Commons Sitting of 25 June 1934

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Darlington Corporation Bill,
London Midland and Scottish Railway Bill,
Lords Amendments considered, and agreed to.
London County Council (Money) Bill,
Read the Third time, and passed.
South Devon and East Cornwall Hospital, Plymouth, Royal Albert Hospital, Devonport, and Central Hospital, Plymouth (Amalgamation, etc.) Bill [Lords],
As amended, considered; to be read the Third time.
Durham County Water Board Bill [Lords],
Middlesex County Council Bill [Lords],
Sheffield Gas Bill [Lords],
Tyne Improvement Bill [Lords],
Wantage Urban District Council Bill [Lords],
Read a Second time, and committed.
Pier and Harbour Provisional Orders (Clacton-on Sea and Saint Mawes) Bill,
Read the Third time, and passed.

POOR RELIEF, ENGLAND AND WALES.
Return ordered,
"showing the number of persons in receipt of Poor Relief in England and Wales on the night of the 1st day of January, 1934 (in continuation of Parliamentary Paper, No. 135 of Session 1932–33).—[Sir Hilton Young.]

ORAL ANSWERS TO QUESTIONS.
  INDIA.

    LIQUOR TRAFFIC.
    Mr. DAVID GRENFELLasked the Secretary of State for India whether he is aware that the present policy of certain provincial Governments in India in cheapening the price of country liquor in the coal area and in increasing the number of grog shops, contrary to the recommendations of the Royal Commission on Labour, is having a bad effect on the moral, physical, and economic conditions of the mine workers; and whether he will consider taking steps to secure the abolition of the putstill system and a reduction in the number of grog shops?
    The SECRETARY of STATE for INDIA (Sir Samuel Hoare): As the hon. Member is aware, the control of the internal liquor traffic rests with the provincial Governments. The action taken by those Governments on the recommendations of the Royal Commission on Labour up to the end of 1933 is described in the progress reports that have been placed in the Library. I will ask the Government of India to include in the 1934 report more detailed information on the action taken on the recommendations on the matters referred to in the hon. Member's question.
    Mr. GRENFELL: Is the right hon. Gentleman aware of the very serious view taken by Indian Labour, both workers and employers, in regard to the considerable increase in the consumption of intoxicating liquor; and has he been informed of the resolution passed by the Mine Workers Association at Gwalior protesting against the cheapening of the price?
    Sir S. HOARE: This is a very important question. We all realise that. It is also a complicated question, as, I think, the hon. Member will see when I give him further information on the subject. The effect of high prices has been to encourage illicit distilling, and, if there is a lowering of prices, it is with the object of discouraging illicit distilling.
    Mr. GRENFELL: Has not the lowering of prices led to an enormous increase in consumption?
    Sir S. HOARE: No, Sir. That is not the case.

    DEATH SENTENCES.
    Mr. BERNAYSasked the Secretary of State for India whether he is in a position now to state what steps have been taken by the Provincial Governments in India to ensure that there is no repetition of the incident last December at Lahore, when a man was executed before a letter ordering the postponement of the execution had been opened?
    Sir S. HOARE: Instructions have been issued by the Provincial Governments that communications relating to prisoners under sentence of death shall be plainly marked to indicate their nature and urgency; and certain officers have been designated as responsible for seeing that orders for postponement of executions are issued promptly, and that acknowledgments are received immediately from jail superintendents to all such communications.
    Mr. BERNAYS: Is my right hon. Friend now satisfied that all possible precautions are being taken?
    Sir S. HOARE: Yes, Sir, I think that is the case. Anyhow, I shall watch the position very carefully.

    EDUCATION (CENTRAL ADVISORY BOARD).
    Duchess of ATHOLLasked the Secretary of State for India if he approves the decision taken by the Government of India in 1932 to revive, as soon as financial conditions have sufficiently improved, the Central Advisory Board of Education, as the most useful and economical means of enabling the Government of India and Provincial Governments to formulate a comprehensive policy of educational development?
    Sir S. HOARE: Yes, certainly.
    Duchess of ATHOLL: How does my right hon. Friend reconcile his approval of the decision of the Government of India to set up a central board to advise provincial education departments, with his advocacy of a federation under which education will be exclusively a provincial subject, and the Federal Government will therefore have no power whatever to advise or assist the Provincial Governments in this matter?
    Sir S. HOARE: That has nothing whatever to do with the question. This
    770
    officer has been appointed for the purpose of co-ordinating provincial administration. There is no conflict between provincial autonomy and co-ordination at the centre.
    Duchess of ATHOLL: I am not sure that my right hon. Friend is referring to the right question. The question which I put had no reference to any appointment of an officer, but to the Central Advisory Board of Education, the purpose of which is to advise the provincial departments in respect of education.
    Mr. MOLSON: Is it not the case that education is at present a transferred subject, and, therefore, that the Government of India already has no power of control over local authorities?
    Sir S. HOARE: Certainly that is the case, and the object of this organisation is, as I say, co-ordination and not administration.

    AGRICULTURE (CENTRAL MARKETING OFFICER).
    Duchess of ATHOLLasked the Secretary of State for India if the recent appointment by the Government of India of an experienced marketing inspector from this country as central marketing officer in India for agricultural produce was made with his approval?
    Sir S. HOARE: The appointment was not one for which my approval was required.
    Duchess of ATHOLL: Again, may I ask whether the appointment of this officer by the Government of India is consistent with what we are told of their advocacy of Federal Government, which will have no power to advise or assist the Provincial Governments in regard to agriculture which is to be an exclusively provincial subject?
    Sir S. HOARE: I would refer the Noble Lady to the answer which I have just given.
    Duchess of ATHOLL: If the Federal Government, under the White Paper proposals, will have no power of spending public money in regard to agriculture, how can it possibly continue the appointment of this central marketing officer, to say nothing of the central agricultural stations which, at present, it maintains?
    Sir S. HOARE: Agriculture, like education, is a transferred subject. In each case there is great value in co-ordination, but not in administration, from the centre.
    Duchess of ATHOLL: May I ask how any co-ordination can be carried out without expenditure of public money which the Federal Government will have no power to expend?
    HON. MEMBERS: Order.

    BANGALORE.
    Duchess of ATHOLLasked the Secretary of State for India if he is aware that the resident in Mysore has stated to a meeting of representatives of the Bangalore municipality and trade organisations that partial retrocession of the station Had been decided on by the Government of India; and has this statement been made with his approval?
    Sir S. HOARE: I have seen a Press report to this effect, but I do not think that anything that was said can have been intended to convey that any final decision had been taken. I understand that the question is still under discussion.
    Duchess of ATHOLL: Are we, therefore to understand that this question awaits the decision of Parliament, as stated by my right hon. Friend in reply to my question on 19th March?
    Sir S. HOARE: Yes, Sir. I have nothing to add to the answer which I then gave.

    HYDERABAD (HEALTH OFFICER).
    Mr. T. WILLIAMSasked the Secretary of State for India the reason for the action of the Government of India in withholding the annual grant of Rs.7,000 due in payment of the salary of the health officer of Hyderabad?
    Sir S. HOARE: I have no information corresponding to the hon. Member's statement, but, if he can give me further particulars, I will look into the matter and let him have a reply.

  DEBTS CLEARING OFFICES AND IMPORT RESTRICTIONS REPRISALS BILL.
  Captain FULLERasked the Secretary of State for India if he is consulting with the Government of India on the
  772
  likely effect on the export trade of India if the clearing house system for Anglo-German trade is set up?
  Sir S. HOARE: The Government of India are being kept in touch with developments.
  Captain FULLER: Shall we have an opportunity of knowing, before the passing of the Bill, what their views are on this question?
  Major NATHANasked the Secretary of State for Foreign Affairs whether the Treaty of Commerce and Navigation between the United Kingdom and Germany, signed at London, 2nd December, 1924, is still in force; and, if so, whether he has considered whether action in relation to Germany under Clause 2 of the Debts Clearing Offices and Import Restrictions Reprisals Bill would be in conformity with the obligations of His Majesty's Government under Article 10 of such Treaty?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): The answer to the first part of the hon. and gallant Member's question is in the affirmative. As regards the second part, action under Clause 2 of the Bill in question would not in normal circumstances be in conformity with Article 10 of the Treaty.
  Mr. DINGLE FOOTasked the Secretary of State for Foreign Affairs the number of British subjects ordinarily resident, or ordinarily carrying on business, in Germany at the present time; and whether he can give any estimate of the debts owing to such persons by persons resident in the United Kingdom?
  Sir J. SIMON: I have no information on either of these points.
  Mr. T. SMITHasked the President of the Board of Trade if he will state in the case of which foreign countries payments or transfers to persons ordinarily resident, or ordinarily carrying on business, in the United Kingdom are subjected to restrictions or are prohibited or have been discontinued?
  Lieut.-Colonel COLVILLE (Secretary, Overseas Trade Department): Some degree of control over the purchase and sale of foreign exchange for the purposes of payments or transfers to other countries including the United Kingdom exists in 29 countries, of which I will circulate a list in the OFFICIAL REPORT.
  Major NATHAN: In view of the Debate in the House to-day, will the hon. and gallant Gentleman give that list now for the general convenience, as it is important for the consideration of the Bill?
  Lieut.-Colonel COLVILLE: If the House desires, I can read the list, but it is a long one of 29 names.
  Following is the list:

  Austria.

  Portuguese East Africa.

  Bulgaria.

  Czechoslovakia.

  Turkey.

  Denmark.

  Argentina.

  Estonia.

  Bolivia.

  Germany.

  Brazil.

  Greece.

  Chile.

  Hungary.

  Colombia.

  Iceland.

  Costa Rica.

  Latvia.

  Ecuador.

  Lithuania.

  Nicaragua.

  Rumania.

  Paraguay.

  Spain.

  Uruguay.

  Yugoslavia.

  Cuba.

  Angola.

  Honduras.

  Mr. R. T. EVANSasked the President of the Board of Trade whether he can give an estimate of the relative position as between Germany and the United Kingdom in the matter of current debts on account of ordinary commercial transactions?
  Lieut.-Colonel COLVILLE: I regret that the desired information is not available.
  Mr. T. WILLIAMSasked the President of the Board of Trade in which foreign countries quantitative restrictions are imposed on the importation into such foreign countries, respectively, of goods of any class or description grown, produced, or manufactured in or consigned from a country to which Clause 2 of the Debts Clearing Office and Import Restrictions Reprisals Bill is designed to apply; and whether those restrictions are in the opinion of the Board of Trade discriminatory against or specially detrimental to a country to which the said Section applies?
  Lieut.-Colonel COLVILLE: Various forms of quantitative restrictions are imposed on imported goods, including goods imported from countries to which Clause 2 of the Bill would apply, in 21 countries, of which I will circulate a list
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  in the OFFICIAL REPORT. With regard to the second part of the question, it is not possible to make a statement as to the nature and effects of these restrictions within the limits of question and answer.
  Mr. WILLIAMS: Could the answer be delivered almost immediately in view of the Debate to-day?
  Lieut.-Colonel COLVILLE: I think the hon. Gentleman has misunderstood me. I could not within the limits of question and answer fully explain the position in relation to the effect of all these restrictions in foreign countries.
  Mr. WILLIAMS: Did I not understand the hon. and gallant Gentleman to state that the subject matter of the reply would be circulated later?
  Lieut.-Colonel COLVILLE: Yes, I have the list here, and I will give the hon. Gentleman one.
  Following is the list:

  Austria.

  Hungary.

  Belgium.

  Iceland.

  Czechoslovakia.

  Latvia.

  Denmark.

  Lithuania.

  Estonia.

  Persia.

  France, and French West Africa.

  Poland.

  Rumania.

  Spain.

  Germany.

  Switzerland.

  Greece.

  Turkey.

  Holland, and the Dutch East Indies.

  Mr. T. SMITHasked the Secretary of State for Dominion Affairs if he will state the amount of trade to Germany from the several British Dominions, and from the several British Dominions to Germany, for the last 12 months or the latest convenient 12-monthly period?
  The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): I am circulating in the OFFICIAL REPORT such figures as are immediately available. I am causing inquiries to be made, with a view to ascertaining whether any later figures can be supplied, and I will communicate the result to my hon. Friend as soon as possible.
  Following are the figures:

  Trade between Germany and the Dominions according to Dominion Statistics.

  Dominion, etc.

  Date.

  Exports from Germany.

  Imports into Germany.

  Balance.

  Canada

  Year ended 31st March, 1933

  $9,088,906

  $8,057,105

  + $1,031,800

  Australia

  Year ended 30th June, 1932

  £1,427,079

  £3,088,171

  −£1,661,092

  New Zealand

  Calendar year 1932

  £459,971

  £289,917

  + £170,054

  Union of South Africa

  Calendar year 1933

  £3,241,284

  £1,981,786

  + £1,259,498

  Irish Free State

  Calendar year 1932

  £1,302,527

  £69,910

  + £1,232,617

  Major NATHANasked the Chancellor of the Exchequer the respective estimated amounts of all debts now due in respect of goods grown, produced, or manufactured in or consigned from Germany and imported into the United Kingdom, and of all debts now due to or for the benefit of persons ordinarily resident or ordinarily carrying on business in Germany, or of any class of any such debts as aforesaid?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): Since there are no exchange restrictions in force in this country I see no reason to suppose that debts now due, and unpaid, by persons in this country in respect of German goods or to persons in Germany amount to any large amount. I have no information as to the amount of bank balances belonging to persons in Germany, but I may take this opportunity to make clear that there is no intention of treating bank balances as debts to be cleared or to use the powers under the Debts Clearing Offices and Import Restrictions Reprisals Bill so as to interfere with them in any way.
  Major NATHAN: May I ask the hon. Gentleman how he reconciles that answer with the plain terms of the Bill before the House, and whether he has taken the views of the Law Officers as to whether the answer he has just given, except in so far as it is an undertaking by the Government, is in accordance with the Bill?
  Mr. HORE-BELISHA: Naturally, I should not have given the answer unless I had been advised that it was an accurate one, and I have informed the hon. Gentleman that there is no intention to deal with the matter in the way in which he feared, but it is permissive.
  Major NATHAN: Is it to be understood that the hon. Member is now, from his
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  place, and speaking on behalf of His Majesty's Government, giving a formal undertaking to the world that bank balances will not, outside the projected Bill, be touched by any machinery now envisaged by the Bill?
  Mr. HORE-BELISHA: If the hon. Gentleman desires that reassurance I can solemnly inform him that what I have said once is true, but I will say it again, and what I say twice is equally true.
  Major NATHANasked the Chancellor of the Exchequer if he will state his estimate of the capital amount of the Dawes Loan and Young Loan, respectively, held by persons ordinarily resident or ordinarily carrying on business in the United Kingdom and, separately, of the capital amount thereof held by British subjects wherever resident or by incorporations incorporated by or under the law of the United Kingdom or of a country forming part of the British Empire as defined by the Import Duties Act, 1932, and by persons who are afforded His Majesty's protection and ordinarily reside or ordinarily carry on business in such a country?
  Mr. HORE-BELISHA: The nominal capital amount of the sterling issues of the Dawes Loan held by persons in the United Kingdom is about £10,000,000 and of the sterling issue of the Young Loan is about £9,000,000. The amount of German obligations held by persons in the other parts of the British Empire is believed to be small, but I have no precise estimate at present.
  Mr. HENDERSON STEWARTasked the Chancellor of the Exchequer what is the total amount of the annual service due to British nationals by Germany in respect of the Dawes and Young Plans; and what is the amount at present outstanding?
  Mr. HORE-BELISHA: The annual amount required for the service of the sterling bonds of the Dawes and Young Loans held by British nationals is estimated at about £1,700,000, on the basis that the service of the Young Loan will be met, as at present, in sterling and not in gold. The nominal amount of such bonds outstanding may be estimated at about £10,000,000 in the case of the Dawes Loan and about £9,000,000 in the case of the Young Loan.

  GERMAN LOANS OUTSTANDING.

  (See Fourth Annual Report of the Bank for International Settlements.)

  Country of Issue.

  Dawes Loan (at 15th October, 1933).

  Young Loan (at 1st June, 1933).

  Amount in currency of original issue.

  Converted at rate of exchange of

  Sterling value.

  Amount in currency of original issue.

  Converted at rate of exchange of

  Sterling value.

  £

  £

  United States of America.

  $63,791,600

  5·00

  12,758,320

  $91,648,000

  5·00

  8,329,600

  United Kingdom

  £9,446,500

  —

  9,446,500

  £11,200,100

  —

  11,200,100

  France

  £2,356,100

  —

  2,356,100

  2,374,962,000

  76·25

  31,147,043

  francs.

  Belgium

  £1,188,000

  —

  1,188,000

  32,733,900

  21·50

  1,522,507

  belgas.

  Holland

  £1,964,900

  —

  1,964,900

  67,828,000

  7·43

  9,128,937

  florins.

  Germany

  £252,400

  —

  252,400

  34,153,300

  13·20

  2,587,371

  reichsmarks

  Switzerland

  £1,873,500

  —

  1,873,500

  —

  —

  —

  Switzerland

  11,886,000

  15·50

  766,839

  86,067,000

  15·50

  5,552,710

  Swiss francs.

  Swiss francs.

  Italy

  79,781,500

  59·00

  1,352,229

  104,100,000

  59·00

  1,764,407

  lire.

  lire.

  Sweden

  20,428,000

  19·40

  1,052,990

  102,773,000

  19·40

  5,297,577

  crowns.

  crowns.

  CHINA.

    PILOTAGE.
    Major-General Sir ALFRED KNOXasked the Secretary of State for Foreign Affairs (1) by whom, and from what source, pilots are at present allocated to ocean-going vessels in Shanghai; and whether he can give the House information as to the proposals of the Chinese Government to change the present system;
    (2) whether he is aware that the status of the Shanghai Licensed Pilots Association is derived from the provisions of the treaty of 1858 and subsequent agreements;
    Mr. R. T. EVANSasked the Chancellor of the Exchequer the total amount of Germany's indebtedness in respect of the Dawes and Young Loans and its distribution as between the several subscribing countries?
    Mr. HORE-BELISHA: I am arranging for the circulation in the OFFICIAL REPORT of a statement of the bonds of the various issues of these two loans outstanding, as shown in the Fourth Annual Report of the Bank for International Settlements.
    Following is the statement:
    and whether any revision of the treaty of 1858 and the agreements is contemplated, in order to facilitate the proposals made by the Chinese Government with reference to the conditions affecting such pilots?
    Mr. CHORLTONasked the Secretary of State for Foreign Affairs (1) whether his attention has been drawn to the appointment of a new pilotage board at Shanghai without consultation with or approval of the Consular body; and what steps he is taking to secure the safe pilotage of British ships in Chinese territorial waters;

    779
    (2) whether his attention has been called to the proposal of the Chinese Government to take over the pilot organisation at all Chinese ports and to operate them under provisional pilotage regulations; whether the status of the Shanghai Licensed Pilots Association will be affected by the new scheme; and whether there is an adequate supply of experienced Chinese pilots in Shanghai?
    Sir J. SIMON: I have been fully informed by His Majesty's Minister in China of the new arrangements for pilotage proposed by the Chinese Government. The rights possessed by foreigners in connection with the engagement of pilots in Chinese waters derive from the Treaty of Tientsin of 1858 and from other treaties between China and foreign countries. These rights were codified in the general pilotage regulations of 1868, which were drawn up by the Inspector-General of Customs and accepted by Great Britain and the interested Powers. These regulations provided for mixed boards to make appointments of pilots in the various ports. At Shanghai all the pilots so appointed belong to a pilot boat company. The Chinese Government recently drew up a provisional pilotage regulation intended to supersede them, and His Majesty's Minister has accordingly made representations to the Chinese Government pointing out that the matter is one of interest to foreign Powers as well as to the Chinese Government, and that in their present form the new provisional regulations are not satisfactory. It is understood that this view is shared by other interested Governments.
    The Chinese Government have indicated that a revised version of the regulations will be communicated to the interested Governments in due course, and in view of this and of the fact that the question is still under discussion between His Majesty's Minister and the Chinese Ministry for Foreign Affairs, I cannot at present say more; but I can assure my hon. Friends that His Majesty's Government are fully alive to the interests of British shipping and of the British pilots who may be affected.
    Mr. CHORLTON: Can my right hon. Friend say what other rights are now being invaded; and shall we have a return in reference to this question?
    Sir J. SIMON: The questions put by my hon. Friend were in reference to the pilotage service, and I think I have given a full answer.

    PIRACY.
    Lieut. - Commander TUFNELLasked the First Lord of the Admiralty whether British shipping firms can still obtain the services of armed guards to protect their vessels in Far Eastern waters against pirates; whether the services of such guards have to be paid for; and whether the Government will consider reverting to the original system under which these guards were automatically supplied to vessels without charge?
    Sir BASIL PETOasked the First Lord of the Admiralty whether his attention has been called to the recent case of piracy on board the British steamer "Shuntien" on the China coast; and whether the Government are now prepared to place armed guards on British passenger vessels engaged in the China coastal trade?
    The FIRST LORD of the ADMIRALTY (Sir Bolton Eyres Monsell): The case of the "Shuntien" was what is commonly known as one of internal piracy, in which pirates disguised as passengers attack the crew during the voyage. To meet such cases, an armed force under the control of the Hong Kong police is maintained at Hong Kong at the cost of the shipping companies and is available for supplying armed guards to merchant ships as necessary. This arrangement, coupled with the adoption of a system of grilles on board, has been in operation since 1930 and has worked satisfactorily. Hitherto, it has been confined to ships trading to southern Chinese waters and has not as yet been extended to ships trading to Northern China, since they have not up to now been subject to this form of attack, but I see no reason why this or some similar arrangement should not be adopted in their case also. Before 1930, as a temporary arrangement pending the introduction of police guards, naval or military guards were supplied. The re-introduction of such guards as a regular arrangement is not considered to be necessary, but the local naval and military authorities are fully alive to the possibility that the provision of such guards may be necessary in special emergencies, and I understand that a military guard has in fact been supplied

    781
    to a passenger steamer which left Shanghai for northern ports on the 19th June.
    Sir B. PETO: In view of the depressed state of our shipping, and the very low profits, if any, which are available, will not the First Lord consider reverting to the practice which was followed prior to 1930, and let British ships which are subject to piracy in Eastern waters have the advantage of an armed guard, without the cost of it having to be met by the shipowners?
    Sir B. EYRES MONSELL: If we have automaticaly to supply naval or military guards to these ships it would impose a great strain on our personnel in that area. We only introduced that protection pending the setting up of the police guard. I am quite willing to meet every case that it is in my power to meet, but I cannot promise the hon. Baronet that we can automatically supply armed guards from the naval or military forces.
    Sir FRANCIS FREMANTLE: Does not the service rendered by His Majesty's Ship "Eagle" show the immense value of aerial bombing for police purposes?
    Sir B. EYRES MONSELL: It was a very fine example of co-operation between the sea and the air.
    Mr. McENTEE: Will the right hon. Gentleman consider appointing the hon. Member for Bridgeton (Mr. Maxton) to organise a crew of passengers disguised as pirates?

  ARMS TRAFFIC (EMBARGO).
  Mr. GEORGE HALLasked the Secretary of State for Foreign Affairs whether His Majesty's Government proposes to use its powers, under the licensing system, to impose an embargo on all offensive weapons, including aeroplanes and tanks, destined for foreign countries, or whether new legislation will be introduced in the event of the proposal for an international embargo on the export of arms to Bolivia and Paraguay being accepted?
  Sir J. SIMON: I am advised that no new legislation will be required.

  AGRICULTURE.

    FOOT-AND-MOUTH DISEASE.
    Lieut. - Colonel Sir ARNOLD WILSONasked the Minister of Agriculture what progress has been made by the foot-and-mouth disease research committee during the last two years; and what, broadly speaking, the results of its investigations have been, more particularly in the direction of preventive treatment by inoculation?
    The MINISTER of AGRICULTURE (Mr. Elliot): It is difficult to summarise the work of the committee during the last two years within the limits of the reply to a Parliamentary question; and, with the consent of my hon. and gallant Friend, I will send him a memorandum on the subject. I may mention that the Fifth Progress Report of the committee is in course of preparation, and is expected to be available in the autumn.
    Sir A. WILSONasked the Minister of Agriculture whether the Foot-and-Mouth Disease Research Committee, since its appointment 10 years ago, have considered the connection between the quality of the food of cattle and the incidence of this disease; whether the committee are dealing with the question of the prevention of foot-and-mouth disease by a combination of high quality food and improved hygiene; and, if not, whether he will suggest that they should consider the possibilities of this method of eliminating the disease?
    Mr. ELLIOT: The research committee have considered the possibilities mentioned by my hon. and gallant Friend and have advised that there is no evidence to show that diet or hygiene, or a combination of both, have any influence on the spread of foot-and-mouth disease. Clinical observations and experimental work carried out by the committee have in fact shown that animals in very good condition may contract the disease in a more severe form than animals in poor condition.
    Lieut.-Colonel ACLAND-TROYTEasked the Minister of Agriculture if he is aware that foreign countries will not accept goods packed with straw rope made in England for fear of foot-and-mouth disease, whereas we import the foreign article, both in the raw state and as packing, from countries in which there

    783
    is much foot-and-mouth disease; and whether he will consider the prohibition of the importation of this article?
    Mr. ELLIOT: My information is that all countries, except the Irish Free State and Jersey, accept goods from Great Britain packed in straw either free from restrictions or subject to an official certificate of disinfection or of freedom of foot-and-mouth disease of the district of origin of the straw. The Orders of the Ministry entirely prohibit the importation into Great Britain from countries where foot-and-mouth disease exists of hay and straw for use as fodder or litter for animals. They also require imported straw used for packing merchandise to be destroyed after use. From the conclusions reached by the Departmental Committee on Foot-and-Mouth Disease in 1925 and subsequent experience, there does not appear to be justification for further prohibition of the importation of this material.

    MEAT IMPORTS.
    Mr. HERBERT WILLIAMSasked the Minister of Agriculture if his attention has been drawn to the fact that in May, 1934, the retained imports of beef and veal amounted to 1,108,000 cwt. as compared with 1,043,000 cwt. in May, 1933, and 964,000 cwt. in May, 1932, when the restriction of beef imports had not commenced, and that of this total supplies from foreign countries totalled approximately 871,000 cwt. in May, 1934, 855,000 cwt. in May, 1933, and 899,000 cwt. in May, 1932; and whether he can now announce when he proposes to introduce an effective scheme for the reduction of the imports of foreign beef, so as to protect the British livestock industry from foreign competition?
    Mr. ELLIOT: I am aware of the figures quoted in the first part of the question, which refer, however, to gross imports. With regard to the second part, the meat situation is receiving active attention, but I am not in a position to make a statement.
    Mr. WILLIAMS: Can my right hon. Friend indicate when this statement is likely to be made?
    Mr. ELLIOT: No, I am afraid I cannot.
    Mr. LAMBERTasked the President of the Board of Trade if the Government has liberty under recent agreements
    784
    to impose a tariff on imported meat; and, if so, will legislation be proposed for the imposition of such duties as will enable the home meat producers to secure a reasonable remuneration for their labour and to pay a fair wage to the agricultural workers?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): Under our existing commitments no new or additional duties can be imposed on imported meat without the consent of the Dominions with whom agreements were made at Ottawa and of Argentina. As regards the latter part of the question, the position of the home meat industry is receiving careful consideration by the Departments concerned, but it is not possible at present to make any statement.
    Mr. LAMBERT: When will the Government resume liberty to deal with this subject?
    Lieut.-Colonel ACLAND-TROYTE: Is the hon. Gentleman aware that the farmers are tired of consideration and that they want action?
    Lieut.-Colonel ACLAND-TROYTEasked the Minister of Agriculture if his attention has been drawn to the fact that the imports of foreign chilled and frozen pork increased from 47,000 cwt. during the first five months of 1932 to 66,000 cwt. in the same period of 1933, and to 210,000 cwt. in the same period of 1934; and, as the Import Duties Advisory Committee are debarred from dealing with this commodity, will he announce his policy for dealing with this foreign competition in our pig industry?
    Mr. ELLIOT: The answer to the first part of the question is in the affirmative. As regards the second part, the whole position as to supplies of meat, including pork, is being reviewed by the Government in the light of the recommendations of the Reorganisation Commission for Fat Stock, and I am not at present in a position to make any statement.
    Lieut.-Colonel ACLAND-TROYTE: Is my right hon. Friend aware that our meat producers are losing money every day, and that immediate action is necessary, and will he do something very rapidly?
    Mr. ELLIOT: Surely very drastic action with regard to the pig industry has been taken and is in force now.
    Mr. T. WILLIAMS: Can the right hon. Gentleman say from what foreign country or Dominion these increased imports of pork are coming?
    Mr. ELLIOT: Not without notice.
    Mr. D. GRENFELL: Will the right hon. Gentleman accept the conclusion, from all these questions, that in agriculture things have continued to get worse and worse while this Government has been in office?

    SMALLHOLDINGS.
    Mr. T. SMITHasked the Minister of Agriculture whether he has any further information to give the House regarding the proposed Small Holdings Association for England and Wales?
    Mr. ELLIOT: The question of the formation of the proposed Small Holdings Association for England and Wales has been under active consideration with representatives and members of the National Council of Social Service and the Society of Friends, and with other persons interested in this subject. I am not yet in a position to make a definite announcement, but I have every hope that it will be possible for the proposed association to be constituted shortly.

    WHEAT ACT.
    Mr. PERKINSasked the Minister of Agriculture whether it is the intention of the Government to continue the wheat quota after 1935?
    Mr. ELLIOT: The Wheat Act, 1932, provides that not later than 1st March, 1935, the Minister shall appoint a committee to review the standard price. If that committee makes a recommendation that the standard price shall be altered, the Minister may by the procedure of a Provisional Order revise the price with effect from 1st August, 1935. There was, however, no expressed intention of Parliament when the Wheat Act was passed, nor is there any intention on the part of the Government, to limit the operation of that Act to the period ending 1935.
    Mr. PERKINS: Do I understand that it is the intention of the Government to continue the principle, if not the exact form, of the Wheat Act after 1935; if so, is my right hon. Friend aware that there is a completely erroneous impression circulating among the farming community
    786
    that this Act will come to an end next year, and will he take immediate steps to correct this false impression?
    Mr. ELLIOT: My answer to the hon. Gentleman's question shows that there is no intention on the part of the Government to limit the operation of the Act, which is the point that my hon. Friend has in mind.
    Lieut.- Colonel ACLAND - TROYTE: Will my right hon. Friend consider extending the acreage allowed to qualify for the deficiency payment?

    MILK REORGANISATION COMMISSION (RECOMMENDATIONS).
    Mr. LAMBERTasked the Minister of Agriculture if he proposes to implement by legislation the recommendations of the Milk Reorganisation Commission and establish producers and distributors boards, with three independent members, to fix the sale price of milk?
    Mr. ELLIOT: As my hon. Friend will be aware, it is incumbent on the Milk Marketing Board, under the provisions of the Milk Marketing Scheme, to consult such persons as they think best qualified to express the views of purchasers of milk by wholesale before prescribing the terms of contracts for the sale of milk by registered producers. Section 13 of the Agricultural Marketing Act, 1933, confers statutory authority on the board, by agreement with the purchasers' representatives, to bring independent persons into such consultations. I am not satisfied that these powers, if fully exercised, are insufficient, and as at present advised, therefore, I am not prepared to raise the wide issues which would be involved in a decision to introduce legislation to carry out the recommendations of the Milk Reorganisation Commission regarding a Central Dairymen's Board and a joint Milk Council.
    Mr. LAMBERT: Is my right hon. Friend aware of the intense dissatisfaction against the award of the three independent persons appointed?
    Mr. ELLIOT: I am aware that there was dissatisfaction with the award of the three independent persons, but I am not aware that any other award by any other three independent persons would be any more acceptable.
    Mr. LAMBERT: Will my right hon. Friend give us a trial?
    Lieut.-Colonel ACLAND-TROYTE: Is my right hon. Friend aware that the present appointed persons cannot possibly be asked to act again after their period of office ends, and can he say what he proposes to put in their place?

    EGG AND POULTRY INDUSTRY.
    Major LEIGHTONasked the Minister of Agriculture whether he will take some temporary immediate action to help the egg and poultry industry pending the issue of the report of the Reorganisation Commission?
    Mr. ELLIOT: There is nothing that I can usefully add to the reply I gave on 11th June, to a question on this subject by my hon. Friend the Member for Ormskirk (Sir T. Rosbotham), of which I am sending my hon. and gallant Friend a copy.
    Mr. HANNON: Is the Minister taking into account the very serious position of the poultry industry in this country, the number of people employed in it, and the fact that it is particularly ex-service men who have taken up poultry raising; and when can we have a statement as to the policy of the Government in respect to this industry?
    Mr. ELLIOT: There was a statement giving our policy, and that was the statement to which I referred, and one should not forget that prices are rather better just now than they were at this time last year.
    Major LEIGHTON: Has my right hon. Friend power to make further restrictions on the imports of eggs?
    Mr. ELLIOT: Oh yes. There is power under the Act of 1933, further to reduce the imports of foreign eggs into this country, and the Reorganisation Commission is sitting.
    Mr. T. WILLIAMS: Is there anything in the Statute law to prohibit agricultural Members from constantly begging?
    Mr. ELLIOT: I would remind the hon. Gentleman of the questions that are often put on behalf of the miners by hon. Members opposite.

    HOPS MARKETING SCHEME (AMENDMENT).
    Mr. HOROBIN(by private notice) asked the Minister of Agriculture whether he can state how soon the committee,
    788
    which he appointed in April to consider the Hops Amending Scheme, is likely to Report?
    Mr. ELLIOT: The committee has now successfully concluded its deliberations and the Brewers' Society and the Hops Marketing Board have agreed, inter alia, that a permanent joint committee of brewers and hop growers, together with impartial members, should be constituted to secure closer collaboration between the two bodies in regard to the marketing of home-grown hops. I hope, before the House is asked to consider the amendment to the Hops Scheme now on the Order Paper, to lay a White Paper containing a summary of the committee's recommendations. I should like to take this opportunity of thanking Sir John Chancellor and his colleagues for their very valuable work on this committee.
    Mr. HOROBIN: While thanking my right hon. Friend, may I ask if he can give the House an assurance that, in view of the great importance of the issues involved, not only a summary but the text of the report will be in the hands of Members for a reasonable period—say at least a week—before the House is asked to pass this extremely important scheme, and possibly to set up a precedent?
    Mr. ELLIOT: I do not think I could undertake to put the text of the report in the hands of Members. This was a report to me and not to the House. I will give as full a summary as possible, and I feel sure it will contain all the information which my hon. Friend desires. In regard to the time at which the hops scheme will come before the House, that is rather a matter for the Leader of the House.
    Mr. T. WILLIAMS: As the suggested amendment to the hops scheme is likely to stand as a precedent for all agriculteural marketing schemes, does not the right hon. Gentleman think that Members should have full possession of the committee's report at least a week in advance of the day when they are called upon to discuss the proposition?
    Mr. ELLIOT: The time-table is obviously a matter for the Leader of the House.
    Mr. WILLIAMS: Will the amending hops scheme come to this House before it goes to another place, and will the maximum time possible be given to hon. Members to study the report?
    Mr. ELLIOT: I am afraid I must not dogmatise about the course of business in another place.
    Mr. HOROBIN: If the right hon. Gentleman, on further consideration, does not intend to publish the full text of the report, may I ask if he will give a definite assurance to the House that there are no outstanding matters of principle or objection which have been raised in the course of inquiry by the brewers or others; and can we at least be certain, if we are only to have a summary, that all the objections of principle are now satisfactorily disposed of?
    Mr. ELLIOT: When the summary of the recommendations is laid, my hon. Friend will be able to see, and in the course of the Debate on the hops scheme he can press for further information on any point on which he thinks the report is not sufficiently clear.
    Mr. WILLIAMS: Is there any minority report, and, if so, will it be made available to Members?
    Mr. ELLIOT: Oh, no, Sir. This is a unanimous agreement.
    Major Sir ARCHIBALD SINCLAIR: Surely there is no reason why we should not have the whole of the recommendations, even if we are only to have a summary of the remainder of the report?
    Mr. ELLIOT: When I speak of a summary of the committee's recommendations, I mean a summary of the results of the committee's deliberations. If anything has been omitted, the proper time to raise that will be when the scheme is being discussed.
    Mr. D. GRENFELL: How are we to know whether the summary is complete?
    Mr. ELLIOT: Surely hon. Members will have to trust to my good faith. I hope it is not impossible to ask them to do that.

  TITHE RENTCHARGE.
  Sir WILLIAM WAYLANDasked the Minister of Agriculture whether, in view of the proposed intention to appoint a Royal Commission to inquire into the question of tithe and the long delay which must occur before the report of the Royal Commission can be laid before Parliament,
  790
  he will present a short Bill during the present Session to give temporary relief to heavily-tithed land until the Government can take action after the Royal Commission have reported?
  Mr. ELLIOT: As my hon. Friend will be aware, the legislative proposals which the Government laid before Parliament in another place provided both for certain reliefs to tithe payers and for facilities for tithe owners in connection with the collection of tithe, but these proposals did not commend themselves to the parties involved. The Government clearly could not contemplate the introduction of further legislative proposals pending the report of the Royal Commission which is to be set up to inquire into the whole question.
  Sir W. WAYLAND: Is my right hon. Friend aware that the Royal Commission may take from one to three years to report and that during that time these heavily tithed farmers will be unable to pay the tithe?
  Mr. ELLIOT: I am aware that a Royal Commission takes a long time to report. That is why I was very anxious to take action straightaway on these proposals, but, not meeting with acceptance, these proposals were not proceeded with, and clearly these heavily tithed farmers will be deprived of the relief which would have come to them through the operation of these proposals.

  HERRING INDUSTRY.
  Mr. LOFTUSasked the Minister of Agriculture if the negotiations for the sale of 70,000 barrels of herring to Russia have now been completed?
  Sir MURDOCH McKENZIE WOODasked the Secretary of State for Scotland if the financial arrangements to carry through the recent agreement for a sale of herring to Russia have been completed?
  The SECRETARY of STATE for SCOTLAND (Sir Godfrey Collins): I have been asked to reply. I understand that the completion of the proposed contract between the British Herring Trade Association, Limited, and the Co-operative Wholesale Society for the sale of 70,000 barrels of herrings has been delayed, owing to a difficulty about the question

  791
  of final inspection and acceptance of the herrings, but it seems likely that this will he overcome. As regards financial arrangements, I understand that the Cooperative Wholesale Society have offered to consider to-morrow any proposals for an advance to the association which the latter may put forward.
  Sir M. WOODasked the Secretary of State for Scotland whether his attention has been drawn to a notice which has been sent out by the British Herring Trade Association warning curers not to cure for the German market on the ground that there is no hope of business in the near future; whether he is aware of the consternation in the industry caused by the notice; and whether he proposes to take any steps to meet the situation resulting from this new development?
  Lieut.-Colonel COLVILLE: I have been asked to reply. I am aware of the notice sent out by the British Herring Trade Association to which my hon. and gallant Friend refers, and I am at once taking steps to ascertain what are the facts of the matter.
  Sir M. WOOD: Is it not nearly a week since this notice was sent out and has not the hon. and gallant Member found out the facts by this time?
  Lieut.-Colonel COLVILLE: The situation in Germany, as the hon. Member knows, is a very difficult one indeed.
  Mr. BOOTHBY: May I ask whether the question of the herring trade will be brought before and kept before the notice of the forthcoming conference in connection with the clearing house?
  Lieut.-Colonel COLVILLE: Yes, Sir, it will be borne in mind.
  Mr. LOFTUS: Is my hon. and gallant Friend aware that Germany last year purchased more than 50 per cent. of the total cure of Great Britain?

  POST OFFICE (PENSIONS).
  Mr. McENTEEasked the Postmaster-General if he will state the number of men now drawing pensions, having reached the age limit, in his Department, in the following grades: postmen, counter hands, telegraphists, and
  792
  telephonists; what is the minimum and the maximum pension based on years of service that can be drawn by each grade; whether men in the same grade and with equal service in the London district and in provincial districts are entitled to equal pensions; and, if not, on what principle is the difference calculated?
  The POSTMASTER-GENERAL (Sir Kingsley Wood): I regret that there are no records available which would readily show the number of men in the grades specified drawing pensions after retirement on account of age, and very considerable time and expense would be involved in working out the figures. The standard rate of pension that may be awarded to a man in any grade is one-eightieth of his emoluments at the time of his retirement for each year of pensionable service. The minimum is ten-eightieths and the maximum forty-eightieths of such emoluments. As the scales of pay in London are generally speaking higher than those in the provinces, the pension of a London man would in ordinary course be higher than that of a provincial man of corresponding rank and service.
  Mr. McENTEE: In view of the fact that members of the fighting services and the police are paid equal pensions irrespective of where they live, will the right hon. Gentleman endeavour to introduce a similar provision in the Post Office?
  Sir K. WOOD: That is another matter.

  REGENT'S PARK.
  Sir CYRIL COBBasked the First Commissioner of Works whether he can place a few permanent garden benches in the rose gardens and alleys of St. John's Lodge, Regent's Park?
  The FIRST COMMISSIONER of WORKS (Mr. Ormsby-Gore): There are already as many as six large teak seats in the centre of the St. John's Lodge Rose Garden, and I am afraid that the provision of further seats, which would have to be placed in front of the herbaceous borders, would spoil the appearance of the garden as a whole.
  Sir C. COBBasked the First Commissioner of Works whether the presence this week of caravans of a fun fair in the

  793
  Inner Circle gardens of Regent's Park arises out of an unexpired existing obligation, or whether it is the intention of the Office of Works to alter the character of any part of the Botanical Gardens area by using it from time to time as a sports ground and a location for theatrical booths, dressing and refreshment tents, and mechanical amusement appliances?
  Mr. ORMSBY-GORE: The Inner Circle gardens have been used for the theatrical garden party and for the Post Office orphanage fete for many years before the administration of these gardens came into the charge of the Office of Works. For this reason I have not thought it desirable to disturb this arrangement; but I have no intention of allowing any considerable extension of such a practice, as this would conflict with the accepted policy of my Department to maintain the gardens for unrestricted enjoyment by the general public.

  TRADE AND COMMERCE.

    ELECTRICAL GOODS (IMPORTS).
    Mr. H. WILLIAMSasked the President of the Board of Trade if his attention has been drawn to the fact that the imports of electrical goods and apparatus have increased from £136,773 in May, 1932, to £152,144 in May, 1933, and to £304,873 in May, 1934; and how long he expects it will be before action is taken to check these rapidly increasing imports?
    Dr. BURGIN: I am aware of the increased imports to which my hon. Friend draws attention. Any question of an increased duty on goods which are subject to duty under the Import Duties Act is a matter for the Import Duties Advisory Committee in the first instance.

    SHIPPING INDUSTRY.
    Mr. H. WILLIAMSasked the President of the Board of Trade what answer he has received from the shipping industry in respect of his proposal to scrap old tramp tonnage and to build new tonnage to replace a part of the scrapped tonnage?
    Dr. BURGIN: My right hon. Friend hopes very shortly to make a statement on the Government's policy in regard to
    794
    British shipping, and I prefer not to anticipate that statement.
    Mr. WILLIAMS: Could the hon. Gentleman in the meantime indicate what response the shipping industry has given to the proposals to scrap and build?
    Dr. BURGIN: That is another matter. It is hoped that the right hon. Gentleman the President of the Board of Trade will be able to make a comprehensive statement on shipping policy. It is only a matter of days. He is working in accordance with programme, and "very shortly" means what it says.
    Mr. WILLIAMS: I have not asked what the proposals are. I have merely asked in my supplementary question what is contained in the original question.
    Dr. BURGIN: The answer will be found in the statement when made.

  WATER SUPPLIES.
  Mr. DENMANasked the Minister of Health what steps he is taking to stimulate the provision of a water supply in the village of Washington?
  The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): My right hon. Friend has recently sanctioned a loan of £7,125 for a scheme of water supply for an area including this village.
  Mr. PETHERICK: Is it not the case that Governmental stimulation of the use of water has recently been proved to be an entire failure in Washington?
  Mr. VYVYAN ADAMSasked the Minister of Health whether he has any statement to make with regard to the shortage of water?
  Mr. SHAKESPEARE: I would refer my hon. Friend to the statement made by my right hon. Friend during the Debate on the Ministry's Estimates. The recent rains have not been sufficient materially to affect the general position.

  POOR LAW RELIEF (DISABILITY PENSIONS).
  Mr. SMEDLEY CROOKEasked the Minister of Health if, in view of the Government's amendment to the Poor

  795
  Law (Scotland) Bill, whereby in affording out-door relief to a poor person a local authority shall disregard the first pound of any wounds or disability pension of which he is in receipt, he will take the necessary steps to ensure that the public assistance committees in England and Wales in dealing with similar cases shall make a similar provision?
  Miss WARDasked the Minister of Health whether it is the intention of the Government to introduce legislation to permit local public assistance committees to disregard £1 disability pensions when assessing the needs of ex-service men in receipt of public assistance?
  Mr. SHAKESPEARE: My right hon. Friend hopes to introduce legislation next Session to deal with this matter. As has been previously stated, public assistance authorities already have power to ignore so much of a disability pension as is off-set by the special needs of the case.
  Miss WARD: Is the hon. Gentleman aware that this principle has been conceded in the new Scottish Poor Law Bill, and will he consider extending the same principle to England and Wales?
  Mr. SHAKESPEARE: We hope to march side by side with Scotland in this matter.
  Captain STRICKLAND: Will the hon. Gentleman consider issuing a further circular to the local authorities drawing their attention to the action of Scotland and advising them to consider it?

  SCOTLAND.

    MILK INDUSTRY (HOURS OF WORK).
    Mr. KIRKWOODasked the Secretary of State for Scotland if he is aware that the Scottish Milk Marketing Board has issued a circular to employés, stating they are to work a 66-hour week on the average; and if, in view of the general demand for a reduction in working hours to a maximum of 48 hours per week, he will bring this matter to the notice of the board with a view to having the circular withdrawn in favour of the recognition of a 48-hour week?
    Sir G. COLLINS: On the information before me I do not think that
    796
    the effect of the circular is correctly stated in the first part of the question. I am drawing the board's attention to the hon. Member's question but I may remind him that I have no authority to interfere with the administrative arrangements in connection with the operation of a Marketing Scheme.
    Mr. KIRKWOOD: If I place in the Minister's hands conclusive proof that they have been asked to work 66 hours, will he use the influence which he undoubtedly has to see that this circular is not put into operation in the milk industry in Scotland?
    Sir G. COLLINS: If the hon. Member will supply me with that information, I will pass it on to the proper authorities, but I must remind him again that I have no power to interfere in the administrative arrangements of this scheme.

  PALESTINE (LAKE TIBERIAS).
  Mr. LECKIEasked the Secretary of State for the Colonies whether he can give the House the result of his inquiries into the threatened interference with the level of the Sea of Galilee by the new electricity works now in progress on the River Jordan?
  The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): Under the concession granted to the Palestine Electric Corporation in 1926, the Company was given the right to dam the water of Lake Tiberias to a maximum level and to draw off the water to a minimum level as may be agreed upon between the High Commissioner for Palestine and the Company. There has been a considerable fall in the level of the lake this year, but I understand from the Company that this is almost entirely due to natural causes.

  EDUCATION (SCHOOL-LEAVING AGE).
  Mr. TINKERasked the Parliamentary Secretary to the Board of Education if his attention has been drawn to the resolution carried at the joint conference of the National Union of Teachers and the Educational Institute of Scotland demanding that Parliament should pass, without delay, a measure raising the school-leaving age to 15; and will he say

  797
  if he has had any communication from them giving reasons why the change should be made?
  The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Mr. Ramsbotham): My Noble Friend has seen a newspaper report of the joint conference of the two bodies referred to, but he has not yet received any communication from them.
  Mr. TINKER: In view of the unanimous appeals from all sections of the community, will the hon. Gentleman and his Noble Friend urge the inclusion of this reform in the King's Speech next Session?

  BRITISH ARMY (RECRUITING).
  Mr. TINKERasked the Financial Secretary to the War Office how many recruits have joined the Regular Army since November, 1933; and is he in a position to say how many of them have joined where a recruiting fee has been paid to ex-service men who have been credited with getting them to join?
  The FINANCIAL SECRETARY to the WAR OFFICE (Dr. Duff Cooper): The answer to the first part of the question is 16,616 up to 16th of this month. In the second part of the question the hon. Member is doubtless referring to recruits raised by ex-service men who are not part of the recruiting organisation. The number of recruits so raised in the three months January to March, 1934, was 224. Later figures are not yet available.

  PUBLIC MEETINGS (POLICE POWERS).
  Sir A. WILSONasked the Secretary of State for the Home Department whether he will circularise all licensing justices to the effect that in places where Part IV of the Public Health Acts Amendment Act, 1890, has, under Section 3, been adopted by the local authority they should, in granting licences for music and dancing in large public halls, at their discretion stipulate that such places may not be used for public meetings of a particular type without the previous consent in writing of the chief constable of the county or borough police, and subject to such precautionary provisions as he may consider desirable
  798
  when, by reason of the size, location, or internal arrangements of the building, the maintenance of order by the police might prove difficult?
  The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Douglas Hacking): As my right hon. Friend has informed the House, the whole question of police powers in connection with the maintenance of order at public meetings is under consideration, but he does not think that powers which Parliament has conferred on licensing justices for the control of entertainments at which there is music or dancing could be used for the very different purpose of controlling public meetings.

  TRANSPORT (PEDESTRIAN CROSSING PLACES).
  Mr. McENTEEasked the Minister of Transport whether it is proposed to erect any form of device at the recognised crossing places for pedestrians in Westminster and other places so as to eliminate any doubt as to the proper time for crossing; and will he state what number of accidents have occurred at marked crossing places since the new system of marking was put into operation?
  The MINISTER of TRANSPORT (Mr. Oliver Stanley): It is not proposed at present to erect any device at marked crossing places for pedestrians at those junctions which are controlled by constables or traffic control signals, but the whole experiment is being carefully watched. At the marked crossing places there has been, during the first 10 days of the experiment, only one accident involving personal injury and that was slight.
  Mr. McENTEE: Is the hon. Gentleman satisfied that there is an improvement since the introduction of these crossing places?
  Mr. STANLEY: The whole matter is to be discussed on a Prayer on Wednesday, and can then be dealt with.
  Captain Sir WILLIAM BRASSasked the Minister of Transport whether his attention has been called to the case of a young girl, aged 16, who was killed on 18th June on a pedestrian crossing

  799
  place at Aldwych, Strand; and, as this is believed to be the first fatal accident since the inauguration of these crossings, whether he will consider having a special inquiry made into the circumstances of the case, in order that his Department may have full particulars of how the accident occurred?
  Mr. STANLEY: My information is that the girl who was unfortunately killed in Aldwych on 18th June was crossing the road at the junction with Houghton Street and that the accident occurred some 20 yards east of the pedestrian crossing place at the junction of Kingsway and Aldwych. It does not appear that the accident had any connection with the inauguration of marked pedestrian crossing places and I do not consider that a special inquiry would serve any useful purpose.

  SAAR TERRITORY (PLEBISCITE).
  Mr. LOGANasked the Secretary of State for Foreign Affairs whether, in relation to the plebiscite in the Saar, any consideration has been given to the need for more effective administration in the meantime in order to ensure some measure of freedom of opinion and the creation of an atmosphere in which the plebiscite, when it is taken, may truly represent the wishes of the inhabitants; and whether he can indicate any steps it is proposed to take to this end?
  Sir J. SIMON: Under the terms of a report approved by the League Council at its last meeting a Plebiscite Commission will be set up as from the 1st July, whose duties include that of ensuring, in co-operation with the Governing Commission of the Saar Territory, the objects which the hon. Member has in view

  HOUSING.

    RENTS (WANDSWORTH).
    Mr. T. SMITH(for Mr. THORNE) asked the Minister of Health whether he has any intention of making a statement relative to the deputation which he met from the housing committee of the Wandsworth Borough Council in connection with rents charged for decontrolled houses?
    Major DAVIES (Lord of the Treasury): I have been asked to answer this question. No, Sir. My right hon. Friend has neither received, nor has he been asked to receive, a deputation from the Wandsworth Borough Council on this subject.

    SLUM CLEARANCE (BANGOR).
    Mr. T. SMITH(for Mr. THORNE) asked the Minister of Health whether there has been a slum-clearance inquiry at Bangor; if he can state the number of houses that are to be pulled down; whether there has been a prevalence of scarlet fever, diphtheria, and infantile mortality in the Glanadda area; and whether there has been any opposition from the property owners in this district?
    Major DAVIES: An inquiry was held at Bangor on the 9th instant into five clearance orders relating to 84 houses. Objections were received in respect of properties scheduled to each of the orders. As regards the third part of the question, separate figures are not available for the Glanadda area, which forms a part of the Bangor sanitary district.

    DOMESTIC ANIMALS.
    Mr. ANSTRUTHER-GRAY(for Mr. HUTCHISON) asked the Minister of Health if he can state the normal regulations imposed by the local authorities in this country in respect of keeping pets in council houses; whether such regulations have been the subject of any protests to the Ministry; and, if so, of what nature?
    Major DAVIES: Local authorities are under no obligation to communicate regulations of this kind to my right hon. Friend, and he is not aware of any protest against them.

  BRITISH UNION OF FASCISTS.
  Mr. T. SMITH(for Mr. THORNE) asked the Home Secretary whether he has received a report from the Commissioner of Police in connection with a meeting held by the British Union of Fascists at the corner of Dacre Road, West Ham, on Wednesday night; if he can state the number of foot and mounted police present; and whether any serious disturbance was caused?
  Mr. HACKING: I have obtained a report from the Commissioner of Police

  801
  of the Metropolis that a Fascist meeting was held at Dacre Road on the 20th instant. In view of the possibility of disorder, a force of about 34 foot, and four mounted, police attended the meeting; apart from some mild heckling there was no disorder.

BUSINESS OF THE HOUSE.
Sir WILLIAM DAVISON: May I ask the Leader of the House whether it will not be possible for the Government to give more than one day to the discussion of the Betting and Lotteries Bill, in view of the large number of back-benchers who desire to represent the views of their constituents in this matter? The House of Lords, I believe, gave two days, if not three, to the Bill. Surely one day to discuss a matter which affects so many people in this country is not sufficient, if a proper expression of opinion is to go from this House?
The LORD PRESIDENT of the COUNCIL (Mr. Baldwin): I did not know that the question was to be asked. I am perfectly clear that it will be impossible in the present state of business to give more time. I hope that the Bill
has been clarified to some extent by its passage through another place. Although I am aware there must be many divergencies of testimony which hon. Members will desire to put before the House, I hope one day will be sufficient. We might possibly suspend the Standing Order to give hon. Members (more time.
Sir W. DAVISON: If it appears that a very large number of Members are anxious to speak and have not an opportunity, will the Government consider allotting further time if necessary?
Mr. BALDWIN: We always give the most earnest consideration to the desires of hon. Members, and of course this suggestion will be considered, but I cannot hold out any hope that it will be considered favourably.
Mr. HALES: Will it not be possible to confine the speeches on the Bill to 15 minutes each?
Motion made, and Question put,
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[Mr. Baldwin.]
The House divided: Ayes, 225; Noes, 34.

Division No. 299.]

AYES.

[3.40 p.m.

Acland-Troyte, Lieut.-Colonel

Cazalet, Thelma (Islington, E.)

Fuller, Captain A. G.

Adams, Samuel Vyvyan T. (Leeds, W.)

Chamberlain, Rt. Hon. N. (Edgbaston)

Ganzoni, Sir John

Agnew, Lieut.-Com. P. G.

Chapman, Sir Samuel (Edinburgh. S.)

Gluckstein, Louis Halle

Albery, Irving James

Chorlton, Alan Ernest Leofric

Glyn, Major Sir Ralph G. C.

Allen, Sir J. Sandeman (Liverp'l, W.)

Christie, James Archibald

Goff, Sir Park

Allen, William (Stoke-on-Trent)

Churchill, Rt. Hon. Winston Spencer

Goodman, Colonel Albert W.

Anstruther-Gray, W. J.

Cobb, Sir Cyril

Graham, Sir F. Fergus (C'mb'rl'd, N.)

Applin, Lieut.-Col. Reginald V. K.

Cochrane, Commander Hon. A. D.

Grattan-Doyle, Sir Nicholas

Astor, Maj. Hn. John J.(Kent, Dover)

Collins, Rt. Hon. Sir Godfrey

Graves, Marjorie

Atholl, Duchess of

Colville, Lieut.-Colonel J.

Grimston, R. V

Baldwin, Rt. Hon. Stanley

Cook, Thomas A.

Guest, Capt, Rt. Hon. F. E.

Barclay-Harvey, C. M.

Cooper, A. Duff

Gunston, Captain D. W.

Barrie, Sir Charles Coupar

Crooke, J. Smedley

Hacking, Rt. Hon. Douglas H.

Beauchamp, Sir Brograve Campbell

Crossley, A. C.

Hales, Harold K.

Beaumont, Hon. R. E. B. (Portsm'th, C.)

Davies, Maj. Geo. F. (Somerset, Yeovil)

Hamilton, Sir George (Ilford)

Beit, Sir Alfred L.

Davison, Sir William Henry

Hannon, Patrick Joseph Henry

Benn, Sir Arthur Shirley

Dawson, Sir Philip

Hartland, George A.

Bernays, Robert

Denman, Hon. R. D.

Haslam, Henry (Horncastle)

Boothby, Robert John Graham

Denville, Alfred

Haslam, Sir John (Bolton)

Borodale, Viscount

Despencer-Robertson, Major J. A. F.

Heneage, Lieut.-Colonel Arthur P.

Bossom, A. C.

Doran, Edward

Herbert, Major J. A. (Monmouth)

Boulton, W. W.

Drummond-Wolff, H. M. C.

Hills, Major Rt. Hon. John Waller

Bower, Commander Robert Tatton

Duckworth, George A. V.

Hore-Bellsha, Leslie

Boyd-Carpenter, Sir Archibald

Dugdale, Captain Thomas Lionel

Horobin, Ian M.

Brass, Captain Sir William

Duggan, Hubert John

Horsbrugh, Florence

Broadbent, Colonel John

Duncan, James A. L. (Kensington, N.)

Howard, Tom Forrest

Brocklebank, C. E. R.

Edmondson, Major Sir James

Howitt, Dr. Alfred B.

Brown, Brig.-Gen. H. C. (Berks, Newb'y)

Elliot, Rt. Hon. Walter

Hudson, Capt. A. U. M.(Hackney, N.)

Browne, Captain A. C.

Ellis, Sir R. Geoffrey

Hunter Dr. Joseph (Dumfries)

Buchan-Hepburn, P. G. T.

Elmley, Viscount

Hurd, Sir Percy

Cadogan, Hon. Edward

Emmott, Charles E. G. C.

Hurst, Sir Gerald B.

Calne, G. R. Hall-

Emrys-Evans, P. V.

James, Wing.-Com. A. W. H.

Campbell-Johnston, Malcolm

Entwistle, Cyril Fullard

Kerr, Hamilton W.

Caporn, Arthur Cecil

Evans, R. T. (Carmarthen)

Knight, Holford

Castlereagh, Viscount

Fleming, Edward Lascelles

Knox, Sir Alfred

Cayzor, Sir Charles (Chester, City)

Fraser, Captain Sir Ian

Lamb, Sir Joseph Quinton

Cayzer, Maj. Sir H. R. (Prtsmth., S.)

Fremantle, Sir Francis

Lambert, Rt. Hon. George

Leckie, J. A.

North, Edward T.

Southby, Commander Archibald R. J.

Leech, Dr. J. W.

Ormsby-Gore, Rt. Hon. William G. A.

Stanley, Rt. Hon. Lord (Fylde)

Leighton, Major B. E. P.

Patrick, Colin M.

Stanley, Hon. O. F. G. (Westmorland)

Lennox-Boyd, A. T.

Peake, Captain Osbert

Stewart, J. H. (Fife, E.)

Lewis, Oswald

Perkins, Walter R. D.

Stourton, Hon. John J.

Lindsay, Kenneth (Kilmarnock)

Petherick, M

Strickland, Captain W. F.

Lister, Rt. Hon. Sir Philip Cunliffe-

Peto, Sir Basil E.(Devon, Barnstaple)

Sueter, Rear-Admiral Sir Murray F.

Locker-Lampson, Rt. Hn. G.(Wd. Gr'n)

Peto, Geoffrey K.(W'verh'pt'n, Bilston)

Sugden, Sir Wilfrid Hart

Loder, Captain J. de Vere

Powell, Lieut.-Col. Evelyn G. H.

Summersby, Charles H.

Loftus, Pierce C.

Raikes, Henry V. A. M.

Sutcliffe, Harold

Lumley, Captain Lawrence R.

Ramsay, Capt. A. H. M. (Midlothian)

Tate, Mavis Constance

Mabane, William

Ramsay, T. B. W. (Western Isles)

Thomas, Rt. Hon. J. H. (Derby)

MacAndrew. Lt.-Col C. G. (Partick)

Ramsbotham, Herwald

Thomas, James P. L. (Hereford)

MacDonald, Rt. Hon. J. R. (Seaham)

Rathbone, Eleanor

Thomas, Major L. B. (King's Norton)

McEwen, Captain J. H. F.

Rawson, Sir Cooper

Titchfield, Major the Marquess of

McKie, John Hamilton

Reid, James S. C. (Stirling)

Todd, A. L. S. (Kingswinford)

Macquisten, Frederick Alexander

Reid, William Allan (Derby)

Tryon, Rt. Hon. George Clement

Maitland, Adam

Remer, John R.

Tufnell, Lieut.-Commander R. L.

Makins, Brigadier-General Ernest

Rickards, George William

Wallace, Captain D. E. (Hornsey)

Manningham-Buller, Lt.-Col. Sir M.

Ropner, Colonel L.

Wallace, John (Dunfermline)

Margesson, Capt. Rt. Hon. H. D. R.

Rosbotham, Sir Thomas

Ward, Lt.-Col. Sir A. L. (Hull)

Martin, Thomas B.

Ross Taylor, Walter (Woodbridge)

Ward, Irene Mary Bewick (Wallsend)

Mason, Col. Glyn K. (Croydon, N.)

Ruggles-Brise, Colonel E. A.

Warrender, Sir Victor A. G.

Mayhew, Lieut.-Colonel John

Russell, Alexander West (Tynemouth)

Watt, Captain George Steven H.

Meller, Sir Richard James

Russell, Hamer Field (Sheffield, B'tside)

Wayland, Sir William A.

Mitchell, Harold P. (Br'tf'd & Chisw'k)

Rutherford, Sir John Hugo (Liverp'l)

Wedderburn, Henry James Scrymgeour-

Molson, A. Hugh Elsdale

Samuel, Sir Arthur Michael (F'nham)

Whyte, Jardine Bell

Monsell, Rt. Hon. Sir B. Eyres

Sandeman, Sir A. N. Stewart

Williams, Herbert G. (Croydon, S.)

Moore, Lt.-Col. Thomas C. R. (Ayr)

Sanderson, Sir Frank Barnard

Willoughby de Eresby, Lord

Moreing, Adrian C.

Savery, Samuel Servington

Wills, Wilfrid D.

Morgan, Robert H.

Scone, Lord

Wilson, Lt.-Col. Sir Arnold (Hertf'd)

Morris-Jones, Dr. J. H. (Denbigh)

Shaw, Helen B. (Lanark, Bothwell)

Windsor-Clive, Lieut.-Colonel George

Morrison, G. A. (Scottish Univer'ties)

Shaw, Captain William T. (Forfar)

Wise, Alfred R.

Moss, Captain H J.

Simmonds, Oliver Edwin

Womersley, Sir Walter

Munro, Patrick

Simon, Rt. Hon. Sir John

Wood, Rt. Hon. Sir H. Kingsley

Nall-Caln, Hon. Ronald

Skelton, Archibald Noel

Worthington, Dr. John V.

Nation, Brigadier-General J. J. H.

Smith, Sir J. Walker- (Barrow-In-F.)

Nicholson, Godfrey (Morpeth)

Smith, Sir Robert (Ab'd'n & K'dine, C.)

TELLERS FOR THE AYES.—

Nicholson, Rt. Hn. W. G. (Petersf'ld)

Sotheron-Estcourt, Captain T. E.

Sir Frederick Thomson and Sir George Penny.

NOES.

Attlee, Clement Richard

Hall, George H. (Merthyr Tydvil)

Roberts, Aled (Wrexham)

Banfield, John William

Hamilton, Sir R. W. (Orkney & Z'tl'nd)

Samuel, Rt. Hon. Sir H. (Darwen)

Batey, Joseph

Harris, Sir Percy

Sinclair, Ma. Rt. Hn. Sir A.(C'thness)

Brown, C. W. E. (Notts., Mansfield)

Holdsworth, Herbert

Smith, Tom (Normanton)

Cove, William G.

Kirkwood, David

Wedgwood Rt. Hon. Josiah

Daggar, George

Logan, David Gilbert

Williams, Edward John (Ogmore)

Davies, David L. (Pontypridd)

McEntee, Valentine L.

Williams, Dr. John H. (Llanelly)

Edwards, Charles

Mainwaring, William Henry

Williams, Thomas (York, Don Valley)

Evans, David Owen (Cardigan)

Mason, David M. (Edinburgh, E.)

Wilmot, John

Foot, Dingle (Dundee)

Maxton, James

Wood, Sir Murdoch McKenzie (Banff)

Gardner, Benjamin Walter

Nathan, Major H. L.

Grenfell, David Rees (Glamorgan)

Rea, Walter Russell

TELLERS FOR THE NOES.—

Mr. Tinker and Mr. Groves.

Question, "That the Bill be now read a Second time," put, and agreed to.

SELECTION (STANDING COMMITTEES).

  Standing Committee C.
  Mr. William Nicholson reported from the Committee of Selection: That they had discharged the following Member from Standing Committee C: Sir Francis Fremantle; and had appointed in substitution: Mr. Galbraith.
  Report to lie upon the Table.

ADMINISTRATION OF JUSTICE (APPEALS) BILL [Lords].
Read the First time; to be read a Second time upon Thursday, and to be printed. [Bill 158.]
ORDERS OF THE DAY.

  DEBTS CLEARING OFFICES AND IMPORT RESTRICTIONS REPRISALS BILL.
  Order for Second Reading read.
  3.49 p.m.
  The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I beg to move, "That the Bill be now read a Second time."
  On Saturday there was published in the Press the text of Notes exchanged between the German Ambassador and His. Majesty's Government concerning the service of certain German loans. I think a perusal of those two Notes will make clear the circumstances in which the Government have, very regretfully, found themselves obliged to introduce the Bill of which I am now moving the Second Reading. There is no doubt that the position of Germany with regard to the foreign exchange necessary to discharge her obligations is one of very great difficulty, but I think two questions arise in connection with that position. The first is whether these difficulties have been brought about, as is alleged by the German Government, mainly by the action of foreign countries, or whether, as is maintained by all the foreign creditors of Germany, it is not largely due to the policy of the German Government itself, and, in particular, to the policy of the Reischsbank. The second question is whether the payment of the full service of the two Government loans known as the Dawes and the Young Loans would be an intolerable strain upon Germany's resources in foreign exchange. I do not wish to repeat here all that is said in the British Note, but I cannot think that any impartial person reading that Note could feel that the answer to these questions could be given in favour of the German view. In the German Note a great deal of emphasis is laid upon the reduction in the Reichsbank's reserves of gold and foreign exchange, and it is said that those reserves have been sacrificed in an effort to maintain payment of the German obligations, but it is nevertheless the fact that a very great part of this serious diminution in the reserves of the Reichsbank has been due to a device adopted by the bank which in its effect is really equivalent to
  808
  depreciation of the German currency, although great stress is laid by the bank upon the necessity of maintaining the gold parity of the reichsmark.
  This device consists in advances of foreign exchange to German exporters for the purpose of enabling them to purchase depreciated bonds abroad. They then sell those depreciated bonds in Germany, where they command a higher price, and they just make a profit in reichsmarks which of course reduces their costs and, as I say, has the same effect as depreciation of the currency. During the six months ended 31st March last the creditors found that, while the Reichsbank was pleading its inability to find foreign exchange to meet its obligations, it had released foreign exchange equivalent to no less than 335,000,000 reichsmarks for this purpose of buying depreciated bonds, scrip, blocked marks, etc., and that 335,000,000 reichsmarks is nearly four times the amount of interest for a full year upon the Dawes and the Young Loans. The exporters are expected to repay these advances out of the foreign exchange which they receive in payment for their exports. That, of course, comes later, but it does, as is pointed out in the British Note, really constitute a hidden reserve of foreign exchange which must be taken into account in any calculation of Germany's resources in that respect. Therefore, it certainly seems a very strange thing that, while pursuing this policy, the German Government should maintain that it is really impossible to transfer the very much smaller amount required to fulfil the obligations upon these two loans. There are other matters mentioned in the Note on which the creditors consider that the estimates made by the Reichsbank are very much less favourable to Germany than would be justified by an impartial examination of the facts. I am afraid I must record that, rightly or wrongly, the creditors of all countries no longer feel the confidence that they did in the good faith of Germany.
  In the course of the discussions that have been taking place in Berlin between the creditors and the representatives of the Reichsbank, the British creditors offered to accept suspension of the service of all the loans except the Dawes and Young Loans and possibly two other minor Government loans. The effect of that offer would be that, out of the

  809
  800,000,000 reichsmarks which would be due during the current year, the German Government would only have to find about 100,000,000 reichsmarks in cash. That offer was so extraordinarily favourable to Germany, as it seems to me, that I must say I think their rejection of it was altogether incomprehensible. At any rate, I cannot see any reason why they should have objected, to it on either economic or financial grounds. However, they did reject it, and the consequence is that the creditors in the foreign countries concerned have found themselves forced to consider what measures they could take in order to preserve the interests of their nationals. That very brief account of the circumstances—I refer hon. Members to the British Note for further details—is the justification for the Bill that I am now presenting.
  Hon. Members will have seen that at the end of the British Note it was made plain to the German Government that the door was still open for further negotiations, and the German Government were invited to send representatives to London for further discussions in the hope that it might be found possible to avoid using the powers which are sought for in this Bill. I am happy to say that that offer has been accepted, and I sincerely hope that it may still be found practicable to make some arrangement with the German authorities which will ensure fair treatment for British bondholders and British traders before 1st July. All the same, we cannot postpone the request to this House for the necessary powers in the hope of a solution which may, after all, be found impossible. We trust, therefore, that we shall be given the Second Beading of this Bill to-day, and that it will be passed through all its stages, so that if it should, unhappily, prove necessary, we may have the powers to put it in force to see that the British nationals are fairly treated.
  The Bill, as hon. Members will observe, contains two operative Clauses—Clause 1, which provides for the setting up of a Clearing Office, and Clause 2, which gives power to the Board of Trade to restrict imports, that is to say, to impose quotas where discriminatory quotas are imposed upon the United Kingdom by foreign countries. I want to make it quite clear that Clause 2 is not directed against Germany; nor, indeed, is it directed against any country in particular. It is a Clause which has been inserted in this Bill after
  810
  many representations from traders that we should take powers of this kind, because we are in the presence of a comparatively new weapon in disputes about imports into various countries, and we must, if we are to deal practically and effectively with that new weapon, be similarly armed ourselves.
  As a matter of fact, we are almost alone in the world in not having powers of this kind. We have already similar or analogous powers with regard to the duties under Section 12 of the Import Duties Act, 1932. That Section gives us power to impose discriminatory duties where discrimination is exercised in the matter of duties against us, but we have no corresponding powers about quotas, for the simple reason that we have not hitherto imposed quotas in this country, with the exception of a few cases of agricultural products where quotas have been imposed for an entirely different purpose. But a practice has now sprung up on the Continent of imposing quotas which reduce the possible import of any particular article into a country, and then offering to bargain to increase the quota in return for concessions to be given by the other side. That is a very difficult position to contend with in the absence of any similar or retaliatory powers on our side, and, therefore, we have felt that it was necessary that we should fill up this gap in our defences. But I say here that we do not like quotas in this country, we have no present intention of imposing quotas and we most earnestly hope that it will never be necessary to use the powers which are contained in Clause 2. Our belief is that the very fact that we possess these powers may make it quite unnecessary to put them into operation.
  If I may go back to Clause 1, which has, of course, reference to the particular circumstances to which I have been alluding, the House will see that the Clause is drawn in very wide terms. Under the Clause, the Treasury may make Orders which will provide for the payment to the Customs on account of a Clearing Office of the whole or part of the value of goods imported from the country to which the Clearing Office is being applied, and the Clearing Office may use the proceeds of those payments in order to discharge debts due by the inhabitants of that country to persons or corporations resident in or carrying on business in this country or in the British

  811
  Empire, whether those debts are in respect of goods supplied, or whether they are in respect of the service of loans. The extent to which this Clause may be put into operation depends entirely upon the course of the negotiations which are shortly to be entered upon, but there are two points which seem to us to be essential for any satisfactory agreement. The first is that there shall be full payment of the service of the Dawes and Young Loans which have legal priority; and the second is, that as regards other matters there shall be no discrimination unfavourable to ourselves between ourselves and the treatment of creditors of other countries.
  I hope that, even if it should be necessary to set up a Clearing Office in order to achieve these two purposes it may still be possible to leave British exports to Germany outside the operation of the Clearing Office, and that there will be no interference with that trade; but it will be seen that the Clause is drawn widely enough to deal with a contingency of that kind should it occur, because it would be possible to provide that the whole value of German goods imported into this country should be made available to the Clearing Office for the purpose of discharging debts due by Germans or British goods exported to Germany. But I am assuming, and I hope that I may safely assume, that there will be as little interference with trade as possible, and that we shall have to concern ourselves only with the service of loans. In that case our first object will be to provide for the full payment of the interest on the Dawes and Young Loans, and it will be proposed in that case to issue an Order providing that 20 per cent. of the value of German imports should be paid to the Customs on behalf of the Clearing Office. The Clearing Office would notify the German authorities of this payment, and since the German Government have announced that the service of the loans will be paid in marks, that means that there will be marks available in Germany with which the German authorities can recoup the trader, who will only receive from the British purchaser 80 per cent. of the value of his goods.
  With regard to the other loans—loans other than the Dawes and Young Loans—the German Government are proposing to
  812
  issue in respect of their service Funding Bonds on the lines suggested by the British creditors, but with 3 per cent. interest. The creditors will be prepared to accept those Funding Bonds, provided that the terms of the bonds are satisfactory, and that, as I said before, there is no unfair discrimination against them as compared with other people. At the present moment, I believe, conversations are proceeding between the German authorities and the Swiss and Dutch creditors, and upon the result of those negotiations must depend whether, in fact, there is or is not discriminatory treatment against the creditors in this country. But assuming that there is no discrimination, then, I think, there is no serious difficulty likely to arise in respect of the treatment of these other loans.
  With regard to the Dawes and Young Loans, I think I should, perhaps, try to make clear one or two points of detail as to the conditions. First of all, what holders and what bonds would be entitled to the benefit of the Clearing Office? The answer to that is: All British nationals holding sterling bonds wherever they are resident, and all foreigners holding sterling bonds who are resident in the United Kingdom. The next question is, what would be the extent of the benefit? The answer to that would be, that as far as the Dawes and Young Loans are concerned, 100 per cent. of the interest would be paid, and with regard to the other British issues of German loans, the holders would receive Funding Bonds or better terms than that, according to whatever arrangements may be concluded by the Germans with the Swiss and the Dutch. Thirdly, with regard to the foreign issues, they would receive only Funding Bonds. The determining date as to the ownership will be 15th June, that is to say, in order to qualify as British nationals holding the bonds, they must have held the bonds on 15th June, and not later.
  There are just two other points on which I should like to say a word. The first is that, although I have spoken only of our differences with Germany in this matter, and although in fact it is only those differences which have caused us to introduce this Bill to the House of Commons, the Clause is not confined to Germany, but is drawn in such terms as would enable it to be applied to any other country if the need arose. I did consider

  813
  for some time whether the Clause should be so drawn, or whether it should not be confined merely to the one case which had arisen, but I think that everybody must have noticed that lapses—if one may use such a word—of this kind are apt to be catching, and certainly if the need should arise again it would, I think, be unfortunate if we had to come repeatedly to the House of Commons to ask that the terms might be extended to this or that country. I do not anticipate that that same sort of question will arise elsewhere, but on the whole it seemed to me that it was better to have the power even though it might never be necessary to use it.
  The second and the last point I want to mention is that everybody must be aware that you cannot have resort to a Measure of this kind without a certain amount of interference with the normal course of trade, and everybody would desire that that interference should be as confined as possible. With a view to the wisest and most careful consideration of any difficulties that may from time to time arise in the administration of the powers that are sought in this Bill, I am proposing to set up a small Advisory Committee which will contain not only the representatives of the Treasury and the Board of Trade, but also representatives of the Bank of England, the Joint Stock Banks, the Federation of British Industries and the Chambers of Commerce. I think that in that way we shall have an opportunity of keeping ourselves in touch with expert opinion on all matters that may arise under the administration of this Clause, and I hope in that way to reduce any friction and inconvenience to the smallest possible dimensions. I dare say there will be some questions on which hon. Members may desire further information. I could have entered into greater detail no doubt, but I felt, on this occasion at any rate, that the House would like to have a broad outline of the position in order that they may see what are the main equities, and the way in which we propose to deal with them.
  4.20 p.m.
  Mr. DAVID GRENFELL: The House is especially grateful to the Chancellor of the Exchequer this afternoon for having taken us in his introductory remarks over the ground which led to the introduction of this Bill. We are as
  814
  anxious on this side of the House as Members in any part of the House that nothing should be said to-day recklessly which would injure the prospects of negotiation and settlement of this dispute, but we really must complain to the House and to the Government that this Bill, having been brought so suddenly before us, leaves us without the opportunity of the full examination which we would desire before we gave our approval to it. We are grateful to the Chancellor of the Exchequer in the two questions which he posed to the House and which he answered himself to his satisfaction and to mine, as far as I was able to follow him, but it is really too much to ask that we should give our considered reply to the Government at such short notice and with such scant information.
  The right hon. Gentleman questioned the policy of the Reichsbank, and asked whether Germany had accumulated reserves of exchange. That is the kind of question on which we are peculiarly unfortunate, because we have not access to information except the information contained in the reports from Herr von Hoesch to the right hon. Gentleman the Secretary of State for Foreign Affairs. I have taken the trouble to examine them, and I must say that I think Herr von Hoesch has strained the argument in favour of his case. The right hon. Gentleman the Secretary of State for Foreign Affairs has answered the case put forward by Herr von Hoesch, but this afternoon we shall find it exceedingly difficult to pass judgment upon, or to give approval to, any of the details of this very difficult Bill. I shall not pretend to understand exactly all it implies. The right hon. Gentleman told us that it is his intention to set up a clearing house through which all transactions and all manner of trade will be carried on, and that payments will be made in respect of all articles imported from Germany into this country. He said there was an intention to charge 20 per cent. ad valorem on the whole of such categories of goods, which was to be paid to the importer by the exporter through the commissioner in respect of such goods.
  Mr. CHAMBERLAIN: The hon. Member said that 20 per cent. was to be charged. I do not know whether that was a misunderstanding. The 20 per

  815
  cent. is 20 per cent. out of the 100 per cent. of the value, and 80 per cent. therefore will he paid direct by the importer to the German exporter.
  Mr. GRENFELL: That is how I understood it and what I was endeavouring to state, but I did not quite follow the implications of the 3 per cent. funding point, but I will leave that matter to other hon. Members who are more expert than I. We regret very much that we have come to this necessity in relation to Germany and in relation to the possibility of resorting to this kind of machinery for dealing with further questions of foreign debts. After all, I think we ought to examine our own responsibility in this regard. Germany has imported borrowed capital to a very great extent in recent years. I understand that she imported 3,500,000,000 dollars in the five years from 1924 to 1928. They were the days of generous lending to which the hon. Member for Farnham (Sir A. M. Samuel) has so often called attention in this House. We were called upon, and we readily responded to the issue of loans in all parts of the world. The London market was exploited and the investing public of this country were induced to part with their money in investments in all parts of the world for all kinds of purposes. Germany was the largest Continental borrower. She borrowed not only for the re-organisation of her own industries but also for public services, buildings, and a variety of reconstruction purposes in those years. It states in paragraph 3 of Herr von Hoesch's Note that she borrowed 18.2 milliards of marks from 1924 to 1930.
  It is difficult to know whether those who lent so readily are themselves free from responsibility in this regard; whether those who induced the British public to invest and to put up the money for all kinds of hazardous loans are not partly responsible, and whether the lenders of this country were apt to invest recklessly and are almost as much to blame as a Government which tries to avoid repayment of those loans. The Germans were borrowing when they were already heavily charged with obligations in respect of Reparations, and they must have known, and indeed the lenders should have known, in piling up those enormous commercial loans, in addition to the Government loans of which we have heard this
  816
  afternoon, the very great risk of not being able to secure repayment. The time has now arrived when we see the almost unsurmountable difficulty of meeting those repayments. Paragraph 3 in the German Report, which Members must have read, is most illuminating, having regard to the things which have been said in this House and which have been said to the public outside, and the columns of nonsense which appeared in our public Press in years gone by, for we find that Germany has really paid no Reparations at all. Germany has only paid Reparations by borrowing, and the most remarkable thing has come to light in the statement from Germany itself in which these figures appear. In paragraph 3 Herr von Hoesch said that
  "foreign capital to the net amount of 18.2 milliards of marks flowed to Germany in the years 1924–30, which enabled her to pay interest on her commercial foreign debt, to increase by 2.1 milliards her stock of gold and exchange to approximately 3 milliards of marks, to pay reparations to the extent of 10.3 milliards of marks."
  Germany has borrowed 1S.2 milliards of marks to pay Reparations of 10.3 milliards of marks. She has borrowed £l in order to pay 12s. of her debt. She has used the remainder for various purposes in strengthening her own financial and industrial position. That is a thing which should be driven right home to the minds of the people of this country, and in any controversy really that must be a very important part of it. Germany has not paid Reparations except to the extent that she has borrowed to pay Reparations, and when she has ceased to borrow she wants to cease repayment. That is the content of the paragraph to which I have called attention. We come to the farcical position revealed in this statement. I do not wish to use words carelessly, but really a most laughable state of things is revealed in this Note. I congratulate the right hon. Gentleman the Secretary of State for Foreign Affairs upon the very dignified way in which he has replied to this communication from Germany. I come to paragraph 11 in which Germany announces her intention of suspending payments for six months. Nothing is said as to what is to happen after the six months. No good reason is given to make one believe that after six months the payments will be resumed or that Germany will be in a position to resume payment. The words are:

  817
  "The transfer of the interest service of the foreign loans is to be suspended for six months from the 1st July. This, if it is carried out completely and if German foreign trade can only be maintained at the previous level, would open up the prospect that the Reichsbank's reserve of gold and exchange, which has almost reached zero point, would, in six months, recover by an amount which would be smaller than Germany has previously paid in reparations in one month."
  There is no ground to believe that Germany will be able to resume payments in six months any better than she can to-day. There is no encouragement to believe in anything which is said in this report, but there is an important paragraph, and I hope that the Chancellor of the Exchequer will be able to give due notice to it. In paragraph 13 a very important consideration arises—that is, the rate of interest on the Dawes Loan. The rate of interest was fixed nominally at 7 per cent., but owing to the great change in the currency since then the rates are considerably hgher than that. On page S of the White Paper it is stated that the rates of interest, in spite of currency depreciation, are 11.39 in the United States, 11.79 in this country, 8.01 in France, 8.47 in Holland and in Switzerland 12.69. That is a matter of very serious consideration and it will be a special subject for negotiation with a view to some kind of permanency of settlement being arrived at by all parties.
  In paragraph 14 of the White Paper there is reference to the fact that payment by Germany as from the 1st July is no longer possible. We are there told that Germany cannot pay. Having regard to the statement that Germany cannot for the present meet her obligations, there is reference in paragraph 15 to an expression of hope by the German Government that the situation may not be further aggravated by compulsury measures against German exports. These matters are very intricate, and the average Member of Parliament will have to depend on the information collected and collated by the experts, who are in intimate touch with the financial situation in Germany and with the arrangements in this country. The experts have had a good deal to say on these matters. It is well to recall the fact that in 1924 the Dawes Plan was called "the experts' plan." A body of experts had met and reported in April, 1924, in a very exhaustive and involved
  818
  series of proposals, and the Labour Government were called upon to implement the recommendations of those experts when the proposals came before the House. The agreement to carry out the experts' plan contained the machinery, procedure and stipulations in great detail.
  I have refreshed my memory of the Preamble signed by Mr. Dawes, in which he said that the creditors of Germany were paying taxes to the limit of their capacity and that Germany should be taxed from year to year to the limit of her capacity. The intention was that Germany should not escape the taxation which was falling upon her creditors who had taken part in the War, from which we have all suffered and from which the world suffers so much to-day. It was arranged that Germany should be subject to no more taxation than the other countries, and the reparation claims against Germany were made having regard to her capacity to pay, without injuring her economic life and destroying her trade. Then we had a body of representatives at The Hague Conference in 1930, when the reparation payments were fixed year by year from 1929 to 1987. The payments to be made by Germany were fixed, but in the copy of the documents in the Library there is reference to the fact that Germany has a right of appeal. I should like to know whether Germany in case of need has the right to suspend payment, as she is now doing, or whether she has the right in case of need to make an application that payment should be suspended for a time. I am not sure whether the meeting of creditors came to be held in pursuance of that provision.
  The German justification for their present action is the conditions that have fallen upon Germany in the world crisis. She calls attention to the enormous falling off in her export trade. Germany has suffered like the rest of the world in a reduction of the volume of her trade. Her export trade is down by almost the same percentage as our own. The world trade is down to less than 40 per cent. of the figures of four or five years ago. Germany has undoubtedly suffered, and in regard to the problem of debt payment she is in the position of some of our own Dominions. When a country is a debtor country and it derives less from the sale of its goods abroad that country finds it

  819
  exceedingly difficult to send outside her own boundaries enormous payments for the service of her debts, but Germany has no special complaint in this respect. As a debtor country she is in no worse position in regard to loss of trade than many a creditor country. We are all affected by the falling off in world trade. I am, however, a little afraid that in our fiscal policy we are making it impossible to restore prosperity and the capacity to pay debts. The idea that we can by tariffs, import regulations and quotas solve this problem of debts is an utterly mistaken one. I do not question the right of the Government to take the steps which they consider necessary, but I do think that the final remedy for debt conditions is not to be found in this sort of a policy. I think that a more generous and wiser course will, perhaps, come as a result of what is taking place to-day.
  I should like to know who are the chief bondholders in this country who are affected by the German action. The right hon. Gentleman said that an advisory committee is to be set up. That committee will represent certain large financial interests in this country, in the main. It will also represent some industrial interests. We claim that the advisory committee ought to be as widely representative as possible. I refuse to believe that all the people competent to adjudicate on this question are those who spend their lives in finance, in banks and in the consideration of statistics, without regard to the general effect upon the political life of the country as well as the financial considerations of the problem. I should like to know whether the bondholders are few or many and whether some information can be given on the point as to whether the committee could not be extended so as to contain elements which will not be purely interested in a selfish or sectional way. We should like the Committee to be open to people who are competent to assist the right hon. Gentleman by giving advice which will be more representative of the wider national interests than has been suggested in his speech.
  We beg the Chancellor of the Exchequer and the Government, with their overwhelming majority, to take notice of the dangers that present themselves in these communications and the growing
  820
  difficulty of the world situation consequent on a delay in debt settlement, and to see whether when the time comes, as it must come soon, we can go to the Conference prepared not to be unduly generous to Germany—I do not believe that Germany has any claim to generosity; I am not satisfied that she is using the resources she has to the best purpose, and I am not satisfied with her future intentions—but to be as generous as we can and at the same time just to our own people as a whole.
  4.40 p.m.
  Sir HERBERT SAMUEL: This Bill has been presented with reference to the German default and public attention has been concentrated almost entirely upon that aspect, but the Bill goes far beyond that question, as the Chancellor of the Exchequer made clear in his speech. It deals not only with the measures to be taken to remedy the grievance of this country, in common with the grievances of other creditor countries, against Germany, but it also proposes to confer very large powers, in fact, unlimited powers upon the Government, subject to approval by Parliament in each particular case, where quotas are imposed by other countries, not only discriminatory quotas but any quotas which, in the words of the Bill, are considered to be specially detrimental to this country. As I read Clause 1 its provisions may also be used where it is thought that this country has a grievance in relation to the allocation of exchange by the Government of any foreign country which is regulating exchange operations. I should like to ask the Financial Secretary to the Treasury when he replies whether the Government have in mind in Clause 1 the use of such powers in the event of any grievance arising in the conditions of exchange restrictions in other countries.
  With regard to the main purpose of the Bill, to which the Chancellor of the Exchequer very naturally devoted the greater part of his statement, we on these benches consider that in the Note which has been presented by the British Government to the German Government the case there set out has been fully established, that on the merits in this dispute it is clear that Germany has not acted rightly, and that there is no adequate justification for the default which she has declared. That being so,

  821
  it is proper that the British Government should take such action as is within their power, and as circumstances permit, in order to secure redress. When the Government come to the House of Commons and ask the House to support them I think that all of us who have any sense of responsibility would be very chary in striking a discordant note and giving the impression abroad that there are divided counsels here in Parliament. In that regard I concur with the view expressed by the hon. Member for Gower (Mr. D. Grenfell) at the outset of his observations.
  Mr. COVE: We are not all of that mind.
  Sir H. SAMUEL: This controversy with Germany should be envisaged by the Members of this House purely with regard to the merits of the particular issue. Many hon. Members, perhaps most hon. Members, hold strong views with regard to the present regime in Germany in general, but that is an issue which does not arise to-day. Matters of this kind should be properly treated in a restricted sense solely with regard to their own particular merits. When it was a question of trading with Russia we, of the Liberal party, always strongly protested against the character of the Russian regime being brought into the question of negotiations, on the ground that the negotiations should be of a financial or commercial character. We did not agree with the view constantly expressed, for example, by the Noble Lady the Member for West Perth (Duchess of Atholl) that Russia should be treated as a pariah on account of the faults of her political regime, somewhat in the spirit which, I believe, still prevails in some rural districts, where feudal ideas are not yet dead, that you must not deal with a tradesman unless he is a member of your own political party.
  In this case no one on these benches would desire to import into the present controversy any considerations arising from the fact that the underlying idea of the general regime in Germany is one with which we are out of sympathy. We regret that any controversy should have arisen with Germany on this matter. Since the War this country has genuinely, and, I think, generously, endeavoured to treat Germany in a spirit of accommodation, and has tried to secure the restoration
  822
  of her economic position believing that this is necessary not only for our own sake but for the economic welfare of the whole of Europe. It is an interesting fact, mentioned by the hon. Member for Gower, who quoted from the Note of the German Government, that, as a matter of fact, the reparations which Germany has been supposed to have been paying since the earlier years following the War have almost all been provided by her own creditors. She is in the position of the old lady who declared with much satisfaction that she had been able to borrow enough money to pay all her debts. That is precisely the position which has prevailed in Germany.
  A final settlement was thought to have been arrived at under the Dawes and Young plans. Bygones were to be bygones, and for the future that was to be regarded as a sacred obligation which was to govern the future financial relations between Germany and other Powers. It is profoundly disturbing that even this obligation is now being repudiated by the German Government. Therefore, we think it is quite necessary and right that the Government should take such action as is possible to secure redress of what is a legitimate grievance on the part of Great Britain. How this Clearing Office would work was somewhat obscure, but the matter has been very much elucidated by what the Chancellor of the Exchequer has told us this afternoon. Clearing houses have been set up in other parts of Europe dealing with not dissimilar matters, but they have been set up by mutual consent, and worked both ways by agreement between the Governments concerned. But this Clearing Office will be perhaps unique in that it is to be set up unilaterally, and may not have the consent or co-operation in working of the other party, namely, the German Government.
  The Chancellor of the Exchequer has told us that it is not proposed to sweep into the funds of the Clearing Office all payments due by merchants of this country to manufacturers and merchants in Germany but that 80 per cent. of the sums due to them will in fact be paid direct, and that only one-fifth of the debt owing by our traders to German traders will be retained in order to make good the default of Germany on these two loans. The Chancellor of the Exchequer anticipates that the German Government

  823
  may make good the other 20 per cent. to their own nationals out of the funds which they themselves have declared have been put aside in the Reichsbank, in marks, to meet interest and payments due on these loans. If that proves to be so it will be a happy solution, and we all desire that the German Government should so acquiesce and provide for the remaining 20 per cent. in that way. We earnestly hope that that will be the case. But it may work out differently, and we have to envisage that possibility. It worked out differently when we imposed duties on Irish goods in order to collect sums due from Ireland, and, while I do not oppose the use of the trade weapon in this case to deal with a political or financial question, I regard it with some apprehension, and can well understand that the Chancellor of the Exchequer should have been animated by feelings of reluctance, as he said to-day in his observations, in finding himself obliged to introduce a Measure of this character.
  The use of the trade weapon in a political dispute is always dangerous, but it is much better indeed than the use of force, which would have been the case in the 19th century, when a fleet might have been sent to threaten Russia in regard to the incident of the British engineers. All who are partisans of the Covenant of the League of Nations recognise that trade embargoes may be useful, and possibly the only means of bringing pressure to bear upon a nation which may be regarded by the League of Nations as guilty of some grave fault, but it is a weapon which ought to be used only in extreme and critical cases, otherwise whenever there is a dispute between countries and it means an embargo, as in the case of Russia, or collecting financial debts through a clearing house, as in the case of Germany, it means that international trade will become more and more harassed, and manufacturers, merchants and shippers, carrying on their functions to the advantage of mankind, will find themselves harassed and hindered and thwarted, owing to controversies between Governments with which they themselves have no concern. Thus industry and industrialists really become the victims of politics.
  Suppose in this case matters do not work out quite in the way the right hon.
  824
  Gentleman hopes, and in the way which we all hope, and that there are reprisals, and that we had to take measures amounting to an embargo. It would not be an embargo only against German imports into this country, because an embargo on one side is always met by an embargo on the other side. Suppose the German manufacturers are not recouped by the German Government, and are not willing to sell their goods at 20 per cent. loss. You may find the trade betwen this country and Germany dwindling more and more, and coming almost to a standstill. The miner who is working in a coal mine, whose product is exported to Germany, or a fisherman whose catch is sold to Germany, will be the people who will feel the ultimate effects of this Measure. They know nothing about Dawes or Young; they would only know that they are affected in their livelihood owing to a controversy between Governments and the failure of statesmen to come to agreement.
  As recently as 1929 we sold to Germany goods to the value of £37,000,000. I know that there are many hon. Members who assume that no foreign country ever buys anything from us; they think that our foreign trade is of no importance. Last year we sold £14,000,000 worth of goods to Germany. Even £14,000,000 worth is worth having, and if we can bring that figure back to £37,000,000, that is the goal to be aimed at rather than the possibility of seeing our trade with Germany dwindle still further. While I agree that the Government are compelled to take action in this matter I hope—indeed I feel sure—that they will adopt a conciliatory attitude in a desire to arrive at a settlement, if we can, and avoid the immediate effects and the possible future risks involved in making an Order under Clause 1.
  The Chancellor of the Exchequer has told us that Clause 2 is entirely unconnected with the German dispute. I was rather surprised to hear him say that. I thought he was going to say that this was a reserve in case the German Government did engage in a commercial war and put discriminatory quotas against our goods, in which case we should want to exercise a power of reprisals against their goods. The right hon. Gentleman did not say that. On the contrary, he explained that it was an entirely different matter, and had been initiated on account of entirely different considerations. In that case I

  825
  do not see why it should not have been in a separate Bill. This is not really one Bill but two Bills, and Clause 2 has nothing to do with the Clearing Office; it has nothing to do with the German debt. It is a general power of retaliation, without limit of time, without limit of country, and places in the hands of the Government full powers to take reprisals against quotas, as the Import Duties Act takes power to take reprisals against tariffs.
  The Chancellor of the Exchequer said that the Government do not like quotas, and do not propose to use the powers under Clause 2 unless they are compelled to do so. That is very interesting coming from him, and I have no doubt that that view will be shared by several of his colleagues. But will it be shared by all, the Minister of Agriculture, for example, who has told us that quotas have come to stay? The Minister of Agriculture preaches the doctrine of economic nationalism as a good thing in itself, "not to be condemned as a disease." He told the whole nation, in a broadcast speech a few months ago, that it was a thing to be desired and to be pursued. We have elements in the Government which, far from disliking, enjoy quotas, and would wish to see them carried still further. In the hands of Ministers of that school Clause 2 places an extremely powerful weapon. No doubt ostensibly this power is to be used if there are discriminatory quotas against us or quotas which are specially detrimental, but it is easy to say that any quota adopted by any country is specially detrimental to this country. Every system of quotas adopted anywhere is intended to be detrimental to the foreigner, and it would be specially detrimental to the foreign country which sends the largest quantity of the particular goods which are subject to a particular quota. I can well imagine, say in a year or two, a Government which desired to pursue the policy of the Minister of Agriculture forgetting all about the obiter dictum of the Chancellor of the Exchequer, that the Government dislike quotas and do not want to use this power, using this Clause in order to extend still further the whole system of quotas in this country. There are no limits in this Clause. It can be applied anywhere, at any time, to any extent and with respect to any country. It is true
  826
  that a Resolution has to be proposed in the House of Commons and the House of Lords, and has to be endorsed, but everyone knows that occasionally the House of Commons is docile and has been known to acquiesce in every proposal of the Government of the day without venturing on any occasion to interpose its own authority and reject any suggestion which is made, and even this House of Commons may conceivably show the same acquiescent spirit.
  Let it be remembered that there are hon. Members of this House and of the Government who, in earlier days, when it was proposed to establish tariffs, said that we did not want tariffs in order to establish a permanent and general system, but to fight tariffs elsewhere, and extend the area of freedom for British trade. There were millions of people who accepted that view and supported it. It is all forgotten now. A permanent and general tariff is part of the system of the country. How about quotas? Are we to see Clause 2 used in precisely the same way? While ostensibly it is a means to fight quotas elsewhere and to secure their abolition in the interests of British trade, it may well be that the same experience as we have had in regard to tariffs will apply also with regard to quotas, and that Clause 2 will be found to be exceedingly detrimental to the general trade of the country, inward and outward. Let it be remembered that when the Russian embargo was imposed as a weapon to secure the release of the British engineers in Russia, we asked the Government whether it would be used for that purpose only and not for general trading negotiations, and the Government refused to give us that assurance. It was only afterwards, when that was pressed and received the extremely powerful support of the right hon. Member for West Birmingham (Sir A. Chamberlain), that the Government changed their attitude and did surrender and agree that the Russian embargo should be used only for the purpose for which it was first advocated, and for no other. Can we get a similar assurance to-day with regard to Clause 2?
  This purports to be an emergency Bill which must be pressed through before 1st July and become law by that date. It has to be taken in the House of Commons on two consecutive days. There is no time for commercial and other interests in the country to consider the

  827
  matter maturely and make representations to Members of Parliament, and no time for opinion here to form itself. The Debate on the Second Reading to-day may bring out points, but there will be no time to consider carefully Amendments for Committee or on Report. To-day the Second Reading is to be passed; tomorrow there are to be the Committee stage, the Report stage and the Third Reading, and the Bill will be rushed through to the House of Lords. So far as Clause 1 is concerned it may be that there is some urgency, but why this extreme speed with respect to the much wider powers to be conferred under Clause 2, which need not have been introduced into the Bill at all, and might well have been the subject of a second Bill? These are points that ought to be considered by Members of the House, and the Amendments that are to be moved in Committee will require such consideration as the brief time at our disposal allows. I am sure that the whole House, or the vast majority of Members, will share the regret of the Chancellor that it should be necessary to introduce into Parliament disturbing Bills of this character. The world is troubled by tariff wars, by conflicts of quotas, by competitions in currency depreciation, and now by reprisals for non-payment of debt. All these things restrict commerce, prevent recovery, and they maintain and may increase unemployment. For all these reasons we most earnestly hope that the negotiations on which the Government are to engage with-in the next few days may be carried to a successful conclusion.
  5.5 p.m.
  Sir JOHN SANDEMAN ALLEN: It has been a matter of great interest to us all to hear the explanation of the Chancellor. I am sure the House is pleased that the serious nature of the position is appreciated, and realises how essential it is that we should look upon this matter in the spirit in which the Chancellor of the Exchequer has dealt with it. There are special difficulties in connection with trade with Germany. I do not want to follow much that has been said to-day. I feel sure that the House and the country realises that Germany paid Reparations out of borrowed money, and that a great deal of the money that was spent on other things was not spent in the wisest and best ways. But those are things of the
  828
  past, and what we have to face is the present situation. It has been clearly pointed out to (the House, both in the dispatch which we have in the White Paper and in the speech of the Chancellor, that in the opinion of those who are in a position to judge Germany is able to meet these obligations. It is vital, however, that certain steps should be taken, provided the negotiations are not successful. In the opinion of most of us it is very important that matters should be thoroughly and satisfactorily arranged in the discussions that are taking place. Not only should the liabilities of Germany under these particular loans be discussed, but the whole position, which is seriously affecting trade between the two countries at the present time.
  The right hon. Member for Darwen (Sir H. Samuel) referred to the quantity of goods that were being bought in Germany from this country. Is it realised how much has been paid for those goods, how much of the liability for those goods has been met up to date? After all, we cannot go on selling goods if we do not get paid for them. That has been the trouble with trade right through Europe. It has been especially bad recently in the case of Germany. The Chancellor referred to the way in which payment of skripmarks had been dealt with. I do not know whether the House understands what is being done. When goods are sent over to Germany the German Government now provide that there can be no direct payment made to the merchants of this country. It has all to go into a Government fund called the Gold Discount Bank. This Government bank then pays one-half direct to the merchant and issues scrip for the other half. It then offers to purchase the scrip at a discount of 50 per cent., and then sells it to a German exporter at a discount of 55 per cent. The man who sells his goods gets 50 per cent. cash, and another 25 per cent. So he loses 25 per cent. That is one of the ways in which British trade suffers. When the scrip is sold to the German exporter the bank gets 5 per cent. off, and then the balance is provided to help the German to export to this country. So that the 100 per cent. is found but our people do not get anything like it, the German export trade alone profiting. Therefore, we are bound to see a diminution in business as long as that method continues.

  829
  There is another difficulty. To-day the German is not allowed to accept bills, not allowed to meet his obligations until a permit has been obtained to find the necessary foreign money. The English shipper who sends to Germany has therefore to wait. First of all he is advised to make sure that a permit has been granted before he sends his goods. Then he finds another regulation in the way, and that is that until the Customs certificate for delivery of the goods has been produced no permit can be given. The goods must therefore land in Germany and he loses control before he even knows whether he is to get paid. That I understand is one of the greatest difficulties in trading.
  I hope that the Government will not limit any action they may have to take or any discussion that they may have with the German authorities, to the question of the interests on the loans, but that in the interest of trade generally they will see that all these matters are put on a better footing. It is this sort of thing which has troubled the country more even than the loans, important as the loans are. How are we to get on if we cannot carry on our trade with Germany or Germans trade with us? I agree entirely with what the right hon. Gentleman has said. We depend to a very large extent on foreign trade, and it is absurd for us to make light of anything which shakes or injures our foreign trade. To that we must be very alive as time goes on. It is important that the whole question of our trade should be considered by the Government now. The chambers of commerce, for which I speak at the moment and at short notice, are quite in sympathy with the action that the Government propose, although we all very strongly hope that the negotiations to be undertaken will enable the Government to settle this question without taking the final action here suggested.
  If any Members of this House imagine that trading interests affect only the waders themselves they never made a greater mistake in their lives. Every person in this country depends upon the trade of the country; whether he be a small man with a small income or wage, or a bigger man, he is just as materially affected by these matters, and almost more so than the traders. Therefore, when advice is being taken it is as well to have the advice of those who are
  830
  experts. For that reason it is satisfactory to know that the Chancellor has arranged to have sound advisers. I do not think the analogy of a political dispute is a fair one in cases of this kind. This is not a political dispute. It is a purely financial and business transaction. It does not matter whether they be exchange restrictions or anything else, it is a matter to which we are thankful that the Government are alive. It is a pity that we were not able to arrange for a clearing house mutually agreed upon as desired by chambers of commerce. I know that there were difficulties, but I hope that now a lot of those difficulties will disappear.
  Clause 1, in my opinion, is sound, and business men support it strongly. Clause 2, as the Chancellor said, does not necessarily apply to any difficulties at the moment. But, after all, is it not time that we should be able to take what steps are necessary should any difficulty arise? Trouble blows up very suddenly. Parliament is to adjourn for two or three months and we do not know what commercial or economic question may arise in the Recess. We may have the quotas driven to death. It may be necessary for those who look after the trade of the country to be armed in these matters, so that they can keep the peace. It is only by being armed that you can keep the peace. I am sure that not only business men but the people generally, when they understand the question will support the action of the Government in arming itself to deal with questions which we all hope will never arise. We hope sincerely that the negotiations will be successful. For years many of us have done our best to promote closer understanding and more intimate relations between this country and Germany, which we look upon as essential. Germany must realise that there is no country in the world that has been so friendly or that has done so much to secure justice and fair play for Germany as this country. Any unprejudiced observer and recorder would be obliged to say that the patience shown by this country and the efforts made by this country have all been for the good of Germany and of those other countries in Europe in regard to which these difficulties have arisen. No blame can be attached to us for the situation. I hope there will be no need to put into

  831
  force the provisions of this Bill, but I think, at the same time, they are excellent provisions to have in case of trouble arising hereafter in relation either to Germany or any other country.
  5.15 p.m.
  Mr. HENDERSON STEWART: I think the hon. Member for the West Derby Division of Liverpool (Sir J. Sandeman Allen) expressed the view of most, if not all, of us, when he hoped that these provisions, whatever their merits may be, will never have to be applied. That opinion cannot be too strongly expressed. As regards the effect which the Bill would have, if carried into force, I cannot speak with the authority of the hon. Member, but I happen to represent a constituency, two of the principal interests in which are mining and fishing, two subjects which have already been mentioned in this Debate. I may be permitted to explain to the House why these proposals are causing some doubt and concern to those connected with the two industries I have mentioned. I do not think any of us would deny to the Government the right or the power to take as strong measures as possible to safeguard the proper privileges and rights of British nationals, but we cannot help feeling some anxiety as to what may happen if all does not go as well as we hope in connection with these proposals.
  The coal trade is the most important in Fife. In the last year or 18 months, thanks largely to the measures of the National Government, the industry there has been improving month by month and at the present time it is employing every available miner in that district. That industry is concerned, lest anything should happen, which would reduce its exports. If I were to ask the Secretary for Mines whether he had any fears upon that score he doubtless would say "No!" and he would point out that there existed what he would probably term a special agreement for the export of coal to Germany. But if this solemn Dawes agreement can be broken, the other agreement might be broken also. Therefore we cannot help feeling a little concerned. The other special interest in my constituency is the herring fishing. I do not say that herring is a vastly important export in relation to the total trade of
  832
  the country. I know that, in figures, it is comparatively small, but it is an industry which affects the whole coastline of the East and North of Scotland and part of the East Coast of England and its geographical importance is therefore considerable. We have heard that, on account of these same currency and transfer problems, Germany is not going to take any herring at all from us this year and that is a very serious report indeed for the people engaged in that industry. Germany took more than half the total cure last year and if there is any possibility of that market being closed this year, it is a very grave matter indeed.
  One is forced to this conclusion. We hope that the conference which is to meet to-morrow will not confine its attentions to the subject matter of this Bill or to the immediate problem raised by the Chancellor of the Exchequer. Those subjects are inextricably bound up with the whole question of trade between the two countries. It is impossible to pick out the Dawes Loan or the Young Loan and to say, "That is something separate; we shall put aside and treat it to-day, and deal with the other things to-morrow." These matters cannot be dealt with in that way. They all form one and the same problem, and those who are specially interested in the export trade would beg the Government—speaking with the greatest possible goodwill—to extend their deliberations with the German representatives, as far as is necessary in order that all these problems of currency and transfer may be properly considered. I think I may say that those remarks represent the views of an exporting district of this country which has, comparatively recently, declared its continued loyalty to the National Government. As the representative of that loyal district I ask the Government to give those views proper consideration in their deliberations on this issue. If I may be pardoned a personal reference, may I say that if there was one issue more than another upon which I secured election in that division it was the issue of our negotiations with foreign countries. I trust that I may be able to return to my constituency when the General Election comes and face my constituents with this declaration—that never has the National Government let down the export trade of the country.
  5.22 p.m.
  Major NATHAN: The House is indebted to the Chancellor of the Exchequer for the very clear statement which he has made of the rather complicated facts set out in the two Notes comprised in the White Paper. I shall have some criticisms to make on the Bill itself but I wish to say, at the outset, that I can well understand the resentment which is felt at the treatment by the German Government of the bondholders as disclosed in those Notes. That resentment seems to me to be justified and no criticism upon which I venture, must be thought to concede any part of the German case in that respect. But I am bound to regard this Bill from the point of view not merely of the bondholders but of its effect upon British interests as a whole and, in particular, British industry. I was interested to hear from the Chancellor of the Exchequer that in his judgment the position arising out of exchange with Germany of the Notes comprised in the White Paper is the necessary justification for this Bill. But be it noted that the Bill applies to two separate and distinct subject matters. The Chancellor of the Exchequer made it clear that, as far as the Government are concerned, or as far as he is concerned, he has not Germany in mind in reference to Clause 2 of the Bill. How can it be then that Clause 2 is justified by the Notes in the White Paper? I can well understand the Chancellor disclaiming that Clause 2 is to apply to Germany. I speak in the presence of the Foreign Secretary who, in answer to a question of mine this afternoon said that, to apply Clause 2 to Germany would be, in normal circumstances, a failure to comply with the obligations undertaken by His Majesty's Government under the Trade Agreement with Germany of December, 1924. There, the conditions are expressly defined under which such prohibitions and restrictions as are contemplated by Clause 2 of this Bill may alone be imposed. Therefore the remark made by the Chancellor of the Exchequer in this respect was nothing more than a statement to the world that this country would continue to recognise its undertakings under Article 10 of the Trade Agreement with Germany.
  I sincerely hope that the negotiations with the German representatives may fructify, but if those negotiations are to
  834
  take place so soon, and if their subject-matter is to be as limited as the right hon. Gentleman has indicated, then I ask whether, should these negotiations be successsful, he will withdraw the Bill?
  Mr. CHAMBERLAIN indicated dissent.
  Major NATHAN: The right hon. Gentleman indicates that he will not withdraw the Bill even in the event of the negotiations being successful. Therefore it is right to assume that the Bill is intended to be of far wider application and implication than merely Germany itself, although the right hon. Gentleman has said that it is the situation disclosed in the White Paper and nothing else which is the justification for the Bill. I fail to reconcile the statement made by the right hon. Gentleman in his speech with his dissent from the suggestion which I have made just now, unless there is a great deal more behind the Bill than he has indicated to the House. I certainly am not opposed to Clearing Office arrangements. Indeed I think I was the first Member of this House to put forward the suggestion, which I did in the form of a question to the Board of Trade some three years ago. But the Clearing Office arrangements which I contemplated then were arrangements made by mutual agreement and designed to facilitate trade between the countries which were parties to those agreements. The Clearing Office to be set up under this Bill is not even professedly for the purpose of advancing trade. It has an entirely different object. It is merely a debt-collecting agency and I am satisfied that its results will be, in no long time, to diminish the already too small trade between this country and Germany.
  The Bill is not restricted by its terms to Germany or to the situation which has arisen in respect of the Dawes and Young Loans. It applies to any foreign country which imposes prohibitions and restrictions., I have obtained, by the courtesy of the Secretary to the Overseas Trade Department, a list of the countries which would come within the purview of the Clearing Office provisions of this Bill. So far from it being a question of Germany alone, there are 29 countries which would come within these provisions, including—and I only mention the more important—the Argentine, Austria, Chile, Czechoslovakia, Germany, Greece, Hun-

  835
  gary, Latvia, Lithuania, and Spain. It is a very wide power to give to any Government to say that it should be in a position overnight without as much as "by your leave" to make an order applicable to all or any one of 29 countries with whom we are in trade relations. There is only one condition subject to which the Government may exercise the power to make such an order and that is the condition that there have been certain restrictions. We know now from the Government that there are no less than 29 countries to which that condition could be applied. Of course the right hon. Gentleman says by implication, if not expressly, "You must trust us to act reasonably and only to act in special circumstances and in particular cases."
  The Government come to the House too often with suggestions of that kind. They bring forward omnibus legislation and ask us to rely upon selective administration. That means, in effect, that this House is surrendering some of its most important powers to the Government of the day, and then, when the particular emergency passes, those powers will not be restored to the House but retained by the Government. So much for the countries to which the Clearing Office arrangement applies—29 of them. To what classes of property are these Clearing Office arrangements to apply? The Chancellor of the Exchequer referred to one class of property, and in the notices in the Press with regard to this Bill it seems to be the common idea that the Bill refers merely to one class of property, namely, debts arising out of goods imported from, let me say, for the sake of example and simplicity, Germany into this country. But there is another class of property also that is subject to these Clearing Office arrangements, and that is debts not arising necessarily out of goods imported into this country from Germany, but merely debts which happen, however they may arise, to be due to persons resident or ordinarily carrying on business in Germany.
  This is a vital matter, and I will give one or two illustrations, but I will give no illustration which has not come before me in the last few days as a practical matter of business for my consideration, having regard to actual or prospective transactions with persons carrying on
  836
  business in or with this country. They will all be actual instances. First, you have the case of goods imported into this country from Germany by an English importer. I know that the Chancellor of the Exchequer has said that only 20 per cent. are to become subject to the Clearing Office arrangements, but under the terms of the Bill a situation may arise in which the importer here of German goods will be called upon to pay the whole of the purchase price to the Clearing Office here. Although the Bill says that the importer is discharged by that payment, be it remembered that he is only discharged in this country, and payment here is only a good defence in the courts of this country. But, unlike the law in this country, in many foreign countries, certainly in Germany, Czechoslovakia, Holland, and Switzerland, jurisdiction is founded merely upon the fact that a debtor may have some property in that foreign country.
  Mark the situation. Your English importer has to pay his purchase price to the Clearing Office here. The German does not get that money, and he is dissatisfied. He finds property of the English importer, either in Germany, Holland, Switzerland, or Czechoslovakia, and he immediately not merely brings an action, but arrests the property and levies provisional execution upon it; in a word: the English importer of those goods from Germany, having paid the Clearing Office and having property abroad finds it seized. In this way any prudent trader in this country who carries on an international trade and has a bank balance, house property, or goods in any country where arrest is part of the system of jurisdiction, dare not import goods from Germany into this country, because he might be made to pay twice, first to the English Clearing Office, and secondly—under the provisions of the foreign law—to the German creditor. That must make clear that the German can seek out the property of the English trader. He does not depend upon it being in Germany. It may be in any other country in Europe where this provision for arrest applies, as it does in most Continental jurisdictions.
  Let me leave that particular class of case and give another, also one of practical experience which has fallen for consideration since the Bill was published.

  837
  A Dutchman buys wheat in Germany, and sells that wheat to an English merchant here. The English merchant then becomes liable to pay the purchase price for that wheat to the Clearing Office, because the debt though due to the Dutchman has arisen in respect of goods imported from Germany. The Dutchman cannot recover in this country from the Englishman, because the latter gets a discharge under the terms of this Bill. The Dutchman has already paid, or may have paid, the German from whom he bought the goods. The result is that the German has had his money, or is entitled to it from the Dutchman, the Englishman has paid the money to the Clearing Office, and the Dutchman who pays for the goods to Germany in order to sell them to England does not get his money at all if he sues for it in this country, though if he sues in Holland or in any other country in which the arrest of property applies and our Englishman has property there, he can recover, and our Englishman will have paid twice.
  I do not think these provisions for depriving of the proceeds of their commerce the citizens of countries outside Germany and England is likely to add very much to international comity, and I am sure they are likely to detract very much from international trade. Again, take the case of a confirmed bank credit. A British bank has given a confirmed bank credit to a Swiss subject wishing to sell German goods to this country. The bank is under an obligation to the Swiss seller of the goods. The British importer of the goods has, under the Bill, to pay to the Clearing Office. The bank has to pay the Swiss, or be subjected to proceedings in this country, to which it would have no defence because the bank in this country would not have paid anything to the Clearing Office, nor does this Bill cover the bank or even profess to cover it in such a case. It only covers the importer. It is only fair and proper that I should make it clear that I am assuming that the Government exercise the powers for which they are asking. They are grave and serious powers, but if they do not intend to exercise them, they should not ask for them, and the House should not give them.
  I have dealt so far merely with the class of property comprised in the terms
  838
  "debts due or to become due in respect of goods" coming into this country, but there has been a singular reticence on the part of the Government as to other classes of property subject to this Bill, namely, debts due or to become due to persons ordinarily resident or carrying on business in, let us say, Germany, because it is at Germany that the Bill is primarily aimed. It does not matter how they arise. They may arise, not in respect of goods, but in any other way whatsoever, the only condition for bringing them within the Clearing Office provisions being that the persons to whom they are due or to become due should be ordinarily resident or carrying on business in Germany.
  My hon. Friend the Financial Secretary to the Treasury will have assuaged very general and very genuine anxieties this afternoon as to the intended operation of the Bill as regards bank balances, for, as far as the phraseology of the Bill is concerned, it applies to bank balances in the same way as to any other class of property. My hon. Friend, in that charming way with which the House is so familiar, rather scoffed at me for putting my question to him earlier this afternoon in a different form of words a second time. I did it because he was making a pronouncement on behalf of the Government on a matter which has aroused the greatest anxiety abroad, and I did not desire that there should be any ambiguity about the statement that bank balances will not be affected. I may tell him that I have myself had to consider the question of whether bank balances were affected by the terms of the Bill, and I have been under the reluctant compulsion of advising that they were, and to my knowledge in a number of cases bank balances have already been withdrawn from this country in view of the provisions of the Bill. I assume that, in view of the categorical statement made by the hon. Gentleman and in order completely to relieve the anxieties which the hon. Gentleman has already assuaged, the Government will accept an Amendment to the Bill expressly excluding bank balances from its operation; and I shall be glad to have an answer to that effect from my hon. Friend when he replies.
  Bank balances, however, are only one part, and although the most important by no means the only important part, of that class of property which is comprised in

  839
  the terms "debts due or to become due to" persons in Germany. What about every Lloyd's policy, every policy for marine insurance, every policy of fire insurance, every policy of life insurance? Immediately it falls due, it is a debt within the provisions of this Bill. Once a Bill in these terms is placed on the Statute Book, no person ordinarily resident or carrying on business in, for instance, Germany, can insure at Lloyd's or in any British insurance office, against marine risks, fire risks, or any other risks, except at his own peril. At any moment, overnight, without any notice, the Government may make an order applying the Bill to debts arising out of insurance policies. And it is not only German nationals to whom it will apply; it is citizens of every one of 29 countries. If my right hon. Friend the Foreign Secretary were again practising at the Bar, and an Argentinian, a Brazilian, a German, a Hungarian, an Austrian, or a citizen of any one of the list of 29 countries came to his old chambers in Temple Gardens, and said to him, "Here is this Bill; tell me, as a lawyer, dare I take out a policy of life, marine, or fire insurance out of which a debt may arise?" My right hon. Friend would have been under the reluctant compulsion, as I have been, of answering, "No, it is not safe as long as these provisions remain in the Bill."
  Further, interest on investments, interest held in Germany on British War Loan, Victory Bonds, British Government securities, immediately it becomes due, becomes subject to the Bill. Victory Bonds, obligations of the British Government, when redeemed become a debt, and come under the provisions of the Bill. No German dare sell securities on the Stock Exchange to any British investor, because under the Bill, immediately he does so, the proceeds become a debt and therefore may be claimed under this Bill. He has therefore to sell to another foreigner; he dare not sell to an Englishman. It is indeed a fine day when a National Government put foreign holders of British securities into a position in which, for their own sheer safety, they have to sell British securities to a foreigner and cannot prudently sell to an Englishman. Every legacy under a will is within the terms of this Bill as now phrased. As it falls due, the interest
  840
  under settlements comes within the four corners of this Bill. I do not wish to weary the House by illustrating every category which comes within this Bill's purview. In short, every debt is caught which is or may become due to a German or the citizen of any one of the other 28 countries to which the Bill may be made applicable. I do not hesitate to say that had this Bill been restricted to a limited purpose it might have achieved its object without involving the risk of the dangers which I feel it my duty to place before the House. It is far too wide and dangerous, not merely because it gives the Government powers which no Government ought to seek or take, but because it strikes at the foundation of British credit, and is likely to have serious reactions upon British industry.
  Mr. MABANE: I am listening with great interest to the hon. Member's speech. Will he mind telling the House to which particular provision of the Bill he is referring when he includes all these debts?
  Major NATHAN: I have been unwilling to read the text because I do not want to weary the House. I am referring to Sub-section (2) of Clause 1. It applies in the first place to goods imported from Germany. The debt there has to arise from goods imported from Germany, but irrespective of the persons to whom the debt becomes due. Then there is the second and wider class of debts, debts, in the words of the Bill,
  "due or to become due to, or for the benefit of, persons ordinarily resident or ordinarily carrying on business in that foreign country."
  That is a debt, howsoever arising, irrespective of whether it has any relation to goods or not.
  The FINANCIAL SECRETARY to the TREASURY: (Mr. H ore-Belisha): Will the hon. and gallant Gentleman read the first words of the Sub-section?
  Major NATHAN: Certainly—
  "An Order made under this Section."
  I am putting the case which, I think, the House ought to consider. I have no desire to be unfair to the Government, and I hope I have not been. I made it clear that I was basing my arguments, as my hon. Friend the Financial Secretary will concede I am entitled to, on the powers which the Government are claiming from the House. They are asking by

  841
  omnibus legislation very wide powers which they say they will administer selectively. The House of Commons in legislating cannot leave the matter there. The House must accept responsibility for the Bill as a whole as it may leave the House. The difficulties of the situation are by no means exhausted, and I should like to take the matter a stage further and make a few observations on the succeeding Sub-sections. Sub-section (3) provides that the payment to the Clearing Office establishes a good discharge for the person from whom the debt is due. That is all very well. It may be a good discharge in this country, but it is not a good discharge anywhere else, and it is possible that there might not merely be an arrest of property, but, if the debtor went abroad, an arrest of the person who had paid the money to the Clearing Office. Sub-section (4) is the machinery for the collection of the money. The Clearing Office is established and the English importer has to pay the price of the goods or the 20 per cent., or whatever the percentage may be, to the Commissioners of Customs at the point of importation. How is that going to facilitate British industry? You have an importer who is buying goods on, say, three months terms. He has made all his arrangements and has made his sales upon the footing that he has to pay his supplier in three months.
  Mr. HORE-BELISHA: Really, the hon. and gallant Gentleman should read the Bill. It says:
  "at such time and in such manner, as may be specified."
  Major NATHAN: I will ask my hon. Friend to read on. Putting it shortly, it says that for the purpose of facilitating the collection of debts to which the order may apply, in respect of goods imported into the United Kingdom, the person importing them "shall, on importation" do one of two things. These words indicate as important the point of time. The person has the alternative of doing one or two things at that point of time and only then—he has to do either of them "on importation." He has either to produce a certificate from the Clearing Office that the debt due or to become due in respect of the goods is already paid or that he has given security; or he has to pay to the Commissioners of Customs
  842
  a sum of money. The point of time at which that amount becomes payable is "on importation"; that means when the goods are cleared at the Customs. I ask hon. Members, looking at it from the point of view of a business matter, how the thing would work.
  I come back to what I was saying when the Financial Secretary interrupted me, and I am not complaining in the least about that. The importer has entered into an arrangement to sell goods upon certain terms in this country and orders the goods from Germany on three months' terms. He has made his financial arrangements accordingly. Under this Bill he is not allowed to wait for three months before paying. He has either to find security or the cash before he can handle the goods at all, still less before they can be delivered to the person from whom the money is due. There is no power to say that the person to whom he sells the goods shall also pay at the same time. Whether it be raw materials or manufactured goods, the importer has to find the cash on the point of importation before he can handle the goods, and has perhaps to wait six months before he gets payment, although he has made all the arrangements which would have enabled him to deal with the transaction in a financially satisfactory way. Every firm cannot find this money or security. Unexpected requirements such as this will fall very harshly on business firms. Suppose you have a firm with debentures. It may be trading in a normal way quite satisfactorily, but it might find the greatest possible difficulty in raising securities to the satisfaction of the Clearing Office. Whether you are paying your money or finding security for payment to the satisfaction of a British Government Department, it comes to precisely the same thing. Instead of paying, the firm might perhaps persuade the Government Department to accept a bank guarantee or the bond of a guarantee society. But neither banks nor guarantee societies will give guarantees or bonds unless those for whom the bonds or guarantees are given are known to them to be able to meet the payments or have given security for the purpose.
  I have spoken of the ordinary importer. Take, however, the case of a commission agent who sells goods here on the basis of, say, a 2½ per cent. commission. His only

  843
  interest in the matter, after negotiating a sale in this country, is to get the goods over here and hand them over to the English purchaser. He gets 2½ per cent. for doing that. Now under this Bill he has got to find the whole of the purchase price, and he may be a man whose business in the ordinary way does not require him to have any capital. Let me give a case which has been presented to me in the last 48 hours. There is an agent carrying on business in a most respectable and responsible way where the firms—both the German manufacturing firm and the English purchasing firm—are of the highest standing and reputation. The agent who gets the commission for arranging the sale to the purchaser has financed the manufacturer of the goods by lending him £28,000. He has got no charge on the goods because they are not yet in existence. He has lent the money simply to finance the manufacturer. When the goods come to this country they will not be delivered to him, but direct to the English purchaser. That becomes a debt due in respect of goods imported into this country. The debt is payable under the terms of this Bill to the Clearing Office but the British agent—a British citizen and taxpayer—who has financed the German firm with £28,000, cannot recover it from the source to which he was entitled to look, namely, the proceeds of the sale of the goods which he had financed.
  This Bill has really not been fully considered and thought out or it has been drafted by those who have no practical contact with the actual everyday conduct of business in this country. Subsection (5) is worth dwelling on just for a moment. It says that a person importing goods into this country
  "shall have the like rights against any person by whom documents of title relating to those goods are held as if he had made the like payment to that person."
  That assumes that the documents of title are held in this country. Under the banking arrangements that may prevail the documents of title may not be here at all and the person will not have the like rights or any rights against the person holding the documents of title.
  There is a last matter on which I shall venture to trouble the House, and I thank hon. Members for their patience, which I greatly appreciate. But this Bill is a matter of real importance. In Subsection
  844
  (6) reference is made as to how money collected under the Bill is to be applied. Be it noted that the collection is to be made from British citizens or persons in this country. The distribution is to be made not only to people in this country, but to any British citizen, wherever resident, and any person, whether British citizens or not, living within the British Empire. I think I have taken it too widely. I do not want to mislead the House, and I will qualify what I have said. I should have said the money may be applied to paying persons ordinarily resident or carrying on business in the United Kingdom, whether British or not, or to British subjects, wherever resident, that is, broadly speaking, within the British Empire. In other words, payments are made out to a larger number of persons than the number from whom the money is taken.
  Let it be noted that the beginning of the Clause dealing with the method of payment states that the Clearing Office may pay "in such order of priority as may be specified." I suggest that that is an entirely novel procedure. When an arrangement is being made to collect assets for distribution among creditors there should be no right of priority among the creditors, especially when the money is collected from a limited number of people and the distribution is made amongst a larger number Surely the ordinary procedure of giving a pro rata distribution ought to be adopted, so that everyone may stand in the same position relatively in respect of his claim. It is a dangerous thing to give to the Clearing Office the right to prefer, shall I say, the bond holder to the industrialist, or one industrialist as against another industrialist. That may have results which can scarcely be foreseen, because the difference between a man receiving money early or later may make all the difference not merely between comfort and discomfort, or profit or loss, but between being able to carry on and being made bankrupt. The House ought not to give to the Clearing Office the power to discriminate between British subjects, or persons resident in this country, who are entitled to share in the pool. I have delayed the House too long, have spoken longer, I think, than I have done before, but this is an important matter and opportunity for Debate on this Bill is limited. My excuse, if excuse is needed,

  845
  is that the Government have introduced this is an emergency Measure which is so important that it must be rushed through the House of Commons; and if apology is needed to the House I find it in this, that this is said to be an emergency matter of great importance and as such requires careful deliberation and examination.
  6.4 p.m.
  Mr. LOFTUS: I confess that 10 days ago, when my right hon. Friend gave notice of this Bill, I had certain misgivings, and those misgivings were intensified when I read the Bill, and I am glad to say that since I read the correspondence between His Majesty's Government and the German Government, and, still more, since the speech made this afternoon by my right hon. Friend, those misgivings are to a great extent lessened, but they are not entirely eradicated. I should like to direct the attention of the House to one or two points relating to the connection between the large favourable balance of trade that the Dominions and Colonies have with Germany and the unfavourable balance of trade which we have. But before doing that I will make a few general observations. The case as regards the Dawes and Young Loans, that it is a calculated and clever refusal to pay, has been made out. The Dawes and Young loans are in quite different categories from other loans. There is a practical difference and, indeed, a moral difference between the Dawes and Young Loans and all the commercial and bankers' loans made to Germany.
  The Dawes and Young Loans were recommended by an international conference, they were accepted by the German Government, they were guaranteed by the German Government, and were either guaranteed or recommended to their nationals by various Governments, including our own. Therefore, it is right and proper that a failure in the payment of interest on those loans should be a Government concern; but I do submit that that consideration does not apply to the vast mass of capital poured into Germany, chiefly from America, though to a great extent also from this country, during the years 1925 to 1928. That capital, after all, took an ordinary commercial
  846
  risk, an ordinary investment risk. People chose to invest in Germany because they got higher rates of interest than in this country, and they must have known that that capital, which was used either to improve the amenities of German towns, by garden suburbs schemes, and so on, or to recondition and re-equip German industry, could only pay its interest if German industry could compete in the markets of the world, capture, to a large extent, the markets of the world, and so earn the necessary favourable balance of trade. Therefore, I deprecate treating these two classes of debts on a similar basis, and frankly I deprecate Government interference to secure ordinary commercial and financial debts, while fully recognising that it is the task of the Government to secure that the obligations under the Dawes and Young Loans are met.
  I leave aside the effect on trade and employment in this country of any grave diminution of German trade, only pointing out that we do a large handling trade, especially of Empire produce on its way to Germany. A large mass of Empire goods comes here, is handled and then is re-shipped to Germany. That, in particular, applies to wool. I would rather deal with the trade of the Empire and certain sections of the Empire. Germany last year sold to the Empire, exclusive of the United Kingdom, 294,000,000 marks' worth of goods. She had an unfavourable trade balance of £22,500,000 with the Empire. She had a favourable trade balance with us of £12,750,000. Therefore, including the United Kingdom, she had an unfavourable trade balance with the Empire as a whole of some £10,000,000. Take the case of Australia, In the three years 1931–32–33 Australia bought from Germany goods to the value of 62,000,000 marks and sold to Germany goods to the value of 317,000,000 marks, that is to say, she sold to Germany almost exactly five times as much as she bought from Germany. How is the transaction carried out? I suggest that the only way this is done is that each year we receive in the form of German goods imported into this country about £5,000,000 a year of Australian in-interest due to us; that that favourable balance of Australia is really a payment of interest coming by triangular trade to London.

  847
  Let me put it in an extreme way in order to make it clear. Australia owes us, including commercial debts, about £30,000,000 a year in interest. She could pay the whole of that by shipping to Germany £30,000,000 worth more—say wool—than she bought from Germany, and Germany could pay Australia for that by shipping £30,000,000 worth of German goods to our country. Those German goods would form a credit in London of £30,000,000 which would meet the interest claims upon Australia. That is an extreme case; but I would suggest that, in actual fact, in each of the three years 1931, 1932 and 1933 we have received here in the form of German goods Australian interest to the amount of just over £5,000,000. The same thing applies also, I think, to all our Dominions and Colonies. They all have, to a varying degree, a favourable trade balance with Germany, and interest due to us comes in the form of German goods. It is the same with the Argentine. The Argentine has a large favourable trade balance with Germany.
  If the result of this policy should be in any way to force Germany, in order to get a favourable balance of trade, to restrict imports to a considerable extent, that will make more difficult the payment of interest obligations in the City of London. I also suggest that during recent years Denmark has had a large favourable balance of trade with us, and that some of the interest payments due by Germany to us have come by Germany selling to Denmark and Denmark selling to us, and this has been detrimental alike to our agriculture and our trawl fishing industry. If by any chance Germany restricted purchases from the Dominions in order to get a favourable trade balance, she might buy elsewhere, and the world market would remain the same; but I feel that it is possible that she might become more self-sufficient. I sincerely hope that that policy will not be adopted, that she will see reason and meet the just claims of the Dawes and Young Loans, but even if she meets them she may, in her efforts to get a favourable trade balance, be driven more into self-sufficiency. We know that during the War she achieved a very great measure of self-sufficiency and that at the present time she would be enabled to attain it to a far higher degree.
  848
  I trust that Germany will not be driven into the course of self-sufficiency, and that she will recognise her obligation and be able to meet it Great suffering to Germany will be involved either by intensified self-sufficiency or the other possible course, which might be the establishment of a monopoly in foreign trade. Under that monopoly she could restrict imports and force her goods over hostile tariff barriers throughout the world. To do that she would, of course, have to force down the standard of living of her people to a very great degree. I would say in all sincerity to His Majesty's Gvernoment that I hope, while they are rightly insistent that there should be a just settlement with Germany, that they will recognise that they are dealing with a people still suffering from post-War neurosis. I trust that they will recognise that they are dealing with a people suffering from internal and external fears. I am glad the right hon. Gentleman the Member for Darwin (Sir H. Samuel) warned the House that we must cast aside all the revulsion we feel about certain methods of the German Government. I do cast it aside, although I regret those methods as much as any other Member of the House. The German people to-day are still suffering, and I feel that we can afford to be magnanimous. We can afford, above all, so to approach them as not in any way to hurt or injure their national pride.
  Germany has one immediate fear. She has made herself practically self-supporting as regards her food supply, but there has been drought in Germany as elsewhere, and the German Government and people are filled with fear that the harvest may fail. If the harvest fails, they will undoubtedly be faced with intense suffering. They have either to face semi-starvation, or, as I say, to flood the markets of the world with their goods to pay for the necessary imports of food. To do this they have to force the standard of their living down, if their goods are to get over the high barriers. I beg His Majesty's Government, seeing that the German people are in that condition, to say, as regards this Bill, "We demand this power, and we intend to use it in order to enforce the rights of the Dawes and the Young bondholders, but, in view of that fear in Germany, we shall tell the German people that we will not use this weapon in any circumstances till

  849
  after 1st October, when we know whether their harvest is a success or a failure."
  I know that many hon. Members believe that the world, including Europe, is making towards stable recovery. I cannot understand how anyone who looks at the condition of Europe can fail to see that the condition is more unstable, more uncertain and more unhappy than it has been for many generations past in time of peace. Europe is balanced, as it were, on the edge of a knife. She may come down on one side towards increased prosperity and better conditions and towards peace and security, or she may come down on the other side towards economic catastrophe and chaos, revolutionary and social trouble, and inevitably to war. If by any rash move we—I will not say cause—but fail to prevent economic crisis in Germany, that crisis may spread and involve Holland and Switzerland, whose finances and industries are so closely bound with those of Germany. I beg the House and the Government to consider the suggestion that I have made that generosity with those people may prove a profitable investment. I beg them to ask and to get this machinery, but to pause before they use it, because it may set in motion other forces which cannot be controlled, and the results of which no man can foresee.
  6.23 p.m.
  Mr. MAXTON: I do not want to intervene to any extent in this discussion. The House will readily recognise that this subject is not just precisely my line of country, but I could not possibly allow this Measure to proceed without saying something upon the subject. The hon. Member for Lowestoft (Mr. Loftus) has made a very eloquent and moving appeal for a tolerant and benevolent view towards the German people. It is very difficult, as he indicated, to separate the German people from the present regime in Germany. An appeal which would have been listened to by nearly every hon. Member of this House with great sympathy a year ago meets with a less sympathetic hearing to-day. I am not going into that particular aspect. I want to criticise His Majesty's Government from another point of view for their introduction of this Measure. As I understand the Measure, it is designed to collect the interest due to certain bondholders, which interest would not be collectable by those bondholders unless
  850
  governmental steps were taken. This is the third occasion in this Parliament on which the Government have come before us with a demand of this description. There was the question of the Irish land bondholders. The whole power of the State had to be flung into the field to make it possible for those who hold Irish land bonds to draw their interest.
  Mr. MOLSON: It affected the British Treasury.
  Mr. MAXTON: Here, again, we are under a certain moral obligation. I am not quite clear in my mind. I am considering the hon. Member's interruption to see if it has any weight before I leave it. I cannot see that it has. The Government have rushed in to put forward all the powers of the State in order to see that the Irish land bondholders should receive their interest. During the discussions, I and other spokesmen offered alternative ways of dealing with the situation created in Ireland by the refusal of the Irish Free State Government to meet the interest on the bonds, but this nation said "No. We have to rush in and safeguard these payments." Then there was the case of Newfoundland.
  Major HILLS: It is not a case of getting money for the bondholders. The people who held Irish land bonds had a government guarantee and the people whom the Government are protecting are not the bondholders but the taxpayers in this country.
  Mr. MAXTON: I know you can find all sorts of excuses and explanations, but when the Irish Free State declined to meet their liabilities a new situation was created, as I said in this House at the time. Do not let us quibble. The special punitive duties were imposed on the Irish Free State for the sake of collecting the money to pay the interest to the Irish land bondholders. [An HON. MEMBER: "No!"] You can quibble and dodge round about as much as you like, but that is the actual fact as everybody in this House knows. That Measure was only introduced because Mr. de Valera refused to meet the Irish land debts due to this country.
  Major HILLS: To save the taxpayer.
  Mr. MAXTON: A new situation was created by Mr. de Valera's refusal. In regard to Newfoundland an exactly

  851
  similar situation arose. Newfoundland could not meet its interest on certain outstanding debts, and again this nation's resources had to be mobilised to save the interest of the Newfoundland bondholders. Now we are asked to do the same thing for citizens who have invested in certain German loans, the Young Loan and the Dawes Loan. Admittedly, when these loans were floated the State put a certain amount of support behind them; not so much support as in the case of the Irish land bonds, but more than in the case of the Newfoundland loans. The reputation of the nation was involved, and now that the interest is in danger the whole power of the State is invoked and the normal working of the Parliamentary institution is interrupted in order to save the interests of those bondholders. The sole purpose for which the House is assembled to-day is to bring in all sorts of extraneous things. We are here to set up a machine to collect the interest for those who hold bonds in either the Dawes or the Young Loan.
  It is only about a week since the default took place. I have sat in this House during the present Parliament and have heard agriculturists, week in, week out, month in, month out, asking the Government to do something for their industry. I have sat in this House week in, week out, month in, month out, and have heard the shipbuilding interests asking that something should be done for shipbuilding or shipping. I have sat in this House month after month and listened to representatives of the cotton industry demanding that something should be done for them; and the same with coal. Every producing interest in this country has come to the House asking for governmental assistance, governmental action, governmental support of some kind or other. But no; in all these cases of productive industries, where direct employment of the workers was involved, there had to be long negotiations, long discussions, advisory committees, commissioners of investigation touring the country; and then, usually, after all the investigations, after all the inquiries, the mountain has produced some ridiculous mouse which was of absolutely no use whatever as real livestock to the industries concerned. Here however, we have the rentier, the moneylender, the fellow that sits and draws
  852
  interest, as distinct from the man who goes out and tries to make something. Whenever his four per cent., or his five per cent., or his seven per cent. is in danger, the whole machinery of the State must be mobilised, and, not six months or 12 months after the difficulty arises, but in the ensuing week, every other bit of business of the House of Commons is to be held up so that special facilities shall be given to protecting the interests of the moneylender.
  I have heard two or three speeches today from some of the most distinctive Free Traders in this country—men who have been prepared to give up all and to risk all for preserving the liberty of the individual to trade as and how he pleased, and to limit and reduce all the barriers that might exist as between the trade of one nation and the trade of another. I hear them to-day being faintly critical of this proposed Measure, but I do not hear them opposing it. I hear them admitting that these things—the setting up of a clearing house for the collection of debts, the granting to the Government of power to impose quotas all over the world—are tremendous barriers in the way of free association in trade between nation and nation. But, although they recognise that this is a tremendous breach of the basic principles which they regard as paramount in political and economic things, yet the importance of collecting the interest on the Dawes and Young loans is so tremendously great that their principles again must be put into the background for the purpose of facilitating this Measure.
  I am not going on any further. As I said when I started, this is not my line of country. I am getting over the hurdles as best I can—dodging most of them—[Laughter.] Let me respond to that laughter. Most of you are not honest enough to say that. In these days, every speech that is made here leaves out more than it puts in. Let me put these points to the Chancellor of the Exchequer. This Measure is introduced to-day admittedly as emergency legislation, admittedly for temporary purposes—or rather, I should not say admittedly, but expressively for temporary purposes. It is introduced with the strongly expressed hope that it will never be used, that the circumstances will not compel the use of it. I want the Chancellor of the Exchequer, or whoever speaks for the Government in closing the

  853
  Debate, to tell us this: Have the Government considered, in the short time during which they have given consideration to this whole problem, all the consequential things that will arise should this not work as a bluff, as it is to-day? If the threat of this little bit of trade war, directly against Germany, does not produce the desired results, are the Government facing up to some of the points put by the hon. Member for Lowestoft (Mr. Loftus) as to the repercussions in other parts of the British Empire? If this particular Bill to-day does lead to the further destruction of the possibilities of stability in Europe, do the Government know what they are going to do if this trade war on which they are embarking to-day goes beyond a mere trade war, and means the embroilment of the whole of Europe again in the struggles that we hoped we were getting away from? This Measure may be good bluff; it may be good jingoism; it may even be good debt collecting for moneylenders; but I would ask the Chancellor of the Exchequer whether the Government are satisfied in their own minds that it is sound statesmanship?
  6.38 p.m.
  Mr. DENMAN: This Debate would not have been complete without the eloquent intervention to which we have just listened. It has been strangely out of line with the earlier part of the Debate. I do not think that the Government can have any complaint against the general reception which their Bill has received at the hands of the House., There has been almost universal support for the Bill, coupled with almost universal regret that it should be necessary, and it is in that spirit that I wish to say a few words myself.
  I suppose that nobody with commercial training can welcome the introduction of this kind of barbarous weapon into the delicate machinery of trade. The Chancellor of the Exchequer was not present, I think, to listen to the speech of the hon. and gallant Member for North-East Bethnal Green (Major Nathan). The hon. and gallant Member's exposition was perhaps the most interesting that we have had in the course of the Debate, because he gave authentic examples of the real damage that may arise in certain possible circumstances in the administration of the Bill. The dangers are obvious. If the Bill were administered in the
  854
  spirit of warfare, you could damage all manner of industries such as the hon. and gallant Member referred to. His points were very largely Committee points, and not really suited to a Second Reading Debate but I should like to refer to one of them, and to express a hope that the Chancellor of the Exchequer will be able to limit the Bill in one respect at least. It has been pointed out that this Bill would refer to insurance contracts, and it is obvious that German insurance in London might suffer profoundly if people believed that a London policy was liable not to be paid in full.
  London is probably the world centre of insurance, and its policies command the confidence of business people all over the globe. But who would take out a life insurance policy if he thought that some years hence 20, 30 or 40 per cent. might be deducted from the amount payable on that policy? Life insurance policies may last for a very long period, and even fire and marine insurance policies normally last many months. Clearly, nobody with the threat hanging over him that an Order might at any (moment be produced taking a percentage of the amount payable on such a policy, should a claim arise upon it, would willingly come to the London market to receive a document of that kind. We have had assurances that bankers' deposits and balances will not be brought within the scope of Clause 1. May I ask the Chancellor of the Exchequer to give us an assurance that insurance policies also will be excluded? He will give considerable relief to the London insurance industry if he can tell us that.
  6.44 p.m.
  Colonel WEDGWOOD: If the Irish Free State had refused to pay some people while paying others, if they had consented to pay bonds which were held in Ireland, if they had bought their bonds abroad at a discount and paid the bonds in Ireland, then I think that our attitude towards the Irish Free State would be justified, and would be such as we feel towards the German Government. It is this new feature of selecting among all your creditors those whom you will pay, this buying of their property cheap by making it valueless and then transporting it to Germany and making it valuable—it is this new feature in dealing with the credit of the world that has really forced the hands of the Government

  855
  of this country. It is not the Dawes Loan or the Young Loan; it is a new method used by an autocratic Government of dealing with its obligations, which, if allowed to go on, would not merely be catching, but would destroy all prospect of recovery of trade. That is why I shall support this Bill. I think the time has come when we have got to invent a weapon to deal with this situation, and I do not even object to the Government using machinery, as they are in this Bill, which gives them more or less autocratic powers, because we are dealing with people who have these autocratic powers, and, if we are to be armed to face them, we must have the same weapons as they have. It is a beastly situation to be in.
  I am probably the only genuine Free Trader left in the House. It has caused me some amusement to listen to the speeches of Tariff Reformers begging the Government to remember the interests of our foreign trade. I wish they would remember it at the proper time. Here we have a case which is really similar to the case with which we were faced 20 years ago. It is true that this weapon, if used, will destroy the trade between us and Germany. I do not care whether they take 20 per cent or 100 per cent. It will make trade impossible. It will make it impossible for a merchant who has paid 20 per cent. to the British Government and 80 per cent. to the man to whom he owes money to go safely to Germany. I am sorry for him. Bank balances are safe, I understand, but insurance becomes impossible. Not only that, but all the hundred and one commercial and even private associations between us and Gel-many must come to an end if the Bill is put into operation. That is the price that we have to pay. In 1914 all the business interests' connected with trade between us and Germany were saying exactly what the hon. Member for North East Bethnal Green (Major Nathan) has said to-day. This is destroying trade. This act of war is the ruin of trade. Yet we had to go into that War. In the same way, we are now putting into the hands of the Chancellor of the Exchequer a power to declare a new form of war, but one none the less deadly to trade between us and Germany and none the less likely to extend to other countries and in other directions.
  856
  But I think on the whole I prefer this sort of war with all its abuses, with all its inevitable results of poverty and dislocation of trade, to the other sort.
  Mr. KIRKWOOD: What guarantee have you that it will not bring the other sort?
  Colonel WEDGWOOD: None at all. All I can say is that I prefer this to the other. The only question on which we have to make up our minds is whether we are justified in saying to our Government: "You have power to declare war with Germany." That is the problem that we ought to face to-day. A great many Members have said, as indeed I would say, "We hope to goodness it may never be necessary to put this weapon into operation." At the same time, I want to strengthen the hands of the Government so that, when they are dealing with a foreign country in the matter, they may be able to say, "We have the country behind us," and I think the country is behind them. We distinguish between the German people and the German Government, as we did in the last War, and as soon as the division became clear we brought about peace. Now you are up against exactly the same situation. I want the Chancellor of the Exchequer and the President of the Board of Trade to go into these negotiations armed in the best possible way and with the same determination to look after the interests of international comity as was shown by Philip Snowden when he was dealing with the Young and Dawes Loans. I have no interest in the Young and the Dawes Loan. My interest is simply that we should put an end once for all to this growing habit of distinguishing between your friends and your enemies as to those whom you will pay, and this dishonest habit of making my property valueless until I have sold it to a German and then the German getting a profit out of it.
  Those are the two new features which, if we allow, we must make up our mind to see extended indefinitely. I believe we can prevent that for all time by taking a firm line now, even though that does risk the possibility of our having to say in that case, "No more trade with Germany till you put it right." I think it is rather a pity that the best statement of the case against the Bill should have come from the hon. Member for North-

  857
  East Bethnal Green, who is a Jew. After all, he and I feel very much alike on this question of the attitude of the German Government and the attitude of the Jews in boycotting trade with that country. I admit that in this matter my heart very often runs away with my head. I think here we have a case where it is not merely in the interests of this country but in the interest of the recovery of the trade of the whole world to establish once for all the principle that there is a way, if we care to take it, of stopping this invidious form of bankruptcy.
  6.53 p.m.
  Lieut.-Colonel Sir ARNOLD WILSON: It is always difficult for a private Member to speak on any subject relating to foreign affairs without doing more harm than good, and there is a good deal that must be left unsaid on a topic like this. When the Bill was printed and came into my hands, I saw with great surprise the word "reprisals" at the top. I looked into the Oxford-English Dictionary and saw that "reprisal" meant the act or practice of seizing by force the property of subjects of another nation, in retaliation, for loss or injury suffered from these or their countrymen, with the footnote "now only historical." I felt "enabling" might have been better. It may be the truth, but truth best kept in the background as the Bill applies to the whole world and not to Germany only. This is another example of the age-long conflict between finance and industry. Finance has at the moment the better of it. I should not greatly care if I thought as a result of the Bill finance in the end would get the better of it, but I do not think it will. My fear is lest we provoke reactions in Germany which will have the reverse effect. I have recently spent a fortnight in that country, and I felt in the atmosphere a willingness to suffer, a willingness to cut down import trade still further, to tighten their belts, to make yet greater sacrifices and to develop their resources to an even greater extent than at present. If effect be given to the Bill, I fear the gravest psychological reactions in that country, and I fear also bankruptcy in a number of foreign countries of firms which have been closely linked by means of cartels with German industry. Germany has hitherto imported large quantities of a number
  858
  of commodities. She will have to cut down those imports. She will increase her production to an even greater pitch than at present, and in the long run I fear that we may be worse off than now. It is to me a matter entirely of expediency, and I am trying to look at it in that light.
  When I turn to the question of paying those who are entitled to sums of money now accumulating in Germany, it seems to me that we are on extraordinarily difficult ground. There are many large firms, some of them only nominally British, some with very great interests, which for the last four or five years have been accumulating large sums of money in Germany. They have been investing them in that country in many forms. Will those sums be debts legally due? If so, it will swamp the whole scheme. There must be very large sums locked up in Germany on behalf of concerns with international ramifications which are legally within the scope of the Bill. I fear for the trade between Germany and India, Germany and Australia, and Germany and New Zealand. There are very large favourable balances between those countries and Germany, and I fear that the Australians will be compelled to take much larger quantities of German goods than at present in German bottoms in order to ensure a market for their commodities. German shipping passing through the Suez Canal is already second only to that of Great Britain.
  I should view with great anxiety any change, however well-intentioned on our part, which had the effect of making the Dominions more internationally minded that they are at present. It would be disastrous if the entrepôt trade, and the three-cornered trade which is now the rule as between India and the Dominions, Germany and Great Britain should be wiped out by a Measure such as this. I earnestly trust that that will not happen. There is no time limit for the Bill. Surely it is rather a heavy weapon to have in one's hand for all time, not only for this Government but for all future Governments, to be able at any moment to impose, with or without the consent of an advisory committee, these drastic measures upon any and all countries on the face of the earth. Could there not be a time limit by which we could

  859
  reconsider it at intervals of say three years? It is a complete change in our Constitution to have these powers vested in the Government for all time.
  I hope we may hear a little more as to the legal position of those who have contracted to supply goods which can only in practice be obtained in Germany. I have tried to find legal decisions bearing on the subject. What will their status be? Then there are the three-cornered agreements. I believe there are only four countries in Europe which have not some form o£ clearing house as between some other countries. Norway and Denmark and Spain and Portugal, so far as I can ascertain, are the only countries except ourselves which have no clearing horse agreements. There is a good deal of experience available now. It would be of great assistance if we could have some sort of White Paper published showing what the experience of foreign countries has been, how it has worked, and what the result has been. There must be a great amount of information on the subject available at the Treasury. It would certainly increase the competence of the trading community, though I do not profess to speak on their behalf, if they could know a little more how these things work in practice. There are private clearing houses in Hamburg, Lubeck, Cologne and Dusseldorf and other centres which are working quite successfully at present on a £100,000, £200,000 or £500,000 maximum. They are working very cheaply and inexpensively on a purely voluntary basis. They have been created solely to stimulate trade. I fear that under this Bill all these private clearing houses will be wiped out. There are firms who, under private barter arrangements, have endeavoured to buy as much as or more than they sell to Germany, and on that basis have built up a pretty satisfactory trade. Will not all these agreements and private arrangements be wiped out?
  I approach the question on practical lines, with no desire to prevent or impede the successful passage of the Bill, which, greatly as I regret it, I recognise as a necessity for a strictly limited purpose, though I cannot see the need of a Bill covering the whole world for an indefinite period. Why was it necessary for the British Government to take the
  860
  lead in this matter? Other Governments also guaranteed the Young and Dawes Loan, their signatures appearing jointly with ours on the prospectus papers. These were issued with the approval of the British Government, and other sections of the loans were issued with the same degree of official sanction. Yet nothing has been done by other countries responsible with us in these negotiations. I repeat that the Bill is necessary, though I deeply regret it, and hope the effect will be strictly limited, that it will not perhaps be applied at all. I do plead for personal communication between leaders of Germany to-day, whatever we think of their policy, and the leaders of this Government. I do not believe delegations on either side are likely to reach anything like a settlement. I am convinced that if leading statesmen could meet on some island, however remote, we could get settlements of this and other questions.
  7.4 p.m.
  Major HILLS: I listened to the speech of the last speaker with great interest. I agree that this is a big stick and may mean the dislocation of trade, but I would ask him to consider what he would do in a case where a country defaults on its foreign obligations and uses the money lent to it to buy up its own securities at a depreciated rate? Are you to sit still because it is more profitable to sit quiet and let this dishonesty go on? I do not believe that that is good business. When the hon. Member for Bridgeton (Mr. Maxton) says we are preferring the rentier, the bondholder, to the trader, has he considered the sort of bondholders that are protected by this Bill? I do not think he bears in mind the special character of the Dawes and Young Loans. The Dawes Loan saved Germany from collapse. Without it, there would have been chaos. It was based on the solemn undertaking of the country to pay interest in all contingencies. It was the same with the Young Loan. Docs the hon. Member understand that the whole basis of international trading depends on keeping a bargain of this sort? If it were impossible for Germany to pay, there would have been some case. Surely the Chancellor of the Exchequer made it clear, beyond all argument, that Germany has chosen to use money in recouping herself, by buying her bonds abroad

  861
  at a depreciated rate and by spending a large part of the available balance in imports of war material. I believe the second part of that statement is incontrovertible.
  Here we have a case where we have to take a lead. What the effect will be on trade I do not know. I am rather of the same view as the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood). I rather believe this is a war of a kind preferable to lack of action. I believe it will carry with it a grave dislocation of trade. Surely the fact that, whatever we suffer, Germany will suffer more, ought to lead to a bargain of a more advantageous description.
  Sir A. WILSON: Germany is prepared to suffer. I do not think that we are, for so small an amount of money.
  Major HILLS: I do not think that, as a matter of business, it does to let a wrong go by. Up to the present, as far as the Chancellor of the Exchequer has gone, all that the Clearing Office will pay is interest on bonds. I ask with all earnestness my hon. Friend opposite what would he have done in this situation? Would he have taken it lying down and done nothing in order to try to protect the right? I do not believe he would have done that in the Chancellor of the Exchequer's place. I am certain that the country is entirely behind the Government in this matter.
  7.11 p.m.
  Sir STAFFORD CRIPPS: I do hope that the right hon. and gallant Member who has just spoken will not address the American Senate, for if he does I can say that they will cheer him loudly, and suggest following this example as far as another little debt is concerned. This Bill is introduced as emergency legislation. My first comment is that as an emergency Bill it is far too wide in its scope. There is no limit to the countries in which emergencies might arise. There is the introduction of Clause 2, which has no relation to the emergency at all, and which would find a better place in the Finance Bill if brought forward at all. There is no limit to the class of debts to be dealt with although, according to the Financial Secretary, the class of debts to be dealt with will not cover the wide range that the Member for
  862
  North-East Bethnal Green (Major Nathan) dealt with.
  Finally, there is no limit to the period of operation of the Bill. This bringing forward of a perfectly general power, unlimited in scope and in time, based on the excuse of an emergency, is something which, I venture to think, the hon. Gentleman opposite may consider some day to be an unfortunate precedent. It is something for which, I think, there is no other precedent, and if it turns out that somebody some day wants to adopt wide powers this will be able to be taken as a precedent. You will have placed on the Statute Book, in 48 hours, a Bill of general purposes unlimited in time and area. If there is any justification for this Bill as an emergency Bill, it ought to be limited strictly to those matters necessary to meet the emergency. Otherwise, there is no justification for asking the House to rush the Bill through in this way. If the Chancellor of the Exchequer wants a wide, general Bill, surely the proper procedure would have been to introduce the Bill in the ordinary course, not treating this Bill solely as a Measure of emergency which, he says, it has to meet.
  We do not want any more wars, economic or otherwise. This Bill certainly looks like heavy economic artillery, and has at the top the unpleasant word "Reprisals." The right hon. and gallant Gentleman who has just spoken has used the words "dishonest" and "wrongdoer," referring to Germany. It is not a hopeful atmosphere in which to embark on negotiations for a settlement, when you call one of the parties dishonest and a wrongdoer. Once one embarks on a structure of building up economic armaments, it is likely to be just as dangerous as building up physical armaments, liable to make it more easy to use measures of this kind, especially where you have got a Bill in very wide terms such as this one.
  There are much wider questions, however, which are raised by this Bill to which I should like to make some reference. This raises the whole question of international debts default. Sooner or later, if the present economic system is to survive in the world, the Governments of the world will have to face up internationally to the problem of bankruptcy which long ago they faced up to domestically. The Governments have

  863
  built up complicated machinery internally by which when a man gets a load of indebtedness and is no longer able to bear it, he is allowed, through a system of bankruptcy, to have his debts wiped off, a percentage being paid of what he has left. Then he starts afresh.
  Mr. MAGNAY: If the court allows him.
  Sir S. CRIPPS: Yes, when he gets his discharge. I am not dealing with people who are dishonest bankrupts. I am dealing with the system which has been built up to deal with the cases of people obliged, for some reason or other, to void or get rid of their debts in order that they may be released. That system, which is built up nationally, has been found absolutely necessary owing to the accumulated indebtedness under the capitalistic system. In exactly the same way you have had for decades now the building up internationally of indebtedness between country and country, but there is no method by which that indebtedness can ever be resolved. Even when there is a default, it does not wipe out the debt. The debt still remains. It may be that a debtor is unable to pay the interest for a period of time, but the load of debt which has been the thing which has largely caused him to pay interest, as in private business, continues. At some time, sooner or later, there will have to be set up internationally the means of getting rid of the perpetual accumulation of indebtedness under the present economic system. Clearly in such a matter, you cannot leave it either to the creditor or the debtor to decide as to whether, in particular circumstances, it is right that the debt should be wiped out, or the interest reduced or whatever the particular means of assisting the debtor may be.
  As long as capitalism lends its surpluses abroad, irrespective of the interests of the people at home and very often irrespective of the interests of the people to whom it lends, as in the well-known case stated by Sir Arthur Salter—the Brazilian Loan—it really is ridiculous that the people who lend the money in that way should be able to insist upon the State coming in as a debt collector with all sorts of Measures, such as the Measure now before the House, which seriously interfere with legitimate international trade, merely for the purpose of collecting those debts. It makes an impossible
  864
  and a chaotic situation, and naturally enough, in such circumstances, the debtor and the creditor always take opposite views as to what is advisable generally in the circumstances.
  We are telling America that it is far better for America that we should not attempt to pay. We realise that it is far sounder economically in the interests of the world generally that we should not try to pay America. America may take the opposite view. Germany tries to persuade us that it is much better really that we should not have payment as regards the Young and the Dawes Loans. The difficulties which will be created by it, and the difficulties of Germany and so on make it impossible. We, on the other hand, take the view that they ought to pay, that it is possible for them to pay, and that it will not interfere with international trade. In such circumstances there is absolutely no one to decide on issues of that kind as to whether or not anybody ought to pay. The result is that you have the two parties without any sort of court or tribunal before whom they can come to decide issues of that kind.
  Why when these difficulties arise should it always be the bondholder who is protected? Why does the right hon. Gentleman think that it is necessary to jeopardise the position of the producer vis-à-vis the bondholder? He recognises, as well as any of us, that in this matter there must be a divergence of interests between the producer and the bondholder. You cannot insist upon the reception of one-sided payments such as the interest on bonds or the delivery of goods to the credit of the bondholder in this country, which is what he is going to insist on if he sets up a clearing house for seriously interfering with the ordinary flow of international trade. The House has seen an example of that in the Argentine Agreement, which was an agreement entered into very largely for the purpose of protecting the bondholder in this country, permitting the continued importation of commodities here in order that the bondholders might be able to draw their interest on Argentine bonds, a matter which has been looked at very regretfully by the producer of agricultural commodities in this country.
  The two interests—the producer interest and the bondholder interest—are obviously antagonistic in just the same

  865
  way as in the present case the interests of the producer and of the bondholder as regards German trade are obviously antagonistic, and must be antagonistic. The goods which are imported here from Germany can either be utilised as exchange for goods exported from this country and the Dominions through triangular trade to Germany, or else they can be used as a one-sided payment to pay money to the rentier here who owns the Dawes Loan or the Young Loan. In the one case they will assist employment in this country. That is to say, if they come here in exchange for debts they will assist employment in this country. If they come as payment to the rentier it is likely that they will be re-exported as fresh capital, not to Germany, but to some other country, and merely pile up afresh one-sided indebtedness between this country and some other country without any assistance to employment in this country, or with a much smaller assistance to employment in this country.
  It appears that the present Government always take the view that it is the rentier who must be protected first regardless of what happens to the interests of the manufacturers or producers. We do not believe that, if you are going on with your present system, you ought to make that the order of precedence, but that you ought to consider, first, the problem of employment and of the producing industries, and afterwards the problem of the collection of debts, if you insist upon collecting the debts of other people. There is no reason why we should rush into action a week before any default has, in fact, been made, when by puttnig this up, we are either relying upon it being a bluff and not having our bluff called, or if our bluff is called, or if we mean, in other words, actually to impose this system, then obviously we must be seriously jeopardising the trade between this country and the Dominions and Germany. It might be that if the Bill were merely a temporary one and were to be used only with full regard to the interests of the producers in this country, it would not be so harmful as it is in its present form. I am afraid that I have not very great faith that this will be used only in the interests of the producers of this country. In fact, it is obvious from its form and from what has been said that it is to be used in the interest of the rentier population.
  866
  There is, in my submission, no possible justification for including Clause 2 in the Bill. It may be that the right hon. Gentleman wants powers, and it may be that the Board of Trade wants powers, but they are not powers apparently associated with those that are desired in Clause 1. Anyway, they go infinitely further than is in the least necessary in order to implement Clause 1. They are the widest possible powers whereby the Board of Trade, without coming to the House at all, can impose restrictions on importations with regard to any country which has itself imposed restrictions that are specially detrimental to this country or to one of the Protectorates, Colonies or parts of the British Empire, and, which is especially detrimental, will apparently apply to any case where our trade is larger than the trade of other people. Of course, the detriment to our trade by any restriction will be something greater than to the trade of any others. These general powers ought not to be put into the Bill, and we shall certainly oppose Clause 2 as strenuously as we can in the further stages of the Bill. We are not vitally concerned in this question, which is a scrap between the capitalists of this country and Germany. We are anxious, if these powers are to be used, that they should not be used to the detriment of the workers of either country. As is known, we have a strong objection, as many other people have, to the regime in Germany, but we have not the slightest desire that the workers in Germany should suffer in any way. If, as I fear, the Bill is not going to succeed as a bluff, and is therefore to be put into operation, it will, in our view, undoubtedly affect the workers both in Germany and in this country, and will add a further block to the already overblocked channels of international trade.
  7.27 p.m.
  Mr. HORE-BELISHA: Even those who have entertained qualms about the possible effects of this Bill have supported it, or at least regarded it as inevitable. I take it that I can put the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps) in the latter category. He tells us that he would prefer to see an international court for the settlement of differences between creditors and debtors. He has not told us how the verdicts of such a court should be enforced, but whatever the procedure

  867
  may be, we are here concerned with a purely practical issue at the present moment of time, which, unfortunately, is antecedent to that millennial state of affairs which we trust one day will reign. The hon. and learned Gentleman always seeks to draw a distinction, as he has this evening, between the rentier, as he calls him, and the producer, and he places their interests into conflict, but he has failed to observe the complete balance, at any rate, of this Bill, the first Clause of which is concerned with the bondholder and, the second of which is introduced in the interests of the producer.
  Sir S. CRIPPS: The hon. Gentleman will credit me with saying that the bondholder was put first and the producer second.
  Mr. HORE-BELISHA: I understood from his speech that the hon. and learned Gentleman was about to oppose Clause 2, but I now gather that he was making a small rhetorical point about the actual sequence into which the Clauses fall. The hon. and learned Gentleman might, at any rate, bear in mind that, had it not been for this wicked bondholder, Germany could not have been rehabilitated, and therefore Germany would not have been in a position to purchase goods which help the producer. However, I desire to remove at once any misapprehension that the Bill may be of an offensive character.
  The opening words of the Clauses make it plain that the Measure is defensive and not offensive. Both the Clauses open with the word "If." What is provided is that in the event of certain action being taken against this country a clearing house may be established on the one hand, or a quota system on the other. In both cases this country is resisting measures that are taken against it, and is not being the initiator of measures. The word "reprisals," to which so much attention has been called, which figures in the Title of the Bill, is not intended in any belligerent spirit, but merely indicates that we are furnishing ourselves with the necessary weapons to protect our own interests. Under the Import Duties Act we already have power to put on special tariffs against countries which discriminate against us, and it is a pure anomaly that we do not at the present
  868
  moment possess a similar power to institute quotas.
  The right hon. Member for Darwen (Sir H. Samuel) feared that we were, under the cover of these defensive powers, about to take some action against other countries, but I would point out to him that the Clause of the Import Duties Act which enables us to put on additional tariffs in the cases which I have mentioned has only been invoked once, in the case of France, a country with which I hope we are about to conclude a trade agreement. Therefore, the right hon. Gentleman may completely remove from his mind any doubts he may have as to the aggression of the intentions with which the Measure will be operated. In fact, its provisions are a necessary part of the armoury of a modern State. Almost every other country in Europe to-day possesses powers similar to those contained in this Bill, and generally in a much wider form, and I am sure that no one would desire to deprive us of the right to meet like with like.
  That is why the Bill is drafted in general terms, but there are special circumstances which justify the first Clause. On the 14th June, Germany announced to the world a complete suspension of the transference of interest on her medium and long-term debts, including the Dawes and Young Loans. The terms of our reply are before the House in the form of the White Paper. Briefly, they may be summed up by the statement that we cannot accept the inclusion of the Dawes and Young Loans within a moratorium, nor can we accept any discrimination against the British creditors of Germany. The right hon. Gentleman followed by others, says that he hopes we shall treat this matter with conciliation. I think our conciliatory spirit is shown in the Note itself, where we invite discussion with German representatives, which is about to begin.
  Our special case in this matter is fortified by a consideration of the import and export figures. There does not seem to us to be any valid reason why the profit made by Germany out of her trade with this country should be diverted to the detriment of the British holders of German bonds. We intend to use the powers which we are taking, with moderation. In the first instance only 20 per cent. of the Customs value of the goods will be paid by the importers to the clearing

  869
  house, the rest being remitted to Germany. As Germany has herself stated that she intends to continue paying her debts in marks, the exporter of goods ought to receive payment in full. Supposing, asks the right hon. Gentleman, the Reichsbank does not pay the exporter in full. Of course, that is the concern of the Reichsbank, and it would be tantamount to a further default on Germany's part if she failed to do so, because she herself has offered to pay in marks. The difficulty, as she alleges, is the power of transfer, a difficulty which we are hereby assisting her to solve.
  So long as no steps are taken by Germany to restrict trade in any artificial manner, there is no reason why this system of paying 20 per cent. to the clearing house should not work to the mutual convenience of both sides. Of course, if Germany takes other steps in the matter I candidly admit that the Bill arms us with the fullest possible powers. The Bill has been subjected by the hon. and gallant Member for North East Bethnal Green (Major Nathan) to a close scrutiny and analysis, and the conclusion of his remarks is to show that we are taking complete powers. That I do not deny, but that we shall use them with moderation I can assure the House, and I do not think that anyone who has spoken has felt disposed to question that fact.
  All the chief European creditors of Germany have unfavourable balances of trade with Germany, and all those countries have taken similar powers in regard to Germany. It is not to be expected, considering these facts, that Germany is about to take steps which will dislocate her own commerce. Is it credible that she should do so? There is no ground therefore for fearing that the introduction of this Bill is going to have any serious commercial repercussions. It is very much to be hoped that that will be avoided. I have said that we intend to apply the powers with discretion, and I would make it plain, in reply to the hon. and gallant Member for North-East Bethnal Green, and my hon. Friend the Member for Central Leeds (Mr. Denman) that we do not intend to include in the clearing, bankers' balances, insurance payments, or financial remittances, but merely debts due in regard to German goods exported
  870
  after the 1st July. I trust that that assurance will assuage any fears that may have been entertained on the point.
  Mr. DENMAN: Will the Government accept amendment to that effect, or do they wish to have the powers as in the Bill?
  Mr. HORE-BELISHA: That is a curious question to put to me at the conclusion of my speech. The hon. Member addressed the House and if he had put that question during his speech I would have given a reasoned answer. My answer now is that if you are furnishing the British Government with powers to protect their own nationals you should not be chary about it. You should trust the Government to exercise the powers that can only be properly exercised by the Executive. Whatever temporary inconvenience there may be, and, of course, there are always inconveniences, even if you take the right and proper course of action, I am sure that both Parliament and the people of this country would have expected the Government to act as they have done in the interest of their nationals for whose business it is their duty to care.
  Bill committed to a Committee of the Whole House, for To-morrow.—[Captain Margesson.]

  DEBTS CLEARING OFFICES AND IMPORT RESTRICTIONS REPRISALS [MONEY].
  Considered in Committee under Standing Order No. 69.
  [Captain BOURNE in the Chair.]
  Resolved,
  "That for the purposes of any Act of the present Session to authorise the setting up of clearing offices for collecting and dealiny with certain debts, to authorise the imposition of restrictions on imports from certain foreign countries and for purposes connected with the matters aforesaid, it is expedient—

  (a) to authorise the payment out of moneys provided by Parliament of any expenses incurred by the Treasury or the Board of Trade in carrying the said Act into execution and of the expenses of any clearing office set up under the said Act to such an amount as may be approved by the Treasury; and

  871

  (b) to authorise the payment into the Exchequer of any fees or commissions received under the said Act by the Board of Trade or by any clearing office set up under the said Act."—[King's Recommendation Signified.]—[Mr. Hore-Belisha.]

  Resolution to be reported To-morrow.

  MILK BILL.
  As amended, considered.
  MILK BILL.

    CLAUSE 1.—(Exchequer payments in respect of milk sold for manufacture.)
    7.43 p.m.
    Sir S. CRIPPS: I beg to move, in page 2, line 25, at the end, to insert:
    "Provided that for each mouth falling between the end of March, nineteen hundred and thirty-five, and the beginning of April, nineteen hundred and thirty-six, the number of gallons of milk in respect of which payment may be made, out of moneys provided by Parliament, shall not exceed the number of gallons in respect of which such payment was made in the corresponding month in the previous year."
    This is a proviso to limit the gallonage of milk in respect of payment to be made in the second year. A number of hon. Members during the Committee stage drew attention to the fact that there was no limitation as regards the amount of money which may be expended upon the subsidising of liquid milk for cheese manufacture. The Minister stated that he was afraid to have any particular figure put in the Bill. I think it was the hon. and gallant Member for Gainsborough (Captain Crookshank) who suggested that he would be prepared to accept 4,000,000 or any figure that the Minister liked, but the Minister said, in effect, that if a figure was inserted the farmers, who are always greedy people, would turn round and say to him: "You must give us that figure, whatever happens," whether the figure would have been normally given to them or not. It was in order to get over that difficulty and at the same time to give the Minister the control that we knew he would like to have over the money to be expended by Parliament that we put down this Amendment. We felt that it clearly was not desirable, nor was it the desire of the Minister, that this subsidy should lead to an increase in the gallonage to go to the cheese factories.
    At one time the Under-Secretary of State for Scotland seemed to think that
    872
    the object of the Bill was to increase the manufacture of cheese, but the Minister of Health disposed of that argument when he said that the most desirable purpose for the use of milk was that it should be used as liquid milk and not for the manufacture of cheese. This Amendment will enable the Government to encourage its use as liquid milk. It means that whatever gallonage this year is used for the purposes of cheese-making, the gallonage next year to be subsidised must not exceed that gallon-age. It will also enable the House to retain control over the amount of subsidy, though not a control in money, which may be awkward owing to the difference in the amount per gallon which might become payable in different months of the year. We think that we are assisting the Minister of Agriculture by this Amendment, as it will achieve the treble purpose of limiting the amount of liquid milk to be used for cheese manufacture, limit the sum of money to be provided by Parliament, and also achieve the maximum flexibility as regards the apportionment of the sum.
    7.46 p.m.
    The MINISTER of AGRICULTURE (Mr. Elliot): I appreciate and welcome the desire shown by the hon. and learned Member for East Bristol (Sir S. Cripps). He seeks to give the Government a certain control, but it is a control of the quantity of milk, and he seeks to do so by taking an entirely irrelevant factor, namely, the amount of milk which has been produced in the corresponding month of the previous year. The present year is a dry year and there may be a shortage of milk; then next year this Amendment would come into force, and next year might be a wet year. I do not think the Amendment can bring about the object which the hon. and learned Member has in mind. I do not think we should exaggerate the danger. We, of course, must keep in mind the fact that we are trying something in the nature of an experiment, but, at the same time, we ought not to exaggerate its dangers. I do not anticipate any great difficulty in administering the proposal in the Bill, but I am sure that the difficulties would be increased rather than diminished by the Amendment.
    7.49 p.m.
    Duchess of ATHOLL: I find myself in rather the unusual position of having considerable sympathy with an Amendment moved by Members of the Opposition. I can see that there may be difficulties in administering the proposal, but I am disappointed in not having heard from the Minister of Agriculture more indication that he realises the very serious matter it is to sellers of liquid milk that there should not be an expansion in the quantity of milk for manufacture.
    Mr. ELLIOT: The Noble Lady is assuming that there will be no expansion. If she supports the Amendment she is ensuring that there will be no expansion.
    Duchess of ATHOLL: That is exactly why I am supporting the Amendment. Obviously, if there be an indefinite and considerable increase of milk for manufacture at low prices it means an increase in the levy, which is already proving a tremendous burden on the sellers of liquid milk. There is a real fear among producers of liquid milk in regard to this matter. It has been stated that there is no limit to the amount of milk which the board may have to take over, and, therefore, no limit to the amount of milk which may be offered for manufacture. There is no limit to the administrative expenditure of the board, and no limit to the levy which they have the power to impose on sellers of liquid milk. The sellers of liquid milk in my own area said that they were in favour of the principle of a pool to help to equalise prices, but when they voted for the scheme they were given to understand that the levy would not be more than 1d. They are now paying a levy of 5d.
    Mr. ELLIOT: I do not wish to interrupt my Noble Friend, but, surely, we are at somewhat strange cross purposes. She is actually proposing, in spite of this burden, to support an Amendment which will increase the burden by limiting the assistance which is to be given. I cannot believe that she seriously intends that. Does she seriously propose that because milk producers are already under a burden that the burden must be increased; because that is the direct result of the Amendment she is supporting.
    Duchess of ATHOLL: I understand that the purpose of the Amendment is
    874
    to limit the quantity of milk there may be available for manufacture. If there be an increase in the amount of such milk, it means an increase in the levy on the sellers of liquid milk.
    Mr. ELLIOT: The Amendment is not a limit of milk; it is a limit of money.
    7.53 p.m.
    Mr. T. WILLIAMS: The defence of the Minister of Agriculture is very weak, weaker than is usually the case. The Noble Lady seems to have hit on the true situation. It is perfectly true that while the Bill limits the payments for two years the right hon. Gentleman said over and over again that the industry is in peril, there is a huge surplus and no outlet for it. He has said what will happen to the dairying industry unless we come to their rescue, and has persuaded the House that the surplus in 1934 will be so colossal that unless Parliament comes forward with a subsidy of £1,750,000 the industry will collapse. The Noble Lady suggests that at the end of two years' time, owing to the advertising genius of the Milk Board, the popularity of liquid milk and an increased consumption in our elementary schools, the surplus ought to be a diminishing quantity; and, if the surplus is a diminishing quantity, then there is nothing in the Amendment which the right hon. Gentleman cannot accept. The right hon. Gentleman and the Noble Lady know that so long as you guarantee prices for milk it is bound to attract a greater rather than a lesser output, not necessarily of Grade A T-T milk, or certified milk, but perhaps of milk of a lower grade. There will be little or no attention paid to cleanliness; it will be merely a question of producing the maximum quantity, because guaranteed prices are available for all the milk which cannot be sold for liquid consumption.
    The right hon. Gentleman must know that certain landowners are at this moment transferring from livestock to dairy farming. That is happening at one farm in Wales of which I know, and will be happening all over the country. The result will be that unless the Minister indicates that this policy is only for two years, and no longer, and that he is going to treat the surplus at the end of 12 months or 24 months in some other way, this two-year policy will be merely a blind and the subsidy will go on

    875
    for all time. The right hon. Gentleman ought to tell the House and the country exactly what he means. The sum is definitely laid down for the first year, but for the second year it is an unknown quantity. It may be £1,750,000. We may have a lot of fine weather in the next 12 months and it may be less, but, if we have a rainy summer and the output of milk is exceptionally high, the £1,750,000 may develop into £2,500,000. The right hon. Gentleman has so little confidence in his own policy that he will not confine the payments for the second 12 months to the same amount that is to be paid during the first 12 months; and the surplus for the present 12 months is higher than it has ever been before. The Amendment is quite clear. It merely states that month by month—
    Mr. ELLIOT indicated dissent.
    Mr. WILLIAMS: We do not object to saying quarter by quarter, or half-year by half-year, or we do not object to the right hon. Gentleman taking the aggregate for the two periods of 12 months. We are anxious to satisfy ourselves that the right hon. Gentleman has some better and more constructive policy than merely subsidising the industry. If he can tell us that the board are going to take some action to reduce the amount of unclean milk being produced and sold, that the Government are going to care for a pure milk supply and will restrict the supply of unclean and tuberculous milk, we shall have more confidence in the right hon. Gentleman's policy. As it is, so long as the Treasury purse is wide open and subsidies are made available for any quantity farmers may produce, clean or unclean, then, obviously, you are going to get a huge increase in the output and to impose on the taxpayer a burden quite unknown. Having set aside £1,000,000 to advertise and popularise the consumption of liquid milk, and having determined that a proportion of the milk shall be given to school children at cheaper prices, the sale of liquid milk will increase as a result of this accumulation of efforts. In that case, unless output is going up steeply because of
    the attraction of the subsidy, the right hon. Gentleman need have no fear that the sum of money made available in the second year will be any less than that made available in the first year. The right hon. Gentleman ought to satisfy the House that the second year's output of unclean milk is not going to increase over the present year's output. The right hon. Gentleman suggests that the subsidy has nothing to do with unclean milk.
    Mr. ELLIOT: This Amendment has nothing to do with unclean milk, and I would ask the hon. Gentleman not to base his argument for it on clean or unclean milk.
    Mr. WILLIAMS: It is quite impossible for the right hon. Gentleman to dissociate any Clause from clean or unclean milk. My point is that he is providing £1,750,000 this year to subsidise milk for manufacture because there is a huge surplus. My argument is that so long as he guarantees prices to milk producers he will attract a greater output than before. As the recent Committee told the world, a very large proportion of the milk now produced is not clean. You are bound to get an increased output of unclean milk. I know the right hon. Gentleman can tell me that Clause 9 deals with an impure milk supply. My point is that there will be people on the livestock side of the industry who will transfer to dairy farming merely because of the guarantee. The £1,750,000 provided to tide dairy farmers over a temporary difficulty ought to be enough. Those farmers who produce Grade A T.T. milk have great difficulty in getting rid of it now, and any excess of supply will mean that even they are to get harsher treatment, because of an increased output, than they are getting now. I want to see some limitation on the subsidy, and some definite start of constructive thought for cleaning the milk supply and increasing the liquid consumption.
    Question put, "That those words be there inserted in the Bill."
    The House Divided: Ayes, 45; Noes, 192.

    Division No. 300.]

    AYES.

    [8.6 p.m.

    Attlee, Clement Richard

    Buchanan, George

    Cripps, Sir Stanfford

    Banfield, John William

    Cape, Thomas

    Daggar, George

    Batey, Joseph

    Cocks, Frederick Seymour

    Davies David L. (Pontypridd)

    Brown, C. W. E. (Notts., Mansfield)

    Cove, William G.

    Dobbie, Williams

    Edwards, Charles

    Jones, Henry Haydn (Merioneth)

    Samuel, Rt. Hon. Sir H. (Darwen)

    Gardner, Benjamin Walter

    Kirkwood, David

    Smith, Tom (Normanton)

    George, Major G. Lloyd (Pembroke)

    Lawson, John James

    Thorne, William James

    George, Megan A. Lloyd (Anglesea)

    Leonard, William

    Tinker, John Joseph

    Greenwood, Rt. Hon. Arthur

    Logan, David Gilbert

    Wedgwood, Rt. Hon. Josiah

    Grenfell, David Rees (Glamorgan)

    Maclean, Nell (Glasgow, Govan)

    Williams, Edward John (Ogmore)

    Griffith, F. Kingsley (Middlesbro', W.)

    Mason, David M. (Edinburgh, E.)

    Williams, Dr. John H. (Llanelly)

    Hall, George H. (Merthyr Tydvil)

    Maxton, James

    Williams, Thomas (York. Don Valley)

    Harris, Sir Percy

    Owen, Major Goronwy

    Wilmot, John

    Holdsworth, Herbert

    Parkinson, John Allen

    Janner, Barnett

    Roberts, Aled (Wrexham)

    TELLERS FOR THE AYES.—

    John, William

    Salter, Dr. Alfred

    Mr. D. Graham and Mr. Groves.

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Guinness, Thomas L. E. B.

    Petherick, M.

    Adams, Samuel Vyvyan T. (Leeds, W.)

    Gunston, Captain D. W.

    Peto, Geoffrey K.(W'verh'pt'n, Bilston)

    Alexander, Sir William

    Hacking, Rt. Hon. Douglas H.

    Procter, Major Henry Adam

    Allen, Sir J. Sandeman (Liverp'l, W.)

    Hales, Harold K.

    Pybus, Sir Percy John

    Anstruther-Gray, W. J.

    Hannon, Patrick Joseph Henry

    Raikes, Henry V. A. M.

    Applin, Lieut.-Col. Reginald V. K.

    Hartland, George A.

    Ramsay, T. B. W. (Western Isles)

    Aske, Sir Robert William

    Haslam, Henry (Horncastle)

    Ramsbotham, Herwald

    Astbury, Lieut.-Com. Frederick Wolle

    Haslam, Sir John (Bolton)

    Rawson, Sir Cooper

    Baldwin, Rt. Hon. Stanley

    Hellgers, Captain F. F. A.

    Reed, Arthur C. (Exeter)

    Balfour, Capt. Harold (I. of Thanet)

    Henderson, Sir Vivian L. (Chelmsford)

    Reid, David D. (County Down)

    Banks, Sir Reginald Mitchell

    Hills, Major Rt. Hon. John Waller

    Reid, William Allan (Derby)

    Barclay-Harvey, C. M.

    Hope, Sydney (Chester, Stalybridge)

    Rhys, Hon. Charles Arthur U.

    Barrie, Sir Charles Coupar

    Hore-Bellsha, Leslie

    Rickards, George William

    Beauchamp, Sir Brograve Campbell

    Horobin, Ian M.

    Ropner, Colonel L.

    Borodale, Viscount

    Horsbrugh, Florence

    Ross Taylor, Walter (Woodbridge)

    Boulton, W. W.

    Howard, Tom Forrest

    Ruggles-Brise, Colonel E. A.

    Bower, Commander Robert Tatton

    Hudson, Capt. A. U. M. (Hackney, N.)

    Runge, Norah Cecil

    Bowyer, Capt. Sir George E. W.

    Hudson, Robert Spear (Southport)

    Russell, Hamer Field (Sheffield. B'tside)

    Braithwaite, J. G. (Hillsborough)

    Hume, Sir George Hopwood

    Russell, R. J. (Eddisbury)

    Brass, Captain Sir William

    Jackson, Sir Henry (Wandsworth, C.)

    Rutherford, John (Edmonton)

    Broadbent, Colonel John

    James, Wing-Com. A. W. H.

    Rutherford, Sir John Hugo (Liverp'l)

    Brown, Col. D. C. (N'th'I'd., Hexham)

    Jamieson, Douglas

    Sandeman, Sir A. N. Stewart

    Brown, Ernest (Leith)

    Jesson, Major Thomas E.

    Selley, Harry R.

    Brown, Brig.-Gen. H. C. (Berks., Newb'y)

    Jones, Sir G. W. H. (Stoke New'gton)

    Shakespeare, Geoffrey H.

    Campbell, Sir Edward Taswell (Brmly)

    Kerr, Lieut.-Col. Charles (Montrose)

    Shaw, Helen B. (Lanark, Bothwell)

    Caporn, Arthur Cecil

    Kerr, Hamilton W.

    Simmonds, Oliver Edwin

    Cassels, James Dale

    Lamb, Sir Joseph Quinton

    Skelton, Archibald Noel

    Christie, James Archibald

    Leckie, J. A.

    Smiles, Lieut.-Col. Sir Walter D.

    Clarry, Reginald George

    Leech, Dr. J. W.

    Smith, Sir J. Walker- (Barrow-In F.)

    Colfox, Major William Philip

    Lees-Jones, John

    Somervell, Sir Donald

    Colville, Lieut.-Colonel J.

    Levy, Thomas

    Somerville, Annesley A. (Windsor)

    Cook, Thomas A.

    Little, Graham-, Sir Ernest

    Somerville, D. G. (Willesden, East)

    Copeland, Ida

    Lloyd, Geoffrey

    Sotheron-Estcourt, Captain T. E.

    Courtauld, Major John Sewell

    Lockwood. John C. (Hackney, C.)

    Southby, Commander Archibald R. J.

    Courthope, Colonel Sir George L.

    Loder, Captain J. de Vere

    Spencer, Captain Richard A.

    Crooke, J. Smedley

    Loftus, Pierce C.

    Spens, William Patrick

    Crookshank, Col. C. de Windt (Bootle)

    Mabane, William

    Stanley, Rt. Hon. Lord (Fylde)

    Crookshank, Capt. H. C, (Gainsb'ro)

    MacDonald, Rt. Hon. J. R. (Seaham)

    Stewart, J. H. (Fife, E.)

    Crossley, A. C.

    Macdonald, Capt. P. D. (I. of W.)

    Strauss, Edward A.

    Cruddas, Lieut.-Colonel Barnard

    McEwen, Captain J. H. F.

    Strickland, Captain W. F.

    Davies, Maj. Geo. F.(Somerset, Yeovil)

    McKie, John Hamilton

    Sugden, Sir Wilfrid Hart

    Dawson, Sir Philip

    Macmillan, Maurice Harold

    Summersby, Charles H.

    Denman, Hon. R. D.

    Magnay, Thomas

    Sutcliffe, Harold

    Denville, Alfred

    Margesson, Capt. Rt. Hon. H. D. R.

    Tate, Mavis Constance

    Drewe, Cedric

    Marsden, Commander Arthur

    Thomas, James P. L. (Hereford)

    Drummond-Wolff, H. M. C.

    Martin, Thomas B.

    Thompson, Sir Luke

    Dunglass, Lord

    Mason, Col. Glyn K. (Croydon, N.)

    Thomson, Sir Frederick Charles

    Eales, John Frederick

    Mayhew. Lieut.-Colonel John

    Todd, A. L. S. (Kingswinford)

    Edmondson, Major Sir James

    Mills, Major J. D. (New Forest)

    Train, John

    Elliot, Rt. Hon. Walter

    Mitchell, Harold P.(Br'tf'd & Chisw'k)

    Tree, Ronald

    Elmley, Viscount

    Mitcheson, G. G.

    Tufnell, Lieut.-Commander R. L.

    Emrys- Evans, P. V.

    Molson, A. Hugh Elsdale

    Wallace, Captain D. E. (Hornsey)

    Entwistle, Cyril Fullard

    Moreing, Adrian C.

    Wallace, John (Dunfermline)

    Essenhigh, Reginald Clare

    Morgan, Robert H.

    Ward, Lt.-Col. Sir A. L. (Hull)

    Evans, R. T. (Carmarthen)

    Morrison, G. A. (Scottish Univer'ties)

    Ward, Irene Mary Bewick (Wallsend)

    Fleming, Edward Lasceiles

    Morrison, William Shepherd

    Warrender, Sir Victor A. G.

    Ford, Sir Patrick J.

    Nation, Brigadier-General J. J. H.

    Whyte, Jardine Bell

    Fremantle, Sir Francis

    Nicholson, Godfrey (Morpeth)

    Williams, Herbert G. (Croydon, S.)

    Fuller, Captain A. G.

    Nunn, William

    Willoughby de Eresby, Lord

    Ganzoni, Sir John

    O'Connor, Terence James

    Wilson, Clyde T. (West Toxteth)

    Gillett, Sir George Masterman

    O'Donovan, Dr. William James

    Wise, Alfred R.

    Goodman, Colonel Albert W.

    Ormsby-Gore, Rt. Hon. William G. A.

    Withers, Sir John James

    Gower, Sir Robert

    Peat, Charles U.

    Graham, Sir F. Fergus (C'mb'rl'd, N.)

    Penny, Sir George

    TELLERS FOR THE NOES.—

    Guest, Capt. Rt. Hon. F. E.

    Perkins, Walter R. D.

    Sir Walter Womersley and Dr. Morris-Jones.

    CLAUSE 2.—(Exchequer payments in respect of milk used for manufacture by milk marketing boards.)
    Amendment made: In page 3, line 13, leave out "the last foregoing Subsection," and insert "this Section."—[Mr. Elliot.]

    CLAUSE 3.— [Exchequer payments in respect of milk converted into cheese at farms.)
    8.13 p.m.
    Mr. T. WILLIAMS: I beg to move, in page 3, line 39, to leave out, "at the beginning of," and to insert "during."
    This Amendment presumably will go hand-in-hand with the next Amendment on the Paper, in page 3, line 40, to leave out from "producer," to "and," in line 43, and to insert "was regularly manufacturing cheese."
    The simple point of the Amendment is that while the subsidy is paid for manufacturing cheese there is a certain limitation imposed on comparatively small dairy farmers. The right hon. Gentleman uses certain words which we wish to delete. We feel that this refers exclusively to the comparatively small farmer, and that he can receive the subsidy only if he has a certain number of milch cows, which have to be specified in some Order. No one quite knows yet what the number will be. We do nnt think that is fair to the small cheese producer. If the subsidy must be paid let it be paid to the small man as readily as to the large cheese factories. All we ask for in the Amendment is that if the board satisfy themselves that during this period the farmer was regularly manufacturing cheese, he shall receive the same subsidy as anyone else. The Minister refused to concede this point in Committee. I hope he has had time to look at the question since then, and that the words of this Amendment he will find more suitable than those proposed during the Committee stage.
    Mr. GEORGE HALL: I beg to second the Amendment.
    8.15 p.m.
    Mr. ELLIOT: It is true that this provision aroused a certain amount of interest during the Committee stage and it is perhaps a good thing that the matter should be referred to again, but I hope to satisfy the hon. Member for Don Valley (Mr. T. Williams) that it
    880
    would be inadvisable to make these Amendments. The desire to make sure that the small man will not be penalised is one with which we all sympathise and if it were true that the small man was being penalised under this provision, I should be willing to accept some Amendment. But, clearly, there must be some figure indicating the number of cows which a farm cheese maker should possess. Administrative difficulties, although perhaps not great, certainly do exist and we must have some criterion as to the number of cows which shall constitute a cheese-making unit and the unit is what we have in mind. The figure which has been chosen by agreement between the Milk Marketing Board and the representative of the farm cheese makers is not less than 12 cows. It may be said that that figure at once takes the small man out of the scheme altogether. It may be said that a man who possessed 12 dairy cows could not be called a small man. To meet that point, however, the board is prepared to recognise an arrangement whereby the smaller producers can join forces for the purpose of constituting cheese making units, provided that the total number of cows in possession of the partnership is not less than 12. That is to say the board in negotiating with farm cheese makers is negotiating with units of not less than 12 cows and a unit can be made up by several producers each with a smaller number of cows than 12. The board safeguards the position as to administration by saying that it will negotiate with units of 12 cows or over and I think the House will admit that that is a reasonable provision.
    So much for the general point. As to the particular point involved here, I do not think the hon. Member has worked out all the implications of his Amendments. If these Amendments were adopted in this form the advance would be payable only in cases where cheese had been regularly manufactured throughout the month. Now the farm cheese maker might be called upon at any time by the board to send milk into the liquid milk market, in order to meet a possible shortage. Clearly, it is desirable that there should be such a provision. If in the first part of the month the cheese maker had made cheese with his milk but in the second part of the month he was required by the board to

    881
    send his milk into the liquid milk market, then, under the terms of these Amendments, he would not be eligible for the advance in respect of the cheese manufactured by him in the first part of the month. It would therefore be to the advantage of the board to keep that milk out of the liquid milk market and to keep it running into the cheese market, even though there might be a shortage of liquid milk for drinking purposes. I am sure that is not an object which the hon. Member has in view. He might, of course, remove that difficulty by redrafting his Amendments, but even if we amended these Amendments the hon. Member would still fail to secure the general purpose which is, I think, secured by the arrangement I have just outlined to the House.
    8.19 p.m.
    Mr. T. WILLIAMS: By leave of the House, may I ask the right hon. Gentleman a question? The quarter, comprising April, May and June has almost expired. It is clear that these small dairy farmers, each with fewer than 12 milch cows, will have to come together in twos and threes and constitute units in order to come under this scheme. Will the small farmers who are willing to make up these units be able to qualify for the period April, May, June even though at the moment each is working by himself?
    8.20 p.m.
    Mr. ELLIOT: I can only reply to the hon. Member by leave of the House. I think there is some misapprehension here. If the small producer comes under the board he thereupon gets the right to send his milk to the board and to receive the appropriate price. He is there completely safeguarded. This provision merely safeguards the board, from the accounting point of view. If milk has been used for farm cheese manufacture, under the arrangement which is recognised in this Bill the board as a whole receives a fortification of its revenue which, from the accounting point of view, is calculated on so many gallons of milk used for cheese. If the small man was outside the scheme in the past, then, of course, he was outside it. When he is inside the scheme he is inside it for all purposes. If he is not pleased with the arrangement he can send his milk in liquid form to the board and he will be paid the full price. It would he inadvisable that an
    882
    Amendment of this kind should be retrospective. It would place difficulties in the way of carrying out the necessary accounting. The small man is safeguarded as soon as the arrangement has come into force which the board must be enabled to make with the cheese maker as to taking over output and paying the full price and as to the retention of milk on the farm for the purposes of cheese manufacture. That arrangement safeguards him; it runs from the day on which it is entered into but not before, and these payments from the Treasury are in respect of advances which have been brought about under that scheme and not any other.
    Mr. T. WILLIAMS: In view of the right hon. Gentleman's explanation and in the hope that that explanation does cover the point which I wish to raise, I beg leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Amendment made: In page 4, line 10, leave out "date on which this Act comes into operation," and insert "commencement of this Act."—[Mr. Elliot.]

    CLAUSE 5.—(Payment to Exchequer in respect of milk used in manufacturing milk products.)
    Amendments made: In page 6, line 4, leave out "a sum equal to," and insert "the sum arrived at by multiplying."
    In line 6, leave out "multiplied."—[Mr. Elliot.]
    Mr. ELLIOT: I beg to move, in page 6, line 32, leave out "sections," and insert "provisions of this Act."
    8.24 p.m.
    Mr. T. WILLIAMS: Perhaps the Minister would be good enough to explain what this Amendment means. I think I have it but I should be more satisfied if the right hon. Gentleman told us why he wishes to remove the word "sections" and to substitute the words "provisions of this Act." There may be drafting reasons for doing so. But before we allow the Amendment to pass and lest we should find afterwards that we had made a blunder in doing so, I think we ought to hear what the right hon. Gentleman has to say on the subject.
    8.25 p.m.
    Mr. ELLIOT: It is clear that "payable under the foregoing sections" is a narrower phrase than "payable under

    883
    the foregoing provisions of this Act," and as my hon. Friend will see, we use that phrase lower down in paragraph (b). Therefore, as "provisions of this Act" appears in paragraph (b), and is the wider phrase, we have thought it desirable to bring the two into harmony.
    Amendment agreed to.

    CLAUSE 6.—(Exchequer payments to Government of Northern Ireland in respect of milk used for manufacture.)
    Mr. ELLIOT: I beg to move, in page 7, line 24, to leave out "month during the period," and to insert:
    "of the twenty-four consecutive months falling."
    This was discussed on the Committee stage and is merely a drafting Amendment.
    Amendment agreed to.

    CLAUSE 9.—(Payments for securing pure milk supply.)
    8.27 p.m.
    Sir S. CRIPPS: I beg to move, in page 11, line 35, at the end, to insert:
    "(2) For the purposes of the foregoing sub-section the Minister of Agriculture and Fisheries in case of default on the part of a local authority in England, and the Secretary of State for Scotland in case of default on the part of a local authority in Scotland, shall exercise all or any of the powers conferred upon such local authority under the Diseases of Animals Acts, 1894 to 1927, or any orders or regulations made thereunder."
    This Amendment is for the purpose of giving the Minister those further powers which throughout the proceedings we have been anxious that he should have with regard to the purification of milk. The present powers which are exercised under the Diseases of Animals Acts, 1894 to 1927, are exercisable only by the local authorities, and the Orders which the Minister has made from time to time, including the Tuberculosis Order and several amending Orders, give power to the local authorities to make inspections and various regulations dealing with herds where there are infected and diseased animals. One of the striking things in the report of the Economic Advisory Committee was that, in a very large number of cases indeed, these powers were not exercised by the local authorities. In an appendix to the report, on page 132 of Command Paper No. 4591, one finds set out a list of the various counties where the local authorities have or have not
    884
    taken action with regard to the inspection of dairy cattle. Reading down them, one notices, first of all, that in a great number of the counties there are no whole-time inspectors at all, and in some there seem to be no part-time inspectors either, while the frequency of inspection in a number of cases is put down as nil. For instance, in Bedfordshire, there are no whole-time inspectors, five part-time inspectors, and the frequency of inspection is "nil."
    "There has been no inspection of dairy herds in this county."
    I do not know what the five part-time inspectors do; apparently they do not inspect. If one takes Berkshire, it shows that there are no whole-time inspectors, seven part-time, and frequency of inspection "nil."
    "Appointment of one, possibly two, whole-time veterinary officers now under consideration."
    One reads county after county where there is very little inspection, though there are others, of course, where there is inspection and where a good deal of work has been done. If one takes Kent, one reads of one whole-time and 20 part-time inspectors, but that there is no regular frequency of inspection, but
    "Whole-time veterinary officer. Controlled action taken in cases of reported tuberculosis and has also inspected herds as time allows, but under no system."
    In others, it is more systematic. What we want to do by inserting this Subsection is to give the Minister, here and now, power to act in these matters instead of the local authorities, in the case of default. It is a very limited power that we are asking the right hon. Gentleman to accept, and it is the sort of power that has often been given to Ministers as regards a very great number of matters. Even in things like the Housing Act, where local authorities do not take the appropriate action, the Minister has power to step in and to undertake the duties. We are asking here, as part of the general steps for the purification of milk, that the Minister should step in where the local authorities are not carrying out their duties under the various provisions under which they are at the present time supposed to act. We very much hope that the Minister will appreciate that we are not doing this in any hostile sense, but that we are really most anxious that in this matter the very maximum possible

    885
    should be done in the way of giving the owners of herds assistance, by inspection, to clean up their herds. If this power is given, we feel that it will be a very valuable power.
    8.32 p.m.
    Mr. ELLIOT: I fully appreciate the desire of the hon. and learned Member for East Bristol (Sir S. Cripps), and indeed the desire of the whole House, to ensure that these powers really are exercised and that we do proceed with the very desirable object of getting cleaner herds and purer milk; but might I draw the hon. and learned Member's attention to the fact that this Amendment is, I think, already covered by existing Statutes? If he will look at the Diseases of Animals Act, 1894, in Section 34, he will see that that Section had it in the rubric, "Proceedings in case of default of local authorities." The Section reads:
    "Where a local authority fail to execute or enforce any of the provisions of this Act, or of an order of the Board of Agriculture"—
    it was the Board then, not the Ministry—
    "the Board may by order empower a person therein named to execute and enforce those provisions, or to procure the execution and enforcement thereof."
    Sir S. CRIPPS: That is, a special Order is required. We are anxious that this general power to act in default shall be given in all matters, so that the staff of the Ministry can do it without a special Order.
    Mr. ELLIOT: I am indebted to the hon. and learned Member for making that point clear, but does he not think that there you might have, what we are always so anxious to avoid for administrative purposes, divided responsibility?
    Sir S. CRIPPS: It is only in cases of default.
    Mr. ELLIOT: If a local authority says, "It is all right, I am not doing it," then the Ministry ought to be doing it. If the public thinks that either or both of these bodies may be doing the work, it is possible that neither will be doing it.
    Sir S. CRIPPS: But it is not being done.
    Mr. ELLIOT: It may be true that it is not being done, but, if so, that is an argument for greater energy in pressing on with these schemes, and I can assure my hon. and learned Friend that it is our intention to administer centrally a great deal of this Measure including a good many of the lure of money provisions, but we shall not get away from a defective energy of administration by merely piling powers into the Statute. The remedy for a defect of administration is to administer, not to legislate. I suggest to my hon. and learned Friend that to put in a general power to say that somebody ought to be doing this is the surest way of seeing that nobody does it. The Act says that the local authority shall do it, and that, if they do not do it, the Department of Agriculture may by order step in. The confusion that would be caused by saying that the Ministry of Agriculture should carry out a duty which normally belongs to a local authority would be the worst possible thing in the administration of this scheme. With every desire to do what both my hon. and learned Friend and I have in mind, I do not think that the Amendment would lead to an acceleration of increased energy in the promotion of these schemes and the cleaning of herds which both of us earnestly desire to press forward.
    8.36 p.m.
    Mr. T. WILLIAMS: I am bound to confess again that the right hon. Gentleman's reply is extremely weak. He first tells us that the power exists and that if a local authority defaults he can by the provision of an Order over-ride the local authority and see that the work is carried out. The proof of the pudding is in the eating. Over 50 per cent. of the local authorities are not carrying out their duties, and in no case, so far as we can recall, has the right hon. Gentleman or any of his predecessors taken power to see that the work was done. It is simply no reply for the Minister to tell us that the local authorities have power and that they ought to do the job, but that in cases where the local authorities do not do the job the Ministry has the power. But even the Ministry does not do its job. I put a question to the right hon. Gentleman only a week ago inviting him to tell the House how many inspectors were employed by the Depart-

    887
    ment for inspecting the herds or any matter appertaining to herds. His reply was "none." He has not one inspector in the whole country for the purpose of inspecting herds or for insisting that the Tuberculosis Order or any other Order is carried out.
    There was a deputation on the 18th April from the People's League of Health to the Minister of Health. Unfortunately, the Minister of Agriculture was absent through no fault of his own. The deputation was a very influential one, and included Lord Moynihan and other well-known surgeons. In replying to the deputation the Minister said he agreed with Lord Moynihan that it was necessary to proceed simultaneously along some lines of advance. In the first place, all that was possible must be done to remove infection from herds. In the second place, steps must be taken for the protection of milk. As the deputation would be aware, he said, the Government were proposing to provide from public funds a sum not exceding £750,000 spread over the next four years in aid of a campaign for securing a purer milk supply. No final decision had yet been taken how best that money could be spent, and before reaching a decision the Government were awaiting the report of the Cattle Diseases Committee of the Economic Advisory Council under the chairmanship of Sir P. Gowland Hopkins.
    When this deputation met the Minister of Health in search of a clean milk supply which ultimately would reflect to the credit and economic prosperity of dairy farmers, the Government had not made up their minds what should be done with the £750,000, but, said the Minister of Health, everything must be done to remove infection from herds. The right hon. Gentleman has now made up his mind what he is going to do with the £750,000. He is going to allot some of it to provide a premium for the producers of Grade A tuberculin-tested milk. Therefore, we must assume that he has also made up his mind that he is going to do nothing with regard to inspections. What does the Hopkins Report invite the right hon. Gentleman to do? They say:
    "Routine veterinary inspections of dairy cattle should be made obligatory for all local authorities."
    888
    The right hon. Gentleman is not suggesting that. Although they say that routine inspections should be made obligatory, we know that 50 per cent. of the local authorities are having no inspections at all. They also say that veterinary service should be expanded under the immediate control of local authorities, with precautions designed to secure to the Department of Agriculture power to co-ordinate the activities of local authorities. They proceed to tell us approximately how many veterinary surgeons will be required. A full service could not be established immediately as it would require about 300 veterinary surgeons, but steps should be taken to provide these. Here is the Hopkins Report for which the Minister of Health and the Minister of Agriculture were waiting. They have now got the recommendations of the Committee based upon a close analysis of all the evidence that was made available, and yet the Government suggest that they are going to do nothing. We think the Government have to do more than merely shovel out their money without any kind of effort to procure a pure milk supply. I do not at all disagree with the right hon. Gentleman in encouraging by a financial premium the production of Grade A tuberculin-tested milk. It is a very noble idea, and I hope that many farmers will respond to the call, but it is not nearly enough to satisfy the problem.
    Unless the right hon. Gentleman will do one or two things, he must expect that years ahead, should he be on that bench, he will always be charged with having had a great deal of responsibility for the impure milk supply of this country. I do not use the words "impure milk" as intending to cast a reflection on all the farmers, because many of them have been striving for a long time to get an improved quality of milk, but there are many who have not been striving. They will not strive, and they are driving down their colleagues to a lower level. We ask the right hon. Gentleman to accept this Amendment to take power, not by the difficult process of an Order in every case, but to take power here and now to employ the inspectors that are necessary to get on with the job where local authorities default; and, unless he is prepared to do this, he cannot blame local authorities. Indeed, he is encouraging them to do nothing at all. I libelled Derbyshire on the Committee stage when

    889
    I said that Derby County Council had one inspector and that the landowners who sit on that body wanted to dismiss him. I made a mistake; it is Nottingham. That county has only one veterinary inspector. He cannot make many inspections, but the landowners are actually wanting to sack him. If the right hon. Gentleman will neither appeal to local authorities to do the job nor step in himself to do it, he will be vulnerable to every attack made upon him in future for the impure milk supply of the country.
    8.45 p.m.
    Major HILLS: We all want to get pure milk, but I would point out to the hon. Member for Don Valley (Mr. T. Williams) and the hon. and learned Gentleman who moved the Amendment that their complaint is really outside the scope of the Bill altogether, and I think that, if the point had been taken, the Amendment might have been ruled out of order; but that is another matter. In effect, they want to supersede the local authorities. The argument of the hon. Member for Don Valley was in favour of a centralised inspection instead of action through the local authorities. I do not think that is the right way of doing it. Possibly the inspection at present is not as good as it might be, because I cannot disregard what is said in the committee's report, but surely the answer to that is not to push aside the local authorities and act over their heads. That procedure always creates difficulties and a lot of friction, and in the end very little good is done, because if the local authorities are driven to resistance past experience has shown that they can resist a central authority. The other way of doing it is to bring all the local authorities up to the level of the best local authorities, and I am certain that is the right way. The Minister has certain powers under the Act of 1894, and under this Bill he goes on the system of rewarding the good producer rather than penalising the bad producer. I believe that is a thing that the central authority can do, although it would be out of the power of the local authorities to do it. Alongside that, pressure can be brought to bear upon the local authorities to increase their inspectorate and so to eliminate disease from our herds. I am certain from what I know of local life, and I believe the hon. Member for Don
    890
    Valley will agree, that it would do far more harm than good to attempt entirely to supersede the local authorities.
    8.49 p.m.
    Mr. HOLDSWORTH: I feel that the hon. Member for Don Valley (Mr. T. Williams) did not do justice to the Minister of Agriculture. During previous stages he has made it clear that he is very keen that inspections should be carried out, but the whole question is, How is it to be done? So far as I recall the Act of 1894 the Minister can act through a special Order. This Amendment is designed to give a general Order. I believe there is a good deal to be said for the Minister's contention that if there is a general Order it will encourage local authorities to neglect to fulfil their conditions under the Act of 1894, and to say, "If we do not do it the Minister under this Act will do it." I think perhaps there may be some legitimate complaint against the Minister of Agriculture for not using the powers which he already possesses under the Act of 1894, and if he gives the House an assurance that those powers will be used in future, and that when a local authority fails to fulfil this function the Minister will ask for a special Order and do what the local authority ought to have done, I think the case will be met.
    8.50 p.m.
    Brigadier-General CLIFTON BROWN: I think there has been some misunderstanding of the situation so far as the local authorities are concerned. The hon. Member for Don Valley (Mr. T. Williams) quoted from a report about the inspection of herds, but local authorities do not in most cases inspect a herd unless tuberculous cows are reported to them. I think, however, although I am open to correction, that there are very few local authorities which do not send medical officers of health and veterinary surgeons to the markets where the cattle are sold. I know they do all round my part of the country—at Reading, Guildford, Chichester and other places. Those officers attend the markets where the cows are sold, because they know they will find there any cows which happen to be tuberculous. The report which the hon. Member spoke of does not refer to any inspection at the markets, although I think that is carried out by most

    891
    counties, and it is really very effective in finding the tuberculous animals.
    Mr. T. WILLIAMS: Surely the hon. and gallant Member has more than confirmed all that I said. He suggests that in his part of the world, though there may be no inspection of herds, medical officers of health and veterinary surgeons attend the markets; but clearly those are the places where the farmer takes his cows to be sold for meat.
    Brigadier-General BROWN: And then they can find out if there are any tuberculous cows.
    Mr. WILLIAMS: But the farmer will have been selling milk from those tuberculous cows for months, and perhaps for years.
    8.52 p.m.
    The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Skelton): I feel there may be some slight confusion in the minds of the supporters of the Amendment between the Act of 1894 and the Milk and Dairies Act. Everything to do with clinical inspection comes under the latter Act, and the House may recollect that one of the main features of that Act is that this provision is compulsory in Scotland and voluntary in England. I do not wish to sing too loudly the praises of my native land, but I think the compulsory inspections have been- of great value. Only one inspection a year is compulsory, but in many counties one gets, in addition to that compulsory inspection, two or even three voluntary inspections a year. All that, however, has nothing to do with the Diseases of Animals Act, which, as far as I can follow the connection, has to do with the slaughter of diseased animals, a power which is exercised where there are violent outbreaks of tuberculosis. However, the main point of the hon. Members who are supporting this Amendment is that we are not taking sufficient interest in the cleaning up of the herds. I think they have forgotten the system of accredited herds. South of the Tweed, where clinical inspection is voluntary on the part of the local authorities, the system of accredited herds is the method whereby, in fact, that voluntary inspection will be made compulsory; for this reason, that the owners of dairy herds in counties where there is no inspection will
    892
    be unable to get the necessary certificate—I am not sure that that is the correct word—to show that their herds are accredited. Once we link up the system of accredited herds with encouragement in the production of pure milk we get a stimulus to the extension of the system of clinical inspections of herds, and we think that will do a great deal more than can be done under the Diseases of Animals Act. The hon. Member for Don Valley (Mr. T. Williams) is very much interested in this topic; so are we. We think that there are other ways, beside giving the Minister powers in this Bill under the Diseases of Animals Act. I am satisfied that in England—where inspection is not used compulsorily and where, as I understand it, it does not need legislation but an Order, and not by the Minister of Agriculture but by the Minister of Health, to make it compulsory—to develop a system of accredited herds will induce compulsion to follow as an inevitable sequel.
    8.56 p.m.
    Mr. LEONARD: I am glad that the Under-Secretary has said a word on behalf of Scotland. He must not forget, however, that there have been detailed claims, especially in regard to Glasgow and its milk, which entitle us to endeavour to make inspection of the herds from which that milk comes as tight as possible. He must be aware that, of the samples taken in Glasgow, not less than from 8 per cent. to 10 per cent. have been found to be tubercular. That warrants us in supporting any proposal to strengthen inspection. I had an opportunity coming down in the train to-day of a look at the "Home Farmer." With regard to accredited herds, I notice that a lot of farmers are writing to their own journal saying that they want to be left alone. They do not seem to have any desire to have further inspection imposed upon them, but they feel that they should be allowed to go along as at the present time. I suggest that this Amendment is something which is required.
    Sir JOSEPH LAMB: Will the hon. Member explain what he meant when he said that from 8 per cent. to 10 per cent. of the samples were tubercular? Did he mean 10 per cent. of the samples or 10 per cent. of the bulk of the milk, because they are very different things?
    Mr. LEONARD: The only measure you can take is the samples which are taken.
    Sir J. LAMB: That method is very unfair. You may take a sample from three or four cows and the sample is accredited only with the same weight as one taken from 100 cows.
    Mr. LEONARD: I have no objection to a machine being erected which will enable us to inspect them all, if the hon. Member will agree to the oncost.
    Question put, "That these words be there inserted in the Bill.
    "The House divided: Ayes, 49; Noes, 209.

    Division No. 301.]

    AYES.

    [8.59 p.m.

    Attlee, Clement Richard

    George, Megan A. Lloyd (Anglesea)

    Nathan, Major H. L.

    Banfield, John William

    Greenwood, Rt. Hon. Arthur

    Owen, Major Goronwy

    Batey, Joseph

    Grenfell, David Rees (Glamorgan)

    Parkinson, John Allen

    Brown, C. W. E. (Notts., Mansfield)

    Hall, George H. (Merthyr Tydvil)

    Rathbone, Eleanor

    Buchanan, George

    Harris, Sir Percy

    Rea, Walter Russell

    Cape, Thomas

    Holdsworth, Herbert

    Roberts, Aled (Wrexham)

    Cocks, Frederick Seymour

    Janner, Barnett

    Salter, Dr. Alfred

    Cove, William G.

    Jenkins, Sir William

    Samuel, Rt. Hon. Sir H. (Darwen)

    Cripps, Sir Stafford

    John, William

    Smith, Tom (Normanton)

    Daggar, George

    Jones, Henry Haydn (Merioneth)

    Thorne, William James

    Davies, David L, (Pontypridd)

    Kirkwood, David

    Tinker, John Joseph

    Dobbie, William

    Lawson, John James

    Williams, Edward John (Ogmore)

    Edwards, Charles

    Leonard, William

    Williams, Dr. John H. (Llanelly)

    Evans, David Owen (Cardigan)

    Logan, David Gilbert

    Williams. Thomas (York, Don Valley)

    Foot, Isaac (Cornwall, Bodmin)

    Maclean, Nell (Glasgow, Govan)

    Wilmot, John

    Gardner, Benjamin Walter

    Mason, David M. (Edinburgh, E.)

    George, Major G. Lloyd (Pembroke)

    Maxton, James.

    TELLERS FOR THE AYES.—

    Mr. D. Graham and Mr. Groves.

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Eales, John Frederick

    Lambert, Rt. Hon. George

    Adams, Samuel Vyvyan T. (Leeds, W.)

    Edmondson, Major Sir James

    Leech, Dr. J. W.

    Alexander, Sir William

    Elliot, Rt. Hon. Walter

    Lees-Jones, John

    Allen, Sir J. Sandeman (Liverp'l, W.)

    Ellis, Sir R. Geoffrey

    Leighton, Major B. E. P.

    Anstruther-Gray, W. J.

    Elliston, Captain George Sampson

    Lennox-Boyd, A. T.

    Applin, Lieut.-Col. Reginald V. K.

    Emrys-Evans, P. V.

    Levy, Thomas

    Aske, Sir Robert William

    Entwistle, Cyril Fullard

    Little, Graham-, Sir Ernest

    Atholl, Duchess of

    Essenhigh, Reginald Clare

    Lockwood, John C. (Hackney, C.)

    Baldwin, Rt. Hon. Stanley

    Evans, R. T. (Carmarthen)

    Loder, Captain J. de Vere

    Baldwin-Webb, Colonel J.

    Everard, W. Lindsay

    Loftus, Pierce C.

    Balfour, Capt. Harold (I. of Thanet)

    Fleming Edward Lascelles

    Lumley, Captain Lawrence R.

    Banks, Sir Reginald Mitchell

    Ford, Sir Patrick J.

    Mabane, William

    Barclay-Harvey, C. M.

    Fremantle, Sir Francis

    McCorquodale, M. S.

    Barrie, Sir Charles Coupar

    Fuller, Captain A. G.

    Mac Donald, Rt. Hon. J. R. (Seaham)

    Beauchamp, Sir Brograve Campbell

    Ganzoni, Sir John

    McEwen, Captain J. H. F.

    Beaumont, Hon. R. E. B. (Portsm'th, C.)

    Gillett, Sir George Masterman

    McKie, John Hamilton

    Borodale, Viscount

    Gluckstein, Louis Halle

    McLean, Dr. W. H. (Tradeston)

    Boulton, W. W.

    Goldie, Noel B.

    Magnay, Thomas

    Bower, Commander Robert Tatton

    Goodman, Colonel Albert W.

    Margesson, Capt. Rt. Hon. H. D. R.

    Bowyer, Capt. Sir George E. W.

    Graham, Sir F. Fergus (C'mb'rl'd, N.)

    Marsden, Commander Arthur

    Braithwaite, J. G. (Hillsborough)

    Griffith, F. Kingsley (Middlesbro', W.)

    Martin, Thomas B.

    Brass, Captain Sir William

    Guest, Capt. Rt. Hon. F. E.

    Mason, Col. Glyn K. (Croydon, N.)

    Broadbent, Colonel John

    Guinness, Thomas L. E. B.

    Mayhew, Lieut.-Colonel John

    Brown, Col. D. C. (N'th'I'd., Hexham)

    Gunston, Captain D. W.

    Mills, Major J. D. (New Forest)

    Brown, Ernest (Leith)

    Hacking, Rt. Hon. Douglas H.

    Mitchell, Harold P.(Br'tfd & Chisw'k)

    Brown, Brig. -Gen. H. C. (Berks., Newb'y)

    Hales, Harold K.

    Mitcheson, G. G.

    Browne, Captain A. C.

    Hammersley, Samuel S.

    Molson, A. Hugh Elsdale

    Campbell, Sir Edward Taswell (Brmly)

    Hannon, Patrick Joseph Henry

    Moreing, Adrian C.

    Campbell-Johnston, Malcolm

    Haslam, Henry (Horncastle)

    Morgan, Robert H.

    Caporn, Arthur Cecil

    Haslam, Sir John (Bolton)

    Morris-Jones, Dr. J. H. (Denbigh)

    Cassels, James Dale

    Hellgers, Captain F. F. A.

    Morrison, G. A. (Scottish Univer'ties)

    Cayzer, Maj. Sir H. R. (P'rtsm'th, S.)

    Henderson, Sir Vivian L. (Chelmsford)

    Morrison. William Shephard

    Christie, James Archibald

    Hills, Major Rt. Hon. John Waller

    Munro, Patrick

    Clarry, Reginald George

    Hope, Sydney (Chester, Stalybridge)

    Nation, Brigadier-General J. J. H.

    Colfox, Major William Philip

    Horobin, Ian M.

    Nicholson, Godfrey (Morpeth)

    Cook, Thomas A.

    Horsbrugh, Florence

    Nunn, William

    Copeland, Ida

    Howard, Tom Forrest

    O'Connor, Terence James

    Courtauld, Major John Sewell

    Hudson, Capt. A. U. M. (Hackney, N.)

    O'Donovan, Dr. William James

    Courthope, Colonel Sir George L.

    Hudson, Robert Spear (Southport)

    Ormsby-Gore, Rt. Hon. William G. A.

    Crooke, J. Smedley

    Hume, Sir George Hopwood

    Penny, Sir George

    Crookshank, Col. C. de Windt (Bootle)

    Hunter, Dr. Joseph (Dumfries)

    Petherick, M.

    Crookshank, Capt. H. C. (Gainsb'ro)

    Hunter, Capt. M. J. (Brigg)

    Powell, Lieut.-Col. Evelyn G. H.

    Crossley, A. C.

    Jackson, Sir Henry (Wandsworth, C.)

    Procter, Major Henry Adam

    Cruddas, Lieut.-Colonel Bernard

    James. Wing-Com. A. W. H.

    Raikes, Henry V. A. M.

    Davies, Maj. Geo. F. (Somerset, Yeovil)

    Jamleson, Douglas

    Ramsay, T. B. W. (Western Isles)

    Dawson, Sir Philip

    Jesson, Major Thomas E.

    Ramsbotham, Herwald

    Denman, Hon. R. D.

    Jones, Sir G. W. H. (Stoke New'gton)

    Rankin, Robert

    Denville, Alfred

    Jones, Lewis (Swansea, West)

    Reed, Arthur C. (Exeter)

    Drewe, Cedric

    Kerr, Lieut.-Col. Charles (Montrose)

    Reid, David D. (County Down)

    Drummond-Wolff, H. M. C.

    Kerr, Hamilton W.

    Reid, William Allan (Derby)

    Dunglass, Lord

    Lamb, Sir Joseph Quinton

    Rhys, Hon. Charles Arthur U.

    Rickards, George William

    Smith, Sir J. Walker- (Barrow-In-F.)

    Todd, A. L. S. (Kingswinford)

    Robinson, John Roland

    Smith, Sir Robert (Ab'd'n & K'dine, C.)

    Touche, Gordon Cosmo

    Ropner, Colonel L.

    Somervell, Sir Donald

    Train, John

    Ross Taylor, Walter (Woodbridge)

    Somerville, Annesley A (Windsor)

    Tree, Ronald

    Ruggles-Brise, Colonel E. A.

    Somerville, D. G. (Willesden, East)

    Tufnell, Lieut.-Commander R. L.

    Runciman, Rt. Hon. Walter

    Sotheron-Estcourt, Captain T. E.

    Wallace, Captain D. E. (Hornsey)

    Runge, Norah Cecil

    Southby, Commander Archibald R. J.

    Wallace, John (Dunfermline)

    Russell, Alexander West (Tynemouth)

    Spencer, Captain Richard A.

    Ward, Irene Mary Bewick (Wallsend)

    Russell, Hamer Field (Sheffield, B'tside)

    Spens, William Patrick

    Warrender, Sir Victor A. G.

    Russell, R. J. (Eddisbury)

    Stanley, Rt. Hon. Lord (Fylde)

    Whyte, Jardine Bell

    Rutherford, John (Edmonton)

    Stewart, J. H. (Fife, E.)

    Williams, Herbert G. (Croydon, S.)

    Rutherford, Sir John Hugo (Liverp'l)

    Storey, Samuel

    Wilson, Lt.-Col. Sir Arnold (Hertf'd)

    Salmon, Sir Isidore

    Strauss, Edward A.

    Wilson, Clyde T. (West Toxteth)

    Salt, Edward W.

    Strickland, Captain W. F.

    Wise, Alfred R.

    Sandeman, Sir A. N. Stewart

    Sugden, Sir Wilfrid Hart

    Withers, Sir John James

    Sanderson, Sir Frank Barnard

    Summersby, Charles H.

    Shaw, Helen B. (Lanark, Bothwell)

    Sutcliffe, Harold

    TELLERS FOR THE NOES.—

    Simmonds, Oliver Edwin

    Tate, Mavis Constance

    Sir Waiter Womersley and Lieut.-

    Skelton, Archibald Noel

    Thomas, James P. L. (Hereford)

    Colonel Sir A. Lambert Ward.

    Smiles, Lieut.-Col. Sir Walter D.

    Thompson, Sir Luke

    Amendment made: in page 11, line 40, leave out "any such board," and insert "the board administering any such scheme."—[Mr. Elliot.]
    9.5 p.m.
    Mr. ELLIOT: I beg to move, in page 12, line 6, after "sum," to insert "not exceeding one penny."
    This Amendment is put down in order to meet a criticism by the board that it was a little unfair that the Minister should find it possible, if the Bill becomes an Act, to make an Order compelling them to make an absolutely unlimited payment, and, therefore, they have suggested that there should be some limitation. I think that that is a reasonable suggestion, and accordingly I am moving this Amendment. I do not think it is necessary to expatiate at any length on the matter. The House has decided that we shall pay a sum of 1d. per gallon, and I think it would be unreasonable to leave the position, after the expiry of the four years, such that the board might be required by the Minister to pay more. It will, of course, be open to the board to pay more if they so desire, but it is perhaps not reasonable to ask them to accept a liability to pay more than the House has itself determined that it is desirable that the House should authorise.
    Sir S. CRIPPS: I should like to ask the right hon. Gentleman if he is quite certain that, if these words are put in, farmers will not say that they are entitled to 1d. when the Milk Board may only want to pay them ½d. That is the argument that the right hon. Gentleman puts forward if we try to put in any terms of limitation.
    Mr. ELLIOT: I can only say that this was the Board's own desire, and I take it that they would not wish to expose themselves to a larger payment than would otherwise have been the case. I think we may trust them not to have laid themselves open to a greater liability than they would otherwise have had.
    9.7 p.m.
    Sir J. LAMB: It is quite true that producers have a considerable fear as to what the Minister may do under Subsection (2) of Clause 9. I should like to thank my right hon. Friend for what he is proposing to do with regard to the limit of 1d.; I presume it is the result of an agreement that he has come to with the board; but under the Order he will (have the right also of determining the circumstances under which the production is carried out. Would he be good enough to say whether these Orders, when they are made by him, will have to be laid on the Table of the House and come under the criticism of Members of the House or of the board, and whether it will be possible either to vary or annul an Order if the producers themselves or Members of the House so desire? I think that, before we part from this Amendment, we ought to have an assurance that at any rate the House or the producers themselves other than the board will have the right to make some statement and put forward their case as to the conditions laid down in the Orders which it is proposed to make.
    Mr. DEPUTY-SPEAKER (Sir Dennis Herbert): I hardly think that that arises on this Amendment.
    Sir J. LAMB: The 1d., I take it, was given merely for the purpose of meeting

    897
    the difficulties which have been expressed to the Minister and to which he has referred, but it only goes half-way, and that is why I thought I should be in order. In any case, might I ask whether the Orders will be laid on the Table of the House?
    9.10 p.m.
    Duchess of ATHOLL: I gathered that the hon. and learned Member for East Bristol (Sir S. Cripps) was afraid that the producers might demand not less than 1d. per gallon as a result of this Amendment if it were embodied in the Bill. I venture to point out that the owners of accredited herds, in Scotland anyhow, say that 1d. will be quite insufficient to recoup them for the additional expense of producing Grade A T.-T. milk. Their claim is that the additional cost entailed upon them is not less than 3d. per gallon, and therefore 1d. will only go a very short way to meet the extra cost in which they are involved. I am not able to investigate that claim, and cannot say whether it is well founded, but if it is—and the case was put to me very strongly the other day by a man who has owned a herd of that kind for several years—it seems to me that it will be very difficult for the owners of these herds to continue to produce milk of that quality.
    I should like some information from the Minister as to how far he expects that this premium of 1d. which he proposes will encourage the owners of herds that are not tubercule-free to undertake the expense of making them free from infection. I think it wuold be very useful if my right hon. Friend could give us some indication as to the number of herds not now free to which this 1d. is intended to extend. Personally, I should be glad if he could leave the question of the amount of the premium open, because it seems to me that this claim of the owners of such herds that the additional cost entailed is 3d. per gallon ought to be thoroughly investigated, and, if it should prove to be well founded, I cannot help thinking that my right hon. Friend would be well advised to spread the butter more thickly, so to speak, and over a less wide extent—that, in other words, it would be better to ensure that the effect of the premium will be to keep existing accredited herds in existence, rather than attempt to bring in more by spreading the premium more widely and thus losing many of the herds that we at present
    898
    have. I would ask my right hon. Friend, therefore, if he could give us any indication as to how many new cows may be covered by this 1d. per gallon, and, perhaps more important, whether he would not undertake a thorough investigation into the claim of the owners of accredited herds that the extra cost is 3d. per gallon.
    Amendment agreed to.
    9.14 p.m.
    Colonel RUGGLES-BRISE: I beg to move, in page 12, line 7, at the end, to insert:
    "Provided that before the end of the period mentioned in the foregoing subsection the boards administering any milk scheme for the time being in force shall cause a poll of registered producers to be taken in accordance with the provisions of the Agricultural Marketing Act, 1981, relating to the amendment of schemes, on the question as to whether the boards shall accept the liability to make the payments mentioned in this sub-section, and, unless the result of such poll is in favour of the boards accepting such liability, no order shall be made under this sub-section."
    We have just heard from the Minister on the last Amendment that he has been able to meet the wishes of the board by limiting the amount of liability under this Clause. By my Amendment I am asking him to go a step further. What is to happen when the four-year subsidy period comes to an end? The £750,000 will by that time have been expended and the board will be taking upon itself full liability up to the new limit of a 1d. a gallon. The producer asks, I think rightly, why the board should be paying in future by the order of the Minister a sum of money out of the milk pool in respect of the provisions of this Clause. It did not figure in the original marketing scheme. The Marketing Act, 1931, lays down most clearly that, if the board is to commence making payments for any purposes out of the milk pool which are not specified in the original scheme, there must be an amendment to the scheme, and it further lays down that there can be no Amendment to the scheme without a poll of the producers. It will be seen, therefore, that under the Clause there is a completely new departure. If the right hon. Gentleman accepts the Amendment, at the end of the four-year period, if it be found desirable for a continuation to be made wholly out of the Milk Fund at the disposal of the board, it will become necessary to have a poll of pro-

    899
    ducers I hope very much that my right hon. Friend will see the force of that argument. In putting forward this Amendment, I am giving voice to a feeling which is very strongly held by milk producers throughout the country.
    9.19 p.m.
    Sir J. LAMB: I beg to second the Amendment. Apparently, I am not going to get a reply to my previous question whethers Orders will be laid; consequently I do not think the producer, as producer, other than being a member of the board, will have any power with regard to the Order. This at least will be an opportunity for him to consider the Order and to decide whether it is one that he can accept.
    9.20 p.m.
    Mr. ELLIOT: I think in this case my hon. and gallant Friend is being a great deal more royalist than the king. The Milk Marketing Board is completely satisfied with the Amendment that has just been made. I think it is a little unnecessary on the part of the hon. and gallant Gentleman to move this Amendment seeking to safeguard the Milk Marketing Board and the producers under it, against a danger against which the board thinks they have guarded themselves. It is not difficult to see why. If any of us had a scheme placed before us with certain advantages and some disadvantages, certain pecuniary rewards and pecuniary liabilities and four years after we had had the pecuniary rewards we were allowed to have a poll as to whether we would accept the liabilities or not, I can well imagine that we should reject them by an overwhelming majority. This is a balanced policy all hanging together, and if the producers reject one part of the policy, they must reject it all. There is nothing in the marketing scheme about this liability, nor is there anything about the cheese-milk advances. They cannot have it both ways. The Bill provides for certain advances, which, by a generous provision of the House, may never be repaid at all, running into many hundreds of thousands of pounds, with certain liabilities attached—liabilities for cleaning up the herds—which for four years are being shouldered by the Government. At the end of that time after the producers have had all the advantages, to hold out to them the
    900
    temptation to repudiate the liabilities which they have also accepted and which they must accept if they are to receive any benefit under the Bill, would be a totally unwarranted course. It is true that there is no provision for this liability in the milk marketing scheme, but there is no provision either for the receipt of several hundreds of thousands of pounds from the taxpayers. If one be rejected, the whole must be rejected; and, at the end of the four years, to throw upon the producers the possibility of having to repay in any circumstances the sums that they have received is to bring upon them a dilemma which it is unnecessary to present to them. I hope my hon. and gallant Friend will not find it necessary to press the Amendment.
    9.24 p.m.
    Mr. T. WILLIAMS: We have been searching for several days to find a point of agreement with the right hon. Gentleman. At last, thanks to the hon. and gallant Gentleman, we have discovered it, and we are not only glad to find the right hon. Gentleman rejecting the Amendment, but also pointing out that there are liabilities as well as assets in political life. I am glad the Minister has rejected the Amendment.
    Lieut. - Colonel ACLAND - TROYTE: This is not entirely a gift. It was expected when the Government introduced the scheme that certain steps would be taken. It was expected that the Government would do something to keep out imports of milk products. My right hon. Friend really might take more notice of this Amendment.
    Mr. ELLIOT: The Amendment has nothing to do with the contention put forward to the House. I should be totally out of order if I attempted to argue it now.
    Duchess of ATHOLL: If he will allow me to say so, I do not think my right hon. Friend has given quite a fair picture in what he said just now. The milk industry has not asked for this Bill. Clause 1 provides for an advance to raise the price of butter as a temporary help in a time of emergency. I regard this advance as an attempt to rectify some of the defects in the scheme that have become apparent but if the price of cheese milk rises above a certain level, the advances have to be repaid.

    901
    Therefore, I cannot say that I regard this as more than an emergency help. I do not think my right hon. Friend can say that the milk producers have asked for the other provisions of the Bill, not at any rate for the advance for freeing herds from tuberculosis, still less that the expense of freeing herds when the Treasury grant is exhausted should be thrown on their shoulders. An hon. Member on Second Heading stressed the liabilities which the Bill would in future years put on producers. This Amendment deals in particular with a matter with which I dealt on a former occasion. I then asked my hon. Friend the Under-Secretary of State for Scotland if when the grant was exhausted this payment or premium would fall on the producers. He said it was impossible to say at the time, but he afterwards wrote me a letter in which he indicated that the industry if in a sufficiently good position would be called on to pay. Now the Minister is ridiculing the suggestion that the industry should be called on to say whether it is prepared to shoulder this burden though, as my hon. and gallant Friend has shown, the scheme provides for such a poll if the industry is being asked to undertake new expenditure. When the milk producers in my part of Scotland realise that the Minister ridicules the suggestion that they should not be allowed to decide if this burden is to fall on them at the end of four years, the serious feeling already aroused will become further exacerbated.
    Mr. ELLIOT: The Clause itself specifically provides for consultation.
    Captain HEILGERS: The Member for Don Valley (Mr. T. Williams) called milk producers beggars. He said the other day that this clean milk and clearing up of the herds was going to cost producers something between £20,000,000, £30,000,000 or even £50,000,000. That at any rate is a very big burden for producers.
    Mr. WILLIAMS: What I said was that it had been estimated that to clear up the herds would cost that. If the National Government remains in office, I cannot imagine it costing producers a penny.
    Brigadier-General BROWN: I really must object to what has been said. I
    902
    voted against the scheme and was perfectly certain that it would fail and that it would have to be bolstered up by this and that subsidy unless the Government put in force the Marketing Act, especially Section 2 stopping the imports of foreign milk products. I object to the producer being told that he has no right to object to this point. As my hon. and gallant Friend who moved the Amendment said the milk producers are not going to have the Milk Marketing Board or anything else if they have these pernicious burdens. If Section 2 of the Marketing Act is put into force there will be no necessity for this Bill at all, except for the cleaning up of the milk part, of which I am in favour. If the Minister of Agriculture will not take warning he should realise it is unwise to shelter behind the Milk Board. He should take more to heart the words of my hon. and gallant Friend.
    9.31 p.m.
    Sir S. CRIPPS: I really must pour a little oil on the troubled waters. This is a deplorable display of temper and I do hope that the right hon. Gentleman's followers will not be quite so vicious because the Chancellor of the Exchequer will not allow them more money. After all, I can understand the feeling of hon. Members who are getting only about £5,500,000; it is not very much. Still, perhaps some of them also have wheat and are getting something for that; something for meat as well; and then there is sugar. On the whole, therefore, they have not done badly, and I do think they might be a little kinder now that the Government are trying to induce a little Fascist discipline into agriculture.
    9.32 p.m.
    Colonel RUGGLES-BRISE: My right hon. Friend has said that this Bill is a completely balanced scheme, and that if the producers were to receive a considerable sum of money in assistance towards the industry, they should at least put up with the liability under another portion of the scheme. I must remind him that under the first part of the scheme the whole of the money advanced by the Treasury is repayable, and therefore on that point his argument rather falls to the ground. I would only say that if these repayments become due, as they will, under this Bill, they will do so just at the same time as others become due,

    903
    so that producers will have an additional liability under Clause 9.
    9.33 p.m.
    Mr. ELLIOT: I am sure that I value very much my hon. Friend's suggestion and the discussion which it has been admitted on all sides of the House has been useful, even the contribution of my hon. and learned Friend the Member for East Bristol (Sir S. Cripps).
    Sir S. CRIPPS: The oil has had its effect.
    Mr. ELLIOT: I would only draw my hon. and gallant Friend's attention, in regard to what he has said about these advances being repayable and therefore an added burden on the producer, to the fact that they are only repayable if the price of cheese milk rises, not to a point where the advance was made, but to a point a penny above that. Therefore, the liability to the producer is considerably increased. I sympathise with the case of my hon. and gallant Friend the Member for Newbury (Brigadier-General Brown), because he said that he voted against the scheme all the way through, and naturally it is very creditable on his part to show as much interest as he does and to assure us of his interest in the scheme, in spite of the fact that he is opposed to it. I know that many Members are curious as to the whole structure of organisation which those Acts represent.
    Brigadier-General BROWN: The Milk Scheme organisation.
    Mr. ELLIOT: Milk schemes and other schemes, but I beg of my hon. and gallant Friend to admit that, at any rate, it is agreed by all the producers that had the scheme not been in existence veritable chaos would have resulted, and the full price would not have been received. Many small, struggling producers in distant parts of the country would not have received it, or anything like it. I think it is generally agreed that it has brought order into a situation which otherwise would have been one of chaos, and is enabling the organised producer to act in line with the organised distributor. It is possible that he has not obtained the full advantages of that organisation, but the organisation is young. The Government recognise their liability and the necessity of reaching a solution. It is not in any bargaining spirit that they bring forward
    904
    these matters. Considerable advantages are secured for the producers by the provisions of the early portions of the Bill. They are advantages which would not be secured for the producer by a tariff on imported milk products. Advantages over and above the tariff imposed as a result of the Ottawa Agreements are being brought to the milk producers as the result of the Bill. I think that my noble Friend the Member for West Perth (Duchess of Atholl) does us less than justice when she says that the Bill was not asked for by the milk industry. Deputation after deputation came to me and my hon. Friend the Under-Secretary asking, above all things, that something should be done for cheese-makers. If there were one thing which the milk industry said more than another, it was that a critical situation might arise in the summer if the cheese industry of this country were not preserved. The Bill was asked for and welcomed by the industry. The Noble Lady does less than justice when she represents by her great argumentative skill these provisions as merely a series of ingenious devices put forward by Ministers with very little to do. This is a practical contribution to the needs of the industry. She need not fear arbitrary action being taken in future by the Minister. The Minister cannot make an Order until after consultation with the board.
    Duchess of ATHOLL: Will my right hon. Friend tell the House if the producers—
    Mr. DEPUTY-SPEAKER: I must remind the Noble Lady that we have already, by leave of the House, had two speeches each from two hon. Members on this Amendment.
    Duchess of ATHOLL: I merely want to ask a question. Has my right hon. Friend had any request from the industry to introduce this provision in regard to cleaning herds with the understanding that the burden would fall on the industry?
    Mr. ELLIOT: I have certainly had representations from the industry that assistance should be given in respect to this milk. I certainly had representations from the industry that assistance should be given towards cleaning up herds and representations from the in-industry for increased assistance for pub-

    905
    licity and in respect of the provision of milk for school children. I also satisfied the Milk Marketing Board on this very provision by the insertion of an Amendment which they asked me to put in. I think it is straining a little hard specifically to ask that the industry should not accept this particular part of the scheme, which is a balanced whole and must stand or fall together.
    Amendment negatived.
    9.42 p.m.
    Sir A. WILSON: I beg to move, in page 12, line 16, at the end, to insert:
    "(4) For the purposes of this Act the words pure and free from the infection of any disease' means milk which has—

    (a) not been treated by heat in such a way as to destroy or modify its natural characteristics and to which no foreign matter such as water, skimmed milk, fat, or other substances have been added and is—

    (b) of a standard of bacteriological purity and of nutritional content;

    which shall be fixed from time to time by the Minister of Agriculture and the Minister of Health after a public inquiry at the cost of the Milk Marketing Board."
    This Amendment, which stands in my name and the names of 30 other Members, deals with the definition and meaning to be given to the words "pure and free from the infection of any disease." To the best of my knowledge, these words have never been defined hitherto in any way, and a great deal must hang upon the meaning which is attached to them. The Amendment proposes, first, to exclude pasteurised milk or milk heated in other ways from the scope of the Bill, and from the scope of milk to receive subsidy from Government funds. If pasteurised milk were to be regarded as eligible for the subsidy, it is clear that there would be available so much pasteurised milk on which money should be paid that the Clause would virtually cease to operate. There is another reason. The Hopkins Report, on which I pin my faith, is exceedingly lukewarm in all its references to pasteurisation. It says that there is not sufficient evidence to support the presumption that pasteurisation is harmless. It avoided saying that it is beneficial. It admits that when children were fed on pasteurised milk in New York the great majority of them at once became ricketty, but states that it is quite possible to replace the loss of vitamins due to heating by the addi-
    906
    tion of orange, lemon or citrous fruit juices "which, in these days, can be obained very easily." Anyone with a knowledge of the working class conditions and rural districts knows very well that orange, lemon or citrous fruit juices cannot be easily and cheaply obtained. It costs something like a shilling a week to purchase the fruit to provide the necessary juice, and to suggest that pure milk means milk deprived of certain vitamins which can be replaced by something added if the mother remembers and can afford it, is not fair to the community.
    If one turns to foreign countries one finds that pasteurised milk is not regarded as pure in any advanced country. In America, for example, no milk may be purchased or sold as pasteurised unless from tuberculin-tested herds. That is a statement which appears on page 196 of the Hopkins Report. Pasteurised milk is not, I understand, allowed to be sold at all for human consumption in Germany or Denmark. Pasteurisation is regarded as a commercial process which has great value in preventing deterioration and decay in milk, but does not necessarily render it germ-free or germ-proof. All butter is made compulsorily from pasteurised milk, but milk is not normally sold or allowed to be sold in public if it is pasteurised.
    9.45 p.m.
    Mr. O'CONNOR: Is it in order to move an Amendment which is unintelligible? It purports to give a definition of milk "pure and free from infection" by setting out in (a) something which it must not have been. The following paragraph (b)—
    "of a standard of bacteriological purity and of nutritional content."
    relates to what it is, not to what it has. Also the last two lines of the Amendment are apparently not attached to paragraph (b). As printed on the Order Paper they attach to the whole of the proposed Sub-section (4), and make nonsense. In my submission, the Amendment as it stands is unintelligible and cannot seriously be proposed to be put into the Act.
    Mr. SPEAKER: I do not know about unintelligibility, but as far as I read the Amendment the grammar seems to be fairly good. That is really all that I am concerned with.
    9.47 p.m.
    Sir A. WILSON: Perhaps I owe an apology to the hon. and learned Member, whose doubts would be set at rest if the word "has" were put in the Amendment after (a). There are good reasons for not imposing pasteurised milk as pure milk upon the population of this country without much more evidence and inquiry. I rely entirely upon the Hopkins Report for the views that I am expressing on behalf of a very large number of people outside the House, who have expressed their opinions very strongly. The Hopkins Report was not designed primarily to discuss the question of pasteurisation. It dealt with cattle diseases, and the reference to pure milk and pasteurisation were incidental to its terms of reference. In the second place, we have no evidence before us. We do not know what evidence was put before the Committee of the Economic Advisory Council, of which Sir Frederick Gowland Hopkins was the chairman. The evidence is not available, not even, as in the case of a recent Departmental Committee's Report, at a cost of £2 19s. 6d. a copy. It cannot be maintained that the inquiry was dealing with the question of public health, tuberculosis, and purity of milk. It was dealing with cattle diseases, and it perfectly fair, from the list of witnesses, to suggest that had the committee been dealing primarily with the question of pure milk they would have heard other and more extensive evidence.
    The second point dealt with by the second part of the Amendment is the setting up of a scientific technical body on which the Ministry of Health and the Ministry of Agriculture would be represented, which would advise from time to time on what might reasonably be regarded as pure milk, free from the infection of any disease. It is quite clear that absolute and perfect freedom from any disease is not obtainable, and probably in the opinion of medical men may not be desirable. A perfectly sterile fluid would almost certainly expose more children to disease than a fluid not wholly sterile but containing some of the good germs. These are matters which cannot be discussed except by experts. My object in moving the Amendment is to secure a standing body, which will be paid for by the Marketing Board, on which the Ministry
    908
    of Agriculture and the Ministry of Health would be represented, which would sit in public, which would hear expert evidence from competent witnesses and would decide from time to time on the question of pure milk. That body would also be able to take into account the question of nutrition, what constitutes good pasturage, and what milk might reasonably be expected in any given month in the year in a given area, from a given herd, instead of having hard and fast regulations which are liable to cause great injustice to individual farmers, resulting in the bulking of milk and the adulteration of milk, so to speak, in order to produce milk of a dead level of fair average.
    Sir NAIRNE STEWART SANDEMAN: Can the hon. and gallant Member say what is the cost of the process of pasteurisation?
    Sir A. WILSON: I have no idea what the cost of pasteurisation is, but I know from the report of the Hopkins Committee that pasteurisation can only safely be performed under very close inspection by highly qualified men, that unless it is very skilfully performed it may do more harm than good, and that it is not accessible to the ordinary small farmer.
    9.51 p.m.
    Brigadier-General BROWN: I beg to second the Amendment. As my hon. and gallant Friend has gone so fully into the matter I need not detain the House. The only point I wish to stress is, that if we want to produce cleaner milk I do not think that pasteurisation is the way to encourage it. If the farmer can get his milk pasteurised he is not going to take the trouble to see that his milk is very clean. I think that if the Hopkins Committee had had more witnesses who were actually producers than those shown in the list of witnesses, they would have given more consideration to the point before even they gave their half-hearted recommendation for pasteurisation. If we wish to have clean milk for school children we must see that not only is it clean but that it is milk upon which they will thrive. On ordinary liquid milk they thrive much better than on pasteurised milk. If we want to encourage the production of clean liquid milk we must not allow local authorities to make any hard and fast rules and say that they will have

    909
    nothing but pasteurised milk, and that all other liquid milk is impure. It is better to convince the producer of milk and his milkman that the object is not to get milk for pasteurisation but to get clean milk, in the best sense, fit for human consumption.
    9.53 p.m.
    Sir FRANCIS FREMANTLE: I do not want to go into the whole subject of pasteurisation. With some of the points put by the hon. and gallant Member for Hitchin (Sir A. Wilson) I agree, but some of them cannot be upheld on detailed examination. His criticism of the Hopkins Report is one on which he has already made up his mind. That report is much more definite than he has made out in favour of pasteurisation. I think we are all agreed as to our ultimate object, and that we do not want pasteurisation to be used in order to give the people bad or unclean milk in any other way. We all agree that we would infinitely rather that the children should have pasteurised milk than milk which contains the germs of tuberculosis and other diseases which we know do definitely produce fatal diseases and result in the deaths of 2,500 children every year. Hon. Members opposite must recognise that fact. Pasteurisation is only the second best, but it is much better to have a second best than something which is worse. The hon. and gallant Member ridiculed pasteurisation by talking about using lemon juice or orange juice to make up for the vitamins which had been destroyed in pasteurisation, and he said that ordinary raw milk with a certain amount of germs was better than pasteurised milk. I cannot understand how anyone can suggest that you are going to get a standard of bacteriological purity and nutritional content by a public inquiry. It is absurd. All you can do is to see that the standard is revised from time to time and if it is thought advisable to inform Parliament as to the grounds on which the standard is laid down. I do not think the Amendment is required.
    9.56 p.m.
    Sir J. LAMB: I hope the Amendment will not be pressed. I am not in favour of pasteurisation because I agree that it is only a second best, it is something which is used after milk is in a state in which it really ought not to be. That is not my objection to the Amendment.
    910
    The hon. and gallant Member in paragraph (b) is asking that the Board of Trade shall have the power to fix a standard for designated milk. This is to be done after a public inquiry, but at the expense of the Milk Marketing Board. I object to the Amendment on that ground.
    9.57 p.m.
    Captain HEILGERS: I support the Amendment, not because I am opposed to pasteurisation, but because I am opposed to pasteurisation as it is carried out in this country to-day. It appears from the Cowland Hopkins Report that there is no proper inspection of licensed plant premises, except under the milk and dairy Orders, and there are many unlicensed plants in this country. Furthermore, it also appears from that report that in many cases pasteurised milk has been found to contain the germs of tuberculosis. With regard to what the hon. and gallant Member for St. Albans (Sir F. Fremantle) has said, two facts stand out. First, that in the countries where most raw milk is drunk tuberculosis is less, and in rural districts where there is less milk pasteurised you get a smaller incidence of tuberculosis.
    9.58 p.m.
    Mr. HASLAM: As I understand it, the object of the Amendment is to secure pure milk and free from the infection of any disease. It is an object with which I sympathise, and with which, indeed, the whole House sympathises, but the question arises whether that object will be obtained by placing this definition in the Bill. The question of pasteurisation is one of expediency. I agree with the hon. Member for St. Albans (Sir F. Fremantle) that in many cases pasteurisation is useful and will preserve consumers of milk from disease in certain cases. On the other hand, it is not an ideal to be aimed at, and it may be used as a cloak for producing impure and inferior milk. With regard to paragraph (b) of the Amendment, the standard of bacterological purity and nutritional content, that to my mind is a question which must depend entirely on the conditions of the milk supply in any particular neighbourhood. Milk fresh from the cow is the finest and best thing of all, and the nearer we get to it the better, but I feel doubtful whether any committee laying down certain standards will really be of any practical utility. I should like to

    911
    hear from the Minister what the cost of this sort of proceeding is likely to be, and who the officers will be who will be testing these things.
    It seems to me that to set up a hard-and-fast standard may lead authorities into immense expenditure, and largely useless expenditure, in having to provide a host of examiners. The question of "nutritional content" surely does not come within the definition of milk free from infection of any disease; it is an entirely separate matter. We all desire milk to be of the highest nutritional content, but is it a practical proposition to set up one standard of nutritional content for the whole of the country? In my view the proposition is not practical. Milk varies in nutritional content. We want to get the best we can, but we may not all come up to standard, because milk in one part of the country does not come up to the standard in another part of the country. The Amendment may lead to wasteful and expensive proceedings. I sympathise entirely with the object in view, but I feel very doubtful indeed whether a definition like this will secure it.
    10.4 p.m.
    Sir S. CRIPPS: The Amendment raises an interesting point as to how the right hon. Gentleman proposes to spend the £750,000 which Clause 9 places at his disposal for the purpose of securing a pure milk supply. The Amendment is, of course, the proposition which is already in Clause 9 defining the object of the expenditure which is authorised under that Clause. We have not yet had from the Minister any sort of definition as to what that objective is. We believe it ought to be to get pure milk from the cow, not pure milk at any later stage in the proceedings. We think it is desirable that this expenditure should not be devoted to pasteurisation. That is the object of the Amendment. Whether the Minister intends to set up any other standard besides bacteriological purity we have not yet heard. "Free from the infection of any disease" would, of course, cover the bacteriological part. We would like to hear from the Minister what is the idea in this Clause of the word "pure," apart from the words "free from the infection of any disease." I appreciate the difficulty of setting up a standard such as is required
    912
    under the second part of this Amendment. On the other hand it would not be satisfactory for this Clause to be passed without the House getting some statement from the Minister as to what this money is to be spent on. I am sure that everyone here would want the money to be spent on cleaning up the herds and not the milk. It is undesirable to produce impure milk and then to clean it. We should be glad of an assurance that this money will be used in getting pure milk free from infection from the cow, and whether pasteurisation is necessary to be used as an intermediary stage until that purity is achieved, is another matter.
    10.7 p.m.
    Sir ROBERT SMITH: I hope the Government will not accept the Amendment, and I say that for two reasons. There is no doubt that the reason why milk has been so little in demand in this country is the fact that it will not keep. The object of the Government is to have milk produced which will keep. When that end has been reached the housewife will buy the milk. Up to now she has not bought milk because she knows that milk she bought this evening would not keep till to-morrow; it would then have gone sour. That is one of the reasons why the poor of the country have been driven to buying tinned milk. We want-to get our people to use more milk. It is better for them, whether it is made pure by pasteurisation or is pure from the start. We want the milk to be produced from herds that are free from tuberculosis. If we cannot get that we ought to take the next best step to secure that end, which is pasteurisation.
    It may seem strange that I should speak in this way, because the Minister of Agriculture and I have disagreed on this subject before in this House. There was a Bill brought in years ago for the supply of milk to school children. I pleaded then that we should not give milk to children in the schools until we could be sure that it was pasteurised and free from tuberculosis. We must try to clean up our milk as much as we can. The hon. and gallant Gentleman who proposed the Amendment referred to Denmark. I do not know whether he has been to Denmark, but I have visited farms there where the milk was produced under the most appalling conditions, and

    913
    it was only after sterilisation that it could be kept at all. We ought to leave the Minister and the Department free to use whatever means they consider best, by sterilisation or in any other way, to secure pure milk and create a bigger demand for it.
    10.10 p.m.
    Mr. SKELTON: The Amendment has given rise to a very interesting Debate, in which the Amendment itself, although its objects have been generally approved by the House, has not escaped criticism. That is natural. I do not think the Amendment would quite succeed in doing what its supporters would wish to do. The most convenient way in which I can deal with the questions raised is to state now what the hon. and learned Member for East Bristol (Sir S. Cripps) asked the Government to state, namely, what is the method which it is intended to apply in order to secure a supply of pure milk, free from infection. The main method will be the initiation of a scheme for the cleaning of the herds, and I think the House will agree that that is the right method. It may be "aid, "If that is so, why do we not accept the Amendment?" I ask hon. Members to look at the Amendment. Its first proposition is that milk, to be pure, must not be treated by heat in such a way as to destroy or modify its natural characteristics. That is to say, that milk which is to be classed as pure must never be pasteurised.
    My hon. and gallant Friend, who moved it, referred to America. The Gowland Hopkins report regards pasteurisation as useful commercially but not as a health measure. If we were to accept the Amendment it would go far to prohibit the pasteurisation of milk. Without qualification I say that there is no intention that any development of pasteurisation should take the place of the cleaning up of the herds, so far as this Clause is concerned. Within that general policy there is, however, this to be added: One hon. Member mentioned that at present a great deal of work is done which is called pasteurisation but is not pasteurisation at all, so far as any beneficial results are concerned. It might well be that under this Bill it would be worth while to make some investigation into the proper method of pasteurisation. But the House must not take it that I am trying even to find a loophole in what I have
    914
    said. The main method in which this money will be spent will be the cleaning up of the herds.
    That deals with the first proposition of the Amendment. The other two propositions are very far removed from anything that ought to be in our minds when we are considering methods for securing a clean milk supply by means of clean herds. It is singularly difficult for us to say that for the purpose of this Clause milk which might be produced from the most perfectly clean herds could not be regarded as clean if at a later stage such foreign matter as water, skimmed milk, fat or other substances have been added to it. That has nothing to do with a pure milk supply; that is adulteration, which is sufficiently dealt with by existing legislation. There is a certain confusion of thought, I suggest, in trying to deal with the problem of adulteration in a Clause which is clearly intended to deal with the improvement of the supply at the source. To make the granting of money for the purpose of cleaning up the herds, dependent upon the milk reaching a particular standard of bacteriological purity and nutritional content seems to take one very far away indeed from the vitally important purpose of the Clause. With regard to these two last points, my hon. and gallant Friend, like the philosopher who took all knowledge for his province, seems determined to use this Amendment as a means of raking in every possible consideration whereby milk at the moment when it touches our lips shall be free from any possible contamination, human or divine. On these general lines I ask him not to press the Amendment, while I thank him for having moved it, because it has given the Government an opportunity of reiterating their determination to use the great bulk of the money, which is being provided here, for the necessary work of cleaning up the herds.
    Sir A. WILSON: In view of what has been said by the hon. Gentleman, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.

    CLAUSE 11.—(Contributions from Exchequer towards expenses of milk marketing boards.)
    10.17 p.m.
    Mr. H. STEWART: I beg to move, in page 14, line 6, after "arrangements," to insert "by advertising or other means."

    915
    I move this Amendment, not in the hope or indeed the desire that it will be accepted in this form, but for the purpose of raising what seems to me, an all-important consideration in connection with increasing the demand for milk. Up to now we have been considering methods of producing clean milk which, admittedly, is an essential condition of increased sales. In Clause 11 we pass to the process of disposing of the milk and two methods are to be adopted. They are being adopted, we are told, because the Minister was besieged by deputations from farmers asking for some means of increasing sales. The first method proposed is really what is known in commerce as the method of sample and the other is the method of publicity and advertising. I say nothing of the first except that it is an admirable method and one with which everybody agrees, because it will have the effect of improving the health of the school children who will benefit by it, and also building up an increased consumption of milk for the future. As to the second, the Minister made a statement to the effect that he was going to limit his contribution for publicity purposes to a sum of £50,000, out of £1,000,000.
    I contend that that is inadequate. I accept the right hon. Gentleman's assurance that he was advised by the experts of the milk board that this amount was sufficient, but my contention is that he was badly advised, and I ask him to take further advice on the matter. This board is not a Government Department but a business concern. It will only succeed if it can sell the milk. Therefore, it is in no way different from any food producing concern in the country. It can only succeed if it is able to meet competitors in the same field or to produce an equivalent service, and I would ask the Minister to recollect that competitors in the business of food producing have come to the conclusion, after long experience, that one of the most potent methods of increasing sales is by means of advertising.
    I am thinking now of one great concern with which I have been intimately connected, which spends each year, not £50,000, not £500,000, but something like £2,000,000 on advertising. They do not do that for fun, nor because they want
    916
    pictures in the Press. They do it because they are very level-headed, hard-headed business men, who see in that way the most effective method of increasing their business. Over the week-end I consulted with some of the leaders of that great industry—I ask the right hon. Gentleman to believe that they are not advertising agency people or Fleet Street experts, but men controlling an immense world organisation—and I put it to these men, "What would you say if you were asked to control the milk trade of this country, to increase the sales of milk, and you were offered £50,000 a year to do it?" They said, "We would not take on the job at all."
    Mr. SPEAKER: Is the hon. Member recommending that more should be spent on advertising?
    Mr. STEWART: Yes, Sir.
    Mr. SPEAKER: In that case, I am afraid he would be out of order.
    Mr. STEWART: I hope I may put the case in a minute or two—
    Mr. SPEAKER: If the object of the hon. Member were to spend a larger sum, the Amendment would be out of order, so that it would be of no use going on with it.
    Mr. STEWART: It is merely an allocation of the sum set aside in this Clause. I am not proposing to increase the sum, but merely suggesting a different allocation of it.
    Mr. SPEAKER: If that be the hon. Member's intention, that is in order.
    Mr. STEWART: That is the intention, Sir. I asked these quite expert people what they thought would be a reasonable sum, and they assured me that it would require at least £150,000, and not £50,000, to be of any real purpose whatsoever. It may be that the Milk Marketing Board has some other proposal up its sleeve which the Minister has not divulged to the House. It may be that they have other methods of increasing the public demand for their products, but I say that if it is to be limited to this sum, then the money is entirely wasted. You might as well, as I suggested the other evening, throw it down the drain, because that too would be valueless. You could use up this sum of £50,000 on a few national news-

    917
    papers alone, without any question of posters. One national newspaper well known to all of us charges no less than £1,400 for a single day's insertion. Therefore, where would £50,000 go in a really effective campaign?
    I support the idea of school children having further milk supplies, but I submit that that is not going to have any effect upon increasing the immediate consumption of milk. It may have some effect in two years' time or in 10 years' time, but not now. If you want to increase the demand for milk, as I understand is the purpose of this Sub-section, I beg the Minister and the House to consider themselves for the time being a board of directors rather than legislators, given this sum of £1,000,000, and I beg them to use the accumulated experience of all business and to set aside a much larger sum than that mentioned by the Minister for this particular purpose. I suggest this Amendment in the hope that the Minister will demand from the Milk Marketing Board not only the details of a scheme for children's milk, but the details of a really effective advertising campaign, and that he will allocate a sufficient amount of money for the purpose.
    10.26 p.m.
    Duchess of ATHOLL: I beg to second the Amendment.
    I cannot claim any knowledge of advertising, and it is not a subject that as a rule interests me, but it does appear to me to be a vital matter to increase the sale of liquid milk at a price that will be sufficiently remunerative to keep dairy farmers from bankruptcy, with which many of them are faced in my part of Scotland. It seems to me, therefore, that publicity of this kind assumes an importance which I am not myself in the habit of giving to it. A greater allocation of the grant mentioned in Clause 11 for publicity further commends itself because it is a form of expenditure which need not continue beyond the two years for which the grant will be available, and therefore, unlike the other proposals in the Bill, it need not be a liability on the producer at the end of a certain period. For these reasons, I shall be glad to see a larger proportion of the grant mentioned in Clause 11 devoted to this purpose.
    10.28 p.m.
    Mr. ELLIOT: I am not quite sure to what allocation the Noble Lady and the hon. Member for East Fife (Mr. H. Stewart) refer. There is no allocation in the Bill, nor would this Amendment make any difference. The Bill says "any arrangements," and surely to add "by advertising or other means "weakens and not strengthens the whole proposal. I hope the House will not accept an Amendment to insert words which do not have any effect whatever beyond limiting the very valuable pro-proposals contained in the Clause, and would therefore limit the purpose which my hon. Friends have in mind.
    Mr. H. STEWART: Will not my right hon. Friend meet the case I put, with a good deal of authority, and with the greatest good will and desire to make this Clause work?
    Mr. ELLIOT: I have more than answered it; I have super-answered it. I have said that anything which my hon. Friend desires to put forward in the Amendment is in the Clause already. Is there anything else I can answer? He asked me for an inch and I offer him an ell. I think he is under some misapprehension. There is no mention of £50,000 in Clause 11.
    Mr. STEWART: My right hon. Friend gave that figure himself.
    Mr. ELLIOT: I must have explained myself incorrectly. I said that we had in view certain expenditure which the Amendment does not alter. He suggested a sum of £150,000 a year as a minimum which it would be reasonable to expend on this purpose. The sums which I suggested were £50,000 a year from the Government for England, and with the pound for pound contribution that would make £100,000. In addition, there is £20,000 for the Scottish section, so that there will be a minimum expenditure of £120,000 a year. It is clear, therefore that the sums we have in view are not very divergent. The Clause, therefore, fully meets the purpose which he and the Noble Lady have in view.
    Mr. STEWART: In view of this new statement and assurance by the Minister, I beg to ask leave to withdraw my Amendment.
    Amendment, by leave, withdrawn.
    Mr. SPEAKER: I do not propose to call the Amendment standing in the name of the hon. and learned Member for East Bristol (Sir S. Cripps)—in page 14, line 35, after "prices," to insert "or distributed without charge "—because it would increase the charge falling upon the Exchequer, and consequently it would not be in order.
    10.31 p.m.
    Sir S. CRIPPS: May I point out that the charge in the Bill is £1,000,000 and the allocation of that £1,000,000 may be made with respect to milk which is sold at any reduced price. The Amendment which I propose to insert would merely mean that some of that money could be expended on milk sold at no price instead of a reduced price, and it could not possibly increase the sum of £1,000,000, which is the charge authorised by this House in respect of this allocation.
    Mr. SPEAKER: If the hon. and gallant Member will look at the Money Resolution he will see that the amount to be spent out of that £1,000,000 is to be spent for a specified purpose, and it is laid down in the Bill that that is milk sold at a reduced price. While we are not entirely governed by the Money Resolution, the actual effect of the hon. and learned Gentleman's Amendment, if accepted by the House, would be that somebody would have to pay the increased charge arising from the distribution of milk free, and in that case obviously the Exchequer would have to meet the charge.
    Sir S. CRIPPS: May I point out that where the milk was distributed without charge it would be the Milk Marketing Board which would have to pay. The Exchequer would pay whatever the Minister decided under this Clause, and the Milk Marketing Board would have to make up the difference. Under the Clause as it stands, if the Milk Marketing Board chooses to distribute it free, although it pays some of the charge itself, it could not get anything from the Exchequer. The extra charge would not fall on the Exchequer, but upon the board.
    Mr. SPEAKER: That is not quite the point. I gather that I have been misunderstood. The actual charge as laid down in the Bill would be increased
    920
    whether it fell on the Milk Board or on the Exchequer.
    10.34 p.m.
    Miss RATHBONE: I am sorry that I cannot quite follow your argument, Mr. Speaker. As this is money to be used for certain classes of persons if some of the milk is distributed without charge, would it not mean that the money would go less far, and therefore fewer people would get the milk? It would not affect the amount spent but the number of persons who would receive the milk.
    Mr. SPEAKER: Whether that would be the effect of the Amendment or not, I do not know, but that was not the intention of the Mover of the Amendment.
    Sir S. CRIPPS: I beg to move, in page 14, line 36, to leave out:
    "and designated for the purpose by the Minister."
    I move to omit those words, because I do not in the least understand what they mean. The Clause as it reads at present—
    Mr. ELLIOT: I am prepared to accept the Amendment of my hon. and learned Friend.
    Amendment agreed to.

    CLAUSE 12.—(Extension of functions of milk marketing boards.)
    Amendments made: In page 15, line 10, after "month," insert "as aforesaid.
    "In line 27, leave out "the said."
    In line 27, after "nine," insert "of this Act."—[Mr. Elliot.]
    10.37 p.m.
    Mr. ELLIOT: I beg to move, in page 16, line 2, to leave out "classes of persons to whom, or."
    This Amendment is moved because it was brought to my notice that the inclusion of the words now proposed to be deleted might enable the boards to differentiate as to price between different buyers in different classes of trade. That was not, of course, intended. The Subsection will now permit what was required to be done, and the words "classes of persons" etc., are not necessary. The next Amendment is a drafting Amendment.
    Amendment agreed to.
    Further Amendment made: In page 16, line 3, at the end, insert "or used."—[Mr. Elliot.]
    Mr. LEONARD: I beg to move, in page 16, line 4, to leave out Sub-section (3).
    The Sub-section seems to contain very wide powers which are to be wielded by boards, constituted as these are. If the Sub-section were passed into law, it is possible that a board would be able to direct the supply to distributing units without regard to the efficiency of the organisation now functioning in that respect, and without regard to the dislocation caused to parties who previously supplied the milk. I will illustrate that by what has taken place in Scotland under the Scottish Milk Marketing Board, who have already—I presume they have the powers—acted within the terms of this Sub-section. The Scottish Co-operative Society has had its business interrupted by the board, who found that two great societies which go to the make up of the Scottish Cooperative Wholesale Society, the Kinning Park Society in Glasgow, and the St. Cuthbert's Society in Edinburgh, have received, in the past, their supplies from the Scottish Co-operative Wholesale Society, in order to level out their requirements.
    Those two large units of the Scottish Co-operative Wholesale Society have been interrupted from receiving their supplies from the Society, and have been directed to other sources for the milk which they require. They have sunk capital into their own supply organisation, but the right to use it has been denied them. They have been directed to farms which, I presume, are closer to them. The mistake which has been made in this respect in Scotland might be made elsewhere. I am aware that the intention of the Subsection is the elimination of waste. I abhor all types of waste, but the cooperative arrangement to which I have referred endeavoured to eliminate the waste arising from what the Minister has called the geographical journeyings of milk. I presume that other co-operative societies and other organisations of milk distribution have also endeavoured to eliminate waste. It is a laudable desire to eliminate waste as far as possible, and that has been done in Scotland, where milk transport in the past has been of the most effective and economical character.
    Furthermore, I would point out that at present, especially in Scotland, there are regional arrangements. There are three, and I think there will be four boards
    922
    functioning in Scotland. I am not sure whether these regional arrangements will last very long, and whether they will not assume in the near future a more national character, so that the national requirements may be catered for by a smaller number of boards than four. In that case there is the possibility of Scotland returning to the national aspect which has been catered for by the co-operative organisation, which has endeavoured so to plan out its duties as to meet the Scottish requirements for milk to the best advantage from the national point of view. I think that a mistake has been made in Scotland. But these boards will now come to England, and the Co-operative Wholesale Society has a number of creameries already functioning in England. If action is taken in the South similar to that which has been taken under the Scottish boards, that again will interrupt the efficient machinery of the co-operative organisation for the distribution of milk to their own members. They will be prevented from using their own plant, and it seems to me that there is a possibility of duplication of plant under the proposals of this Sub-section. I repeat that this has been eliminated considerably by the conscious efforts of the societies to which I have referred, and they have attained a considerable degree of efficiency which I should not like to see interrupted.
    I am mindful that the Minister in Committee made a statement regarding the possibilities of meeting any complaint that might be put before him, but, as far as I can see, while he has certainly taken the matter into consideration, the first part of his proposal really widens the field within which further penalties may be imposed, and, while I readily admit that the right of consultation given in this Clause is a commendable departure, we cannot shut our eyes to the fact that full power to act still remains with the board, and we fear that it will act in a manner that will not redound to good organisation as we see it at present. I think, therefore, that it is a mistake to endeavour to interrupt the units of distribution which are already functioning successfully at the present time, and that it would be better to find ways and means of rationalisation where that is necessary in sections of the industry which are not rationalised at present; and I think that that could be secured without

    923
    interfering as is being done at present. Therefore, I should like, notwithstanding what has been done by the Minister, to get assurances from him that the efficient machinery which is already functioning will not be interrupted. The co-operative milk handling organisation reacts to the requirements of millions of people in this country, and it is because of the dislocation which has been brought about in the North by that organisation being interfered with by the Milk Board that I fear that the extension of this right to England will result in damage such as I have referred to taking place further South.
    Mr. TINKER: I beg to second the Amendment.
    10.45 p.m.
    Mr. ELLIOT: We had some discussion on this matter in Committee, and I certainly hope I shall be able to meet hon. Members opposite by the Amendment that I have on the Paper. I think it is agreed in all parts of the House that rationalisation of long journeys of agricultural produce is desirable, but the Committee desired to be assured that this would not be wantonly used so as to interrupt the long-established channels of distribution. It is a fact that agricultural produce tends to be shunted about the country in a way that is injurious to the product and expensive to the consumer. Let me give one single example. In April, while about 6,500,000 gallons were brought into London from the Northern, North-Western, Mid-Western and South Wales regions, in the same month in regions nearer to London no less than 2,250,000 gallons of milk were being processed and manufactured. The liquid product was being brought long distances and the liquid product close at hand was being worked up into manufactured milk which might have come equally well from the ends of the earth. For instance, the Marketing Board; had to grant facilities to buyers in London to manufacture milk from Essex, and at the same time 20,000 gallons was coming here from Carlisle.
    Clearly, these are stages in the distribution of milk which should, if possible, be eliminated, and I think the power here proposed is a reasonable power to give. The co-operatives, who have themselves
    924
    done a great deal towards the reorganisation of supply, will not. I think, object if that process is carried a step further. In general, the product should be consumed as near as possible to the area in which it is produced and should not travel unnecessarily about the country. When we come to my Amendment, I shall be prepared to defend the steps that I am taking to see that the power is not wantonly used and that the desires expressed in Committee are met. I would ask the House not to accept the contention that power to rationalise the distribution of milk in this way should be withheld from the board, but to allow the Sub-section to remain as part of the Statute.
    10.48 p.m.
    Mr. T. WILLIAMS: The right hon. Gentleman has at least recognised the point which has been submitted by my hon. Friend, and which was submitted to the Committee, to the extent of having put an Amendment on the Paper. We recognise the advance that he has made but we doubt if it is all that is necessary. We certainly want sane marketing for all agricultural produce, but we do not want marketing at any price. We have already had some little experience of how it has worked out in Scotland, and we have heard that the largest retail societies have been denied the right to receive from the Scottish Wholesale Society, their parent and child as it were, their supplies of milk. The Co-operative Wholesale Society is utterly different from the average distributor. The big society is owned by the small societies. They run on capital provided by the small societies, and they have built up a huge business all over the country, simply serving the needs of their members. I fully appreciate the right hon. Gentleman's point that to transfer milk from Carlisle to London in liquid form and then to send milk produced within the immediate neighbourhood of London for manufacture is absurd, and ought not to be continued.
    I raised that point with the right hon. Gentleman, I believe, several months since. I then pointed out that Scottish farmers had their scouts out to see what price was fixed for milk in London, and, having secured that knowledge, fixed their prcie below it, so that they could transfer milk to London and undercut the producers in the south. We do not want to see that happen here. There is

    925
    a parallel to Sub-section (3) in the sugar-beet development, where after a period of years, we see factories growing up manufacturing sugar out of home-grown beet. The Government, through the agency of the Minister, has established some machine whereby importers of sugar, refiners and home producers get together, the consumer paying for the rationalising of the factories, though during this time the Government have been paying a £40,000,000 subsidy. We do not want, during the period of subsidising the industry, one creamery or one piece of machinery to be thrown out of gear and another piece of machinery to be built up at the same time, which ultimately will have to be rationalised at the expense of the State. Therefore, the experience gained in the Scottish incident is one which the right hon. Gentleman should note. The same possibility is present here with the Milk Board. When you think of the co-operative societies, with the massive organisation built up in the absence of similar organisation, we are apprehensive of what might happen. If the right hon. Gentleman is going to make a fuller statement, we shall listen with great interest to what he says. In the meantime, we think that Sub-section (3) constitutes a grave danger.
    10.53 p.m.
    Sir PERCY HARRIS: I hope that this Amendment will not be pressed. I think that the right hon. Gentleman has made out his case for better organisation and the riddance of duplication of waste and of taking milk on long journeys. If there is any justification for this Bill, it is this effort to plan. I sometimes think that the hon. Gentleman is the best Socialist in this House, because he is the Socialist who wants to put into practice some form of Socialism in our time. We all remember in our early days the classic Socialist example of 12 milk carts going down one street when one milk cart would do the job. For that reason, to leave out these words completely would defeat one of the best purposes of the Bill, bringing milk to the consumer so that one day we may reduce its price. I am glad that the Minister is going to add some words. When he reaches those words, I will try to help him, and will reserve what I have to say until then.
    Amendment negatived.
    Mr. ELLIOT: I beg to move, in page 16, line 9, at the end, to insert:
    "and the provisions of the scheme which relate to penalties shall apply with respect to any determination of the board under this sub-section as they apply with respect to determinations of the board under the scheme which regulate sales of milk:
    Provided that no determination shall be made under this sub-section by any board except after consultation with such a committee as the Minister may have approved for the purpose as representing the interests of purchasers of milk by wholesale."
    I accept the support of the hon. Member for South-West Bethnal Green (Sir P. Harris) gladly. As it is only on infrequent occasions that I have received such support, I am the more willing to move the Amendment as briefly as possible, so as to be in possession of that support as soon as possible. The Amendment is explanatory. Unlike many Amendments moved in this House, even, I regret to say, from the Front Bench, the Amendment is quite simple and means exactly what it says. There was a fear that the board might work rashly and without proper consultation with those who have had long experience in the trade which alone enables them to speak with authority. We have dealt with that matter by saying that the board shall consult the committee. The distributive trade was afraid that this committee might not be fully representative of that trade, and might be chosen by the Milk Board simply pro forma, and not with a genuine desire for consultation. To remove that fear we have said that the committee shall be approved by the Minister, which is to say that it shall be thoroughly representative of interests affected in this manner. My hon. Friend the Member for South-West Bethnal Green wishes to strengthen it further and to say that even after this consultation no determination should be made by any board unless it were approved by the Minister.
    Sir P. HARRIS: Failing agreement.
    Mr. ELLIOT: I would beg of the hon. Gentleman to consider the further stages which might come to such a determination. He will see that his proposed words are inappropriate, because it is most desirable that we should not infringe the right of any aggrieved party to bring the matter before the committee of investigation. If the matter comes before the committee of investigation, the

    927
    Minister stands in the peculiar position of a judge, and might have to take action on a report of the committee of investigation. To bring in the Minister at an earlier stage would not increase the rights of the subject, but diminish them. Therefore, I hope that my hon. Friend the Member for South-West Bethnal Green will not find it necessary to press his Amendment with the object of bringing the Minister further into the matter. The Amendment says that there shall be consultation with responsible persons who are to be
    "approved for the purpose as representing the interests of purchasers of milk by wholesale. "
    The Amendment meets the undertaking which I gave on the Committee stage of the Bill.
    11 p.m.
    Sir P. HARRIS: I beg to move, as an Amendment to the proposed Amendment, at the end, to add:
    "and failing agreement between the Board and such Committee no determination under the Sub-section shall be made by any Board unless approved by the Minister after hearing the views of the Board and such Committee."
    I appreciate the spirit of the right hon. and gallant Gentleman. We are both aiming at the same purpose. I agree that he has made a gallant attempt to meet the views of the interests who feel that they are in serious jeopardy of having an interference with their rights. As the right hon. Gentleman knows, perhaps better than anyone else, advice is cheap. He has had plenty of it during the last 12 months in his position at the Board of Agriculture, but advice does not carry one very far. The board represents the interests of the producers. That is a fundamental weakness of this scheme. Naturally, the board is responsible to the people who elect it and for whom it acts, and it will always approach these problems from the producers' point of view. Rightly or wrongly, there are the interests of the wholesale distributors to be considered, and it will be found very often that the interests of the distributors and the producers do not coincide. The words which the right hon. Gentleman proposes to insert are that the committee shall be consulted, but if there is a deadlock the board will win every time, because
    928
    it is supreme. It will always have the last word. Advice will be given, but the board may not choose, in the interests of the producers, to take the advice given. I am paying a compliment to the right hon. Gentleman and appealing to his very sympathetic nature, as representing the whole of the country, when I seek to provide that he should reconcile the two points of view by accepting my Amendment. It will strengthen the words which he proposes to insert in the Clause. If he cannot accept my words, perhaps he will add something of the kind in another place.
    Mr. KINGSLEY GRIFFITH: I beg to second the Amendment to the proposed Amendment.
    Mr. ELLIOT: I do not wish to be discourteous to my hon. Friend, but I would beg him to consider the point that I put in moving my Amendment, that the position of the Minister as the judge after the committee of investigation has considered any special grievance would make it very difficult for me to accept his Amendment. The hon. Member for St. Rollox (Mr. Leonard) knows that disputes under conditions which are similar to the conditions in this Sub-section are already before a committee of investigation. Clearly, if the Minister has already been concerned in a dispute at an earlier stage it would prejudice him very much to act as judge in the final determination. With every desire to meet my hon. Friend, I cannot accept the Amendment.
    Sir P. HARRIS: It was suggested to me that another Minister might be approached. If my right hon. Friend would promise to do something in another place to strengthen his words, I should be glad to withdraw my Amendment.
    Mr. ELLIOT: To bring in another Minister would mean raising the whole question of bringing in Ministers to act in an executive and judicial capacity, which would be constitutionally unwise.
    Amendment to the proposed Amendment, by leave, withdrawn.
    Question again proposed, "That those words be there inserted in the Bill."
    11.5 p.m.
    Mr. LEONARD: I appreciate the attitude of the Minister in presenting his Amendments and also the difficulty of endeavouring to cater for one organisa-

    929
    tion in the framework of a general scheme, but I hope that the board will exercise their powers in the same manner and spirit in which the right hon. Gentleman has proposed his modifications. The way in which co-operators have treated the farmers of the country and most industries with which they have come in contact is known; but our fears have foundation in the past. When a plea was made to a board already functioning that a consultant should be brought in it received a very short reply. That attitude is not hopeful for the future and I hope it will not be persisted in, and I hope that the modifications proposed by the right hon. Gentleman will be acted upon in the manner and spirit in which they have been put forward.
    Amendment agreed to.
    Bill to be read the Third time Tomorrow.

  BRITISH SUGAR (SUBSIDY) BILL.
  Further considered in Committee.
  [Sir DENNIS HERBERT in the Chair.]

  BRITISH SUGAR (SUBSIDY) BILL.

    CLAUSE 1.—(Extension of period in respect of which subsidies are payable under 15 & 16 Geo. 5. c. 12.)
    Question again proposed, "That the Clause stand part of the Bill."
    11.7 p.m.
    Mr. T. WILLIAMS: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
    I do so in order to ascertain from the right hon. Gentleman how long he expects to go with this Measure. It is now after 11 o'clock, a time when hon. Members are more or less semi-prostrate. [HON. MEMBERS: "No!"] I mean those hon. Members who are not here, and I think that we should know exactly how far the right hon. Gentleman intends to go to-night.
    11.8 p.m.
    Mr. ELLIOT: I can only speak in the absence of the Patronage Secretary, but I think it is not unreasonable to ask that we should proceed with the Bill now. We must get on with the Bill if the House is to adjourn at a reasonable time this summer, and it has been on the Order Paper for so many weeks that I am beginning to feel there is a danger that we shall not get a Debate at all. I am anxious to make a statement with regard
    930
    to the appointments, a matter which is of interest both inside and outside the House. The hour is not late and, as I hope we shall proceed amicably, I think we ought to make good progress.
    Mr. T. WILLIAMS: I beg to ask leave to withdraw the Motion.
    Motion, by leave, withdrawn.
    Question again proposed, "That the Clause stand part of the Bill."
    11.9 p.m.
    Mr. ELLIOT: It is possible to cover again in some respects much of the field covered on the Second Reading because Clause 1 is almost the whole of the Bill. I do not propose to detain the Committee in going over the arguments we have already heard on the Bill and on many other occasions as well. The delay in proceeding with the Measure has been of advantage in that it enables us to have with us again my right hon. Friend the Member for Darwen (Sir H. Samuel), whom we are glad to see back invigorated by his holiday and resplendent in purple and fine linen. I am anxious to deal with the point raised, that there was some, I will not say under-hand, but some bargain between the sugar industry and the Government, and that it had been withheld from the knowledge of the House. There is no agreement or understanding in any form whatever between the Government and the industry as to any levy scheme to provide assistance for the home-grown sugar industry, or as to any form of assistance which may be granted to the industry after the expiry of the subsidy period covered by the Bill. The Government has not arrived at a decision on the question of future assistance for the industry. That question is one on which the Greene Committee has been asked to report, and the Government will not come to any decision until the recommendations of the Greene Committee have been received and considered.
    I have been asked to make some statement as to the questions which were discussed when the Committee of inquiry was going into the proposals for a marketing scheme which were brought forward by the industry. In January of 1933, I invited representatives of the refining and beet sugar interests to confer with a view to finding some measure of agreement in the national interest on those

    931
    questions which in the previous nine years had been a source of acute difference between the two sections of the United Kingdom sugar industry. The representatives succeeded in arriving at a basis for a reconciliation of interests, and I invited them to formulate proposals to secure the more efficient operation of the industry, and I inquired whether the industry had any suggestions to make as to the form which future assistance from the State might take, if any. The fact that the refining and beet sugar interests were meeting was announced in the House in reply to questions on 7th February, 16th March, and 25th May, 1933.
    In the spring of 1933 the industry informed me that they were prepared to organise under the Agricultural Marketing Acts, and as to the form which future assistance should take they submitted proposals. The industry's proposal to reorganise under the Agricultural Marketing Acts was regarded as broadly satisfactory by the Government, but the industry was informed that, without any commitment on the principle of a levy, in any event the scheme on the lines put forward was unacceptable, and that any future assistance to the industry must be part of a comprehensive plan satisfactory to Parliament. As stated previously, the question of future State assistance to the industry has been referred to the Greene Committee, and the industry placed before me at a later date revised proposals for a levy scheme which it is understood have now been placed before the Greene Committee by the industry. I cannot, of course, say what action the Committee will take, but they will no doubt examine that scheme in all its bearings.
    There is no understanding between the Government and the industry as to the form in which the Sugar Marketing Scheme should be submitted. As the House was informed on 27th July last, the introduction of the present Sugar Bill was conditional upon the refiners and beet sugar manufacturers, on the one hand, and the beet growers on the other, submitting schemes under the Agricultural Marketing Acts for regulating the marketing of sugar and sugar-beet respectively.
    The promoters of the schemes were free, under the democratic procedure of the
    932
    Marketing Acts to submit their own proposals for marketing reform. It would be improper at the present juncture to discuss the merits or demerits of the sugar marketing scheme as submitted, but an inquiry into objections has been held and the Minister and the Secretary of State for Scotland have a statutory duty to consider those objections and the report of the commissioner who held the inquiry, before any further action can be taken in regard to the scheme. Of course, a scheme cannot come into force unless both Houses of Parliament by affirmative resolution decide that it should be approved and nothing could be smuggled through Parliament against Parliament's will. If it is decided to proceed with the sugar marketing scheme, either with or without modification, after consideration of the objections and the commissioner's report, the House of Commons will have full opportunity of considering it. In view of the misrepresentations which have been made recently in regard to the levy proposal, I thought it desirable to take this opportunity of making this statement on a matter which has previously, in my opinion quite properly, been regarded by all the parties as confidential. I hope that my statement has laid the ghost of this extraordinary "corrupt bargain" which, it was said by certain parties, had been come to and was being smuggled through, against the interest of the consumer and without the knowledge of Parliament. Like other candle and turnip bogies, that bogy is found, on examination, to have no reality.
    11.17 p.m.
    Sir S. CRIPPS: I do not think the Minister has disposed of the main point which was raised in the former Debate with regard to this question of the subsidy. As I recollect it, the Government undertook that before the subsidy was continued, an inquiry would be entered into by some committee or other body, to deal with the whole question, in order that the House of Commons might have full information on the merits and demerits and the incidence of the subsidy, when discussing this Bill. The Minister has told us that as long ago as January, 1933, he invited various bodies to meet him to discuss the possibility of an arrangement between those parties under the Marketing Acts, or some other

    933
    arrangement, and that in the Spring of 1933 they carne to a provisional agreement as regards a common basis. In other words, as long ago as the Spring of 1933 the parties had already come, together with the Minister and a line upon which to work had been laid down. Why was it that the committee was not then set up in order that the House of Commons might have the report before considering this matter? As it is, for some reason which is wholly unexplained, the committee was not appointed until fairly late in the present year, when it was too late to have the report available before we were asked to consider this Bill.
    The gravamen of the charge against the Minister and the Government is not that they entered into some conversations with the interests concerned in this matter, but that, having entered into these conversations, they held up the appointment of the committee upon the report of which the House of Commons was relying in order that it might have the material necessary to enable it to discuss the continuation of the subsidy. The right hon. Gentleman has not dealt with that at all, and I ask him to give an explanation why, in view of the promise which was given, the committee was not appointed in time for us to have its report before discussing this Bill.
    11.20 p.m.
    Mr. ELLIOT: The hon. and learned Member for East Bristol (Sir S. Cripps) has gone back to ground already covered exhaustively on the Second Reading of
    the Bill. On this Clause 1 I was being pressed for a statement as to the position of the sugar marketing scheme, and the question as to whether there had been undue delay in the appointment of the Greene Committee was, I recollect, canvassed entirely on the Second Reading, because it was on that occasion that the right hon. Member for Darwen (Sir H. Samuel) said he was pointing out that advantage was being taken of the innocence of the hon. and learned Member for East Bristol and his party. I was not expecting criticism of that kind levelled at me or at the hon. and learned Member for East Bristol, and so it was stamped on my memory, all the more because the right hon. Member for Darwen animadverted, not on the matter, but on the manner of my reply and said it was elephantine humour unworthy of my position. So the matter was not merely gone into, but it was gone into with a certain amount of acerbity. The general question of the delay in the appointment of the Greene Committee was thoroughly explained then, and I do not think I can add anything to that statement. I was most anxious to confine myself on this occasion to a statement in answer to a charge, made quite legitimately, that the Government should do something to explain the position of the sugar marketing scheme, and it was on that point that I was pressed to make a statement.
    Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 191; Noes, 37.

    Division No. 302.]

    AYES.

    [11.24 p.m.

    Acland-Troyte, Lieut.-Colonel

    Butt, Sir Alfred

    Edmondson, Major Sir James

    Adams, Samuel Vyvyan T. (Leeds, W.)

    Campbell, Sir Edward Taswell (Brmly)

    Elliot, Rt. Hon. Walter

    Allen, Sir J. Sandeman (L'pool, W.)

    Campbell-Johnston. Malcolm

    Ellis, Sir R. Geoffrey

    Anstruther-Gray, W. J.

    Caporn, Arthur Cecil

    Elliston, Captain George Sampson

    Aske, Sir Robert William

    Carver, Major William H.

    Elmley, Viscount

    Atholl, Duchess of

    Castlereagh, Viscount

    Emrys-Evans, P. V.

    Baldwin-Webb, Colonel J.

    Cayzer, Maj. Sir H. R. (Prtsmth., S.)

    Entwistie, Cyril Fullard

    Balfour, Capt. Harold (I. of Thanet)

    Christie, James Archibald

    Fermoy, Lord

    Banks, Sir Reginald Mitchell

    Colfox, Major William Philip

    Ford, Sir Patrick J.

    Barclay-Harvey, C. M.

    Colville, Lieut.-Colonel J.

    Fraser, Captain Sir Ian

    Bateman, A. L.

    Cook, Thomas A.

    Fremantle, Sir Francis

    Beauchamp, Sir Brograve Campbell

    Copeland, Ida

    Fuller, Captain A. G.

    Beaumont, Hon. R. E. B. (Portsm'th, C.)

    Courtauld, Major John Sewell

    Ganzoni, Sir John

    Borodale, Viscount

    Crooks, J. Smedley

    Gluckstein, Louis Halle

    Bossom, A. C.

    Crookshank, Col. C. de Windt (Bootle)

    Goodman, Colonel Albert W.

    Boulton, W. W.

    Crookshank, Capt, H. C. (Gainsb'ro)

    Gower, Sir Robert

    Bower, Commander Robert Tatton

    Cruddas, Lieut.-Colonel Bernard

    Graham, Sir F. Fergus (C'mb'rl'd, N.)

    Braithwaite, J. G. (Hillsborough)

    Davies, Edward C. (Montgomery)

    Graves, Marjorie

    Brass, Captain Sir William

    Davies, Maj. Geo. F. (Somerset, Yeovil)

    Guest, Capt. Rt. Hon. F. E.

    Brown, Col. D. C. (N'th'I'd., Hexham)

    Drews, Cedric

    Guinness, Thomas L. E. B.

    Brown, Ernest (Leith)

    Drummond, Wolff, H. M. C.

    Gunston, Captain D. W.

    Brown, Brig.-Gen. H. C. (Berks., Newb'y)

    Duckworth, George A. V.

    Hacking, Rt. Hon. Douglas H

    Browne, Captain A. C.

    Duncan, James A. L. (Kensington, N.)

    Hales, Harold K.

    Burgin, Dr. Edward Leslie

    Dunglass, Lord

    Hanbury, Cecil

    Hannon, Patrick Joseph Henry

    Morgan, Robert H.

    Shute, Colonel J. J.

    Haslam, Henry (Horncastle)

    Morrison, William Shephard

    Skelton, Archibald Noel

    Haslam, Sir John (Bolton)

    Munro, Patrick

    Smith, Sir J. Walker- (Barrow-In-F.)

    Hellgers, Captain F. F. A.

    Nation, Brigadier-General J. J. H.

    Smith, Sir Robert (Ab'd'n & K'dine, C.)

    Hills, Major Rt. Hon. John Waller

    Nicholson, Godfrey (Morpeth)

    Somervell, Sir Donald

    Hope, Sydney (Chester, Stalybridge)

    North, Edward T.

    Sotheron-Estcourt, Captain T. E.

    Horsbrugh, Florence

    Nunn, William

    Southby, Commander Archibald R. J.

    Howard, Tom Forrest

    O'Donovan, Dr. William James

    Spencer, Captain Richard A.

    Howitt, Dr. Alfred B.

    O'Neill, Rt. Hon. Sir Hugh

    Spens, William Patrick

    Hudson, Capt. A. U. M. (Hackney, N.)

    Patrick, Colin M.

    Stanley, Rt. Hon. Lord (Fylde)

    Hunter, Dr. Joseph (Dumfries)

    Peat, Charles U.

    Stevenson, James

    Hunter, Capt. M. J. (Brigg)

    Penny, Sir George

    Stewart, J. H. (Fife, E.)

    James, Wing-Com. A. W. H.

    Perkins, Walter R. D.

    Stourton, Hon. John J.

    Jamieson, Douglas

    Peto, Geoffrey K. (W'verh'pt'n, Bilst'n)

    Strauss, Edward A.

    Jesson, Major Thomas E.

    Powell, Lieut.-Col. Evelyn G. H.

    Strickland, Captain W. F.

    Jones, Sir G. W. H. (Stoke New'gton)

    Procter, Major Henry Adam

    Sueter, Rear-Admiral Sir Murray F.

    Ker, J. Campbell

    Raikes, Henry V. A. M.

    Sugden, Sir Wilfrid Hart

    Kerr, Lieut.-Col. Charles (Montrose)

    Ramsay, Capt. A. H. M. (Midlothian)

    Sutcliffe, Harold

    Kerr, Hamilton W.

    Ramsay, T. B W. (Western Isles)

    Tate, Mavis Constance

    Lamb, Sir Joseph Quinton

    Ramsbotham, Herwald

    Thomas, James P. L. (Hereford)

    Leckie, J. A.

    Rankin, Robert

    Thompson, Sir Luke

    Leech, Dr. J. W.

    Reed, Arthur C. (Exeter)

    Thomson, Sir Frederick Charles

    Leighton, Major B. E. P.

    Reid, James S. C. (Stirling)

    Todd, A. L. S. (Kingswinford)

    Lennox-Boyd, A. T.

    Reid, William Allan (Derby)

    Touche, Gordon Cosmo

    Lloyd, Geoffrey

    Remer, John R.

    Tree, Ronald

    Lockwood, John C. (Hackney, C.)

    Rickards, George William

    Tryon, Rt. Hon. George Clement

    Loder, Captain J. de Vere

    Robinson, John Roland

    Tufnell, Lieut.-Commander R. L.

    Loftus, Pierce C.

    Ropner, Colonel L.

    Wallace, Captain D. E. (Hornsey)

    Lumley, Captain Lawrence R.

    Ross, Ronald D.

    Ward, Lt.-Col. Sir A. L. (Hull)

    Mabane, William

    Ross Taylor, Walter (Woodbridge)

    Ward, Irene Mary Bewick (Wallsend)

    MacAndrew, Lt.-Col. C. G. (Partick)

    Ruggles-Brise, Colonel E. A.

    Warrender, Sir Victor A. G.

    McCorquodale, M. S.

    Runge, Norah Cecil

    Whyte, Jardine Bell

    McEwen, Captain J. H. F.

    Russell, Alexander West (Tynemouth)

    Willoughby de Eresby, Lord

    McKie, John Hamilton

    Rutherford, John (Edmonton)

    Wilson, Clyde T. (West Toxteth)

    Magnay, Thomas

    Rutherford, Sir John Hugo (Liverp'l)

    Wise, Alfred R.

    Margesson, Capt. Rt. Hon. H. D. R.

    Salmon, Sir Isidore

    Womersley, Sir Walter

    Mason, Col. Glyn K. (Croydon, N.)

    Salt, Edward W.

    Mayhew, Lieut.-Colonel John

    Sandeman, Sir A. N. Stewart

    TELLERS FOR THE AYES.—

    Mills, Major J. D. (New Forest)

    Sassoon, Rt. Hon. Sir Philip A. G. D.

    Captain Sir George Bowyer and

    Mitchell, Harold P.(Br'tf'd & Chisw'k)

    Shaw, Helen B. (Lanark, Bothwell)

    Dr. Morris-Jones.

    Molson, A. Hugh Elsdale

    Shepperson, Sir Ernest W.

    NOES.

    Attlee, Clement Richard

    Greenwood, Rt. Hon. Arthur

    Nathan, Major H. L.

    Banfield, John William

    Grenfell, David Rees (Glamorgan)

    Pickering, Ernest H.

    Brown, C. W. E. (Notts., Mansfield)

    Griffith, F. Kingsley (Middlesbro', W).

    Rathbone, Eleanor

    Buchanan, George

    Hall, George H. (Merthyr Tydvil)

    Rea, Walter Russell

    Cocks, Frederick Seymour

    Harris, Sir Percy

    Roberts, Aled (Wrexham)

    Cripps, Sir Stafford

    Holdsworth, Herbert

    Samuel, Rt. Hon. Sir H. (Darwen)

    Daggar, George

    Janner, Barnett

    Smith, Tom (Normanton)

    Davies, David L. (Pontypridd)

    Jenkins, Sir William

    Tinker, John Joseph

    Dobbie, William

    Logan, David Gilbert

    Williams, Edward John (Ogmore)

    Edwards, Charles

    McEntee, Valentine L.

    Williams, Thomas (York, Don Valley)

    Evans, R. T. (Carmarthen)

    Maclean, Nell (Glasgow, Govan)

    Wilmot, John

    Foot, Dingle (Dundee)

    Mallalieu, Edward Lancelot

    Gardner, Benjamin Walter

    Maxton, James

    TELLERS FOR THE NOES.—

    Mr. John and Mr. D. Graham.

    CLAUSE 2.—(Rates of subsidy.)
    11.31 p.m.
    Mr. ALED ROBERTS: I beg to move, in page 1, line 20, to leave out "the same rate as," and to insert:
    "half the rate that would have been payable."
    Not more than half-an-hour ago the Minister of Agriculture took great credit to himself for proposing an Amendment which, he said, clearly explained itself, and I think we also can take some credit that the words of this Amendment explain clearly what is in our minds. By passing Clause I the Committee have decided that the sugar subsidy should be continued for another year, and this
    936
    being, in our opinion, a great evil, we want to reduce it as much as we can, and propose that the subsidy so continued should be reduced by one-half. The contention of Parliament when introducing this subsidy in the first instance was that for a period of years, which is now about to expire, the sugar-beet industry should have such assistance in order to establish itself. It has had 10 years in which to do that, and something like £40,000,000 has been poured into its coffers. It has at periods during the duration of the subsidy been able to pay dividends of something approaching 15 per cent. on its capital and to allot very large sums to reserve and to depreciation accounts, and it has produced sugar

    937
    during that period which has been worth something less than one-half of the total value of the subsidy. We think that sort of thing ought to be stopped as soon as possible. The Government have been very much to blame all the way through for not having given the House information before this. Now the country is to be penalised by having to pay this subsidy for another 11 months simply because the Government could not bring themselves to appoint a committee at the proper time to consider this matter. We think, in short, that the whole business is perfectly iniquitous and that if we cannot remove the subsidy altogether we should reduce it to as low a figure as possible.
    11.35 p.m.
    Mr. MALLALIEU: I would remind the Committee that when the subsidy was originally introduced it was ordained that at certain specific stages it should be diminished. This has been described as a continuation of the subsidy; in my submission, it is really an increase. It is a proposal to pay the subsidy at the rate at which it was paid last year, but all accretions to the subsidy should be at a smaller rate than those paid before. To propose that the subsidy should be continued at the same rate is out of spirit with the original proposal, which was to give an ever-diminishing subsidy in order to encourage the industry to look after itself and to enable it to stand on its own feet. The Committee will be doing wrong to agree to the subsidy at the existing rate, because that will lull the industry into a sense of security which will prove false when the next election comes along.
    11.37 p.m.
    Mr. ELLIOT: The Amendment is to halve the rate of subsidy which is being paid. I do not know whether that is a subtle reference to the hopes which the hon. Member for Colne Valley (Mr. Mallalieu) and his associates have in regard to the next election. I think the
    hon. Member for Wrexham (Mr. A. Roberts) gave away the whole case when he said that he objected to the principle of the Bill. He says: "If we cannot sweep it all away, let us sweep away as much as we can." His argument frankly was that the Amendment would cripple the Bill, and make it unworkable, and that is his hope. He thinks that some other form of sugar production would be better. I am doing him no injustice when I say that he wants to make the Bill unworkable. My argument would only be that which I brought forward on Second Beading, The House has decided that there shall be this continuation, and that the beet-sugar industry in this country, with the opportunities for employment that it gives at considerable expense—and I am not in any way attempting to minimise that—should be also continued. To pass this Amendment would be to throw completely out of gear all the calculations that have been made and all the arrangements that have been entered into, and would succeed in crippling the scheme and make it unworkable; but that is not the desire of the majority of the Committee, and I am sure that hon. Members will resist this Amendment. I am not going into the minor argument brought forward by the hon. Member for Colne Valley, that the subsidy is being increased except to point out that we should not be very pleased if the continuation of our Parliamentary salaries every year could be regarded as an increase. I do not want to enter into those recondite points. These rates are unavoidable for this year, if the scheme is to go on. I think the Committee desire that it shall go on and therefore they will not accept the Amendment.
    Question put, "That the words proposed to be left out stand part of the Clause."
    The Committee divided: Ayes, 178; Noes, 34.

    Division No. 303.]

    AYES.

    [11.41 p.m.

    Acland-Troyte, Lieut.-Colonel

    Bottom, A. C.

    Butt, Sir Alfred

    Adams, Samuel Vyvyan T. (Leeds, W.)

    Boulton, W. W.

    Campbell, Sir Edward Taswell (Brmly)

    Anstruther-Gray, W. J.

    Bower, Commander Robert Tatton

    Caporn, Arthur Cecil

    Aske, Sir Robert William

    Braithwaite, J. G. (Hillsborough)

    Carver, Major William H.

    Atholl, Duchess of

    Brass, Captain Sir William

    Castlereagh, Viscount

    Baldwin-Webb, Colonel J.

    Broadbent, Colonel John

    Cayzer, Maj. Sir H. R. (Prtsmth., S.)

    Balfour, Capt. Harold (I. of Thanet)

    Brown, Col. D. C. (N'th'l'd., Hexham)

    Christie, James Archibald

    Barclay-Harvey, C M.

    Brown, Ernest (Leith)

    Colfox, Major William Philip

    Bateman, A. L.

    Brown, Brig.-Gen. H. C. (Berks., Newb'y)

    Colville, Lieut.-Colonel J.

    Beauchamp, Sir Brograve Campbell

    Browne, Captain A. C.

    Cook, Thomas A.

    Beaumont, Hon. R. E. B. (Portsm'th, C.)

    Burgin, Dr. Edward Leslie

    Copeland, Ida

    Courtauld, Major John Sewell

    Kerr, Lieut.-Col. Charles (Montrose)

    Ross, Ronald D.

    Crooke, J. Smedley

    Kerr, Hamilton W.

    Ross Taylor, Walter (Woodbridge)

    Crookshank, Col. C. de Windt (Bootie)

    Lamb, Sir Joseph Quinton

    Ruggles-Brise, Colonel E. A.

    Crookshank, Capt. H. C. (Gainsb'ro)

    Leckie, J. A.

    Runge, Norah Cecil

    Cruddas, Lieut.-Colonel Bernard

    Leech, Dr. J. W.

    Russell, Alexander West (Tynemouth)

    Davies, Edward C. (Montgomery)

    Leighton, Major B. E. P.

    Rutherford, John (Edmonton)

    Davies, Maj. Geo. F.(Somerset, Yeovil)

    Lennox-Boyd, A. T.

    Rutherford, Sir John Hugo (Liverp'l)

    Drewe, Cedric

    Lloyd, Geoffrey

    Salmon, Sir Isidore

    Drummond-Wolff, H. M. C.

    Lockwood, John C. (Hackney, C.)

    Salt, Edward W.

    Duckworth, George A. V.

    Loder, Captain J. de Vere

    Sandeman, Sir A. N. Stewart

    Duncan, James A. L. (Kensington, N.)

    Loftus, Pierce C.

    Sassoon, Rt. Hon. Sir Philip A. G. D.

    Dunglass, Lord

    Lumley, Captain Lawrence R.

    Shaw, Helen B. (Lanark, Bothwell)

    Edmondson, Major Sir James

    Mabane, William

    Shepperson, Sir Ernest W.

    Elliot, Rt. Hon. Walter

    MacAndrew, Lieut.-Col. C. G.(Partick)

    Skelton, Archibald Noel

    Elmley, Viscount

    McCorquodale, M. S.

    Smith, Sir J. Walker- (Barrow-in-F.)

    Entwistle, Cyril Fullard

    McKie, John Hamilton

    Smith, Sir Robert (Ab'd'n & K'dlne, C.)

    Fermoy, Lord

    Magnay, Thomas

    Somervell, Sir Donald

    Fleming, Edward Lascelles

    Margesson, Capt. Rt. Hon. H. D. R.

    Sotheron-Estcourt, Captain T. E.

    Fox, Sir Gifford

    Mason, Col. Glyn K. (Croydon, N.)

    Southby, Commander Archibald R. J.

    Fraser, Captain Sir Ian

    Mayhew, Lieut.-Colonel John

    Spencer, Captain Richard A.

    Fremantle, Sir Francis

    Mills, Major J. D. (New Forest)

    Spens, William Patrick

    Fuller, Captain A. G.

    Mitchell, Harold P.(Br'tf'd & Chisw'k)

    Stanley, Rt. Hon. Lord (Fylde)

    Gluckstein, Louis Halle

    Molson, A. Hugh Elsdale

    Stevenson, James

    Goodman, Colonel Albert W.

    Morgan, Robert H.

    Stourton, Hon. John J.

    Gower, Sir Robert

    Morrison, William Shepherd

    Strickland, Captain W. F.

    Graham, Sir F. Fergus (C'mb'rl' d, N.)

    Munro, Patrick

    Sueter, Rear-Admiral Sir Murray F.

    Graves, Marjorie

    Nation, Brigadier-General J. J. H.

    Sugden, Sir Wilfrid Hart

    Guest, Capt Rt. Hon. F. E.

    Nicholson, Godfrey (Morpeth)

    Sutcliffe, Harold

    Guinness, Thomas L. E. B.

    North, Edward T.

    Tate, Mavis Constance

    Gunston, Captain D. W.

    Nunn, William

    Thomas, James P. L. (Hereford)

    Hacking, Rt. Hon. Douglas H.

    O'Donovan, Dr. William James

    Thompson, Sir Luke

    Hales, Harold K.

    O'Neill, Rt. Hon. Sir Hugh

    Thomson, Sir Frederick Charles

    Hammersley, Samuel S.

    Patrick, Colin M.

    Todd, A. L. S. (Kingswinford)

    Hanbury, Cecil

    Peat, Charles U.

    Touche, Gordon Cosmo

    Hanley, Dennis A.

    Penny, Sir George

    Tree, Ronald

    Haslam, Henry (Horncastle)

    Perkins, Walter R. D.

    Tryon, Rt. Hon. George Clement

    Haslam, Sir John (Bolton)

    Peto, Geoffrey K. (W'verh'pt'n, Bilst'n)

    Tufnell, Lieut.-Commander R. L.

    Hellgers, Captain F. F. A.

    Powell, Lieut.-Col. Evelyn G. H.

    Ward, Lt.-Col. Sir A. L. (Hull)

    Hope, Sydney (Chester, Stalybridge)

    Raikes, Henry V. A. M.

    Ward, Irene Mary Bewick (Wallsend)

    Horsbrugh, Florence

    Ramsay, Capt. A. H. M. (Midlothian)

    Warrender, Sir Victor A. G.

    Howard, Tom Forrest

    Ramsay, T. B. W. (Western Isles)

    Whyte, Jardine Bell

    Howitt, Dr. Alfred B.

    Ramsbotham, Herwald

    Willoughby de Eresby, Lord

    Hudson, Capt. A. U. M.(Hackney, N.)

    Rankin, Robert

    Wilson, Clyde T, (West Toxteth)

    Hunter, Dr. Joseph (Dumfries)

    Reed, Arthur C. (Exeter)

    Wise, Alfred R.

    Hunter, Capt. M. J. (Brigg)

    Reid, James S. C. (Stirling)

    Womersley, Sir Walter

    James, Wing-Com. A. W. H.

    Reid, William Allan (Derby)

    Jamleson, Douglas

    Remer, John R.

    TELLERS FOR THE AYES.—

    Jesson, Major Thomas E.

    Rickards, George William

    Captain Sir George Bowyer and

    Jones, Sir G. W. H. (Stoke New'gton)

    Robinson, John Roland

    Dr. Morris-Jones.

    Ker, J. Campbell

    Ropner, Colonel L.

    NOES.

    Banfield, John William

    Grenfell, David Rees (Glamorgan)

    Pickering, Ernest H.

    Brown, C. W. E. (Notts., Mansfield)

    Griffith. F. Kingsley (Middlesbro', W.)

    Rathbone, Eleanor

    Cocks, Frederick Seymour

    Hall, George H. (Merthyr Tydvil)

    Samuel, Rt. Hon. Sir H. (Darwen)

    Cripps, Sir Stafford

    Harris, Sir Percy

    Smith, Tom (Normanton)

    Daggar, George

    Holdsworth, Herbert

    Tinker, John Joseph

    Davies, David L. (Pontypridd)

    Janner, Barnett

    Williams, Edward John (Ogmore)

    Dobbie, William

    Jenkins, Sir William

    Williams, Thomas (York, Don Valley)

    Edwards, Charles

    John, William

    Wilmot, John

    Evans, R. T. (Carmarthen)

    Logan, David Gilbert

    Foot, Dingle (Dundee)

    McEntee, Valentine L.

    TELLERS FOR THE NOES.—

    Gardner, Benjamin Walter

    Maclean, Nell (Glasgow, Govan)

    Mr. Walter Rea and Mr. Aled Roberts.

    Graham, D. M. (Lanark, Hamilton)

    Mallalieu, Edward Lancelot

    Greenwood, Rt. Hon. Arthur

    Nathan, Major H. L.

    Resolution agreed to.

    Clauses 3 (All subsidies to be paid by the Minister), 4 (Power of Minister to make advances on account of subsidy in respect of molasses), and 5 (Short title, interpretation and extent) ordered to stand part of the Bill.
    Schedule (Rules for calculating the subsidy payable in respect of molasses manufactured between the thirty-first day of August, nineteen hundred and thirty-four, and the first day of September, nineteen hundred and thirty-five) agreed to.
    Bill reported, without Amendment; to be read the Third time To-morrow.

  MINES (WORKING FACILITIES) BILL [LORDS].
  Not amended (in the Standing Committee), considered; read the Third time, and passed, without Amendment.

  PETROLEUM (PRODUCTION) [MONEY].
  Resolution reported,
  "That, for the purpose of any Act of the present Session to vest in the Crown the property in petroleum and natural gas within Great Britain and to make provision with respect to the searching and boring for and getting of petroleum and natural gas, and for purposes connected with the matters aforesaid, it is expedient to authorise—
  942

  (a) the payment into the Exchequer of all moneys received by the Board of Trade under the said Act; and

  (b) the payment out of moneys provided by Parliament of all expenses of the Board of Trade under the said Act."

  The remaining Orders were read, and postponed.
  It being after half-past Eleven of the Clock, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
  Adjourned at six minutes before Twelve o'Clock.