TRADE AGREEMENTS AND NEGOTIATIONS.

HC Deb 10 May 1933 vol 277 cc1539-668

Motion made, and Question proposed, "That this House do now adjourn."—[Captain Margesson.]

3.32 p.m.

The PRESIDENT of the BOARD of TRADE (Mr. Runciman)

The two trade agreements which will be under discussion to-day are with countries with which we have been in close commercial alliance for a very long time. In the Argentine nearly all the great developments of docks and harbours, railways and roads, and other public works, have been done out of facilities provided in this country. We have not only built a great deal of the railways out of British capital but the total amount invested in the country is estimated to have reached over £500,000,000. There has been no investment in an outside country comparable to this. Similarly in the case of Denmark a very large amount of her industrial prosperity has depended not so much upon British enterprise as upon Danish enterprise in selling in this country products which are the basis of her agricultural prosperity, which has been on such a scale as to have thrown the balance of trade almost out of gear. I will deal first of all with the Danish agreement. When I said that the balance of trade was preponderatingly on the side of Denmark, I had in mind not only what has happened last year but in the last 20 years. At no time during the last 20 years have the purchases made by Denmark of British goods been comparable to the amount of purchases made in Denmark by the British or for British consumption. I go no further back than 1930 to point out that the total imports into the United Kingdom from Denmark amounted to over £54,000,000, and during the same period the exports from the United Kingdom consigned to Denmark came to only £10,000,000. That is to say, their exports to the United Kingdom were nearly five times as great as the exports from the United Kingdom to Denmark.

Two years ago the Government took up this subject with the representatives of the Danish trade organisations, as well as the Danish Government, and pointed out to them that this enormous balance in their favour, even when full allowance was made for three-cornered and four-cornered transactions, gave rise to a good deal of dissatisfaction in the United Kingdom and we made it clear to them that, although we were of a very friendly disposition, we did not like to see our trade so heavily weighted on one side and so inadequately recompensed on the other. My hon. Friend the Secretary to the Overseas Trade Department, who throughout the whole of these transactions has taken a most useful interest in all the details, went to Denmark on the invitation partly of the Danish Government and partly of their trade organisations. He made clear to them what was the British point of view and he had to inform them, amongst other things, of the fact that, now that we were equipped with a tariff, we were able to control trade and to regulate its ebb and flow in a way that had not been possible in the past. It was necessary that that should be said in order that they might understand the position. The result of the interviews and conferences that took place in Denmark was that an exhibition of British goods was organised in Copenhagen. I think every one of our industries appeared there and, contrary to the experience of so many other international exhibitions, a great deal of trade resulted. My hon. Friend came back able to report that actually on the spot there had been orders given for an immense quantity of British goods, orders which formerly had gone to Continental countries and in which we had not participated. There were signs of the change in feeling in the total figures for 1932, for the total imports into the United Kingdom consigned from Denmark, instead of being on the basis of five to one as they had been two years earlier, had sunk to the relative basis of four to one.

That was largely a result of personal intervention, and I think we ought to thank my hon. Friend for the skill and conduct with which he conducted the negotiations. But, of course, they were incomplete. We were anxious to secure, if we could, a great increase in the exports from the United Kingdom to Denmark in the principal commodities which they purchase—coal, cotton, textiles, iron and steel manufactures, motor cars, woollen and worsted goods and the like. The negotiations which have been carried on throughout the last 12 months, and with increasing intensity during the last six months, have resulted in the agreement which is before the House to-day. I should like to point out where we stand as the result of that agreement in respect of the principal exporting industries of this country. The Danes have undertaken to increase their purchase of coal, to raise it nearer to the old level of 1923–24 instead of the low level of 1931–32. Even as the result of the friendly intervention of my hon. and gallant Friend the total amount of coal bought from this country for use in Denmark in 1932 was only 58 per cent. The rest came mainly from Germany and from Poland. There was a time when we held almost the whole of the Danish coal trade, but that time, I am afraid, has now long since passed, and the competition which we have to meet from the Poles and the Germans makes it almost impossible for us to expect that we shall ever again be able to supply the whole of Denmark's coal requirements. We felt that we were entitled to press upon the Danish authorities the necessity for making larger purchases. They have agreed that the figure which stood at 58 per cent. in 1932 shall now be raised to 80 per cent. On the actual figures it means that on the 1931 comparison, there will be an increased importation into Denmark of British coal of 1,300,000 tons, which we assume to be the equivalent of the employment of about 5,300 men at the pits. With regard to coke no definite agreement has been reached, but the Danish representatives have undertaken that the purchase of coke from our markets shall not fall below the recent level. They have undertaken to offer a definite guarantee on coal, but on coke they were not in the same position of freedom or authority. At all events, the coke imports into Denmark will be safeguarded, and I think we may look forward to an increase in coke as well as of coal.

With regard to iron and steel, the most outstanding feature of the increase of our iron and steel trade with Denmark has been the placing of the order for the Storstrom Bridge with an English firm. That contract has already been signed, and I believe that some of the work has already commenced. The Danes are prepared to agree to a general understanding for Government purchases and also for municipal purchases—that is to say, as far as this can be influenced by the Government. The first offer of orders for iron and steel shall be made to United Kingdom firms, coupled, in the case of Government purchases, with a price preference of 10 per cent., and, in addition, private purchasers shall be urged to give the first offer for iron and steel to the United Kingdom wherever possible.

On the other side, we have given the undertakings with regard to bacon and ham which also affect the import trade into Denmark from this country, for we have linked up what we have agreed with regard to pig products with an undertaking that all the jute which comes here round the hams and the bacon from Denmark shall be jute of British origin and manufacture, that the salt and the saltpetre used for the curing of the bacon and the hams shall be bought in the United Kingdom, and that the parchment paper, which, I understand, plays some part in that trade, shall also be of British origin. We dealt with a large number of the items on the Tariff List, and I will mention some of those in which we have obtained a definite reduction. We have obtained a definite reduction in printed cotton piece goods, on certain unbleached cotton piece goods, felt hats, carpets, photographic plates, marmalade and apricot jam, pickles, biscuits and cakes. These were items in which their tariff appeared to us to be unduly high, and we pressed upon them a reduction because of the importance which a reduction would mean to the manufacturers in this country, and I am glad to say that the Danes have accorded a reduction of tariffs on each one of those items. But what is of almost equal importance is that they have shown themselves ready and have undertaken to conventionalise a very large range of other duties.

Denmark is a low tariff country and the danger which we ran here was of her making a change over from a low tariff to a high tariff basis. We have safeguarded ourselves by an undertaking which we have secured from Denmark that they will agree not to raise their duties even from the present low level on all cotton and woollen piece goods other than those covered by the reductions which I have mentioned already, certain classes of linen piece goods, woollen stockings, cotton thread, undyed worsted yarn for weaving, whisky and gin, artificial asphalt, gramophones and phonographs, linoleum, sewing machines, tractors, link bolt chains and a number of others. In our opinion there is considerable advantage in our knowing that, for a period of three years at least, there can be no change in the duties imposed upon those articles, giving a degree of certainty to trade which it has lacked in the past.

What about the other side? It would be absurd to imagine that any of those Agreements could go through without something being conceded on the United Kingdom side. We have agreed to reductions of duties on industrial products, the imports of which into the United Kingdom from Denmark in 1931 amounted to £75,000—reductions on a comparatively small range of articles. But we have agreed, in response to their conventionalisation, to our conventionalising the right of free entry or of the present ratio of duties on agricultural or industrial products, the imports of which into the United Kingdom in 1931 came to over £300,000. There will be conventionalisation of free entry or of present duties, with actual or potential restrictions of imports, in the case of agricultural products and fish, the imports of which into the United Kingdom from Denmark in 1931 came to the large total of £43,300,000. No concession was offered on requests covering about £1,000,000 of Danish imports in 1931. I do not propose to say anything about the agricultural aspect of these Agreements as the Minister of Agriculture is to speak a little later in the evening and he can speak with a degree of detail which is not at my command. There is the Danish Agreement in rough outline. It offers something in the way of security for the future. It will enable some of our industries to expand with a degree of certainty which has not been their lot for a long time past, and it will add, to a very large extent, to the market for coal which is now one of the most pressing needs of the United Kingdom.

I turn from the Danish Agreement to the Argentine. In the case of the Argen- tine we had an entirely different set of problems. In the first place, the Argentine tariff, instead of being a low tariff like the Danish, is a high tariff. No attempts have been made for a long time past to enter upon a new trade agreement with Denmark. Indeed, I think that the Convention of 1825 is the last instrument which has governed our relations with Denmark, but attempts have been made in the case of the Argentine to make a reduction in the duties imposed under their tariff. The House will remember that Lord D'Abernon devoted himself to a visit to the Argentine and to negotiations out there with that object in view. I regret to say that nothing came of it. I believe that one reason why nothing came of it was that we had no means of exercising any pressure. We are now in a position to do that. A second important fact in regard to the Argentine was that on the great amount of British capital which is invested out there it had been impossible during the last six or 12 months to get adequate remittances home. Debenture interest on the Argentine railways due to debenture holders here lay frozen in the Argentine banks, no means were provided for its remittance to this country and no payment was possible on a very large range of investments. I need hardly add that exactly the same restrictions were imposed upon traders.

There was no instance, happily, of any default in the payment of debenture interest in the case of any of the Argentine railways which are of British origin and under British control, but they had to use their resources in London right up to the limit in order to meet their obligations. I will mention what has been the result of our negotiations in respect of these items later. Not only were these undertakings short of their remittances from the Argentine, but there was actually money which was due from many of the English companies out there, including money due to our own Exchequer. A considerable amount of British revenue was held up at Buenos Ayres which the Exchequer was unable to collect. All that I am glad to say is now to be set free. The important thing in regard to these very large frozen deposits was that they held back a great deal more trade than was represented in the actual transactions in which they originated. We all know quite well that in the stagnation of world trade tariffs are not the only instruments which have been used.

Exchange control has had much more to do in the last six months with the dislocation of commercial transactions between international merchants, markets and manufacturers than anything else under the sun. The function of controlling exchange supplies, whether in Europe or elsewhere, has spread with great rapidity. It was an evidence of a commercial fear only to be paralleled by the military fear of recent years, and the big financial houses found themselves one by one the victims of national policy which prevented the payment of debts which were due from the Argentine to the United Kingdom, due even to the United Kingdom Government, and certainly to those who had made sales there and could not achieve payment. What did these sums amount to? In the case of public utility companies covering a great variety of interests of one kind or another, all of public importance in the Argentine, nearly £6,000,000 of British money was so held up. The Insurance Companies Investment Trusts and other similar organisations had about £1,000,000 held up in Buenos Ayres. Trade debts, as nearly as we could estimate them, amounted to about £4,500,000, out of which at least £500,000 represented textiles on which no payment could be made.

Whatever may be thought about exchange control one thing is quite certain, that if it continued it would ultimately destroy trade altogether. It is impossible to persuade merchants to undertake risks, to fulfil orders, to take on new obligations unless they know that they are going to be paid, and until last week there was no assured prospect of any exporter from this country to the Argentine receiving payment for his goods. We raised that as one of the most important subjects with the Argentine representatives. We worked in conjunction with those who are very fully alive to the use that can be made of financial machinery here and elsewhere, and we have kept through the Argentine representatives in close touch with their Finance Minister. I should like here publicly to acknowledge the readiness with which he has acceded to our requests. What has been done at Buenos Ayres would have been quite impossible without the friendly co-operation of the Vice-President of the Republic, who has just returned to Argentina, and his colleagues who were here for some months.

Under the finance section of the agreement there will be set free about 900,000 paper pesos with which to carry through the liquefying of small transactions. The receipt of money here for the meeting of debenture interest has already begun. In the case of one company, the Central Argentine Railway Company, the total amount required for the recent service of their debt has been provided in London by the loosening of this old restriction. There will be made available in hard cash mainly for the small traders sufficient to clear off the smaller obligations which are now frozen. Beyond that, the total amount which is still due will be liquefied through the process of bonds, issued on the security of the Argentine Government, to be placed in the hands of representative authorities here and used by them for the provision of cash in sterling, in place of the frozen paper which is the creditors' only possession now. This means the liquefying of about £11,000,000. I would impress upon the House that once having started the process of liquefying cash which has been frozen under exchange restrictions we hope that the example will be followed elsewhere, and everything will be done on our part to facilitate similar transactions.

With regard to the possibility of a reduction in tariffs in the future, I would like to point out that the representatives of Argentina were unable—owing partly to the time at their disposal and to the absence from this country of any of their technical representatives who could deal in detail with the question—to enter into any definite obligation in regard to the reduction of duties, but after full negotiation with their Government they have undertaken as regards goods of which the substantial proportion of imports into Argentina is derived from the United Kingdom, and in respect of which proposals have been submitted to them for a reduction of Customs duties, to revert in general to the rates of duties and the valuation of duties on such goods in force in 1930. I would point out that in 1930 on certain cotton goods, for instance, the rate was only 28.16 per cent. That duty has risen to 40.96 per cent. If this undertaking is implemented by Argentina, as I hope it will be, the duty on these cotton goods will go down again from 40.96 to 28.16.

Brigadier-General Sir HENRY CROFT

Is that for British goods or for those of all countries?

Mr. RUNCIMAN

It is for all countries, but we are more largely interested in this than all the other countries put together, and we were not going to throw away such an advantage as this for the sake of what I might regard as a religious or irreligious application of the most-favoured-nation Clause. It also applies to cotton tissues, printed, of a certain weight, where there will be a reduction from 46.08 to 31.68. In the case of cotton tissues dyed weighing more than 80 and up to 130 grammes per square metre, there will also be a drop in the duty from 46.08 to 31.68. I have given those as examples of the effect of the new arrangement which we have carried partially, but only partially, through.

With regard to the general tariff, discussions are to be continued at once with the Argentine. I should have liked to have come down to the House with a complete statement with regard to the tariff, but I did not think it worth while to delay the financial arrangements and the other obligations entered into with the Argentine until the former had been completed. That, I hope, will be completed in due course. We are sending out one of our best representatives from the Board of Trade to collaborate with his opposite number in Buenos Ayres, and I trust that long before the 1st August, the date fixed for the new Agreement, the new tariff will come into force.

I have given a very short account of the transactions which have been carried through during the last few months, but I would like to conclude by saying something on one aspect of the Argentine Agreement which has dominated the whole of our transactions. If we had not been far and away the largest purchasers of Argentine meat, it would not have been possible to have made this Agreement at all. It is a remarkable fact that no less than 99 per cent. of chilled beef which is exported from the Argentine comes to this country. They send also a considerable amount of frozen beef, and a certain amount of frozen mutton, but chilled beef is their principal commodity. If that importation is checked, it strikes a blow at their major agricultural industry. The raising of stock is, after all, the one great industry of the Argentine, and the marketing of their meat products is the most important business in which they are engaged. It covers not only those who are engaged in the frigorificos, but also a large number of vessels which run to and fro between the Argentine and this country. It is they who very largely invented the system of chilling rather than freezing, and they are in the happy position of being the only meat-producing country in the world which has at present both the equipment and the necessary proximity for the success of this business.

While we were dealing with the subject of meat in the Argentine, we had to keep in mind from the beginning to the end two other markets which are of prime concern to us. The first in importance to us is our home market, and the second our Dominion market. We have cleared up the position at Ottawa beyond any doubt or misunderstanding with regard to Dominion meat, and we made it clear that in order of precedence and importance the home meat trade should come first, Dominion second, and the Argentine third. I think it will be seen, after making a very close examination of the terms of the Agreement which covers meat, that we have provided for all the necessary freedom of action which this Government at home must retain for itself. We had long discussions and, in a friendly spirit, many tussles on this subject of the supply of meat, the extent to which it would go, the limitations which might be placed upon it for various reasons, and, finally, we came to an agreement with the representatives of Argentina.

The Minister of Agriculture will say something on this subject later in the evening, but, as a preliminary to what he has to say, I can inform the House that in chilled meat, the most important of these items, the Argentine is limited to the level of July, 1931, to June, 1932. That, in itself, is a reduction of 10 per cent. on the previous four years. The year 1931–32, I might say in passing, showed the lowest figures for six years past. If it be thought necessary, a further 10 per cent. reduction may be made with the object of maintaining the price level, provided the gap is not filled by other countries. We are not prepared to give the same facilities to other suppliers which we have given to the Argentine in return for what they have given to us. If for price reasons suppliers of meat were agreed on all-round reduction, there would be a further reduction of quantity.

When we turn to frozen meat the figures are very remarkable. We had already provided in the Ottawa Agreement that there should be a heavy reduction in the amount of frozen meat allocated to Argentine supplies, and under the table published in the Ottawa Agreement, page 54 of the Ottawa Agreements Act, it will be seen that by June, 1934, the Argentine will have lost one-third of their former supplies of frozen meat, and that gap will have been filled entirely from the Dominions and home supplies. Provision had also been made for the regulation of quantities, so that by a reduction of the quantity of supplies we could do what was necessary to preserve the high price level.

Mr. ATTLEE

Who will pay?

Mr. RUNCIMAN

The consumers. Let there be no misunderstanding about that. I do not hold the view of the Leader of the Opposition, that to raise the price level is a blow to the worker. I heard my right hon. Friend say so yesterday, but I want to point out that, unless there is a restoration of the price level, there will never be a, revival of trade.

Mr. LANSBURY

My argument was equally simple—that unless there is a great increase in consumption, there will not be any prosperity anywhere.

Mr. RUNCIMAN

The largest numbers of people in the consuming categories are to be found in the countries where primary production is greatest. If you can increase the purchasing power of those who live in the countries where they produce wheat, meat, wool and the other great primary commodities, you will add enormously to our market, and by that means you will undoubtedly help people here to a degree far outweighing anthing that can be achieved by dodging the market.

I make no apology for being a party to a policy which aims at regulating and raising wholesale prices. It is absolutely essential for the agricultural industry, and, indeed, for every other industry in the world. Nothing has been more destructive than the way in which prices have sagged during the last six or seven years when no man dare take an obligation without covering himself against a fall to-morrow, knowing full well that he will probably wake up to find 5, 8 or 10 per cent. of the value of his products disappear. As long as that went on, there was no hope of recovery. We hope that by these agreements we have done something to turn the tide; that we shall now go in the direction of a steady if not a higher price level; that we shall have lowered a good many of the obstacles to trade and removed a good many of the bonds with which we are now shackled. In particular, with regard to the Argentine, I should like to add one personal note. It has been my honour to introduce these agreements to the House of Commons, but the main work has been done by others. I take the fullest responsibility for them, and I have been in daily touch with them, but I need hardly say that without the collaboration of the Secretary to the Department of Overseas Trade, and also in no less degree that of the Parliamentary Secretary to the Board of Trade, whose amazing knowledge of foreign languages has been of inestimable value to us, we should not have been able to obtain these agreements. I commend them to the House.

4.11 p.m.

Mr. T. WILLIAMS

We have just listened to an extraordinary speech from the right hon. Gentleman, whom, if I may be permitted, I should like to congratulate on having retained his office after the events of the past week. During the course of his speech the right hon. Gentleman flotsamed and jetsamed hither and thither. Sometimes we saw the old Free Trader who was anxious to reduce tariffs. On another occasion, when the House was feeling rather glum, we saw the typical tariff merchant telling us that without tariffs we could have had no bargaining power at all. On other occasions the right hon. Gentleman entered into the higher realms of finance and prices, and I rather thought that, the question of prices introduced in the later passages of his speech rather tended to destroy some part of the value of what he had previously said. There is one thing to be said for the right hon. Gentleman's agreements. I think, after listening very carefully to all that he said, we can, perhaps, describe the Danish Agreement as a trade agreement and the Argentine Agreement as a debt-collecting agreement. That may account for the very cryptic sentences in the "Manchester Guardian" on Monday, when, after an attack upon the right hon. Gentleman's agreement last week, it says: The right hon. Gentleman the Member for West Birmingham has announced in advance that he does not propose to oppose the Danish or Argentine Agreements. And it continues: Of course not. Jewellery is not involved. I hope the right hon. Gentleman will be pleased now that the right hon. Member for West Birmingham (Sir A. Chamberlain) and another hon. Member for Birmingham are not opposing these two trade agreements. Whatever else they do, tariffs develop all the selfishness of vested interests. We had an example of that last week, when it was jewellery and toys. This week, although I know the right hon. Gentleman has been doing his best to avoid it, it may be dairy farmers, meat producers and possibly the Dominions. I shall have something to say about the Dominion Agreements in a few minutes. The Minister of Agriculture, I know, is a very energetic man. He has been tireless in his efforts to stifle any opposition there may be from agriculturists to these agreements. I rather suspect that the right hon. Gentleman was so successful at the meeting last evening, and doped the agricultural Members so well, that this morning when the Standing Committee met to discuss the Agricultural Marketing Bill, which they are bubbling over to get, we failed to obtain a quorum, and had to adjourn. He must have been eminently successful in his efforts whatever he may have told the agricultural Members of this House. I have a telegram here from the Lancashire County Agricultural Association. It says: Trade pacts with Denmark and Argentine: in interests of home agriculturists we urge you to oppose this unjust discrimination against British farmer. I do not vouch for the wisdom of the Lancashire Agricultural Association, but that telegram indicates that while the right hon. Gentleman may have satisfied Members of Parliament he has failed to satisfy the representatives of agriculture in that part of the country. During the past few weeks all sorts of papers have been commenting upon these trade agreements. There may be something of real value here and there in some of them, but at all events the right hon. Gentleman the President of the Board of Trade by implication has proved that traders, monopolists, and profit seekers have brought this country to ruin and that it requires these trade agreements to get us out of the slough of despond. Perhaps it is worth while. "The Sunday Observer" said last Sunday that the agreements "aroused mingled feelings," while the "Sunday Express" described them as "three black pacts." The economists said the agreements "reek with the fatal conceptions of regulated, licensed and compensated trade." It is a terrible charge to make against the right hon. Gentleman, who has been a Free Trader all his life, that he is now making agreements which reek with "regulated, licensed and compensated trade." Someone has said that what the Government are suffering from at the moment is "pacteria." One thing can be said about this Government, and that is that no Government has made more rushes hither and thither in a search for an economic and industrial policy. And no Government has failed so miserably.

In 1930 some hon. Members produced a manifesto, it was signed amongst others by the Minister of Agriculture. The Lord President of the Council then warned his followers about zig-zagging. During the last few months we have had Safeguarding, abnormal imports, duties, full-blooded Protection, a Tariff Advisory Committee, and now we are to have trade agreements, regulations and licensing. The Lord President of the Council who warned his friends about the zig-zagging hither and thither, partially supporting Protection and then partially supporting Free Trade, has himself, and his Government, been doing nothing but zig-zagging from beginning to end. I have a little sympathy with hon. Members who in their inno- cence expected a real eldorado when they obtained full-blooded Protection. These trade agreements are like snatching a bone from a, dog. Hon. Members who, in their innocence expected an eldorado, are disturbed. Hon. Members below the Gangway, who are supporters of the Government, are a little disturbed. They are disturbing to the majority of hon. Members who desire Protection and restraint of trade and to those who desire unrestricted competition. They are neither one thing nor the other. They are a mixture of both, and satisfy nobody.

If we look at the advantages of the Denmark Agreement a few miners will obtain work in this country; that is on the assumption that Denmark increases her purchases of coal from this country. If we take all the advantages of the Danish Agreement and all the alleged advantages of the Argentine Agreement it is doubtful whether we shall secure as much increase in trade as the Government have lost by the application of the Russian embargo a week or two ago. All these months of labour seem to have produced very small results, having regard to what has been thrown away. As far as coal is concerned, 3,500 miners may obtain employment, and to that extent we welcome the agreement. As far as there is any extension in our exports of coal, steel and iron, salt, jute and cloth paper, we shall welcome any improvement in our general trade, but the disadvantages may be real when we examine them carefully. After all, we have to permit the importation of large quantities of butter, that is a static figure for the next three years, and it is no use the Minister of Agriculture telling agricultural Members or the Dominions that they will not be affected in their dairy industry, because if the price of butter increases by 1d., 2d. or 3d. per lb. it is obvious that the consumption of butter is bound to decrease. So long as the amount to be imported from Denmark is static, so long as you have no control over imports from the Dominions, then, clearly, there can be no increased market for the dairy farmers of this country. This trade agreement with Denmark may have an effect on Germany, Holland, Sweden and the United States, and may make impossible such agreements as we hope to obtain at the Economic Conference.

I should like to ask the President of the Board of Trade a question in regard to one commodity. He told us that while an agreement had been reached with Denmark for an increase in the tonnage of coal no such agreement could be reached with regard to coke. Is it not the case that Holland and Sweden and Belgium, who have hitherto imported no coke into Denmark, have no w become formidable rivals to this country? Is it not the case that Denmark could make no agreement for increasing the purchase of coke owing to a fear of interfering with the trade of Holland, Sweden and Belgium? May not the reactions be very severe in these countries, and at the Economic Conference? Why is it, since tariffs were imposed for the purpose of reducing tariffs, there are so very few items upon which Denmark proposes to reduce her tariffs, although they made a promise that they would not increase the duties on other articles. That may mean something or nothing; but it does not seem to be any tremendous advantage. It does not seem to be much advantage for a country to say "our tariffs are 10 per cent., 15 per cent. and 20 per cent., and that for the next three years we do not intend to move them."

There is one item upon which the right hon. Gentleman might have removed the duty, if he was considering the consumer in this country. During all these negotiations he has insisted on the preservation of the 15s. per cwt. duty on butter imported from Denmark to this country. That may be nothing at all to the wealthy man but to the poor miserable wretch who is drawing 15s. 3d. unemployment benefit it is a considerable sum. It means that be must give up butter for margarine, to the detriment of his physical powers and the health of his wife and children. Moreover, it has not the redeeming feature of having been put on for protective purposes. There is a guaranteed quantity. Nor is it competitive.

The MINISTER of AGRICULTURE (Major Elliot)

There is no guaranteed quantity for any period, not even for one year.

Mr. WILLIAMS

The agreement is perfectly clear. For three years the quantity of butter which can be imported from Denmark is 2,300,000 cwts. per annum, and if the imports to this country exceed 8,100,000 cwts. then Denmark will obtain an increase proportionate to the increase over and above 8,100,000 cwts. That is definite and clear. The butter duty is merely an infliction on the consumer. It is neither competitive nor protective, and the right hon. Gentleman might as well have given the consumers of this country the benefit of that 1½d. per lb. on their butter. The Argentine agreement is much more a debt collecting than a trade agreement. The right hon. Gentleman confessed that the tariff advantages were not yet determined. He was hopeful that some agreement would be reached, and a date, the 1st August, has been fixed by which, unless some tariff agreement is arrived at, there will be power to cancel the arrangements. In the meantime, no real trade advantages are to be found in any part of the Argentine agreement. It is true that no duties are to be charged on coal, but coal has been on the Free List for a long time, and I do not think that many miners are going to obtain work as a result of this agreement.

The conception of the right hon. Gentleman seems to be that because we are a creditor nation we are bound to buy much more from our debtor nations than we sell to them. That is entirely opposite to the view generally expressed by hon. Members opposite. I have heard the right hon. Gentleman, when he wanted a cheer from all quarters of the House, refer to the fact that Russia only buys about £8,000,000 worth of goods from us while she sells to us £29,000,000. And hon. Members opposite cheered. Now the right hon. Gentleman admits that for many years past we have been buying from Denmark about £45,000,000 worth per annum, and have only been selling to Denmark about £10,000,000 worth. As to the Argentine, we buy £56,000,000 worth annually, and only sell about £16,000,000 worth.

These Agreements seem to me to be perpetuating to a large extent an adverse balance, so far as trade with these countries is concerned. I have heard the right hon. Gentleman say that there has to be a close proximity between purchases and sales, but it seems to me that the two Agreements clearly indicate that wherever nationals have lent money in any part of the world we have to purchase more from them than we sell to them if they are to pay their debts. Right hon. and hon. Gentlemen should appreciate that fact. I recall many of the statements made with regard to Russia, and speeches about exports and imports from Russia. If right hon. and hon. Gentlemen would think in terms of these two Agreements and the bargains into which they have entered with the Argentine and Denmark, there would not perhaps be the same sort of cheers as we have heard in this House so frequently. The right hon. Gentleman tells us that Russia has made no pretence at paying certain debts, but the right hon. Gentleman cannot tell us of a single instance since the War in which Russia has not paid for every pennyworth that she has purchased from this country according to agreements entered into. The Russians have not only paid on the nail, but have actually made a very considerable profit—

The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister)

I understood the hon. Gentleman's argument was that we take more from a country which owes us money, in order that it may pay interest on its debts. That is true; but the difference is that Russia made no attempt to pay any of her debts, whereas other countries did.

Mr. WILLIAMS

But surely the right hon. Gentleman is riding off on a very easy donkey in that argument. We have never suggested that because we purchase £10,000,000 worth of goods from one country we must of necessity sell £1,000,000 worth of goods to that country. We have never advanced that argument. Invariably it has been advanced by right hon. and hon. Gentlemen from the benches opposite. Here we have the embodiment of a total contradiction of their philosophy. Let me recall that the Argentine Agreement permits the Argentine people to import chilled meat into this country on the basis of the sales for the year ended June, 1932. Unless certain events arise they will continue to import on that basis. Almost on every page of the agreement there is a sort of veiled threat to the Dominions not to import as much in future as they have done in the past. If, for instance, any restriction occurs with the Argentine imports, and New Zealand or Australia should increase their imports to this country of frozen beef or mutton, the Government have power either to enter into negotiations with them to restrict their imports or to compel them to do so. That is an absolute violation of the agreements reached at Ottawa. Let me quote from page 24, paragraph 4, of the Ottawa Agreement with Australia: The policy of His Majesty's Government in the United Kingdom in relation to meat production is, first, to secure development of home production, and, secondly, to give to the Dominions an expanding share of imports into the United Kingdom. This Argentine Agreement will not permit that. This agreement makes it almost impossible for any expansion to take place. In fact it warns the Dominions that if they exceed certain quantities, and particularly should the price tendency be downward, something will have to be done with the Dominions to upset the agreements that we have entered into, both with regard to the quantities imported down to June, 1932, and the 10 per cent. extra which they were supposed to be allowed. The right hon. Gentleman may shake his head, but I think he will find on close examination that this Argentine Agreement will disturb Dominion importers perhaps more than it disturbs British farmers at the moment. There is another curious thing in the Argentine Agreement, and Liberals will be interested in it. Little did we think that the right hon. Gentleman the President of the Board of Trade could be such as ardent Liberal one day, such a magnificent Protectionist the following day and blend his Liberalism and Protection and Socialism the following day. Here in this agreement he is going to give a trial to Socialism. On Page 10, paragraph 3, we find this: Should the Argentine Government, or the Argentine producers, operating under a special law, own, control or manage undertakings not conducted primarily for private profit but for the better regulation of the trade with the purpose of assuring a reasonable return to the cattle producer, the Government of the United Kingdom will be prepared to license approved importers to import meat from such undertakings, up to 15 per cent. of the total quantity imported from Argentina to the United Kingdom. That seems to indicate that the right hon. Gentleman is willing to give favourable consideration to non-profit making undertakings, and to that extent we think that the agreement is well worth while. Certainly that part will call for our support. There is, however, a very doubtful conclusion to paragraph 3, where the right hon. Gentleman insists that these exports must be carried through the usual shipping channels. When it comes to exporting, shipping, and so forth, then we see that Lord Vesty must count for something. Page 6, paragraph 5, of the agreement with Denmark says: The control of exports of fish from Denmark to the United Kingdom shall be entrusted to the Danish Government so long as the Government of the United Kingdom are satisfied that such control is effectual and in conformity with the scheme of regulation of imports for the time being in force. The Government of the United Kingdom will co-operate with the Danish Government in exercising the necessary control of direct landing. We have been told in the past that because Russia had full charge of Russian exports and imports we ought not to trade with them or have any relationship at all with them. Yet the right hon. Gentleman is willing to allow all the arrangements for the exporting of £45,000,000 worth of commodities to be arranged by the Danish Government. It is all part of one's political education. It seems to me that these agreements are a very useful sign. As I said earlier, we can see certain potential advantages from the selling of coal. As to steel and iron, we may increase our sales ever so slightly. Certainly we shall sell more paper and more jute cloths and so forth, and I hope the hon. Member for Dundee will be pleased about it. But we acknowledge by these agreements that the old order of things have been a complete failure. Merely to leave private traders, monopolies or profit seekers in charge of the destinies of this or any other nation has proved a hopeless and colossal failure. Even the funds that are frozen in South America are largely due to the mishandling of the situation by those who were in business for profit.

It seems to me that the Government have made up their mind upon one thing. Let me here ask a fair question. The Minister of Agriculture, I anticipate, will reply later, and he is an expert in replying to all sorts of questions. It seems to be the policy of the Government, having secured a general all-round reduction in wages between 1929 and 1933—a reduction amounting to many millions per annum— to force prices back to the 1929 level, so that we shall have 1933 wages with which to buy at 1929 prices. We are not a large agricultural community, but we have 46,000,000 people. Forty odd millions of those people have had their incomes reduced by anything from 10 to 25 per cent. during the four years. Now prices are to go back to the 1929 level. Is that going to create more or less trade? Will it help the producer in the Argentine if we cannot afford to buy his meat? Will it help the producer of wheat or meat or butter at home, if our people cannot afford to buy those things? That seems to be the Government's new slogan. On Monday last I asked the Minister of Agriculture to state the price of bacon before the restriction scheme began, compared with the price at the present time. The answer showed that the prices of home-produced and imported bacon have increased by exactly 25 per cent. Should there be a general all-round price increase of 25 per cent.—

Mr. HOWARD

No.

Mr. WILLIAMS

Does the hon. Gentleman want to suggest that a rise in the wholesale prices will not be reflected in retail prices?

Mr. HOWARD

Every fall in wholesale prices during the past few years should have meant a corresponding fall in retail prices, and yet that has not been the case. Why should the hon. Member assume the reverse?

Mr. WILLIAMS

If the hon. Gentleman followed price levels he would know that there is a lag between the wholesale and the retail price, either up or down, and always to the disadvantage of the consumer. I cannot conceive the wholesale price level being increased by 25 per cent. and the consumer escaping payment of the bigger price. These Agreements are perhaps the commencement of a new economic orientation. I can visualise the possibility of our living to bless the day when the President of the Board of Trade started to negotiate these Agreements. I can visualise the possibility of Agreements with Denmark, Holland, Sweden, Germany, Bulgaria, Poland, Russia, United States and the rest, so that each country will know exactly what it is to export to every other country before the year commences. There will be no necessity for middlemen, no necessity for private importers or exporters. All the work will be done by Govern- ment departments. All the agreements and arrangements will be carefully prepared and it will be simple for each Government to determine the quantities of commodities to be imported from various countries in the same way as the right hon. Gentleman seeks to predetermine them in this case. To that extent I think we are returning to sanity. I have no intention of condemning the agreements. I am going to wait, like Mr. Micawber, for something to turn up, and hope for the best. I cannot do better than quote the words of one who is, I think, well known to every hon. Member: We must some day, at last and forever, cross the line between Nonsense and Common-sense. That is a compliment to the right hon. Gentleman. And on that day we shall pass from Class Paternalism, originally derived from fetish fiction in times of universal ignorance, to Human Brotherhood in accordance with the nature of things and our growing knowledge of it; from Political Government to Industrial Administration; from Competition in Individualism, to Individuality in Co-operation; from War and Despotism in any form, to Peace and Liberty. We appear to be reaching that stage today. Personally t think the right hon. Gentleman has started us on that way. I compliment him for what he has done so far. We shall follow where he leads but we shall build with a totally different object in view.

4.47 p.m.

Major Sir ARCHIBALD SINCLAIR

Neither the lucid exposition of these agreements by the President of the Board of Trade, nor the closely and forcibly argued speech of the hon. Member for Don Valley (Mr. T. Williams) has failed to lift the gloom and depression which hang over this Debate. What a different scene this is from that which was staged by the Government on 12th April last. Then there was a discussion on a Vote of Censure about unemployment. The word was passed round that the President of the Board of Trade was going to make an important pronouncement. Members hurried in to take their seats; there was a hustle in the Galleries upstairs; the telephones were working to Copenhagen and Stockholm and Oslo and Buenos Ayres, and we all waited eagerly for a great and important pronouncement. The Leader of the Opposition was warned to be in his place at half-past six, but at six o'clock the President of the Board of Trade could contain himself no longer. He leapt to his feet and in modest phrases informed the House that agreements of immense importance had been concluded with four countries and nearly with a fifth. The right hon. Gentleman said that this success would justify as nothing else could the tariff policy of the Government; that all who were concerned with our distressed areas could rest assured that definite immediate and practical advantages would be secured to some of our most depressed industries not only to the special exporting areas but over the whole wide range of industries in this country. In the right hon. Gentleman's peroration we were told how deeply grateful we should be to all the eminent people who had assisted him in making these agreements.

To-day we have these Agreements in cold print. We hold these thin pamphlets in our hands, and we are engaged in what must be an inconclusive debate on a deliberately evasive Motion, put down by the Government to give an opportunity for discussing these insignificant and trivial agreements. Those who believe that the whole policy of the Government is wrongly conceived will, at least, bear in mind the words of the President of the Board of Trade that in these agreements as in nothing else lies the justification of the tariff policy of the Government. Why are the results so disappointing? The President of the Board of Trade has described himself as a soft-hearted but hard-headed bargainer. But when he declared that if the House thought he was a poor bargainer they could get somebody else to bargain, that was not a gesture of weakness or resignation as it was wrongfully interpreted to be in some quarters. It was a gesture of defiance, because he well knows, as I know and as nearly every hon. Member knows, that no more forceful persuasive and experienced negotiator could hold the office of President of the Board of Trade than the right hon. Gentleman himself. It is not the negotiators, but the predelictions and the preconceptions and the policy of the majority of his colleagues in the Cabinet and his followers, that are at fault in this business.

Speaking in opposition to the Import Duties Bill I pointed out that it was based on four incompatible principles. There was, first, the idea of home protection and building up a great tariff wall; the idea that "Tariff Reform means work for all" and that we should keep out foreign goods. Then there is Economic Imperialism, the idea of Imperial Preference and of a great self-contained Empire. But, of course, as agriculturists have found when Canada is allowed to send us her oats in vast quantities and even subsidises her exports, it is very inconvenient and a little inconsistent with the principle of home protection. Then there is the idea of the tariff for revenue. The Chancellor of the Exchequer, however, has told us that the duties have been so successful in keeping out goods that the revenue has fallen deplorably short of the estimate. Finally, there is the conception of the tariff as a bargaining weapon to keep down foreign tariffs. It is to this inconsistency, with its many-sided appeals, so dazzingly effective in political agitation, that the failure of the Government's policy in action is mainly due. In no department of the policy of tariffs is it so bad as in this department of tariff bargaining and that was the real lure by which they caught votes at the last Election.

I have never concealed from my friends my belief that at the last Election, the majority of the people, subject to one condition, wanted an experiment in tariffs. That condition was that they wanted to have tariffs in order to try to bring down the tariffs of the foreigner. There is implanted in the people of this land a deep instinct that their fathers were right when they cast their bread upon the waters, made Britain a great sea Power, and created trade with every corner of the globe. It was because they thought that these tariffs might be useful as a means of bargaining that they were in favour of that departure, but you cannot successfully use the tariff in that way, if, every time you start bargaining, some interest catches hold of you by the coat-tails. The President of the Board of Trade himself has said that that would make tariff bargaining impossible. You cannot bargain effectively unless you subordinate all other considerations in tariff policy to the one main issue of getting foreign tariffs lowered. Negotiations with one country after another, confined within the limits of the most-favoured-nation clause and the Ottawa Agreements, will never produce anything more satisfactory or substantial than the agreements which we are considering.

I do not want to say much about the German Agreement, although we have been told that it is one of the subjects which can be discussed to-day. It was discussed the other night, but there is just one point in connection with it, on which I should like an answer from the Minister who replies for the Government. It is a point which was left obscure to a number of us at any rate, after the last discussion. It is whether there is any guarantee in the agreement against the imposition of duties on British coal imported into Germany. I cannot find it, and those of my friends whom I have consulted cannot find it in the agreement. Yet, when the President of the Board of Trade was asked by the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) what he meant by an open market, and whether he meant a market without a duty, the right hon. Gentleman answered, "Yes." We should like that to be made clear.

Here, again, we have the expenditure of energy and skill by tile representatives of trade, by the President of the Board of Trade, and by all the eminent gentlemen who were enumerated in the right hon. Gentleman's last speech, with the result that out of 220,000 odd unemployed miners, only some of the few odd thousands are to get employment as a result of the agreement with Germany. It is worth something. I voted for it, and I do not under-estimate the value of providing work even for 3,800 miners, but we are discussing a great question of policy, something upon which the whole tariff policy of the Government is to be judged, something so important that it is held up to us as a great achievement. But we find that as a result of this tariff bargaining we are back, not where we were, but below where we were, as regards exports of coal to Germany, before this tariff business started, and only these few thousand miners are to get employment. Why, the amount of employment afforded is about one-twentieth to one-fortieth, not of the total number of unemployed, but of the average fluctuation in the figures of unemployment from month to month.

Mr. J. P. MORRIS

Is the right hon. Gentleman aware that the agreement signed with Germany is only a coal agreement to deal with the specific problem of the coal industry, and that it is the forerunner of a more comprehensive agreement which will deal with the whole of the German tariffs?

Sir A. SINCLAIR

I am very interested to hear it. I hope that my hon. Friend's anticipation will be justified by events. I can only deal with what we have before us. If it is only a coal agreement, I shall want to know why it is only a coal agreement. I shall go into that question presently. We can only deal with the agreements before us, the agreements which, we were told by the President of the Board of Trade, were sufficient to justify the tariff policy of the Government. Take now the Argentine Agreement. As regards exports from the Argentine to this country, as I understand, the Argentine are to be admitted to the family table of the British Empire, but they are to sit just below the salt. The advantages of that are very clear. As regards our exports, coal is to stop where it is, that is to say, on the Free List. Then we had the important Clause 6 (b) of the Protocol, which the President of the Board of Trade quoted, under which the duties on a large range of articles are to revert roughly to the level of those in force in 1930. I did not hear the right hon. Gentleman quote this part, though I am sure he did so, but it is very important, and I again draw attention to it: So far as fiscal considerations and the interests of national industries permit. How far is that? Presumably all these duties were imposed in accordance with fiscal considerations and the national interests of the country. How far, then, can they be brought down? It will indeed be interesting to see because a great deal will depend upon that. The President of the Board of Trade indicated that in one or two textile items of tariffs quite substantial concessions would be granted. I offer him my congratulations on that achievement, but, after all, they are within very narrow limits, so far as we can judge and so far as he has given us any indication this afternoon. The third feature of the Argentine Agreement is the preferential treatment which is to be accorded to this country in the opera- tion of the exchange control. No country, of course, has a greater interest than we have in sweeping away and modifying these exchange restrictions, which, as the right hon. Gentleman so rightly said, are destroying trade all over the world; but is it worth while, I wonder, to have made this agreement just at this moment? It is unfortunate, at any rate, it seems to me, that it should have come forward just at this moment, within a few weeks of the World Economic Conference. It has appeared, and it must appear, to the United States of America as though we are using our economic power to snatch advantages for ourselves just on the eve of that Conference. I cannot help thinking that it is a little unfortunate that it has been concluded and published just at this time, and for this reason, that it may make advantages on a larger scale still more difficult for us to obtain.

As to the Danish Agreement, it is particularly difficult to estimate the advantages there to British trade. The President of the Board of Trade pointed out that one feature of this agreement is that Denmark agrees to take 80 per cent. of her imports of coal from Britain; and he told us that coke is to be safeguarded. I am very glad that the hon. Member who has just sat down dealt with that point, because it is important that we should get from the Minister what that means. Great anxiety has been caused, not only in the coalfield on the North East Coast, but in the coal industry generally, by the falling off in the trade in coke and coke by-products with Scandinavia, and we should indeed be glad if the Minister could give us any further indication of any definite arrangement which may have been reached for the safeguarding of the interests of the coke industry.

The right hon. Gentleman the President of the Board of Trade said that on the 1931 figures there would be an increase in the British coal trade with Denmark of 1,325,000 tons. Perhaps the Minister will explain why the President chose the 1931 figures. I have no doubt there is some very good reason, but it so happens that I, rather naturally, had taken the 1932 figures, and it also so happens that on those figures the increase in the export of coal is not quite 800,000 tons. I have no doubt there is some reason why the 1931 figures were taken, but even these figures are really illusory, because the effects of our agricultural quota, as the last speaker pointed out, will increase, and the effect of the Ottawa Agreements and the immense quota given to Canada under those agreements is inevitably to contract the purchasing power of Denmark. There will be a reaction against these advantages which we have obtained in the Danish market, from Germany, Poland and Holland. The effect of these forces must inevitably be to reduce the purchasing power of Denmark, and I should not be a bit surprised if this agreement does not result, not in an increase of 800,000 tons, and still less in one of 1,325,000 tons, in the exports of our coal.

Then there is the Gentleman's Agreement about iron and steel. We have had no information about its terms except the very important information about the new bridge and the preference given under Government and municipal contracts, which I am sure we were all very glad to hear. Then there is this list of tariff reductions, the importance of which is very difficult indeed to estimate, but I think I am right in saying—I hope I may be wrong and that the Minister will be able to put me right—that it does not seem to me that it will affect more than one-tenth of our textile exports to Denmark. Apart from textiles, the chief item that I can see affected is pickles, of which our export to Denmark was something like £20,000 or £30,000 worth last year. The stabilising of the Danish import duties would be, I admit, important, but for one consideration, namely, that we are just going into the World Economic Conference. Do the Government take such a defeatist view of that Conference that they do not think that, as a result of the Conference, tariffs will be stabilised at their present level, that, far from hoping for reductions, they are fearful that Denmark will put its tariffs up? If that is not their view, why do they plume themselves on an agreement which merely results in a stabilising of Danish tariffs, which would have been in any case the result of the World Economic Conference?

There is one other point that I would like to ask on that matter, and that is whether the 10 per cent. surcharge goes. I assume that it does, but would the Minister just make it clear that that is so? From my reading of Article I of the agreement, it will go, but if it does not go, we shall be in a worse position than we were in in 1930 and 1931. At the moment, assuming that the surcharge does go, we shall be just about in the same position, a little better, fractionally better, than we were before we started on this tariff bargaining business, and that will be the whole result of the use, the ruthless employment, of the tariff weapon against that country which is the most dependent of any country in the world upon British markets. As a whole, the result is indeed discouraging.

The hon. Member who has just sat down drew attention to one other aspect of the agreement, namely, the inevitable result of quotas in leading to the socialisation of foreign trade. I drew attention to that myself in speaking on the Ottawa Agreements and on the quota system. It must lead to that. Indeed, much as I dislike it, and much as I believe that there is no substitute for price, the function of which is to adjust supply and demand, nevertheless I feel sure that if you are committed to A quota system, then indeed the management of it ought to be in the hands of some impartial authority on behalf of the public as a whole. Naturaly, the farmers are disappointed. I see that, in the words of the agricultural correspondent of "The Times," they are in doubt as to the practical advantages of the Government's policy, now that its limitations are exposed by these Agreements. They are right. If we are to Lye in a world where international trade is restricted, diverted, canalised, regulated by these agreements, our standards of life must inevitably deteriorate. Dr. Schacht, the President of the Reichsbank, in a broadcast message which he delivered in America the other day—

Major ELLIOT

Good old Hitler!

Sir A. SINCLAIR

I have heard Dr. Schacht accused of many crimes, but not of that, and in fact he has lost his position, as I understand, of President of the Reichsbank with the change of Government. [HON. MEMBERS: "No!"] I withdraw that, but at any rate he is not a Hitlerite. He is the President of the Reichsbank, which is not in the Government, and at any rate, even if he was and is a Hitlerite, it is the more surprising that one whom one would suppose, on broad grounds of political philosophy, would be so much disposed to the acceptance of the whole Protectionist thesis, should say that there were two ways out of the present situation. One was separation of the nations from each other, leading to lower standards of life, and the other was international co-operation for the opening of new markets. Every tariff, every quota, every act of economic hostility is an act of separation and leads in every case to impoverishment.

It is not on these lines that our agriculture can hope to flourish or be the only prosperous industry in a stricken land. There are, I believe, four main ways in which agriculture can be helped in this country. Two of them are not concerned with the subject of this Debate. One would be the reconstruction of the industry and the other would be to give to farmers the benefit of the cheap money which is now available; but the third would be, of course, raising world prices by international agreement, and the fourth restoring international trade, which is the only way to restore the purchasing power of the great masses of the people in this country who depend upon the export trade and who are the only customers of the farmer. By protectionist standards the farmers are being sacrificed, as my hon. Friends above me here are entitled to say. We Free Traders do not take that view. I do not associate myself with those criticisms, but Free Traders must view the agreements with misgiving, for fear that they may put obstacles in the way of the success of the World Economic Conference and, therefore, of the attainment of those two last objectives which I mentioned.

There is another industry on which the prosperity of the countryside very largely depends and on which, I understand, the Minister of Agriculture is going to say a few words in a minute, and that is the fishing industry. There is a very important export branch of that industry, which is more important perhaps to Scotland than to any other country in Europe, and that is the herring fishing industry. When my hon. Friend the Member for Banff (Sir M. Wood) and my hon. Friend the Member for Great Yarmouth (Mr. Harbord) tried to raise the subject the other day, they were jeered at. In fact, the idea of raising the ques- tion of the fishing industry placed such a strain upon the resources of humour of this House that two hon. Members were moved to make the same joke about it within a few minutes of each other, and each of them said that my hon. Friends had tried to draw a red herring across the track of the Debate. We did not hear gibes at the expense of the fishing industry at the time of the War. Then, the late Lord Balfour said that the fishermen were the shield and buckler of the Allied cause. They live exposed like the coal miner to the full rigour of the economic blizzard, they live, like him, cut off in small communities and, living together in those communities, the whole of the life of those communities is dependent upon the success of this one industry.

Those communities have made a great contribution to this country and the Empire. It was a man from one of those communities that this country called to the leadership of this nation in the national crisis in 1931. Those communities are now suffering as very few interests are in this country. They depend upon the export trade with Russia and with Germany. The German tariffs have been trebled as the result of this economic hostility in which we have been engaged. No industry is more critically situated. The Secretary to the Department of Overseas Trade knows the difficulties, and I have paid tribute before to him in this House and in Scotland for the work which he has done on their behalf. But is this boasted tariff weapon, which has cost us so much to forge, powerless to do anything for an industry which is part of the sea power and heritage of Britain?

In so far as these treaties reduce tariffs and remove obstacles to trade, we welcome them. I have made two criticisms, that these treaties are pitifully narrow in their range and unfairly selective and capricious in the benefits, as well as in the disadvantages, which they afford to particular interests. My third criticism is that they put, I am afraid, a further obstacle in the path of the World Economic Conference. The President of the Board of Trade sometimes forgets Ottawa. That was the first and, as I often fear, a deadly blow at the prospects of the World Economic Conference. He went down to Cornwall a few weeks ago and lectured foreign countries upon their quota systems. He wished that the French would bring an end to the quota system, and he wished that the German Government would put an end to that insane quota system, which has become the curse of European trade. Then the Chancellor of the Exchequer says sternly: We cannot go back to Free Trade, not even if all the world adopted it, because we should inevitably destroy the standard of living that we have slowly and painfully built up. We all know that the standard of living was built up on the basis of Free Trade, and that only two or three years ago the League of Nations published a return showing the standard of living of all the European countries, and that group by group, all down the list, those with the freest trade and the lowest tariff had the highest standard of living, and vice versa. It is not for the standard of living that the Chancellor of the Exchequer wants to preserve these duties and quotas. He wants to preserve the policy of economic Imperialism to which he is committed by his family tradition and his political past. The Minister of Agriculture, when addressing farmers the other day, told them that quotas had come to stay. A few nights ago, when addressing the Association of Bankers, he declared that Mr. Rupert Beckett, the President of the Association, had "rightly condemned them." The Prime Minister and Mr. Roosevelt have declared that excessive tariffs, quotas and exchange restrictions are to be removed. The Chancellor of the Exchequer emphasises the word "excessive." What nations have excessive tariffs? What nations are going to the conference and admit that their tariffs are excessive? Every nation thinks that its tariffs are such as are necessary for its national needs.

If our forebears had kept this country a little agricultural country, we should have had a population of only 12,000,000 or 15,000,000. They made a sounder and bolder decision and they took enormous risks in order to build up trade all over the world. We shall never preserve that heritage by cowering behind our economic armaments. We shall no more preserve it by those means than Bazaine was able to save France by locking up his army in the fortifications of Metz. The Government must take a world view and go into the World Economic Conference determined to make it a success and determined to make their policy consistent, because unless they give a bold, and above all a consistent, lead to that conference, it must inevitably fail. If there is one form of economic armament more fatal than another, it is the import quota. The President of the Board of Trade calls them "insane." What have the economic experts who have drawn up the annotated agenda for the Economic Conference to say about them? Who are these experts? The Secretary of State for Foreign Affairs says that they are a body of exceptional authority. It contains 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 distingguished members of the United States."—[OFFICIAL REPORT, 9th May, 1933; cols. 1426–7, Vol. 277.] He quoted it at length in answer to the Leader of the Opposition last night, and he is too good a lawyer to quote evidence from one witness on a great number of points and then to descredit the evidence on the point to which that witness himself attaches more importance than almost any other point in the whole of his evidence. If, therefore, he attaches so much authority to the conclusions of this body on other points, we must suppose that he accepts their conclusions equally upon this point. They say that restrictions of international trade, whether they take the form of prohibitions or of quotas or licences have in recent years become exceptionally widespread and are so numerous that they now constitute an almost insurmountable barrier to international exchanges. They say that these restrictions often assume the aspect of weapons of economic warfare, and they go on to say: The abolition of these measures, which have grown up around and in addition to Customs tariffs, constitutes the most urgent problem from the point of view of bringing world economy back to a more normal condition. Yet since that report was written the Government have declared their intention of arming this country with a formidable equipment of quotas—arbitrary, mischievous quotas, according to the Lord President of the Council; insane quotas, according to the President of the Board of Trade; quotas which Mr. Rupert Beckett was right to condemn, according to the Minister of Agriculture; and yet quotas which have come to stay, quotas which we are to retain if the whole world goes Free Trade. But now in these treaties we are going further, and we are actually inducing foreign nations to impose quotas in our interests which the President of the Board of Trade condemned other countries for doing when they did it of their own accord. There are in politics many issues, some small and some big. Very often the popular interest is attracted by the smaller issue, but it is on the larger issue that the fate of Governments and the welfare of the people depend.

In our view, the World Economic Conference should be the supreme object of the Government's policy, to which all other considerations must be subordinated. It may be a matter of opinion whether it is better for a Government to have two policies, one moderately good and the other bad, or one wholly bad. But clearly we cannot change the Government before the World Economic Conference. Therefore, we can only pin our faith on the President of the Board of Trade. He remains a Free Trader. [HON. MEMBERS: "Oh!"] Hon. Members must not question it. He stated it as recently as the 27th April.

"Change and decay in all around I see." —political change and intellectual decay; but that was only a fortnight ago, and I think that even in these days of change that announcement stands unless the President of the Board of Trade quickly denies it. For my own part, I have no more doubt about his intellectual convictions on questions of Free Trade than I have about his personal sincerity. It is about the effectiveness of his political methods that I have misgivings. I hope that he will put his hand firmly on the tiller and direct us towards the goal of economic peace and the restoration of free exchange, because on that basis alone can economic peace be restored and the prosperity of the world revived.

5.26 p.m.

Mr. J. P. MORRIS

The right hon. and gallant Gentleman the Member for Caithness (Sir A. Sinclair) attempted in his speech to make light of the fact that only 3,800 men would be found employ- ment as a result of the German coal agreement. I interrupted him to the effect that the agreement was only a coal agreement and that it was the forerunner of a more comprehensive agreement to deal with the whole of the German tariffs. I said that it was very unfortunate that the first exchange of notes regarding commercial relations between this country and another country should have been wrongly designated when in fact it was an agreement to deal with a specific problem in the coal industry. Already we have had two Debates on the German coal agreement, and I do not purpose wearying the House by iterating and reiterating what transpired then. So far as I see, there are two points of criticism against the Government's policy in connection with the German coal agreement. The first point is that confidence has been undermined in certain industries by the lowering of the Customs Duties imposed by the Import Duties Advisory Committee and considered as the necessary minimum. The second point is that in return for concessions given to German industries we have received a negligible advantage in that we have the right to export only 180,000 tons of coal to Germany for a month.

Let me deal with the first of these criticisms. I want to ask hon. Members, and in particular my right hon. and gallant Friend the Member for Caithness, whether they were not aware that when we changed the fiscal policy of this country it was part and parcel of the mandate given to the National Government to enter into trade agreements with foreign countries. That being so, does the right hon. and gallant Gentleman think it was possible to conduct negotiations for the trade agreements on the basis that we were to get all and give nothing? Surely it would have been impossible to negotiate, let alone conclude, a single agreement, if there had not been a willingness on both sides to make concessions. Like myself, I suppose my right hon. Friend accepted the manifesto issued by the Prime Minister before the General Election. Let me jog his memory. I suppose that he, like myself, prosecuted with all the energy at his command that part of the manifesto which read: The Prime Minister asks for a free hand to consider every proposal likely to help, such as tariffs, the expansion of exports, the contraction of imports and commercial agreements with foreign countries. That manifesto was accepted and endorsed by the right hon. Gentleman's own leader, the right hon. Member for Darwen (Sir H. Samuel). I supported the policy of tariffs, not because I had faith in tariffs as tariffs, but because tariffs, if adopted as the policy of this country, could be used as a bargaining weapon in negotiating trade agreements with other countries. Hon. Members in this House and the leaders of industry knew, or ought to have known, that the Customs duties imposed by the Import Duties Advisory Committee would be reduced when we attempted to negotiate and conclude trade agreements with foreign countries, and they ought to have known that it is the duty of the Government not to legislate for sectional interests but for the country as a whole, and that certain sacrifices would have to be made.

I cannot understand the attitude of hon. Members who opposed the German Agreement. I am reluctantly forced to the conclusion that no matter what this Government did they would not have been satisfied. I am forced to the conclusion that there is some other underlying reason for their opposition to that agreement, a disingenuous reason ingeniously disguised. I am not going to be a party to any attempt to discredit the National Government on the issue of these trade agreements. I agreed to serve under the Prime Minister as the leader of my party and under other leaders of all shades of political opinion. Notwithstanding our different political view points, I will continue to accept the Prime Minister as my leader and go with him to the end. It was for that purpose that I was sent to this House, and if I did not carry out that purpose I should be betraying the confidence and trust reposed in me at the General Election not only by Conservatives but by a tremendous number of Liberals and Socialists. My right hon. Friend attempted to-day to "stage a come-back" for Liberalism. When I think of the great Liberal party of the past I am tempted to give a definition of what Liberalism new is, and I would say: Liberalism was once a very high-class thoroughbred, a classic winner, full of spirit. On its retirement to the stud, due to bad mating, its progeny has not achieved the success of its parents. It is now a common selling-plater, and there is no demand for the strain. I only hope that being old and decrepit, as it now is, it will be allowed to end its days in peace, browsing in the pastures of Gladstonian and Asquithian memories.

The second criticism against the German Agreement is the complaint of the smallness of the advantage gained by the coal industry in return for concessions given to German industries. Under that agreement we are assured of exporting to Germany 2,160,000 tons of coal per annum, in addition to the tonnage to the free ports and for German bunkers. The figure for the latter is not known, but it is estimated to approximate to 1,000,000 tons per year. So we are certain of exporting to Germany 3,160,000 tons of coal per year, and in addition to that figure we are also entitled to export a proportion equal to the proportion by which the consumption of coal in Germany exceeds the figure of 7,500,000 tons per month. It is very difficult to estimate what the consumption of coal in Germany will be, but I think I am right in assuming that Germany will participate in any increase of international trade arising out of the World Economic Conference, and so one is not wrong in assuming that there will be a big increase in the consumption of coal in that country. Therefore, we are definitely certain of the advantage of being able to export to Germany 1,000,000 tons of coal more than we did last year. I do not regard that as a negligible achievement. I am very glad to see that the serious and continuous decline in our export of coal to Germany has been arrested. Even to have arrested that decline is a fine achievement, but to translate that serious decline into an increase is wonderful, bearing in mind the falling away in the production of coal in Germany from 12,500,000 tons a month in 1930 to 8,500,000 tons in 1932. I congratulate His Majesty's Government on concluding the German Agreement, but more particularly do I congratulate my hon. Friend the Secretary for Mines, who, in all my association with him, has led me to this conclusion, that instead of talking about things he does a job of work in a very efficient manner.

Although the German Agreement was the first agreement discussed in this House, the Anglo-Danish Agreement was the first to be signed since we abandoned our policy of Free Trade and assumed control of our home markets. For a long period successive British Governments made the attempt to secure fair treatment for British goods in foreign markets, but the more we tried the less seemed to be the result. No matter how badly our goods were being treated in foreign markets we were powerless to assist, because we gave the full freedom of the British markets to foreign goods, and foreign countries, knowing that weakness, abused the position with impunity. Even the attempt by Mr. William Graham to negotiate a tariff truce during the last Socialist administration was laughed out of court through there being no bargaining weapon in the hands of the British Government. Happily, conditions are now changed. No sooner were they changed than countries which, up to then, had turned a deaf ear to all our entreaties suddenly exhibited an eagerness to discuss commercial relations with this country. It is common knowledge that after redressing the adverse balance of trade His Majesty's Government were committed to a consideration of a closer economic unity within the Empire, and that only after Ottawa was it possible to negotiate treaties with foreign countries. Particularly gratifying is it that the first of these trade agreements has been signed with one of the Scandinavian countries, because in addition to being our friends they have been our best customers. It is very praiseworthy to note, bearing in mind the smaller population, that between them they have purchased from this country many million pounds worth of British goods more than France, Germany or the United States of America.

Bearing in mind the many intricate problems faced by the negotiators of the Anglo-Danish Agreement, it is very gratifying that that agreement has met with such success in both countries. The first difficulty facing the negotiators must have been how to overcome the great lack of balance in the trade between the two countries. We have been told this afternoon that Denmark purchased from this country only £10,000,000 worth of goods, while we purchased from Denmark more than £50,000,000 worth. The difficulty was further increased by the fact that Danish exports to this country were principally agricultural products, the very goods which His Majesty's Government, under their new policy, are encouraging the farmers of this country to produce in increased quantities and also inviting Dominion farmers to send here in larger quantities. Fortunately, there was sufficient give and take, and so a solution was possible. Denmark recognised that the balance of trade was heavily in her favour, and she signified her willingness to increase her purchases of British goods by tariff concessions and through agreements made between organisations representing producers in this country and buyers in Denmark. We, on our side, recognising the interests of British agriculture and British fishing and the interests in the Dominions met the interests of Denmark by reserving to her as far as possible the high place won by Danish agriculturists in the British markets.

The chief reason for my intervention in this Debate is to clarify the issue, over which controversy now raging so violently in Lancashire, on the question why the Lancashire cotton industry was not consulted during the negotiation for the Anglo-Danish Agreement, and the assertion made that because the cotton industry was not consulted no benefits accrue to it under the agreement. I was first made acquainted with this complaint in a letter I received from a cotton spinners' and manufacturers' association in which it was stated that the cotton trade had not received a quota similar to the coal trade. It was said that the quota was there for the asking; that the Danish delegation came prepared to give a quota to the cotton industry.

After being in communication with the Board of Trade, and after examining the correspondence issued by the Manchester Chamber of Commerce on this subject, I want to state definitely that whatever the complaint may be regarding the merits of the Anglo-Danish Agreement the allegation that there had been failure to consult is both untrue and misleading. There is not a person engaged in the cotton industry who did not know as far back as last August that negotiations for an Anglo-Danish Agreement were pending. The Board of Trade was in constant touch with the Manchester Chamber of Commerce, and that body communicated to all its members all the documentary representations made to the Board of Trade. There was, therefore, every opportunity given to the cotton trade to dissent from or to support the point of view of the Manchester Chamber of Commerce. In addition, every interest in the cotton trade was requested by the Chamber of Commerce to forward to the Chamber what were its needs, desires and anxieties on the question of the negotiations. I regret to say that the cotton trade did not avail itself of the opportunity presented to it by the Chamber of Commerce, and it is ill-becoming and beside the point, at this juncture, to charge the Government with a lack of interest and vigilant eye in watching the interest of the cotton trade during the negotiations.

The reason why it is not possible to negotiate for a quota for the cotton trade, as was granted to the coal trade, is that conditions are vastly different in the two industries. Unlike coal, cotton imports into Denmark had not fallen. As regards coal, exports to Denmark, which were 96.6 per cent. in 1924, had declined to 43.5 in 1931. In the case of cotton goods, England has always enjoyed a large proportion of the total Danish imports. We have always enjoyed a proportion equal to at least 50 per cent. In fact, in 1932, we had an increase of 20 per cent. over 1931, in the exports of cotton goods to Denmark. The true position is that never, since 1924, have we enjoyed such an increased trade in cotton goods with Denmark. The Danish Government and the municipalities in Denmark are large buyers of iron and steel, but they do not buy cotton. There are no co-operative organisations representing buyers of cotton goods such as there are watching the interests of agriculture. In both countries, the cotton trade is carried on by a multiplicity of private concerns, and is not organised, either among the suppliers in this country or among the buyers of Denmark, as is the case with the coal industry.

Therefore, I maintain that the whole of the complaints emanating from Lancashire on this point fall to the ground, in that they are based on false premises and are made without full knowledge of the true circumstances—circumstances which made it impracticable to arrange for a quota for the cotton trade. What has been done for the cotton trade is to obtain an under- taking from Denmark that duties, low as they are, in a few cases shall be reduced, glad the remainder conventionalised for a period of three years. There is also an advantage to the trade in the reduction of commercial travellers' licence fees. The cotton trade ought to remember that the Anglo-Danish Agreement affords very distinct advantages to certain specific basic industries in this country, and that, as a result of those advantages, by the increased number of people who are found employment and the increased purchasing power of the people in those industries, the cotton industry will benefit indirectly from the better conditions obtaining. It ill becomes any industry to make 'allegations against the Government, when that industry ought to put its own house in order.

At the present time, it is absolutely impossible to get a united voice from Lancashire as to what are the needs of the trade, in respect to Government legislation. Only last night, a letter was addressed to the various sections of the trade, asking them to meet and to form themselves into a liaison committee, in order to keep the Government informed of their true needs. The achievement of the National Government, in the negotiation and signing of those agreements, is a stage in the policy of His Majesty's Government which will bring a new hope to the depressed industries of this country. I hope that His Majesty's Government will continue in the manner in which they have proceeded so far, and if they do so, I have no doubt that in a very short space of time we shall emerge from that mist of depression which has for so long pervaded the industries of this country.

5.48 p.m.

Mr. AMERY

I wish that I could share the simple and almost lyrical enthusiasm with which the hon. Member for North Salford (Mr. Morris) has welcomed the agreements. I might feel tempted to controvert what he said about the German Agreement, but I have already spoken twice in the House upon that subject, and I do not think that it would be reasonable again to go over the ground that I have already covered. The German Agreement, unfortunately, has been completed. The only thing I wish to say about it concerns the future. We are to embark upon future negotiations, anti I think that it is vital to the industry of this country to know where it stands in respect of those future negotiations, and more particularly where it stands in relation to the recommendations of the Import Duties Advisory Committee and to the pledges and the assurances given to industry by that Committee. Is industry to understand in future that the tariff, arrived at as the minimum to afford security for British industry by the Committee, after examining every factor affecting industry, hearing objections on the part of other industries and consumers and insisting upon standards of efficiency, means nothing to the industries concerned, and can be brushed away without notice at any moment by the action of a President of the Board of Trade, influenced only by pressure from the exporting industries?

Again, and it is no less important, are we to understand that the view of the President of the Board of Trade is that when the Advisory Committee give a pledge to an industry that Protection will be continued for such and such a period of years, they only "speak for themselves" and that that pledge has no binding effect upon the Government and is, therefore, as far as that industry is concerned, valueless? It is essential that we should know where we stand. If we are to maintain the system of the Advisory Committee making careful examination of all the facts, that should be the minimum security that British industry should get, and a tariff so established should not be given away in any negotiation. All that we should do, for the purpose of negotiation, is to make quite clear to other countries that, if they will not give us favourable terms, they will have to face duties a good deal higher than those set out by the Advisory Committee.

The whole world is accustomed to the system of a double tariff, the conventional favourable tariff which you give to those who treat you well and the general higher tariff which you impose against those who are not prepared to meet you half way. It seems to me that what we have to get is some form of general tariff above the conventional tariff fixed by the Advisory Committee. If we do not do that, we had far better scrap the Advisory Committee and simply impose some rough-and-ready scale of duties which the President of the Board of Trade and his Department decide upon as their bargaining basis. Industries in this country must know where they stand. I do not believe that there is one industrialist now contemplating putting money into British industry, on the strength of the tariff established by the Advisory Committee, who is prepared to go on until he knows what the Government's meaning really is. We are entitled to know what the Government's policy is. Is it a protective policy, as most other countries have, with a certain room for bargaining and negotiation over and above that? Or is the policy one of putting up tariffs in order to knock them down again? The industry of the country is entitled to know on which leg the Government stands. If the Government cannot arrive at a policy, it had better abandon all its other tasks until it settles down to one method or another, and arrives at some unity and at some policy.

I want to say only a word or two about the Danish and Argentine Agreements, in so far as they affect British agriculture. Before doing so, I should like to endorse what my hon. Friend the Member for North Salford has said about the desirability of establishing intimate and cordial relations with the Scandinavian countries. They are good markets of ours. They are countries of which it cannot be said that their standard of life is lower than ours, and the competition from them is not in any sense unfair. Culturally, and in many other ways, they are closely related to us, and I should be the first person to welcome eagerly any agreement that brought them into close, and, I hope, permanent, association with this country. Equally, I fully realise the importance of a good trade agreement with the Argentine, in view of the large volume of British capital invested in that country. I would not advocate, either in the interests of home agriculture or of Empire agriculture, such a sudden and violent dislocation of the trade of those countries as would inflict really serious injury to them, and leave them no room to readjust themselves.

I maintain, however, that in these trade agreements, neither the interests of British agriculture nor those of the Empire have been sufficiently considered. As regards agriculture, the main point that I should like to make is to ask why we should have precluded ourselves, quite unnecessarily, from making use of the weapon of a duty to protect our agriculture, in regard to some of the most important articles which affect the life of our agriculture? We have not yet heard a single intelligible reason why the Government are not prepared to impose a duty upon bacon or other agricultural products. There is only one conclusion that we can come to, and that is that the refusal to impose a duty does not derive from the merits of the case, but is a concession to certain members of the Cabinet who, having abandoned Free Trade as a whole, still cling to certain of its inhibitions. I think it is a pity that great interests, which are vital to this country, to the interests of agriculture and the interests of the revenue, should be sacrified to the obstinate veto of a particular Minister.

It is perfectly possible, in existing circumstances, that duties alone may not meet the immediate needs of the situation, and I am not condemning the system of quotas as entirely inapplicable or valueless. It may well be that some form of quota restriction, of quantitative limitation, may be useful to-day, or even, it may be, permanently. But I would suggest that the quota system has not yet been proved; it is a purely experimental system, whose difficulties have still to be surmounted, and may well prove to be insurmountable. The agricultural community themselves may not at all relish the amount of restriction involved, and the whole business of deciding as to the quotas allotted to different countries, and the administration of these matters, may raise great difficulties. I should like to quote to the House one or two sentences from an article which appeased in the "Times" a day or two ago: If the farmer is critical of these agreements and of the policy embodied in the Marketing Bill, it, is because be is not so sure as the Ministry of Agriculture appears to be of the success in operation of the several marketing schemes that are in preparation or in prospect. The control of marketing on a national scale is a great experiment, which may or may not yield refreshing fruits. …Farmers have confidence in Major Elliot as one of the best friends that agriculture has had for a generation, but they do not hide their doubts about the wisdom of pinning faith so completely to the success of marketing schemes and the good will of oversea producers when the future of British agriculture is at stake. We have so completely pinned our faith to these schemes that we have burnt our boats, and precluded ourselves for a period of years, which may easily be indefinitely extended, from having recourse to the old, tried, and normally effective method of duties. More than that, the right hon. Gentleman the Member for Caithness (Sir A. Sinclair) laid great stress upon his opposition to quotas, and one of the things which he hoped would emerge from the World Conference was their abolition. Is it impossible that one of the things that the World Conference will conclude is that quantitative quota restrictions, like exchange restrictions, are undesirable, and that the world should go back to the simple, old-fashioned method of tariffs? If we are to agree to that, where are we? More than that, it has been assumed right through by the Government, I do not know on what certain authority, that while under the most-favoured-nation Clause duties as between different countries may not be varied, yet it is in keeping with that Clause, and with certain specific treaties, that we should quite arbitrarily restrict quantitatively the imports from different countries, so long as we have some sort of scheme at home that has any restrictive element in it. I should say that such action would be directly contrary to the spirit, if not the letter, of the most-favoured-nation Clause, and may well be open to the most damaging challenge before the International Court; and, if we lost our case we should be thrown back on the position that we have no quota and no duty. I think that from that point of view the agricultural community in this country have very grave reason to be alarmed about these agreements. The questions of what we get in return, and how far we have fixed Denmark and other countries at a figure which leaves British agriculture very little room for expansion, are questions for others more qualified than myself.

The particular point to which I should like to draw the attention of the House is the relationship of the Danish and Argentine Agreements to the whole policy which was initiated at the Ottawa Conference. Some of us have given the best part of our lives to that policy; some of us believe that the whole future prosperity and greatness of this country, and the part that it will play in the affairs of the world, depend on drawing ever closer the economic relations of the Empire, developing to the fullest extent possible by the use of the British market the great resources of the Dominions, and, in turn, helping to develop the Dominion markets in order to strengthen the industry, the shipping and the finance of this country. From that point of view we welcomed the agreements concluded at Ottawa last August as an earnest of a policy that had been set in motion. Many of us were not satisfied that those agreements achieved all that it was desirable to achieve, but we hoped that they were a beginning; we hoped that, beyond the letter of those agreements, every opportunity would be seized by this Government to show its Imperial faith and to advance further on the line of extending inter-Imperial trade. I should like to quote the language used by the Lord President of the Council in his opening speech at that Conference. That part of his speech struck me more than any other, and I was in more whole-hearted agreement with it than with any other part. He said: The real importance of Ottawa lies in the fact that it marks the point where two roads diverge, the one leading to the development of purely national interests, the other to closer Imperial union…If, when our task is finished, we can say we have definitely taken the latter road, the actual distance progressed is of minor importance; the progress will continue, and in the future we shall always be approaching nearer and nearer the goal. In the light of that utterance, let me examine one or two of the features of these two agreements. I admit that there is nothing in these agreements which is actually contrary to the letter of the Ottawa Agreements; the letter of the Ottawa Agreements remains undisturbed. But the whole spirit of the Ottawa Agreements is, I venture to say, contradicted by the conclusions, and even by the language, of these agreements. The whole spirit of Ottawa is that no obstacle should be set to the continued further development of Empire resources, and to the progressive displacement by Empire production of foreign production so far as that is consistent with the interests of agriculture in this country. These agreements definitely bar in many directions any extension of Imperial preference. At Ottawa, for reasons which I found it difficult to fathom, we made no attempt to establish any wheat preference of any importance, beyond a trifling 2s. a quarter. There are many reasons, domestic as well as Imperial, why we should extend that preference. We have to-day a wheat subsidy system in which the subsidy is levied directly on the consumer, and makes the consumer's loaf dearer to the extent of the subsidy. It would be far preferable that the means for providing that subsidy should be found by a duty on foreign wheat, and such a duty would at the same time afford very valuable assistance to the wheat grower in the Dominions. But the Argentine Agreement forbids our giving any increased preference beyond the 2s. a quarter, and, equally, any quantitative control for the purpose of assisting Empire wheat. I should have thought that that was hardly consistent with the eloquent phrases of my right hon. Friend the Lord President of the Council. Coming to the question of meat and dairy produce, we find, in Article 4 of the Danish Agreement, the following sentence: The Government of the United Kingdom undertake not to regulate the quantity of the imports of bacon and hams, butter, eggs or cream from Denmark except in so far as may be necessary to secure the effective operation of a scheme or schemes for the regulation of the marketing of domestic supplies of these products. We are not allowed, on any fair interpretation of that provision, to meet the Dominions in conference and say that we want to regulate the supplies of these things from the point of view of assisting Dominion production. It may be that, by a side-wind to a British scheme—a domestic scheme—we may "wangle" in figures which may help the Empire rather more than foreign countries, but we are precluded by this Article from anything that resembles an avowed agreement between the Governments of the Empire to give each other extended preference on these products by means of regulation; and, of course, extended preference by means of duties is ruled out by another part of the same agreement. Again, under the Argentine Agreement we can only impose a restriction in so far as it appears to the Government of the United Kingdom, after consulting and exchanging all relevant information with the Argentine Government "— who are kept well in the picture right through— to be necessary in order to secure a remunerative level of prices in the United Kingdom market. It is only in the event of an unremunerative level of prices, and not in the event of our wanting to increase production at home or in the Empire at the expense of Argentine production, that we are allowed to do that. Restriction can only come in when it is a matter of price. But what we were concerned with at Ottawa was not prices, but the transfer of production from the foreigner to the citizen of the Empire—the increase of the productive strength and power of the Empire. Even that very limited right to restrict is restricted. The agreement goes on to say that no such restriction will be maintained if it appears that it is in any degree neutralised by imports from other parts of the Empire. In other words, if we impose a restriction on beef, and the result is an increased importation of New Zealand mutton or lamb, that restriction cannot go on, and such partial advantages as it may have for the British beef producer are at once cancelled. Further, a restriction of only 10 per cent. is contemplated, and, in case of any restriction beyond that, Empire meat has to be restricted too. What, then, becomes of the idea of a great development of the meat industry of the Empire, the creation of a great chilled beef industry?

I believe we stand today on the verge of solving the problem of sending chilled beef from other parts of the Empire. So far, as the President of the Board of Trade said quite truly, the Argentine is the only country with the equipment and the proximity which could enable it to send us chilled beef. But already Rhodesia is making very hopeful experiments in that direction. It has the proximity; it has not yet the equipment. But it could get it, and, if it is reasonably encouraged, it will get it. There are reasons, too, for believing that, by putting a certain amount of carbonic acid gas into the hold, Australian chilled beef can be brought here irk good condition. Nevertheless, under this agreement, after a 10 per cent. restriction of Argentine chilled beef, no other restriction can take place unless the Dominion supply is in its turn correspondingly restricted. What does that mean? It means that, if you build up an infant chilled beef industry in South Africa, you cannot give it a chance of growing further by restricting Argentine imports, but, on the contrary, if you restrict Argentine imports from the point of view of the home farmer here, you have to restrict that chilled beef supply still further. I see no possibility whatever, under this agreement, of developing a chilled beef trade with the Dominions. It seems to me that the treaty does restrict real and hopeful prospects in the British Empire.

Again, let me take the butter position. In the Danish Treaty, in Article 4, while the figure guaranteed to Denmark in respect of bacon, ham and eggs is a quota of the foreign import, in respect of butter Denmark gets a minimum quota of the total import and an actual minimum figure which means that, if there is any serious diminution in the volume of butter imported into this country, the Dominions will have to suffer while the position of Denmark remains entrenched. After all, it is significant that the one Danish import which least affects the British farmer, but most seriously affects the Dominions, is the one that is chosen for what I should call almost a preference. Valuable as the Danish trade is, anxious as we are to promote that trade, it yet differs in certain very essential respects from the New Zealand trade. Let me take the case of butter alone. In every shilling that we pay for New Zealand butter there is a very considerable element representing British shipping, which is not represented in anything like the same proportion in the import of Danish butter. The New Zealanders spend every year over £3,000,000 in refrigerated freights alone. New Zealand shipping is the basis of a shipping trade whose capital value is at least £25,000,000. Very little of that is represented in the price of the 2,300,000 cwts. which are guaranteed to Denmark. The whole of the New Zealand insurance is put in this country—£80,000 a year. Denmark is willing to build an important bridge, it is true, but where has all the capital equipment of New Zealand come from in recent years? Only the other day Wellington opened a dry dock for the purpose of this British trade. It was bought from this country and it cost £800,000. There are other considerations that I need hardly touch upon, the £1,000,000 that New Zealand is contributing to the Singapore Dock-£700,000 has already been contributed—and the part that her farmers played in the War. The policy for which the greater part of the House stands is one that believes that Empire trade is worth more than foreign.

More than that, there is a further consideration, and one of no small difficulty and delicacy, that arises when you limit Empire development and production. I had the privilege of attending the Ottawa Conference as one of the unofficial representatives of agriculture. All the representatives of agriculture in their discussions, in this country and at Ottawa, with the Dominion representatives were prepared to agree to the free entry of Dominion produce into this country for a period of years—three years in the case of certain articles, and five in the case of others—but on one condition only, and that was that foreign supplies should be drastically cut down, both by duty and by quantitative regulation, so as to give a wide enough field in which Empire and home farmers could co-operate instead of cutting each other's throats. One part of that policy was carried out. We are not free to impose against the Dominions for a certain period of years duties or restrictions which otherwise they might have been willing to accept. On the other hand, we have not fulfilled what from the point of view of the British farmer was an essential part of the bargain—effective restriction of foreign supplies. We have introduced a restriction on meat, which meant fixing the Argentine import at the figure of last year. In the same way the restriction in respect of other meats by no means goes as far as either the Dominions had hoped or those of us who believe in co-operation between the Dominions and the home farmer had expected. You will find arising out of this new policy considerable difficulty from the position in which you put the British farmer, certainly as regards butter and probably also cheese.

You cannot blow hot and cold with a policy of this sort. The German Agreement, whatever the damage it may inflict upon three or four quite important industries, is far more serious in the shock that it has given to confidence. The terms of these Danish and Argentine agreements, whether we are getting immediate value in return or not, will involve throughout the Empire a grave set-back from the whole spirit in which I had hoped we had left the matter at the conclusion of the Ottawa negotiations. One began there in an atmosphere of strict bargaining—it was necessary to do so—but I always hoped that bargaining would be followed up by generous further action, unbargained for but justified by the extent of Empire preference. Now our attitude is that Ottawa is finished. We made certain bargains. We will not break them, but now we turn off on a, new tack. We cannot conduct the affairs of the British Empire on those lines. Those who are responsible for seeing through the Ottawa Agreements ought to have kept a much closer Control over the negotiations for the Danish and Argentine Agreements and seen that they carried out the policy of Ottawa not only in the letter but in the spirit.

6.24 p.m.

Major ELLIOT

I am sure all of us will have listened with the greatest interest, and indeed with the greatest sympathy, to my right hon. Friend's eloquent speech, I think one of the best he has ever delivered in the House. If the line of argument that he held out could be reasonably maintained, it would be far more damaging than some of the wild and whirling words that were launched by the right hon. Gentleman the Member for Caithness (Sir A. Sinclair). We come now to the real gravamen of the attack against the trade pacts. We did not get it from the Liberal Benches. Although I listened with the greatest interest to every word that the right hon. Baronet spoke, I did not hear the fundamental words pronounced by him as to which Lobby he is going into when the Division comes, and the House has a right to ask that. [An HON. MEMBER: "There is no Division!"] There is opportunity for a Division undoubtedly. The right hon. Baronet is not attempting to run away on that. He said he was full of misgivings, he had great fears, his feet were terribly cold, but he was going to give no advice to the House as to whether we should accept these agree- ments. My right hon. Friend the Member for Sparkbrook (Mr. Amery) has an entirely different point of view, and that point of view is one with which we must all sympathise. He has devoted his life to the working out of these proposals and he must feel a certain uneasiness when, by a hard stroke of fate, it comes to the hands of others to put into action the doctrines which he has so eloquently preached. But we are putting them into, action. I join issue with every line of his remarks about our contravention of the spirit of Ottawa which he has claimed that my right hon. and hon. Friends have been guilty of, and I propose later to revert to that aspect of the problem, which I admit is one of fundamental importance.

But first of all I will deal with one or two questions which have been asked, and one or two criticisms which have been made by the hon. Member for Don Valley (Mr. T. Williams) whose temperate criticisms here and in Committee upstairs we have all learned to appreciate, and indeed whose power at short notice of getting up an enormous variety of subjects is one which hon. Members must respect and in some cases envy. It is true that in the hurry of working up his brief he had to go to the Lancashire County Agricultural Association as the only body that he could get which opposed these pacts. He did not have time to look up the public statements of the National Farmers Union nor, one would expect, would he pay much attention to the resolutions of the Conservative. Agricultural Committee of this House because, no doubt, he thinks that every Member of that Committee is burning with a desire to support on every possible occasion and in every possible way every single action of the Government. I do not wish to disabuse him so I will not press the matter further. But he said if there were any restrictions on Argentine imports Dominion imports would also be cut. That is not so. There are substantial cuts over and above those which were freely agreed to by the Dominions as being adequate for the trade pacts that we made with them before any restriction whatever is asked for from the Dominions in their imports into this country. He said the President of the Board of Trade had taken care to look after the usual shipping channels in his stipulations in the Argentine agreement. The shipping channels between this country and South America, the Royal Mail Steam Packet and others, are shipping channels in which many people in this country, and the House as a whole through its commitments under the Trade Facilities Act, are very deeply interested and certainly the President of the Board of Trade need not blush for not having desired a fresh subsidy cutting into this great development of long-distance trade which is so important to our shipping.

The gravamen of the hon. Member's charge was that the Government seeks to raise prices, and he said, "If you seek to raise prices above the 1929 level, what will it avail us if we are not able to purchase at those prices?" He spoke of the continually rising price level and the continually falling wage level, and all one can say is to repeat the words of the President of the Board of Trade. We must cut into this vicious circle of deflation in some way, and we say that the wage position in this country has been better held than the price position in the wholesale commodity market and that there has been a greater drop, as we all know, in the whole sale prices of commodities than there has been a fall in wages, and that, in fact, the burden of fixed charges, in which, I know, wages form a considerable part, has risen faster than the remuneration which the primary producer is receiving.

My right hon. and gallant Friend the Member for Caithness launched an attack of some considerable length upon us. His chief accusation was against the system of quotas, which seemed to call for his especial condemnation. He brought to our notice the resolutions of the experts working upon the Preparatory Commission of the World Economic Conference. When did this sudden contempt, hatred and suspicion of quotas arise in his breast and in the breast of his right hon. Friend the Member for Darwen (Sir H. Samuel)? It was not when they were in the Government, when they approved the quota on bacon and when they consented to the policy of the quantitative regulation of the main crop of potatoes. Does the right hon. Gentleman deny that? Does he deny that he was an honourable party to the Declaration of 11th February of last year when the policy of the quota on bacon was laid down? Did he differ on that, or deliver one of his eloquent speeches? Is it not true that Jupiter and his four satellites on that occasion were revolving in the silence only broken by the harmony of the sphere with which we were accustomed?

How could my right hon. Friend, whose responsibility for that is much greater than mine, dare to accuse me in his speech? I found, when I came to the Ministry of Agriculture, that the policy had been signed, sealed and delivered by the then Minister of Agriculture and by the then Secretary of State for Scotland, the right hon. and gallant Gentleman the Member for Caithness. He has no right now to turn round and denounce me for a policy of which he approved. Was the argument in which he and his friend justified themselves in their opposition to the Ottawa Agreements that they sent people as delegates hoping that they would fail, and that when they said that if a satisfactory scheme was evolved they would be prepared to agree to the quantitative regulation of bacon, they hoped that a satisfactory scheme would not be evolved? I would not launch that accusation against them. I believe that they made the declaration in good faith and that it was part of the long-range policy of the Government with which my right hon. and gallant Friend associated himself and to which he was fully alive. He has taken his hand from the plough. I have put my hand to the same plough, which he left, stuck half-way in the furrow.

Sir A. SINCLAIR

The answer is simple. Indeed, the right hon. and gallant Gentleman has already shifted his ground from saying that we had affixed our signatures to a document in favour of quotas to saying that we had contemplated their adoption. The point was that we agreed to an inquiry into the development of this branch of the agricultural industry and that if it was found necessary and advisable to introduce a quota restriction we were prepared to examine the scheme and approve it if it conformed to certain conditions which we thought important in the public interest.

Major ELLIOT

For the purposes of greater accuracy I have provided myself with a copy. The relative passage, after recapitulating a number of proposals, is: The foregoing proposals refer to immediate action. The Government's long-range policy is designed to facilitate economic development in those branches of the agricultural industry which are likely to be the most remunerative, and particularly those which lend themselves to most rapid development…With regard to bacon, the preparation of a scheme for the organisation of the bacon industry will be undertaken forthwith, and, provided a feasible and satisfactory scheme is evolved"— and I am sure that my right hon. Friend used those words in good faith— the Government will be prepared to promote some form of quantitative regulation of imports, In virtue of that, the Lane Fox Commission was set up and reported, and we undertook the quota regulations which are set out in that report, not less and not more, and in virtue of that we are entitled to claim the support of my right hon. and gallant Friend for the policy which he helped to initiate and was prepared to promote.

Sir A. SINCLAIR

I ask what the right hon. and gallant Gentleman would have said if, with that document in front of me, I had been asked to agree to a proposition of that kind and to consider whether a great part of the agricultural industry could be assisted by some method of quantitative restriction if I had replied that on a priori grounds I would not consider it at all? I was prepared to consider any proposal which might come out of that Commission's report, but to say that I was by that committed to a general policy of quotas and the expansion of such a policy on the eve of the World Economic Conference is absurd.

Major ELLIOT

Then I suppose the same defence applies to the next paragraph: The Government also undertake to appoint a Reorganisation Commission…to prepare a scheme for the organisation and marketing of the home potato crop and to consider such practicable complementary action as may appear to be necessary for the regulation of imports of main crop potatoes. "Consideration" is the magic word by which my right hon. and gallant Friend escapes. No question of principle is now involved. I understood that his principles were outraged by this inroad into world Free Trade by this artificial method of quotas. We are now told, "Not at all." If it is practical and if it is satisfactory, then, of course, any question of the World Economic Conference ends. Here is his signed, sealed and delivered word, and he in that case would have to justify himself before the World Economic Conference. It is not, perhaps, as difficult a task as he thinks, for, unlike my right hon. and gallant Friend, I have read the draft Agenda of the World Economic Conference. The action which we are taking in this respect arises directly out of the recommendations which the experts made to the World Economic Conference, and the further steps which we shall take, and the further proposals which I shall mention to the House before I sit down, are directed to deal with one particular proposal which the experts demanded should be considered by the World Economic Conference, and which the United States of America is considering at this very moment. What is the proposal which the experts laid before the World Economic Conference for consideration? I am quoting from their report: Higher price levels. The Commission considers that one of the measures that should be envisaged is a general policy of easy money designed to promote a healthy expansion of business. It also thinks that the question requires to be considered"— and I take it that they, too, used the word "considered" in a real and not in a purely considering sense— whether in the case of certain primary commodities where large stocks are overhanging the markets a better level of prices could not be obtained by the regulation of exports or production. Such an arrangement could be of special importance in the case of wheat. When we go, as we shall go, to the World Economic Conference, and when we defend, as we shall defend, the action taken to regulate the production of certain primary commodities where large stocks are overhanging the markets—and will anybody deny that that applied to meat last autumn, and that it applies to dairy produce just now and to the main commodities we are regulating under our quota system?—we shall not have to go further than to approve the agenda drawn up by the experts for submission and consideration at that conference.

Sir HERBERT SAMUEL

Will not the right hon. and gallant Gentleman also read the paragraph in which, in most specific terms, they say that the system of quota regulation is largely responsible for the present state of world trade and recommend its abolition as one of the primary purposes of the conference?

Major ELLIOT

I shall leave to my right hon. Friend the task of resolving the difficulties which he appears to find. I am dealing with agricultural commodities to which special attention is directed, and especially the case of wheat, where one of the great nations which is chiefly concerned with the conference—the United States—is actually considering a restriction scheme at this moment, and has thought it necessary to go in for special measures of farm relief in the Farm Relief Bill, as to which we have no criticism, as I am sure the United States have no criticism of our measures of farm relief. On the widest aspect of all, the aspect of chaos in world trade, whether we shall have some plan or whether it is to be left to the anarchic scramble, which my right hon. Friend may desire to see restored—I shall leave the solution of the difficulty to the discussions of the conference. I am perfectly certain that planning will win in argument against the scramble. That planning should be done is one of the main reasons why we are going to the World Economic Conference.

The general considerations seem perhaps not quite germane to the subject under discussion. Yet they are germane because, after all, the fundamental question we are discussing here to-night is a question of policy. Is the policy which we are to pursue a correct one? The main proposals are first the policy of regulation, second the policy of the regulation by quantitative as against tariff measures, and thirdly do those pacts carry out the agricultural policy which His Majesty's Government have defined? As to the question of the necessity for regulation, I do not believe that anybody, except perhaps a few remnants of what my right hon. Friend the Member for Hillhead (Sir R. Horne) once called the "bifurcated remnant of the rump of a party," would disagree. World trade is one of the essentials of to-day, and all we are discussing are the particular conditions in which that regulation is to take place. The question as to whether regulation is better done by tariff or by quantitative regulation is one upon which we are also willing to meet our opponents. It was said by my right hon. Friend the Member for Sparkbrook that this was departing from the old and well-tried methods of tariffs. The old, yes, the well tried, yes, and the fallacious. In an afternoon Denmark reduced her exchange 25 per cent. and thus wiped out any tariffs that might be against her to that extent. The United States has taken power to devalue in an afternoon its currency 50 per cent. Are we going to put on a 50 per cent. tariff in anticipation of possible deflation by the United States and have a tariff to give protection on top of that?

Earl WINTERTON

That is your whole tariff policy.

Major ELLIOT

I am prepared to discuss that matter with my right hon. Friend, but at the moment I am discussing the important question of agriculture, and particularly home agriculture, which we cannot leave to the battle of competition, so weakened as it has been of late years, as far as we might leave other strong, well-armed British industries.

In regard to quantitative or tariff regulation for agricultural produce, we have a working model across the water; only a few miles from here is a great agricultural State whose imports into this country are regulated by a tariff and not by a quota. I refer to the Free State of Ireland. In regard to that country, we have a few examples in figures which may be of interest to the House. The tariff in that case, as everyone will admit, is a tariff of a fairly powerful nature—40 per cent. ad valorem, not 10 per cent. or 15 per cent., but 40 per cent. ad valorem on meat, livestock and butter imports from that country. What is the position in regard to livestock? Last week, despite the 40 per cent. tariff, the Irish cattle import into this country was double what it was in the corresponding week of last year, when no tariff was applied. Who will speak of the efficacy of the 40 per cent. tariff in that case? Take the butter figures for the first three months of this year. Two years ago the figures were 6,500 cwts.; last year 5,500. What are they in the first three months of this year? Fifteen thousand, and that with the 40 per cent. ad valorem tariff. When we come to matters so vital as the control of the food supplies of this country and the survival of our countryside, I say that the tariff weapon is not the weapon which it is most useful for this country to employ. The method of quantitative regulation is the only method which I believe is fully efficacious.

Mr. AMERY

Before the right hon. and gallant Gentleman leaves that point, I hope he will answer the real issue as to why a tariff should not also be applied in addition to quantitative regulation. Why should you not also have the method of tariff in addition to whatever emergency measures you may take for the abnormal situation that exists, thereby securing the reinforcement of the tariff and the revenue which it should provide?

Major ELLIOT

In the case of Denmark we have those two; we have a tariff and we have a quota. The right hon. Gentleman asks why we should not have both. Because at one point when you are going to make an agreement you must agree. You must have some fixed point round which your agreement revolves. If everything is to be uncertain, who is to agree? The right hon. Gentleman says that he desires to draw closer to the Scandinavian countries, to share more and more in their trade, to associate with people whose standard of living and whose standard of culture are similar to ours, and with whom we daily meet in friendly intercourse. Then he winds up by asking for an agreement in which not only are we to restrict their imports, but on the top of that we are to put a swingeing duty for the benefit of British taxpayers. I should like to do many things for agriculture, but we have to remember that there are other people in this country besides agriculturists.

We have to remember that when it comes to agreements, and when agreements have to be made in some way or other, we must say where we stand, and I say without any hesitation that to get both those control measures working effectively at one and the same time is impossible, and if we have to come down on one, then I come down on the side of the quantitative regulation. My right hon. Friend says that by also applying a tariff we thereby bring much needed revenue into the Exchequer. I wish sometimes that I had had an entirely free hand to deal with livestock and butter imports from the Irish Free State, without having to consult my right hon. Friend the Chancellor of the Exchequer and the Dominions Secretary as to the revenues that they would bring in. If we had a duty of 2d. on meat, and that for every pound of Argentine meat that comes into this country the Exchequer knew that it was going to get 2d., it would be 200 times as difficult to regulate Argentine meat imports as it is when the Treasury knows that it is not getting anything.

Sir H. SAMUEL

Is quantitative regulation to be a permanent system?

Major ELLIOT

Quantitative regulation is to be a permanent system as long as the circumstances which have brought about quantitative regulation remain. Or again as that declaration, which the right hon. Gentleman himself signed, declares it is part of the long-range policy of His Majesty's Government. The difficulties in which we find ourselves have to be solved by regulation, and I have given my reasons as quickly as I might for saying that those regulations should be quantitative and not by tariffs.

I come now to the question whether these pacts carry out the purpose which we have in mind. Have these pacts been dictated by the policy of His Majesty's Government, or has the policy of His Majesty's Government been dictated by the pacts? In my view, the pacts arise out of the policy and not the policy out of the pacts. I will take the Danish Agreement first. That agreement provides in Article 4, Clause 1, that: The Government of the United Kingdom undertake not to regulate the quantity of the imports of bacon and hams, butter, eggs or cream from Denmark, except in so far as may be necessary to secure the effective operation of a scheme or schemes for the regulation of the marketing of domestic supplies of these products. Everybody knows that there is such a scheme. The provisions of that scheme have been published since last autumn. The acceptance of that scheme by His Majesty's Government has been reiterated at length. Everyone knows that the principles of the Lane Fox Report are the principles on which His Majesty's Government are operating, and that in the Clause quoted the full operation of the Lane Fox Report in every respect is specifically and actually safeguarded. The agreement further says: For bacon and hams, the Danish allocation shall not be less than 62 per cent. of the total permitted imports from foreign countries. Here let me clear up, if I can, a point on which people both inside and outside the House seem to have gone astray. They say, "62 per cent." Then they turn to last year's imports, and they say that it means 62 per cent. of so many cwts of bacon. It does not mean so many cwts. of bacon. It means a percentage of the total permitted imports. That is, the total imports permitted by His Majesty's Government, and it is to be 62 per cent. of the total permitted imports from foreign countries; 62 per cent. of whatever figure His Majesty's Government decide should be the total permitted imports. The agreement proceeds: For butter, the Danish allocation shall not be less than 2,300,000 cwts. in any year. That is the only fixed figure that is given, and it is given because the experts whom we consulted considered that a healthy state of the market could be secured by the regulation of the market, and that that figure of 2,300,000 cwts. represented a fair allocation for Denmark. It is a cut figure of between 13 and 14 per cent. on the present rate of importation, and it is a cut figure on the amount imported in the last three years. It is a cut figure whatever circumstances you like to take. To say that it is a contravention of the Ottawa Agreement is not true, when it is not merely a cut figure on last year, a cut figure on the last three years, and represents a cut of between 13 and 14 per cent. on last year. Moreover, the utmost figure suggested in a conference asked for by the Dominions themselves in regard to the butter imports into this country was 6 per cent. of Dominion imports. Therefore, it shows that we are fully maintaining the principle of the home producer first, the Dominion producer second, and the foreign producer third. For eggs, the Danish allocation shall not be less than 5½ million great hundreds in any year, subject, however, to the understanding that if some greater reduction in the total imports from all foreign countries than is compatible with this quantity should be essential to secure the maintenance of a remunerative level of prices, the Government of the United Kingdom may, after consultation with the Danish Government, subject the imports of eggs from Denmark to such reduction below 5½ million great hundreds as may be necessary to this end. That provision means what it says, that the importation of eggs into this country from Denmark is in the hands of His Majesty's Government and that 5½ million great hundreds is a figure below which the import of eggs may be reduced, and may be reduced at the will and by the good pleasure of His Majesty's Government. Therefore, the freedom of His Majesty's Government in that respect has been absolutely reserved. For cream, any reduction that may be necessary in the quantity of imports from Denmark shall be effected as gradually as possible. There, in so many words, is stated the fact that not only may there be a reduction but that a reduction is actually and immediately contemplated, and under the procedure that I have in mind that reduction will take place. To this extent I have sought to explain the Danish Agreement. If there is anything further to be said on the matter I shall be perfectly willing either to be interrupted now, or that my hon. and gallant Friend the Secretary for the Department of Overseas Trade should deal with it later. What I have been concerned with has been to show that the pact arises out of policy and not that the policy arises out of the pact, and I think the stipulations which I have read to the House from the agreement show clearly that that is the case.

When we come to the Argentine Agreement, again we have to turn to figures. The agreement with the Argentine Republic stipulates that: The Government of the United Kingdom…will not impose any restriction on the imports of chilled beef into the United Kingdom from Argentina…unless, and then only in so far as, it appears to the Government of the United Kingdom after consulting and exchanging all relevant information with the Argentine Government to be necessary in order to secure a remunerative level of prices in the United Kingdom market. For what other purpose could a reduction in Argentine meat imports into this country be required? They are to be imposed only for the purpose of securing a remunerative level of prices in this market for the suppliers of this market, for the Dominion suppliers of this market as well as other suppliers. When last Autumn we put on the Argentine restric- tions one of the main points raised by the Dominions was that they desired to see a reduction of chilled beef imports not merely for the sake of a reduction but in order to secure a remunerative level of prices in the United Kingdom market. No such restriction will be maintained if it appears that the imports so excluded are being replaced by increased imports into the United Kingdom of other kinds of meat. Surely, in that case we have as protection the Ottawa Agreement. We stand by the Ottawa Agreement. Under the Ottawa Agreement there is a fixed quantity of meat to be imported into this country by the Dominions, and what the Dominions agreed to at Ottawa is inserted in the terms of this agreement. The right hon. Gentleman the Member for Sparkbrook says: "You are taking a great new step and making it more difficult for us to maintain Dominion preference. It is contrary to the spirit if not to the letter of the Ottawa Agreement." Is that so? Under Clause 2 of the agreement we can cut Argentine imports of chilled beef into this country by 10 per cent. below the quantity imported in 1932, without any reduction being made whatever by the Dominions. Only after this cut has been made is a reduction asked for from the Dominions. Not merely is the amount of Dominion imports agreed to at Ottawa reserved, but a 10 per cent cut over that is reserved. It is suggested that over that the Dominions should also share in the reduction. If a critical situation has arisen and a 15 per cent. reduction was imposed upon Argentina, a 5 per cent. cut would be asked from the Dominions. Surely, no one can say that we have departed in this new proposition from the binding general formula, the home producer first, the Dominion producer second, and the foreign producer third.

It is said that we have here failed to consider the Dominions. That is another charge made by the right hon. Gentleman the Member for Sparkbrook. He said that there is somewhere in this a suspicion of pressure being brought to bear—some form of antagonism towards the increasing Dominion imports. We have, first of all, to consider the market, and the market cannot stand these supplies which are being piled upon it now. It is necessary, if the market is to provide a remunerative level of prices for the home producer, that the suppliers of the market must consider British home producers first and foremost. We have a situation just now where we have unrestricted imports of butter and cheese from the Dominions, and we know that the situation is so serious—the price of Dominion butter is falling so rapidly and the stocks of, dairy products are so considerable—that it is very difficult to say whether we shall be able to save the situation in the face of the amount coming into the market.

The stocks which are accumulating are so large that it may be imperative, in the terms of the report of the Economic Commission's experts, that we should consider whether some rise in the price level should not be found by restriction of imports or, if necessary, by a restriction of production itself. We do intend, if we get the sanction of the House either tacitly or implicitly in this Debate tonight, to call into consultation to-morrow all the countries supplying processed milk products to this country, with a view to arranging for a restriction of these processed milk products into our market.

Mr. de ROTHSCHILD

May I ask whether the right hon. Gentleman will take any action with regard to the Dominions?

Major ELLIOT

My hon. Friend must be aware of the binding nature of the contract which is set down in the Ottawa Agreements—that the Dominions have free access to this market. What they do is their affair, and not ours. What we say is that the market has to be considered. We have to deal with the Dominions by argument and consultation. As I have said, we shall act the first thing to-morrow morning if we receive sanction to do so. We have two further things to deal with. We have our present policy which, as I say, on the declaration of the Government, the instructions of this House, and the opinions of the experts, can be fully justified. We have to deal with over-development of supply, especially during the times immediately ahead of us. We still reserve under these Treaties full liberty of action with regard to agricultural produce. We shall not convince either this House or the farmers by words; we shall convince them only by action. They will see that action being taken.

With regard to the proposal for the regulation of fish supplies, I am pledged to say a word. I gave the outline of the proposal in answer to a question in the House on Monday. In the case of the regulation of fish, we propose to proceed by the method of quantitative restriction. It is true that for years past the scientific bodies concerned have stressed the danger of over-fishing in the North Sea. The glut, and the fall in prices consequent upon that glut, have had the usual anomalous effect of a glut crisis of further increasing the amount of supply, and not of diminishing it. Greater and greater quantities of immature fish have been landed, thus causing damage to the fishing grounds and exhausting the capital upon which we hoped to trade in future years.

We propose to take action with regard to that. We propose to impose a size limit upon the fish landed in the United Kingdom. We propose to ask the industry to use a larger mesh of net with the object of allowing the escape of immature fish—thereby stopping the landing of small fish on our shores, as well as the catching of large quantities of very small fish, which are not landed but thrown back into the sea, dead. That means a reduction—a considerable reduction—in the landings of British fish. Does anyone suggest that a reduction in the landings of our fish is to be filled by greater and greater quantities of fish caught by other people outside our shores? The trawling industry is at a low level economically, and the prices of fish have fallen. Chartered accountants' examination of the accounts of many fishing companies have shown that they are not able to keep up their plant, and are facing unparalleled economic difficulties. The right hon. and gallant Gentleman the Member for Caithness delivered a paean of praise in defence of the fishing community. I have a right to say, "What are you going to do about it?" He says, "I am only thinking of the herring fishing industry; they are an export trade, and they will not be helped by what you are doing for the white fishing industry."

Sir A. SINCLAIR

I asked for information.

Major ELLIOT

The herring export trade has to he dealt with by export trade negotiations, which we shall come to when we come to negotiating an agreement, such as he has been denouncing, with countries which take a large proportion of our herring exports. They will have to be dealt with in trade agreements which we hope to negotiate with Germany and Finland.

Sir A. SINCLAIR

And Russia?

Major ELLIOT

When my right hon. and gallant Friend can explain away the difficulties in which Russian trade now is we shall talk of negotiating a trade agreement with Russia. We shall have to deal with the herring fishing industry by export agreements, and the white fishing industry by import agreements. The essential points, as I have said, are art enlargement of the mesh of the net, a size limit below which fish will not he imported into this country, and, if necessary to bring about yet further reductions, a prohibition of the landings from distant grounds—where the fish is of poor quality—which throw a glut on the market at the worst time for the market. This last chiefly affects Germany. Since I came in, I have been informed that we have been able to reach an agreement with Germany on principle, so that in addition to the agreements we have reached with the Scandinavian countries, with Denmark, and in principle with Norway and Sweden, I am also able to tell the House that we have reached an agreement on principle on this proposal with Germany.

These proposals have to be worked out in detail with our own fishing industry. We have, of course, submitted them provisionally to the trawlers, and I think we may say that the trawlers look upon them with a favourable eye. We also desire to examine reorganisation in this industry, on which many examining commissions and committees have reported. It is our desire to have a reorganisation commission to lay before the industry a scheme of reorganisation which should be of the greatest interest to all concerned in the trade.

These proposals ought to proceed, whether there is a tariff truce conference sitting or not. As to the difficulties of the dairy industry, we are now getting letters from firms suggesting a cut of two gallons in every 10—a 20 per cent. cut in the production of our people. That is not a situation we should sit still and allow to go on simply because there is an Economic Conference sitting in London. The action we hope to take upon this question is action which I will be fully prepared to justify at the Economic Conference, when I am asked to justify my action there.

I have, perhaps, detained the House too long, but these matters are of vital importance to the home producers. Several hon. Members have put their cases, including that for the consumers, but the case I am defending here, and before the world, is the case of the producer here at home who is not having a square deal. The steps we have taken to safeguard his position are not so great as the steps taken to safeguard his opposite number in other countries. There is nothing in the proposals we have brought forward so far-reaching as those contained in the Farm Relief Bill, which is one of the major Measures of President Roosevelt's Government. We make no criticism of the action of the United States in defending the position of the primary producers. We wish them well. Unless the primary producers there and here can recover, it is a poor look out for primary production and the prosperity of this country. In these times through which we are making our way there are many rough corners, but we must persist, and we must continue to take action. We cannot shelter ourselves because a committee of 60 or more nations is to meet to consider these questions. Each nation must bring its own contribution to this pool. These pacts are our contribution. They are planned trade, or freer trade. On a Protectionist or Free Trade platform I am prepared to justify these proposals. Without hesitation I say that planning is neither blind economic nationalism nor is it the chaos, which appears to be the desire of my two right hon. Friends.

Planned trade is the clue to the exit from this economic labyrinth in which the Economic Conference finds 60 nations of the world. Down that clue we have found a way of exit from the frozen credits of the Argentine. Down that clue we have found an escape from the labyrinth of the competition between Danish bacon and butter and home bacon and butter. By that clue we hope to aid the fishing industry to escape from the very edge of the abyss of bankruptcy. We have followed this clue because we believe these pacts are a contribution to the long-range, policy of the Government which my two right hon. Friends signed, and from which they are apparently now ready to depart, and which is enshrined in the Agricultural Marketing Bill. That long-range policy was sound, the proposals which arise out of it are sound, and I believe that other countries will have to follow that line to escape.

7.15 p.m.

Sir H. SAMUEL

I do not rise to continue the Debate, but in a few sentences to state what the facts really are with regard to the undertaking which my right hon. Friend and I gave when we were Members of the Cabinet, and to show the House how utterly unjustified was the conclusion which the right hon. and gallant Gentleman attempted to draw from those facts. He is not entitled in any degree to pray in aid the action we took in February, 1932, as a justification for the policy which he is now pursuing. By the course we took then, we stand. He might have quoted not only the statement made in the House on 11th February on behalf of the then Cabinet, but also a speech of mire on 4th February, in which I dealt with the same point, and a speech of mine on the Second Reading of the Agricultural Marketing Bill, in which I again declared the policy we were prepared to support in this regard. It is this: where there is a reorganisation scheme for any particular industry, not only bacon—I quoted iron and steel and I gave, as a precedent, the dye industry—where there was a change of method, and it was necessary to give some temporary shelter to that particular industry for a specified time to prevent it, while is was in process of reorganisation, being destroyed by a deliberate importation of foreign goods, we were prepared to agree to that measure of shelter. But on two conditions; first, that the consumers interests were adequately protected and, secondly, that there was Parliamentary sanction in each case.

That is the kind of scheme which my right hon. Friend and I had in view. If a scheme in our view was satisfactory and fulfilled those necessary conditions we would not rule it out on the ground that it involved some measure of interference with imports, and if such a scheme had been proposed we should have been prepared to accept it within the particular limited conditions I lave expressed. But to say that because we were prepared in those circumstances to agree to such a limited form of regulation we are pledged to any and every form of regulation for all agricultural imports, such as embodied in these agreements, is an utterly unfair use of that limited precedent. The right hon. and gallant Gentleman is wholly unjustified in his argument, and I entirely repudiate the conclusions he tries to draw from it.

Further, I say that, if there was a general international understanding that in no circumstances at any time should there be such regulation of imports, I think that this country would gain by forming part of such an arrangement, even foregoing the limited proposals to which I have just referred. In general, the proposals of the right hon. and gallant Gentleman, which are not justified in any degree by the precedent he quoted of February, 1932, are in the main in direct contradiction to the whole spirit and purpose of the recommendations of the experts committee, and, although he may quote a particular passage which may give some colourable excuse for some part of his action, the general purport of the experts' report is that restrictions upon trade ought to be limited to the smallest proportions. The right hon. and gallant Gentleman is advocating a policy which is one of a general regulation of all and every agricultural product for this country and for every other country, and I say that if this is to be the declared policy of the Government we may as well withdraw from the World Economic Conference, for its proceedings are bound to be futile.

7.20 p.m.

Captain HEILGERS

I cannot follow the explanation of the right hon. Member for Darwen (Sir H. Samuel), but my impression is that his heart is not in agriculture, while the Minister for Agriculture is entirely for the industry. The right hon. and gallant Member for Caithness (Sir A. Sinclair) said earlier in the Debate that judged by protectionist standards the farmers were being sacrificed. I wonder what would have happened if we had had an entirely Free Trade standard to-day? I agree that agriculturists like myself when they heard that trade agreements were to be completed with Denmark and the Argentine felt a little anxiety, some misgivings, as to what would be the outcome. We knew that it was possible that agriculture might be sacrificed to make an Argentinian holiday. We knew that it was quite certain that agriculture must be held out as the only bait with which to catch the fish. The hon. Member for Don Valley (Mr. T. Williams) thought the Minister of Agriculture had doped Members representing agricultural constituencies. I feel that I may have been doped, because I find that I have now less misgivings with regard to these agreements. I find that the realisation is better than the anticipation.

We are giving more, in these agreements, to the Argentine than we are to Denmark, and I think that is only right. The Argentine deserves more consideration. For a century now we have had ties of the closest friendship with that country. It has been developed by British capital, it is dependent on British shipping, it is dependent on British markets, and, therefore, it is right that we should give as much of our market to the Argentine as we can afford. They have been encouraged to look to Britain alone as the outlet for their produce, and in the present position of world trade the Argentine has no other outlet for her produce. We have offered to the Argentine complete stabilisation of her meat industry, which is the life blood of the country, and she, in return, has given us what I am told by those connected with the country are immensely valuable provisions for unfreezing credits and for exchange control. Are these not going to be of supreme value to the exporters of this country? They will be able to sell freely and unhampered to the Argentine. We shall be in a position superior to that of any other country as regards Argentine trade, so long as the exchange control remains, and control will remain so long as the Argentine continues to guarantee the services of her public debt, so long as the prices of primary commodities remain as low as they are to-day or in the neighbourhood of the present rates.

Look at the other side of the picture. What have we given to Argentine in regard to beef? Those who are in favour of tariffs, those who regard tariffs as the only cure for British agriculture, will say that we have given everything. I do not agree with them entirely, but I agree with them to this extent that it is a great pity to have entirely given away the power to impose tariffs for three years. If these schemes are a success, if our production is increased, if our organisation becomes better, we should be in a position to reap some revenue before the end of three years. We are giving the Argentine the right to have her imports of chilled beef not reduced below 10 per cent. of the quantity sent during the year ending June, 1932. We are going to stick to Schedule H of the Ottawa Agreements as regards frozen meat, which gives, I think, eventually a reduction of 35 per cent. by June, 1934. But frozen meat is a small proportion of the whole meat trade of the Argentine. It represents about 20 per cent. of her exports. As regards beef alone it represents only 7 per cent., therefore, the principal thing we have to deal with is the 93 per cent. of Argentine beef exports, that is chilled beef.

I wonder what the position is going to be in the near future. There is a collapse in the home market. The trade in store cattle at the moment is very depressed. Store cattle are extremely difficult to sell. The marsh areas in Norfolk, usually let for grazing cattle, are almost unlettable. Suppose there is an unforeseen need for further restrictions, what is going to happen? Will the Dominions respond quite so readily as the Minister of Agriculture expects? They have not shown any such desire as far as I know to respond on the question of dairy produce.

Major ELLIOT

May I remind the hon. and gallant Member that there is a considerable proportion of the restrictions in this form which is not yet expended, which we have available for the second, third, and fourth quarters of this year, and which will, I think, bring sensible relief in the latter part of the year.

Captain HEILGERS

I am glad to have that statement. The fact that we have a reserve in hand will be of great assistance to those who are interested in the beef trade. There is another point which I desire to put before the Government. At the moment there is a fall in consumption. What is going to happen if a fall in consumption goes quicker than the restrictions? We shall be faced with the fact that the restrictions are not enough. At any rate, we can feel this about the Argentine side of the agreement that we have not given anything away that we did not have before. As to the Danish Agreement I confess I feel far happier about it. The Minister has put the case quite clearly. It is true that it will still be possible to have Danish bacon and eggs on an English breakfast table, but it will not be at the expense of the home producer. The Danes have an import quota of 62 per cent. for bacon and 35 per cent. for eggs. I should like to have seen a quota for butter as well, but I feel that the figure of 2,300,000 cwts. which has been fixed will not embarrass us in any way for a good many years to come. On the other side of the picture, Danish bacon is coming in salted British and wrapped British and Danish batter is coming in salted British, but I hope that, neither of them will come in labelled "British."

As regards the question of coal, I am glad that the hon. Member for Don Valley appreciates the value of the agreements. When the new terms come into force we are getting an increase of about 100 per cent. of our exports to Denmark in 1931. Surely that is an argument for tariffs. We have heard much about the alleged harm which tariffs have done to our trade in coal with Germany but we have not heard anything to-day about the increase which tariffs have brought about in our trade in coal with Denmark. I am glad to see the provisions with regard to iron and steel; they are even more promising than one could have visualised. In my constituency where there are large engineering works, and in the distressed areas, these provisions must be of enormous importance. Looking through the trade returns I notice that Denmark does not figure in the trade returns, as regards iron and steel, under any category except tinplates. In all the other categories in the trade returns Denmark figures as one of the "alsorans." There is an enormous scope for an increase in the importation of iron and steel into Denmark. I ask myself: Could the Government have obtained the concessions they have obtained, as regards the manufacturing side of the agreements, by giving less than they have in the case of agriculture? We have to remember on the agricultural side that Denmark and the Argentine were by far the biggest fences that we had to jump. I submit that we have got over them without a crash. I confess that there is one thing about which I feel alarmed, and that is the fact that we have conferred upon the Argentine what amounts virtually to Dominion status in trade. But I am content to follow the Minister of Agriculture, whose confidence is infectious. My right hon. Friend has the backing of the National Farmers' Union, and as far as I can see he has given away nothing which is very likely to be of any material benefit to agriculture except tariffs, and I give him my support and confidence.

7.35 p.m.

Mr. CHARLES BROWN

I am sure that the out-and-out Protectionist, such as the hon. and gallant Member for Bournemouth (Sir H. Croft) and the right hon. Member for Sparkbrook (Mr. Amery), have had a really bad afternoon so far. On the one side they have had the President of the Board of Trade expounding these agreements to the House, and making it clear that so far as he was concerned tariffs were to be used for the restoration of freer trade. We have had the Minister of Agriculture delivering, as always, an interesting and very important speech. He has told us that as far as he is concerned tariffs are out of date, old-fashioned and not much use in the economic circumstances of the modern world, that the arguments which have been used in support of tariffs are very largely fallacious, and that the policy of quantitative regulations which he has expounded is now the definite policy of the Government.

In view of that fact, I want to put to the right hon. and gallant Gentleman a straight and pertinent question. Before the Debate closes will some representative of the Government tell us the date on which the Import Duties Act is to be repealed? In view of the statements that have been made by Ministers, it is time that such an announcement was made, so that the country may know where it is. What I have said about that is reinforced by the speech of the right hon. Member for Sparkbrook. We were told 15 months ago that one of the things which would give certainty to industry and make matters easier generally for the industrialist, was the establish- ment of a Protectionist system. The right hon. Member for Sparkbrook comes here to-day, after 15 months of the experiment, and says: "Where does industry stand?" Apparently no one knows; there is no certainty anywhere. I suggest that the sooner the Government make some definite announcement on the matter, as to whether or not they intend to pursue the policy of tariffs and Protection, the better it will be for everyone concerned, and the more certain will industrialists be about the future.

The right hon. Member for Sparkbrook also stressed the fact that in his view the country was being sacrificed to the obstinacy and prejudice of certain Ministers. Presumably he meant those Ministers who are supposed to have Free Trade sympathies. But if the right hon. Gentleman had delivered his speech after the Minister of Agriculture had spoken he might have felt that the views of the Minister of Agriculture about quantative regulation were equally dangerous to the ideas that the right hon. Member for Sparkbrook so frequently expounds to the House. The right hon. Gentleman went on to complain that the agreements with the Argentine and with Denmark contradict or are antagonistic to the spirit of the Ottawa Agreements. As I listened to him I felt that he was arguing that the Government ought to make no agreements with any other nations, but ought to embark chiefly on a policy of Empire economic unity, by entering into arrangements with the various Dominions, and the corollary of that, as far as I understood the right hon. Gentleman, was to wage ruthless economic war with the other nations of the world.

About a year ago I characterised the earlier speeches of the right hon. Member for Sparkbrook as a series of laments because the Government had not pursued as vigorously as he thought they ought to have pursued a policy of Protection. I suggested that those early speeches of the right hon. Gentleman should be collected and published as a new Book of Lamentations. Now the right hon. Gentleman has begun another series of speeches. The first was delivered last week, and we have had another of the same sort to-day. The right hon. Gentleman ought now to begin to collect these speeches and issue a new series entitled, "The Choice of Weapons, and how to Use Them." In his earlier speeches there was a good deal of pity and pathos because the Government were not pursuing the vigorous Protectionist policy which he expected. I suppose that that was largely due to the fact that when he looked at the Government Front Bench he saw there a mixture of his political friends and enemies, and he did not think that that mixture could result in anything very decisive. Consequently those early speeches were very pathetic indeed.

Now the right hon. Gentleman comes along and delivers an entirely different type of speech. All his speeches now turn round the question whether or not the tariff is an effective bargaining weapon. That is the new theme on which he talks. Of course it all depends on who uses the weapon. I can easily understand the fears of the right hon. Gentleman when the tariff as a bargaining weapon is in the feeble hands of a Free Trader. No doubt the real Protectionist would attempt to use it, whether with any success or not would remain to be seen, to make Protection stronger and firmer and surer. The right hon. Gentleman and those who think with him will never obtain the sort of Protectionist system that they desire while the so-called Free Traders are in the Government. Not only have they now to remove the Free Traders, but they must remove the other type, the followers of the right hon. Gentleman the Minister of Agriculture, who believes in quantitative regulation. So they have a really difficult task on hand before they will see established that system of Protection which they so ardently desire. If I shared the views of the right hon. Member for Sparkbrook and the hon. and gallant Member for Bournemouth I should be using all the influence I could command to bring about that cleansing of the Government that is necessary for a full-blooded policy of Protection to be brought into operation.

Let me say a few words about the speech of the President of the Board of Trade. He began by painting for us a picture of the development of the Argentine. He told us that the country had been developed by British capital. He described how its docks, harbours, railways, roads and general development had come about through the export of capital from this country, and he reminded us that there is invested in that country something like £500,000,000 of British capital. But instead of the British capital in that country being invested in industrial processes, it has resulted in the development of the Argentine as a great agricultural community, and the consequence has been that its agricultural products come into very keen competition with British agricultural products. One could also speak of the export of British capital to other parts of the world to create industrial enterprises the products of which come into severe competition with the products of British industry. It does not seem to matter much whether you export your capital to countries engaged in the production of primary products, or to countries in which there is a process of industrial development. Out of both kinds of export of capital there develops, sooner or later, competition with your own home products and out of that competition arise most of the difficulties with which we are now confronted.

The President of the Board of Trade, I think, complimented Denmark on what he called Danish enterprise in securing markets for their products in Great Britain. The fight hon. Gentleman seems to have changed his position considerably during the last two years. No longer does he speak in complimentary terms of the enterprise of all countries in the world conducing to the general well-being of mankind. He is now engaged in policies which are calculated to limit the enterprise and development of certain countries, presumably with the idea of fostering enterprise and development in our own country. Not very long ago the right hon. Gentleman told us that one invention was worth a number of Acts of Parliament. Apparently he has abandoned that position and his view now is that the future depends on successful trade agreements with various countries. Coming from a Free Trader it was interesting to hear the statement that tariffs enabled Government to control the ebb and flow of trade. Unfortunately, tariffs, quotas, quantitative regulations are all reducing the volume of trade. There will be less ebb and flow to control the longer the Government remain in office. Every policy which they pursue seems to reduce the total volume of trade still further, and we shall soon have complete stagnation. In regard to coal, I only make one comment. Coining from a mining constituency I do not complain about the possibility of selling more coal in Denmark or anywhere else. This contribution to the improvement of the coal trade, miserable as it is, is welcome to anyone coming from a mining constituency. We will give the right hon. Gentleman credit for that.

A major part of Government policy in this matter has just been expounded by the Minister of Agriculture and one is entitled to make a few comments on the policies which have been pursued by the Government so far during their period of office, and the various stages through which those policies have passed. Let us always remember that this Government arose out of a great national crisis. We were told that everything was going to the dogs, and the Government were returned to redeem the situation. Let us review the processes of redemption which they have suggested. First we were told that the road to salvation was to establish Protection, and keep out foreign goods, and that if we did so, all our factories would quickly become throbbing hives of industry, wages would be raised to a higher level, and the British workman would experience prosperity such as he had never known before. The right hon. and gallant Gentleman the Member for Caithness and Sutherland (Sir A. Sinclair) has reminded us that the Chancellor of the Exchequer bemoaned the fact that the tariffs had kept out too many goods and had not produced the amount of revenue expected. You cannot have it both ways. You cannot have the revenue and keep out the goods at the same time. It would be a good thing if the Government made up their minds which they want to do. Do they want to get the revenue or to keep out the goods?

Mr. CAPORN

Which does the hon. Member want?

Mr. BROWN

It is not my business to explain which I want. My business is to try to find out what the Government intend to do; what their policy is and what are the results of the policy pursued by them so far. What I should like to do is something which I can expound on a future occasion. The second road to salvation indicated by the Government was by the Ottawa Agreements. "Ottawa" was the next slogan. The establishment of Protection did not carry us very far so we were made to concentrate on the Ottawa Conference and we were told that out of it certain agreements would emerge which would carry us much nearer to the desired goal. We are now beginning to see that the proposals made at Ottawa were fantastic and absurd, and are not carrying us any nearer to prosperity.

Lieut.-Commander BOWER

How can we tell?

Mr. BROWN

The hon. Member suggests, I presume, that it is too early yet to tell. It will always be too early to ask what results these measures are producing according to hon. Members. But hon. Members must understand that if they fail to deliver the goods—no matter about the question of possible results now or at some future time—the electorate will give them their answer. The third road to salvation we were told was via these trade agreements. I was very interested last week when I heard the Secretary for Mines trying to convince the House that we had never sold as much coal to Germany as we thought we had, and the President of the Board of Trade trying to convince us that we shall now sell much more coal to Germany than we ever have sold. It was amusing to find the Secretary for Mines doing one thing and the President of the Board of Trade doing another.

The fourth way to salvation we are told is through the Economic Conference in June. I do not know what the Government will put up after that. None of the things which they have done so far have made any visible impression as regards the common people in this country, except in a few isolated areas. Those of us who criticise a protectionist system have never contended that tariffs do not, in regard to particular industries and for short spaces of time, bring certain advantages. In isolated places it is possible to point to certain good results but I am speaking in general terms and I say in general terms that, so far, none of these policies have made any visible improvement in the lives of the masses of the people. Consequently, so far as the Government is concerned, no good which it can achieve during the remainder of its career will compensate for the evil which it has already wrought. To me, the speedy end of the Govern- ment is desirable in the interests of the country and of the Empire, and of the world and most of all in the interests of the working classes at home.

7.55 p.m.

Colonel RUGGLES-BRISE

The hon. Member for Mansfield (Mr. C. Brown) will forgive me if I do not, at this stage, follow him in his arguments though I may have something to say in reference to them later. I only rise to make two points which I wish brought to the attention of the Minister of Agriculture. The right hon. and gallant Gentleman just now told the House that as regards imports of chilled meat into this country he had in reserve a good many points of restriction which he intended to employ in the autumn in order then to create a better market for home-bred cattle. That is to say at this moment supplies are being allowed to come into the home market at large—comparatively speaking—in order that they may be restricted at a period later in the year when the cattle fed upon the grass through the summer months will be coming into the market for sale. The Minister appears to have overlooked the fact that in the spring months, in March, April and May, winter-fed cattle are coming upon the market. Winter-fed cattle are far more expensive than the grass-fed cattle of the summer. Winter-fed cattle have to be hand-fed and given concentrated foods in order to make them fat. It is far more expensive to finish them than to finish the summer grass-fed cattle which require comparatively little attention in those areas where the grass is good. I therefore ask the Minister to direct his attention another year to trying to keep the home market just as bare of imported meat at this time of year, as in the autumn.

My other point has some reference to the remarks of the last speaker. He anticipated that my right hon. Friend the Member for Sparkbrook (Mr. Amery) would probably issue a treatise entitled "Choice of Weapons." It is about the choice of weapons that I desire to say a few words. We note one common feature about the Danish and Argentine Agreements, and that is the abandonment of the tariff weapon. That weapon has been, for good or ill, definitely abandoned in those two agreements. In regard to the whole question of regulating the home market, we are faced with two dis- tinct problems, and if we are to restore the home market to the home producer, we have to make a choice of weapons. The first problem is to remove the glut, the surpluses, the quantities which are in excess of our normal requirements. We have to regulate supplies from whatever source they come into our home market.

The second problem is quite a distinct one though it is inter-related with the first. It is, to regulate or raise the wholesale price level. You may have been successful in regulating the supply from all sources to within a few tons of the exact requirements of the meat-consuming public. But although successful in regulating the quantity, the whole of that supply may be offered to the public at a price which is definitely below the cost of production. We have the two weaons—quantitative control or the quota system, and the tariff weapon. I have no hesitation in saying this—and here I join issue with my right hon. Friend the Member for Sparkbrook—that in order to achieve the regulation of supplies coming into the home market, there is no doubt that the quota system is far the most effective, but when you come to the second part of the problem, the raising of the wholesale price level, the situation is quite different, and here, I believe, the tariff weapon is far the most effective for that purpose.

Let us suppose that the Government desire to-day to achieve, as I believe they do, a definite rise in the wholesale price of meat in this country. They have abandoned for the moment, though I hope they are going to resume control of it, the tariff weapon, and they are thrown back on using the weapon of quantitative control only. We will suppose that the Government have adjusted supplies to the exact requirements of the market, but intend to raise the wholesale price level. What will happen? The Government will have definitely to reduce the quantities, but my point is that if you are able to achieve the supply of meat to your customers' requirements, you want to give the meat customers the full WO per cent. of their requirements. Why should people who are willing and anxious to consume 100 per cent. of meat be deprived of, we will say, 10 or 15 per cent. of their requirements? That is not the right way to get the good will of the consumer, and as an agriculturist I would say that that is the last thing I want to happen. We want to get the good will of the consumer, not merely to consume 100 per cent. of his meat requirements, but I would like to see him consume 110 or 120 per cent. of his requirements, and the last thing that I desire is to see him deprived of any portion of his ordinary, natural 100 per cent. requirement. Therefore, I say that the Government ought to arm themselves with the tariff weapon in order to avoid having to make a restriction below the 100 per cent. requirement of the meat market, and ought to use that tariff weapon for raising the wholesale price of meat. I regret very much that the Government should have abandoned this useful weapon.

In the negotiations which led to the signing of the Danish and Argentine Agreements, as well as of the agreement with Germany, my right hon. Friend the President of the Board of Trade and those with him had three extraordinarily powerful weapons. First of all, they had the weapon of quantitative control; secondly, they had the weapon of the tariff; and, thirdly, they had, I think, the equally potent weapon, which they were able to use in argument, that both Denmark and Argentina had enjoyed a very favourable trade balance with this country for many years past. A criticism which might reasonably be levelled against the conclusion of these various treaties is that my right hon. Friend and those with him, starting with those three very powerful weapons, might have been able to come to a more successful bargain. We do not yet know whether we have really made a good bargain. It will take time to see how it all works out, but when one considers that, as far as the Danish Agreement is concerned, whereas Denmark has been sending us some' £54,000,000 worth of goods against some £10,000,000 worth that we have been sending to her in return, I cannot think there was any justification whatever to leave off bargaining at the point where it was left off, when we still had the tariff weapon in reserve. I hope that before they enter into negotiations for any further agreements with foreign countries, the Government will re-arm themselves with the most powerful weapon of all, the tariff weapon.

8.5 p.m.

Sir FERGUS GRAHAM

I am grateful, Captain Bourne, to have caught your eye, though it be only for a few minutes that I want to address myself to some telegrams which I have received from the agricultural party with regard to these Pacts with Denmark and the Argentine. I feel that, far from tariffs being out of date, as was said, I think, by an hon. Member opposite, the Imports Duties Act has been one of three valuable levers wherewith these bargains have been made. I sympathise with the right hon. Gentleman who made the bargains on almost imponderable units and enormous figures, and I am prepared to believe that there will be a successful result, which can but be proved by time. I therefore desire to congratulate the right hon. Gentleman, though I feel that congratulations over a bargain are not quite in order. A sheep dealer whose reputation is too hard in bargaining, is not thereby helped in any future bargaining. No bargain could be made without a quid pro quo, and yet, in these agreements, it appears to me that no harm is done to agriculture. Some of those who have spoken have failed to recognise that the percentages given are percentages of permitted imports, and that "permitted imports" is a fluid phrase and one that we hope may be reduced as the British farming community and the marketing board contract for yet larger supplies which they can offer in the 12 months ahead.

I believe that quantitative regulation is more helpful than a tariff at the present time for the farmer. I come from a district where Irish cattle have been coming in, despite the heavy tariff that there is against them, and where it appears that the Irishman, desiring to pay his dues by other means than by the tariff on those cattle, can render the tariff of not much help to the local farmers. Your quantitative regulation is precise, accurate, and smooth in its working, and, therefore, for the consumers surely a gentler method of helping the producer. Perishable goods have to be disposed of somewhere, and whatever tariff was against them, however prohibitive it might be, those perishable goods would have to be thrown into this country, though the producer lost thereby. We have seen lately, while foreign exchanges have been unsteady, how easy it is for a foreign country to evade the effect of a tariff, however fierce, by currency manipulation.

At past elections those who have supported tariffs have in many cases believed that the power of bargaining was one of their main planks. We have believed that when this country should cast aside its fiscal policy of Free Trade, being unique in its insular Free Trade, it would not also cast aside its quality of being unique but would deal with a type of tariff that should help the whole world while helping itself, a tariff that should be able to govern the trade of the world that had gone too far by merely building high walls, without reason, by acting as a lever whereby those walls might be reduced. The main need of agriculture and of the farmers at the moment is, first, a price for their primary products, and then some security and stability among their consuming industries.

In 1927 I had the honour of being a member of a deputation to Argentina, and while I was most hospitably entertained and we saw many estancias and frigerificos, we saw the enormous possibilities of production in that wonderful country and can feel satisfaction that, within the bounds of this agreement, the production that they were offering in 1927, which was not then doing harm, can be maintained. We welcome stability for agriculture at a level which did not prove detrimental to our own. I believe that during the course of but a short while we shall recognise the real advantages of these agreements.

8.13 p.m.

Mr. HENDERSON STEWART

We have heard to-day the views of Members of the Government, of the Conservative party supporting the Government, of that group of the Conservative party which on this issue opposes the Government, of the Labour party, and of the Liberal party; and it will not be out of place, perhaps, if I try to express the views of a Liberal who supports the Government on this highly important matter. First of all, let us examine the place of these Trade Agreements in our economic policy at home. Whether you like these agreements or not, whether you think them good or bad, this at least you cannot dispute, that they are the direct consequence of the economic policy adumbrated at the General Election in 1931, a policy upon which this National Government was returned. Throughout that election leaders of the various groups making up this Government emphasised the essential nature of these and similar trade agreements, for we are dependent to so large an extent upon the export trade. Two out of three of our unemployed belong to the exporting industries. It was obvious to leaders of the various parties—it was certainly accepted by the country—that no real relief of unemployment could be brought about unless we found new markets abroad. There seemed then, and there seems now, no way other than that of negotiations with individual countries for obtaining those markets.

I agree with my right hon. and gallant Friend the Member for Caithness (Sir A. Sinclair) when he said that many Liberals were persuaded to support the Government on the grounds of these Trade Agreements. The principle of making trade agreements was embodied at the earliest possible moment in an Act of Parliament. Last year we had the Import Duties Act, which the right hon. Gentleman the Member for Spark-brook (Mr. Amery) welcomed as a triumph for the cause for which he had been fighting for over 30 years. One of the principal objects of that Act, according to him—taking it from the Preamble—was the securing of better terms for British trade from foreign countries. That was the immediate action taken to implement the policy for which the Government was returned. That Act was carried by an overwhelming majority in this House. If I may be allowed to make a small personal reference, this policy was confirmed unmistakeably by the country in February of this year, because I made the prospect of these Trade Agreements one of the principal reasons for seeking support for the Government at that time. I am one of those who owe, and am proud to owe, my seat to the prospect of these Trade Agreements, and some of these agreements having been produced, I congratulate the Government and the Ministers responsible for them. Bearing these facts in mind—the declarations of Ministers, the declarations contained in manifestos at the General Election, and the Act which was passed a year ago—it came to me as a surprise that the right hon. Gentleman the Member for Spark-brook and his friends should challenge the principle upon which these agreements have been made.

I would like to know what is the position of these hon. Gentlemen and right hon. Gentlemen? It seems that they agree to the system of the Advisory Committee, and that they support the principle by which the House should confirm the recommendations of that committee. According to the right hon. Gentleman and his friends, however, once a rate of duty has been fixed for any particular industry, it must remain unaltered and unalterable till the end of time. That is what I understand from the right hon. Gentleman's explanation to-day. I say nothing of the new constitutional theory that that policy suggests. If the House of Commons is to be debarred from being able to revoke Measures that it has passed, then, indeed, it is a revolutionary step such as even my hon. Friends on the opposite benches would not contemplate. I should like to understand the point of view of these hon. Gentlemen and right hon. Gentlemen. What do they want?

There is in my part of the country an old ruin which we as children used to call the chief's castle. It was a place of defence. With its moat, its drawbridge, its keep, and its great massive walls, it was a place of strength in which the chiefs and their clans could take shelter and in which they could hold out against their enemies. In anarchic times men built for themselves impregnable fortresses of that kind. I thought that that system had passed, and yet the right hon. Gentleman the Member for Spark-brook would seek to apply the same system to the industrial and economic policy of this country. He would build round each individual trade of this country a chief's castle of tariffs in which each industry could hold out against other industries and against the whole world, in a position unassailable, impregnable, sacred even. Such would apparently be the practical application of the right hon. Gentleman's policy. I noticed that to-night he gave a further explanation of his point of view. He said that he was in favour of a double tariff. He would carry on with the policy of the duties laid down by the Advisory Committee, and he would say to a foreign country, "You are a bad country, you are not helping us, you do not take our trade, and the balance of trade is low, so we will put another dirty on." That is a different policy from the one adumbrated by his right hon. Friend the Member for West Birmingham (Sir A. Chamberlain). He has another way. He apparently would instruct the Advisory Committee, after having chosen a level of tariffs, to add another x per cent. with which we could bargain and which could be taken off. When these opponents of the National Government on this important item in the Government's policy are able to reconcile their ideas and to offer a considered policy, we may understand where we are.

The anarchic view by which each industry is to be put within a castle to withstand and deny and beat off attacks, even if made by the Government, is not the view of protection to which I subscribe. It is certainly not my view of the economic policy of this Government. I was, like my hon. Friends on these benches, born and brought up a Free Trader. I believed that it was the system best calculated to bring prosperity to all the nations of the world. I confess frankly that the events of 1931 forced me regretfully to change my mind. I accepted in the special emergency the policy of Protection. I accepted it for the same reason for which I had previously accepted Free Trade—on the understanding that its application would not be anarchic and individualistic but co-operative, designed not to safeguard the interests of one class rather than others, but, without limit to the goods of this country or even of the Empire, to restore trade for all industries in this country and to bring about the greatest good for the greatest number. That is my view of the power of this Government to impose tariffs, that is my view of the way in which we ought to use it, and I would like to examine the new agreements in that light.

I think it is futile to judge these agreements solely by the concessions made on our side. That way progress is completely barred. The only real test is the result on balance, and I want to test these agreements by that measure. My right hon. and gallant Friend the Member for Caithness (Sir A. Sinclair) poured scorn upon these agreements, he saw nothing good in them. At any rate that was the trend of Ids speech, though I am glad that towards the end he was able to admit that so far as they removed tariffs he welcomed them. His speech seemed to consist mainly of a theoretical examination of tariffs and Free Trade. I would prefer, because it is the explanation of and the justification for the attitude my hon. and right hon. Friends have taken in supporting the Government, to examine our problems in the light of hard facts, and to apply realism rather than theory to an examination of the position. Test these agreements by the results, on balance on employment and trade in this country.

The German Agreement increases the export of coal from this country to Germany by an amount which, it is estimated, will give employment to an additional 4,000 or 5,000 men, including coal workers and those connected with the mines and those connected with shipping and transport. No doubt all of us would have liked a better bargain. The right hon. Member for West Birmingham (Sir A. Chamberlain) would have given away less. He would not have given away anything on tariffs on this side. I myself, and most of my friends in the East of Scotland, of whatever party, would like to have gained more, and especially gained something to restore the market for herring. My right hon. and gallant Friend the Member for Caithness was entitled to pay that great tribute to the fishing industry. I, too, represent a division an important, part of which is concerned with fishing, and I too have represented to the Board of Trade the necessity for seeking an increased market in Germany for British herring, and I am assured that this question will be tackled when the wider negotiations are opened after the World Economic Conference.

Test the Danish Agreement by the measure of the results on balance to the trade and employment of this country. That agreement will result in an increased export of something like 1,500,000 torts of British coal. That is estimated by the President of the Board of Trade to give work to an additional 5,000 men. If we add the number in the auxiliary trades— transport, shipping, and trimmers—we may well reach a figure of something like 8,000 men. And not only coal but coke, and not only coke but, more important, steel and iron. I see it is estimated that whereas we now export about 50,000 tons of steel and iron, by the new agreement or at any rate by private negotiations between traders carried on under the shadow, as it were, of the agreement, that total will be increased to 75,000 tons. That is an increase of something like 30 per cent. of the exports of iron and steel. In the case of cotton and wool we are assured by that agreement of economic prices for those important products. Motor cars and other manufactures mentioned by the President of the Board of Trade are to have the tariff against them reduced so that they may enter more freely into the Danish market.

Sir JOSEPH NALL

I would like the hon. Gentleman to realise that under the agreement there will be a decrease in cotton exports, and not an increase.

Mr. STEWART

I do not accept that. There is a paragraph in the treaty which lays it down that the importation of those particular products, which I think come under Part II of the Schedule, is to be controlled to the extent that the Government will he able to maintain "a level of economic prices." Those are the words of the agreement. Jute and salt, which were imported in large quantities from other countries are now to be imported from this country. There is a further important point which was mentioned by the President of the Board of Trade; there is to be security for traders that the tariffs upon a long list of articles will not be raised in future. I cannot estimate very closely the figure of the employment which that Danish Agreement will give, but so far as I can estimate it I see employment provided in this country for at least 10,000 men.

Take the Argentine Agreement. The Argentine is a great country, in which £600,000,000 of British capital is invested, a country above all others about which we need to observe care, and to which we ought to offer every assistance for development and expansion. What have we done through the Trade Agreement with that country? It is not yet completed, as the President of the Board of Trade has told us, and is subject to adjustment later on, and it is not so easy, therefore, to estimate the net gains. But at any rate two or three things have emerged clearly, and two or three immense advantages will come to this country which I, representing an exporting constituency, welcome. In the first place £11,000,000 of frozen British money will be unfrozen. There are firms in my Division who have had money owing to them for nearly two years. Their export trade has almost stopped. They cannot get any return for the things they have sent out to the Argentine. That difficulty, which, as the President of the Board of Trade very rightly said, shackles trade and chokes it, is being removed as a result of this agreement. There are to be reductions in Customs duties. I took the opportunity a month or two ago of giving this House an example of the kind of thing that is done in the Argentine. Articles sent out there, worth, shall we say, £1 are immediately doubled in value to £2, and a high tariff is added on the basis of the £2. That kind of problem will not arise in the future, because one of the conditions of this agreement is that the Argentine shall revert immediately to the system of 1930. Therefore, I see there another opportunity for British goods entering into an enlarged market.

Coal is to be retained on the Free List. My right hon and gallant Friend the Member for Caithness poured scorn on this result, too, that we were able to maintain the present level of tariffs and the present Free List in the Argentine and in Denmark. I do not think that at this time, when tariffs in every country are changing and when so many exchange difficulties confront us, we should scoff at any measure that brings about a measure of stability and gives business men a reasonable outlook for the future. We shall obtain that as the result of the Argentine Agreement, and further, we have agreed, as is seen by the Treaty, to examine the means of extending the market for coal. As a result of these measures, I foresee a great expansion of British trade in that country of unlimited resources, and if it were only for that reason I would welcome the trade agreement, and I should suggest that this House should welcome it It will mean also the stabilisation of British markets in meat, beef, and similar products. The market for meat is subject to constant fluctuation; that difficulty will be overcame by this agreement.

What are the results of these three trade agreements in increased employment? What is the net result by the test I suggested a moment or two ago? Again, I can only make a rough guess, because I have not all the facts at my disposal; the Argentine Agreement is still subject to revision. Estimating in the most conservative way, and adding what we are entitled to add, according to the statement a day or two ago, the increased market for coal that may come from the further treaties with Norway and Sweden, I see an increased employment in this country of not less than 100,000 men. The test of these agreements is how else—[Interruption.] Very well, say 200,000 men. This is the challenge that I apply to opponents of this policy: How else would you find employment for those men at this time? Is there any answer to this question? Will hon. and right hon. Gentlemen sitting on the Opposition Benches offer a solution, a policy or a programme that will give employment within a year to these men? This is a practical contribution to the solution of unemployment, and for that reason it is to be welcomed. Moreover, it brings a measure of relief—and a considerable measure—to the most depressed areas in the country. Hon. and right hon. Members on the Opposition Benches sometimes harrow the House and the country with stories of the conditions in the mining areas. There are mines in my division. There are mines in Fife. There is depression there which I understand and appreciate. It is because I see work and wages brought to those men and to those particularly distressed areas that I am glad that these agreements have been brought about.

My right hon. and gallant Friend the Member for Caithness expressed considerable fear lest these agreements endangered the success of the World Economic Conference. He said that he was afraid that the nations of the world would look upon our action as an attempt to serve selfish interests and to secure selfish ends. I will say this to my right hon. and gallant Friend: These agreements were initiated and negotiations were begun, some of them, nearly a year ago; some of them, at any rate, considerably more than six months ago, at a time when the date of the World Economic Conference was still uncertain and when no one was sure that the Conference would meet at a reasonable time in the future. Is it suggested that this Government, because of the possibility of a conference some months or years ahead, should stand by and do nothing to improve the trade of this country? That seems to me an amazing doctrine. There is another observation: What are the objects of the World Economic Conference? What are the obstacles we are going there to try to remove? One of those obstacles is excessive tariffs. That is mentioned in the report of the experts; it is mentioned in the joint statement issued by the Prime Minister and the President of America, and it is in another report, issued a few days ago by the American President and one of the other representatives of the countries with whom he was discussing the matter. It is agreed everywhere that excessive tariffs are one of the main problems with which this Conference has to grapple. These trade agreements make a contribution to a lowering of world tariffs. Another problem is exchange restrictions. I have referred to the position of the Argentine; £11,000,000 worth of frozen trade will be released. This agreement has been an example to the World Conference, a model rather than a hindrance to its labours.

Another problem of which we have heard a good deal to-night is that of prices. It is the view of all economists of whom I have heard, and of all the experts and the Governments of all the nations, that until we get an improvement in prices there can be no restoration of trade. It is all very well for hon. Members of the Opposition to say that they are opposed to this policy. One of their most respected leaders, now passed beyond this House, the late Mr. William Graham, was, in 1930, an advocate of increased prices. In the course of the Debates, if I remember rightly—I was not a Member of the House, but I read the Debates when they took place—he urged the necessity and the importance of increasing prices. Indeed, his Coal Bill was an interpretation and application of that policy, because the main purpose of the Bill was to improve prices for the benefit of all those engaged in the industry. We have tackled that question of prices in this Argentine Agreement. In the provisions of the agreement there are measures calculated to improve prices in this country, to deal with the problem of glut, and to ensure for producers here a reasonable return for their labour.

Much has been said to-night regarding quota restrictions, and I am not going to say more of them, except that, as a Liberal brought up to understand and believe, as I do even now, in individual liberty, I welcome this method of controlling and organising the production and marketing of agricultural produce. If my hon. Friends on those benches welcome me as a recruit on that point, I have no objection. It is the want of organisation and planning and arrangement that causes so much of our trouble at the present time. In view of the advantages that I see from these agreements, I welcome them. I see in them a real prospect of improved trade for this country in the immediate future. The Minister of Agriculture to-night gave, in one of the most striking parts of his speech, an assurance of immediate action. Tomorrow, he said, he would start working on these agreements. Not very long ago he replied to the challenge of this House by saying that action had been asked for, and here it was. In these trade agreements I see the National Government laying down the lines of action, and I welcome them for that reason.

8.46 p.m.

Sir DOUGLAS NEWTON

I will be very brief in my observations, because I am aware that many Members of the House want to take part in the Debate. The hon. Member who spoke last from the Opposition Benches, poured scorn, as I thought rather unfairly, on the attempts, of the National Government to put forward a constructive policy for dealing with the chaos which was their legacy as the result of the Labour party's tenure of office. He twitted us with having failed to re-establish conditions on, a more satisfacto7 basis during the short period for which we have been in control' of the national affairs. I think that, when criticisms of our efforts and our. Government are launched from those benches, it is fair to remind hon. Members on the other side of the House that at any rate we have stopped a levy on the purses of the taxpayers of £1,000,000 a week for the relief of unemployment, being added to our National Debt and at any rate we have succeeded in balancing the Budget, so that I venture to think the position has very much improved.

Naturally, in the course of this Debate, the question of British agriculture has received considerable discussion. I am glad that that has been the case, because I am convinced that it is only when the difficulties of home agriculturists and world agriculturists are solved that we can hope to reach a better state of world trade. By the solution of the difficulties of agriculture, the problem of unemployment will be solved, and it will be possible to reduce taxation in this country and in other countries; and the prosperity of agriculture will bring about a sustained and increased demand for the interchange of goods manufactured by our industrialists. These agreements do not hurt, harm or hinder a progressive home agricultural policy. I feel that the agreements have not, perhaps, been fully appreciated and understood by agriculturists, partly because of what I regard as the grievous misrepresentations which have appeared in certain quarters of the popular Press.

We have seen headlines ridiculing and decrying the policy to which these agreements give effect, and I notice that one paper, which has been particularly critical of the agreements, says that to-day 25 delegates of the Agricultural party from 19 counties are coming to the House of Commons to protest, on behalf of the farming industry, Against trade pacts with foreign producers. Who are the members of this Agricultural party who are going to make this protest? So far as those entitled to speak for organised agriculture are concerned, that is to say, the representatives of the National Farmers' Union, they have carefully considered these proposals, and the chairman of the National Farmers' Union, Mr. Gates, Captain Morris, and his colleagues, have publicly expressed their satisfaction with the Anglo-Danish Agreement and the Argentine Agreement, in that those pacts preserve for the British Government adequate freedom of action in relation to quantitative control of imports. It is, therefore, a little surprising that so much prominence should be given to the visit of these agriculturists, who really repre- sent, so far as the industry is concerned, no one except themselves.

In the proposals of these pacts there is nothing hostile or inimical to the full development of the home agricultural programme which has been laid clown in this House, a programme which will provide for the expansion of home agriculture. It recognises the conditions laid down, at Ottawa, namely, our own people first, the Dominions second, and foreign countries after those other two interests have been preserved. Criticism has been levelled in some quarters against these pacts on the ground that the foreigner benefits. It is assumed that, because the foreigner benefits, we must lose. That is a mentality which I entirely fail to understand or appreciate. If there are two men wrecked on a small island, hating each other, the one sitting at one end of the island where the only water supply exists, and the other sitting at the other end of the island where the only food supply exists, surely an agreement can be advantageous to both of them. Therefore, even if there are differences between ourselves and some foreign countries—and I see no reason why there should be such differences—we can mutually benefit as the result of these Agreements.

I do not wish to go into the details of the agreements, but I would like to point out that, so far as the Danish Agreement is concerned, we retain, with respect to pig products, bacon and hams, a perfectly free hand, if it should be necessary, to impose greater restrictions. Then the Danes will be permitted 62 per cent. of whatever imports are allowed from foreign sources, and in respect of eggs they will be permitted 33 per cent. of whatever imports are allowed from foreign sources. In other words, they have a share in imports hypothecated and marked out for them, but the actual amounts of these imports will be determined by our people here at home.

In these agreements I see no menace to the home farmer, and I venture to think that quantitative regulation is preferable to a system of tariffs. I therefore welcome the agreements, not, perhaps, from the point of view of the agriculturist directly, but from the point of view that they will do no harm to home agriculture, and will, I hope, materially assist home industrialists. If home industrialists are materially assisted, that undoubtedly, in its turn, will bring about an increased demand for the produce of home agriculture. I congratulate those who have carried out these very complicated and difficult negotiations on behalf of our country.

8.53 p.m.

Mr. GEORGE HALL

I do not propose to follow the hon. Member for Cambridge (Sir D. Newton), seeing that he has dealt very briefly with the question of agriculture, and has dealt with it in such a way that I feel sure every hon. Member present in the House was very much impressed by what he said, for no one can speak with greater authority than he on that subject. As regards the speech of the hon. Member for East Fife (Mr. H. Stewart), I regret very much that the Prime Minister was not present to listen to it. He told us he could see in these agreements employment for some 100,000 persons. It is a pity he could not go on, not with his speech, but examining the agreements with a view to informing the House as to how many men were likely to be employed as the result of their operation. We do not wish in any way to minimise the very small advantage that they are going to bring to the coal industry, but I am afraid it is not going to benefit to the extent that the hon. Member attempted to lead the House to believe. The agreements, after all, represent an extension of the tariff policy of the Government. We were informed, when the protective proposals were put into operation, that numbers of representatives of various countries that were affected by the Government proposals were sitting on the doorstep of the Board of Trade waiting to enter into agreements, and that was more than 12 months ago. They were then informed that nor trade agreement could be entered into until after the Ottawa Conference. It has taken nearly nine months before any agreements have been entered into notwithstanding the fact that we were informed that the Government had in their hands a weapon with which other countries could be bludgeoned into agreements. We have had two agreements—not three, two. There is a kind of tentative agreement with the Argentine, but we are to wait until August before we get the real trade agreement. My hon. Friend the Member for Don Valley (Mr. T. Williams) rightly described the Argen- tine Agreement as a debt collecting agreement which was made to release some frozen money that is in the Argentine, though I am not suggesting that that is not going to be helpful to our trade.

I am going to deal almost entirely with the question of coal, because I am afraid an exaggerated importance is given to the agreements as far as the coal industry is concerned. The hon. Member for East Fife referred to the coal agreements with Denmark and Germany. Coal is only mentioned in those two agreements. He forgets the harm that was done as the result of the Ottawa Agreements and the application of tariffs. I trust that I shall be able to prove that, whatever advantage we may have had as the result of these agreements, the tariff policy of the Government has robbed the coal exporting areas of the country of nearly three times the amount of trade that we have gained as the result of the agreements. The coal export trade is still the largest in bulk volume of our export trades Some 200,000 miners and their families are directly dependent upon the export trade, and there are another 200,000 who are indirectly dependent. There is no industry in the country that has suffered more during the last 10 years than the coal export industry. I am not going to minimise the value of the market for a single ton of coal, but it will be very wrong for anyone to attempt to exaggerate the benefits that we are going to get as a result of these agreements.

We have already a trade agreement concluded with Denmark and Germany. I am not sure whether the agreements with Norway and Sweden have been signed. I understand that the negotiations are almost complete. As far as the Argentine is concerned, we are to wait until August before any agreement dealing with the actual trade between ourselves and that country is concluded. In 1913, Norway, Sweden, Denmark, Germany and the Argentine purchased from us 22,500,000 tons, or 30 per cent. of our cargo coal export. In 1929 there was a reduction from 30 per cent. to 23.5 per cent., and in 1932 there was a further reduction to 21.6 per cent. That was the position with regard to the coal export to the countries with which we have entered into agreements. Let me deal with the actual reduction in the exports to those countries. We have had greater advantages, as far as the coal industry is concerned, from Denmark than from Germany. Denmark in 1913 imported from us 90 per cent. of her coal imports. We had an almost exclusive right to that market. In 1924, upon which year I understand the right hon. Gentleman has based the tonnage in this agreement, there was a difficulty regarding the French and the Ruhr, but we have seen a gradual decline from 1924 until 1929, and in 1931–32 there was a gradual increase in the amount of coal imported into Denmark from this country. I think last year, as compared with the year before, there was an increase of something like 500,000 tons. These two agreements are going to give to the coal exporting areas of the country an increase as compared with last year of about 2,000,000 tons. Our best customer for coal is France. She has taken nearly one out of every four tons of coal exported from this country. If we compare the exports to France in 1932 with 1930, we find that there has been a reduction of over 6,000,000 tons. In France we have lost very largely, we claim as a result of our tariff policy, a market for three times the amount of coal that we have gained as the result of this agreement.

I do not want to deal with that any more fully, but I want to touch upon the question of coke. The President of the Board of Trade skipped over it. After all, it is a very important industry and it is very important as far as our export trade is concerned. Its manufacture consumes something like 30,000,000 tons of coal a year. The right hon. Gentleman has no guarantee of the amount of coke which is to be taken by Denmark as the result of the agreement. He says that they are hoping to take as much in the future as they took during last year. I will examine the position of the importation of coke into Denmark from this country. In 1924 Denmark took 89.9 per cent., and in 1930 she took 68 per cent. of her coke from this country. As far as Holland and Germany are concerned, there was an increase in 1932 as compared with 1924, upon the figures for which year the agreement is based, as far as coke is concerned, from 6.6 per cent. to 14.1 per cent. in the imports of German coke, and an increase from 3.5 per cent. to 17.9 per cent. in the import of coke from Holland and from Belgium. That is the position as far as coke is concerned. There is no definite agreement, but only a pious hope, that, as far as coke is concerned, Denmark will import from this country as much coke as was imported last year. It is the same thing with regard to the supply of iron and steel. There is no guarantee whatever, but the Danish Government will use its influence with Government departments and with municipalities to place orders for iron and steel in this country and give a preference of 10 per cent.

I would ask the right hon. Gentleman, or the Secretary for the Overseas Trade Department, if he is to reply, seeing that the Danish Government will not themselves be responsible for the purchase of the 80 per cent. of coal as provided in the agreement, whether they are to use their influence with the purchasers of coal? I do not want to divide the coal industry of this country into sections. I know that Scotland and the north-eastern areas will benefit as a result of the German and the Danish agreements. As far as South Wales is concerned—and it is, after all, one of the most depressed coal exporting areas in the country—it will not benefit directly as a result of the German and of the Danish agreements. Last year we exported from South Wales or from the British channel ports only about 37,000 tons of the 2,080,000 tons of coal imported into Denmark. But we are very concerned about the Argentine proposals. The Argentine market is very valuable to the South Wales coal industry. Ninety per cent, of the coal imported into the Argentine is exported from South Wales, and we hope that the representative of the Board of Trade when he negotiates the agreement with the Argentine will keep that fact in mind.

Some confusion has taken place regarding the figure's relating to the German coal position. The German Agreement provides for the marketing of 180,000 tons of coal from this country per month. That compares with a market for 349,000 tons per month in 1928, 376,000 tons per month in 1929, 344,000 tons per month in 1930, and for 260,000 tons for the first eight months of 1931 and an average of 319,000 tons for the remaining four months of 1931. Taking the average spread over 1931 the coal imports into that area were no less than 231,000 tons. According to the agreement there can be no increase upon this totally inadequate figure unless the German consumption rises above what is approximately its present level of 7.5 million tons. Even on the improbable assumption that the German consumption rose and attained the highest figure ever recorded, namely, 10,750,000 tons a month, the scale of increase which the agreement provides would only permit the British quota to be increased to 258,000 tons. Even that figure would mean that our exports of coal to Germany would be 23,000 tons a month less than they were in 1931, which was the worst year in the coal export trade of this country. Whatever may be said about tariffs as a weapon with which to bargain, and however much we may say that a market even for an additional ton of coal is very helpful, all we can say is that the coal industry of this country is to get very little out of these agreements. The 350,000 miners at present unemployed, very largely in the export areas of this country, who were led by the President of the Board of Trade and by the Government to believe that, once tariffs were introduced, it would mean that the Government would have a weapon in their hands so to increase the coal export trade of this country that it would not only bring a large volume of employment but also bring a certain amount of prosperity as well. We see very little in these agreements. There may be a glimmer of light, but they are certainly not going to do what most of the miring population of this country were led by the Government to believe they would do.

9.14 p.m.

Sir J. NALL

I want to pursue certain aspects of the Trade Agreements, especially as to-day we are principally considering those with Denmark and the Argentine. I say at once that I agree with those of my hon. Friends who have indicated that the pact with Denmark is of advantage to agriculture, just as I appreciate that both that pact and the German pact are of advantage for coal export, and for those reasons they should be supported. I am not one of those who presumes to represent only sectional interests in this House. I hope that I am able to take the view of all the different interests which are involved, and, indeed, with some of them I am myself associated.

It seems to me that the outstanding point in these Debates is that coal mining, which is looked after by a specialised and centralised Department, although it is not a centralised and organised industry as, unfortunately, the House is well aware, has got a very fair deal in this agreement. No one can profess that agriculture is organised either in its pig production, its milk production, or in any ether branch. It is not an organised industry in this country, but it is looked after by a centralised and organised Department, with a special Minister of State, who has said this afternoon that these pacts are the result of policy, and that the policy is not the result of the pacts. That is very obvious. The Danish pact, in particular, is a result of agricultural policy, pursued by an agricultural Department specially pioneered by a Minister who has made that his special task. When we come to the other industries, some of which are organised and some of which are not so well organised, which are depending upon the general administration of a general department like the Board of Trade, these pacts are not so good.

I do not want the President of the Board of Trade to misunderstand me. I am not suggesting that it is solely the fault of the Board of Trade, because I hope to indicate mainly what is the complaint, to what extent it is justified, and what we should do about it. In particular, I want to refer to the Danish pact and its effect on the textile industries. It is claimed that this pact does great things for the textile industry. I did not agree with the hon. Member for North Salford (Mr. J. P. Morris) because I think that he has been badly misinformed on some aspects of the matter, although with the latter part of his speech I found myself in a certain measure of agreement. Last August the textile industry was well aware through its organisations that these talks with Denmark were going to begin. It is unfortunate that some branches or some organisations of the textile industry did not take the matter sufficiently seriously and did not set about finding out what they wanted and what interests ought to be preserved or looked after. In par- ticular, some of them failed entirely to communicate with the Manchester Chamber of Commerce, which is the only fully informed and representative body in the cotton trade competent to deal with these negotiations. That was unfortunate. To some extent it let the Board of Trade down.

The fact is, that although these pending negotiations were known of last August, in October, notwithstanding that fact, Denmark proceeded very considerably to increase the duties on certain classes of textiles. In some cases the duties were doubled. On piece goods especially, cotton and artificial silk goods, which were hitherto subject to an ad valorem duty of 38½ per cent., the duties were suddenly doubled to a specific duty of 7.7 kroner per kilo, which was at that time equivalent to a doubling of the ad valorem duty. I would say, en passant, that in the Debate the Minister of Agriculture this afternoon used arguments against tariffs as compared with quotas. He is paying too much attention to ad valorem duties and forgetting the advantage of specific duties. The Danes did not forget that. They dropped their ad valorem duty and adopted a specific duty on cotton piece goods which was, in fact, a doubling of the old ad valorem duty. This agreement which has been presented to the House reduces that kr. 7.7 specific tax per kilo to kr. 4.95 on certain defined goods.

I am told on good authority that the goods to which that reduced rate applies represent only 25 per cent. of the goods which were affected by the 7.7 duty. Therefore, although there is an advantage on goods which are subject to the 4.95 specific duty in the agreement, 75 per cent. of the trade is now penalised by the maintenance of the 7.7 kroner duty, and there is no provision for its reduction. Moreover, it seems to be forgotten in many quarters in regard to these things, that the reduced duty on the comparatively small volume of goods to which it relates is governed by the mostfavoured-nation clause with other nations, and this country gets no advantage at all apropos other nations. Our competitors in the Danish market get just as much advantage out of that reduction as we do. It may be asked: Why was not all this threshed out at the time? I asked the President of the Board of Trade a question on the subject some days ago. I asked him, particularly and deliberately, but not with any view of harassing or embarrassing the Department, whether any representations were made for a quota in regard to imported textiles into Denmark. My right hon. Friend answered on the 2nd May: No request has been made by His Majesty's Government for the imposition of quota restrictions by the Danish Government on imports of cotton goods or any other class of goods into Denmark, as such restrictions would in the view of His Majesty's Government be disadvantageous to United Kingdom interests. The circumstances of the cotton textile trade are such what arrangements between trade organisations for increased purchases in this country, which it was possible to secure in certain other cases, could not in this case be made applicable."—[OFFICIAT REPORT, 2nd May, 1933; col. 652, Vol. 277.] That is refuted by people in the trade, because Denmark does apply a system of import licences. At the present time and for the last few months licences have only been issued to importing interests in Denmark in the ratio of 45 per cent. of last year's figures. Therefore, so far from our exports of these goods being increased at the present time they are only being allowed to admit 45 per cent. of what they used to have. Owing to the maintenance of this high specific duty on 75 per cent. of the piece goods trade, in any event, licence or no licence, the sale of these goods is prejudiced because of the advanced cost. That is the complaint that is made by the trade.

I am told that the biggest purchasers of these goods in Denmark, although they are not organised as a central agency or as a co-operative society, are sufficiently big to respond to any arrangement that might be made regarding these import licences, and there was no reason apparently why we should not have insisted on a larger percentage or proportion of the licensed imports into that market. Whatever the proportion of the total admitted in the market has been in the past there was no reason why we should not have pressed for an increased volume of that import. I submit to the Government that that had nothing to do with most-favoured-nation treatment. It is not a question of the imposition of the duty, and it is a thing for which we ought to press. In October last, goods which were shipped from Manchester were in- volved in this increase of the duties which was imposed in October. They are still in bond, and have never been released by the Danish Customs, as the rate of duty they must pay is still in dispute and has never been settled. Several thousand pieces of these goods are still in Manchester and have not been shipped because this question of the duty has not been settled, and the Danes are demanding the higher rate which entirety kills business.

That is the complaint, and we must examine how far it is justified. As I understand it, these complaints have not been wholly and clearly presented to the Board of Trade. The traders themselves must accept a good deal of the blame for the extent to which they have not been clearly presented to the Board of Trade. It may be said they should accept the whole of the blame. I would subscribe to that if it were not for the fact that other traders, who are not able to put up an organised point of view, are looked after. Agriculture is not as well organised as the cotton trade, but it is looked after by the Ministry of Agriculture. Where trades are not well organised, the Board of Trade should see that these matters do not go by default because the trade is not accustomed to putting its case under the new system as fully as it should. What is to be done here? There is a distinct kink in this agreement as regards the textile industry. The change in the Danish duties from the old ad valorem rates applicable last August to the high rates put on last October, and only partially mitigated by this agreement will, in fact, severely curtail our chance of selling our goods in the Danish market. The licence system, which might enable us to sell our goods better if we have been given a better quota, is, in fact, restricting our trade in that country.

If our trade with Denmark was on an even keel, and we were dealing on a fifty-fifty basis and buying from the Danes as much as we sold to them, this would be a matter for argument. But, when we are buying from them four times as much, as we sell them, we are entitled to take a stronger line and to say, "Without the British market Danish agriculture would be in a sore and sorry plight. We can do without the Danish supply; Denmark cannot do without the British market." We are entitled to make use of that argument also to the Argentine. The hon. Member opposite said just now, "What a wonderful thing is this Argentine Agreement! We shall at least get paid." Get paid by a debtor to whom we owe five times as much as he owes us! Does it need an agreement and the diminution of tariffs to obtain payment from a country which is selling to us five times as much as they are buying from us! Such arguments ought not to be the reason for giving away any advantage which we ought to have in their market. Both in the case of Denmark and the Argentine we were entitled to take a much firmer stand and to demand much better treatment in the way of quotas for our exports, and we have not got a reasonable deal. The President of the Board of Trade the other day likened these bargains to the difficult business of selling a horse. I do not know why he used that somewhat irrelevant metaphor. So far from selling a horse, in certain directions we are rather being sold a pup. I can only hope that, after having produced these somewhat question-able specimens of Great Danes, he will not bring any more such mongrels into the kennel lest the House refuses to register them.

For what they are, these agreements have their good points. They are an advantage to agriculture; they do give some small advantage to coalmining; they may here and there give some advantage to industries. In the main, however, they will act with great disadvantage upon the other industries. Particularly has Lancashire cause to complain that the Lancashire interests do not secure any adequate treatment in these agreements. The traders of Lancashire must realise that, when the Chamber of Commerce in Manchester, which is the only sufficiently informed and organised institution in the district to represent them on these matters, calls, as it has done, upon its members and upon the affiliated and associated trade organisations, to co-operate upon these matters of overseas trade, it is incumbent upon those interests to respond and to agree as to what proposals should be submitted in order to increase and facilitate our trade. I hope my right hon. Friend and his Department will realise that, as regards the textile industry no less than any other industry, his Department must not function merely as a passive obstructionist saying so often that the most-favoured-nation clause is in the way, and that nothing can be done. They.must show a fervent desire to foster the interests of our export trades just as mines and agriculture are being assisted by their Departments. If the Board of Trade acts in that spirit, my right hon. Friend must free that Department from the complex of complacent incompetence which it professes owing to the existence of the most-favoured-nation clause. Let him give notice to get rid of that clause and to get rid of most-favoured-nation treaties. In particular, let him get rid of the Japanese Treaty. Then the Department will begin to do something again for those interests on which the nation depends.

9.35 p.m.

Lieut.-Colonel SANDEMAN ALLEN

I understand that the last speaker thinks there are good points about these agreements. I am inclined to think that there are very good points about them. I intervene in this Debate because I happened to be in the Argentine at the time the Argentine Mission arrived in London. I was able to collect the views of agriculturists and farmers in the Argentine as to the position which existed in that country. Let me first of all put a point with regard to the Danish Agreement be fore I deal with the question of the. Argentine. In Article 2 of the Danish Agreement it says: The articles enumerated in the Second Schedule to this agreement produced or manufactured in Denmark from whatever place arriving shall not on importation into the United Kingdom be subjected to duties or charges other or higher than those specified in the Schedule. When we discussed the Ottawa Agreements we discovered that we could not send wheat from Canada via the United States, but in this case, apparently, it does not matter from where Danish manufactured goods are sent. The hon. and gallant Member for Coventry (Captain Strickland) put a question to the Government this afternoon and was told that no preference was involved in this case. I submit that, technically, this is a preference; and that it is splitting hairs to say that there is no preference. We are not legislating for to-day but for the future, and if the right hon. Gentleman finds any nation is not prepared to meet us some considerable way he will have to consider removing the most-favoured-nation clause. If that occurred, what is going to happen to this agreement? It would immediately become a preference. Perhaps the right hon. Gentleman will answer that point. The answer, of course, in the Ottawa Agreements was that it was never done in the case of preference. Surely, if it can be done for a foreign country it can be done within the Empire. The hon. Member for Aberdare (Mr. G. Hall) has said that there has been a steady decline in our exports of coal from 1923 until 1931. He gave all sorts of reasons for this except the correct one, that the production was interfered with by trade disputes, fostered by the party to which he belongs. That was the reason; and he forgot that oil has come in. There is one further point. Commercial travellers have represented to me that they are not getting fair play. They are taxed in Denmark, while Danish travellers are not taxed in England. I know that there is a reduction in the tax in Denmark but there is an injustice here, and I hope he will give me an answer which will reassure some of the most hard working members of the community, who feel that they are being badly done by.

The Argentine Agreement is a question of frozen credits and chilled meat. I found a great desire in the Argentine to trade much more than they have done in the past with this country. That is a definite desire expressed all through the country. They have begun to realise that if they wish to sell their products on the same scale as in the past they must help us to pay for them by buying more of our goods. We must not forget that we expect them to pay interest to us. They do not like to trade—I say it quite frankly—with the United States of America. It is not the fault of the United States Government, but hardly ever does a United States product come up to the sample produced in the Argentine, whereas British products never fail to come up to sample. That is a great attraction. We may not always give them what is most needed in that country, but our products never fail to live up to sample. It is hardly creditable the extent to which frozen credits were damaging trade in all sorts of unimaginable directions. The chaotic condi- tions of finance are almost beyond imagination. If I wanted, to get change for a I could get 13.20 pesos, but I found that I could get 16.80 and 17.00 on the kerb exchange. How can you carry on trade on two different bases of exchange? It is impossible.

Trade was being damaged in the most amazing and unforeseen ways. We have big invisible exports in the Argentine, far bigger than the Government realise. We have large interests there. Railway-men in this country are receiving pensions from the Argentine. In many cases they have found themselves in great trouble because they could not get their pensions. British parents in the Argentine, and Argentine parents, who were having their children educated in this country, have been unable to remit money home to pay the school bills, and in one way and another these frozen credits were making tremendous difficulties for the trade of the country. I congratulate the right hon. Gentleman on the agreement he has made in liquidating, or, in thawing, these frozen credits. As far as chilled beef is concerned I was fortunate. I saw the beef from calf to can. I was on a ranch, and then went into a chilling factory. I saw the cattle leave the ranch and arrive at the chilling factory. I saw them in the refrigerating chamber and eventually leave the factory in chilled form or canned. The Minister of Agriculture in a most excellent speech pointed out—it is quite true—that every type of meat competes with every other type and that if you are going to control one type you will have to control all other types of meat. I notice that my right hon. and gallant Friend has inserted in the Argentine Agreement a Clause to prevent too much offal being sent to this country—too much in proportion to the amount of meat. That is quite right. But from what I have seen the offal of cattle in the Argentine is in a first class and healthy condition. I have seen some of the cattle from Ireland, and I know of a case where about 80 per cent. of the liver was condemned because it was not edible. I did not see a single liver in the Argentine that had been condemned. Possibly it was hidden from me, but I do not think so.

I am glad my right hon. Friend has recognised the claim of Australia and our Dominions by seeing that their experi- mental shipments are not interfered with. He is obviously prepared to await any progress that is made in our Dominions in the chilled beef industry. Progress has to be made and will be made. Australia is tackling this question. She has great difficulties with which to contend, but I am certain that it will not be very long before she can take her place in the chilled beef industry in this country. I am delighted to see that there is to be no increase in the duties on quebracho extract. Our tanning industries in this country are competing with Sweden and Germany, and are beginning to find more employment daily. I congratulate the Minister on taking note of this and putting this particular extract among those articles upon which the duty is not to be increased.

Speaking generally, I welcome this agreement as a reduction of tariffs, a start towards a reduction of tariffs and trade barriers. The bargaining power of tariffs was to be used to reduce tariffs and not in any way to increase them, and that was specifically stated. To those right hon. Members who feel that tariffs should stay at a certain level, and that if we want to bargain we should threaten to increase them, I say that; they are on the wrong track altogether. Unless we get a reduction of trade barriers throughout the worldĤthat was one of our objects in bringing in tariffs—we are heading for economic ruin in this civilisation. I want to avoid as far as possible the policy which has been carried out by the United States in closing her frontiers to anyone's goods and yet demanding and extracting money from others. We are still one of the big creditor nations. Since before the War we have not changed our position materially as creditors. The United States were debtors to the tune of approximately £1,000,000,000 before the War, and now they are creditors for about £4,000,000,000. I think I am correct in saying that approximately we are in the same financial position as creditors as we were before the War. Do not let us emulate the United States and exclude the only method of paying interest or repaying capital.

We must get tariffs down. I welcome this agreement as a step towards a removal of tariffs. I ask the Government to watch monetary policy with the greatest care. Tariffs are but as the petty cash of business compared with the monetary and exchange problem. My right hon. Friend the Member for Caithness and Sutherland (Sir A. Sinclair) referred to our snatching an advantage for ourselves on the eve of the Economic Conference. I think the boot is entirely on the other leg. The United States the other day deliberately repudiated half her liability to us, and snatched an advantage which may lead to another economic war such as she has carried on since the War. She has carried on that war by means of tariffs and is doing it now by demonetisation of her currency. I hope that the right hon. Gentleman will consult with the Chancellor of the Exchequer and see that his trade agreements are not entirely defeated by alterations of monetary policy which might quite easily take away and advantage that has been given.

9.50 p.m.

Sir GERVAIS RENTOUL

I know that time is fleeeting, but I am very glad to have an opportunity of saying a few words regarding what was certainly not the least important part of the speech delivered by my right hon. Friend the Minister of Agriculture, namely, his policy for the development of the fishing industry. We have heard a great deal about agriculture in this discussion and about the effect that these treaties will have on many other industries, but not one word up to the present has been said about the fishing industry. If my right hon. Friend bears in mind the Scriptural admonition, Woe unto you when all men shall speak well of you. I think he must be beginning to feel a trifle nervous, because already by his policy and the impression it has created he has made it possible for some of us to be welcome and even popular guests at gatherings of our farming and agricultural constituents, and he seems now to he well on the road towards staking out a similar claim to the gratitude of the fishing industry.

The proposals which he has outlined will undoubtedly give confidence and hope to the fishing industry. Naturally we shall await with anxiety the exact details of the legislation which it is proposed to introduce. The fishing industry has never been a particularly vocal in- dustry. It is not represented by any powerful trade union, and it has had to rely on the inadequate voice of myself and certain other hon. Members who represent fishing constituencies in order to bring its interests before this House. Hitherto we have had to seize such meagre opportunities as offered, on perhaps the discussion of some Estimate or on a private Member's Motion. But my right hon. Friend has now raised the position and the development of this industry to a first-class issue, and he is proposing to introduce legislation in order to deal with problems that have been long outstanding, the importance of which has too often been ignored.

The 10 per cent. duty on foreign-caught fish was recognised by the trawling section of the industry as a step in the right direction, but, unfortunately, experience has already shown that that duty was not sufficient to achieve the object in view. It has not been successful in stopping the dumping of foreign fish, and a very powerful case has already been submitted to the Tariff Advisory Committee for an increased duty. But even if that claim is granted I still believe that something more will be required, for the reasons which were dealt with by my right hon. Friend, and that what will be necessary, in addition to a duty, will be something in the nature of quantitative control. The provision in the agreement with Denmark is in that direction. I think it will be valuable to the fishing industry, and that we may say that the reduction of the quantity of fish imported from Denmark to the maximum figure of 412,000 cwts. will be equivalent to at least another 10 per cent. duty, so far as the British fishing industry is concerned.

The fishing industry is on a different footing from most other industries, in that it is in a position to supply this country with all the fish that we can consume. Therefore foreign-caught fish, either white fish or herring, are really superfluous for our own requirements. Of course we know that there is a conflict of interests between the trawling section and the herring section of the industry, the fish in the one case being for human consumption and in the other almost entirely for export. We know that there is a very real fear on the part of the herring fishing industry that these duties and quotas and controls are likely to provoke retaliation on the part of foreign countries.

I should be the last to deny the importance of the herring industry, for in the port of Lowestoft, from the point of view of employment, the herring fishing industry is more important than the trawling industry. In the adjacent constituency of Great Yarmouth the herring industry is more important still. But I have never accepted the implication that foreign countries purchase our herring from a spirit of philanthropy, out of a desire to assist the hard-pressed British fisherman. I can find no evidence of that. I believe that foreign countries buy our herring for one reason only, and that is that they happen to want them and are not in a position to catch them in sufficient quantities for themselves. Directly they are in a position to do so we are likely to find a distinct change in the situation. Directly Germany can develop her herring fishing industry to a sufficient extent—and we know she is making big efforts to do so—she will take every measure she thinks desirable in her own interest to stop the importation of British herrings. I agree with the view expressed so strongly by the Minister of Agriculture when we last discussed this matter that we should grossly deceive ourselves if we were to imagine that by refraining from imposing tariffs we should induce other countries to refrain from developing their fishing industries and taking such steps as they thought necessary in their own interests. The development of the German fishing industry has been going on since the War and tariffs have been constantly increased ever since that time. Therefore I feel certain that some control by agreement such as is outlined in these agreements is a move in the right direction.

The Minister referred to other proposals which are of great importance. For example there is the question of over-fishing. There have been complaints for many years in regard to the over-fishing of the North Sea and undoubtedly increasing quantities of immature fish have been brought in, and have gone to the meal factories or have been thrown back into the sea. I daresay the development of the steam trawler has been largely responsible for this result. It has led to increased intensity of fishing and it may be that our power of catching is now in excess of the powers of reproduc- tion and growth in certain fishing grounds. Significant figures are contained in the report of the Economic Advisory Council on the fishing industry. In 1913 the proportion of what are described as large fish to the total catch was 24 per cent. In 1928 the proportion of large fish had sunk to 7 per cent. In 1913 the proportion of medium fish to the total catch was 41 per cent.; in 1928 it had sunk to 27 per cent. In 1913 the proportion of small fish to the total catch was 35 per cent.; in 1928 it had risen to 66 per cent. These figures give clear and convincing proof of the growing tendency to bring in under-sized and immature fish. They are the figures for England and Wales but the figures for Scotland show exactly the same proportion. I have often heard this development referred to in my constituency as "the massacre of the innocents." We welcome the proposal to deal with this problem by increasing the size of the mesh and restricting the landing either from our own or foreign boats of under-sized fish.

The general reorganisation of the industry to which the Minister also referred is long overdue, as everyone who knows the conditions in the industry will admit. The problem of marketing has never been seriously tackled, and we must all recognise that there is a gross disparity between the price paid to the producer, who catches the fish with so much labour endurance and heroism, and the price paid by the ordinary consumer. It is not a problem which can be dismissed with a mere allegation of profiteering. Some years ago the Food Council held an exhaustive inquiry into the price of fish and came to the conclusion that there was no evidence of undue profiteering. Probably the explanation is that a system has grown up whereby fish, in passing from the producer to the consumer, has to go through many hands, and each person who handles it has a certain "rake-off" or profit. But in no single case can you put your finger on a person and say: "That person is making an undue profit which ought to be stopped." If you could devise a system of more direct marketing, eliminating, it may be, some of the unnecessary middlemen, you would do something for the prosperity of the industry.

There is one question which I should like to ask with regard to the total amount of fish provided for in the Danish Agreement namely 412,000 cwts. How is that allowance to be spread over the year. I think the arrangement will fail in its purpose if Denmark is allowed to send in any fish in any quantity she likes up to that total limit, at any particular time of the year that may be convenient to her. I suggest that a quantitative allowance, possibly on a monthly basis, would be the most satisfactory method. I should like to hear what the Government have in mind with regard to that point.

Major ELLIOT

As to the distribution of the quota throughout the year, obviously it is undesirable that the whole of it should be pitched in during one short period. On the other hand, the actual allocation is a matter on which we are now in negotiation with the foreign countries concerned, and we hope to be able to arrive at an agreed settlement.

Sir G. RENTOUL

I am much indebted to the Minister for that explanation. I was sure that he would realise the importance of the matter and we shall await with interest any arrangements that may be made. The only other point I want to mention is this. If you undertake the reorganisation of the industry, if you are going to improve our catching power, I hope you are also going to popularise fish as an article of diet and increase its consumption. Yet, apparently, for three years at all events, there can be no reduction in the total of the amount which Denmark is permitted to send, although we may improve the productive potentialities of our own industry. That may be inevitable but I hope that in negotiating any further arrangements with other countries the point will not be lost sight of, that a proper reorganisation of the fishing industry may lead to a big development of home production and therefore we ought not to tie our hands for too long a period. I end as I began by wishing well to my right hon. and gallant Friend in his work on behalf of the fishing industry. A prosperous fishing industry is vital to this country, yet, without some measure of assistance in securing the home market for the British fishermen, not only is that industry's prosperity jeopardised, but it may even become doubtful whether the industry can continue to exist. There is no one remedy. Tariffs alone are not sufficient. What is essential and I believe what is contemplated is a policy which will embrace duties, quotas and the internal reorganisation of the industry.It is along those lines alone that salvation is to be found.

10.5 p.m.

Mr. ATTLEE

We are now coming to the end of an interesting and very varied discussion. I do not intend to follow the hon. and learned Member for Lowestoft (Sir G. Rentoul) into the details of the fishery trade, although I shall pray some of his statements in aid later in my remarks. We have had a varied discussion. We have had laments on the quotas and restrictions from the right hon. Gentlemen below the Gangway opposite, who are, of course, accessories before the fact, and we have had, on the other hand, the bitter cry of the hon. Member for Hulme (Sir J. Nall) that the cotton trade, presumably from their close connection with the Manchester School, have not yet learned successful lobbying under tariff conditions.

The first point that I should like to deal with is the Argentine Agreement, especially Article 1, which seems to me to rise almost at once to a very high pitch of insanity. It suggests that the Government of the United Kingdom are very anxious to secure a remunerative level of prices in the United Kingdom market for the chilled beef of the Argentine. I am not surprised at that, because that is only following out the policy laid down by the Chancellor of the Exchequer in a perfect gem which he let fall on Thursday the 16th February, and which I should like to rescue from oblivion. He said: We have got to raise wholesale prices. … Nevertheless, there is one case in which we here have been able to act without any assistance from other nations, or at least with assistance only to a limited extent, and that concerns meat, because ours is practically the only market for surplus meat."—[OFFICIAL REPORT: 16th February, 1933; col. 1223, vol. 274.] I want to follow up that argument, because it is so interesting. Being the only market, we must endeavour to raise prices against ourselves. What does that mean? It means either that we should give the people of the Argentine more goods and services in exchange for the same amount of their meat products, or that we should receive from the Argentine payment of interest for our capital in- vested there or for our services performed for that country in a smaller amount in terms of commodities. That is not exactly business. It may be a very high morality, but it hardly strikes me as business. In fact, I should have thought, from a national point of view, it was the economics of Colney Hatch. It is always very easy for a Minister to ride off on generalities and cover up these queer lapses when they are dealing with nations, but let us take an individual case. Supposing I make a contract to do some work for my butcher and for him to pay me in meat at 8d. a lb. If I charge him 20s., he gives me 30 lbs. of meat, and then, after a great deal of trouble, I make an enormous success by making a new agreement, by which he gives me meat at 1s. a lb., so that I shall get 20 lbs. of meat instead of 30 lbs. for doing the same work. That is actually what is proposed in the elaborate business of what they call raising wholesale prices.

When I raised that matter before, there was a great deal of doubt about who was going to pay for it, and when I suggested that the consumer paid, there was a good deal of indignation. Some thought it was a free gift from Lord Vestey, while others thought it was going to be paid by someone else. But it is a great advantage to have somebody who is so cynically frank as the President of the Board of Trade, because when I made an interjection while he was speaking, he said, "The consumer" Of course, he.could not very well get away from it, because he made an answer at Question Time to-day on the subject of bread. We had a great deal of controversy about who was going to pay the wheat quota. When I stated that the whole system was one for taking a, certain amount out of the pockets of the consumers of bread and putting it into the pockets of the farmers, I was told that I was doing a grave injustice to the Government's scheme. But, on the other hand, when my hon. Friend the Member for Plaistow (Mr. Thorne) put a question to-day with regard to the increased cost of the 4-lb. loaf, it turned out that the loaf had been increased a halfpenny per lb. because of the standard laid down by the Food Council, by which, when the cost to the baker went up to 27s., including the quota, it was able to be passed on to the consumer.

We find, therefore, that the effect of this agreement really is to be that we are to give the Argentine people a free gift. It is interesting to see what that really amounts to. We have had speakers saying that it would be excellent to have an extra 2d. a lb. on meat. If you work that out roughly on the quota which we are allowing to the Argentine, if, with our great efforts, we can manage to increase the price of meat by 2d. a lb., it will mainly come out of the pockets of the workers in this country. It is only handing over an extra £1,250,000 to the Argentine, and that will be an enormous success for this country.

The right hon. Gentleman the President of the Board of Trade is recognised as a very acute business man. He is perfectly cynical with regard to the question of Free Trade and Protection, because of the over-riding consideration that he is a typical capitalist of the second generation. He represents a desire to see that the British capitalists get the interest on their money invested abroad. We have something like £450,000,000 invested in the Argentine, very largely in railway debentures and so on, and it is becoming increasingly difficult for the Argentine to pay that interest, so that British capitalists are getting very anxious, but now they are going to get their money. I reckon it costs something like £20,000,000 a year for the Argentine to pay that interest, and we are going to make them a contribution to help them to pay it. In order that the British rentier may get his money from the Argentine, we shall extract £1,250,000 out of the pockets of the consumers of meat in this country and send it to the Argentine, who will send it hack to the rentiers in this country.

I call that a pretty cold-blooded scheme, but it illustrates exactly the attitude that we have expressed in this Government. I cannot see why they do not carry it a little further. If it is good to raise prices in this market here, so that there may be more money going to people who send us goods, why not do it all round? Why do you not do it with Ireland? All you have to do is to raise the price of Irish agricultural products until they get a much higher price than at present, and they will be able to pay their land annuities, and we shall get rid of all our troubles. What is all the trouble about with Russia? If you can only raise the price of timber sufficiently so that Russia will get a great deal of money for their timber, perhaps they will be able to pay on their Lena concession. It seems a wonderful new way of dealing with these matters. The President of the Board of Trade is helped out by what we might describe as the other whimsical Walter. He made an interesting remark in his speech when he said that the great trouble to-day in the world was partly the burden of the rentier and partly the burden of wages. That was a most revealing.statement.

The right hon. Gentleman is a typical supporter of the class basis of society to-day. He is more reactionary than the Noble Lord the Member for Hastings (Lord E. Percy). I have heard the Noble Lord speak in the House with a full recognition of the fact that what we had to see was a standard of life which would enable the people of the world to be able to consume the commodities produced in the world. The Minister of Agriculture is right back in Victorian England. He thinks of wages as a cost of production, as an inconvenient thing, a cost which you have to pay in order that the rentier may make money. He followed that up quite logically by saying that the vicious circle had to be cut somewhere, and, of course, the people who are going to be cut are the wage-earners. It might be difficult actually to have an attack on wages, but you could easily get over it by reducing the purchasing power of wages. This Argentine Agreement and the reasons given for it are a, good revelation of the minds of the Government.

Sir H. CROFT

Is the hon. Gentleman opposing it?

Mr. ATTLEE

I entirely oppose the Argentine Agreement. In it we have an endeavour to meet the position which is oppressing the world at the present time in what has been called the Nemesis of usury. We see it most clearly in the swollen amount of War Debts, but we see it also in those commercial debts that are bearing so heavily on the people of South America. Why the way out should be that we should subsidise the people of the Argentine at the expense of the workers of this country I do not under- stand, and there is only a very vague reference to getting any of the advantage of this money to the people who actually produce the meat. There is a reference to it, but it will take a lot of getting through when you consider how the meat trade is run, and the powerful vested interests there are in it. There I would pray in aid the hon. and learned Member for Lowestoft (Sir G. Rentoul) who pointed out that one of the difficulties was that so much of the profit stuck to various hands between the producer and the consumer. I am glad to recognise a convert there. We have been preaching that for 25 years.

To come to the Danish Agreement, which is a much more innocuous document: The President of the Board of Trade said that for 20 years or more Denmark had sent more to us than we had sent to them, and seemed to be rather aggrieved by that. Of course, he did not take that line 20 years ago, when I think he was also President of the Board of Trade. He is much too well informed to imagine that during all that time we did not pay for our imports from Denmark. He knows perfectly well that those imports had to be paid for either by goods or by services, or possibly by interest or in some other way. This agreement is really a recognition that the system of exchange and the whole monetary system has broken down to such an extent that everybody is trying to get back to barter. That is the essential point about these trade agreements. That is the essential point about quantitative regulation. It is the endeavour to get away from this money business, and to exchange goods for goods. We do not in the least take the same line as the right hon. and gallant Member for Caithness (Sir A. Sinclair), who is a mid-Victorian survival, who preaches the Free Trade doctrine at its finest. We believe that there must be regulation and we would like to see this country going back to a large extent to barter, in the disturbed condition of the world.

I am afraid that here I am going to throw a bouquet to the Minister of Agriculture, but as I did not throw him one just now perhaps we shall not come under his ban of Woe unto you when all men shall speak well of you. because I shall not speak entirely well of him. The right hon. Gentleman is now going a very long way towards getting complete control of our food supplies. Apparently he is going to control the marketing of meat, of pig products and of fish; he also has the wheat quota; and by his trade agreements he is, in one way or another, gradually getting the whole control of our food in his hands. With the aid of the President of the Board of Trade he wants to make a series of agreements by which we shall pay for that food by British goods and services. We think that is an excellent way of doing it, but what a long and roundabout way he takes, and why is he not denounced as we were denounced when we suggested doing exactly the same thing, only in a more scientific way, by export and import boards? An hon. Member laughs, but if he has ever examined the import board system he will find that the power the Minister of Agriculture is exercising today is akin to that of an import board. The only difference is that the right hon. Gentleman, as A, good capitalist, wants to leave profiteering opportunities to private enterprise to come in between, and is not attempting to take the steps which the hon. and learned Member for Lowestoft would like to squeeze out the middleman and the profiteer.

Nevertheless, I gladly recognise that the right hon. Gentleman is forward looking in some degree. He believes in planning. What is quite obvious from his speech is that he is planning to make a world safe for the rentier. His idea of a plan—and, as a matter of fact, it is the idea of hon. Members with regard to the World Economic Conference—is to hope that by the World Economic Conference and by these agreements we shall make the world safe for capitalism and safe for the rentier. Hence, at this time, when masses of the people of this country are underfed, this House spends day after day in trying hard to restrict the floods of food that are ready to come to this country. I think that the tide of production will be too much for the Government and that they will be driven to see the entire lack of logic of their position. What they will not recognise is that the purchasers of the food that is to come, whether from Denmark or from the Argentine, are necessarily for the most part the masses of the workers of this country. If you wish to pay for those supplies with increased amounts of British goods, you must get the same Amount purchased, but if you are going to raise the prices and keep wages at their present level, you are not going to have an. increase of purchases.

The failure of the Government is in recognising that what the world needs is increased purchasing-power all the way round. In these agreements they are merely redistributing purchasing power. By the Argentine Agreement, the Government are going to take £1,000,000 of purchasing-power from the consumers of meat in this country, and give it to the producers of meat in the Argentine, in the hope that the producers of meat in the Argentine will buy more goods in this country, and thus set the wheels of industry rolling. As the affairs of the Argentine are in the hands of the moneylenders, that million of money will never get to the producers in the Argentine, but will merely get into the hands of the rentier and will eventually join that great mass of unused capital which, like the unused labour, is lying idle in this country at the present time. Therefore, while we thoroughly approve of the system of regulating trade and of agreements with other countries, we suggest that the whole method of them is entirely out of touch with the spirit and the needs of the present age, and that they are directed towards trying to make an artificial dearth and keeping a society of rich and poor, instead of embracing the opportunity of raising the general standard of the whole people.

10.28 p.m.

Lieut.-Colonel J. COLVILLE (Secretary Overseas Trade Department)

I do not propose to follow the hon. Gentleman who just spoken, in his discussion of the evils of usury and of the wrong-doings of the rentier class, but I am bound to refer to one particular criticism that he made of our agreement He directed our attention very specially to the provisions which are made for the maintenance or the raising of commodity prices, and he roundly condemned all artificial measures that might be applied to raise such commodity prices as being, in the long run, detrimental to the mass of the people.

I remember very clearly—it is among the early recollections en I came into this House—a Bill which occupied a great deal of the time of the House, and in the discussion of which the hon. Gentleman took an active part. That was the Coal Mines Bill. In the Coal Mines Bill there were provisions for the application of a quota, and the quota was devised for the purpose of artificially raising prices. It seems to me that the hon. Gentleman is not quite consistent. In that case his dislike of the capitalist system and the rentier class was not sufficiently strong to prevent him from setting up machinery designed to secure higher profits for the coalowners by artificial restriction of output, and I think that, when he blames us for introducing any method for raising or maintaining commodity prices, he must remember the part that he took in introducing first of all into this House artificial methods for holding prices up.

Mr. ATTLEE

They were not accompanied by a policy of cuts.

Lieut.-Colonel COLVILLE

The hon. Gentleman's interruption is not going to escape. If anything has been made plain in the Debate, it has been that these agreements are for the very purpose of assisting those people whom the hon. Member wishes to help, namely, the working people, by providing more employment for them. The hon. Member for Aberdare (Mr. G. Hall) took much trouble to make out his case that, while the Government, by these agreements, might secure some small advantages for the coal industry, those advantages were much more than offset by the disadvantages which the tariff policy had brought in the loss of coal export markets in other directions. I think I fairly state his case. I have been at some trouble to examine the figures for coal exports from this country during the period when the Labour Government was in office, when no such fiscal policy was in operation, and I think that, had the hon. Member examined those figures before making his speech, he might have based his case on different grounds. We find that, in 1929, the average per month of United Kingdom exports, including foreign bunkers, amounted to 6,492,000 tons. In 1930, a year later, the monthly average of United Kingdom exports had dropped by over 500,000 tons, to 5,970,000 tons; and again, a year later, in 1931, it had dropped by 1,100,000 tons to.4,857,000 tons. The Labour Government were in office from May, 1929, to August, 1931, and during that period a drop took place in the average monthly coal exports from this country of a far higher degree than that which has taken place during the time that the National Government have been in office, in spite of the fact that world conditions have been worse during that period.

Mr. G. HALL

I would point out that the figures which I gave referred only to France, and that I did not take the year 1929, but the years 1930 and 1931.

Lieut.-Colonel COLVILLE

I understood the hon. Member to be basing his case not only on France, hut that he was making a general attack on the Government's policy in other directions; and I think that that was understood generally in the House. Turning to Germany and Poland, which are also coal exporting countries, in 1929 and 1930 there was a diminution in their exports, but between the years 1931 and 1932 the diminution was very much greater, which demonstrates that the years during which we have been in office, and with the conditions of which we have had to deal, have been years of peculiar difficulty for the coal trade, and we have been much more successful in dealing with that trade than the late Government was.

I now turn to the subject-matter of the agreements. There have been two speeches from the Government Front Bench. The President of the Board of Trade has explained the agreements in detail and has shown them to be an integral part of the Government's trade policy. The Minister of Agriculture has demonstrated that the undertakings given on our side in relation to agricultural products are not mere haphazard concessions. They definitely form part of the Government's plan, and they do not prevent effective action to control our home market and safeguard the interests of home consumers. If any further proof was wanted, it was in what my right hon. Friend said, that to-morrow he proposed actively to proceed with arrangements for the control of the supply of milk products. Both Ministers also made it clear that the agreements that we have made are strictly in accordance with our Imperial undertakings. We do not com- plain that these agreements should have been criticised in certain quarters. I have never taken part in any business deal or agreement yet which has not had its critics in certain quarters. But everyone must have been struck with the degree of unanimity in the House as to the value of these agreements from the national point of view in spite of the fact that there were criticisms from various angles. We do not stand here on the defensive. We make no apology for these measures. Rather we commend them to the House as an achievement of great value to commerce, trade and finance which could certainly not have been reached if we had not changed our fiscal policy and freed our hands to negotiate with other countries.

Let me deal first with the Argentine Agreement. A problem of complexity had to be faced, as I am sure the Parliamentary Secretary to the Board of Trade, who carried out very much of the work in connection with the agreement, will admit—a problem of great complexity but also a problem of immense practical interest to Great Britain. One must go back to 1825 to get this in its proper setting. After the Napoleonic wars, Argentina had the foresight to see the coming ascendancy of Great Britain in commercial matters. She hitched her waggon to that star by the Treaty of Amity, Commerce and Navigation of that year. But the attraction was mutual. In this country we saw there a land of promise, and capital from Great Britain flowed into that country. I need not describe the developments of the century between but will come down to the present time, when we find that nearly £500,000,000 of British capital is invested there. Public loans, railways, public utility companies, shipping, land development, in fact almost every aspect of the life of that country has been assisted and developed by British capital. No less than £20,000,000 to £25,000,000 per annum should be the normal order of remittances coming from the Argentine to Great Britain, or, to put it in another way, £500,000 a week. Members of the Labour party, who disapprove of the system of private ownership, have suggested that the Argentine Agreement will only help a certain class, the rentier class, but surely even they do not suggest that we must make for some far off day when there is a master brain in Whitehall controlling all the investments of the country to take action to bring the money back to the soil of this country and put it into circulation here. If we can free this block and bring the money again into circulation, every class of the community will be benefited.

But this great country of Argentina had become a source of anxiety. Through the rapid rise of tariffs, the markets for our goods had been lost and, worse still, the frozen exchange was bringing hardship to companies, traders and individuals. My experience at the Department of Overseas Trade, where I get information from every part of the world as far as the treatment of British goods is concerned, leads me to believe that exchange restrictions, applied, no doubt, for the purpose of maintaining currency, are the most damaging barrier to trade that we have to face at present. We may surmount all kinds of tariffs, negotiate a quota, and meet competition, but if in the end we cannot get payment for goods, the result is a complete stoppage of trade. I received a letter from a firm not very long ago relating to frozen trade debts in a certain foreign country, and it was short and to the point. It said: Dear Sir, Your Department helped us to find this market. Perhaps now you can help us to find the money. I think I have said sufficient to demonstrate that one of the greatest barriers to trade is a barrier which prevents payment where trade is carried on. That fact has been recognised by the business community. Recently a committee was set up representative of the Chambers of Commerce, the Federation of British Industry, and the bankers which, together with the Government's assistance, examined the question of frozen money in foreign countries, and it rendered valuable assistance to our negotiators in this case. Our negotiators in the case of the Argentine Republic took their stand on the position that exchange created by our purchases should in the main be applied to our requirements as far as it was consistent with the stability of Argentina. As has already been explained, we have secured by the agreement that the full amount of exchange arising from our purchases shall be made available for meeting applications for remittances after deduction of a reasonable sum annually towards the services of external debt. An hon. Gentleman asked, What is that reasonable sum? Obviously, some of these things must be left to careful negotiation and consideration, but we are satisfied in the arrangements made that such a sum will only be what is reasonable and necessary to maintain the credit of the Argentine Republic.

Argentina has also agreed to set aside £900,000 out of which cash payments will be made to holders of frozen balances. In addition the Argentine Government will issue sterling bonds which will be negotiable for balances not met. These undertakings will assure an immediate flow of money to this country. The bonds will be negotiable but the issue of bonds will not take place until the agreement as a whole has gone through. But we are satisfied that by this method we shall secure a considerable repayment of money to this country which could in no other way be brought back to these shores. I will turn for a moment to the Argentine Tariff. The Argentine Tariff although originally intended mainly for revenue has become highly protective in character and in many directions constitutes a real barrier to our trade. It has been continuously raised in recent years. The protocol to the convention includes a declaration that the rates of 1930 will be reverted to, and changes in classification to meet our wishes will also be made.

A point of importance, which, I think, has not been sufficiently stressed during our Debate to-day, is the maintenance on the Free List of those articles in which we are particularly interested, and particularly that the free entry of coal is guaranteed. One should remember in these days of competition of other fuel that such an understanding is of immense value to this country. The hon. Member for Aberdare who asked: "What did the Argentine Agreement do for South Wales?" will get his answer here. We have secured for the period of the agreement the free entry of our coal into Argentina, a vital product of this country, and particularly for South Wales. The right hon. Member for Caithness and Sutherland (Sir A. Sinclair) asked where we stood in the Argentine Republic as regards coal. Not only do we secure free entry for our coal but we also secure that an understanding shall be reached as to what means are possible for maintaining the United Kingdom position in that market. The United Kingdom coal position in that market is a very important one, amounting to some 89 per cent. at the present time. We recognise that this is an undertaking entered into between two friendly peoples and that it will be honoured in the spirit as well as the letter, and we believe that we shall be able to hold our share in the Argentine market and to maintain it at its present level, namely, 89 per cent. Surely South Wales must feel that in this agreement we have done something for the coal trade in that part of the country in safeguarding our coal interests in the Argentine.

It has been suggested in some quarters that the benefits that the Argentine Republic will give us in the matter of tariffs will not be of great help to us because other countries will get them as well. That is because of the policy of the most-favoured-nation treatment. The benefits given to us will be on those articles in which we are mainly interested and in which we can hope to obtain the largest share in their market. It may be said, why does not Argentina give up her most-favoured-nation treaties with other countries. That is a point that I cannot answer here and now. It is a matter for the Argentine Government, and they are well able to argue their own case, but it is only fair to point out that although the Argentine depends on Great Britain as the market for 40 per cent. of her exports she sends 60 per cent. of exports to other countries, and she must think twice before she indulges in a series of tariff wars with those countries which provide 60 per cent. of her market abroad. We must recollect that our interests in this regard are linked up with the prosperity of Argentina and that her prosperity must remain, if she is to remain a great buying market for our goods. We have secured in this agreement considerable tariff concessions on those articles in which we are interested and on those articles in which we can increase our trade.

Turning from the Argentine Agreement to the Danish Agreement, at first glance there seems to have been some points of similarity between the two countries in that there was a favourable balance of trade in both cases; but no question of invested capital, no question of frozen assets appear in the Danish Agreement. The problem there was to secure if we could a better balance of trade in our relations with Denmark. No doubt a balance could be secured by reducing both sides down to zero. Some people seem to recommend that, but that is not our policy. Our policy is to increase our exports to Denmark while retaining such power as is necessary to regulate the imports of Danish foodstuffs coming to this market, in accordance with our agricultural plan. We consider that we have by our agreement with Denmark achieved a measure of success which has surprised a great number of people in this country. I do not intend to deal with the side of the agreement already dealt with by the Minister of Agriculture, but I claim that we have had full regard to the interests of our producers in this country in dealing with Danish foodstuffs coming to our market.

On the other side, with which I have been personally connected, of trying to get the Danes to buy more from us, I would like to say something. When Great Britain changed her tariff policy, there was in Denmark a very natural feeling of anxiety as regards the future of her market. I say it in no unfriendly spirit. Denmark went to work in the right way to show she could make her market more valuable to us by increasing her purchases from this country. It was in that spirit that, the Copenhagen Exhibition was conceived. It was almost without parallel that there should be an exhibition in a foreign country entirely of British goods and paid for by that foreign country. Denmark set about showing us she could buy more of our goods. We considered whether, in dealing with this question of Danish trade, we could really get sufficient improvement in our trade balance by tariff concessions alone and we decided we must try, if possible, to adopt methods supplementary to tariff concessions. That was the origin of the purchase agreements which appear for the first time in the Danish Agreement. We considered that, wherever possible, we should bring together trade organisations in the two countries where these trade organisations were able to enter into binding agreements for industries as a whole, and the respective Governments would take note of these undertakings. We have managed to do so in the case of jute, of salt and of saltpetre used for curing bacon, and of wrapping paper used for covering the butter that comes here.

As regards coal, we secured there the greatest achievement by bringing the United Kingdom share back to 80 per cent. The right hon. and gallant Member for Caithness asked that we should compare it with last year, when already there was an improvement. Last year our policy was at work in Denmark. Let him compare it with the last year of Free Trade when there was no such policy at work. I have in my hand the report of a commission that went out to Scandinavia at the request of the late Labour Government. It was headed by Mr. Shin-well, then Secretary for Mines. It was a well-conducted mission and produced a most valuable report but it produced no orders for British coal. We have accomplished what that mission, ably led as it was, never achieved, simply because we had what they had not, an immense lever, which we used to secure larger sales of coal. In the case of coke, we have obtained an undertaking, which I believe will be honoured in the letter and in the spirit, to make every effort to maintain the market for British coke. As to iron and steel, there is no purchase agreement as in the case of salt and jute, but we have an undertaking which we are confident will result in a great increase of our sales to Denmark. I, personally, hope that they will be doubled and that the figure we have named is a minimum figure which we hope will be considerably exceeded. As has been announced, the Danes have already placed an order for the construction of the Storstrom bridge. It will be one of the finest bridges in Europe, and will stand as a, monument to the goodwill which exists between Denmark and ourselves.

I come now to the question of tariff concessions. The hon. Member for the Hulme Division of Manchester (Sir.T. Nall) spoke about the feeling in the textile industry, that they had not done so well out of the Danish Agreement as they might have done. There was full consultation with the Manchester Chamber of Commerce on this matter. In the case of the textile industries we were up against a difficult position, because Denmark herself has a textile industry which is crying out for protection. We have secured a stop on her duties at an admittedly moderate level, which will be of advantage to the Lancashire trade. The hon. Member was under a misapprehension when he spoke of the raising of certain duties in October last. In point of fact the alteration which took place in the duties in October was on artificial silk mixtures only, not on cotton. The figures of imports into Denmark for the first three months of this year show a marked increase in the amount of British cotton textiles which are being taken by that country. There is a control in operation, but that control does not allocate particular quotas to particular countries, nor is it in our interests that they should do so, because quotas would have to have some relation to previous importation, and our imports of cotton are on the increase while those of other countries are on the decrease. I understand the anxiety of the hon. Member on the subject, but I ask him to encourage his friends to press on in this market, for in present circumstances, and with the sentiment which now exists in Denmark, we have every opportunity of greatly increasing our sales in the years in front of us.

One word in conclusion on the general policy of His Majesty's Government in the matter of trade negotiations. We have been asked why we do not give up altogether the policy of the most-favoured-nation clause. Surely it would not be a good contribution to world recovery and stability that we should now give notice to denounce 41 different treaties and initiate 41 different sets of negotiations. There is a much better way than that of dealing with this problem, and that is the way enunciated by the President of the Board of Trade a few days ago when he said: His Majesty's Government will certainly not be prepared to continue indefinitely to accord full most-favoured-nation 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.] That is the method by which we intend to proceed, and that is the method which we believe will bring most benefit to the trade of this country. We do not apologise for these agreements. We place them before the House and the country in full confidence that they are achievements of great value. We see in them more than mere trade bargains. We see in them an indication that in a world dazed by trade depression there is yet a great country which can rake a lead and show the way to better times.

Motion, by leave, withdrawn.