which we are acquiring is going to be administered so that it will be an asset, equivalent in value, to the people of this country, for the money which they are paying.

There is another question. It is not only the Dominions that are affected by this precedent. It will obviously apply to Colonies which we are governing ourselves, such as Kenya and Nigeria. Why should those countries be forced to go into the market and borrow at a higher rate of interest than they would pay if they were borrowing on British security. Kenya borrows at 5 per cent. when they could get the money at 3½ per cent. on British guarantees. We know now that in future if these countries fail to pay interest on their loans we shall come to their assistance. But do not let us lose on the swings and on the roundabouts as well. Do let us enable those countries to borrow more cheaply, and if we are going to give guarantees, do not let us leave it to bondholders to profi by a rise from 55 to par when we know that, in this long run, we have to pay. No. this is not a question of the benefit of the people of Newfoundland. It is a question, for us, of whether the payment of this large sum, whatever it may be, is to have a value to the people of this country and I hope the new administration will take that point of view into account.


The right hon. and gallant Gentleman has said that France is borrowing more cheaply than this country. I have not the figures, but my impression is that she is borrowing at a considerably higher rate than this country. Can the right hon. and gallant Gentleman quote figures to prove his point t


No. I have not figures here to prove my point, but I think that over the last two years France has been able to borrow, both short term and long term, cheaper than this country.


My impression is quite the contrary.


The hon. Member may be right. The Stock Exchange is rather a speciality of his, and I take it that he is probably correct. But the credit of those countries which have gone off gold, or have repudiated debts, is infinitely higher to-day than either he or I conceived possible five years ago. I am sure the hon. Member will agree that if we are going to do this sort of thing, it is as well to have British credit behind it beforehand instead of afterwards.

Let me pass from the point of finance to ask how they are going to develop this property. In the Report of the Royal Commission there is a distinct recommendation that there should be taxation of land values in Newfoundland in order that the land may come into the hands of the State and may then be used for development purposes. I shall have absolutely no use for this new Government if they do not take that elementary precaution of getting back for the State land which has been, not sold, but given away to all these concession companies. It is of immense importance to us that those commissioners, not only the men there, but those from this country, should be men not interested in any way in land development companies or in companies out there. I put that question earlier in the Debate. If you have vested interests enthroned on that Commission, you will never get your tax on land values in Newfoundland, you will never get the land of Newfoundland back for the people of this country or of Newfoundland, and you will never get the opportunity of settling people in that country and developing the property on commercial lines. That is an important detail, because it affects any chance of making a success of this new venture of ours in governing a colony across the sea.

There is a third point that makes it very difficult for one to decide whether we are bound to implement this gift or not, and that is as to whether or not we are setting up a dictatorship. Nobody in this House loathes dictatorships more than I do, and nobody is a greater admirer of Parliamentary institutions, and I could not support a scheme which definitely set up for all time an irresponsible dictatorship, responsible to the people here, but not responsible to the people who are governed. This is also a question of precedent. Newfoundland may not very much matter, but it does matter if the principles applied in the case of Newfoundland were to be applied generally by His Majesty's Government. You get round the whole difficulty if you have representation here. If we are to vote for this Bill to-day, we really ought to know whether we are going—though it is true that it cannot be dealt with in this Bill—in future to allow for the representation of Newfoundland in this Parliament, so that we can deny—


That is a point which Mr. Speaker ruled cannot be discussed on this occasion.


I am not raising the point, and I do not hope for a reply, but I am indicating that whether I vote for the Third Reading or not must obviously depend upon whether this is going to be for all time a dictatorship or whether the Government can hold out hope that even under this scheme some system of representative government can continue. The Letters Patent have not yet been revoked, and the new Constitution has not yet been set up, so I presume we cannot solve this problem by question and answer in the House, but I think we might have an indication on that point as well as on the nature of the commissioners who are to be set up. One has heard whispers as to who the High Commissioner is going to be. I do not pretend to be a judge of the matter—I do not know the man—but I would remind the hon. Gentleman, when he says that we are going to have no politicians dealing with this proposition, that the Duke of Wellington became one of the worst politicians when he took up the job, and nearly produced a revolution in this country; and I think it would not be desirable to put somebody entirely excluded from political life into a position where knowledge of politics in the best sense is a vital element in the successful conduct of the experiment.

We have here a really great departure. It is no use shutting our eyes to the fact that it is a precedent which will be used in the time to come; it is no use shutting our eyes to the fact that we cannot indefinitely improve British credit and at the same time spread British credit over the world; it is no use blinking the fact that this is a commercial proposition, and whether we make out of Newfoundland something that will give satisfaction to the people of England as well as of Newfoundland, until we see the new Government in operation we cannot tell whether we are going to make a success of the thing or not. I hope that the hon. Member, in replying, will say something about the commissioners, something about their carrying out of the recommendation in the report which I consider vital, and something, even as vague as he cares to make it, which will allay our fears of a permanent dictatorship by this country over a non-self-governing Dominion.

6.22 p.m.


We appreciate very much indeed the helpful spirit which has animated all hon. Members who have spoken in this Third Heading Debate, and I can say quite honestly that the chief impression left on my mind by the whole series of Debates is that all hon. Members, in whatever part of the House they sit, are only anxious to do what is wisest for the Newfoundland people and the people of this country as a whole. That does not mean to say that we have been able to agree, all of us, as to exactly what the wisest course is, but I believe that there is really a great deal more agreement between us than some of the violent Debates would indicate. However, before I come to that matter, I should like to answer two or three questions which have been put to me.

I have been asked by two or three hon. Members whether this is not a dangerous precedent, whether it will not allow other Dominions, for instance, to consider that if they get into similar financial trouble, this is an indication to them that they can come and ask us to get them out of it. I can state definitely that this is not to be taken as a precedent at all, but, quite apart from the question whether we, for our part, are ready to consider an appeal of that kind coming from another Dominion in the future, let me remind hon. Members of the terms upon which we are coming to the aid of Newfoundland. We have agreed to bring to them this financial assistance on condition that self-government is given up in Newfoundland for the time being, and that we take over responsibility for the entire administration of the Island. I think that, in view of that, it cannot be held that this is likely to be a precedent which will embarrass us in the future in the case of other Dominions.

But, quite apart even from the Dominions, my right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) said that this might be a dangerous precedent with regard to municipal authorities in this country who got into financial trouble and who imagined that, because we came to the aid of Newfoundland, they would have a still greater claim on us for aid. Again I would remind my right hon. and gallant Friend of the terms of this Bill, and similar terms in their case would be that we should take over responsibility for local government in the area of such a municipal authority. I believe that when hon. Members are reminded of that fact, they will see how very small indeed is the danger of this becoming a precedent embarrassing to us in either of those cases.

I was asked one or two questions by my hon. Friend the Member for Aberdare (Mr. G. Hall), who spoke about the tragic and distressing conditions under which fishermen and cultivators in Newfoundland have been living for a long time past, and who asked whether we did not, at the Dominions Office, know about those conditions and whether it was not our business long ago to make suggestions, or give advice, or interfere in some way in order to try to improve those conditions. He asked further whether we knew about the financial straits into which the Dominion was getting, whether we knew about all these economic and financial causes which were leading up to this crisis, and, if so, why we did not intervene with advice, or with assistance, or at any rate why we did not take some positive action to indicate to the Government of Newfoundland that we were displeased and that we thought things ought to be run in some different way.

The answer to that is the answer which has been given before, and it might not be a desirable or satisfactory answer to my hon. Friend, but at any rate it is an answer based on fact, from which we cannot get away. The fact is that Newfoundland even at this moment is still a Dominion and that it is no business of the Dominions Office or of anyone in Downing Street to interfere with the internal affairs of any Dominion, whether Newfoundland or one of the other Dominions, unless requested to do so by the Government of that Dominion. When my hon. Friend quotes the precedent of, I think, Mr. Joseph Chamberlain giving some very cogent advice to Newfoundland in 1898, or 1901, or about then, he quotes a case which illustrates the point, because Mr. Chamberlain was only able to offer that advice after an appeal had been made to him by the authorities in Newfoundland for his views and advice upon a question. Therefore, we were not able to offer any advice or to interfere in any way at all, until—


I think it was the Governor who at that time reported what was likely to happen if an agreement was entered into. It was not a question of the Government of Newfoundland asking for advice, but a report from the Governor as to conditions which were likely to arise.


Even so, the position of the Governor has changed a good deal since 1898, and it was in fact in this case absolutely impossible, because of the status of Newfoundland, for the Dominions Office or the Government here to offer advice or to interfere in any way until they were invited to give advice or assistance by the Newfoundland Government. My hon. Friend will remember that as soon as the late Government of Newfoundland did appeal to us in 1931, we sent out a financial adviser and did our very best to get conditions in the island on to an even keel again, without having to resort to the drastic proposals which we are now putting through in this legislation. As I say, I believe that really there is a great deal more agreement in all parts of the House than the occasionally violent Debates would have indicated, because everyone agrees that the very serious situation in Newfoundland is one that cannot possibly be left where it is.

This Bill proposes to deal with the situation in two stages. We are disagreed upon the first stage and agreed upon the second stage. The first stage is to come immediately to the rescue of the present financial situation to enable the Newfoundland Government to avoid default. There is disagreement between the two sides of the House on that point, and hon. Members on that side have again to-day pressed their view that default would have been no bad thing. I am not going to bore the House by repeating all the arguments against that point of view. All that I will repeat is that we believe default would have been serious, and it would have been serious for the people whom we are most anxious to help, namely, the humble fishermen and the cultivators of the land. It must be quite evident that if confidence is shaken in a country which is dependent very largely upon imports for providing the population with the necessities of life, that population will run a grave risk of having to do without some of those necessities. I do not want to pursue that argument, for it has been represented again and again in the course of these Debates.

The second stage in our policy for coming to the aid of Newfoundland and rectifying the present very serious situation is the stage of establishing a new form of government which shall be able to pursue a policy of political training and economic development to enable the island as quickly as possible to stand on its own feet again. There, I believe, we are entirely agreed at any rate in principle. Hon. Members opposite and below the Gangway have often said that they would be behind the Government in a policy of directly helping the fishermen and agriculturists. That, however, is the most important part of this policy, and the Government have agree that the first step to avoiding default would not be justified at all unless we meant to go on and initiate that economic development and those other constructive changes which will restore the island to a position of prosperity and bring improvement into the lives of the general people. My hon. Friend said there was nothing in this Bill which would help the ordinary population of the island. He asked, for instance, why the Government did not make it a condition of coming to the rescue of the budget of Newfoundland that the truck system should be modified or abolished straightaway. As a matter of fact, we are as good as doing that. We are not only making the condition that steps should be taken to reform or abolish the truck system; we are making the condition that we should take over the responsibility for the whole administration, including the department which would have to deal with this question of doing business by credit.

It is certainly one of the intentions of the Government that the truck system should be abolished as soon as possible. I would remind my hon. Friend that the truck system, whatever we may think about it, and however strongly we may feel about it, cannot be abolished overnight. It is going to be a gradual process. We do not want to raise any false hopes about it, because the commission itself in its report pointed out: The habit is now so deeply engrained, both' among the merchants and among the fishermen, that the alteration can only be effected gradually. That that policy should be effected is one of the prime intentions of the Government in initiating this scheme. My hon. Friend said again that there is nothing in this Bill which will help the fishermen and agriculturists. Again I disagree with him. Clause 5 of the Bill enables the Government of Newfoundland to apply to the Colonial Development Advisory Committee for loans or grants to enable that Government to carry out development work in the island, and those works, whether they are to do with the fisheries or with agriculture, or with the starting of an industry for the raising of fur-bearing animals, or whatever they may be, will be undertaken with the main object of improving the chances of employment and the livelihood of the ordinary common Newfoundlander. It is laid down in this Bill that that shall be one of the purposes of the policy which we are initiating.


What about the land for the people?


I will deal with the more specific questions which the right hon. and gallant Gentleman asked me before I sit down. I would repeat that the policy of development is the prime purpose of the Government in putting through this complicated and ambitious scheme for coming to the aid of Newfoundland economically and politically. Some questions were asked by my hon. Friend the Member for Bridgeton (Mr. Maxton) as to the type of commissioner whom we are going to send out. He wanted to know how they were to be chosen. Again I do not want to repeat what has been said very often in the Debate, but we recognise that the commissioners must have at least two great qualifications. One is that they must have great administrative ability because of this work of development, which is an essential part of the scheme. Another is that they must be able to handle what is an exceedingly difficult political situation. They must, therefore, have some political experience, and be able to handle a rather difficult political state of affairs. All I can say at this moment is that we are searching through every list that we can think of which is appropriate in order to try to find men who will fulfil those qualifications.

My Noble Friend the Member for Horsham (Earl Winterton), who was studiously polite to the Dominions Office when he said in the Debate the other day he did not mind this work coming under that Department, stated that he did not feel the Dominions Office had in their service men with that experience which is necessary to tackle the Newfoundland problems, and he sug- gested that the Colonial Office had in their service men with a much more appropriate experience. We are searching through the Colonial Office service. We are also searching through the India service, and through all those services which are appropriate in order to try to find the very best men that we can. It may be that in those services we shall not be able to find three men who can really do the job. We might not find in those services, for instance, the men with the right political qualifications. Therefore, we are searching outside those services as well, and we shall be extremely grateful to any hon. Members who have suggestions to make if they will send them in, I can assure the House that my right hon. Friend will consider them on their merits. My hon. Friend the Member for Bridgeton said that he would not be willing to go. Perhaps he would like one of his lieutenants to go. Suppose the hon. Member for Gorbals (Mr. Buchanan) were to go, the House would miss him very much during the next all-night sitting, but I feel sure that he would at least come back and defend the Government oh the next occasion when this matter was discussed.


There is a suggestion that you might send Lord Trenchard.


If my hon. Friend would like to send in that name, my right hon. Friend will consider it. The question of the salaries to be paid to the Commissioners has been raised. As regards the figure of the salaries, it is impossible to say anything at the present moment. The consideration of the whole question of the type of men whom we are able to get has not gone far enough to enable a specific statement to be made, but a statement in regard to it will be made at the earliest possible moment. My hon. Friend asked whether the salaries of the three United Kingdom Commissioners would come from moneys voted by this House. They will, and they will appear on the Dominions service vote. That cost is included in the estimate which the Chancellor of the Exchequer gave when he said that the whole cost might be from £1,500,000 to £2,000,000 between now and the end of 1936. My hon. Friend asked whether it was correct that the salaries of the Newfoundland Commissioners would not come out of money voted by this House. That is so. These salaries will be paid out of the revenue of Newfoundland itself

One or two questions were asked as to the work which the commissioners will undertake. I was asked whether they would have any specific instructions with regard to the work of the Civil Service. One of the things that stands out all through the report of the Royal Commission is that the unfortunate system which prevails in recruiting the Civil Service in the Island is one of the causes of the breakdown of government there. It will be one of the first questions which the new Government will consider, and any suggestions that they have to make about it will receive our immediate attention. My hon. Friend asked about agricultural development, and whether the commission would have any specific instructions regarding that question. Again, the commission Government will go out in order to develop as quickly as possible the resources of the Island, and one of their first duties will be to inquire into the possibility of improvng and developing agriculture.

My right hon. and gallant Friend the Member for Newcastle-under-Lyme wanted to know about the taxation of land values in Newfoundland. The right hon. and gallant Gentleman has no doubt studied the report, and he will recognise that some very powerful arguments were put forward in it in favour of that form of taxation. That is a matter for the new Government to consider, and it is impossible for us to prejudge the issue. We have to leave that to the Governor and the commissioners, and I have no doubt that the sections of the report dealing with it will not completely escape their notice. With regard to the right hon. and gallant Gentleman's specific question as to whether we were going to put on to the commission anybody who is interested in land development companies, so that vested interests might be entrenched in the Government, the answer is that we shall not put in as a commissioner anyone who is connected with land development companies in Newfoundland.


That applies to the three appointed there as well, I suppose?


That applies to all the six commissioners who will aid the Governor. Finally, my right hon. and gallant Friend showed his gallantry by returning to the charge and endeavouring to find out whether we were going to have a Newfoundland Member in this House. I am not going to get out of order by dealing with that question. Apart from that question, he also asked whether there was any idea of a Legislative Assembly or some shadow of democratic government being established in Newfoundland.


No. I did not.


Then I misunderstood my right hon. and gallant Friend, and I am not quite certain what was the point of his further remarks. He wanted to know whether we were going to continue the dictatorship indefinitely.


The only way of ending a dictatorship is to have their representatives at Westminster, in the same way as with Scotland or Orkney and Shetland.


I would only say that if the Government we are establishing under this Bill is a dictatorship, it is not going to be permanent, and the Bill itself makes it quite clear that it is not to be permanent. It is a temporary arrangement, and, as a matter of fact, in Clause 1 (2) there is not only a provision for revoking the Letters Patent which are to establish this new form of Government, but there is a provision for amending those Letters Patent, and therefore there is open the possibility of amending this form of Government short of revoking the Letters Patent and restoring self-government to the Island.


Will the hon. Gentleman answer the point about the advances being a first charge?


My hon. Friend asked a question about the advances being a first charge, and perhaps I may be permitted to read the paragraph, which has been very carefully prepared, because I want to give a perfectly watertight answer. The service of the guaranteed stock and any advances by the United Kingdom Government to Newfoundland—other than free grants—or payments under the guarantee, will rank as a prior charge on Newfoundland after the service of the existing trustee securities, and it would be impossible for a future Newfoundland Government, while any of this stock or any debt to this country remains, to give the banks or any other lender a charge in front of these obligations.

Finally, I maintain that this extremely difficult and delicate problem of a Dominion which has asked that self-government might be taken away from it for a temporary period is a problem worthy of handling by a people of great Imperial traditions like ourselves. But it is not only the people of this island who are going to be concerned with the policy to be pursued and the work to be done. This is to be an act of partnership, an act of co-operation between the people of Newfoundland and the people of this country. There are to be associated with our three

commissioners, three commissioners appointed from Newfoundland's population, and a very heavy responsibility will fall upon those Newfoundland commissioners. But, above all, this policy cannot succeed without co-operation on the part of the whole population of Newfoundland. That population is possessed of many fine qualities, which have been referred to in this House, and we hope and pray that those great qualities will now be devoted to the service of the Island of Newfoundland, because without their devotion in that cause we shall not be able to pull the Island through the difficult period ahead. Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 293; Noes, 52.

Division No. 57.] AYES. [6.50 p.m.
Adams, Samuel Vyvyan T. (Leeds, W.) Craddock, Sir Reginald Henry Headlam, Lieut.-Col. Cuthbert M.
Albery, Irving James Crookshank, Col. C.de Windt (Bootle) Henderson, Sir Vivian L. (Chelmsford)
Allen, Lt.-Col. J. Sandeman (B'k'nh'd) Croom-Johnson, R. P. Heneage, Lieut.-Colonel Arthur P.
Anstruther-Gray, W. J. Cross, R. H. Hills, Major Rt. Hon. John Waller
Aske, Sir Robert William Crossley, A. C. Holdsworth, Herbert
Astbury, Lieut.-Com. Frederick Wolfe Davison, Sir William Henry Hope, Sydney (Chester, Stalybridge)
Astor, Maj. Hn. John J. (Kent, Dover) Denman, Hon. R. D. Hore-Belisha, Leslie
Astor, Viscountess (Plymouth, Sutton) Dickie, John P. Hornby, Frank
Atholl, Duchess of Donner, P. W. Home, Rt. Hon. Sir Robert, S.
Bailey, Eric Alfred George Drewe, Cedric Horobin, Ian M.
Baillie, Sir Adrian W. M. Dugdale, Captain Thomas Lionel Horsbrugh, Florence
Baldwin, Rt. Hon. Stanley Duggan, Hubert John Howard, Tom Forrest
Balfour, George (Hampstead) Duncan, James A. L. (Kensington, N.) Howitt, Dr. Alfred B.
Barclay-Harvey, C. M. Dunglass, Lord Hudson, Robert Spear (Southport)
Beauchamp, Sir Brograve Campbell Elliot, Rt. Hon. Walter Hume, Sir George Hopwood
Beaumont, Hon. R.E.B. (Portsm'th, C.) Elmley, Viscount Hunter, Dr. Joseph (Dumfries)
Beit, Sir Alfred L. Emmott, Charles E. G. C. Jackson, Sir Henry (Wandsworth, C.)
Benn, Sir Arthur Shirley Emrys-Evans, P. V. James, Wing.-Com. A. W. H.
Bennett, Capt. Sir Ernest Nathaniel Entwistle, Cyril Fullard Joel, Dudley J. Barnato
Birchall, Major Sir John Dearman Erskine, Lord (Weston-super-Mare) Johnstone, Harcourt (S. Shields)
Blindell, James Essenhigh, Reginald Clare Jones, Henry Haydn (Merioneth)
Bowater, Col. Sir T. Vansittart Evans, Capt. Arthur (Cardiff, S.) Ker, J. Campbell
Bower, Lieut.-Com. Robert Tatton Flelden, Edward Brockiehurst Kerr, Lieut.-Col. Charles (Montrose)
Bowyer, Capt. Sir George E. W. Fleming, Edward Lascelies Kerr, Hamilton W.
Braithwaite, J. G. (Hillsborough) Flint, Abraham John Knight, Holford
Broadbent, Colonel John Foot, Dingle (Dundee) Knox, Sir Alfred
Brocklebank, C. E. R. Foot, Isaac (Cornwall, Bodmin) Law, Sir Alfred
Brown, Ernest (Leith) Fox, Sir Gilford Law, Richard K. (Hull, S.W.)
Brown, Brig.-Gen.H.C. (Berks., Newb'y) Fraser, Captain Ian Leech, Dr. J. W.
Buchan, John Fuller, Captain A. G. Leighton, Major B. E. P.
Buchan-Hepburn, P. G. T. Galbraith, James Francis Wallace Lennox-Boyd, A. T.
Burgin, Dr. Edward Leslie Ganzonl, Sir John Levy, Thomas
Burnett, John George Gillett, Sir George Masterman Lewis, Oswald
Butt, Sir Alfred Gilmour, Lt.-Col. Rt. Hon. Sir John Liddall, Walter S.
Cadogan, Hon. Edward Glossop, C. W. H. Lindsay, Kenneth Martin (Kilm'rnock)
Campbell, Sir Edward Taswell (Brmly) Giuckstein, Louis Halle Lister, Rt. Hon. Sir Philip Cunliffe.
Caporn, Arthur Cecil Glyn, Major Ralph G. C. Liewellin, Major John J.
Carver, Major William H. Goff, Sir Park Liewellyn-Jones, Frederick
Castlereagh, Viscount Goldie, Noel B. Lloyd, Geoffrey
Cautley, Sir Henry S. Goodman, Colonel Albert W. Locker-Lampson, Rt. Hn. G. (Wd.G'n)
Cayzer, Sir Charles (Chester, City) Graham, Sir F. Fergus (C'mb'rl'd, N.) Lockwood, John C. (Hackney, C.)
Cayzer, Maj. Sir H. R. (Prtsmth., S.) Graves, Marjorle Lookwood, Capt. J. H. (Shipley)
Cazalet, Thelma (Islington, E.) Grenfell, E. C. (City of London) Loder, Captain J. de Vere
Chamberlain, Rt. Hon. N. (Edgbaston) Griffith, F. Kingsley (Middlesbro', W.) Lovat-Fraser, James Alexander
Chapman, Sir Samuel (Edinburgh, S.) Grigg, Sir Edward Mabane, William
Clarke, Frank Grimston, R. V. MacDonald, Rt. Hn. J. R. (Seaham)
Clayton, Sir Christopher Guinness, Thomas L. E. B. MacDonald, Maicolm (Bassetlaw)
Cochrane, Commander Hon. A. D. Gunston, Captain D. W. McEwen, Captain J. H. F.
Collins, Rt. Hon. Sir Godfrey Hacking, Rt. Hon. Douglas H. McKie, John Hamilton
Colville, Lieut-Colonel J. Hamilton, Sir R. W.(Orkney & Zetl'nd) McLean, Dr. W. H. (Tradeston)
Conant, R. J. E. Hanbury, Cecil Macmillan, Maurice Harold
Cooper, A. Duff Hannon, Patrick Joseph Henry Makins, Brigadler-General Ernest
Courtauld, Major John Sewell Harvey, George (Lambeth, Kenningt'n) Mailaileu, Edward Lanceiot
Courthope, Colonel Sir George L. Harvey, Major S. E. (Devon, Totnes) Manningham-Buller, Lt.-Col. Sir M.
Margesson, Capt. Rt. Hon. H. D. R. Procter, Major Henry Adam Spears, Brigadier-General Edward L.
Marsden, Commander Arthur Raikes, Henry V. A. M. Spens, William Patrick
Martin, Thomas B. Ramsay, T. B. W. (Western Isles) Stanley, Lord (Lancaster, Fylde)
Mason, David M. (Edinburgh, E.) Ramsbotham, Herwald Stanley, Hon. O. F. C. (Westmorland)
Mason, Col. Glyn K. (Croydon, N.) Ramsden, Sir Eugene Stourton, Hon. John J.
Mayhew, Lieut.-Colonel John Rathbone, Eleanor Strauss, Edward A.
Meller, Sir Richard James Ray, Sir William Strickland, Captain W. F.
Mills, Sir Frederick (Layton, E.) Rea, Walter Russell Sueter, Rear-Admiral Murray F.
Milne, Charles Reed, Arthur C. (Exeter) Sugden, Sir Wilfrid Hart
Mitchell, Harold P. (Br'tt'd & Chlsw'k) Reid, David D. (County Down) Sutcilffe, Harold
Mitchell, Sir W. Lane (Streatham) Reid, James S. C. (Stirling) Tate, Mavis Constance
Mitcheson, G. G. Reid, William Allan (Derby) Taylor, Vice Admiral E.A. (P'dd'gt'n,S.)
Molson, A. Hugh Eisdale Remer, John R. Thomas, Rt. Hon. J. H. (Derby)
Monsell, Rt. Hon. Sir B. Eyres Rentoul, Sir Gervais S. Thomas, James P. L. (Hereford)
Moreing, Adrian C. Rhys, Hon. Charles Arthur U. Thomson, Sir Frederick Charles
Morgan, Robert H. Rickards, George William Thorp, Linton Theodore
Morris, Owen Temple (Cardiff, E.) Robinson, John Roland Todd, Capt. A. J. K. (B'wick-on-T.)
Morris-Jones. Dr. J. H. (Denbigh) Rosbotham, Sir Thomas Todd, A. L. S. (Kingswinford)
Morrison, William Shephard Ross Taylor, Walter (Woodbridge) Touche, Gordon Cosmo
Muirhead, Lieut.-Colonel A. J. Ruggies-Brise, Colonel E. A. Train, John
Munro, Patrick Runciman, Rt Hon. Walter Tryon, Rt. Hon. George Clement
Nail, Sir Joseph Runge, Norah Cecil Turton, Robert Hugh
Nation, Brigadier-General J. J. H. Russell, Alexander West (Tynemouth) Wallace, Captain D. E. (Hornsey)
Nicholson, Godfrey (Morpeth) Russell, Hamer Field (Sheffield, B'tslde) Wallace, John (Dunfermline)
Nicholson, Rt. Hn. W. G. (Petersf'ld) Rutherford, John (Edmonton) Ward, Lt.-Col. Sir A. L. (Hull)
Normand, Rt. Hon. Wilfrid Rutherford, Sir John Hugo (Liverp'l) Ward, Irene Mary Bewick (Wallsend)
Nunn, William Salt, Edward W. Wardlaw-Mllne, Sir John S.
O'Connor, Terence James Samuel, Sir Arthur Michael (F'nham) Warrender, Sir Victor A. G.
O'Donovan, Dr. William James Samuel, Rt. Hon. Sir H. (Darwen) Watt, Captain George Steven H.
Oman, Sir Charles William C. Sandeman, Sir A. N. Stewart Wedderburn, Henry James Scrymgeour
O'Neill, Rt. Hon. Sir Hugh Sanderson, Sir Frank Barnard Wells, Sydney Richard
Ormsby-Gore, Rt. Hon. William G. A. Savery, Samuel Servington Weymouth, Viscount
Palmer, Francis Noel Scone, Lord Williams, Charles (Devon, Torquay)
Patrick, Coiln M. Shakespeare, Geoffrey H. Williams, Herbert G. (Croydon, S.)
Peake, Captain Osbert Shaw, Helen B. (Lanark, Bothwell) Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Pearson, William G. Simmonds, Oliver Edwin Wilson, G. H. A. (Cambridge U.)
Percy, Lord Eustace Sinclair, Maj. Rt. Hn.Sir A. (C'thness) Windsor-Clive, Lieut.-Colonel George
Perkins, Walter R. D. Skeiton, Archibald Noel Winterton, Rt. Hon. Earl
Petherick, M. Smith, Bracewell (Dulwich) Wolmer, Rt. Hon. Viscount
Peto, Sir Basil E. (Devon, Barnstaple) Smithers, Waldron Wood, Sir Murdoch McKenzle (Banff)
Peto, Geoffrey K. (W'verh'pt'n, Bliston) Somervell, Sir Donald Young, Ernest J. (Middlesbrough, E.)
Pickford, Hon. Mary Ada Somerville, Annesley A. (Windsor)
Potter, John Somerville, D. G. (Willesden, East) TELLERS FOR THE AYES.—
Powell, Lieut.-Col. Evelyn G. H. Sotheron-Estcourt, Captain T. E. Sir George Penny and Mr. Womersley.
Pownall, Sir Assheton Southby, Commander Archibald R. J.
Adams, D. M. (Poplar, South) George, Major G. Lloyd (Pembroke) Maxton, James
Attlee, Clement Richard George, Megan A. Lloyd (Anglesea) Milner, Major James
Banfield, John William Graham, D. M. (Lanark, Hamilton) Owen, Major Goronwy
Batey, Joseph Greenwood, Rt. Hon. Arthur Parkinson, John Allen
Bevan, Aneurin (Ebbw Vale) Grenfell, David Rees (Glamorgan) Price, Gabriel
Brown, C. W. E. (Notts., Mansfield) Grithffis, T. (Monmouth, Pontypool) Safter, Dr. Alfred
Buchanan, George Grundy, Thomas W. Smith, Tom (Normanton)
Cape, Thomas Hall, George H. (Merthyr Tydvil) Thorne, William James
Cocks, Frederick Seymour Jenkins, Sir William Tinker, John Joseph
Cove, William G. Jones, J. J. (West Ham, Silvertown) Wallhead, Richard C.
Cripps, Sir Stafford Jones, Morgan (Caerphilly) Wedgwood, Rt. Hon. Josiah
Daggar, George Kirkwood, David Williams, David (Swansea, East)
Davies, David L. (Pontypridd) Lawson, John James Williams, Edward John (Ogmore)
Davies, Rhys John (Westhoughton) Logan, David Gilbert Williams, Dr. John H. (Llanelly)
Dobbie, William Lunn, William Williams, Thomas (York, Don Valley)
Edwards, Charles McEntee, Valentin, L. Wilmot, John
Evans, David Owen (Cardigan) Maclean, Neil (Glasgow, Govan)
Evans, Capt. Ernest (Welsh Univ.) Mainwaring, William Henry TELLERS FOR THE AYES.—
Mr. Groves and Mr. G. Macdonald.

Bill read the Third time, and passed.