HC Deb 09 May 1933 vol 277 cc1371-475

Motion made, and Question proposed, That a sum, not exceeding £124,278, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1934, for the Salaries and Expenses of the Department of His Majesty's Secretary of State for Foreign Affairs."—[Note: £85,000 has been voted on account.]

3.32 p.m.

The PRIME MINISTER (Mr. Ramsay MacDonald)

I have been informed that it might facilitate progress and meet the convenience of the Committee if I opened the Debate to-day, and, of course, I very willingly play my part in that regard. At the same time, I must warn the Committee that I can say very little more than I said last Thursday. Anyone who reads the newspapers with an appreciation of the issues involved must see that the state—I cannot exactly say of the negotiations, because some of these subjects are not even under negotiation—but the position of very delicate matters which must be faced without delay, and must be faced with the determination to come to a definite agreement upon them, is not to be improved, and the prospects of success are not to be improved, by statements from me, as full, perhaps, as would satisfy some Members of the Opposition, on what is going on in a tentative and purely noncommittal way. Therefore, I ask, not only the indulgence of the Committee, because it does not amount to indulgence, but the co-operation of the Committee, so ' that anything I may say, it may be in unconsidered phrases, will not be added to the difficulties or subtracted from the prospects of a good issue.

I repeat that four days in Washington were all too brief to come to agreements, to settle things; but four days were perfectly adequate for the President and myself to exchange information, to survey the country that has to be crossed by both our Governments before satisfactory issues are reached; and we employed our time purely and solely in that exercise. I informed the President as well as I could and as fully as I could of the situation in which this country finds itself, and he was good enough, with, I am perfectly certain, the same candour and the same desire, to expose everything regarding his country, so that he might report to his Government and I might report to my colleagues here what the position was, what the nature of the problems was, where impossibility lay, and where possibility lay.

I hope that there is no Member of this Committee who is under any delusion regarding the difficult days that are ahead of us. There were three big sections of interest that had to be examined in the way I have described—debts; the business that must come up at the Economic Conference in accordance with the report presented to all the nations involved in that conference by the expert committee that met at Geneva at the end of last year and the beginning of this year; and there was a third section, a little bit removed from these two, but nevertheless a section about which it was quite essential that the President and myself should have a fairly prolonged conversation, in order that I might inform him of how His Majesty's Government regarded the European situation, the prospects of peace, the pacifying and the disturbing elements, so that the co-operation between our two Governments at Geneva should, without coming to any alliance and without coming to any sealed and signed agreement, be as complete as human beings of good will could make it.

I think the House will agree with me that the Cabinet should be put in possession of the most intimate information upon those subjects. We can write letters and we can send dispatches, and I think those right hon. Members of the House who have been conducting diplomacy, on delicate matters especially, will agree with me when I say that it is the unfortunate experience too often that, the more voluminous letters and dispatches become, the further away becomes the prospect of an agreement. The ordinary channels, most fortunately, as regards London and Washington, are most admirably manned not only by men of great skill in handling negotia- tions but by men, I had the very best reason for coining away with the conclusion, who are completely trusted by the Governments to which they are accredited. Therefore, when Easter came, and when this House in any event was to get up for nine or 10 days, I was very glad indeed to accept the request made to me by my colleagues that I might spend my Easter holiday going to Washington and steal a few days of my Parliamentary time when the House resumed after the Easter vacation. On Debts I can add nothing to what I have said. There were mutual exchanges of view and, what was still more important, I think, in view of the nature of that problem, exchanges of information as to bow, shall I say, the land lay.

In looking at what I said on Thursday there is one thing that I am not quite sure I emphasised enough, and I want to do that now. There was a complete union of opinion that the International Economic Conference cannot be fully successful unless the Debt question can be removed before it finishes. The final settlement, I am sure now, is going to take a little time. I do not mean by that a long time. I mean literally that it is going to take just a little time. There are so many issues involved; there are so many awkward relationships to be dealt with in the complete and final settlement. Even were no one involved except the President of the United States representing his Government, and myself and my right hon. Friend by me representing this Government—even if that was the chessboard, the moving is going to take a little time before it is settled. Therefore, the settlement must be made as soon as possible. I understood after I had sat down that some misunderstanding was created—if I am responsible for it, I am very sorry—as the result of an answer that I gave to a question put to me by the right hon. Gentleman the Member for South Molton (Mr. Lambert). His question was: Will the question of War Debts come before the World Economic Conference?"— [OFFicial, REPORT, 4th May, 1933; col. 1007, Vol. 277.] I replied "No." I am told that that created a little bit of trouble in the minds of various Members of the House. I thought, when I stated that, that all I had said was that there was no change. It was never contemplated that War Debts should come before the Inter- national Economic Conference. I am not sure that a full list is in yet, but at that conference there may be 60 nations represented. Could any more impossible body have the question of European War Debts placed before it for the purpose of settlement? No one ever suggested that. The Debt negotiations will have to go on concurrently and on parallel lines. They have got to be dealt with by another body of men. I only throw this out as what I hope is a very common-sense reflection and not as an announcement. Far be it from an announcement, and I hope no one either here or elsewhere will take It as an announcement. We are all in London; representatives of 60 nations, including every nation interested in War Debts. The conference is not going to sit from nine o'clock in the morning until midnight. Those who are here primarily for International Conference business will have some measure of time at their disposal which may provide an opportunity for considering the problem of War Debts. A permanent settlement is the thing that we have to aim at. The 15th June is to be an awkward hurdle. What is required is a wide survey of the possibilities in the meantime, and nothing here ought to be said which will so increase difficulties as to make the hurdle impossible to clear.

As regards the Economic Conference, I should like to repeat what I said, because I think the significance of the statement may have been a little lost. On what has naturally become a special and somewhat burning question—the question of the tariff truce—I said this: I had better say that I felt it to be my duty"— that is, at Washington— to point out. how different is the position of a country like our own from that of those which are already high tariff countries, with policies of economic defence already fully worked out and in operation. Whilst I welcomed the idea of a truce during the period of the conference, I made it plain that its application would have to be subject to the safeguards which this difference in our position requires. Then I added: This was considered"— by all those present at that conversation, at that exchange of views— to be reasons ble."—[OFFICIAL REPORT, 4th May, 1933; col. 1005. Vol. 277.] Only a few minutes ago, and since I came into this House and sat on this bench, I was informed as follows: There have been further exchanges of views with the United States Government, and I am now in a position to say that, subject to the settlement of the actual words, and while protecting the essential position of both Governments, there is every prospect of reaching agreement between us as to the advisability of an immediate tariff truce, that is, an avoidance of the adoption of new initiatives which might increase the many varieties of difficulties now arresting international commerce. [Interruption.] I should have thought that this was perfectly plain. I hope that the criticism will be a little more pointed than that. We as a nation are still negotiating and still developing our policy and that continues. Without starting any initiative in some new direction, or taking up new matters which are not merely a continuation of what is going on now, we should agree to a truce, in order to try and help ale success of the International Economic Conference, until we see what the prospects of the success of that conference are to be. Alter all, what does it amount to? It amounts to this. We want, as a result of that conference, to remove barriers, which are unnecessary for national protection, to international trade. We intend that the truce shall not prevent the continuation of the work we have now begun or the work we are developing in accordance with the announcements already made in this House.


In relation to tariffs?


There is another question connected with the Economic Conference in which the American Government and ourselves take the greatest interest and on which we place the utmost importance. It is a policy which will enable wholesale prices to be raised in order that producers may be able to go on producing, and thus increasing the volume of trade and putting thousands and thousands of men now unemployed back to work again. There is a third point, or a third section of interest; it is more than a point. The stabilisation of the relative value of currency must be attempted by agreement. I doubt if anyone who has not gone through my experience of the last two or three weeks can appreciate the danger of unstable international values not only to trade—I take it that the Committee are fully acquainted with that—but to political relationships. When I was still at sea,—[Laughter.]—Hon. Members laugh; I think it is a very valuable point which I have conceded—the United States went off gold. About that matter I have nothing to say as to the merits of the action, but I can assure hon. Members that the political effect at one moment threatened to be disastrous.

Hon. Members must understand that the accusations and the extraordinary stories which were told went far beyond trade considerations and went right into the middle of political tranquillity and good will. There was a tale which contained very grave allegations on the subject with which I am dealing. I found one day in the news which was supplied to me that from Paris there came a story that the British and the French Governments had united, in fact, they used the word "conspired" in order to join in an offensive against the dollar, and that our Equalisation Fund had been placed at the disposal of the French Government to carry on the campaign. As long as there is instability in international relations those sort of things are bound to go on, and the effect, I repeat, on political relations threatens to be most disastrous indeed. Therefore, one of the purposes of the International Economic Conference, which was declared before the United States went off gold, is even more important, as greater fluctuations have taken place as regards some national currencies than at the time when it was decided that this item should be included in the Agenda. Therefore Governments are bound without delay to try and agree so that the danger of serious misunderstandings may be removed and trading confusion and political damage avoided. The dangers will remain until somehow or other, an agreement is come to regarding the stabilisation of the international relations of the currencies of the great trading countries.

Then, as regards security, one of the points that we both considered, that we had very clearly in front of us, was the menace to the tranquillity of the mind of Europe which recent events in Europe had created. We saw quite clearly the extra difficulties that were being put upon Geneva. We saw quite clearly the new risks with which the Disarmament Conference was being faced, and yet I am very happy to say that the United States Government are prepared to play a further part in tranquillising Europe by agreeing, if the Disarmament Conference comes to anything like a satisfactory issue, to take their part in consultative pacts, the effect of which will be to increase the security of Europe and the safety of threatened nations against war. This is a very considerable advance. Mr. Stimson began it in that courageous statement he made before he went out of office regarding the need to redefine neutrality, and the present Government have expressed their intention of going further and making their obligations quite definite and authoritative. The announcement will be made at Washington in due time when the matter is further considered and its details are dealt with.

I notice that there were some indications that, apart from the statement I have just made, there is no programme.of how to do this. That is exactly what I had no intention of trying to get at Washington. Does anyone mean to say, if they go back and review some of the points I have dealt with as matters of agreed intention, that any one of these matters could have been taken further? If we had gone no further than the very beginnings of examining details, the four days would have been gone. What was done was this: Until then we did not even know the intentions of the United States Government, and the United States Government was not in possession of our position and of the work we have been doing in Geneva and the declarations that have been made in this House.

That is the gain of Washington, and it is a very substantial gain, the importance of which, I repeat, can be best appreciated by anyone who has ever taken part in big international negotiations. There are many slips between the cup and the lip, and, as I said just after I rose to address the Committee, the contents of the newspapers on both sides of the Atlantic show us that it is one thing to intend, but if opinion or newspaper circulation seems to call for obstacles to be put in the way, the very best will of two men, or three men, or a dozen men cannot, I think, be thwarted, when we are determined, as far as in us lies, that that will not take place; but that intention certainly can be delayed, and new and unnecessary and altogether imaginary obstacles can be put in the way of its realisation. Whatever may happen, the United States and ourselves now clearly understand each other, that we shall enter with a full determination to do everything we can to make the International Conference a success, and thereafter to continue to help it to remove fear from the hearts of the pacific nations of Europe.

4.6 p.m.


I beg to move to reduce the Vote by £100.

The Prime Minister, in his opening remarks, appeared to deprecate our asking for further information of the questions connected with the World Economic Conference and his visit to Washington, and he was at some pains to tell us that, whatever might be said to-day, he was anxious that nothing should be said that would, as it were, put sand in the machine, or in any way injure a settlement. I should like to say, first of all, that there is no one in this House or in the country who does not desire friendly relationships both with the United States and with all other nations. We have no desire to put grit into any machine. But while it is perfectly true that this matter which we are discussing is a very serious one, and, as we are continually told by the Front Bench opposite, there are very difficult days ahead, we who sit on these benches think that the country is entitled to know, after nearly two years of office by the present Government, what their policy in relation to the various questions to came before the Economic Conference really is.

This afternoon the right hon. Gentleman told us at the outset that he did not think he could tell us very much more than he told us the other night. I think he has lived up to that statement. I listened very carefully, and I expect the Committee listened very carefully, and I am bound to say I am no wiser as to what the policy of the Government is than I was at the conclusion of the speech last Thursday and now at the end of to-day's speech. It is simply words, and words and words. There has not been a single concrete proposition put before the Committee. While it is quite true that we have 10 right to expect the right hon. Gentleman to divulge any confidential discussion he had with the President as to American policy, we maintain that this House and the country have a clear and definite right to know what the policy of our Government is, and there is no one in the country who ought to stand up for that more than the right hon. Gentleman. He, together with a number of other men, formed the Union of Democratic Control, whose main object was to get rid of secret diplomacy.


You did that successfully in your Cabinet.


I think the right hon. Gentleman might save that gibe, because the Cabinet in which his respected father was dropped bricks quite as successfully as any Labour Government. All this rubbishy nonsense about Cabinet secrecy! I am ashamed of the right hon. Gentleman, after all his experience, standing up and having the impudence to say that. The record of his party, especially during the days of Mr. Balfour's last administration, was no credit to any of the Members of the Cabinet concerned. Everybody who lived during that period remembers it, and everybody knows that when Cabinet Ministers fall out the public usually come by their own. I think they have repented at leisure. [An HON. MEMBER:"Too late!"] Quite too late, and they have got to put up with it.

The last part of the right hon. Gentleman's speech rather inferred that by going to Washington he was able to inform the President of what had been happening at Geneva and in this House. Does he really expect us to take that seriously? Has not the President of the United States all the avenues of information open to him that even the humblest citizen of this country and of America has, and knows quite well what is happening at Geneva without the right hon. Gentleman travelling over the sea?


indicated dissent.


Well, if the right hon. Gentleman looks up the OFFICIAL REPORT to-morrow he will see what he said, that really one of the things he had done was to enlighten the President.as to the happenings at Geneva and in this House. I do not think it was worth while travelling to Washington to do that. Also I want to say that I do not really understand—perhaps other Members of the Committee did, but they were not very cheerful about it—what he exactly meant when he told us that the President agrees with him that, unless complete agreement as to the settlement of War Debts is arrived at before the Economic Conference closes, the Economic Conference will not have been a success. I understand now that there are to be two conferences sitting at one time, one dealing with the economic conditions and the other dealing with War Debts. Do I understand that correctly?


I said it would be possible.


He carefully safeguarded himself. That is what the right hon. Gentleman always does. I do not know what he means, and I undertake to say there is no one in this Committee knows what he means. He said quite definitely that there would be 60 odd nations represented, and within those 60 nations there would be representatives of all the Powers concerned with War Debts, that the conference would not sit from early morning till late at night, and that it would be possible to have another conference sitting dealing with War Debts. Am I right so far? It is very important that we should know.


I said that it would be possible.


That is exactly the sort of statement that we get from the right hon. Gentleman. We do not even know now whether War Debts will be discussed. This is not a joke; it is a very important matter. I understood the right hon. Gentleman to say that unless a settlement was arrived at both he and the President agreed that the Economic Conference would not have succeeded. Then he went on to say that while it was true War Debts would not be discussed at the larger conference he inferred—I admit that he did not use the actual words, but he led us to believe it—that some other body would he discussing a War Debt settlement. Now he tells me that he safeguarded himself. I do not think he is treating the House or the country fair to safeguard himself in that fashion. I ask him now, categorically, will there be after the 12th June, while the Economic Conference is sitting, a conference at the same time discussing and trying to arrive at a settlement on War Debts? Will he please answer me?


My answer is this. War Debts will have to be settled before any International Economic Conference can be a success, and every opportunity will be taken to effect that.


If that satisfies the Committee, they will be satisfied with anything. I do not intend to make any effort to deal with what the right hon. Gentleman has said to-day, because he has not said anything concrete as to the Government's policy. I propose to make my own contribution to this discussion and to put some questions to the right hon. Gentleman in the hope that pernaps some other Minister will try his 'prentice hand at giving us an answer. I would point out to whoever reads anything that may, be said in this Debate, that the Government have not on any single occasion up to now taken the House into their confidence as to what they consider is the real economic problem that the world has to face. The right hon. Gentleman has used all kinds of language to tell us the sort of questions that might come up, but he has not on one single occasion taken the trouble, nor have any of his colleagues done so, to tell the nation why this conference is being held. It is true that the economic situation of the world is very bad. It is true also that that condition of things arises in all sorts of countries. When the right hon. Gentleman is speaking, or when his colleagues are speaking, on behalf of this nation, they argue at one moment that it is necessary to keep on the Gold Standard. On another occasion that it is good to be off the Gold Standard. On yet another occasion they tell us that it is a balanced Budget, but, when it is pointed out that another country has an unbalanced Budget, they say:" Well, they have not suffered quite so much as we have done." On some occasions it is tariffs, and on other occasions it is Free Trade. But we have never had a clear and coherent statement of the Government's own policy.

Whatever statement they have made on tariffs was smashed by the President of the Board of Trade in his speech last week, when he gave us an apology for going back to Free Trade relationships with countries in Scandinavia and Denmark. He told us then what every novice has been saying to the Government ever since they came into office, that the mere shifting of trade from Canada to Denmark, or from Denmark to Canada, did not increase the volume of trade one bit, but only shifted it. The right hon. Gentleman told us last week that in this beautiful capitalist world in which we are living some industries must suffer for the good of others, but neither he nor his colleagues have ever attempted to get down to the real bed-rock situation. I do not think the Prime Minister is fair to himself in this matter, because he knows perfectly well, and he has taught it to 6,000,000 people, relatively speaking, that the world problem that has to be solved is how to bring abundance to the service of the masses of the people. In all the speeches that are made by right hon. Gentleman opposite there has never been any appreciation of that fact. They never tell us how they propose to equalise consumption with production. There is not, one of them who would stand up to-day and say that either Free Trade or tariffs can accomplish that feat. Free Trade never accomplished it when this country was on Free Trade. No one, I think, can question that fact. During the last 18 months we have been on tariffs, and we are doing our best now to try to modify the policy which we were told was to save the nation. So far as I am concerned and so far as my colleagues on these benches are concerned, we have never said that either one or the other of those policies was the real call of prosperity or of poverty. There may be occasions when tariffs may be good and there are other occasions when Free Trade is the proper policy to adopt.

The point that I want to make—it is necessary for us to make it, however other people may dissent from it—is that before the world economic situation can be grappled with and settled these facts must be faced and grappled with by those who are going to attempt a settlement: in countries where there is Free Trade, in countries where there are tariffs, in countries where Budgets are balanced, in countries where Budgets are unbalanced, in, countries on the Gold Standard, in countries off the Gold Standard, there is poverty, destitution, unemployment and want. No one can contradict that statement. Therefore, all the discussions in this House during the last two years, especially on these subjects, have ignored the fundamental truths which underlie the situation. No one knows that better than the Prime Minister. It may be that we are wrong, that our analysis of the situation is wrong, and that our remedy is wrong, but let someone who is going to the Economic Conference tell us how they propose to settle that question. Let the Prime Minister, or the Foreign Secretary, or the President of the Board of Trade, or anyone else, tell us what propositions they are going to make to the World Conference for a solution of the problems that I have tried to state. It has not been done yet, and this House and the country are entitled to know.

We are entitled to know what the Prime Minister means by the raising of world wholesale prices. It sounds good in the ears of those who handle goods in a wholesale manner. The argument has been, and I have heard it here again and again, that there is a great lag between wholesale and retail prices. In any ordinary civilised society that would have been dealt with long ago, but it has been allowed to remain. It is true that the raising of world prices in one way or the other might affect the people who are called the rentier class, or the moneylenders as I prefer to call them, and it is also absolutely true that the people who will pay most owing to the raising of prices are the great masses of working people. About that there can be no question. There is no secret that the Prime Minister need hide, in case he should upset his negotiations. Let him tell us by what machinery he proposes to raise prices? Let him also tell us a little more of the reasons why it should be done. We want to know, because this is a very important matter for the people whom, at any rate, we think we represent. It is very important that they should know what raising prices really means for them, and the machinery by which it is going to be done. The latter is more important than anything else.

I do not think the right hon. Gentleman has begun to think how he is going to do it. I do not think that the Members of the Government have the least notion how they propose to do it. I am quite sure, however, that if it is done it will be the working people who will have to pay. In our view, and I state this quite seriously, this doctrine or theory of raising world prices has come about because wages are already down to such a point that they cannot be put down any further, and this is the only way by which those who manage and organise industry hope to get something more out of it than they are able to get at the present time. I want to know definitely and distinctly how the right hon. Gentleman proposes to carry this through. We want to know from the right hon. Gentleman what international machinery he proposes to set up to accomplish this end. It cannot be done without international machinery. I would like the Prime Minister to tell us that, because he understands our point of view. Will he tell us whether the Government have any policy in regard to international control of the world supplies of raw materials? That is very important, because unless you do have international control I should very much like to know how you are going to govern and regulate prices. You have attempted to regulate supplies of tin and rubber, and you have tried to do it occasionally with tea, wheat and other goods, but you have always failed. Perhaps some right hon. Gentleman will tell us during the discussion how it is to be done. All we know is that control to help profiteers to preserve their profits has always failed, because the profiteers have fallen out among themselves. The point is how it is proposed to safeguard the distribution of the raw materials of the world in order that they may be used for the service of the peoples of the world. At present they are not so used.

Another important question which the Economic Conference must discuss, but about which we have heard precious little except when hon. Members from all parts of the House ask questions, is the competition of the Chinese and the Japanese in our markets. The right hon. Gentleman has written a great deal on this subject; he understands it quite well. What is he, what is his Government, going to propose in order to equalise wages and hours and conditions of labour as between the various Euro- pean nations and as between Eastern and Western nations? This is a very important question in world economics. The export of capital in the shape of services or goods to China, to Japan and to India, during the last 50 or 60 years has set up an enormous competition with the workers in Lancashire and Yorkshire, and in other parts of this country, and with the workers in America. The standards of life in these countries are much lower than the standards of life here, but this competition has been brought about by the export of capital in various forms from this country to these other countries, and those who are now complaining of this competition are in all probability the persons who have invested money or goods in these countries.

We want to know what the right hon. Gentleman proposes to do about these matters. It is no use saying:" we will consider them; they are very important and must have due consideration." After 18 months this Government of all the talents ought to have arrived at some conclusion on the matter. The right hon. Gentleman knows our policy in relation to this subject. Long ago, if we had had the power, we should have: negotiated agreements with the Indians, the Japanese and the Chinese. Hon. Members of the Tory party who are now laughing have been asking to-day questions as to whether the President of the Board of Trade can make an agreement with. Japan. The fact is that it is the only method by which you can get a settlement, but you can only get a settlement on reasonable lines if you want to arrive at an agreement for the service of men and women and not for the profit of a few men and women. There is another question which, probably, will receive the same sort of treatment as the last. People apparently forget, when they invest their money, that they can only get their interest when someone else accepts goods from the countries where their money is invested. There is the question of commercial debts. Is that question going to be discussed at the Economic Conference? It may be that what I am saying is not worth consideration by right hon. Gentlemen opposite; and it is rather unfortunate that they cannot bear to listen for a little time—I try to listen respectfully to anyone who speaks from that box—

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

The right hon. Gentleman does not appreciate the subject of conversation to which he takes exception; it was as to who should answer him.


Everyone knows that if a person is speaking on a subject of this kind and the right hon. Gentleman to whom his remarks are particularly addressed passes the time talking it is a little disconcerting. The subject I was raising is in our judgment one of the most important of the questions that any economic conference can discuss; it is the question of commercial debts; the old question of universal usury, the toll that is paid, or is expected to be paid, to those who lend money, to those who gamble in the exchanges. South America, Germany, most of the European nations, Australia and Canada, owe this country, and certainly the United States, a good deal of money, and it makes trade, and especially trade along the lines which the present Government have adopted, extremely difficult. A Bill. is coming before us tomorrow dealing with one country in South America, and I am not exaggerating when I say that that country and ourselves have come to an agreement which would not have been arrived at but for the fact that the Argentine cannot pay its debts to this country unless we take goods from the Argentine. That is rapidly becoming the position of all debtor nations. The terrible difficulties facing the world are largely due to the fact that great snowballs of debt have been piled up, and, instead of Governments facing the position, especially our own Government, we are renewing the loan and thus making the debt a little larger. Then we alter our fiscal policy, which the Government adopted with so much enthusiasm about a year ago, simply in order to collect these debts.

What do the Government propose to do about this question? What policy are they going to put before the Economic Conference? Sir Josiah Stamp, who is an authority on these matters, and another distinguished economist, has told us that we must have a sort of international bankruptcy court in order that these debtor nations may be freed of their debts and to stop these snowballs of debt constantly increasing. We should prefer that steps were taken to stop the continued export of capital from this country, and other countries; that these matters should be regulated beforehand rather than allow them to grow in this snowball fashion. But what is the Government's policy on the matter? Are the Government going to continue to frame their policy in relation to these nations always with regard to how much we can get out of them as payment for the debts they have incurred to our nationals. Of course, there are some nations which will simply default and not pay. No one can blame them. They could pay if people would take their goods. But people will not take their goods, and, consequently, some of them default, while others come to us and we change our fiscal system, or we raise a loan to enable them to pay off something, and thus increase their debt by doing so. We do that occasionally in the East End of London. The people in Poplar can understand the legerdemain by which the Argentine is being helped out of her difficulties at the present moment, because they go through the same thing themselves at the pawnbrokers.

The Prime Minister mentioned one matter which, I think, requires more attention than he seemed to imagine, and that is the fact of a great country like the United States going off the Gold Standard and paying off a portion of her debt by a depreciated currency. It may be excellent business, but I am doubtful whether it is excellent morals. It may be good for America but it is not very good for the people who are being paid. People who are receiving salaries are being hit. A great nation like the United States, with its stacks of gold, apparently for no reason at all, we do not know, says that she will debase her currency and pay her debts by giving people less than they bargained for. That may be good business, but I think it is very bad morals, anyhow. I should like to know a little more than the Prime Minister told us what the Government think about it.

That brings me to a kindred subject, and I am sorry that the right hon. Member for Hillhead (Sir R. Horne) and the right hon. Member for Epping (Mr. Churchill) have gone away, and also that the right hon. Member for Sparkbrook (Mr. Amery) is not present. They have talked at large on the question of the Gold Standard. The Prime Minister has not said a word about it th.,s afternoon. We should like to know what the Government's policy is in regard to the Gold Standard. This has nothing to do with the United States. There ought to be no secret about this. One heard mysterious stories told us by the hon. Member for Putney (Mr. S. Samuel) about gambling in exchange and in currency, and we had serious statements from the Chancellor of the Exchequer about the need for £350,000,000. But we must not ask what he is doing. The right hon. Gentleman says, "All we tell you is that we are protecting the interests of the nation," and so on. Yes, but we read in the newspapers that this question is going to be discussed at the World Economic Conference. Who has a right to know what the policy of the Government is if we have not that right? Who has more right than the House of Commons?

The right hon. Gentleman I mentioned just now proved conclusively some weeks ago in this House that the Gold Standard was all fudge, and the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) poured more scorn than I could on this whole business of financial jugglery. I do not want to use any extreme language. I ask the right hon. Gentleman, in view of the statements that were made here last week, what is the Government's policy to be at the Economic Conference? How does he propose to bring about this international arrangement? I tried to follow him when he spoke on the subject, but I was left in a maze of words. I asked him to tell the Committee what the Government really intend. We hear stories of the pound being pegged to this and pegged to the other. It would be rather nice to know where the Government are coming down, where they propose to peg it now. It is all a gamble, I know, because we were told by an authority on the subject last week that it was all a gamble; but we want to know what steps the right hon. Gentleman proposes to suggest to the Economic Conference to put an end to the gamble. When he talked about the rise in the world wholesale prices he left us guessing how he proposes to do it. Now I ask him how he proposes to deal with this subject?

We have this great fund of £350,000,000. We were told at the start that it was not to be permanent, that it was only to help us over this time. We ask now what permanent arrangements the Government propose to put an end to the gambling in currency and exchange. that goes on..[think it is a monstrous thing that at this time of day the: cost of a commodity should be one thing to-day and another thing to-morrow, simply because some people have determined to gamble and make money out of it. As I said just now, we have had monopolies in wheat, tin, rubber, and other raw materials, but we are faced to-day with the very worst kind of monopoly, and that is a monopoly in the means by which people exchange goods. Where money is concerned I take my stand on this—that money or gold is of no value compared with the ordinary things that men and women live by, that if all the gold in the world disappeared to-morrow the world would not be a scrap poorer. But Governments use gold for various purposes. Our view is that a currency should be used only for the purpose of bringing about the distribution of goods oil, the one hand, to those who need them for consumption on the other. There should never be gambling in currency as there is now. I understand that the Government agree about that. What we want to know is what they propose to do about it?

Then I want to come back to the 'question of War Debts. I do not think that any of us ought to be mealy-mouthed about this. It is often said that we on these benches think of every other country but our own, that we are always willing to sacrifice our own country for someone else's country. But what are the facts with regard to War Debts? We have been told in this House scores of times. This country, which we were told other countries distrusted because they felt we might fail in our obligations. has cancelled somewhere about 11,000,000,000 worth of War Debts to France and Italy. We have allowed to go by default many millions of pounds worth of other Debts, and the only outstanding Debt, outside this country, that stands against us, is the debt to America.


I do not want to interrupt the right hon. Gentleman unnecessarily, and I am not complaining of anything that he has said, but now that he is turning to the question of War Debts it would be as well for me to tell the Committee the conclusion to which I have conic as to how far the Committee can discuss that subject of War Debts in this Debate. In view of the fact that it is impossible to discuss foreign relations generally without some regard to these War Debts, I cannot shut them out from this Debate altogether. On the other hand I understand that it is definitely the case that War Debts are not on the agenda of the World Economic Conference, and the expense of that conference being held in London is the only possible item in the Foreign Office Vote upon which War Debts can be discussed in detail. But as they do not come within the business of the Economic Conference the expenses of which are included in the Vote now under discussion they can be discussed only in so far as they affect the question of foreign relations generally, and not in regard to details of policy, as to what should or should not be done for the 'settlement of War Debts. I hope I have made that clear to the Committee, as I wish to prevent any difficulty arising.


Does the Foreign Secretary's salary come under the Vote that is now before e Committee?


Yes, that is so. Let me explain the matter further. For that reason, if for no other, so far as the existence of War Debts affects the duties carried out by the Foreign Office, I cannot shut them out from discussion to-day, but on the other hand discussions with a view to the settlement of War Debts are not carried on by the Foreign Office at all, and therefore do not come under the Foreign Office Vote; they are carried on by the Treasury.


On a point of Order. I respectfully submit that it is a matter of domestic convenience among Ministers as to whether a particular Minister carries on a. discussion or not, but War Debts constitute an essential part of foreign relations and must be in order on the Foreign Office Vote, particularly on the Vote for the salary of the Secretary of State.


I presume it will be in order to refer to the matter in the same limited way that the Prime Minister referred to it in his statement to-day.


The hon. Member for West Birmingham (Sir A. Chamberlain) has not followed what I meant. I expressly stated that a discussion in regard to War Debts could be admitted in so far as War Debts affected foreign relations generally. I am sure that the Committee will realise the difficulty of drawing the line. I think they clearly understand that there are certain discussions in regard to War Debts against which I wanted to warn them. I refer to the discussion of methods for dealing with War Debts which methods would be negotiated not by the Foreign Office but under another branch of the Government, namely the Treasury.


I have moved to reduce the Vote by £100 in order to bring in the Foreign Secretary's salary. So far as I understand the matter the negotiations with foreign Governments are usually carried on by the Foreign Secretary. But the point that you make, Mr. Chairman, is just a little awkward for us, because the Prime Minister himself introduced the subject of War Debts, and we have understood that War Debts, as the right hon. Gentleman said, have a great significance in this question of the World Economic Conference.


I want to give the right hon. Gentleman as little trouble as possible. I quite agree that everything the Prime Minister has said with regard to this subject has been in order, and equally anything of the same nature or in reply to the Prime Minister would be in order also. The right hon. Gentleman will please understand that I do not for one moment want to shut our War Debts in so far as they affect foreign relations. The only thing about which I wanted to warn the Committee was that I must shut out discussion of details of negotiations, details of methods of dealing with War Debts which, if they arose in the discussions of the Foreign Office, would immediately be passed over to another Department. I had no reason to think that the right hon. Gentleman would be likely to go beyond my ruling, but I thought it only fair, for his sake and the sake of the Committee, to state the position.


I suppose we must all do our best to meet your Ruling, but we really do want the Committee to face up to the situation. We are the only country which apparently is to be called upon to pay the pound of flesh. If we inflated our currency we could follow the recent example of the United States; we could follow the example of France, which during the time of the Labour Government paid a debt of £50,000,000 with £10,000,000, simply because French currency had depreciated. It may be said that if we declare that we would not pay in June, that would be repudiation, but I think it is equally repudiation to inflate currency in that way and get rid of a large amount of responsibility. I certainly ask the Government to tell us quite definitely what they propose to do on 12th June. I think we are entitled to know that. This is the 9th of May. There is only a month to go, and we do not want to be put in the position—I tried to escape it on the last occasion—that we are right up against the day, and then have to decide one way or the other without any time for consideration or discussion. If the Government cannot tell us to-day, or will not tell us, what they propose to do by 12th June, and if the American Government say "Pay up," we ask that as early a date a possible be set apart to allow the House of Commons full time to decide its policy.


Payment is on 15th June.


Well, the 15th June then. I have seen somewhere that it was the 12th June, but it is like most things in the newspapers—nearly always wrong. I also want to know about the proposed tariff truce. If anybody really gained anything at all out of the right hon. Gentleman's statement this afternoon, he is much more understanding than I am, and I would like someone to tell us exactly what that means, and whether Ireland will be at the Economic Conference, and whether Russia will be there. We would also like to know, if the tariff truce is brought into being, whether it will affect the embargo on Russia and the penal tariffs on Ireland. Will they be held up for the time being I My main point, however, is as to the scope of the truce, how it will apply, and so on. I do not want to know what the right hon. Gentleman told the President—he can keep that in the inmost recesses of his breast, or his heart, or his brains, or anywhere else, as I have no doubt the. President of the United States will—but I do want to know what our own policy is. We want to know, not what the American policy is, but what our Government mean to propose.

In conclusion, we consider that this Conference must fail unless it gets away from the idea that you can re-establish trade and industry on the old basis of cut-throat competition. I have already said a little about Free Trade, but I think the Free Traders in the House must agree that the original theory of Free Trade is finished and dead. There is no such thing now as carrying on business without Government interference or even Government control. I have heard hon. and right hon. Members who are pledged to the old individualist theory of Free Trade advocate, for agriculture and other industries, governmental control in one form or another, and we have passed the period when traders and industrialists can be allowed to function, or are capable of functioning, separately and alone. They are bound, all of them, to submit to Government interference and control, and most of them are now asking for Government help, most of them are hoping, through this Economic Conference and the arrangements that they trust will come from it, that there will be, by some means or other, more security for them, both for their profits and for their trade generally.

So far as we are concerned, we do not want to see a world state which is created to make things better or easier for those whose business in life is merely to make profit, to make money out of the labours of other people. We think it is impossible to put the capitalist system back to where it was before the War. We think it is impossible that world recovery can take place if the nations allow their affairs to be managed by groups of capitalists or of financiers, and we are against the theory that you can only run a business when you run it for private profit or gain. We want the Prime Minister to be true to his old faith and at that Conference to advocate the true international co-operation, of which he was so brilliant an exponent till within the last two years. We think that capitalism has done its job in the world and has now to be succeeded by co-operation. We believe that the piling-up of usurers' debts is injuring the world and that you must. change that system in one way or another. Either it will be changed by collapse and revolution, or it may be changed by something very much worse, namely, the moral, mental and physical decay of your people, but we are quite certain that. you cannot re-establish that system on the old lines without real oppression of the masses and without squeezing out of them almost the last vestige of life.

When I think of the enormous powers of production, the enormous power of the machine, the enormous power which science gives to a handful of people, and when I think of the great masses of men and women who are denied the right to enjoy what these machines and science are able to give us—when I think of what their condition is likely to be under a new system, within which the world is made safe for plutocracy, safe for the monopolist, and safe for the moneylender, but unsafe and disastrous for the mass of the common people, I can only marvel at the idea that statesmen, knowing the facts, should sit down and try to bolster up the present system.

5.7 p.m.


The right hon. Gentleman who has just resumed his seat has suggested to the Government a number of interrogatories. I do not propose to add to those interrogatories or even to support him in addressing those questions to the Government, for most of the questions to which he asks for answers are the very questions which the World Economic Conference is to meet in order to solve, and the questions that he has addressed to the Prime Minister are almost as though the conversations which he has had with President Roosevelt had been the Conference.


No. We all understand that those questions are to be discussed at the Conference, but what we want to know is what our Government, on behalf of this nation, are going to put before that Conference; and we have not had a word on that.


Very many of those questions are questions of extreme complexity and technicality, which cannot be expressed in a speech by the Prime Minister, or the Foreign Secretary, or the Chancellor of the Exchequer in a Debate like this, and it seems to me that many of the questions that the right hon. Gentleman addressed to the Government could really only be answered in the definite propositions laid by the Government before the Conference itself, and finally by the resolutions or agreements which might emerge from the Conference. So I do not propose to address to the Prime Minister or to the Chancellor of the Exchequer any such questions on this occasion.

There have been some criticisms also of the Prime Minister's absences from this country for the purpose of these negotiations and conferences. I would venture to say that I think those criticisms are misconceived. The world is now interdependent to a degree to which it has never hitherto been, and it is absolutely essential that the Prime Minister of the United Kingdom and other representative statesmen should meet together, whether at Geneva, or at Lausanne, or at Washington, and by personal conversation try to unravel these hard, stiff knots into which the economic affairs of the world have been tied; and particularly is that so with respect to the relations between this country and the United States of America. The most close and cordial cooperation in all economic and political matters between the British Commonwealth of Nations and the United States of America ought, in the judgment of very many of us, to be the very keystone of British international policy, and the Prime Minister is entitled to the thanks, I think, of the Committee and of the nation for undertaking these arduous tasks and for the conversations which he has recently had with President Roosevelt. There is a well-known saying of Dr. Johnson's, that a man should keep his friendship in constant repair, and unless there are these personal contacts, conversations, and friendly interchanges of views, old friendships may fall into disrepair, to the great disadvantage of all parties concerned.

With respect to the present worldwide depression, this is above all the case—the need of co-operation between the United States and the other countries of the world. I have long held the view, and I think it is very widely shared, that the depression from which we are all suffering largely emanates from the United States. As the British Broadcasting Corporation, the wireless, continually informs us, "a depression is travelling Eastward across the Atlantic." That is what in fact happened, and in particular the high Smoot-Grandy tariff in the United States, coupled with the payment of debts from Europe to America, together with the operations of the American Farm Board, which were intended to get prices up, but which have had the effect of bringing them down to a catastrophically low level—all these things have had the most serious repercussions upon Europe; and now, at the present time, we watch with the greatest sympathy and interest the vigorous attempts of President Roosevelt, for if they succeed in restoring prosperity to America, they will certainly succeed in restoring prosperity to all of us.

With respect to the debts, it is obviously right that they should not be the subject of negotiation at a conference of 60 nations. The matter can much better he discussed outside, among those primarily concerned, and I do not think that we can endorse the request of the Leader of the Opposition to the Government to say to-day what course they are proposing to take on the 15th June. The fact remains that the coincidence of the 12th June, the date when this great conference meets, and the 15th June, when the next instalment of the debt from this country to America falls due, is very unfortunate, and I sincerely trust that every effort will be made to relieve the situation before then.

We frequently hear the views of the American Congress on the Debt question. The House of Commons has been exceedingly reticent, and, I think, wisely so. All of us are most anxious not to embarrass the Government in any way in the conduct of what is necessarily a most delicate and difficult negotiation, and that feeling, I think, should be uppermost in the, minds of all of us to-day. At. the same time, I think it right that in this House the opinion should be voiced which is felt throughout the length and breadth of the country, that in our view our creditor should be willing to show an accommodating spirit. We are now almost the only country in the world which is fulfilling the financial obligations that arose out of the War. The ex-enemv States, almost all our former Allies, and the Dominions are not paying their debts to us, and it is indeed hard that we alone, or almost alone, should be called upon to pay half-yearly these vast sums which are clue under our bond.

For my own part I feel the most intense repugnance to any idea of repudiation. We wish to maintain for the Government of Great Britain the highest standard of financial integrity and our reputation of not failing to do what we have undertaken. All the more reason that our creditor should, as I say, be willing to show a spirit of accommodation. This is an instance of the bad effects which follow from debts being incurred as between one Government and another, and I hope that, if some solution is found of this most difficult problem, it may result in any sums that may be payable being transmitted if possible in the form in which Governments usually pay interest and sinking fund on debts and that is as between a Government and its bondholders and not between Government and Government. If this debt or such of it as may remain, could be transformed from an inter-Governmental debt, into some form of publicly-issued obligations, whether in this country or in America, or in other countries, I feel sure that it would be to the advantage of international relations to remove this matter, if possible, from the political sphere as a matter between Governments, to the commercial and financial sphere in which Governments as a rule carry on their financial trams-actions as between a Government and its bondholders. That is all I wish to say on this matter today. As I have already observed, this feeling which is widespread, I am sure, in the House of Commons and in the country, has to be expressed with much discretion and reserve. Very much more forceful language might be used if our real feelings on the subject were to be freely and frankly expressed.

Another point which will come before the conference is the stabilisation of currencies—a most hard problem to face and to salve, and, indeed, in my view insoluble, unless the flow of commerce is set free to a. greater extent than hitherto. If the present restrictions remain, whatever efforts you make to stabilise currency, whatever parity you fix is liable to be upset and overthrown within three months, six months or a year by the very fortes which have been operating and have upset the stability of the currencies of the world up to the present. A preliminary point has been raised with regard to the conference and has been referred to by the Prime Minister—the suggestion from the United States of a so-called tariff truce. But under the general designation of tariff truce is included more than a truce with regard to tariffs strictly so-called. As the Prime Minister has indicated to-clay, in that general designation is included the suggestion that all forms of trade restriction should, so to speak, be stabilised at the present rate and not increased during the term of the conference. There the Government have found themselves necessarily in a great difficulty because in these days they are busily engaged in imposing further restrictions. When the United States calls upon them to stay their hand they have to remember that day by day they are announcing fresh restrictions upon trade and fresh quotas, particularly in the sphere of agriculture and fisheries; and that if they were to accede to the American demand, literally and simply, they would disappoint many interests in this country in whose minds expectations have been aroused of immediate advantages, as they consider them.

The Government, therefore, are in a great difficulty. They have to-day announced that they have arrived at a compromise and that they will maintain the present rate and the present form of restrictions, whether tariffs or quotas, and add to them only in so far as they are already committed to do so, but that they will not undertake any fresh commitments. That, I understand to be the meaning of the Prime Minister's declaration to-clay, and it illustrates the essential contradiction in the Government's economic policy, a contradiction which I must dwell upon, because, unless it is resolved, it will make our Government impotent to give any lead in the conference and is likely to make the conference itself futile. It is suggested that the British Government have no policy to lay before the Economic Conference. I do not agree. They not. only have a policy, but they have two policies, and the two policies unfortunately contradict each other. The Prime Minister and the President of the United States issued a statement at the termination of the conversations in Washington which included these words indicating measures to be taken by the conference: There should be constructive effort to moderate the network of restrictions of all sorts by which commerce is at present hampered, such as excessive tariffs, quotas, exchange restrictions, etc. That is the agreed programme for the Conference, and it follows, of course, the unanimous advice of the experts gathered together from all over the world to prepare the agenda of the Conference. That is the central proposal which they make. That is the problem which we are discussing to-day—Tuesday. But to-—morrow Wednesday—we shall be discussing, among other things, the Danish Trade Agreement which imposes a quota system for a period of three years, fastens it upon us in some respects, and upon Denmark in others, restricts Danish trade with the rest of Europe, and imposes certain obligations for the restriction of our trade for that period. Only yesterday there was announced another great system of quotas affecting one of the principal industries of this country, the fishing industry, which is to be put under a regime of restriction and regulation, with the possibility that imports from all the different fishing countries of Europe will be parcelled out, so that so much may be sent but nothing more. There are to be general restrictions intended for the assistance of the vested interests in fishing in this country.

Let us remember that the President of the Board of Trade has described the whole quota system as "insane" and "a curse to European trade." I have repeated those words several times and quoted them in this House, and the President of the Board of Trade has never replied. He has never said that the system is not insane and that it is not a curse to European trade, but he goes on gaily introducing more and more quotas week by week. This system is just as essential a part of the present Government's economic policy as the other and opposite proposal, endorsed by the Prime Minister and the President of the United States, of no restrictions. So, we have the Tuesday policy, advocated to-day, of removing restrictions, and the Wednesday policy, to be proposed to-morrow, of maintaining and increasing restrictions, both propounded by the same Government at the same time as though they were compatible one with the other. That is the essential fundamental inconsistency of the Government's economic policy, and, unless they can clear their minds on these matters before the Conference meets, I am afraid they will cut a very sorry figure.


The right hon. Gentleman does not seem to have noticed the word "excessive" in the statement which he has quoted.


On many previous occasions we have heard about "excessive" tariffs, quotas and exchange restrictions. I do not know whether the word "excessive" covers the exchange restrictions.


It covers the whole.


In any case it appears to us that all these quotas are excessive. I do not know that the President of the Board of Trade when he described the quota system as "insane" and a "curse to Europe" was speaking of excessive quotas. He was referring to the whole plan, and he expressed his earnest hope that the German Government and the French Government would abandon the system. At the same time as he expressed the hope that other countries would abandon it, he himself was extending and enforcing it. As a matter of fact, that is a real dualism which must be, somehow, resolved. The German representative who went to Washington to continue the conservations on behalf of the German Government, Dr. Schacht, gave a broadcast address when he reached America in which he used these words: There were two ways out of the present crisis. One was separation of the nations from each other leading to lower standards of living, the other was international cooperation for opening new markets. That was the choice—separation and poverty, or co-operation and prosperity. I think that is true but while the right hon. Gentleman agrees that co-operation is a means to prosperity, these new restrictions and the whole policy endorsed by my right hon. Friend the Member for West Birmingham (Sir A. Chamberlain) is a policy for separation and therefore, in our view, for poverty. My right hon. Friend the Member for West Birmingham—and this is relevant to the matter under discussion because it. touches the very essence of the problem of the World Economic Conference—engaged last week in very vigorous criticisms of the German Agreement which has been entered into by the Government. From his point of view, I thought the criticism was unanswerable. He said in effect:" The Government have appointed an Advisory Committee which is to be independent of Parliament and which proposes a certain scale of duties. Those duties are necessary in the opinion of that committee for the legitimate protection of certain trades. After the duties have been settled, and the trades under those duties are carrying on their activities and possibly increasing them, the Government come along and because it desires to engage in a Trade Agreement with Germany lowers the duties which have been declared by the properly constituted authority to he right and reasonable."

That is all true, and I do not see any possible answer to it. My right hon. Friend says, "You, by your policy, have excluded political pressure from Members of the House of Commons to raise the duties, yet you allow economic pressure from a foreign country to have effect in order to lower them." The right hon. Gentleman's constituents who make jewellery and the constituents of other hon. Members who make clocks, toys and similar articles have a perfect right to complain. But when my right hon. Friend goes further and says that this policy of Protection, with a tariff board. can continue concurrently with a policy of bargaining with foreign countries, there, I disagree. He said he was all in favour of bargaining and of negotiating with Germany and of assisting the coal industry and using our tariff in order to force down foreign tariffs. How are you going to do that if you are to maintain an adequate system of protection, in order to ensure, as my right hon. Friend thinks it will ensure, work for the British working men? He wants to see foreign manufactured goods shut out in order that the British working man may be employed. Yet he says he wants to have a higher fighting tariff which you can lower or raise according as foreign countries are reasonable or unreasonable.

My right hon. Friend avoids the essence of the matter. Either you let in some classes of German goods or you do not. If you let in some classes of German goods, then his primary purpose is defeated and the British goods are not made. If you do not let in those classes of German goods, what have you to offer to Germany in the way of a bargain in the interests of the coal industry? I should very much like my right hon. Friend, if he should be speaking in this Debate or some subsequent Debate, to say precisely what he would. offer to Germany as a means of bargaining and to other European countries that do not send us raw materials. Is there any class of German goods that does not compete with some class of British goods? I know of none of great importance, and, if that is so, his whole case falls to the ground, and he is convicted of a very obvious inconsistency. His policy contradicts itself. He urges the President of the Board ml Trade to engage in fresh negotiations with Germany for a general agreement. I frequently sympathise with my right hon. Friend the President of the Board of Trade in his present position, which I imagine is excessively uncomfortable, but I sympathise with him most when my right hon. Friend the Member for West Birmingham gives him such an impossible task as to enter into general negotiations with Germany for the advantage of British trade in Germany, while at the same time German goods are to he excluded from this country in the interests of British industry.

Some of us have been urging for more than a year that we shall get no solution on these matters so long as the mostfavoured-nation clause is maintained in our treaties unchanged. If, indeed, we can persuade the whole. world to adopt a large and simultaneous reduction in all their tariffs—a really effective reduction amounting almost to Free Trade—then indeed the most-favoured-nation clause could still continue to prevail universally. That would no doubt be the best solution, lit it is perhaps optimistic to think that that can be achieved. If we are going to have a group of low tariff and Free Trade countries, or any form of bilateral agreements such as those lately negotiated by the Government, we must then have a modification of the most-favoured-nation clause, or else restrict our agreements within so small a compass that they are of extremely little value. That is what has happened hitherto. The most-favoured-nation clause as in these agreements make them so narrow and small that the advantage to British trade taken as a whole can only be regarded as little more than trivial. We have pressed this on the Government again and again, and so have my right hon. Friends who start from a different standpoint. The right hon. Member for Tamworth (Sir A. Steel-Maitland) and the right hon. Member for Sparkbrook (Mr. Amery) have urged it recently; Chambers of Commerce have taken it up, and last week the President of the Board of Trade at last reluctantly and belatedly indicated a change in his attitude. Until then he had been almost always obdurate in emphasising the advantages of the most-favoured-nation clause, but last week he said that the Government will certainly not be prepared to continue indefinitely to accord full most-favourednation treatment to countries which show themselves unwilling to meet the reasonable requirements of this country in regard to the treatment of United Kingdom goods."—[OFFICIAL REPORT, 4th May, 1933; col. 1002, Vol. 277.] I welcome that conversion, which I have been pressing for a long time, and I am convinced that unless that policy is brought prominently forward at the World Economic Conference it will not be able to achieve very large results in the sphere of tariff reductions.

There is another point which is referred to in the statement of the Prime Minister and the President to which attention has not yet been drawn in this Debate or, so far as I know, outside the House. There was a remarkable and important sentence in the declaration of the Prime Minister and the President: Enterprise must be stimulated by creating conditions favourable to business recovery, and Governments can contribute by the development of appropriate programmes of capital expenditure. That is very remarkable coming over the signature of the right hon. Gentleman, because hitherto, whenever we have had Debates in the House on unemployment and from all quarters the Government have been urged to bring forward large and important programmes of capital development, the spokesmen of the Government have replied, in the first place, showing how dangerous these are, and, in the second place, showing how little employment is given by what they call "relief works." In every way they throw cold water on the whole policy of capital development. It is true that the Prime Minister has said that if Members will bring forward schemes the Government will be prepared to tabulate them and give them consideration. I think that there has been more tabulation than con-. sideration hitherto. At all events, very little has been done, and instead of forming, with vigour, energy and initiative, large programmes of capital development which would give employment to vast numbers of people, the Government have adopted a negative attitude and there has been nothing visibly (lone to carry out this policy.

I hope that now that the Government have accepted the principle of "appropriate programmes of capital expenditure" we shall hear very soon in the House of Commons what those programmes in fact are. When I asked a question on this point a few days ago the answer was given that all the matters in the declaration at Washington were inter-related and that no ore Government could act by itself. No definite reply was given to my question as to when programmes would be submitted. I submit to the Prime Minister that there is no reason why, in this particular matter, any one Government should not act independently of the rest. Most of these questions are international and interrelated, but just as President Roosevelt in the United States is himself putting forward, with great vigour and energy, large programmes of capital development, so in this country there is no reason why the same policy should not be followed independently. Many of us have been in favour of this policy for some years past. In 1931 it had to be suspended on account of the financial crisis and the impossibility of borrowing money, and the need above all of restoring financial credit and not incurring fresh loans, but now that the situation is so different the policy should be changed and a different course should be adopted.

I am glad to think that the Government are gradually adopting a policy that has been pressed upon them for some time past from various quarters. They are realising at. last four things. First, if each country excludes imports of foreign goods they would destroy world commerce, and by destroying world commerce they would destroy the interests of that country itself. This applies as much to the United Kingdom as to any ether country. We see the folly of it when it is done by Australia, by the United States or by Ireland, but when it is done by ourselves we think it extraordinarily wise. Secondly, the Government now by their declaration are beginning to realise that if they insist upon the exclusion from this country of foreign goods they cannot bargain with foreign countries by admitting their goods. The two are essentially incompatible. Thirdly, so long as the most-favoured-nation clause is maintained unchanged it is impossible to negotiate satisfactory reductions either with a group of countries or with particular countries. Fourthly, a programme of capital development, which many of us have urged insistently for so long, is the right policy according to the declaration of the Prime Minister and the President.

If these views had been adopted earlier and acted upon, much loss would have been avoided, and we should have had a greater advance towards world recovery. Now these principles have been grudgingly admitted, but will they be acted upon'! That is now the test. Well meaning declarations by Prime Ministers and Presidents, or programmes drawn up by experts, or even resolutions passed by international conferences are not enough. What matters is action. Tuesday's policy of liberation is so far only a policy of words. Wednesday's policy of further restrictions is a policy of action. The moral of this is that until this wiser policy is translated into action it ought not to command the support of the nation, and it will not help the recovery of the world.

5.41 p.m.


I had not foreseen the course that the Debate would take when I came down to the House to-day. I understand that the right hon. Gentleman the Leader of the Opposition had asked for a further opportunity to discuss the Prime Minister's visit to America. My right hon. Friend the Member for Darwen (Sir H. Samuel) has taken the opportunity to make a reply to a speech which I made in the House last week. Even the right hon. Gentleman the Leader of the Opposition seemed less anxious to discuss the Prime Minis- ter's visit to America than to cross-examine him about the coming World Economic Conference, and, above all, to repeat what he has so often repeated, though with a variation of language which I admire, his deep conviction that there is no cure for the world until all the nations of the world which repudiate his views have come to accept them. That may be so, but that, I think, will have to be the subject of another international economic conference and will hardly be the result of the present conference.

I may have a word or two to say on other matters, but I rise to call attention to one matter in the Prime Minister's statement to which neither of the right hon. Gentleman who preceded me has made any allesion. It seemed to me by far the most important thing that he said. My right hon. Friend knows that I welcomed the announcement that he was going to America at the invitation of the President of the United States, and that I recalled a previous visit which he had made to the previous President. I paid him a tribute fm the success which had attended that visit, and I hoped for the same success for the present visit. Without taking any decision--and the Prime Minister told us that before he went that he was not going to take any—I think that he does accomplish a great purpose, nationally and internationally, in having a full and free exchange of the kind which he explained to us to-day of views between himself and the head of the American Government. We all of us know of problem after problem for which we need international co-operation in order to secure a solution, but the first step to international co-operation between one nation and another is that the representatives of both nations should understand one another's difficulties and what it may be possible for them to do and what it may not be possible for them to do.

I trust the Prime Minister has made clear to the President the limits beyond which no British Government can travel, just as he has opened up to his vision the roads along which we might go far to meet what we understand to be American or other foreign opinion. But the right hon. Gentleman brought us back the statement that the President had announced his willingness, if a satisfactory disarmament convention could be reached, to arrange for America to take part in consultative pacts for the purpose of greater security of the nations so disarmed, and to make those pacts definite and authoritative and operative. That is the best news that has come to Europe from America for many a long day, and, if it is not an impertinence for me to do so, I desire to express my deep appreciation of the consequences which that decision of the American Government may have upon the peace of the world, and to congratulate my right hon. Friend that he has been able to give us that assurance.

It is of consequence, too, though to my mind of lesser consequence, that another result of the conversation should be agreement between the Prime Minister and the President that they could not bring the Economic Conference to such a satisfactory issue as both desired and both felt necessary without a settlement of the question of international debts. I do not think it is very reasonable for the Leader of the Opposition to press to know how exactly that settlement is going to be brought about, or to ask if there is to be another conference. There may be a great many people here who may confer or not on all subjects on the agenda who may also take the opportunity to discuss other things at the request of their Governments and perhaps to reach agreements about them, but it is not necessary that it should be done in that way. I understood the Prime Minister himself to indicate that that was one of the ways in which it might be done, but other ways are open. The important thing is the recognition that we cannot settle our economic troubles without first settling the question of international debts. The number of nations interested in these questions of international War Debts is much smaller than the number of nations interested in the World Economic Conference, and let us hope that, being a smaller number, they will find fewer hours necessary in order to reach agreement.

That really is all I wish to say on what I had understood to be the subject of the Debate, but I must turn for one moment to the speech of my right hon. Friend the Member for Darwen. As he concluded, I could not help regretting that the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) had already left the House. What pleasure it would have given him to see how quickly his appeal for a little more ginger had worked in the bosom of the Liberal party and to hear my right hon. Friend the Member for Darwen, a Minister in a Government which told us not to borrow, who said that reckless borrowing was one of the great causes which had brought us to the brink of disaster, and over the brink, converted in 48 hours, under the dulcet tones of the wizard of Carnarvon, to recommend again an unlimited expenditure of borrowed money.


I am sorry to deprive my right hon. Friend of the pleasure of his jest. I do not expect him to do me the honour of studying my speeches, but he would have found exactly the. same thing said in a speech of mine in February, and again in the Debates in the House on unemployment.


I am afraid I have not followed as closely as I ought to have done the speech of February or the later speech to which my right hon. Friend alluded. What was present to my mind was a number of speeches which he made in support of that policy when he sat where the hon. Member for Bridgeton (Mr. Maxton) sits now, and the haste with which he had abandoned it when he joined His Majesty's Government. But my right hon. Friend was not content merely to give satisfaction to the right hon. Member for Carnarvon Boroughs. He was anxious to prove that the President of the Board of Trade and I were pursuing different policies. I am sorry to disappoint my right hon. Friend the Member for Darwen, but lie is mistaken. We are pursuing the same policy, but we had a little difference the other day about the methods to be employed. I thought that the duties fixed for particular industries by the Import Duties Advisory Committee ought to be treated as a minimum, and that the basis of negotiations should be, to use my own words, "This is our most-favoured-nation treatment for those nations which give us comparable treatment: and unless you give comparable treatment to us you cannot expect most-favoured-nation treatment in return." Here is my right hon. Friend saying that the Government and I are pursuing two incompatible ends, and in the same breath he takes credit to himself by saying: "For years I have come to the conclusion that the most-favoured-nation clause as now administered has been a sham. Thank goodness the President of the Board of Trade, however dilatory, and all too late, has at last said that he cannot bargain on the basis of the present interpretation of the most-favoured-nation treatment and that most-favoured-nation treatment cannot be given to those who will not make a satisfactory bargain in return."

I hope I do not misrepresent my right hon. Friend the Member for Darwen in that. That being so, he and I stand on the same footing. The only question is: What is the most-favoured-nation treat-moot? I want the most-favoured-nation treatment to be the duties as estabEished by the Advisory Committee, and he wants most-favoured-nation treatment to be no duties at all. But the principle of bargaining, the compatibility of the things which we are pursuing, is the same whether you take his basis or mine. May I ask, since obviously I have studied my right hon. Friends speeches insufficiently, when he first carne to the conclusion that the most-favoured treatment was no use? I do not remember 30 years ago, when the tariff movement was launched, and that argument appeared in countless tariff 'speeches, that we had any support from my right hon. Friend. If the right hon. Member for Carnarvon Boroughs is, as I think he has reason to be, pleased with the progress which my right hon. Friend is making, I also have reason to be pleased, and beg that he will go on in the same path.

5.55 p.m.


In his speech the Prime Minister made the statement that a permanent settlement of War Debts is a thing we have to aim at. There are many ways of achieving that permanent settlement, and it is from that point of view that I wish to make a few remarks. There is an opinion abroad, I think it is held in many quarters, and I see a mention of it in the "Times" to-day, that enforced default on the part of the debtor is the only course which is left today. If that is an opinion which is held at all largely in this country, I must confess that it fills me with dismay; because what is our position in this matter? We have forgiven many of our Allies, we have forgiven enormous sums in war debts. We have also entered into the Lausanne, Agreement, and there is attached to that "the Gentlemen's Agreement," and I think every one in the House will realise that it is practically impossible, and certainly impracticable, for us ever to reclaim the sums which we have given up under that agreement. That is a further direction in which we have made colossal sacrifices. It seems to roe that it would be grossly unfair if the most generous creditor in the world were forced in the cad to incur the stigma of default because in many directions it is the view that enforced default is all that is left to the debtors. For my part I would desire to fight most strongly against anything of this kind happening.

There are two sides from which I wish to look at the question, the moral side and the business side. When we paid the last instalment of debt I recollect, that the Chancellor of the Exchequer, in defending that course, said that to default would offend the moral sense of our people. I thought he was perfectly right, and I think a default to-day would offend the moral sense of our people as much as it would have done then. But there is the business side of it. Many of our debtors, many of those who owe us money, have, during the course of this depression, been malting valiant efforts to meet their obligations. I refer not only to foreign nations but to our own Dominions and Colonies. They have been making those efforts and making them successfully in many cases, and the result has been that even during last year we received a very large income from abroad, far in excess of the sums which we are still under covenant to pay yearly to America. What will these debtors say to themselves if we, still having the means to pay, decide to get out of this trouble by defaulting to the United States of America? Can it be supposed that they will still continue to make the same efforts to pay us? I very much doubt it. It would be very much the same as if a small debtor were owing something to a great business house in the City of London and found they were defaulting. He would consider that he had every moral right to default himself, and so it would be with our debtors. If I may put it so, we have been the high priest of finance and financial integrity in the past, and if we fall from that pedestal we are going to be the biggest losers. That is the business side of it.

The Committee are freely entitled to say: "What will you do about it?" Here, ass the right hon. Member for Darwen (Sir H. Samuel) has done, I cannot help reminding myself and the Committee that during the post-War years the course which our friends the United States have adopted has not been calculated to be in the best interests of the world, or, in fact, in the long run, of themselves. I am well aware of the appeal which the Prime Minister made that we should be discreet, but if one is candid with one's friends at times it does no harm. There would be very little difference of opinion on that point.

Coming back to what we should do if the United States is unwilling to meet us, I would say to her: "Our financial integrity is a very valuable asset to us. It is a thing with which we are not going to part lightly. If you insist upon these debts being paid, we shall do our best to pay you for as long as we can, but at the same time, in order to make that possible, it will be necessary for us to curtail imports from you to as large a degree as we can." This, I suppose, is where I should very shortly be ruled out of order by the Chair, because the question would become one either for the Treasury or the Board of Trade. I have said enough to indicate that in my view, which I believe would be very much backed up, how we have power to take a very firm line in order to avoid any necessity of default on our part. Any settlement based on the lines of repudiation would be absolute disaster. Should the negotiations unhappily fail, and I hope that they will not fail, I am perfectly certain that the Government would have the nation behind them in taking a firm line in order that they might not lose that most precious thing, which we have built up for many years, our financial supremacy and integrity.

I am reminded of the visit which Lord Snowden paid, I think it was to Belgium, shortly after he became Chancellor, and he took a very strong line on behalf of this country. I well remember that when he came back he had a great ovation at Liverpool Street railway station. I think that a firm line would be backed up by this country. I wish, on this point, to appeal to the Govern- ment, should it become necessary to take this firm line, that something might not be done which I am certain we should regret in time to come, and which, on balance, would not tend to the greater happiness and prosperity of this country.

6.3 p.m.


The hon. Member who has just sat down has made an important contribution to our Debate. At the beginning of his speech he referred to the way in which we ought to meet our obligation to America in respect of War Debts. I am sure that everybody in the House will be ready to echo his hope that this country will not be drawn into a position of default, and will be equally ready to support the view expressed by the right hon. Member for Darwen (Sir H. Samuel) that only in the very last and worst circumstances should we be guilty of repudiation. That would be very awkward and embarrassing for a great creditor nation such as we are, and even more than that, it would be, I am sure, a severe blow to our pride throughout the whole of our history.

I would like to refer to the speech which we have had from the right hon. Gentleman the Member for Darwen. It was inevitable, of course, that the right hon. Gentleman should deal with the question of tariffs, and equally inevitable that he should give us those views to which we are becoming accustomed on that subject. It is difficult to understand why the same point of view is always presented without any variation, no matter how different the circumstances are. My right hon. Friend seems to think that you can only have one of two sets of circumstances; either you must tax everything that comes into the country or you must tax nothing, whereas, in point of fact, every nation which has developed a scientific tariff system, taxes those things which it suits them to tax and puts no duty on those things which they wish to have in free. Equally, my right hon. Friend seems to think that every Protectionist in the country wishes to destroy all foreign competition. As long as I have been a Tariff Reformer I have never shared that view. I am perfectly willing to see this country compete with every country on fair terms, but the attitude that we have always taken is that, where you are compelled to maintain a wage-scale immensely in ex- cess of that which is paid by your competitors, it is only fair to protect the standard of life which your people enjoy.

The last of the supposed dilemmas, very easy dilemmas, which my right hon. Friend put, suggested that it was entirely inconsistent for the Government to agree to a system for reducing excessive tariffs and at the same time to be negotiating tariff treaties. Surely it is obvious to everybody that we had never been able to get other countries to take the slightest interest in reducing tariffs until we put on our own tariff. Our position to-day is one in which we are still far from the high-water mark of tariffs, as they exist in other countries, but as a result of the moderate tariffs we have imposed we are in a position to deal with other countries and to negotiate treaties which will be of service to this country. In no wise do those treaties make it impossible to make bargains with other countries in regard to import duties which suit them. I leave the point, thus cursorily dealt with, in order to take up the main theme with which we are concerned to-day.

It is true, as the Leader of the Opposition has told the Committee, that the Prime Minister has divulged to us to-day nothing that was not in his speech of last week, except that momentous declaration with regard to the future attitude of the United States of America in relation to the violation of the peace arrangements which have been made. Apart from that, the Prime Minister has been able to tell us nothing. The reason is not far to seek. It is quite impossible that he should be able to divulge the conversations which, for the very reason that they were so confidential, have been—at least as I believe—of such high importance. Therefore we are left, so far as we ourselves are concerned, to puzzle out the situation and to try to arrive at some idea of what is happening. The situation has been rendered infinitely puzzling by the departure of America from the Gold Standard.

I hope that the Committee will forgive me if for a moment I try to present the situation as I see it. America for some considerable time, certainly until the Hoover Government fell, was engaged in a policy of credit expansion. That policy did not have the full success that it might have attained; indeed, it did not prove very effective in any degree, but mainly for three reasons. The first reason was that the policy was not persisted sufficiently, but that from time to time there was an apparent cessation of the efforts to expand the credit of the country. In the second place, and this is more important than the other, the banking system of America proved too weak to stand the strain under which it acted; and the third reason was that, because of that bad condition of the banking system, the credit which it, was sought to create never got down to the pockets of the people. For those three reasons, and because of the lack of confidence which was created in America, the policy of credit expension may be said to have proved ineffective.

With the advent of President Roosevelt's Government, there was a wave of confidence which undoubtedly helped the situation in America a great deal. The banking system was still in the feeble condition which I have described, and he immediately set about to put it on a stronger foundation. Before there was sufficient time to effect any real reform, a crisis arrived and, as the Committee will remember, very many banks entirely failed to meet their obligations, and very many others had to be closed. This brought about a condition of crisis which had to be dealt with by drastic measures. Already all the primary producers of America were in difficulties through not being able to realise sufficient returns for their production to meet their costs, and especially to meet the costs of the money which they had borrowed in better times. To that situation was added the difficulty that, as one knows, there are to-day banks closed compulsorily in America which are responsible for 5,000,000,000 dollars of the deposits of the people, and accordingly many hundreds of thousands of people, who were already unable to meet their obligations in full, have been subjected to a new catastrophe, which made the situation absolutely intolerable.

The President took what was, no doubt, a very drastic step—he suspended the Gold Standard. It is worth while, if the Committee will forgive me, looking at the phraseology which he used in explaining why he took that coarse of action. He said that the Administration has the definite objective of raising commodity prices to such an extent that those who have borrowed money will, on the average, be able to repay that money in the same kind of dollar as they borrowed. We do not seek to let them get such a cheap dollar that they will be able to pay back a great deal less than they borrowed; in other words, we seek to correct a wrong, and not to create another wrong in the opposite direction. That brings home to this House, and we have had repeated discussions upon this point, the very principle which has been so often enunciated by several of us in the course of those Debates, and we have proof, in the case of the American Administration, of the very evil that we feared. People in the heyday of prosperity, when they got a high price for their crops, borrowed money. Take the case of the American grower of wheat. He finds, in recent years, that he has had to produce three bushels of wheat instead of one, to pay for the debt which he incurred in better times. That is only one illustration, but it applies to the whole range of primary production. Perhaps I might, from recollection, tell the Committee that the value of the production of wheat at to-day's prices is far less than half of what it was in 1929.

Again, the value of the profits of the great corporations of America, which was a huge sum in the year 1929, is now replaced by a great loss. The effect of the failure of the primary producer is disastrous to the man who is making machines, because the purchasers of his machines are, in a great agricultural country like America, very largely composed of those who produce the primary products, and, accordingly, you get this distress spreading through the whole community, ending up, as we know, with the largest number of unemployed people that there is in any quarter of the world. That is the intolerable situation from which President Roosevelt is trying to redeem that great community, and he has taken the action of abandoning the Gold Standard, with the immediate result of an increase in prices which, beginning with a flicker, has now attained quite appreciable dimensions.

I entirely agreed with my right hon. Friend the Member for Darwen when he pointed out the effect that prosperity in America had on other countries, and, undoubtedly, what has happened there has stimulated a rise in the prices of commodities in this country, a result which we, with our cheap money policy, were perhaps unable to attain alone. I always thought that we did not do enough by ourselves, but in any case it is clear that we may feel confident that we can attain it when we have the two great producing areas, the United States of America and the British Empire, acting upon a common policy. I say acting upon a common policy for this reason, that I understand our object to be exactly the same as that at which America is now aiming. I would recall to the Committee the fact that the Macmillan Committee laid it down, as one of the essential factors in future progress, that prices should be restored to something like the 1929 level, and I would remind the Committee, further, that this policy was accepted by the Chancellor of the Exchequer. I have it in my recollection, also, that at Ottawa exactly the same policy was laid down, and perhaps I may be allowed to read this statement, which resulted from the deliberations of the Financial Committee at Ottawa. One of the most important conditions precedent to the re-establishment of prosperity is, they say: A rise in the general level of commodity prices in the various countries to a height more in keeping with the level of costs, including the burden of debt and other fixed and semi-fixed charges. I say that it is a hopeful situation when you find that the United States of America and the British Empire are now acting on one common policy for the purpose of raising the wholesale prices of commodities. That could never have been, or, at least, it could never have attained its possible fruitfulness, if America had not departed from the Gold Standard, but, now that it has done so, I think we may look forward, on the principle of unity of action which has been recently enunciated, to better things. This leads me, going beyond what the Prime Minister actually said in his speech, to remind the Committee that there was issued last week a communiqué from Washington, which expressed the conclusions at which the President and our Prime Minister had arrived. Those conclusions are as follow: The necessity for an increase in the general level of commodity prices was recognised as primary and fundamental … The central banks should by concerted action provide adequate expansion of credit, and every means should be used to get the credit thus created into circulation. … The ultimate re-establishment of equilibrium in the international exchanges should also be contemplated. We must, when circumstances permit, re-establish an international monetary standard which will operate successfully without depressing prices, and avoid a repetition of mistakes which have produced such disastrous results in the past. In this connection the question of silver, which is of such importance in trade with the Orient, was discussed, and proposals were tentatively suggested for an improvement in its status. That is a programme the objects of which are that commodity prices should be increased so that they may be able to meet production costs and yield a fair margin of profit, that this object should be attained by a system of credit expansion through the concerted action of the central banks in both countries, and that we should seek to reach an international monetary standard, at the same time getting rid of those things which have brought about disaster in the past, that is to say, those elements which rendered the Gold Standard in the end unworkable. It is a programme upon which, as I have said, our two countries are United, and, so far as I am concerned, holding the views which perhaps I have expressed at too great length from time to time in the House, it makes me more hopeful to-day than I have been at any time during the last thre eyears.

There are people who are afraid of what is called a competitive depreciation in currency, and that, undoubtedly, would be a subject for fear if we were so insane as to let is happen. I am not surprised that some people entertain some apprehensions on that subject, because what has been written in journals on both sides of the Atlantic has revealed that this idea prevails in some people's minds. Undoubtedly there have been people in America who entirely misunderstood the object and effect of our Exchange Equalisation Fund, and have attributed to those who are managing that fund a desire always to keep the pound in a position in which it would destroy the chances of people doing business on the basis of the dollar. That has never been, as we know, the object or desire of anyone in this country. On the other hand, there are people here who fear that, partly as a result of speculation and for other reasons, our pound may rise to a level at which it would be impossible for us to do profitable business.

So far as the immediate future is concerned, if, greatly Oaring, I might do so, I would venture to lay down a policy for both countries in this form: We are both convinced that some stability in the level of prices must be obtained. Both countries are convinced that certain measures must be taken to bring that about, mainly through credit expansion. Our object is entirely the same. What each of us, therefore, should aim at, is to have our currency on a basis of exchange which would enable each country, with the means and resources which it possesses, to carry on its business upon a proper and a profitable footing. Perhaps I might use the phrase which was used by the Chairman of the Westminster Bank at the dinner at which he spoke last night, when he said that the basis of exchange for us should be fixed at such a level as was compatible with our means and prospects. It is this objective at which both countries should aim, and neither of them need in the process be regarded as in any sense competing in depreciation with the other.

There was a reference to the question of silver in the passage which I have read from the speech of President Roosevelt, and, if I might be allowed to do so, I should like to refer to that for a moment. It is not merely the party at present in power in America that has taken up the question of the importance of silver in the monetary system of the world. President Hoover, before he went out of office, laid stress, I think in his last address to Congress, upon the status of silver as being of great importance to America and since the Prime Minister left Washington President Roosevelt has been given very remarkable powers by Congress in this regard. He has been given the right, at his own discretion, to take payment from the debtor countries of their debts in the form of silver, up to an amount of 200,000,000 dollars, with silver up to a price of 50 cents an ounce. I think that to-day its price is roughly 34 or 35 cents an ounce. In the second place, he is to be entitled to issue currency as against the silver which he buys, and which would be coined into silver dollars. It is probably well known to the Committee that already a very considerable amount of American currency is issued against coined silver dollars in the United States Treasury. In the third place, he is to be entitled to fix a ratio, if he chooses, as between the value of silver and the value of gold, which, as the Committee will understand, would leave him free to introduce a complete system of bimetallism such as America enjoyed up to the year 1873. Further, President Roosevelt himself, in the passage quoted in the "Times" this morning, refers to the difficulty that America had under the Gold Standard, with its gold bonds that had to be paid in terms of gold. He adds: Nevertheless gold, and to a partial extent, silver, are perfectly good bases for currency. I have referred to the power given to the President to take payment of international debts in silver. I do not think I am repeating anything that ought not to be told when I say that I suggested, before our last payment was made to America, that silver should be offered in payment, and I am naturally pleased to see now that that was an idea which certainly would not have been disagreeable to America. But I would ask the Committee to realise how important from our point of view such a suggestion is. America has always said, and with a certain amount of truth, that part of the depression in the world is due to the fact that our policy of going completely away from the Silver Standard in India, and taking up a Gold Bullion Standard, had had the result of impoverishing the East and checking purchases which China and India would otherwise have been making. That is the complaint that America has always made against us. As the Committee probably know, the Indian Government have at the present time a very large amount of silver overhanging the market, which always keeps the price depressed, because no one knows when the Indian Government will come in to sell their silver. At the present time there is roughly in the Indian Treasury something like 400,000,000 ounces of silver, and of that they could probably part with 300,000,000 ounces. They probably could not part with more, because at least a part of their issue of notes at the present time is based upon silver, but they could part with, probably, 300,000,000 ounces, and that amount, at the price at which America is now prepared to value it, would give India a price which it has never had a chance of realising for a long time past.

There is no better way in which India could be served at present than if this country were to purchase her silver, giving her sterling in return for it which would form a nucleus for her Central Bank, while we transferred that silver to America in payment of our debt. You may say this means that we are committing ourselves to paying the American debt. What I say in reply to that is that, whatever happens about the American debt, and no matter how much it is cancelled, there will still be an appreciable sum to pay. You cannot imagine America letting Europe off with less payment than that which we exact from Germany, which is a sum of £150,000,000 under the Lausanne arrangement, and accordingly it is certain that we shall have something to pay. This 300,000,000 ounces of India's silver at 50 cents will represent $150,000,000. There is no doubt at all that it would be a great relief to us to pay in silver and it would be of great benefit to India that her silver should be got rid of upon these terms. Accordingly, while the Prime Minister was not in a position to reveal the intimate conversations which he had with President Roosevelt, nevertheless as one of the results of those meetings it is for us a very significant factor that there appears in the powers given to President Roosevelt the right to take this step which is of such vast importance not merely to us and to India, but, as the Americans think, to themselves in reviving a trade which has been so diminished and decreased in China. We sent a delegation of business men to China a few years ago and in their report they made this statement: The continued depreciation in the value of silver has enormously reduced the purchasing power of China. In our opinion every means should be sought for bringing about the stabilisation of silver and so of restoring to China her full purchasing power. Only by international agreement can this result be attained, and we feel that Great Britain should take a leading part in endeavouring to secure such agreement. I state with confidence that at a time like this, when it is possible that by the united action of Great Britain and the United States some favourable turn may be given to world prosperity, there is nothing which will give so quick a stimulus to the trade of the world as an increase in the purchasing power of India and China. Silver in these countries is at an abnormally low level. It is probably represented by about a third of the price at which these people made their savings. The Committee will understand that, if anyone finds his fortune reduced by two-thirds of its previous value and the prospect before him is that the other third may diminish to a figure which will completely impoverish him, that obviously has the worst possible effect on his desire or ability to purchase goods. Accordingly, I hope that the Government, in dealing with this matter, will take up a rather different attitude from that which the Chancellor of the Exchequer adopted when we last discussed it. He fell into one or two errors, on which I am not going to expatiate to-day. In the first place, he underestimated the amount of silver available in the world and, in the second place, he took the amount that would be available as against all the gold known to exist in the world and said it was an inappreciable quantity. He entirely forgot that what is of importance is the anoint of gold that is in circulation, that he was bound to subtract from the amount of the existing gold all that was sterilised in the hands of a few countries, and that the amount of influence that silver would have on being brought in to supplement gold would be in the proportion which it bears to the amount of gold in active circulation.

I hope the Government now proposes to look at this subject with more sympathy. I am not going to dilate upon what forms the arrangement might take, whether you would go in for a system of bi-metallism, such as President Roosevelt has been given the power to instal, or whether you would make silver a part of your reserve against the currency that you issue. It is certain that, if you bought silver at the market price to-day and made it part of your reserves, so far from depreciating in your hands you would have an asset which would be growing in value rather than lessening. Nor is there any reason to fear that you would have any such great production of silver as would make a glut in the market. Finally, I should like, as my right hon. Friend the Member for West Birmingham did, to say that I believe that the Prime Minister in his visit to America has achieved a very great success. Anyone who reads between the lines of President Roosevelt's pronouncements can see the influence which Great Britain has exercised. These personal contacts which the Prime Minister has made lave, I am sure, been invaluable. Re has sensibilities and intuitions derived from his Highland origin which are not given to the ordinary man and in his contacts with statesmen of other nations has rendered very great service to the country. I, for one, feel confident that great progress has been made in our relations with America and, without casting any reflections upon any other nation, I am sure that it is by united action between our country and the United States that success in restoring prosperity is to be achieved.

6.34 p.m.


The actual question before the Committee is that my salary should be reduced by £100 and I, therefore, feel that the occasion is one when I should be justified in intervening, although the speeches that have already been made have to a very large extent answered one another. The Leader of the Opposition took the line that the Prime Minister had said nothing at all. He was sufficiently answered by the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) who said, I think with the general approval of the Committee, that what the Prime Minister had been able to say at the opening of the Debate was most significant and most encouraging to all of us who look forward to promoting economic peace and good understanding throughout the world. Then my right hon. Friend the Member for Darwen (Sir H. Samuel) made a contribution which the Government were very grateful to receive but, in so far as he had any criticisms to make and any references to his own past declarations in support of those criticisms, it would be only seemly that I should leave him to the tender mercies of my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George). Subject, however, to this pairing off of different points of view, there are two or three matters on which questions were put and on which some additional explanations may be offered.

First, as to what has been called the tariff truce. I was a little surprised that the Leader of the Opposition wanted to know what a tariff truce was. He seemed to think that it was a phrase that was used with reference to some arrangement to reduce the existing level of tariffs. He was a colleague in a former Government of a very distinguished man whose absence we sincerely deplore. When Mr. William Graham was President of the Board of Trade, he attempted to negotiate a tariff truce. The circumstances were very different, and I hope the results will be very different, but the thing itself was the same. I understand by a tariff truce an agreement between members to the truce that, subject to certain exceptions, qualifications or what not, they will, for the period of the truce, undertake not to put up the tariffs that are at present imposed. If you are about to enter into an economic discussion with the different nations of the world, it is obviously most desirable to do something of that sort, if you can, or else every nation, in anticipation of the day when the economic discussions begin, may be tempted to put itself in what it would think a better negotiating position by increasing every sort and kind of tariff and obstacle that it can invent in order that it may be able, with a great show of grace and reasonableness, to have something to take off when the day of discussion comes. Therefore, it is in principle, I should have thought, an eminently practical and desirable ideal to pursue. It has the further advantage that it is not calculated unduly to disturb the situation, to rock the boat, just when everyone is preparing, as well as they can, to enter into these difficult negotiations, so that they are not taken by surprise at the last moment.

May I remind the Committee of an analogy? When we went to Lausanne and the Prime Minister presided over that important conference, the success of which no one disputes, we found it necessary, before proceedings began, to enter into negotiations and to secure an agreement between the principal parties assembled there for the express purpose of keeping the status quo for the period of the discussions. We started the Lausanne Conference with an agreement which we negotiated and signed on the very morning on which it began, and which provided that, although the date might arrive on which a particular payment became due or a particular receipt might be expected, the whole status quo should be preserved for the period of the discussion in order that we might be able to get on with our business.

That, in principle, is the idea of a tariff truce. The reason why Mr. William Graham's well-meant efforts did not avail are at this time of day quite beyond dispute. It was not because he was not an ingenious and a persistent man, very well qualified, if ever man was, to conduct and carry through successfully a negotiation of that character. As a matter of fact, though he approached seven countries of Europe and made his contribution with the greatest clearness that there should be a tariff truce for two years, nothing ever happened except that he indicated that we would subscribe to the suggestion if only other people would do the same. Why? It is perfectly plain that the reason why, with all his skill and ingenuity, the late William Graham could not bring about a tariff truce was because everybody knew that the policy of this country at the time was so firmly set along a particular economic line that in no circumstances whatever would the Government of that day recede from their position.

I have never concealed from any audience at any time that in my view there are immense arguments in favour of an international Free Trade position. Here is one of its defects—in negotiating with any chance of success anything like a mutual arrangement with other countries as to whether we have a tariff truce or not. My right hon. Friend the Member for Darwen who, to the general regret, thought it necessary to leave the Government, and his friends, asserted that the Ottawa Arrangements to which he had an objection would prevent any negotiations of this character. I ventured to say that I hoped that the time would not be far distant before he would find that the Scandinavian countries and the Argentine and others would be corning in and entering into negotiations with us. These negotiations are now leading to tariff arrangements. [Interruption.] Does the right hon. Gentleman object to it? I feel sure that if the right hon. Gentleman has anything of which to complain, he does not object to an arrangement which limits the amount of tariff to be paid, and as regards the present tariff truce, I am sure he will warmly support it. We are endeavouring to secure that in the interval, before the Economic Conference opens and during the period of the discussion at the Economic Conference, we shall not, have the whole situation observed and the idea of securing good economic relations affected by the intemperate, nasty, selfish imposition of tariffs and restrictions, but that at the very least we shall keep things as they are. That was the reason why my right hon. Friend the Prime Minister made the statement the other day which he quoted, and which I will repeat, pointing out to President Roosevelt, how different is the position of a country like our own from that of those which are already high tariff countries, with policies of economic defence already fully worked out and in operation. That is to say, that it is all very well to call a halt, but it does not by any means follow, at the moment when a halt is called, that the comparative levels between countries with high tariffs and countries which have not high tariffs are levels to be preserved ad infirtitum. He went on to say: Whilst I welcomed the idea of a truce during the period of the conference, I made it plain that its application would have to be subject to the safeguards which this difference in our position requires. As we know, this effort to prevent the misuse of the period before the opening of the conference and the period of the conference was proposed by the United States. The Prime Minister has shown himself in principle in favour of the proposal. The form which it will take, with due regard to our own interests, and the special interests of each country concerned, is under discussion and, I believe, is very likely to reach agreement. So much for the tariff truce.

The next matter which I note is a declaration made by the Leader of the Opposition, which, undoubtedly, was of very great importance, because he made it, not only on behalf of himself, which in itself would be important, but on behalf of his party. He spoke for himself and his friends, and for greater accuracy I have procured the actual passage from those who report these things as they are being said. He referred to the proposal, which many people favour, of making the best effort that can be made by international means to raise commodity prices, and I desire before the Debate ends to put quite clearly on record the view of the Leader of the Opposition and his friends on the subject of raising commodity prices. He began by observing, quite justly, that there is a difference between wholesale prices and retail prices, and a great lag between them, as there often is. He said: In any ordinary civilised society that would have been dealt with long ago, hut it has been allowed to remain. I do not discuss the facts that would justify the difference between retail and wholesale prices. I admit that there is a large gap—nowhere, in the world at the moment is the gap greater between retail and wholesale prices than in the case of the products of Soviet Russia. He went on to say: It is true that the raising of world prices in one way or the other might affect the people who are called the rentier class, or the moneylenders as I prefer to call them, and it is also absolutely true that the people who will pay most owing to the raising of prices are the great masses of working people. We may take it, then, that the view of the Leader of the Opposition and his followers is that they are not supporters of the effort by international means to raise commodity prices, because they take the view that if such an event happened it would injure the great mass of the working people. In order that that may be made doubly plain, I will quote one other passage from the speech of the Leader of the Opposition this afternoon, in which he said that there are great difficulties in knowing how to raise commodity prices, but of this he was quite sure: I am quite sure, however, that if it is done, it will be the working people who will have to pay. At any rate, I may be permitted to observe that that is not everybody's opinion. I hold in my hand, for example, the report of the experts who formed the committee appointed by the League of Nations to make a preliminary study of the problems which might be expected to come before the Monetary and Economic Conference. It was, undoubtedly, a body of most exceptional authority. It con- tained certainly some of the best-known authorities on this sort of subject in the world. It produced a report which was entirely unanimous. It was not limited to people appointed by countries which are members of the League, but included very distinguished members of the United States. I read these sentences: The unprecedented fall of commodity prices in recent years has caused a growing disequilibrium between costs and prices, has immensely increased the real burden of all debts and fixed charges, has made business more and more unprofitable, and has resulted "— I would ask the right hon. Gentleman to give ear to this— in a continuous and disastrous increase of unemployment throughout the world. I think that before the Debate ends we are entitled to have an authorised view from hon. Gentlemen opposite. I am sure that we all recognise their devotion and sincerity in endeavouring to find ways to reduce unemployment throughout the world. Here is the unanimous view of people drawn from different parts of the world who certainly speak with great authority on the subject, and they held the view, which I thought was held by every educated man on the subject, namely, that the fall in commodity prices had inflicted a great injury upon the purchasing power of vast masses of people, and that thereby had most materially prevented the free sale of goods and had reduced the employment of great masses of labouring men. Is that the correct view or is the correct view that put from the other side of the Table this afternoon by the right hon. Gentleman the Leader of the Opposition in which he says, "Oh, no, that is quite wrong. By raising commodity prices you are only going to inflict another injustice upon the working classes of this country?"


Hear, hear.


A very old friend of mine still takes that view. At any rate, they are certainly taking a view repudiated by every authority of which I have ever heard, and which I thought until this afternoon was repudiated by the Labour party itself. We are willing to join on that issue, and the right hon. Gentleman is at liberty to say to anyone he pleases that the Government are going to do their utmost, in co-operation with other countries in the world at the Economic Conference, to see whether the disastrous fall in commodity prices cannot be stopped, and if it is not possible to devise means by international action by which the level of commodity prices may be raised. I think that I have the full authority of my colleagues when I say that we suffer under the delusion, which is common to all experience, and every economist of standing of whom I have ever heard, namely, that the fall in commodity prices has done great injury and a great deal to increase the mass of unemployment in the world.

The Leader of the Opposition made reference to the Prime Minister's account of what had passed during his visit to America, and more particularly as to the care which the Prime Minister exercised in stating what was to be the exact position and attitude of this Government and this country in the approaching discussions. We appeal to the good sense of the House and to the common sense of our fellow-countrymen. If you entrust a Prime Minister and a Government with the handling of matters so anxious and so difficult as, let us say, the problem of debt, does any sensible man, whatever his politics, really expect a Prime Minister who has been discussing those things with the President of the United States to come here, when they are still under discussion, and proceed to make an elaborate statement of the exact position and the exact method by which they are to be dealt with? Anybody who protests against unreasonable concealment of matters which have become established facts is well justified in doing so, but it is a wholly different proposition to call upon those who are resporsible to make a declaration on what they have been urging and considering and been trying to get considered, when it is admitted on all hands that no bargain has been made.

Anyone who recalls the facts knows that before the Prime Minister went co America he made it entirely plain to the House and to the country that he did not go there to get a bargain. I very well remember that, before my right hon. Friend left these shores, some of us, considering 'what we should do when he came back, pointed out this fact, and we were well conscious of it, that he was not going over there with authority to make a bargain. The Opposition would have been the very first to object if he had made any sort of bargain. He was bound to come back, after doing his best, without a bargain. It was emphasised t o all of us that when he came back he would be exposed to every form of reproach. "What have you done for trade?" "What have you brought back?" I think that the House of Commons and the country are satisfied that the view taken by my right hon. Friend the Member for West Birmingham is the statesmanlike view, and that the fact that the Prime Minister has been able to make the declaration he has made, standing alone, is an abundant justification of his having gone to America.

Let me point out, in confirmation, what is the language employed by President Roosevelt, I think in a broadcast the other day, after these conversations he has had with the Prime Minister. We know that my right hon. Friend tells us he has reached a very large measure of agreement in sympathy, outlook and approach with the President of the American Republic, and after the Prime Minister left there was the broadcast delivered by the President of the United States. This is what he said, and if we treat this as not only the objective of the United States of America, but the objective of the British Government, too, if this has been the consequence of these discussions, I ask any hon. Member whether something worth doing has not been achieved? President Roosevelt said there were four great objectives: (1) A general reduction of armaments and through this the removal of the, fear of invasion and armed attack, and at the same time the reduction of armament costs in order to help in balancing Government Budgets and the reduction of taxation. I think we will all agree with that (2) The cutting down of trade barriers in order to start the exchange of crops and goods between the nations. (3) The setting up of a stabilisation of currencies in order that trade can make contracts ahead. (4) The re-establishment of friendly relations and greater confidence between all nations. If that can be proclaimed to the American people after the visit of our Prime Minister to Washington as the common objective being aimed at by these two statesmen not only for their respective countries but the whole world, I do most firmly and boldly claim that the action which is being challenged here to-night is justified, and that we have every reason to be glad that it has had that most fruitful result.

My last point is the relation between the debt question and the Economic Conference. I will not, of course, go beyond the position which the Prime Minister took up with great deliberation. I would be the very last to move a single step further. Let me just remind the Committee again of what the Report of the Expert Committee appointed by the League of Nations states. Many good things are to be found in their report. If lion. Members will turn to page 7 of the report, where it deals with the general programme of the Conference, they will find this: The programme of reconstruction which we deem it necessary for the Government to undertake is set out below. There is a very elaborate programme below. Of this programme the experts say: The problem of inter-governmental indebtedness has not been included, because it lies outside our terms of reference. That is well known to everybody. It would be the height of absurdity to call 60 or 65 nations together that they might discuss so difficult a task as inter-departmental debts. which at the most concerns, say, a dozen nations primarily affected. But the experts go on: In our opinion, however, it is essential that this question"— that is the question of inter-governmental indebtedness— shall be settled and that the settlement shall relieve the world of further anxiety concerning the disturbing effects of such payments upon financial, economic and currency stability. Until there is such settlement, or the definite prospect of such a settlement, these debts will remain an insuperable barrier to economic and financial reconstruction. We therefore attach the greatest importance to the early resumption and successful conclusion of negotiations upon this problem. There are also the sentences where they say: In stressing the necessity for concerted action we do not wish to suggest that nothing can be accomplished before the Conference meets. On the contrary, the success of the Conference will depend in great measure upon the vigour with which the participating Governments enter upon preliminary negotiations in the meantime. If we wish a reason for the Prime Minister's visit, there it is. The experts further say: The prospects of substantial all-round success in the necessary complex and multilateral conference discussions will be greatly enhanced if, in the intervening months, preliminary negotiations have cleared the way for reciprocal concessions. I have endeavoured to deal with some of the matters which have been raised in this Debate. I would ask the Committee to show their confidence in the policy of the Government by restoring to me this beggarly £100.

7.6 p.m.


I object to this Government. I think they have injured the trade of the country with their tariff. I think they have increased the number of unemployed by their economics. I think they have consistently supported the creditor, as against the debtor, in currency matters. If, however, there has been one comparatively bright spot in the conduct of the National Government it has been, in my opinion, their conduct of foreign affairs. Although I fully approve of reducing the salary of the Foreign Secretary, I have no desire to reduce the length of his life or of his stay here. If he delays for one moment his exit, I shall indicate to him that the views expressed by my right hon. Friend the Member for Bow and Bromley (Mr. Lansbury) this evening on the evil effects of inflation, which he marked down and reprobated so severely, are precisely the views he himself expressed only three years ago, and when he swept the country, only two years ago, and which I myself have unfortunately set in print. Yet he knows now that they were wrong. I know they were wrong, and the right hon. Gentleman beside me will, I feel certain, take presently what I call the recent neo-economic view on this little question of inflation versus deflation. Perhaps, rather than base himself on expert economists, who can always be hired on either side, I may put the point in a way in which he himself will completely understand—the admirable healing power of what we call reflation.

If we raise wholesale prices, the rentier will be cut. The moneylender, if prices are raised by 50 per cent., will lose 33 per cent. of his purchasing power. It is true that that will affect the poor, fool worker also, but the difference between the two is that the rentier cannot get it back, but the worker, by decrease of unemployment, gets it back in increased wages. Let me point out to the right hon. Gentleman what is a fundamental doctrine of the Socialist party. I am pleased to be able to state it because I am not always regarded as quite orthodox, but on this I am absolutely orthodox. I base myself on Karl Marx, and in his economics Karl Marx is absolutely correct. He said that there was a definite and iron law of wages; that wages were not governed by the value of work done but, sooner or later, by the cost of subsistence; that, as the unemployed grew in numbers, whenever there were two men for one job, these two men automatically undercut each other's offer of wages, and wages tended to sink to subsistence level.

It is a realisation of that truth which brings me to agree to the urgent necessity for cutting clown those debts incurred when prices were twice what they are to-day. Unless we cut down these debts, we can never recover prosperity for our trade and get the unemployed back into productive work. The best cure for low wages is a large demand for employment or an alternative of self-employment. The restoration of prices to the 1929 level should be aimed at by statesmen to-day. Because I believe that I am content to see prices raised, because only so can the working classes recover their right o their pay.

To the bootmaker everything is leather. To the right hon. Gentleman the Member for Hillhead (Sir R. Home) everything is silver. I do wish he would leave silver out. It carries no conviction. When he is dealing with the general issue of the raising of prices he does carry conviction, bur, directly he gets to silver, and the raising of the price of silver, I hate him. What I object to is his breaking the united front.

We want to get prices back to 1929, and not silver to the 1873 price level. I have no sympathy with him on that issue. The real issue is to get prices back. I think the Government want prices back, and I am quite certain that President Roosevelt and the Americans want prices back. We have never had a statement from the Front Bench as clear and definite as President Roosevelt made in the "Times" this morning—a definite demand to raise commodity prices so that the creditor that lent money shall not get back the increased value due to the fall in prices, but shall get back the same sort of dollars as he lent. This argument, stated with perfect clarity by President Roosevelt, has never been stated with perfect clarity by our own Front Bench. To-day we do not know whether the Government are going into this International Conference with a clear view of what they want, or whether they are, just like Mr. Micawber, waiting for something to turn up. If we are going without a plan into conference with America, which has a plan, and with all those goldless nations which have plenty of ambitions but no gold, then the nation that will come out of that conference carrying the baby will be the British nation. The right hon. Member for Derby (Mr. T. H. Thomas) went to the Ottawa Conference with lots of plans, but he came back with precious few sheaves. He went out there refusing to consider matters of currency, and he came out without any scheme even for stabilising sterling. Ever since, New Zealand and Australia have gone down one way and Canada has gone up the other way. Ottawa may have bound the Empire together with tariff bonds but it resulted in no currency and in diverse values of sterling throughout the Empire.

The Prime Minister has enough sense to get into touch with America and to understand their position; and I want him, from a knowledge of what America is after, to be quite clear of what we are after. We really want to get prices back to the 1929 level. That involves reflation. There is no way of getting out of it. It has, of course, any number of objections. There are the objections raised by the hon. Member for Farnham (Sir A. M. Samuel) and others.


The right hon. and gallant Member would clear up for himself my position as well as his own if he would define what he means by getting up prices. Does he mean prices of primary commodities? I do. He must remember that our position is quite different from that of America. We have only one raw primary commodity, coal, but they have a large number of raw primary commodities. If he puts it into my mouth that I wish to put up the prices of secondary commodities, I disagree, as I do not know how we are then going to sell our commodities in the export market.


The hon. Baronet will have an opportunity of making the usual speech later on, and he will be able to show that all the trouble in the world comes from America. Have hon. Members observed what is happening in Germany? Everything that has gone wrong in Germany is put down to the Jews. Now, if we ate to judge from the speeches of the hon. Baronet and a good many other hon. Members, the whole mess that civilisation has got into in the collapse of prices is due to America. It is always due to somebody else. It is about time we did some clear thinking on our own and tried to see if we could not do something to put things right, rather than saying, that it is always the fault of the other chap. There is lack of clear thinking of what the increase in prices mean, how much it affects the various interests of the moneylenders, the rentier, the landlords and the working-classes, and how it can be brought about whether by individual action, by national action or international action. It is because we have never thought clearly on that point that we have no national plan. Inflation has its drawbacks. Of course it has, but if you are going to try to make on omelette without breaking eggs, you are going to try for something that is hopeless.

This is a scheme for a reduction of the indebtedness of the world and will mean that those who have lent money will lose purchasing power, while those who use it will have a chance of snaking profit out of their borrowings once more. The Americans by a stroke of the pen are reducing the value of the dollar, we will say by 25 per cent. Other things being equal it is mathematically certain that the reduction in the value of the dollar by 25 per cent., whether they call it the "Roosevelt" or the dollar—will mean that prices, measured in that depreciated currency, will rise by 25 per cent. That means that every single person who has a fixed income will lose 25 per cent. of the purchasing power of that fixed income. That is to be done because only by making that sacrifice will they be able to restore trade and, what is more, only by making that sacrifice will those who have lent their money be sure of getting any interest on it.

What is the alternative? We have either to bring down costs or to raise prices. Bringing down costs has been advocated by the right hon. Gentleman opposite in a letter to the "Times," and he begs the manufacturers of this country to cut their costs lower. If they cut their costs to the bone they can scarcely get them any lower. We cannot get costs down any more except by driving wages down further, and that means driving down the weakest wage earner. The alternative is to put up prices, and it is in order to do that that we should be prepared to make this sacrifice. Do not let hon. Members misunderstand me This is, in form, a capital levy upon all wealth. It is done partly in order to restore trade and partly in order to avoid individual bankruptcy here and there. There are few manufacturing firms in this country that are not in the hands of the bankers to-day. The bankers themselves are in favour of some such scheme as this, because the alternative is individual firms going bankrupt. When an individual firm goes bankrupt it means that the family is smashed, the work-people are thrown out of work and the stock is sold at slaughter prices, competing with other people, bringing down their prices and producing bankruptcy elsewhere. That is what we are up against in this country, in America and daresay in the rest of the world. America has met the position by a clear-cut plan, and I ask that the Government of Great Britain shall have as clear cut a plan in order to meet an exactly similar situation.

The difficulty which the Government are facing in America, and which has not yet been faced in this country, is that the question of inflation depends upon the relative value of the pound to the dollar. The Americans wish the pound relative to the dollar to be as high as possible. The higher it is the more will they be able to sell American goods in this country and the more will English goods be excluded from America. Therefore, it is in the interests of the American Government to go into this conference for the stabilising of currencies to get as low a value as possible for their dollar with regard to the pound, and it is just as much important, in fact more important to see that we should have a low value of the pound relative to the dollar. We are a far bigger exporting nation than America and far more dependent upon our export trade. Although a low dollar would mean that we should get our food supplies more cheaply, the injury to our export trade from the rise of the pound relative to the dollar which has taken place recently is far more important to us and far more ruinous to our trade.

Hon. Members who talk in the country about Tariff Reform do not realise that we have had an automatic 50 per cent. tariff on all goods coming from other countries, but the rise of the pound relative to the dollar that has taken place has already toned down that tariff and at the same time put up the tariff on our exports. Therefore, it is necessary that we should go into this conference with a clear knowledge that it is the British interest to keep the pound low relative to the dollar when stabilisation takes place.

I do not want stabilisation. Everybody seems to have come back to the idea that it is a good thing to get back to gold. I do not want that. I prefer the annual balance that comes from exports and imports and investments and income. I would call the attention of the House to the certain danger, almost the certain collapse, of any system of gold stabilisation that may be enforced by the International Conference. Let us assume that we all go back to the Gold Standard, with the gold content of the dollar, the pound and possibly the franc written down. The Argentine will go back to gold, and Japan will go back to gold, but at a lower gold content than their old currency.

It is obvious that what will happen when we stabilise on that basis will be that Great Britain as usual will go on balancing her Budget, spending nothing and putting everything by that she can. On the other hand, it is conceivable that America will not be so anxious to save. They have an ingrained habit of buying on the credit system and of giving out money to farmers and army pensioners even more extensively than we do in this country. They may not balance their Budget. It is certain that there is no European country which will balance its Budget. It is certain that as unemployment grows in each of these countries, not only will a balanced Budget become more and more difficult, but the way out will become ever more obvious. Having done it once, why not do it again? France is already thinking of doing it again. Germany is thinking of doing it again, depreciating again, being driven off gold again, or going off automatically.

Having once seen the advantage of depreciating one's currency below that of other countries, it will be very difficult to insist on stability for ever on any basis that may be agreed to in June, July, or whenever the World Economic Conference meets. I want to put that danger forward because I do not want people to talk about everything being put right when the World Economic Conference has once more restored currency at a lower gold content. I do not want people to imagine that that is a good thing. The way has been shown hew to get rid of debt. The new method is so patent that your stabilisation on a gold currency can never work for long. We had better rely and continue to rely, as we have done during the last two years, on the natural play and interplay of supply and demand.

7.30 p.m.


With much that the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) has said most hon. Members of the House will agree, except perhaps those who sit upon the same Front Opposition Bench. I wish to deal with a slightly different aspect of world problems than that with which the right hon. and gallant Member has dealt. It is one which I think is equally important, but its position in the World Economic Conference is not, I think, quite so clear. It is clear that the Economic Conference is intended to deal with a reduction of excessive tariff restrictions and quotas, and so on. The right hon. Member for Darwen (Sir H. Samuel) asked the Government to resolve what he suggested was an inconsistency in their policy. The inconsistency can be resolved, perhaps not to the right hon. Gentleman's satisfaction, in this way. There are many of us who distinguish between tariffs and quotas of one kind and tariffs and quotas of another kind. There are many of us who believe that certain tariffs and regulations on commerce, such as those foreshadowed to be undertaken by the Minister of Agriculture, are good, and if properly used will take a permanent place in the organisation of trade between different countries of the world. The idea that markets should be left open at any time no be flooded with increased commodities or manufactures from any part of the world is an idea to which the world will not revert, and some form of regulation by tariffs or quotas will be a permanent feature of the future organisation of trade.

But undoubtedly there are tariffs and restrictions which do not usefully control the flow of international trade; they clog and hinder it. Some people believe that where tariffs and restrictions clog and hinder trade it is due mainly to the fact that the statesmen who have introduced them have not sufficiently studied or, having studied them have, like the President of the Board of Trade, forgotten the teachings of Adam Smith and those who propounded Free Trade doctrines in the past. I do not take that view. If one surveys the international relations of the countries of the world, the economic relations, they fall into two broad heads. There is the commodity or trade relation between countries of the world, and there is the financial or loan relation between countries of the world. I believe it is because these two grottos of relations have got quite out of touch with each other, do not fit in with each other. If you superimpose one upon the other you will find that your loans of indebtedness do not correspond with what is the possible or natural flow of trade products and services between one country and another.

In the nineteenth century we lent money to the Argentine for development, for the building of railways. It was done by people here who had money to invest. They said, "Here is a railway development, a new company, let us put our money into it." That would have been a fatal thing for them to do had it not been that contemporaneously the growing population in this country wanted more wheat and more grain from the Argentine, which the railways, built by this money, enabled the Argentine to send us. To some extent it was an axiom in the nineteenth century that the financial and loan policy of banks and private in- dividuals in this country kept in step with trading and commercial needs and the policy of traders of this country. Although there were occasional breakdowns in prices in the nineteenth century the two positions never really got quite out of step. Now, I believe, they are completely out of step. War debts are referred to frequently and everyone agrees that they should be dealt with. But ought we not to go a little further and say, why are war debts hindering trade; why do we want them out of the way? The reason is that creditor countries under war debts are adopting a trade and commercial policy which makes it impracticable, almost impossible, for debtor countries to pay.

After the Franco-German war it was generally accepted that the Reparations payment imposed on France did her little or no harm because Germany was willing to accept payment of reparations in a way which France was able to pay. That particular war debt was liquidated without any harm being done to the country which had to pay. The particular situation which arises between countries of the world now is a situation with which we are wholly unfamiliar in our private and domestic relations. We are familiar with people going bankrupt, but we are quite unfamiliar with a creditor refusing to be paid; and that is, in effect, what creditor countries are doing who will not accept payment in commodities or services. If you could get hold of an omnipotent statesman and give him an infinitely efficient statistical bureau what he would set himself to do first would be to make what I may describe as a commodity survey of the nations of the world. He would find that one country had a surplus production, a certain surplus, which it could put into the world's pool, and certain imports which it needed for the satisfactory employment of its people at a reasonable standard of life. Another country, less developed, would not have a surplus to put into the pool; it would need to take more out of the pool than it put in. It would need loans from other countries for development. Having made that commodity survey he would make a financial loan survey of the nations of the world, and he would say to those countries: you cannot, and you will not, get any currency system going, you cannot, and you will not, get trade flowing again profitably, an interchange of goods between one nation and another, until your financial and loan position As something which your natural flow of commodities can deal with and liquidate.

Unless the World Economic Conference can go behind the mere formal existence of tariffs and restrictions and quotas, and trace those which are bad and are really impeding trade, unless it can get down to the roots of the problem it will have little chance of setting the world upon its feet again. I understand, as everyone must, that War Debts as such cannot properly be on the Agenda of the World Economic Conference, but the reason why it is necessary to get rid of War Debts must surely be open to the fullest discussions. More than that, there are no doubt many immediate problems to be dealt with but we must look to the future as well as to the past, and unless in the future there is some machinery to see that what I have called the commodity position and the financial and loan position do not get out of step again, as they have in the past, the solution will not be permanent, and we shall shortly be back in the same position in which we find ourselves to-day.

7.40 p.m.


The hon. Member for Crewe (Mr. Somervell) and myself are at any rate agreed in this, that we are both working for freer trade, and that, after all, is the policy of hon. Members on these benches. I agree with the hon. Member that it may be a long time, perhaps never, before we get back to a system of complete Free Trade, but we are anxious to examine every proposal, and see whether it does or does not make for freer trade throughout the world. That was the reason why we resigned on the Ottawa Agreements. The Foreign Secretary was a little unfair to the right hon. Member for Darwen (Sir H. Samuel) when he suggested that we said that the Ottawa Agreements would entirely prevent tariff agreements with foreign countries. We never said anything of the sort. We said that they would limit the manoeuvring ground—and they have done so. There is not a Minister of the Government who will say that these Agreements at Ottawa have not been a difficulty in arranging agreements with foreign countries. We have discovered that in the meagre tariff arrangements which have so far been made.

That is the way in which we have to examine the truce which has been proposed by the United States Government; will it or will it not make for freer trade? It has been said that to call it a truce is a misnomer, that it is not an agreement to call off hostilities but only an arrangement not to extend our front. But even so it is a great advance. After all, one of the great objections to tariffs is their instability, and if you remove that instability you remove some of the objections to them. In any case, it is a great advance that America, which has the most elaborate network of tariffs in the world is coming forward with these proposals. I wish His Majesty's Government could see their way to give them a more generous welcome than they have. The Prime Minister in his statement this afternoon said he could only deal with the conversations in a tentative and noncommittal way. I am afraid that he has accepted this tariff truce in a tentative and non-committal way. He says that he cannot accept the idea of a complete truce, there must be reservations, but that during the progress of negotiations there will be no initiative.

What does he mean by "no new initiative"? Does it mean that during the process of the Economic Conference there will be no negotiations for further trade agreements? Do they further mean that while the Conference is sitting there will be no order from the Import Duties Advisory Committee. It is important that we should have some answer to these questions in this Debate. If the answer is that the trade agreements are to go on, that the Tariff Advisory Committee are to continue to make recommendations, I cannot see how any useful result can come from the World Conference with regard to tariff reductions. The right hon. Gentleman the Foreign Secretary said that these reservations have the full support of the United States. There is a statement on the tape machine this afternoon from the Exchange Agency that does not bear out that statement at all. This is what it says in a message from Washington: Great Britain's unwillingness to lend support to Washington's tariff truce sug- gestion has aroused some measure of resentment among the officials of the Government in Washington. Why need there be any reservations at all? After all, it will be only for a few weeks that the World Conference will be assembled. Surely it is not asking for very much that the Government should say that during that time we will not directly or indirectly increase our tariff barriers. I hope that in making this plea to the Government I shall have some support from the members of the Conservative party. Many of them argue to me that they are not convinced Protectionists, that they are really as much Free Traders as I am. When they make those arguments they always seem to dig me in the chest with their pipes—a most irritating form of political gesture. They say that they are as good Free Traders as we are. Well, then, surely it is time for them to prove their declaration. Many of them admit that they were not elected as Protectionists, that their appeal to the electors was twofold, one for a protective tariff and the other for a tariff to get greater Free Trade. Were all those arguments just a sham?


Did you support a tariff?


I refused to promise to vote in any circumsances for a permanent tariff. I took my stand on the Grey letter, and said that I would support Any emergency proposal, but was against a permanent tariff. What are to be the proposals of the Government? What is their plan? Are they, or are they not, going to fight for freer trade? On 8th February of this year I put to the Prime Minister this question: Will the Prime Minister give an assurance to the House that at the forthcoming Economic Conference the efforts of the British Government will be directed to the removal of tariff barriers, which are now universally admitted to be one of the main causes of the distress of the world. And the Prime Minister replied: Yes, Sir."—[OFFICIAL, REPORT, 8th February, 1933; col. 172, Vol. 274.] Is that pledge going to be implemented, and if so how? The right hon. Gentleman the President of the Board of Trade, speaking on 15th March on certain conditions which were necessary before we entered a low tariff group, said: Within those limits we are ready to consider any proposals that may be put forward."—[OFFICIAL REPORT, 15th March, 1933; col. 2028, Vol. 275.] But have we got no proposals? It is argued, why should we take the lead? The stock-in-trade defence of the Government is that since they have been in office the position has proportionately deteriorated less here than in any other country in the world. If that is so, and it probably is, that position does entail on us certain very definite obligations. It is argued that tariffs are of comparatively little importance compared with trade restrictions, currency restrictions and the like. But you cannot isolate the two. Both currency and tariff restrictions result from the same economic mercantilism, the absurd theory that exports are good and imports are bad. If that idea is to be pursued at the Economic Conference the venue of the Geological Museum has been well chosen, because it is as dated as the fossils that will look down upon their deliberations.


Are you suggesting a permanent adverse balance of trade?


The hon. Member is on a different point. I am not talking about an adverse balance of trade. I hope the Government realise the overwhelming importance of this Conference. Are they going to stand to their pledges, to stand up to the hostile section in their majority and ask for freer trade? The difficulty is that the history of these crises seems to show that Governments act only when they are frightened. It was not until the bankers' crisis in America that action was at last taken. It was not until it was realised that money was pouring out of this country in 1931 at the rate of £1,000,000 a day that the National Government was formed. There is plenty of cause for alarm in this country. The Government sometimes argue as if the position was stationary. It may be said that unemployment is slightly going down and trade slightly improving. But unemployment remains stabilised at the appalling figure of 2,500,000, and although you may stabilise unemployment you cannot stabilise human misery, for it is very much more uncomfortable to be unemployed for a year than to be unemployed for six months.

I suggest that the position in the country is definitely getting worse, that it is a matter of urgency. Anyone who speaks, as I do, for an industrial constituency, must be alarmed when he goes up and down the streets. The other day I was watching a school emptying at the end of the morning's work. That was in my constituency. I definitely came to the conclusion that the children were less well nourished and worse clad than they had been a year ago. That was a very serious reflection. I thought possibly that it was only a personal impression, and so I tried to get some statistical proof. I looked up the figures as to the meals provided for necessitous children in Bristol. I discovered that whereas the number of meals supplied to necessitous children in 1932 was 127,000, for the year ended March, 1933, it was 207,000, an increase of nearly 80,000. The number of children who received meals at some time during the year 1932 was 1,480, and in 1933 it was 2,300. Yet we in Bristol are fortunate in escaping the worst of the economic blizzard. We have a variety of industries and are not dependent on one factor of employment. If the figures are like that in Bristol, they must be worse in many other constituencies. The fundamental cause of this is surely all the restrictions on consumption. Trade restrictions are reaching such dimensions that they are bringing foreign trade to a standstill. The intercourse of man with his neighbour is being throttled. Now is the supreme chance to end this slow suicide. I hope the Government will rise to the heights of its opportunities.

7.55 p.m.


My hon. Friend the Member for North Bristol (Mr. Bernays) appealed to Members of the Conservative party to co-operate with him in impressing upon the Government the extreme urgency of the forthcoming World Conference, and the extreme importance which the Government ought to attach to that conference. I am sure that nearly all the Members of the Conservative party will join with the hon. Member in that request to the Government, or would join if it were necessary; but I think that we have very little need to suppose that the Government are not as aware as we are of the urgency of the question. A great majority of Members of the House have decided that the conference next month is really the last chance that we shall have of doing what we in this country have been trying to do ever since the War, and sometimes with great sacrifices, that is restoring the old system of international trade.

We tried first by the Debt settlement of 1923. That settlement failed in its object, and most people will agree that it involved us and the world in very considerable sacrifices. It put upon us a burden which we have not been able to bear, and it put upon every nation in the world the burden of a rigid and inexorable system of inter-governmental payments of War Debts and Reparations. It is true that those payments of War Debts and Reparations existed before the settlement of 1923, but they were still in a fluid form, and they could still be modified. That settlement which was entered into with the idea of making a great step back to the old conditions of international trade which had existed before the War, was the first step taken in that direction, and it failed.

We took another step in the same direction by going back to the Gold Standard in 1925. That, too, was enormously expensive to the people of this country. That too failed. It added tremendously to the difficulties of our trade, particularly our export trade, and there is no doubt that it added tremendously to the figures of unemployment. But it failed. There again was an attempt to get back to the old system of international trade which existed before the War. Now we are engaged once again in an attempt to get back to that system, and, if this attempt fails, not only shall we have wasted, for no purpose whatever, all the sacrifices which we have made in the last 10 years, but we shall be face to face with the immediate collapse of the present system, even in the dwindling form in which we still have it to-day.

We are all agreed, I think, that we must have a success of the Economic Conference, and I think it is worth while asking ourselves what we mean by success in this connection. The Prime Minister indicated to-day that the Government would demand a parallel solution of the Debt question and that they regard it as an essential quality in any success which the World Conference might have. That is one very obvious element in its success, but, if we look through the sort of things that we expect from the World Conference, they all fall back in the last resort upon the United States of America. I do not believe that the British Government have any very great contribution to make at the Conference, and I do not think that they should have. I think the main cause of the contraction of internal trade, which is the characteristic of the post-war years, has been the policy of the United States of America, and one can say that without any offence to America, because obviously the Government of the United States have already realised that that is the case, and the people of America are beginning now to realise it. The success of the World Economic Conference will be measured by the extent to which the American Government and people are willing to reverse what has almost become their traditional economic policy since the War. It seems to me to follow, therefore, that our Government have a very great duty to perform, but that duty is here and now rather than at the Conference itself; and the duty of the Government, which I am sore they are undertaking wholeheartedly, is to do everything they can to back up the President of the United States of America in persuading his own people to accept the policy which he has accepted in his conversations with our Government and with other Governments of Europe. The Government and we in this House should do everything we possibly can to support the President's hands at this moment, and we should do nothing which may be likely to weaken his hands in his dealings with his Congress and his people in the United States.

In the last few days the position of the President of the United States has become very much weaker than it was. Until a matter of perhaps a week ago there was no doubt at all that President Roosevelt occupied in the United States a stronger position than any President since the War. He seemed to have got command of the people and to be in a position in which he could override Congress and appeal to the people over the heads of Congress, but in the last few days there seems to have been a weakening in his position and a consolidating of the opposition to him in Congress; and I am very much afraid that the reason for that is that, rightly or wrongly, the American people have got the notion that we are not really going to co-operate with them so closely as the Prime Minister has led the President to believe. I do not think there is any ground for that notion, but it makes it essential that the Government, and particularly the Conservative supporters of the Government in this House of Commons, should make it clear to the American people that we do accept, whole-heartedly, the tariff truce which the American Government propose.

We, the private Members in this House, ought to do or say nothing which would gives the impression to Congress and the people of the United States of America that we are trying to stretch the qualification which the Prime Minister made, and the President accepted, that we were in a special position. What the Prime Minister said to-day, and what the Secretary of State said later on, should have done a, great deal to clear up any misapprehension of that kind that may exist on the other side of the Atlantic. At the same time, we, the Conservative Back Bench Members, should do or say nothing to try to force our Government to make some concession to our natural Protectionist leanings, a concession which may be misinterpreted in the United States and give the opponents of President Roosevelt there an opportunity of saying, "It is no use trying to co-operate with the British, because they will not cooperate with you."

There is one other point to which American opinion attaches very great importance—and I think there is some misapprehension in that direction also —and that is the question of the Disarmament Conference. As the right hon. Member for West Birmingham (Sir A. Chamberlain) said this afternoon, perhaps the most important item in the suggested programme which has been agreed to by the President and the Prime Minister is the new conception of neutrality which the American Government was willing to accept. The whole of Europe, including ourselves, has spent the last 10 years bewailing the fact that we could not get the United States of America to undertake any kind of responsibility with regard to European affairs and with regard to any treaties or pacts. This endorsement by President Roosevelt of the Stimson conception of neutrality is a tremendous advance on anything that has come before from the United States, and I would suggest to the Government that it is an advance which they ought to welcome, not only because it is good in itself, but in order to give the American people the assurance that this concession on their part—and it is a concession from their own traditional view—is appreciated by us in this country.

It is a little unfortunate that the Prime Minister has found it impossible to go to Geneva. I do not want in any way to under-rate the magnificent work which has been done there by the Under-Secretary of State, because I, in common, I think, with most Members of the House, have admired his work there in the last few weeks very much indeed. At the same time, it seems to me to be a little bit unfortunate, in view of the gesture which has been made by the Government of the United States of America to our point of view and the European point of view, that our representative at Geneva at this critical time should be, not the Prime Minister nor the Secretary of State, but the Under-Secretary of State, and I wish it were possible for the Prime Minister to reconsider his decision. He told us at Question Time yesterday, I think, that there has never been any question of his going to Geneva. That is no doubt so, but I, for one, would wish that the question might now arise and that he might now go and exert the tremendous influence that he has in Europe, together with the influence of the United States Government.

As I have said, I believe that the success of the Conference, so far as we are concerned, lies in our attitude now, before the Conference, towards the proposals, whatever they may be, which the President of the United States has accepted. As the right hon. and learned Member for Hillhead (Sir R. Home) said —and I think the House agreed with him —these proposals, in so far as we know, are of a very substantial and real character, and if they are accepted by the American Government, they will go a very long way towards solving the difficulties in which we find ourselves to-day. I am convinced that the only way in which we can hope to get the American people—not the American Government, which has accepted them—to accept these proposals is by backing up their Presi- dent and by doing everything we can now. We may have to make some small sacrifices, small, that is, by comparison with what we should gain, and the American people and Government would in return have to make very much larger sacrifices when the Conference is in session. If we could get a bargain of that kind—and I think we can, if the Government do all that they can to strengthen President Roosevelt's hands, it certainly would not be a bad bargain for the people of this country.

8.13 p.m.


I promise my hon. Friends on the benches immediately below me that I will not detain the Committee very long. If my hon. Friend the Member for South-West Hull (Mr. Law) will excuse me, I shall not follow him in the extraordinarily interesting speech which he has just delivered. I want to direct my attention, first of all, to a point which seems to have been omitted from the consideration of the hon. Member for North Bristol (Mr. Bernays) and the right hon. Member for Darwen (Sir H. Samuel) in the matter of the Tariff Truce. The whole idea of a Tariff Truce is no longer ludicrous since the advent of the Import Duties Act. Is it not true to say that without a tariff this country would be like a creature striding naked into the World Economic Conference the plaything of the worst blasts of the economic blizzard? It is the moderate measure of Protection adopted by this country which has relieved it from that rather pitiable condition. The Prime Minister, as I think every hon. Member expected, spent about 30 minutes in eloquently saying nothing. That was anticipated generally, both by the House of Commons and, I believe, by the country. Then my right hon. Friend the Leader of the Opposition proceeded to spend 70 minutes in the same rhetorical exercise. That result, as regards the Prime Minister's speech, was easy to anticipate. Indeed we could anticipate nothing else, but he said it so very eloquently that one felt that the same remark was justified of him as was made of Tennyson: How little he says, yet how beautifully he says it. At one moment I thought the plume was going to be blown away from the crest of Everest when the right hon. Gentleman was definitely interrogated whether or not debts were going to be considered contemporaneously with tariffs. I must say that I find it entirely impossible to imagine that tariffs would be considered apart from debts. To my mind the two problems are interlocked; yet, although the right hon. Gentleman was definitely tackled upon the matter, as far as understanding what conclusions he wished us to infer from his reply, I at any rate am still, in his own language, "at sea." Greatly daring, I am going to say something which the Prime Minister certainly could not say here, and perhaps was not even able to say at the Presidential fireside. So valuable sometimes is the obscurity of the back benches. If cancellation by agreement between ourselves and America becomes impossible, we may definitely have to prepare to default. That is a very ugly word I know for an Englishman and it is particularly humiliating now when British credit has once again become the linch pin in the wheel of international finance; but, as every hon. Member is aware, the British Government's case was stated on 1st December last in a Note to the United States of America which, on all hands, has been regarded as unanswerable. At all events, if it is not unanswerable, it has not been answered, and even the "Manchester Guardian," which has never been remarkable for its ecstatic support of the National Government, described it as "a great State paper."

The American public so far seem entirely unable to grasp the irony of a situation where they are demanding payment in gold when they are no longer on the Gold Standard. I submit to the Committee that the world situation is too grave to allow prosperity to wait until American opinion has changed. We cannot wait for the Middle West to grasp the fact that the accumulation of the mere symbols of wealth is crushing America's capacity to produce that wealth. If necessary, by the apparently ugly expedient of default she may have to be dragged by the heels out of the midden of gold which is threatening to suffocate her. The whole difficulty of getting American opinion round to the unanswerable point of view is exactly epitomised in a legend about a speech said to have been delivered by an American Senator to a. popular audience. He is credited with this extraordinary language: We won't take their goods, we will make them. (Loud applause.) We won't take their gold, we have enough. (Renewed applause.) It is their money we want. (Tumultuous cheering). The truth is, that payment of our debt to America, if we make another, will be nothing more or less on our part, since Lausanne, than a penal payment. For what, may I ask, are we paying this penalty? Is it for participation in the European War between 1914 and 1918? I would not go so far as to say that any Power which participates in any war is blameless. Clearly, no single Power can fight a war in complete isolation, but any Englishman who fairly reads the history of events immediately anterior to 1914 will come to the conclusion that this country is the least blameworthy for the catastrophe of 1914 to 1918. In spite of that, which, I believe, too, is regarded as unanswerable in every quarter of the House, this country is to be penalised most. The position is ridiculous if we, of all the Powers who fought in the War, are to be the most seriously penalised. I think opinion both inside and outside the House will have to face the possibility of the grim fact and necessity of repudiation—that is, of course, if we cannot achieve the ideal of cancellation by agreement.

I have one more submission to make to the Committee. I am very glad indeed that the question of disarmament was raised by the Prime Minister in his conversation with President Roosevelt. I should like to stress and underline what has been said by the hon. Member for Hull. Now that there is a prospect that debts may be finally removed from the international complex I am sorry to think that America's powerful criticism of the folly of the suicidal expenditure by the European powers and the force of that criticism, may be partly removed. I very much regret also that there is no immediate prospect of naval disarmament as between ourselves and America. The proposals of the British Disarmament Draft Convention, excellent as they are, as far as they go, are yet limited to air and land forces. When I think of disarmament I accept the view of the Government that it is by disarmament that we shall get security. And when I con- template this great problem I cannot forget the relief which is owing to the taxpayer of this country and that the chief relief which we can get is by means of general disarmament and by a policy of international agreement on the battleship and her necessary foil, the submarine. In that way the taxpayer might be saved annually tens of millions of pounds. I would like to stress in my concluding words what hon. Members have said in all parts of the Committee. They have welcomed the visit of the Prime Minister to America. I am convinced for my own part that that visit has materially improved and enhanced the good relationships between ourselves and that great Republic. I believe that the League of Nations is an indispensable feature in international affairs but I believe also that there is a no less vital necessity for the English speaking peoples of the world, ourselves and the United States, to come together in a sure and permanent understanding. That understanding is most likely to be cemented by the personal contact of two gentlemen like the Prime Minister and President Roosevelt who, after all, speak approximately the same language.

8.23 p.m.


I wish to join with those who have congratulated the Prime Minister on the results of his visit to the United States. I do not quarrel with the fact that in his statement on the results of their visit he has been unable to give us anything of a very concrete or detailed character. That was inevitable. It is thoroughly unreasonable to expect in connection with delicate discussions in which concrete facts must have arisen which will form the subject-matter of negotiations and bargaining at a subsequent conference, that the Prime Minister should be required now to state the concrete proposals advanced on both sides and the reception given to them. While recognising that it is unreasonable to expect the Prime Minister or any Member of the Government to state, prior to the World Economic Conference, their definite monetary policy and the detailed objectives which they have in mind, I urge strongly on the Government that even if they do not tell us what their policy is, it is most important they should at least have thoroughly made up their minds on these specific matters before the conference starts. I think that it will be agreed that that is desirable, and I go further and say it is essential. It might sound very obvious to say that, but we do know that the Government have to make up their minds on some extraordinarily difficult problems. We know the strong anti-gold complex which has pervaded this House since the country went off the Gold Standard.

The theory of money is an extrordinarily difficult theory, and it is one about which a great many people have obtained some superficial knowledge in the last year or two. The more superficial it is the more dogmatic they are in the line that they have taken up on it. The strangest attitude has been taken up by those who say, "At no cost must we return to the Gold Standard. We are doing very well since we left gold in September, 1931, and, as the result of our depreciated exchange, we have had an advantage in our export trade in the world market. Leave well alone, and do not on any account go back to the Gold Standard which has let us clown in the past." That sounds all very well, and while the United States and France and other countries remain on the Gold Standard, and while they were willing for us to have these advantages of depreciation without entering into competition with them in depreciated exchanges, there was a great deal to be said for it. Moreover, there was this point, that while certain important trading countries were still on the Gold tSandard—which merely means that their currencies have a definite fixed relation to gold in that the price of gold was permanently fixed in terms of their own currencies—we could, through the machinery of the Exchange Equalisation Account and the skill and management of the Bank of England, maintain a comparative stability in our own exchange.

But that was only possible by the fact that there were important countries still on the Gold Standard, that there was a definite price of gold in relation to which we could manage our own currency, that there was some yardstick or measure in relation to which we could aim at some measure of stability. Those conditions, however, no longer prevail. It is true that France remains on the Gold Standard and the price of gold in sterling is now fixed merely by the exchange value of francs to sterling. It is unreasonable to think that France will be able indefinitely to carry the whole burden of maintaining the Gold Standard and giving other countries the advantage of some form of stability of value without any of the disadvantages of being on the Gold Standard. I submit that the position is now rapidly arriving when there will be no measure of stability in international exchange at all. We are getting to an era in which we shall have violently fluctuating exchanges between every country in the world. If you ask any trading person, I. think that he will admit that if there is one thing that destroys trade far more than the old conditions when we were on the Gold Standard at too high a parity, it is not to know from day to day what the exchange rates will be in the country with whom you are endeavouring to trade. A violently fluctuating exchange makes trade quite impossible. Therefore, I submit that the positicn has very vitally altered, and if there is one thing of supreme importance to-day it is to try and arrive at a measure of stability between the exchange values of the different countries of the world.

If we are to get that stability, we must be prepared now at the World Economic Conference to go back to the Gold Standard. There must be an international monetary standard if we are to have stability of exchanges. That international monetary standard can be none other than gold. Theoretically, it might be some other standard. We have heard about an index of commodity standard, but I have never yet seen formulated by any economist any practical method of working such a standard. But whether it is practical or not, it is ruled out of practical politics by the fact that we would never get the agreement of the world as a whole on any monetary standard other than gold. Therefore, we must face the fact that we must be prepared in June at fie World Economic Conference to go back to gold. A definite question will arise as to what the ratio shall be. Of course, going back to gold, as everyone k:aows now, although there is still a little misconception about it in some quarters, does not mean going back to gold in the manner in which we did in 1925. It does not mean that an ounce of gold must necessarily be worth 85s. in English currency. We could come back to the Gold Standard and fix the price of an ounce of gold at any amount we liked in sterling, and we would still be on the Gold Standard and enjoy all the advantages of stability.

It will be extremely difficult, of course, to arrive at the ratios at which the various countries could go back to the Gold Standard. Ultimately, the only proper ratios between the exchanges of one country and another must be determined by the respective price levels in those two countries, because, after all, that is all that exchange means. You have exchange purely for the purpose of converting a price in your own currency into the price in some other currency, and the true economic level of exchange between two countries must be determined by the respective price levels in those two countries.

The DEPUTY-CHAIRMAN (Captain Bourne)

I am loth to interrupt the hon. and learned Member, but he must remember that the Vote before us at the present moment is the Foreign Office Vote. I agree that the question of exchange is a matter that will be raised at the World Economic Conference, and it is in order to raise it now, but I do not think that the Foreign Office can possibly be responsible for the details into which the hon. and learned Member is now going.


I thought that the subject matter of the. Debate was the World Economic Conference and the policy of the Government at that conference. It is impossible to discuss that policy without going into these matters and the stabilisation of the Gold Standard, which we understand formed a large part of the discussions of the Prime Minister with President Roosevelt. If you consider that I am going beyond the confines of this Debate, I will reserve my speech until the Second Reading of the Exchange Equalisation Account Bill. I chose this particular occasion to make it because the Exchange Equalisation Account is rather restricted in its area, whereas I understood here that we were discussing the policy of the World Economic Conference.


Perhaps I can assist the hon. and learned Member. On the Foreign Office Vote we are entitled to discuss the general policy of the Government at the conference, but I think that the hon. and learned Member is now getting into such details that it will be necessary for a representative of the Treasury to reply to him. They are matters which cannot be raised on the Foreign Office Vote.


May I say that I have been present throughout the whole of these discussions, and practically every speaker has dealt with the question of silver and gold and the relative value of the pound.


The Debate has ranged very wide indeed, and so long as the hon. and gallant Member kept himself to the general question of the necessity of coming to a stable exchange I did not stop him, but now it seems to me that he has got on to a matter which is completely outside the purview of the Foreign Office. Whatever the merits of this question I think the details of it ought to be raised on the Treasury Vote, for, after all, the Treasury are responsible for that particular item. As long as he keeps to the question generally of whether a return to the Gold Standard would be sound, and that possibly we should not return to it at the old level, he would be in order, but when he goes into the detailed question as to what the level should be I think he is going beyond what can be raised on this particular Vote.


I should have thought it would have been desirable that this matter should be discussed. Certainly these points were discussed on the Exchange Equalisation Account, but I thought they were more relevant to the World Economic Conference, which is the general matter under discussion this evening, because the Exchange Equalisation Account is only limited to the management of a fund for the purpose of preventing undue fluctuations in sterling, whereas here I am endeavouring to urge on the Government a permanent policy for stabilising our currency on a gold basis, and trying to show that that can be done, and that the only thing we need trouble about is to see that we get back on a sufficiently low basis. However, if you say, Captain Bourne, that I must not go into that in too great detail I will try to keep on the lines you have indicated.

I have endeavoured to point out the importance of coming back to gold. The Prime Minister has said, and President Roosevelt stated it in his broadcast to the American people the other day, that they have agreed on the desirability of raising the world level of wholesale prices. That does not carry us very far, because everyone has agreed on that for some time, but when the methods of achieving it have been advocated there has oven a great diversity of opinion and considerable opposition to the only methods which have been put forward as practical. There are two methods, I submit, by which the world wholesale price level could be raised. One is by adopting the recommendations of the Macmillan Report on monetary policy, and the other is by devaluation, such as we are told President Roosevelt is determined to apply. The objection to carrying out the recommendations of the Macmillan Report on monetary policy is that they will be slow in operation and will not be quite so certain in their action in bringing about this increased price level of wholesale commodities, and there will be statutory difficulties in various countries, because the ratio of their gold reserves to their currency is definitely fixed by law. Furthermore, the recommendation of the Macmillan Report involves international management and co-operation between the central banks, which will certainly be difficult of achievement, and at least take considerable time to bring about.

The second method of obtaining an increase in the world price level is by what is called the devaluation of the various currencies in terms of gold, that is, merely altering the price of gold in terms of the various national currencies. The advantage of that method of raising prices is that the result of it would be very rapid in action, it would work automatically, it would be quite certain in its action, and be perfectly simple and involve no artificial management. I suggest that we should welcome the determination, as now expressed by President Roosevelt, to devalue the American dollar, because while America remained on the Gold Standard at the old parity it was extremely difficult to get any general increase in the price level by the independent action of any individual Government. Now that America is prepared to devalue that will come to the same thing in its effect on prices as if there were a large increase in the total quantity of gold in the world, because what the treasuries of the various countries are concerned about is the value of the gold in terms of their own currencies, and if the gold there is increased in value then the structure of credit based on those gold reserve's is expanded by the precise pro-potion of the devaluation of the currency in terms of gold. I submit, therefore, that we should be prepared at this stage to devalue our currency and come back to gold.

I was endeavouring, when you called me to order, Captain Bourne, to deal with the difficult question of what that ratio that amount of devaluation should be, but in view of your Ruling I shall not say anything more about it beyond this, that it is important that we should stabilise at a low enough ratio. We do not wart to incur the difficultie;, and disadvantages that we had when we came back to gold in 1925 at the old parity, but so long as we come back low enough—and, after al. we have the experience since September, 1931, to guide us—that is more important than the mere ate at which other countries come back. If we cannot get those other countries to agree to come back to gold otherwise than on a too high basis at least we shall be able to adjust matters afterwards by the fact that we are sow a tariff country, and have in our hand a weapon for negotiating trade agreements.

If the ratio at which we come back to gold is wrong, the tendency again will be for a drain of gold such as drove us off the Gold Standard in 1931. But when that happened we were defenceless. We had too great imports and a fall in our exports, and we were tnable to take any measures to correct them. We are no longer in that position. We are in the position of being able at any rate to modify our imports by tariffs, and to increase our exports by negotiation. In those circumstances, I submit that it is perfectly safe for this country to come back to gold on a devalued basis, provided we come back at a sufficiently low ratio, and I most strongly urge on the Government that they should not pay too much attention to the prejudice in some quarters against coming back to gold at any cost.

I have only one more word to say, and that is that while urging that we should now be prepared to come back to the international Gold Standard I realise that it must be a condition of our coming back that we should have a settlement of the War Debts question with America. It is essential before we Dome back to the Gold Standard that that question should be settled. I suggest that it would be very undesirable if, in our anxiety to get agreement on other important points this matter were shelved or postponed until after the World Economic Conference. We should say clearly to America: "We are prepared to settle this debt question on reasonable terms," as the right hon. Gentleman the Member for Hillhead (Sir R. Home) said this evening. We shall have to pay something. It is clear that America will not cancel her Debt at a figure less than the £150,000,000, which has been imposed finally on Germany at Lausanne. We must prepare to settle on some reasonable terms, but the discussion must be round about the figure that was agreed for Germany at Lausanne; it cannot be at a much higher scale.

The time has come—and I agree with remarks made by the hon. Gentleman who preceded me—if the democracy of America is not prepared to allow its representatives to discuss the debt question on any terms on which there is likely to be agreement, when the Government ought to be in a position clearly to state to the American Government that, if a settlement is not arrived at, no further payment will be made by this country. The last Note which was sent by this Government bore that implication, not perhaps perfectly clearly, but it could not have had any other implication than that the payment to be made in November was merely to be regarded as a payment on account of capital and to be included in the final settlement which was to be arranged. The arguments of the Note make it perfectly clear that we never contemplated any payments on a large scale because we showed, on economic grounds, how that was quite impossible and would be most damaging to the world at large.

On these various points the Government should firmly make up their minds before the World Economic Conference, determined that, on the debt question, if America will not make a reasonable settlement, to be prepared to say: "We do not propose to make any further payment to America." With regard to this most important question of monetary policy, we should be prepared to say that we are determined to go back to the Gold Standard if the United States will agree to do the same, and to restore an international Gold Standard on a devalued basis.

8.48 p.m.


I wish to put a viewpoint representative of myself and my friends in this part of the House. I do not think that I shall have to be called to order for going too far into the question of the Gold Standard or bimetallism, because I do not feel that these things are the fundamental issues involved in the problem that confronts the Committee, or in the problem that will confront the World Economic Conference when it, meets in June. I was disappointed with the Prime Minister's statement to-day, and my disappointment was not reduced in any way when I heard the subsequent speech of the Secretary of State for Foreign Affairs. It is probably true that, in a world that is seething with national rivalries and suspicions, when the representative men of various countries get together for a personal contact as distinct from communications by letter or by telephone, certain suspicions may be removed. Personal contacts of that kind are very valuable, but I do not think that the Prime Minister told us anything to-day that would justify any ordinary man of common sense in believing that anything of importance took place at Washington beyond, as I have just said, the value of personal contact. I know that it is very difficult for any Minister, when he is tackled about negotiations halfway through, to say the definite things that the nation wants to hear. I know the Prime Minister very well and always, in my association with him, he knew the advantage of an indefinite situation of that sort, and he made the fullest use of it. [An HON. MEMBER "Statesmanship."] It may be statesmanship of the classical man to speak with a double tongue. I would, if I could, tell the Committee, because there are great things which I could tell them if my lips were not sealed, and if I had not to bear in mind things that the rest of hon. Members would have no real understanding about.

That may be statesmanship of the golden era, but it is not the sort of common-sense talk that we want to-day. We ought to know in this country and in this House, what Britain had to say to America through her Prime Minister, and we ought to know more definitely still what Great Britain has to contribute to the World Economic Conference when it comes. All that we have had to-day is the three or four issues which have, time and again, been the basis of interesting academic discussions, just as they have been the subject of discussions in economic text-books for the last lb years—bimetallism; the Gold Standard; how to maintain international parities in exchange; War Debts, and how they are to be paid in goods or money. I am afraid that the World Economic Conference will also have its pundits who hold by one or other of those theories, and that that conference will be wasted in and economic discussions when there are hundreds of millions of people not wanting discussions, but wanting bread.

I was interested to hear the Foreign Secretary being horribly surprised and shocked at the mere idea that there should be anybody, particularly the Leader of the Opposition, who questions the desirability of raising wholesale prices. For the first four or five years that I was in this House, every governmental effort in this matter was directed towards the end of getting prices down. Again and again, from the Treasury Bench, we were told that it was only when we got prices down to rock bottom that there would be a great revival in world trade. Now the Foreign Secretary of to-day is shocked that there should be anybody so foolish as to believe that that is the way to solve the problem of the world which is, mark you, to get the people of the world bread—that is the essential problem, to get bread in the homes of the people of the world. We can fool around with treaties and gold prices and all the rest of it, but that is the problem of trade and commerce, getting people bread. That was the problem of our woad-painted, skin-covered ancestors, but they did it; and the most primitive tribes in Africa can do it. Now we have a great structure of banks, exchanges, stock exchanges, Cabinet Ministers and civil servants, so complete that we lose sight of what our purpose is. The purpose of the whole business, political, financial, commercial and industrial, is to get bread to the people. Yet the Foreign Secretary seems shocked at any suggestion that the raising of the price of bread is not necessarily a way by which the people will be able to get bread mere easily.

I want to put this to the Lord President of the Council, who is the only Member of the Government new left on the bench. The captains and the kings have departed to their various duties, and Horatius keeps the bridge alone, or, at any rate, with only one to help, a Liberal colleague who is occupying the place of Spurius Latins. I thought there was something spurious about one of the two. [HON. MEMBERS: "Oh!"] No; that is not a subtle gibe at the Liberal associations of the junior Lord of the Treasury who accompanies the Lord President on the bench at the moment. I ask the right hon. Gentleman to try to persuade his Cabinet that what Britain has to take to the World Economic Conference is not a series of devices by which all the nations will agree to throw away the things that give them a competitive advantage over other nations. That is the World Economic Conference as I see it now—that, in a competitive world, the 60 competing nations are expected to come into the London World Economic Conference and all agree to give away the things that give them some competitive advantage just now over their fellows. I can imagine that being done. I can imagine all the nations agreeing to give up the things that give them competitive advantages over their fellows. If I proposed it, I am sure I should be told that it was Utopian, but, when it comes from practical politicians, I am bound to accept it as a practical policy. I can imagine, by putting a terrible strain on my imagination, that all the competing nations of the world will agree at the World Economic Conference to give up all the things that give them competitive advantages, but I am perfectly certain that, having agreed to give up the competitive advantages which at present they have, they would immediately depart from London to their own separate places and apply their brains to discovering new competitive methods of getting the better of one another.

I suggest to the Lord President of the Council that he should persuade his Cabinet colleagues not to be foolish, for once in their lives to stop being mere idealists and Utopians. Surely, that is a perfectly sound tu quoque. Any person who sets out to do a thing that is frankly impossible is a Utopian, and I ask them not to attempt the Utopian task of getting the nations of the world to give up competition while maintaining a competitive basis for the whole of the industrial labour of the world. I ask them to go to the Conference, not attempting to face the problem of how to maintain competition while abolishing it, but to go there to discuss how the resources and the capacities of the various nations of the world can be most economically directed and organised towards satisfying the material needs of the people of the world. That would be a World Economic Conference. This is merely going to be a conference of the nations of the world, each going as a nation, thinking in terms of the advantages it can get for itself as a nation. In the Conference is to be a World Economic Conference, the nations have to go there trying to think of the world and the people of the world as one unit.

I do not know whether that frame of mind is yet present in the world. I hear one hon. Member say it is Utopian. It may be. I know that when any Member from Scotland in this House comes and talks about Scotland as a separate nation, with national aspirations, with a national trade and industry of its own, all the English Members think that it is a very trivial, parochial, parish-pump idea that Scotland should think of itself as a separate nation, instead of regarding itself as a bit of the great British nation. I am capable of seeing a nationalistic view as being limited in that way. I hope that the Government will be just as capable of thinking in terms of the world, when they go to the World Economic Conference, as I am of thinking of Great Britain, although all my national aspirations and prejudices make me more concerned with the welfare of Scotland and the West of Scotland than with London and the South of England.

I am sorry now that the House of Commons did not take earlier opportunities of discussing the Agenda for the World Economic Conference. I think we made a profound mistake, and insulted ourselves as a House of Commons, when we agreed to the attitude that the preparation of the Agenda was a matter for the experts. I think that the House of Commons was much more capable of deciding what were the issues that should be discussed and should mine on to the Agenda. It was probably true that, when those issues were laid down on the Agenda, there was a place for the experts, but the preparation of the Agenda itself was a job for the House of Commons. I hope it is not too late, because the idea of a World Economic Conference is a big idea. Anyone who has had international ideas and aspirations must appreciate the bigness of the conception, and it would be very pathetic if a big conference of that description, which has attracted the thoughts of men in all corners of the world, should be wasted on trivial discussions about 10 Der cent, tariffs, gold or silver, or the raising of wholesale prices, instead of considering the great, big, over-riding question whether it is possible for the nations of the world to agree to pool their capacities, to pool their resources, and to divide equitably and fairly among all the people the products which those resources and capacities can in these days produce.

9.5 p.m.


We are now discussing an Amendment to reduce the Foreign Office Vote by £100. We moved it because we hoped that a. discussion would have some influence upon the Conference. It cannot meet without influencing very seriously indeed the prospects of supplying those fundamental human needs which concern us all. We have failed to ascertain again to-day what is to be attempted at this Conference. We thought, having waited until the Prime Minister came back, now that the conversations at Washington were over, now that the right hon. Gentleman knew the mind of the American President and now that other gentlemen have been to America too, there might be an opportunity for frank and full consultation with Members of the House of Commons and the people of the country. The Prime Minister told us on Thursday only just a little less than he told us to-day. I confess to a sense of personal disappointment that we could not obtain more information after four days' conversation between the Prime Minister and the President of the American Republic. There were conversations touching on these vital questions which are of great moment to the whole world.

Singularly enough, these discussions in America have been carried on more or less in secrecy in every case. M. Herriot has come back to Paris and the same thing happened there. He came back with his wallet full of information and conveyed that to his colleagues, but he is to say nothing for the moment to the French public in regard to the details of these conversations. I gather that an Italian delegate has been to America and has made his report, but, under the present constitution, very little need be done to satisfy the needs of the people. An Argentinian delegate is in America now. These people go one by one and have separate conversations, but secrecy is maintained and no one knows what they discuss. No one knows whether they discuss the same thing—whether President Roosevelt had the same kind of conversations with the representatives of the several countries who visited him. We have an idea from President Roosevelt's own speech of 3,000 words which he broadcasted to the whole world a night or two ago. It was a very interesting speech, showing a, capacity to interpret and to explain the American economic situation in a clearer way than any European statesman has attempted to portray the conditions in his own country. President Roosevelt urges attention to the enormous debts which have been piled upon the American people by financial manipulations which must be condemned and must be held responsible in the main for the present economic difficulties of the whole world.

He said the main object of the Government; must be to raise commodity prices so that borrowers may repay their loans at their value when borrowed, and he says, "If we can do that we shall have solved our main difficulty." Indeed, he went a long way towards presenting a solution for America, where the enormous depression in the prices of primary products has had a much greater effect probably than here. We have very few primary products in this country. They do not enter in the same scale into our commercial life. There is no primary product except coal that we send abroad in very large volumes or values. In America they grow wheat, cotton and timber, and all those commodities, which are subject to world competition and the universal depression which has overtaken the world, have fallen very considerably in value. The wheat farmer of the Middle West finds that he has to hand over 14 times as much wheat to pay the annual burden on the debt as he did when the debt was contracted. Wheat is only one-fourteenth of the value in money that it represented eight or 10 years ago before the period of inflation and before the fall in prices took place. When one recognises the special problems of America, one has to try to compare the means by which America's problems can be solved and see whether we have anything to gain by following the special methods that may be applied in that country. We find that America has already taken action. Action has been urged upon this House, as if action on our part was a desirable thing, but action without proper understanding might be a most dangerous thing, and we are not quite certain even yet that the rapid action taken in America is going to solve their problem as effectively as some people imagine.

In view of the disparity in the nature of the problems of these two countries we should like to know whether any agreement was possible with America. We are awaiting a Conference where 61 nations are to be represented. I should like to know in a general way whether the four or five nations already represented in conversations in America have found it possible to agree on a smaller scale than the world-wi.de scale of the Conference which is to be held. We should like to know the measure of agreement, and whether the Government are prepared to take action similar to the action which has been taken in America in what is called the Farm Relief Bill. Here is an example of legislation of a very drastic character. Let us consider the means taken in America and whether we are prepared to take similar action in the solution of our own domestic problems in preparation for dealing with the solution of the larger world problems in which we are to share.

The American Farm Bill consists of three parts, and hon. Members will find that it will well repay their interest if they fully examine the Bill. The first part of the Bill seeks to impose a tax on all agricultural products to the extent of the difference between the present prices and the average prices during the five years from 1909 to 1913. Prices are to be raised to the consumer. A tax is to be put upon the present level of prices which is to be devoted to a fund, the proceeds of which are to be apportioned among farmers in the form of compensation for allowing their land to become unproductive and idle. It is a bonus on idleness. They are now to get payment for not working and not producing. Part 3 of the Bill deals with the policy of inflation. The American bankers are to take up 3,000,000,000 dollars with the object of improving the credit of the banks operating throughout all the States in America. Further, it is intended in Part 3, as a, terminating stroke in deflation, that power be given to the President to return to the Gold Standard, not at the rate at which the dollar previously stood of 23.25 grains to the dollar, but with a gold content of half that level, namely of 11⅝ths grains to the dollar.

We do not know whether there is any sanctity in the fixing of gold parity, but steps are being taken in America to write down the dollar to half its value. Are hon. Members prepared to write down the value of the pound sterling to that extent? Is that in contemplation? Would the House vote in favour of a thing of that kind? Would it be a good thing for this country? We ought to know whether the Government are prepared to take similar measures to America in working with that country in regard to the new co-operation in which the whole world is to share. I think that for the moment the question of returning to the Gold Standard is barred out. We are to substitute some other measure. Here comes the question of inflation. There are people who believe in inflation without, I fear, realising all its implications. My right hon. Friend was charged with having interpreted this thing wrongly. People who use the word "default" with horror, use the word "deflation," not realising that it often means default in many cases

There is the policy of inflation. The Foreign Secretary directed attention to the Leader of the Opposition this afternoon, and I wish, with due modesty, to give a reply to the allegation brought against my right hon. Friend. The Foreign Secretary said that the Leader of the Opposition had questioned the policy of raising prices, and that it appeared to be inconsistent with what the right hon. Gentleman believed to be the policy of this party. He charged the right hon. Gentleman and those who sit with him with being hostile to this plan to save the world, and he quoted the words of the right hon. Gentleman, that the people who will pay most are the masses of workpeople. The right hon. Gentleman said that, and I say it, and I am satisfied that we can sustain the contention wherever the argument is allowed or whoever takes part in the argument whether inside this House or elsewhere. The right hon. Gentleman quoted a statement which really confirmed the opinion of my right hon. Friend. The Foreign Secretary quoted from a report of the League of Nations in which it stated that the fall in commodity prices was responsible for unemployment, and that among other effects it increased the burden of fixed charges. I do not know whether the right hon. Gentleman scored a point on his own premises, but I am sure that he did not score in regard to the quotation which he made from the League of Nations.

I should like to know whether the burden of fixed charges has now brought down world prices. The allegation is made that the burden of fixed charges has entirely destroyed prices throughout the world. We have to be careful, when we demand a solution or readjustment of these things, of any action taken in this House. The Lord President of the Council, who is very reticent in these Debates, is not given to rash judgment, and considers well before he makes up his mind. I would like to know from him what is meant by the Government in the steps they are to take to raise prices. How are they going to increase purchasing power? It is no use raising prices unless you raise purchasing power to a corresponding extent. What steps are the Government taking to raise prices and what is to be done to increase pur- chasing power even if only corresponding to the increase in prices? To raise prices without raising wages would certainly reduce the volume of trade, and I fail to see how that could benefit anybody.

This policy of a reduction of output is being pursued all along the line. Not merely is there a deliberate attempt to reduce the output of agriculture, but there are indications that the Government are committing themselves to this sort of thing. You find it in legislation, in Orders-in-Council and in the agreements with foreign countries. There is not only a restriction of the volume of trade in commodities imported into this country, but through various pieces of legislation there is to be a reduction in the output of commodities at home. I would like to know whether it is intended to raise prices by restricting the volume of production. There are two ways of dealing with this matter: First of all, to restore the wages which have been taken away from the working people in the last 12 years. £2,000,000 per working day has been lost, £12,000,000 per week and £600,000,000 a year has been taken off the wages bill of this country in that period. Put that back, and it will at once cause such a demand for cornmodies that by the end of one pay week you will find prices soaring, more people buying and more money coming into circulation. If that can be done, it should be done by international agreement with all nations carrying on the same policy for raising prices simultaneously.

Another way of meeting this difficulty is to reduce the fixed charges. Is there any reason why the dollar or the pound lent to the State or to industry at a time when it represented half its present value should be considered at its full value? Is there any reason why we in this country should not reduce to their real value the nominal debts, in the form of national debts, municipal debts and all other fixed charges on industry in order that we may carry a reasonable burden on industry? The world is really over-burdened with debt, and we are very disappointed to find this question of debt reduction is not to be talked about at the Conference. The Prime Minister told us to-day that concurrently and parallel with, and with other technical qualifications, there is a probability of another conference on this issue being held in London. Why not recognise straight away, as President Roosevelt has in America, that this question is a paramount issue and must be discussed at a world. conference? It is no longer a question oetween France and the United States and ourselves and United States or of the Balfour Note or any other note. It is a question of 60 nations coming togetier to decide how best they may make their future arrangements in order that the people may have a chance of a decent living. It is no use boggling at these things and standing on ceremony and saying that to discuss it would displease America and therefore it cannot be done. We are in the position of people who have paid and were prepared to pay until a settlement was assured. The Government should let us have an opportunity of saying these things.

The most definite thing the Prime Minister said was that a tariff truce is to be arranged. The right hon. Gentleman gave me the impression that no further initiative could be taken or legislation passed in this House to raise additional import duties. Tariffs were to go on as they are now until the truce is called off whenever that may be. The Foreign Secretary quoted a report of the League of Nations. I have here the official report of the World Economic Conference, 1927, in which it is stated that tariffs, though within the sovereign jurisdiction of the separate States, are not matters of purely domestic interest but greatly influence the trade of the world. It goes on to say that the time has come to put an end the increase of tariffs and move in the opposite direction. The late Mr. William Graham was a close student of the League of Nations and a very good economist too. He did all he could to get the world to move in the opposite direction, but because he failed in 1929–30 that is no reason why the problem should not again be tackled. He had not a majority in this House, and Continental observers knew that though he tried to persuade them that it might he to their advantage not to have high tariff walls dividing them from each other, there might be a Tory Government again coming into power in this country which would impose tariffs, despite Mr. William Graham and all his good intentions. He was not working in the best possible conditions, and it was no discredit to him that he failed. The circumstances must be taken into account, and it is not too late now. This statement, which came from the League of Nations in 1927, is equally true to-day.

I ask the Lord President of the Council and the Government: what are we doing now in regard to tariffs? We have put tariffs on in regard to the whole world. We are raising world prices by a combination of tariffs and quotas. I had a reply from the President of the Board of Trade yesterday that bacon products had gone up by 30 per cent. in three months. Indeed, the intention is to use tariffs and regulations to raise tlhe prices not only of our home products but of the products that come from foreign cuntries. I do not see how we are going into these tariff discussions unless the Government are prepared to get an understanding with the rest of the world which will enable the world to regain prosperity, and unless they are prepared to abate their zeal and confidence in tariffs and become Free Traders. If the majority of 61 nations come to the conclusion reached by the League of Nations as far back as 1927, are we so closely wedded to tariffs and protection that we shall find it impossible to take our place in this conference freely and fully? That is the problem.

I do not believe that a capitalist system can right itself. I believe that it is breaking down all over the world. America is the ideal home of capitalism, but it is there that the failure is greater than anywhere else. If those who believe in capitalism wish to continue it, they must convince this House and the world that they can, either by international conferences or by nations acting either collectively or individually, do something to maintain that system intact and enable people to live. I do not believe it can be done, and I do not think that the problem of capitalism can be resolved even at this conference. What is the view of hon. Members as to the maximum weight that the capitalist system can carry? What is the burden of international debt, industrial capital, ground rents and vested interests that can be carried? When is the time coming when we must jettison part of the burden? When are we to lighten the burden on the industrial system? Let it be soon. Let us say so. There is no disgrace in our facing up to this problem. We shall be very much disappointed if we see the problem and turn our backs upon it through cowardice. The downfall of the capitalist system will be the cause of confusion and great disorder in the world, and whatever system takes its place will take its place much more easily and beneficially by the process of gradual transformation rather than allowing the system to be broken down by the weight of its own anomalies.

I should like to believe that the conference is not going to consist of 61 delegates, each going there with a different opinion, each having a different interest, each prejudiced with its own point of view. I would like to believe that the agenda when it is drawn up, if it is not already drawn up, will be the agenda of a conference working to plans and specifications, working on some agreed lines, working with an agreed object. I would like to believe that the objects indicated by the hon. Member for Bridgeton (Mr. Maxton) will be among the objects of the conference. We ought to come to a conclusion as to whether there is not the prospect of futility in too much attention being paid to propping and shoring up bad material, as the President of the Council once described it. Are we going to prop up this thing, or are we prepared in the World Economic Conference to take bolder lines? We, on these benches, believe that the world can be set right. We believe we can restore the purchasing power of the masses of the people. We believe that it is vitally necessary that the purchasing power shall be restored at the earliest possible moment. If you work to a plan, if the plan is clear in your own mind, if you have the materials for the job, like good craftsmen you will be laying the foundations on which a new structure of civilisation can be erected, in which man will find it convenient and comfortable to live, but without plan, without foresight and without forethought the conference is bound to fail.

Question put, "That a sum, not exceeding £124,178, be granted to His Majesty for the said Service."

The Committee divided: Ayes, 39; Noes, 241.

Division No. 160.] AYES. [3.22 p.m.
Acland Troyte, Lieut.-Colonel Christie. James Archibald Fade, Sir Bertram G.
Adams, Samuel Vyvyan T. (Leeds, W.) Clarke, Frank Fleming, Edward Lasceiles
Agnew, Lieut.-Com. P. G. Clarry, Reginald George Foot, Isaac (Cornwall, Bodmin)
Aitchison, Rt. Hon. Craigle M. Clayton, Dr. George C. Fox, Sir Gifford
Albery, Irving James Cochrane, Commander Hon. A. D. Fremantle, Sir Francis
Allen, Sir J. Sandeman (Liverp'l, W.) Colfox, Major William Philip Fuller, Captain A. G.
Allen, Lt.-Col. J. Sandeman (B'k'nh'd) Collins, Rt. Hon. Sir Godfrey Ganzoni, Sir John
Allen, William (Stoke-on-Trent) Colman, N. C. D. Gibson, Charles Granville
Anstruther-Gray, w. J. Colville, Lieut.-Colonel J. Gilmour, Lt.-Col. Rt. Hon. Sir John
Applin, Lieut.-Col. Reginald V. K. Conant, R. J. E, Glossop, C. W. H.
Apsley, Lord Cook, Thomas A. Gluckstein, Louis Halle
Baldwin, Rt. Hon. Stanley Cooke, Douglas Golf, Sir Park
Barclay-Harvey, C. M. Cooper, A. Duff Goodman, Colonel Albert W.
Beauchamp, Sir Brograve Campbell Copeland, Ida Graham, Sir P. Fergus (C'mb'rl'd, N.)
Benn, Sir Arthur Shirley Craddock, Sir Reginald Henry Granville, Edgar
Bernays, Robert Croft, Brigadier-General Sir H. Grattan-Doyle, Sir Nicholas
Bllndell, James Crooke, J. Smedley Griffith, F. Kingsley (Middlesbro', W.)
Boulton, W. W. Crookshank, Capt. H. C. (Galnsb'ro) Grimston, R. V.
Bowyer, Capt. Sir George E. W. Cross, R. H. Gritten, W. G. Howard
Boyce, H. Leslie Crossley, A. C Guest, Capt. Rt. Hon. F. E.
Bracken, Brendan Culverwell, Cyril Tom Guinness, Thomas L. E. B.
Broadbent, Colonel John Curry, A. C. Gunston, Captain D. W.
Brocklebank, C. E. R. Davies, Maj. Geo. F.(Somerset, Yeovil) Guy, J. C. Morrison
Brown, Col. D. C. (N'th'ld., Hexham) Davison, sir William Henry Hacking, Rt. Hon. Douglas H.
Brown, Ernest (Leith) Despencer-Robertson, Major J. A. F. Hales, Harold K.
Browne, Captain A. C. Dickie, John P. Hamilton, Sir George (llford)
Buchan-Hepburn, P. G. T. Donner, P. w. Hamilton, Sir M. W.(Orkney & Zetl'nd)
Burgin, Dr. Edward Leslie Doran, Edward Han bury, Cecil
Burnett, John George Dower, Captain A. V. G. Hannon, Patrick Joseph Henry
Cadogan, Hon. Edward Drewe, Cedric Harris, Sir Percy
Campbell, Edward Taswell (Bromley) Dugdale, Captain Thomas Lionel Hartland, George A.
Campbell, Vice-Admiral G. (Burnley) Duncan, James A. L. (Kensington, N.) Harvey, Major S. E. (Devon, Totnes)
Campbell-Johnston, Malcolm Eady, George H. Haslam, Sir John (Bolton)
Caporn, Arthur Cecil Elliot, Major Rt. Hon. Walter E Headlam, Lieut.-Col. Cuthbert M.
Castlereagh, Viscount Ellis, Sir R. Geoffrey Hellgers, Captain F. F. A.
Cautley, Sir Henry B. Elliston, Captain George Sampson Henderson, Sir Vivian L. (Chelmsford)
Cayzer, Maj. Sir H. R. (Prtsmth., S.) Elmley, Viscount Heneage, Lieut.-Colonel Arthur P.
Cazalet, Thelma (Islington. E.) Emmott, Charles E. G. C. Hills, Major Rt. Hon. John Waller
Chamberlain, Rt. Hon. Sir J. A. (Birm., W) Emrys-Evans, P. V. Holdsworth, Herbert
Chamberlain, Rt. Hon. N.(Edgbaston) Erskine, Lord (Weston-super-Mare) Hope, Capt. Hon. A. O. J. (Aston)
Chapman, Col. R.(Houghton-le-Spring) Erskine-Bolst, Capt. C. C. (Blackpool) Hore-Bellsha, Leslie
Chapman, Sir Samuel (Edinburgh. S.) Evans, Capt. Arthur (Cardiff, S.) Hornby, Frank
Chorlton, Alan Ernest Leofric Evans, R. T. (Carmarthen) Home, Rt. Hon. Sir Robert S.
Horsbrugh, Florence Mitchell, Sir W. Lane (Streatham) Savery, Samuel Servington
Howitt, Dr. Alfred B. Molson, A. Hugh Elsdale Scone, Lord
Hudson, Capt. A. U. M. (Hackney, N.) Monsell, Rt. Hon. Sir B. Eyres Shakespeare, Geoffrey H.
Hudson, Robert Spear (Southport) Moore, Lt.-Col. Thomas C. R. (Ayr) Shaw, Helen B. (Lanark, Bothwell)
Hume, Sir George Hopwood Morris, John Patrick (Salford, N.) Shepperson, Sir Ernest W.
Hunter, Dr. Joseph (Dumfries) Morris, Owen Temple (Cardiff, E.) Simon, Rt. Hon. Sir John
Hurd, Sir Percy Morris-Jones, Dr. J. H. (Denbigh) Skelton, Archibald Noel
Hurst, Sir Gerald B. Muirhead, Major A. J. Slater, John
Jackson, Sir Henry (Wandsworth, C.) Munro, Patrick Smiles, Lieut.-Col. Sir Walter D.
James, Wing.-Com. A. W. H. Nation, Brigadier-General J. J. H. Smith, Louis W. (Sheffield, Hallam)
Jamieson, Douglas Nicholson, Godfrey (Morpeth) Smith, R. W. (Ab'rd'n & Kinc'dine, C.)
Jesson, Major Thomas E. Nicholson, Rt. Hn. W. G. (Peterst'ld) Smithers, Waldron
Johnstone, Harcourt (S. Shields) Nunn, William Somervell, Donald Bradley
Jones, Henry Haydn (Merioneth) O'Connor, Terence James Somerville, Annesley A. (Windsor)
Jones, Lewis (Swansea, West) Ormsby-Gore, Rt. Hon. William G. A. Sotheron-Estcourt, Captain T. E.
Kerr, Hamilton W. Palmer, Francis Noel Southby, Commander Archibald R. J.
Kimball, Lawrence Peake, Captain Osbert Spencer, Captain Richard A.
Knight, Holford Peat, Charles U. Spender-Clay, Rt. Hon. Herbert H.
Lamb, Sir Joseph Quinton Perkins, Walter R. D. Stanley, Hon. O. F. C. (Westmorland)
Lambert, Rt. Hon. George Peto, Sir Basil E. (Devon, B'nstaple) steel-Maitland, Rt. Hon. Sir Arthur
Latham, Sir Herbert Paul Peto, Geoffrey K.(W'verh'pt'n, Bilston) Stevenson, James
Law, Richard K. (Hull, S. W.) Pickering, Ernest H. Stewart, J. H. (Fife, E.)
Leckie, J. A. Pickford, Hon. Mary Ada Stewart, William J. (Belfast, S.)
Leech, Dr. J. W. Pike, Cecil F. Storey, Samuel
Lees-Jones, John Potter, John Strauss, Edward A.
Levy, Thomas Pownall. Sir Assheton Strickland, Captain W. F.
Liddall, Walter S. Procter, Major Henry Adam Sueter, Rear-Admiral Murray F.
Lindsay, Noel Ker Raikes, Henry V. A. M. Thomas, James P. L. (Hereford)
Lister, Rt. Hon. Sir Philip Cunliffe- Ramsay, Alexander (W. Bromwich) Thompson, Luke
Locker-Lampson, Rt. Hn. G.(Wd. Gr'n) Ramsay, Capt. A. H. M. (Midlothian) Titchfield, Major the Marquess of
Lockwood, John C. (Hackney, C.) Ramsden, Sir Eugene Touche, Gordon Cosmo
Lumley, Captain Lawrence R. Rankin, Robert Train, John
Lyons, Abraham Montagu Rathbone, Eleanor Tryon, Rt. Hon. George Clement
Mabane, William Rea, Walter Russell Ward, Lt.-Col. Sir A. L. (Hull)
Mac Andrew, Capt. J. O. (Ayr) Reid, Capt. A. Cunningham- Ward, Irene Mary Bewick (Wallsend)
McCorquodale, M. S. Reid, William Allan (Derby) Warrender, Sir Victor A. G.
MacDonald, Rt. Hon. J. R. (Seaham) Renwick, Major Gustav A. Watt, Captain George Steven H.
Macdonald, Capt. P. D. (1. of W.) Roberts, Aled (Wrexham) Wedderburn, Henry James Scrymgeour-
McEwen, Captain J. H. F. Roberts, Sir Samuel (Ecclesall) Wells, Sydney Richard
McKie, John Hamilton Robinson, John Roland White, Henry Graham
Maclay, Hon. Joseph Paton Ropner, Colonel L, Whyte, Jardine Bell
McLean, Major Sir Alan Rosbotham, Sir Samuel Williams. Herbert G. (Croydon, S.)
Macmillan, Maurice Harold Ross Taylor, Walter (Woodbridge) Wilson, Clyde T. (West Toxteth)
Macpherson, Rt. Hon. Sir Ian Rothschild, James A. de Wilson, G. H. A. (Cambridge U.)
Magnay, Thomas Runciman, Rt. Hon. Walter Wolmer, Rt. Hon. Viscount
Maitland. Adam Rutherford, John (Edmonton) Wood, Rt. Hon. Sir H. Kingsley
Mander, Geoffrey le M. Rutherford, Sir John Hugo (Liverp'l) Wood, Sir Murdoch McKenzie (Banff)
Margesson, Capt. Rt. Hon. H. D. R. Salmon, Sir Isidore Worthington, Dr. John V.
Martin, Thomas B. Salt, Edward W.
Mason, David M. (Edinburgh, E.) Samuel, Sir Arthur Michael (F'nham) TELLERS FOR THE AYES.—
Mayhew, Lieut-Colonel John Samuel, Rt. Hon. Sir H. (Darwen) Sir Frederick Thomson and Mr.
Mills, Sir Frederick (Leyton, E.) Sandeman, Sir A. N. Stewart Womersley.
Mills, Major J. D. (New Forest) Sassoon, Rt. Hon. Sir Philip A. G. D.
Attlee, Clement Richard Hall, George H. (Merthyr Tydvil) Owen, Major Goronwy
Banfield, John William Hirst, George Henry Parkinson. John Allen
Batey, Joseph Jones, J. J. (West Ham, Sitvertown) Price, Gabriel
Bevan, Aneurin (Ebbw Vale) Jones, Morgan (Caerphilly) Thorne, William James
Cocks, Frederick Seymour Kirkwood, David Tinker, John Joseph
Cripps, Sir Stafford Lansbury, Rt. Hon. George Wedgwood, Rt. Hon. Joslah
Daggar, George Lawson, John James Williams, David (Swansea, East)
Davies, David L. (Pontypridd) Leonard, William Williams, Edward John (Ogmore)
Davies, Rhys John (Westhoughton) Logan, David Gilbert Williams. Or. John H. (Llanelly)
Dobble, William Lunn, William Williams, Thomas (York., Don Valley)
Edwards, Charles Macdonald, Gordon (Ince)
George, Major G. Lloyd (Pembroke) McEntee, Valentine L. TELLERS FOR THE NOES.—
Greenwood, Rt. Hon. Arthur Mainwaring, William Henry Mr. John and Mr. Groves.
Grenfell, David Rees (Glamorgan) Maxton, James

Resolution agreed to.

Division No. 161.] AYES. [9.39 p.m.
Attlee, Clement Richard Groves, Thomas E. Mason, David M. (Edinburgh, E.)
Banfield, John William Hall, George H. (Merthyr Tydvll) Maxton, James
Batey, Joseph Hirst, George Henry Milner, Major James
Bevan, Aneurln (Ebbw Vale) Jenkins, Sir William Parkinson, John Allen
Cape, Thomas John, William Price. Gabriel
Cocks, Frederick Seymour Jones, Morgan (Caerphilly) Thorne, William James
Crlpps, Sir Stafford Lansbury, Rt. Hon. George Tinker, John Joseph
Daggar, George Lawson, John James Williams, David (Swansea, East)
Davles, David L. (Pontypridd) Leonard, William Williams, Edward John (Ogmore)
Davles, Rhys John (Westhoughton) Logan, David Gilbert Williams, Dr. John H. (Llanelly)
Dobble, William Lunn, William Williams, Thomas (York, Don Valley)
Edwards, Charles McEntee, Valentine L.
Greenwood, Rt. Hon. Arthur Maclean, Neil (Glasgow, Govan) TELLERS FOR THE AYES.
Grenlell, David Rees (Glamorgan) Mainwaring, William Henry Mr. 'D. Graham and Mr. G.
Acland Troyte, Lieut.-Colonel Flelden, Edward Brocklehurst Lovat-Fraser, James Alexander
Adams, Samuel Vyvyan T. (Leeds, W.) Fleming, Edward Lascelles Mabane, William
Agnew, Lieut.-Com. P. G. Foot, Dingle (Dundee) MacAndrew, Capt. J. O. (Ayr)
Albery, Irving James Foot, Isaac (Cornwall, Bodmin) McCorquodale, M. s.
Allen, Sir J. Sandeman (Llverp'l, W.) Ford, Sir Patrick J. MacDonald, Rt. Hon. J. R. (Seaham)
Applln, Lieut.-Col. Reginald V. K. Fremantle, Sir Francis McEwen. Captain J. H. F.
Apsley, Lord Ganzonl, Sir John McLean, Major Sir Alan
Aske, Sir Robert William Gibson, Charles Granville McLean, Dr. w. H. (Tradeston)
Atholl, Duchess of Gillett, Sir George Masterman Macqulsten, Frederick Alexander
Atkinson, Cyril Glimour, Lt.-Col. Rt Hon. Sir John Magnay, Thomas
Baldwin, Rt. Hon. Stanley Glucksteln, Louis Halle Munder, Geoffrey le M.
Banks, Sir Reginald Mitchell Goff, Sir Park Margesson, Capt. Rt. Hon. H. D. R.
Barclay-Harvey, C. M. Goodman, Colonel Albert W. Mayhaw, Lieut.-Colonel John
Barrle, Sir Charles Coupar Gower, Sir Robert Mills, Sir Frederick (Leyton, E.)
Beaumont, Hon. r.e.b. (Pertsm'th, C) Graham, Sir F. Fergus (C'mb'rl'd, N.) Mills, Major J. D. (New Forest)
Bernays, Robert Grenlell, E. C. (City ot London) Mitchell, Harold P.(Br'tf'd & Chlsw'k)
Bird, Ernest Roy (Yorks., Sklpton) Griffith, F. Kingslcy (Middlesbro', W.) Molson, A. Hugh Elsdale
Blinded, James Grimston, R. V. Monsell, Rt Hon. Sir B. Eyres
Bowyer, Capt. Sir George E. W. Gunston, Captain D. W. Moore, Lt.-Col. Thomas C. R. (Ayr)
Boyd-Carpenter, Sir Archibald Guy, J. C. Morrison Morris, John Patrick (Sallord, N.)
Broadbent, Colonel John Hales, Harold K. Morris, Owen Temple (Cardiff, E.)
Brocklebank, C. E. R. Hamilton, Sir R.W.(Orkney & Zetl'nd) Morris-Jones, Dr. J. H. (Denbigh)
Brown, Col. D. C. (N'th'l'd., Hexham) Hanbury, Cecil Morrison, William Shephard
Brown, Ernest (Lelth) Hannon, Patrick Joseph Henry Mulrhead, Major A. J.
Brown, Brlg.-Gen.H.C.(Berks.,Newb'y) Harbord, Arthur Munro, Patrick
Buchan-Hepburn, P. G. T. Hartland, George A. Nation, Brigadier-General J. J. H.
Burghley, Lord Haslam, Henry (Horncastle) Normand, Wilfrid Guild
Burgln, Dr. Edward Leslie Haslam, Sir John (Bolton) Nunn, William
Burnett, John George Hellgers, Captain F. F. A. O'Donovan, Dr. William James
Campbell, Edward Taswell (Bromley) Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Oman, Sir Charles William C.
Campbell, Vice-Admiral G. (Burnley) Holdsworth, Herbert O'Neill, Rt. Hon. Sir Hugh
Caporn, Arthur Cecil Hope, Capt. Hon. A. 0. J. (Aston) OrmBby-Gors, Rt. Hon. William G. A.
Carver, Major William H. Hore-Bellsha, Leslie Palmer, Francis Noel
Castlereagh, Viscount Hornby, Frank Patrick, Colin M.
Cazalet, Thelma (Islington, E.) Home, Rt. Hon. Sir Robert S. Peaks, Captain Osbert
Chamberlain, Rt. Hon.Slr J. A. (Blrm.,W) Horsbrugh, Florence Peat, Charles U.
Chamberlain, Rt. Hon. N. (Edgbaston) Howard, Tom Forrest Percy, Lore Eustace
Clarke, Frank Hudson, Capt. A. U. M.(Hackney,N.) Perkins, Walter R. D.
Clayton Or. George C. Hudson, Robert Spear (Southport) Pato, Geoffrey K. (W'verh'pt'n, Bllst'n)
Cochrane, Commander Hon. A. D. Hunter, Dr. Joseph (Dumfries) Pickering, Ernest H.
Cook, Thomas A. Hunter, Capt. M. J. (Brlgg) Pickford, Hon. Mary Ada
Cooke, Douglas Insklp, Rt. Hon. Sir Thomas W. H. Potter, John
Copeland, Ida Jackson, J. C. (Hoywood & Radcllffe) Power, Sir John Cecil
Courtauld, Major John Sewell James, Wing Com. A. W. H. Procter, Major Henry Adam
Courthope, Colonel Sir George L. Janner, Barnett Ramsay, Alexander (W. Bromwlch)
Craven-Ellis, William Jesson, Major Thomas E. Ramsay, Capt. A. H. M. (Midlothian)
Crooke, J. Smedley Jones, Henry Haydn (Merioneth) Ramsay, T. B. W. (Western Isles)
Crookshank, Col.C.de Wlndt (Bootle) Jones. Lewis (Swansea, West) Reld, David D. (County Down)
Crookshank, Capt. H. C. (Galnsb'rol Ker, J. Campbell Reld, James S. C. (Stirling)
Cruddas, Lieut-Colonel Bernard Kerr, Lleut.-Col. Charles (Montrose) Reld, William Allan (Derby)
Davidson, Rt. Hon. J. C. C. Kimball, Lawrence Remer, John R.
Dickie, John P. Lambert, Rt. Hon. George Robinson, John Roland
Donner, P. W. Law, Sir Alfred Ropner, Colonel L.
Drewe, Cedrlc Law, Richard K. (Hull, S.W.) Rosbotham, Sir Samuel
Duncan, James A.L.(Kensington, N.) Leckie, J. A. Floss, Ronald D.
Ellis, Sir R. Geoffrey Leech. Dr. J. W. Floss Taylor, Walter (Woodbrldge)
Elliston, Captain George Sampson Lees-Jones, John Rothschild, James A. de
Elmley, Viscount Lennox-Boyd, A. T. Ruggles-Brlse, Colonel E. A.
Emmott, Charles E. G C. Llddall, Walter S. Russell, Alexander West (Tynemouth)
Emrys-Evans, P. V. Lindsay, Noel Ker Rutherford, John (Edmonton)
Entwlstle, Cyril Fullard Little, Graham-, Sir Ernest Rutherford, Sir John Hugo (Llverp'l)
Ersklne, Lord (Weston-super-Mare) Llewellin, Major John J. Salt, Edward W.
Ersklne-Boltt, Capt. C. C. (Blk'pool) Llewellyn-Jones, Frederick Samuel, si- Arthur Michael (F'nham)
Essenhlgh, Reginald Clare Lloyd, Geoffrey Samuel, Samuel (W'dsworth, Putney)
Evans, David Owen (Cardigan) Locker-Lampson, Rt. Hn. G.(Wd. Gr'n) Sandeman, Sir A. N. Stewart
Sanderson, Sir Frank Barnard Storey, Samuel Ward, Irene Mary Bewick (Wallsend)
Shakespeare, Geoffrey H. Strauss, Edward A. Warrender, Sir victor A. G.
Shaw, Helen B. (Lanark, Bothwell) Strickland, Captain W. F. Waterhouse, Captain Charles
Shaw, Captain William T. (Forfar) Sueter, Rear-Admiral Murray F. Wedderburn, Henry James Scrymgeour
Shepperson, Sir Ernest W. Sugden, Sir Wilfrid Hart Weymouth, Viscount
Simon, Rt, Hon. Sir John Tate, Mavis Constance Whiteside, Borras Noel H.
Smiles, Lleut.-Col. Sir Walter D. Templeton, William P. Williams, Herbert G. (Croydon, S.)
Smith, R. W. (Ab'rd'n & Klnc'dine. C.) Thomas, James P. L. (Herelord) windsor-Clive, Lleut.-Colonel George
Smithers, Waldron Thompson, Luke Winterton, Rt. Hon. Earl
Somervell, Donald Bradley Thorp, Linton Theodore Womersley, Waller James
Somerville, Annesley A (Windsor) Titchfield, Major the Marquess of Wood, Sir Murdoch McKenzie (Banff)
Sotheron-Estcourt, Captain T. E. Todd, Capt. A. J. K. (B'wick-on-T.) Worthlngton, Or. John V.
Spencer, Captain Richard A. Touche, Gordon Cosmo
Spens, William Patrick Tryon, Rt. Hon. George Clement TELLERS FOR THE NOES.
Steel-Maitland, Rt. Hon. Sir Arthur Turton, Robert Hugh Major George Davles and
Stevenson, James Wallace, John (Dunfermline) Commander Southby
Stewart, J. H. (File, E.) Ward, Lt.-Col. Sir A. L. (Hull)

Original Question again proposed.

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[Captain Margesson.]

Committee report Progress; to sit again To-morrow.