Commons Sitting of 7 May 1934

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

PRIVATE BUSINESS.
Church House (Westminster) Bill,
Lords Amendment considered, and agreed to.
Cambridge University and Town Waterworks Bill [Lords],
Workington Corporation Bill [Lords],
Read the Third time, and passed, with Amendments.
South West Suburban Water Bill,
Weston-super-Mare Urban District Council Bill,
As amended, considered; to be read the Third time.
Wandsworth Borough Council Bill [Lords],
Watchet Urban District Council Bill [Lords],
Read a Second time, and committed.

ORAL ANSWERS TO QUESTIONS.
  INDIA.

    JAPANESE IMPORTS (QUOTA ARRANGEMENT).
    Mr. HAMMERSLEYasked the Secretary of State for India what executive machinery has been set up to ensure that Japaneses importations, via Indian States, are included in the quota restrictions?
    The SECRETARY of STATE for INDIA (Sir Samuel Hoare): The executive arrangements made in connection with the Indo-Japanese agreement provide for the issue of certificates by the Japanese Government in respect of every consignment of cotton piece-goods from Japan to India. As regards consignments imported by way of ports in the Indian
    706
    States, the Government of India are, as I told my hon. Friend on 16th April, fully alive to the necessity of securing the co-operation of the States. They have prohibited the import into British India of Japanese cotton piece-goods not covered by certificates, and have taken suitable steps for the enforcement of this prohibition by means of Customs cordons.
    Mr. HAMMERSLEY: Is my right hon. Friend satisfied from the assurances that have been given to him from the Government of India that, in fact, these quota restrictions can effectively be enforced?
    Sir S. HOARE: Yes, Sir; and I am particularly satisfied that the Government of India are taking every possible step to prevent any infringement of the convention.

    PIECE GOODS (IMPORTATIONS VIA BHAVNAGAR).
    Mr. HAMMERSLEYasked the Secretary of State for India what steps are being taken to safeguard the Government of India from loss of revenue by excessive importation of piece goods through Bhavnagar?
    Sir S. HOARE: So far as I am aware, there have not been any large imports of cotton piece-goods through Bhavnagar. The position of this State and others in relation to the overseas trade of India and the Customs revenue of the Indian Government is being considered by the Government of India in communication with His Majesty's Government.
    Mr. HAMMERSLEY: Is it not a fact that when goods are imported through this State, it has the right to keep the import duties that are levied, and will a careful watch be kept on the situation to see that the receipt of these revenues does not alter the normal avenues of trade into India?
    Sir S. HOARE: My hon. Friend is probably aware that his question raises one or two complicated issues connected with the treaty that has been in force between Bhavnagar and the Crown for many years. The Government of India and myself are considering the reactions of this treaty, and my hon. Friend can rest assured that the points he has in mind are receiving our attention.

    BANGALORE (CIVIL AND MILITARY STATION).
    Major General Sir ALFRED KNOXasked the Secretary of State for India whether the retrocession of the civil and military station of Bangalore will involve the building of a new military station at Agram; and what the cost of this will be?
    Sir S. HOARE: I would refer my hon. and gallant Friend to the answer given to my hon. and gallant Friend the Member for Newbury (Brigadier-General Brown) on 16th April.
    Sir A. KNOX: Is it not true that negotiations are in progress for the retrocession of the military station?
    Sir S. HOARE: If my hon. and gallant Friend will refer to the answer to which I have alluded, he will see that I gave my hon. and gallant Friend an answer on that specific point.
    Sir A. KNOX: Will the right hon. Gentleman take into consideration the fact that I looked at that reply, and that I did not see any answer to my question in it?
    Sir S. HOARE: I should have thought that the answer was a fairly simple one. There is no intention at all of retroceding the military encampment.
    Captain FULLER: Is there any intention of building a new station at Agram?
    Sir S. HOARE: Obviously, there is no question of building a new station when we do not intend to move from the existing one.
    Duchess of ATHOLL: Did not my right hon. Friend inform the House on 22nd November that negotiations were in progress with Mysore for the retrocession of the station?
    Sir S. HOARE: I cannot do more than refer my Noble Friend to the answers I have given on this subject. Certainly, I gave that answer then, but I gave the answer to the hon. and gallant Gentleman the Member for Newbury a few weeks ago.
    Sir A. KNOXasked the Secretary of State for India whether he is aware that the Bangalore Trades Association has submitted to the Resident a memorandum stating that the entire population of the civil and military station of
    708
    Bangalore protests against the proposed retrocession of the station to the Mysore Government; and whether he will reconsider a policy which will place thousands of Europeans and Anglo-Indians against their will under the rule of an Indian State?
    Sir S. HOARE: A copy of a memorandum by the Bangalore Trades Association has been sent to me. I can, however, add nothing to the replies given to the questions of my Noble Friend the Member for Kinross (Duchess of Atholl) on 19th March and to previous questions.
    Sir A. KNOX: If there are no negotiations in progress for the retrocession of the military station, why should the Bangalore Trades Association send in this special memorandum?
    Sir S. HOARE: There are negotiations going on about the civil station; there are no negotiations going on about the military station.
    Sir A. KNOX: Will the right hon. Gentleman definitely say that the military station is not in any case to be retroceded?
    Sir S. HOARE: I have already said it twice, and I will say it three times.

    GOVERNMENT STORES (FOREIGN COUNTRIES).
    Sir FRANK SANDERSONasked the Secretary of State for India approximately the value of goods of all descriptions ordered by the various Government Departments of the Government of India from countries outside the British Empire during the last five years?
    Sir S. HOARE: As the reply includes a number of figures, I am circulating it in the OFFICIAL EEPORT.
    Following is the reply :
    The nearest approach I can give to the figures desired by the hon. Member is the value for the last five financial years of Government stores consigned from foreign countries to India. This is as follows :

    Year.

    Value Rs.

    1928–29

    2,31,29,094

    1929–30

    2,30,94,713

    1930–31

    1,60,07,951

    1931–32

    92,94,205

    1932–33

    39,85,431*

    * Provisional Figures.

    INDIAN ARMY (CADETS).
    Duchess of ATHOLLasked the Secretary of State for India the number of Indian cadets who passed successfully out of the Royal Military College, Sandhurst, into the Indian Army, and the number of these now holding commissions in that Army?
    Sir S. HOARE: The numbers are 153 and 139 respectively, the latter including officers commissioned to the Unattached List for the Indian Army pending their final posting to that Army.
    Captain CAZALET: Is it the intention of the Government that in future Indian cadets should go to the Sandhurst in India, and not to a military college here?
    Sir S. HOARE: Yes, that is the intention of the Government.

    PUNJAB CIVIL SERVICE (JUDICIAL BRANCH).
    Duchess of ATHOLLasked the Secretary of State for India if he will place upon the Table of the House the rules drawn up by the Punjab Government requiring the judges of the Punjab High Court, when appointing judges to the subordinate courts, to allocate nominations to the various religious communities irrespective of the places secured by the candidates in the qualifying examination?
    Sir S. HOARE: I understand from the Punjab Government that there are no formal rules. For many years it has, however, been the general policy of the Punjab Government to avoid an undue preponderance of any one class or community in the public services, and since 1900 there has been a convention that out of every 11 appointments to the Judicial Branch of the Punjab Civil Service, four should go to Hindus, four to Mohammedans, two to Sikhs and one to members of other communities.
    Duchess of ATHOLL: Does not the convention which my right hon. Friend mentioned amount, in fact, to rules sufficiently well understood to have been the subject of a question to the Home Member of the Punjab Government last July, which was referred to in the Civil and Military Gazette of 1st August?
    Sir S. HOARE: I do not know whether that is so or not. If my Noble Friend will send me particulars of her supplementery
    710
    question, I will look into them. My information goes to show that there are no formal rules.

    CONSTITUTION (POLICE; FORCE).
    Duchess of ATHOLLasked the Secretary of State for India if he will lay upon the Table the memoranda which, following on the publication of the report of the Statutory Commission on Indian Constitutional Reform, the All-India Police Association and the Bengal branch of the association sent to the Secretary of State protesting against the Commission's recommendation to transfer the police force to a responsible Indian Minister?
    Sir S. HOARE: These documents were received by my predecessor in 1930. Since then the Indian Police Association have submitted a representation to the Joint Select Committee, and have been examined upon it. I do not, therefore, propose to publish these memoranda.
    Duchess of ATHOLL: Is it not the case that Bengal officers of police have not been examined by the Joint Select Committee, and in that case would it not be well that a strong expression of opinion against the recommendation should be made known?
    Sir S. HOARE: I do not think so. The police evidence given to the Select Committee was given by the police organisations. There was no pressure put on anybody as to the evidence they should give. The particular memoranda to which my Noble Friend refers were sent four years ago. I should have thought that the recent memoranda were more up-to-date.
    Duchess of ATHOLL: Will my right hon. Friend answer the question whether the officers of the Bengal police were heard by the Joint Select Committee along with the others?
    Sir S. HOARE: It is essentially a matter for the police organisations. They settle what evidence they shall give.

  JAPAN AND CHINA.
  Mr. HARCOURT JOHNSTONEasked the Secretary of State for Foreign Affairs the reasons why the third Japanese principle, which Mr. Hirota

  711
  stated to Sir Francis Lindley, namely, that Japan is opposed to any foreign activity in China prejudicial to the peace and order of East Asia, was omitted from the Government statement?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): The principle quoted by the hon. Member was not contained in the official statement by the Japanese Minister for Foreign Affairs to Sir Francis Lindley, the whole substance of which I gave to the House on 30th April. It appeared in a later declaration which was, I understand, communicated to the United States Ambassador, and a copy of which was also given subsequently to His Majesty's Ambassador.
  Mr. JOHNSTONE: Is it the opinion of the right hon. Gentleman that the reservation made by the Japanese Government does in fact weaken the declaration they made to our Ambassador, Sir Francis Lindley?
  Sir J. SIMON: I think that the statement made was a complete statement, and I reported it most faithfully to the House.
  Mr. JOHNSTONE: That is not the question I asked. It was whether the supplementary statement made by the Japanese Government to the United States Ambassador in fact weakened the declaration—which, I accept, was fully reported to the House—made to Sir Francis Lindley?
  Sir J. SIMON: I am primarily concerned with the statement made to the representative of our own Government, and the statement of our Government to Japan. I will add, in answer to the supplementary question, that if what is desired is to oppose what is prejudicial to peace and order in East Asia, I should have thought that was the common object of all the signatories of the Nine-Power Treaty.
  Major Sir ALAN McLEANasked the Secretary of State for Foreign. Affairs whether the reassurances given to him recently by the Japanese Government in respect of Japanese policy in China included any reference to the purpose for which the additional accommodation for
  712
  Japanese troops is being provided by new barracks now under construction at Shanghai?
  Sir J. SIMON: No, Sir.
  Sir A. McLEAN: May I ask whether inquiries have been made of the Japanese Government as to the peaceful purpose likely to be achieved by the erection of barracks for 9,000 Japanese troops?
  Sir J. SIMON: No, Sir. I think Japan has had barracks in Shanghai ever since 1927.
  Sir JOHN HASLAM (for Captain ERSKINE-BOLST)asked the Secretary of State for Foreign Affairs the special rights possessed by Japan in relation to China which have been recognised by other Powers and not shared by them?
  Sir J. SIMON: The phrase which my hon. Friend has quoted was employed for the purpose of indicating that any particular policy of His Majesty's Government in China or any particular activity of British subjects could only be successfully challenged by showing that such policy or such activity infringed some special Japanese right recognised by other Powers and not shared by them. There are no rights of a general character that would fall within the category indicated by my hon. Friend. Japan, however, like other countries, has no doubt acquired special rights in China recognised by other Powers but not shared by them, by virtue of agreements relating to particular enterprises. An example would be the Japanese concession in Hankow. I am not in a position to give a list of such agreements nor do I think it necessary to do so, since the responsibility of proving that this or that right comes within the category in question does not rest on His Majesty's Government.

  THE YEMEN.
  Colonel WEDGWOODasked the Secretary of State for Foreign Affairs whether he has any information as to the situation at Hodeida and in the Yemen?
  Sir J. SIMON: On 1st May, His Majesty's Ship "Penzance" reported that the Yemeni civil and military autihorities

  713
  had withdrawn from Hodeida and that the local tribesmen Bad looted the Customs shed and arms depot belonging to the Yemeni Government. Private property was reported still intact. His Majesty's Ship "Penzance" at once proceeded to Hodeida in order to safeguard the interests of the British community there, consisting mainly of some 300 British Indians. AB a result of these precautions, no disturbances appear to have occurred in the town. On 5th May, the Saudi forces entered Hodeida and assumed complete responsibility for the maintenance of order in the town and for the protection of foreign life and property. His Majesty's Ship "Penzance" is still at Hodeida. Apart from the capture by Saudi forces of the Yemeni ports of Medi, Loheia and Hodeida, His Majesty's Government have no trustworthy information regarding the position in the Yemen. I would add, as to the general position, that His Majesty's Government have observed an attitude of strict neutrality towards the conflict between Ibn Saud and the Imam, with both of whom His Majesty's Government are on friendly treaty relations, taking only such measures as have proved essential for the safeguarding of lives and property of British subjects and British protected persons in the area affected by the hostilities.

  NAVAL AND MILITARY PENSIONS AND GRANTS.
  Mr. GROVESasked the Minister of Pensions if he will inquire into the circumstances of J. Dorey, 44, Cullum Street, Stratford, Reference No. 11/M/343,844, having been refused a surgical boot; and whether he is aware that the adaptation of his own ordinary boot has been unsuccessful?
  The MINISTER of PENSIONS (Major Tryon): The hon. Member does not appear to have been quite correctly informed with reference to the matter raised in the last part of his question. I am willing, however, if the man is having any difficulty, to have him examined with a view to considering whether anything can be done to assist him.

  TRADE AND COMMERCE.

    ARGENTINA.
    Mr. POTTERasked the Secretary to the Overseas Trade Department whether any important orders have reached the United Kingdom from Argentina as the definite result of the Roca Agreement?
    Lieut.-Colonel COLVILLE (Secretary, Overseas Trade Department): It is not possible to attribute individual orders directly to the Anglo-Argentine Convention. I understand that certain important orders have in fact been secured by traders since the Agreement was signed, and I trust that even a larger number will be placed during the remaining term of the Agreement.
    Mr. POTTERasked the Secretary for Mines whether there has been any increase in the export of British coal to Argentina since the signing of the Roca Agreement?
    The SECRETARY for MINES (Mr. Ernest Brown): Provision for the maintenance of the position of British coal exports to Argentina appears in the Supplementary Agreement ratified on 7th November, 1933. The statistics of the exports of British coal to Argentina in the five months ended March, 1934, show a slight increase as compared with those for the corresponding period a year ago.
    Mr. HANNON: May I ask whether this slight increase in the export of coal to Argentina is what this country is getting out of the Argentine Trade Agreement?
    Mr. BROWN: We are concerned here only with coal. I would point out to my hon. Friend that as regards coal the position before the agreement was extremely satisfactory, seeing that we were exporting nearly 90 per cent. of Argentina's coal imports.

    MANCHURIA.
    Earl WINTERTONasked the Secretary to the Overseas Trade Department if any representative of his Department is resident in the State of Manchukuo or is responsible for assisting and advising British manufacturers desiring to sell their products in that country.
    Lieut.-Colonel COLVILLE: The Department of Overseas Trade is represented in Manchuria by His Majesty's

    715
    Consular Officers at Mukden, Harbin, Dairen and Newehwang, among the first of whose duties it is to assist and promote United Kingdom export trade.
    Earl WINTERTON: Can my hon. and gallant Friend say whether reports are received from these gentlemen from time to time, and, if so, will he make them available by laying a copy of them in the Library?
    Lieut.-Colonel COLVILLE: Very useful information is being received from them in the Department, and I will consider that suggestion.

    SCOTTISH HERRING (SALES, AMERICA).
    Rear - Admiral Sir MURRAY SUETERasked the Secretary to the Overseas Trade Department what steps he is taking in Britain or in North America to develop the sale in America of Stornoway herring and herring from the west coast of Scotland?
    Lieut.-Colonel COLVILLE: The Department of Overseas Trade is in close touch with Scottish exporters of pickled herrings, and I am aware of the difficulty experienced in recent years in maintaining sales in Canada and the United States of America owing to the severity of local competition and the tendency for imports to decline. The overseas officers of the Department in these countries are continually watching the situation in order to assist herring exporters to secure a fair share of the available market and to protect their interests.

    JAPANESE COMPETITION, GREAT BRITAIN AND COLONIES (GOVERNMENT PROPOSALS).
    Mr. HAMMERSLEYasked the Secretary of State for the Colonies if he can now make a statement on the policy of His Majesty's Government for dealing with excessive importation from Japan into the Colonial Empire?
    The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): I understand that my right hon. Friend the President of the Board of Trade is to make a statement in reply to a subsequent question.
    Captain DOWERasked the President of the Board of Trade if he is now in a position to make a statement as to the result of his further conversation with
    716
    the Japanese Ambassador with regard to trade negotiations between this country and Japan?
    Mr. REMERasked the President of the Board of Trade if he has any statement to make as to his conversations with the Japanese Ambassador on Thursday?
    Mr. CHORLTONasked the President of the Board of Trade whether he can now make any statement on the conversations between His Majesty's Government and the Japanese Government relating to the cotton and rayon industries?
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman): The House will remember that when I last made a statement on this subject on 15th March I informed them that, on the failure of the representatives of the textile industries of Japan and of this country to come to an agreement, the whole position was under review between the two Governments. When I saw the Japanese Ambassador on 16th March, I handed him a memorandum inquiring whether, in the circumstances, the Japanese Government had any proposals to put forward for dealing with the problem. On 31st March I received a reply in which the Japanese Government expressed their willingness to consider any further proposals which His Majesty's Government in the United Kingdom might make, but made no proposals of their own.
    The Government have considered the whole problem again very carefully in the light of this reply. It is already a year since His Majesty's Government drew the attention of the Japanese Government to the serious position arising from Japanese competition. It is, of course, of the utmost importance that every effort should be made to deal with a problem of this magnitude in the most appropriate way. Unfortunately there appeared to be nothing in the Japanese Government's note of 31st March to suggest that an early agreement on this subject was to be expected. Although, therefore, the Government still hold the view that the problem which faces us is one which can only be settled satisfactorily by co-operation in some form between Japan and ourselves, His Majesty's Government cannot allow a situation to develop in which negotiations are protracted indefinitely without any immediate prospect of success

    717
    and during this time the Japanese—quite naturally from their point of view—are continuously expanding their exports in our markets to the detriment of Lancashire, while our hands are tied. Accordingly His Majesty's Government have come to the conclusion that they would not be justified any longer in postponing, in the hope of agreement, such action as is open to them with a view to safeguarding the trade of this country. I therefore informed the Japanese Ambassador on Thursday last that in the circumstances His Majesty's Government were obliged to resume their liberty to take such action as they deemed necessary to safeguard our commercial interests. I assured him—and I am confident the House will join me in this—that such steps as it was proposed to take would be taken in no unfriendly spirit.
    As regards the Anglo-Japanese Treaty, I am satisfied that His Majesty's Government can, without denouncing it, take proper and sufficient measures to protect the commercial interests of this country, and in these circumstances I see no reason to terminate a Treaty which has regulated the commercial relations between the two countries for over 20 years. As far as the United Kingdom market is concerned, the Government do not feel they can any longer continue to suspend the review of the silk duties by the Import Duties Advisory Committee and my right hon. Friend the Chancellor of the Exchequer has asked the Committee to complete its report on these duties as quickly as possible.
    In the case of Colonial markets, my right hon. Friend the Secretary of State for the Colonies has been in consultation with Colonial Governors. The Governments of the Colonies and Protectorates for which such action would be appropriate will be asked to introduce import quotas which, except in the case of West Africa, would apply to all foreign imports of cotton and rayon goods. With a view to reinstating this country in the position in those markets which she held before the present abnormal period, it is intended that the basis for apportioning these quotas as between foreign countries shall be as far as possible the average of their imports in the years 1927–1931. It is further proposed that the necessary legislation in the Colonial territories should be enacted with the least possible delay, and that it should be so framed
    718
    that the actual quota regulation will be reckoned as commencing retrospectively from to-day, 7th May, so that no attempt at forestalling will be allowed to frustrate the policy and intentions of the measures under contemplation. In the most important of the West African Colonies, as the House is aware, there are treaty obligations which preclude differentiation in favour of our own goods. It was for this reason that on 16th May of last year notice was given to release the West African Colonies from their obligations under the Anglo-Japanese Treaty, and action there will be limited to Japanese goods.
    I have not attempted to deal in this statement with the position of any goods except cotton and rayon textiles. The Government are aware that Japanese competition is not limited to these goods, and they are considering in the case of each of the other industries involved what tariff action in Colonial markets is called for. As regards the home market, I have no reason to suppose that the matter cannot be dealt with by means of the ordinary procedure of the Import Duties Act. While His Majesty's Government cannot any longer refrain from taking steps to safeguard our trade interests, we shall, of course, be ready at any time to give the most careful consideration to any proposals which the Japanese Government may desire to put forward towards the solution by mutual agreement of this difficult problem. A solution of this kind ought to be possible where the Governments of the two countries are, as I am sure they are, anxious to agree.
    Mr. HAMMERSLEY: While thanking my right hon. Friend for the comprehensive nature of the reply, might I inquire whether steps are to be taken to consult the Dominions with a view to their taking co-operative action?
    Mr. RUNCIMAN: That is a question purely for the Dominions themselves, and I am afraid that I cannot intervene in that matter.
    Captain DOWER: While thanking my right hon. Friend for his reply, which will be most warmly welcomed in Lancashire, may I have his assurance that he will watch the dumping into the Colonies of Japanese goods other than textiles?
    Mr. CHORLTON: May I ask my right hon. Friend if, in the action which he

    719
    proposes to take, he can tell us anything about the most-favoured-nation clause and its denunciation, because that will provide him with a far greater weapon than those which he proposes this afternoon?
    Mr. RUNCIMAN: No, Sir. I am afraid that I cannot agree with my hon. Friend in that conclusion.
    Mr. AMERY: Might I ask if there is any reason why the Dominions should not be consulted with a view to their co-operating with us in this matter?
    Mr. RUNCIMAN: The Dominions have been kept fully informed of what we have done, but the initiative must, of course, come from them.
    Major PROCTER: May I ask whether, in fixing the quota, the right hon. Gentleman will also fix the price of the quota cloth from Japan going into the Colonies?
    Mr. HALES: May I ask the right hon. Gentleman whether he has thought of consulting with other nations outside the Empire, as the Japanese competition is affecting every nation of the world and is undoubtedly the greatest menace since we have had a civilisation?

    RUBBER INDUSTRY (REGULATION SCHEME).
    Mr. REMERasked the Secretary of State for the Colonies what steps will be taken when establishing an advisory panel representative of rubber manufacturers to advise the international committee which is to control the rubber regulation scheme, to ensure the fulfilment of the condition laid down by the World Economic Conference that the willing co-operation of consuming interests must be secured in the working of the scheme?
    Sir P. CUNLIFFE-LISTER: The consuming interests will themselves be invited to nominate the advisory panel.
    Captain CAZALET: Has the right hon. Gentleman received any representations yet from the United States of America?
    Sir P. CUNLIFFE-LISTER: We have had a great deal of discussion with the United States of America long before the present discussions started.
    Mr. BANFIELDasked the Secretary of State for the Colonies whether he is satisfied that the scheme for rubber regulation is adequately designed to secure a reasonable price level of the commodity; what is to be the pivotal price which the scheme aims at maintaining; and whether he will consider the advisability of introducing a clause into the scheme to provide that, should the price exceed a certain limit, it will be possible to reconsider the whole question?
    Sir P. CUNLIFFE-LISTER: I am satisfied that the scheme is adequately designed to secure a reasonable price level. It does not aim at maintaining any pivotal price. I do not think it would be advisable to introduce the clause suggested?
    Mr. BANFIELD: What does the right hon. Gentleman consider to be a reasonable price?
    Sir P. CUNLIFFE-LISTER: It is impossible to say, unless the hon. Gentleman will tell me exactly what are going to be the world conditions and the general level of prices and of costs throughout the coming years.
    Mr. HAMILTON KERRasked the Secretary of State for the Colonies whether any members of the International Rubber Regulation Committee will actually be appointed by the British Government; and, if not, whether any alternative steps will be taken to ensure that the interests of British industry which requires rubber for its activities are represented by any members thereof?
    Sir P. CUNLIFFE-LISTER: The answer to the first part of the question is in the negative. As regards the second part of the question, my hon. Friend will be aware from previous replies that a panel representing consuming interests will be associated with the committee. His Majesty's Government have assumed that one of the members of the panel will represent the interests of the British industry.
    Mr. SUMMERSBYasked the Secretary of State for the Colonies if he can give details of the provision contained in the rubber regulation scheme for associating representatives of consumers

    721
    with the International Committee; and whether he will issue a full explanatory statement?
    Sir P. CUNLIFFE-LISTER: I have already stated, in reply to questions, the general terms of this provision; and I will send the hon. Member a copy of the relevant provisions in the agreement which has now been published.
    Mr. GROVESasked the Secretary of State for the Colonies whether, in connection with the proposed rubber regulation scheme, he will request the Governments of Malaya and Ceylon, in appointing their representatives on the International Rubber Regulation Committee, to appoint some members representative of consuming interests in order to ensure that the scheme shall operate harmoniously and to the best interests of all concerned?
    Sir P. CUNLIFFE-LISTER: No, Sir. Other provision is expressly made in the scheme for the representation of the interests of consumers.

    IMPORTED GOODS (SELLING PRICES).
    Sir PERCY HURDasked the President of the Board of Trade if he will give an assurance that, in pursuance of the Government policy of home first and Empire second, all future trade agreements shall include a clause to deter the sale in this country of foreign surplus produce at knock-out prices to the detriment of British and British Empire producers; and if he will invite the Dominion Governments to make a corresponding provision in their trade agreements with foreign countries?
    Lieut. -Colonel COLVILLE: His Majesty's Government in the United Kingdom have constantly in mind possible difficulties arising from the sale in this country of imports at unduly low prices; but in making agreements with foreign countries each case must be considered on its merits.
    Sir P. H U R D: In the case of the negotiations which are now pending with Holland, will a clause of this character be put into the agreement?
    Lieut.-Colonel COLVILLE: I cannot forecast what clauses will be in the agreement, but the question is being borne in mind.
    Sir P. HURD: Is it being borne in mind with a view to protecting the interests of British producers?
    Lieut.-Colonel COLVILLE: Yes, Sir.
    Mr. LAMBERTasked the President of the Board of Trade if he will present a list of agricutlural commodities imported into Great Britain that are sold here at prices below those at which they are sold in the country of origin; and also specifying the countries of origin and the differential prices at which they are sold?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): No, Sir. My right hon. Friend will find, in the "Monthly Crop Report and Agricultural Statistics" issued by the International Institute of Agriculture and the quarterly review of the International Institute of Statistics, particulars of the prices in a number of countries of certain agricultural products, but it is necessary to point out that such quotations may not in all cases relate to products of comparable qualities.
    Mr. LAMBERT: Will the Board of Trade let us know exactly what products are being dealt in in this country at prices less than those at which they are sold in the country of origin?
    Dr. BURGIN: The total quantity of foodstuffs imported into this country is, of course, very large, and my right hon. Friend will find on reflection that any compilation of statistics of all that volume of trade would be an immense undertaking; and if, at the end, you were not comparing like with like, the result would hardly be satisfactory. The point that my right hon. Friend has in mind is kept very closely under consideration.
    Mr. HANNON: Is it not clear, from the question and answer that are now before the House, that the time has come when His Majesty's Government should introduce an Anti-Dumping Bill?
    Lieut.-Colonel HENEAGE: In view of the statement of the hon. Gentleman that reports in these publications—
    Mr. SPEAKER: We cannot have a debate on the matter.
    Lieut.-Colonel HENEAGE: With great deference, it is a most important matter—
    Mr. SPEAKER: I am afraid we must get on.

    RUSSIA (RUBBER AND TEA RE-EXPORTS).
    Sir WILLIAM DAVISONasked the President of the Board of Trade whether his attention has been drawn to the considerable increase in re-exports from Great Britain to Soviet Russia of rubber and tea; and whether such re-exports will be excluded from the terms of the recent Trade Agreement, as no additional employment is provided in Great Britain by these transactions?
    Lieut.-Colonel COLVILLE: The re-exports of rubber to Soviet Russia have only increased slightly during the first quarter of this year as compared with a year ago, and the re-exports of tea have been considerably less during the quarter than in the corresponding quarter of 1933. The answer to the second part of the question is in the negative.
    Sir W. DAVISON: Was not the House informed that one of the principal objects of the Trade Agreement was to give increased employment in this country; and how can the mere re-export and transhipment of goods in this country give employment to British workers?
    Lieut.-Colonel COLVILLE: It does give employment; but, as I have pointed out, the re-export of tea has been considerably less since the agreement.
    Sir W. DAVISON: Even if that is so, has it anything to do with the question? The object of the new Agreement was to give additional employment. Does the re-export of tea and rubber give employment in this country?
    Lieut.-Colonel COLVILLE: Yes, Sir; but my hon. Friend asked me to deal with the question of a considerable increase, and in fact there is rather a decrease in the case of tea.

    CATTLE AND HORSES (IRISH FREE STATE EXPORTS).
    Sir GIFFORD FOXasked the Financial Secretary to the Treasury whether any means exist or can be introduced to show the proportion of cattle and horses, including Army remounts, originating from the Free State and exported to this country by way of Northern Ireland?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): I regret that the figure desired by my hon. Friend is not available, but I will circulate in the OFFICIAL REPORT certain particulars of imports of cattle and horses from the Irish Free State which he may find helpful.
    Following are the particulars :
    The approximate number and value of cattle and horses imported from the Irish Free State into Great Britain and Northern Ireland during the calendar year 1933 were as follow :

    No.

    Valus.

    £

    Cattle

    591,400

    5,619,400

    Horses

    4,800

    184,700

    These included imports into Northern Ireland via the Land Boundary as follow :

    No.

    Valus.

    £

    Cattle

    112,500

    828,800

    Horses

    2,700

    33,500

    IMPORTS AND EXPORTS.
    Sir PERCY HARRIS (for Mr. HOLDSWORTH)asked the President of the Board of Trade what was the total value for the year 1933 of the merchandise imported into this country from foreign countries and British countries, respectively, and the corresponding figures for the total value of merchandise, produce and manufactures of the United Kingdom exported to foreign and British countries?
    Dr. BURGIN: The hon. Member will find the desired particulars in Tables X and XI of the issue of the "Accounts relating to Trade and Navigation of the United Kingdom" for January last.

    CHEMICALS (IMPORTS).
    Sir WILLIAM WAYLAND (for Mr. HERBERT WILLIAMS)asked the President of the Board of Trade whether his attention has been drawn to the imports of chemicals which, according to the Board of Trade Journal for 3rd May, are 46.9 per cent. higher in the first quarter of this year than in the corresponding quarter of 1933; whether he will ascertain if the requirements of chemicals in this country can be met from home sources; and whether, if the home

    725
    industry is capable of supplying all our requirements, he will take steps to enable it to do so?
    Dr. BURGIN: I am aware of the figures to which my hon. Friend refers. Some of our imports consist of chemicals not obtainable in this country. Any question of increasing a duty leviable under the Import Duties Act is a matter, in the first instance, for the Import Duties Advisory Comimittee.
    Sir W. WAYLAND: Is not the Minister aware that there are very few chemicals imported which this country cannot manufacture, also that the wages in the chemical trade in European countries are very much lower than in this country?
    Dr. BURGIN: I should like to think that chemicals could all be made here, but I have taken the trouble to look up the four particular families of chemicals which constitute the greater part of the increase to which the question relates and I am satisfied that we are, and have been for many years past, dependent on foreign supplies in those cases.

  AGRICULTURE.

    CHEESE PRODUCTION (FARMS).
    Sir W. WAYLANDasked the Minister of Agriculture how many farmers have now registered as cheese producers; how many cows are owned by cheese producers registered to date; what is their estimated output of milk during the coming season; how many tons of cheese this will contribute towards the requirements of the home market; and what proportion this represents of our total consumption?
    The FIRST COMMISSIONER OF WORKS (Mr. Ormsby-Gore): I have been asked to reply. The number of farmers registered with the Milk Marketing Board as farm cheese-makers on 2nd May, 1934, was 1,284, owning 54,400 cows with an estimated output of milk of 22,000,000 gallons per annum. The yield of cheese from this gallonage would be roughly 10,000 tons, which represents approximately 5 per cent. of our total annual cheese consumption.
    Sir W. WAYLAND: Does the Minister agree that that is a very small proportion of our total consumption?
    Mr. ORMSBY-GORE: Oh, very small indeed.

    MILK.
    Mr. MACLAYasked the Minister of Agriculture whether he will draw the attention of the Milk Marketing Board to the importance of commencing as early as possible an extensive advertising campaign to encourage the public to consume more milk?
    Mr. ORMSBY-GORE: My right hon. Friend is quite satisfied that the Milk Marketing Boards fully realise the desirability of encouraging the public to consume more milk : and the hon. Member will recollect that the proposals which he explained in his statement on milk policy in this House on 22nd February include the provision of funds for a publicity campaign. Schemes for that purpose are now being formulated.
    Mr. MACLAY: Does the right hon. Gentleman realise that up to the present there has been no advertising whatever, and will he bear in mind that every other beverage has to advertise extensively in order to ensure its commercial success, and do his best to speed up this matter?
    Mr. ORMSBY-GORE: I think the board fully realise that they have to undertake a scheme of advertising, but it is just as well, having regard to the nation-wide character of the project before them, that they should think it out and work it out thoroughly before beginning.
    Lieut.-Colonel ACLAND-TROYTE: Can the right hon. Gentleman do something to stop the doctors from constantly crabbing our milk supply?
    Mr. ORMSBY-GORE: I have no power over doctors.
    Sir P. HARRIS: Will the same energy be shown in advertising milk as is shown in advertising stout?
    Lieut.-Colonel HENEAGEasked the Minister of Health whether, in view of the small number of farms producing high-class milk, he will reduce the licences payable to a nominal sum?
    The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): My right hon. Friend will consider this question in connection with any revision of the Milk (Special Designations) Order.
    Lieut.-Colonel HENEAGE: When the right hon. Gentleman is considering this question, will he also consider the question of improving and encouraging high-class milk, which at present receives very little support in this country or by the Government Departments which have contracts?
    Mr. LAMBERTasked the Minister of Health if he is satisfied that all imported milk products are produced from healthy animals kept in conditions of cleanliness?
    Mr. SHAKESPEARE: My right hon. Friend is not in a position to say that all milk products are made from healthy animals kept in conditions of cleanliness, but he understands that most of the imported products are made from pasteurised milk or cream.
    Mr. LAMBERT: Are we to understand that any kind of muck can be brought into this country under the name of butter, even if it is made under the most filthy conditions?
    Mr. SHAKESPEARE: I am informed that no danger to the public health is involved.
    Lieut.-Colonel ACLAND-TROYTE: Is there no inspection at the ports, to see what the condition of this dairy produce is before it is brought in?
    Mr. HANNON: Are we to understand that the Government can institute no machinery to test the quality of the produce as it arrives?

    Number of Cattle, other than Calves, imported from Northern Ireland ports to Great Britain and the Isle of Man during the first three months of 1932, 1933 and 1934. (From monthly returns issued by the Ministry of Agriculture, Northern Ireland.)

    January to March.

    Fat.

    Stores (including heifers and bulls for breeding).

    Milch Cows.

    Springers.

    Total.

    No.

    No.

    No.

    No.

    No.

    1932

    …

    …

    4,966

    35,693

    2,898

    285

    43,842

    1933

    …

    …

    7,087

    25,608

    2,255

    169

    35,119

    1934

    …

    …

    15,627

    30,711

    2,054

    214

    48,606

    FISH FARMS.
    Brigadier -General CLIFTON BROWNasked the Minister of Agriculture how many fish farms there are in England and Scotland, respectively; and how many people are employed thereon?
    Mr. SHAKESPEARE: Of course, we can institute machinery, but I should not like to come to the House and ask for a large expenditure which, on the grounds of public health, I could not justify.
    Mr. HANNON: Are the people of this country to feed upon milk products from milk of the composition of which we have no knowledge?
    Sir W. WAYLAND: Has the hon. Gentleman ever visited a Polish or Russian dairy farm?
    Lieut.-Colonel ACLAND-TROYTE: May I have a reply to my question as to whether there is any inspection at the ports?
    Mr. SHAKESPEARE: If a product is in liquid form, we have ample power under regulations to demand a bacteriological examination. As regards non-liquid products, I am told that there is no danger to health.

    CATTLE (IMPORTS FROM NORTHERN IRELAND).
    Sir A. KNOXasked the Minister of Agriculture what number of beasts were shipped from Northern Ireland to the United Kingdom in the first three months of 1932, 1933 and 1934, respectively?
    Mr. ORMSBY-GORE: A statement is being circulated in the OFFICIAL REPORT giving the information desired.
    Following is the statement :
    Mr. ORMSBY-GORE: There are in England and Wales about 23 commercial fish farms, four fish hatcheries owned by local fishery boards, and a number of private fish farms with regard to which I have no particulars; with the exception

    729
    of the hatcheries belonging to the fishery boards, all these farms are privately owned and I have no information as to the number of people employed. In Scotland there are, I am informed by my right hon. Friend the Secretary of State, six fish farms; the number of persons employed is believed to be approximately 17, but no exact information is available on this point.
    Lieut. - Colonel ACLAND - TROYTE: May I ask whether the owners of these fisheries were consulted before the introduction of the Diseases of Fish Bill, and if not, why not?
    Mr. ORMSBY-GORE: I must have notice of that question.
    Brigadier-General BROWN: Will the hon. Gentleman kindly pass on to the Secretary of State for Scotland, who will be on the Committee on this Bill, the information as to the number of fish farms in England?
    Mr. ORMSBY-GORE: I have given notice to him.

    LAND SETTLEMENT SCHEMES, DURHAM.
    Mr. MARTINasked the Minister of Agriculture whether he can give particulars of schemes of land settlement undertaken by the Durham County Council; how many men or families have been put on to the land under such schemes; how much such schemes have cost the county council; and how much the Exchequer has contributed to such schemes?
    Mr. ORMSBY-GORE: As the answer is long and involves a number of figures, it is proposed, with the hon. Member's concurrence, to circulate a statement in the OFFICIAL REPORT.
    Mr. MARTIN: Can the hon. Gentleman give me the last item—how much the Exchequer has contributed?
    Mr. ORMSBY-GORE: The information is under a series of heads, and perhaps the hon. Member will read the answer.
    Following is the statement :
    1. Land acquired between 1st January, 1908, and 31st March, 1926.
    The County Council hold an area of 3,995 acres let to 222 individual tenants and 11 associations comprising 483 tenants. The total expenditure for which loans were raised for the cost of acquisition
    730
    and equipment of the land for smallholdings was £138,000. The whole of the annual loss incurred by the council is refunded from the Exchequer. Up to 31st March, 1926, the amounts so paid were the actual losses incurred, while from that date onwards the amounts are based on a valuation of income and expenditure at that date. The total payments made to the council up to 31st March, 1934, amounted to £115,481. The amount payable annually at the present time is just over £7,000, but will diminish as the loans are paid off.
    2. Land acquired under the Smallholdings Act, 1926.
    The council have acquired an area of 888 acres which is let to 31 individual tenants and two societies comprising 146 members. The estimated total capital expenditure is £36,371. The Ministry defrays 75 per cent. of the annual losses calculated on the basis of estimates made at the time of acquisition; the remaining part of the loss falls on the council's smallholdings account. The total of estimated losses on approved schemes up to 31st March, 1934, amount to £912, the Ministry's contribution thereto being £684. The estimated annual loss at the present time is £465, of which the Ministry pays £349. These amounts will diminish as the loans are paid off.

    SUGAR INQUIRY COMMITTEE.
    Colonel ROPNERasked the Minister of Agriculture whether the shipping industry has been invited to give evidence before the committee which is considering the question of the assistance which is to be given for the production of home-grown sugar?
    Mr. ORMSBY-GORE: I understand that the Sugar Inquiry Committee has not yet invited the shipping industry to appear before it, but that it is willing to receive written statements of evidence from any representative body and to consider in each case the advisability of examining witnesses.

    EGGS (IMPORT).
    Viscount ELMLEYasked the President of the Board of Trade how many eggs were imported in April, 1933, and April, 1934, respectively?
    Dr. BURGIN: My Noble Friend will find particulars of the imports of eggs

    731
    during April, 1933, in the "Accounts relating to Trade and Navigation of the United Kingdom" for that month. The figures for April, 1934, will be published in these accounts on Monday next.

  GREENHOW HILL, YORKSHIRE (RIGHT OF WAY).
  Mr. T. SMITHasked the Minister of Agriculture if he is aware that a right of way has recently been closed by the landlord at Greenhow Hill, Yorkshire, which has been used by an agricultural family, named Newbould, for over 200 years; that this closing order renders farming operations for the latter most difficult; and will he intervene on the tenant's behalf?
  Mr. ORMSBY-GORE: My right hon. Friend has no information of this matter; neither has he any jurisdiction or power to intervene.
  Mr. SMITH: If I come round to the right hon. Gentleman's room, will he go into the matter and make representations on it?
  Mr. ORMSBY-GORE: I understand that this is entirely a matter for the rural district council, and not for the Ministry of Agriculture.

  ROYAL PARKS.

    BIRD SANCTUABIES.
    Lieut.-Colonel MOOREasked the First Commissioner of Works if he will consider wiring off suitable portions of the lakes in those Royal Parks where boating is permitted, so that during the breeding season the young birds may have a sanctuary from the boats and oars and not be maimed' and killed as they have been in previous years?
    Mr. ORMSBY-GORE: Boating is allowed on the Serpentine and the Regent's Park lake. The island in the Serpentine and the channel separating it from the northern bank are chained off : in Regent's Park, boats are excluded from the arms of the lake at its north-western and south-western ends. I have no evidence in my Department that, under present conditions, birds have suffered injury in the manner suggested by my
    732
    hon. and gallant Friend, but I will certainly consider whether it is possible for any further areas of water to be marked off as sanctuaries.
    Lieut.-Colonel MOORE: Will the right hon. Gentleman allow me to escort him some Sunday morning around Regent's Park so that he can see how many of these small birds and ducks are being killed?

    REGENT'S PABK, ST. JOHN'S LODGE.
    Sir ARTHUR MICHAEL SAMUELasked the First Commissioner of Works whether the main building of St. John's Lodge, Regent's Park, now unoccupied, could be used as a museum or exhibition building for modern sculpture, statuary, and decorative metal work by British craftsmen?
    Mr. ORMSBY-GORE: If a body with the necessary financial backing and authority came forward with a suitable proposal of this description, I should be glad to consider it.
    Sir A. M. SAMUEL: Will my right hon. Friend take this opportunity of inviting the local authorities to send exhibts from their arts and crafts schools, so as to help forward the Art and Industry Movement That would certainly assist the finances.
    Mr. ORMSBY-GORE: I would like to point out that I have drawn public attention by answers in this House to the fact that the house is available for suitable museum purposes, and that it will require a considerable sum of money to be spent on it if it is to be used for such a purpose. It is now an ordinary private house, and the lighting of the rooms, etc., will require to be completely altered before it can be made suitable for public exhibitions.
    Sir A. M. SAMUEL: Why not ask the London County Council, which is very public-spirited in these matters of arts and crafts, to send their exhibits there?
    Lieut.-Colonel MOORE: Can the right hon. Gentleman give an assurance that this lovely building will not be pulled down, but that some suitable purpose will be found for it?
    Mr. ORMSBY-GORE: We have had it on our hands for some time. I admit

    733
    that the outside has some considerable architectural merit, but the inside is in a very bad condition and would require a considerable sum of money spent on it. I am quite willing to receive any representations from any museum or any local authority which desires to use the building for exhibition purposes. As I have stated, plenty of publicity has been given by the series of questions in this House and I cannot do more.

  DUKE OF ATHOLL FUND (POLICE INQUIRIES).
  Mr. McENTEEasked the Attorney-General whether, in view of subsequent developments, he is now prepared to hold a public inquiry into the allegations regarding the action of the police in respect to a recent sweepstake?
  The ATTORNEY-GENERAL (Sir Thomas Inskip): In considering this question, I have had to consider the public interest, and I am satisfied that the questions between the Duke of Atholl and myself concerning conversations which took place more than six months ago are not such as to justify the expenditure of public money and the absorption of valuable time which a public inquiry would involve. The Government, therefore, do not propose to hold an inquiry.
  Mr. McENTEE: In view of the fact that the Duke of Atholl reiterated his charges against the police, and that the right hon. and learned Gentleman's own Department denies having given any such instructions, will he give an opportunity to the two officers concerned to make some public statement in regard to their own position in the matter?
  Sir W. DAVISON: Will the right hon. and learned Gentleman inform the House whether he has requested the Duke of Atholl to supply him with the corroborative evidence which he says was in his possession, and which he complained had not been asked for?
  The ATTORNEY-GENERAL: I have not asked the Duke of Atholl to supply me with the corroborative evidence, but the Duke raised questions in another place without any communication with me, and I have given this honourable House the answers which I have thought were proper.
  Mr. McENTEE: Is it not a fact that the Duke has stated that he has already supplied that information to the right hon. and learned Gentleman's Department?
  Mr. TINKER: Is the attitude which the right hon. and learned Gentleman is taking up for the purposes of getting the Duke to make a statement in public?
  The ATTORNEY-GENERAL: The attitude I have taken up is conceived, as I say, in the public interest.

  BRITISH COLUMBIA (BRITISH INVESTORS).
  Mr. POTTERasked the Secretary of State for Dominion Affairs whether, in view of the United Kingdom holdings of British Columbia obligations, he will obtain from the Canadian Dominion Government an explanation of the official announcement on 17th April, on behalf of the Government of British Columbia, that recourse to the courts would be closed to holders of British Columbia external debt in relation to the conversion of British Columbia public debt?
  The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): I understand that inscribed stocks issued in the City of London have been safeguarded by British Columbia statute in relation to the contemplated conversion of British Columbia Public Debt, in accordance with an undertaking given by the British Columbia Minister of Finance. I further understand that the announcement to which the hon. Member refers was not an official announcement in the ordinary sense of the term, but that the Attorney-General of the Province, in the course of a speech, was explaining powers conferred upon the Provincial Government by recent legislation, for conversion, should the opportunity for such a conversion arise, of indebtedness other than inscribed stock issued in the City of London.

  PALESTINE (CHURCH OF THE HOLY SEPULCHRE).
  Colonel WEDGWOODasked the Secretary of State for the Colonies what expenditure upon the Church of the Holy Sepulchre has been authorised; and what inquiry was made as to other sources

  735
  from which the funds might have been obtained before the expenditure of public funds was authorised?
  Sir P. CUNLIFFE-LISTER: It was ascertained that the ecclesiastical bodies concerned were unable at present to provide the necessary funds. Authority was therefore given for meeting provisionally from the funds of Palestine the cost of the survey, £750, and of emergency works, £2,500. As the matter brooked no delay, this was the obvious course to take, but, as I have already stated on more than one occasion, the question of the ultimate incidence of the cost will be a matter for discussion with the ecclesiastical authorities.
  Colonel WEDGWOOD: Is any part of the cost coming on to the Palestine Loan, which is to be debated on Friday next?
  Sir P. CUNLIFFE-LISTER: No, Sir, it is not.

  ADMIRALTY DEPOT, SHEFFIELD (EMPLOYES).
  Mr. T. SMITHasked the First Lord of the Admiralty if he is aware that employés at an Admiralty depot, Sheffield, are dismissed without pension on reaching the age of 60; and whether this is due to any order or regulation; and, if so, will he make such order or regulation available for Members of this House?
  The PARLIAMNTARY SECRETARY to the ADMIRALTY (Lord Stanley): Admiralty employés at Sheffield are subject to the same regulations as regards discharge for age as employés at other Admiralty establishments. On discharge their eligibility for pensions and gratuities is determined with reference to the provisions of the Superannuation Acts, which do not provide for the grant of pension or gratuity in all cases, but only where certain conditions as to service are satisfied.

  UNEMPLOYMENT INSURANCE (CARDIFF CORPORATION EMPLOYES).
  Mr. BUCHANANasked the Minister of Labour, with regard to the request he has received from the Cardiff Corporation
  asking that about 2,000
  736
  permanent employés should be allowed to contract out of unemployment insurance, if he has sanctioned the request; and what amount the Insurance Fund will lose if the request is granted?
  The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. R. S. Hudson): I presume the hon. Member is referring to the power of the Minister under paragraph (d) of Part II of the First Schedule to the Unemployment Insurance Act, 1920, in certain circumstances to issue a certificate of exception from unemployment insurance. My right hon. Friend has received no application from Cardiff Corporation for any such certificate beyond that which they already hold. In the circumstances the second part of the question does not arise.

  TRADE DISPUTE, WARRINGTON.
  Mr. GOLDIEasked the Minister of Labour whether he is aware that a strike is now in progress at Warrington as a result of a dispute which has arisen between the Warrington Co-operative Society and their employés in consequence whereof several branches of the said society have been temporarily closed; and whether he is prepared to intervene with a view to the settlement at the earliest possible moment of this controversy?
  Mr. HUDSON: I am glad to be able to say that this dispute has been settled.

  ROYAL AIR FORCE (BOMBERS).
  Commander LOCKER - LAMPSONasked the Under-Secretary of State for Air how many four-engined bombers are now in use by the Air Force; and what increases in this direction are anticipated shortly?
  The UNDER-SECRETARY of STATE for AIR (Sir Philip Sassoon): No four-engined bombers are in service in the Royal Air Force at the present time or in immediate prospect. The adoption of types of aircraft with a larger number of power units than those in normal use to-day is, of course, kept under constant review, but consideration of their relative advantages and disadvantages involves highly technical issues which cannot be discussed within the limits of a Parliamentary reply.

  IRELAND (LAND FRONTIER SMUGGLING).
  Sir G. FOXasked the Financial Secretary to the Treasury the length of land frontier in Ireland between Northern Ireland and the Free State; the number of customs officers posted there to prevent smuggling; the number of motor cars they employ; and the number and quantities of smuggled articles they have detected within the last six months?
  Mr. HORE-BELISHA: The land boundary, which is made up of the exterior boundaries of the six counties of Northern Ireland, is just under 200 miles long. As regards the remainder of the question, it would not be in the public interest to give the information desired.
  Sir G. FOX: Is the Financial Secretary satisfied that the present arrangements will stop this scandalous smuggling, in view of the fact that fat cattle are worth about £6 more in Northern Ireland than in the Irish Free State?
  Mr. HORE-BELISHA: I am not ever satisfied, but every step that can be taken is and will be taken.
  Sir G. FOXasked the Financial Secretary to the Treasury whether he has received any recent reports from the Government of Northern Ireland indicating the continued existence of smuggling from the Irish Free State on a large scale; and whether the Government of Northern Ireland is satisfied that all adequate and sufficient precautions are being taken to prevent it?
  Mr. HORE-BELISHA: I am not aware of the particular reports to which my hon. Friend refers, but close consideration is being given to the prevention of smuggling in consultation with the Government of Northern Ireland.
  Brigadier-General BROWN: Is the Financial Secretary aware that that is the same sort of answer that he gave me six months ago, and that in the meantime smuggling has very greatly increased; and will he, in consultation with the Government of Northern Ireland, take steps to stop this smuggling?
  Mr. HORE-BELISHA: The fact that I gave an answer six months ago and have given the same answer to-day is proof that I was speaking the truth on both occasions.

  TRANSPORT (BY-PASS ROAD, YORKSHIRE).
  Mr. GLOSSOPasked the Minister of Transport if he is now in a position to make a statement regarding the resumption of work on the Sheffield-Penistone-Huddersfield by-pass which was begun in 1930 and abandoned in 1932?
  The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Lieut.-Colonel Headlam): This is one of a number of schemes, suspended as a result of the financial crisis, which are being kept under constant review in the hope that arrangements may be made, at no distant date, for the resumption of work, as and when funds permit.
  Mr. GLOSSOP: Could not this matter be reviewed at an early date, in view of the fact that the town of Penistone is one of the few places in the country where there has not been a considerable reduction in unemployment, so that a resumption of this work would be greatly to the benefit of the unemployed people there?
  Lieut.-Colonel HEADLAM: All these matters are taken into consideration.

  CHILE (BRITISH BONDHOLDERS).
  Mr. JOHN WILMOTasked the Secretary of State for Foreign Affairs if his attention has been called to the law recently passed by the Chilean legislature regarding the sterling bonds of the Compañia de Salitre de Chile; and if he will make representations with a view to securing equitable treatment of the British holders of such bonds?
  Sir J. SIMON: I assume; that the hon. Member has in mind the Nitrate Bill which was promulgated by the Chilean Government on 6th January last. Prior to and during the passage of the legislation in question the British interests concerned made representations to the Chilean Government on the subject, with the support of His Majesty's Government where this seemed desirable. I understand that in certain instances effect has been given to these representations in the law as finally passed. In all the circumstances, I do not consider that the action suggested by the hon. Member would serve any useful purpose.

  CIVIL SERVANTS (SHAREHOLDINGS).
  Mr. CHARLES BROWN (for Mr. DOBBIE)asked the Prime Minister whether he will take steps, by legislation or otherwise, to lay down the principle that high officials in the Admiralty, the War Office, the Board of Trade, the Home Office, the Prison Commissioners, the Board of Inland Revenue, the Colonial Office, the India Office, Scotland Yard, the Commissioners in Lunacy, the Ministry of Transport, the Ministry of Health, and the Foreign Office should not hold shares in concerns dealing directly or indirectly with these Departments?
  The PRIME MINISTER (Mr. Ramsay MacDonald): The principles regulating the conduct of civil servants in this and cognate matters are laid down in a Treasury Circular dated 13th March, 1928, of which I am sending the bon. Member a copy. I do not think it is either necessary or desirable to lay down more precise regulations in amplification of these principles, as their application must necessarily vary according to the position, the Department, and the work of the officer concerned.

  FASCIST MEETING, NEWCASTLE-ON-TYNE.
  Mr. T. SMITH (for Mr. THORNE)asked the Secretary of State for the Home Department if any report has been received by him from the police of New-castle-on-Tyne in connection with a Fascist meeting that was recently held in that city; if he can state the number of people injured and taken to the Newcastle infirmary; if he is aware that they marched through the streets in military formation; and whether he has any information as to the extent of these practices?
  The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Gilmour): Yes, Sir : I have obtained a report from the Chief Constable of Newcastle-upon-Tyne regarding the Fascist meeting held in that City on 29th April last. I am informed that there was some disorder which the police attribute to insulting language used by some of the Fascist speakers towards the crowd. So far as the police are aware, only two persons were injured, one a woman who was knocked down in the general melee
  740
  and was rescued by the police and the other a Fascist who was badly cut on the lip and was taken by the police to the hospital where he received treatment. I understand that it is a common practice of the Fascists to march from their meetings in formation.
  Mr. SMITH: Is any action contemplated?
  Mr. DENVILLE: Is the right hon. Gentleman aware that the Newcastle police are as efficient as any police force in the country and are quite capable of attending to any breach of the peace when occasion arises?

  EDUCATION (CAPITATION GRANT).
  Mr. T. SMITH (for Mr. THORNE)asked the Parliamentary Secretary to the Board of Education if he is aware that, under the new regulations, the capitation grant will be reduced from 45s. to 41s.; if he can give any reason for this alteration; and if he can state, approximately, the saving to the Government?
  Captain AUSTIN HUDSON (Lord of the Treasury): My Noble Friend would draw the hon. Member's attention to the answer given to the hon. Member for Caerphilly (Mr. M. Jones) on 26th April. The reduction in the rate of capitation grant should be read in conjunction with the increase in the rate of percentage grant in respect of teachers' salaries. The general effect of these changes taken together will be to secure that the increase in salary expenditure consequent on the remission of half the cut in teachers' salaries, as from 1st July next, will fall upon Exchequer funds.

  BELGIUM (LATE KING ALBERT).
  Sir HERBERT SAMUEL (by Private Notice)asked the Secretary of State for Foreign Affairs whether he has received any communication from the Belgian Embassy with regard to the late King of the Belgians, and whether he has any statement to make on the matter?
  Sir J. SIMON: Yes, Sir. My attention has been rightly drawn by the Belgian Government to a statement alleged to have been made by Colonel G. Seton Hutchison to the effect that the late King of the Belgians was murdered. I feel sure that the whole House will join with

  741
  me in regretting the pain and indignation that has been caused throughout Belgium by this unfounded and irresponsible statement.

  SELECTION (STANDING COMMITTEES).
    STANDING COMMITTEE A.
    Mr. William Nicholson reported from the Committee of Selection; That they had discharged the following Member from Standing Committee A : Sir Geoffrey Ellis; and had appointed in substitution : Miss Rathbone.

    STANDING COMMITTEE D.
    Mr. William Nicholson further reported from the Committee; That they had discharged the following Member from Standing Committee D : Brigadier-General Clifton Brown; and had appointed in substitution : The Solicitor-General.
    Reports to lie upon the Table.

  MESSAGE FROM THE LORDS.
  That they have agreed to—
  Illegal Trawling (Scotland) Bill, without Amendment.

ORDERS OF THE DAY.

  SUPPLY.
  [4TH ALLOTTED DAY.]
  Considered in Committee.
  [Sir DENNIS HERBERT in the Chair.]
  CIVIL ESTIMATES, 1934.
  CLASS II.
  DOMINIONS OFFICE.
  Motion made, and Question proposed.
  "That a sum, not exceeding £36,618, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1935, for the Salaries and Expenses of the Department of His Majesty's Secretary of State for Dominion Affairs."—[Note.—£17,000 has been voted on account.]
  3.46 p.m.
  Sir HERBERT SAMUEL: I beg to move, to reduce the Vote by £100.
  I am moving a reduction in the Vote in order to draw attention to a special matter which, I am sure, the Committee will regard as one of wide importance. Some of my hon. Friends will raise other questions upon this Vote, but I propose to devote myself entirely to the questions which arise out of certain correspondence between the Government of New Zealand and His Majesty's Government in Great Britain. First, let me invite the Committee to consider what are clearly the facts of the case, and, in order that it may be established beyond the possibility of doubt or question, I will ask leave to read a telegram which opens the correspondence to which I refer which was sent by the Governor-General of New Zealand to the Dominions Office on 25th October last year. The telegram reads as follows :
  "My Prime Minister has asked me to send you the following telegram :
  With reference to question of quantitative regulation of agricultural produce imported into United Kingdom, there is a widespread belief on the part of producers in New Zealand that if we undertook a drastic reduction or removal of New Zealand's protective tariff on United Kingdom goods His Majesty's Government in the United Kingdom would guarantee continuance of unrestricted entry of New Zealand primary products. His Majesty's Government in New Zealand would be grateful
  754
  if His Majesty's Government in the United Kingdom would indicate their attitude towards this suggestion."
  This important communication was considered by the Government for a period of two months, and towards the end of December they sent a reply, which is included in the White Paper presented to the House which discouraged the suggestion. The New Zealand Government in February sent another telegram which, in effect, was an inquiry as to what the Government in fact intended to do with regard to the regulation of New Zealand imports into this country, to which the Dominions Secretary sent a reply in the following month, saying substantially that they were not in a position to make any statement as to the course which they proposed to take. How the first reply-was viewed in New Zealand is clearly-shown by the speech which was made by Mr. Coates, the Minister of Finance, who, in a speech at Wellington on 21st February, used these words :
  "It was being widely contended here"—
  that is, in New Zealand—
  "that if New Zealand would drastically reduce her protective tariff, the United Kingdom would guarantee the unrestricted entry of all New Zealand's primary products. Such an arrangement seemed impossible in the light of information gained by New Zealand Ministers"—
  it seemed impossible as from this end, the United Kingdom end—
  "but inquiry had been made from the British Government, which had replied that the suggestion could not be considered."
  That is the view taken of the Government's reply by the Finance Minister of New Zealand. It is quite true that the communication which was received did not amount to an offer from New Zealand to remove or drastically reduce their duties. It was an inquiry, but any business man on, say, the Manchester Cotton Exchange or any commercial exchange who refused to consider an inquiry because it was not yet an offer, would very soon become bankrupt. The reply of the Government, giving an entirely negative response to the inquiry, may perhaps prove the turning point in the direction of British Imperial policy in relation to the Dominions. If Empire Free Trade means, as it apparently does mean in the mouths of many of those who use that phrase, Empire protection, and is, indeed, the exact opposite of what it purports

  755
  ports to be, I do not favour it, but if Empire Free Trade means what its name would, on the face of it, imply, then I am wholeheartedly in favour of it. If it means that there shall be, at all events, a completely unimpeded exchange of goods between the mother country, the Dominions, India, the Colonies and all parts of the Empire, mutually, that is, to my mind, a very fine ideal, a noble ideal, tending certainly towards a great increase of intercourse between various parts of the Commonwealth and the promotion of Imperial unity, which is the object all of us desire. I should like to see no distinctions of any kind made between British subjects in all matters of trade, and in so far as Empire Free Trade is directed towards that object, it is a worthy object. It is true that in the early part of the nineteenth century, or the middle of that century, there were many people in all parties who were indifferent to what were then called Colonial questions. There was a school who were designated as "Little Englanders," and a section of the Liberal party in that distant period undoubtedly professed those doctrines. It was about that same time that Benjamin Disraeli, when Chancellor of the Exchequer, wrote a letter to Lord Malmesbury, the Foreign Secretary, in which he said :
  "These wretched Colonies will all be independent in a few years, and are a millstone round our necks."
  That statement is recorded in Lord Malmesbury's "Memoirs of an ex-Minister." So that school of thought had an influence in many quarters perhaps unrecognised and unexpected at the present time. Liberals have long since entirely dissociated themselves from those ideas. I think that the whole nation now, irrespective of party, is agreed on desiring to maintain the union, and promoting in every possible way the prosperity of the Empire as a whole. If we who represent Liberal ideas in this House to-day opposed, as we did oppose and as we still oppose, the Ottawa Agreements, it was not for any lack of desire to promote and increase intercourse between the various parts of the Dominions, but because we felt convinced, and still feel convinced, that that was not the right way, or the effective way, to achieve the end in view. What my right hon. Friend the Member for Sparkbrook (Mr. Amery) called "hard bargaining at Ottawa," is more likely, in
  756
  the long run, to cause discord, disagreement and disunion than serve the cause which, ostensibly, it seeks to promote.
  The opposition to the Ottawa Agreements is not limited to this country. The Ottawa proposals were contested as hotly in Canada as here. The whole of the opposition in Canada, led by Mr. Mackenzie King, the late Prime Minister, opposed the Ottawa Agreements and divided against them on every occasion, and propounded a different policy. Mr. Mackenzie King publicly declared in the Canadian Parliament that if he were returned to power the policy that he would adopt would be, first of all, to repeal the enormous increases in the protective tariffs against British goods which had been imposed by Mr. Bennett's Government, and which had been diminished in only a comparatively trivial degree as a result of the Ottawa Agreements. He said that he would first repeal Mr. Bennett's tariff increases against us, which still remain to-day and are hampering British trade in Canada, and that at the same time he would give a preference to us on all the remaining Canadian duties. On that policy during the last year or so Mr. Mackenzie King's party has won every by-election in Canada as every seat vacated, indicating very clearly the views of the Canadian people. It is not our business in this House to intervene in any way in the domestic politics of any Dominion, but we are vitally concerned in this matter and it is right that the Committee should be informed, or be reminded—for, I am sure, the facts are well known to most hon. Members—as to the course of events in the Dominions.
  The tendency which is now being adopted, the policy of restriction or contraction of trade which is now being so definitely adopted by His Majesty's Government in the United Kingdom, is causing the most profound concern throughout the Dominions. I visited Western Canada in the summer of last year, and already then it was evident that public men of all schools of thought were gravely concerned as to the possibility of the future development and expansion of the vast areas of Western Canada being checked, and the process being even reversed, by the restrictive policy adopted in the Mother Country and elsewhere. Western Canada has been equipped for a much larger population than she now has,

  757
  and for a much more extensive area of cultivation. Her towns, her railways, her roads and the number of her farms can purvey a far greater amount of produce than is now produced.
  It is the same in other parts of the Empire. In Western Australia, for example, so gravely concerned are the people at the present course of events that, as the Committee knows, there is a secession movement in the State of Western Australia seeking to get freedom to make its own commercial arrangements in order that its prosperity may no longer be hampered, as it is now in danger of being hampered. To-day I read that Mr. Lyons, the Prime Minister of Australia, has been telling the producers of Australia that, in view of present tendencies in the Mother Country, it may soon be necessary for Australia to take the most active steps to endeavour to open up markets in other parts of the world.
  The SECRETARY of STATE, for DOMINION AFFAIRS (Mr. J. H. Thomas): Does my right hon. Friend suggest that the secession movement in Western Australia is against anything done in this country, or against something in Australia?
  Sir H. SAMUEL: To a great extent it is both. [HON. MEMBERS : "No!"] It is the fact that Western Australia is suffering and likely to suffer in a greater degree owing to the fact that she is part of the Australian Commonwealth, which has been adopting a policy of high protection, the effect of which is felt by the primary producers in Australia. It also hinders inter-Imperial trade. If Australia were to make the same inquiry as New Zealand has made and were to receive the same answer, as no doubt she would receive, that would be exceedingly detrimental to the interests of Western Australia, as to the other parts of that Commonwealth. In the Dominions in general, throughout the agricultural districts, every village and every town is affected by this matter. Every man in those territories who has devoted himself to the upbuilding of the new country in which he was born or to which he has migrated, whose whole life is bound up with its prosperity and who looks forward eagerly and hopefully to its development and expansion and to the growth
  758
  of the population of the towns feels at this moment that that future is imperilled by the process of restrictive trade which is being adopted in this country and in other countries of the world. For that danger they will be inclined to put the blame, where? Here, on this House and on the Government Front Bench, for any Measure which restricts the future development and prosperity of those Dominions.
  This is a clear example, a clear, vivid and conspicuous example of the policy of economic nationalism and self-sufficiency which His Majesty's Government vigorously condemn, but which they energetically pursue—a policy which has reduced our trade to one-half of what it has been. [HON. MEMBERS : "No."] I speak generally of the policy of economic nationalism throughout the world. I am sorry if I was misunderstood. I mean that the Government are parties to a policy which, taken as a whole, has had the effect of reducing not only our trade but everyone's trade to one-half of what it was a few years ago. In 1929 we were exporting almost exactly £2,000,000 worth of goods every day from the United Kingdom. Last year and in the first quarter of this year we have been exporting almost exactly £1,000,000 worth of goods every day. That is the main reason for the unemployment problem which dominates our economics.
  When the Government replied to that, the Chancellor of the Exchequer and others replied with much self-satisfaction that now Great Britain has recovered her position as the premier exporting country in the world. I would rather be second or third among the well-fed and prosperous than first among the half-starved. The fact that others are even worse off than ourselves is little consolation to our 2,000,000 of unemployed, and little consolation to the Chancellor of the Exchequer when he has to take £70,000,000 a year from the taxpayers in order to find the State portion of the costs of the unemployed's maintenance.
  That this spread of economic nationalism is the cause of the world troubles has now been declared by very many people and by very many authorities who previously were silent, indifferent or sceptical on the subject. There were, first of all, though not to be placed in that category

  759
  it is true, the experts who prepared the agenda for the World Economic Conference, who declared it in the most emphatic terms. There were the Prime Minister and the President of the United States who, after the Prime Minister's visit to America a year ago, put in the forefront of the measures that were desirable for the recovery of world prosperity the restoration of greater freedom in the interchange of goods. There are now in the United States the Secretary of State, Mr. Hull, and the Minister of Agriculture, Mr. Wallace, who repeatedly and continuously declare that the only hope of a restoration of prosperity, either for the United States or other countries, is the relaxation of these restrictions. There has been a meeting of the International Chamber of Commerce, which stated that in the first of its proposals.
  There was a meeting in Rome last month of the Inter-Parliamentary Commercial Conference, which came to the same conclusion. The annual report of the Director of the International Labour Office, published two or three days ago, was to the same effect. The British Chamber of Shipping has made representations to His Majesty's Government in the most emphatic terms, declaring that the prosperity of British shipping is absolutely dependent upon the restoration of greater freedom of trade. Within the last few days the President and 17 ex-Presidents of the Liverpool Cotton Association have published a most urgent appeal to the nation declaring that the extreme depression of the Liverpool Cotton trade cannot be relieved until the tendency to economic nationalism again is reversed.
  The Corn Trade Association, the Cooperative Congress, and recently the chairmen of almost all the great banks, at their annual meetings, in nearly identical terms in their annual addresses summarising the state of finance and commerce in the past year and prognosticating its future, almost without exception included emphatic passages declaring that until the world returned to some degree of sanity and allowed greater freedom of interchange of goods full prosperity could not possibly be achieved. Quite recently from even more unexpected quarters the same message comes. The Federation of British Industries,
  760
  which has been foremost in the movement towards economic nationalism, now sees the results that ensue, and Sir George Macdonogh, in his presidential address a few days ago, said :
  "Great Britain had regained her position as the chief exporting country of the world. They had held their own and done better than their competitors, but they were not yet selling that volume of goods which alone would enable them to reduce the ranks of the unemployed."
  " Alone would enable them." Then he went on to say :
  "The world still seemed wedded to economic nationalism, as evidenced by high tariffs, quotas, subsidies and exchange restrictions. No progress towards attaining a freer flow of trade had been made by general international action during 1933. If there was to be a real revival of international trade it was imperative that Great Britain should resume her role as leader in the offensive against the forces of contraction. In order to do so the Government must not flinch from using the powers it now possessed, or with which it could arm itself."
  Then Birmingham. Even the Birmingham Chamber of Commerce, one of the leaders in the movement for trade restriction, in its annual report published a few days ago, said :
  "It would appear that if the ingenious devices which have been contrived in recent years to prevent the flow of trade through its natural channels can be adjusted so as to lessen their restrictive effect, the world should enjoy greatly increased prosperity in the ensuing year. Your Council ventures to express the hope that in pursuance of their economic objective Governments will come to recognise the essential inter-dependence of the nations, that in the long run there can be no isolated prosperity, that in a sick world the attainment by individual nations of full economic health is impossible."
  And we have the Chancellor of the Exchequer in his Budget speech using words which have frequently been quoted here and outside, and which bear repetition. He said :
  "Our export trade.… is still far behind the figure at which it stood only a few years ago,. … because of the disastrous shrinkage in international trade itself."
  He went on :
  "The channels through which that trade formerly flowed so freely are still blocked, and indeed the passage seems to become more difficult as the spirit of economic nationalism continues to spread. We see new obstacles to international trade continually raised."—[OFFICIAL REPORT, 17th April, 1934 col. 906, Vol. 288.]

  761
  That is, after two or three years of tariffs here, with the big stick in his hand, the result, he said, is that all the prognostications made and the promises given have been falsified; and the position is worse now and new obstacles are continually being raised. What is the cause? I am afraid that the cause is absent from the House to-day, owing to indisposition. We all regret the absence of the Minister of Agriculture. He is the real reason; those who belong to the school of thought that he represents are the reason why the Government, which has itself condemned economic nationalism and regrets it, is one of the most active participators in the (movement. While we regret the absence of the Minister of Agriculture the Debate must continue; this great matter of public importance cannot be postponed on account of the absence of any individual, though I regret that he should not be here and that the criticisms which I feel bound to make must be delivered without his presence.
  In this particular matter of New Zealand the right hon. Gentleman is the representative of a school of thought which has caused the rejection of the suggestion that was made by New Zealand. He has told us that above all else action is necessary, that the Government should act, that action is the one thing required. He has told the House on more than one occasion that Parliament and the country would forgive anything except inaction, that they would forgive mistakes but not forgive lethargy. He is rather like a man learning to ride a bicycle. He does not mind very much in what direction he is going. He lurches from side to side, to the dismay and terror of pedestrians, but he has to go on for fear of falling off. He goes on, and the faster he can go the more likelihood there is that he will be able to maintain the perpendicular. He reminds me of the saying of a little girl :
  "How do I know what I think until I see what I say? "
  Sometimes, but not very often, the Supplementary Questions of my noble Friend the Member for the Sutton Division of Plymouth (Viscountess Astor), bring to mind that saying. The Minister of Agriculture seems to me to be declaring "How do I know what I want until I see what I do?" That
  762
  appears to be the rule on which he is proceeding; action and more action, and then after we have acted we shall discover what it is that we really believe. It recalls the well-known lines of Clough :
  "Action will furnish belief, but will that belief be the true one?
  This is the point, you know. However, it does not much matter."
  But it does matter when the action of the right hon. Gentleman causes great disturbance, and indeed is giving rise to perils, within the Empire itself. This slap-dash happy-go-lucky policy we might be able to endure if its effects were limited to this Island, but when it affects the relations between ourselves and the Dominions we must take a more serious view of it. The Minister of Agriculture in a recent broadcast talk declared what was the principle that is now being carried out in the reply of the Government to New Zealand. He said :
  "I would say that the stresses and strains of the new era are so terrific that an attempt to solve our problems within smaller areas of the world is more likely to succeed than within larger. If you say that this is economic nationalism, I reply that economic nationalism is denounced by many people who have not really applied their minds to the problems involved, and who speak of economic nationalism as though it were a disease instead of being, as it certainly is, a symptom of the coming of a Leisure State."
  There are already 2,200,000 citizens of the "Leisure State," and their number is likely to be largely increased by this policy. The right hon. Gentleman speaks again of the New State which is to be achieved through this economic nationalism, but the New State is simply a revival of the state of things of 100 years ago. Any defender of the old Corn Laws who sat in this House when it was first built, or in the old House which preceded it, anyone who lived before the rise of the Dominions, would understand and sympathise with the language of the present Minister of Agriculture. What he is proposing is simply tending to the same economic system, the same theory, as existed in those days, which would bring with it the same contraction of trade, the same lowering of the standard of living and the same agricultural depressions which existed in this country—more intense than anything than we have had in later years—at the very time when the doctrine of economic nationalism was at its highest and when the determination to exclude foreign imports was at

  763
  its highest point. The Minister of Agriculture is not the radiant pioneer of a brave new world that he thinks he is; he is a political Rip Van Winkle who has awakened after a sleep of 100 years and is propounding in 1934 the ideas of 1834.
  It is clearly obvious, in the particular instance we are now discussing, that the Government are adopting two policies in flat contradiction with one another. They are endeavouring to use tariffs for the purpose of developing trade, for forcing trade barriers which have been erected against our exports, and at the same time are adopting a policy of rigid economic nationalism, which makes this country more and more self-sufficient and which excludes goods coming even from our own Dominions. They are trying to ride two horses at once, but as the horses are headed in opposite directions they will certainly suffer a fall. It may be asked, "If you disapprove of the policy of the Government, what is the policy of which you do approve; what is the alternative policy you desire to be adopted?" It is often suggested that the duty of an Opposition is merely to oppose, and that an Opposition speaker who propounds a positive or constructive proposal merely exposes a wider ground for hostile criticism. I have received advice of that kind. I think it is bad advice. I do not think that democracy nowadays is in the least interested in party scores or cares at all about mere debating successes in the House of Commons. Democracy rightly asks that anyone who criticises should also be constructive, and that anyone who objects to a policy should inform the House and the nation of the alternative he would propose. That is a perfectly legitimate demand, and in the time at my disposal I will endeavour to answer it.
  Our objective is different from that of the Government, and the road to it is also different. The Government are proceeding on the assumption that consumption is to be regarded as fixed, or almost fixed. In fact, the Minister of Agriculture a few months ago came down to the House on a Friday morning and astonished us by saying that the consumption of main foodstuffs in this country must be regarded as, in effect, stabilised, and that any increase of supplies from home must necessarily, logically and mathematically, result in a restriction
  764
  of supplies from abroad. He says in all his speeches and addresses that since consumption is fixed and machinery produces more, either men will be thrown out of work or else they will have to work much shorter hours, and you will have what he calls the "Leisure State." Meantime, you must stop supplies and end what he calls the glut.
  We consider that this is a perpetuation of poverty and in the end is an intensification of poverty. We do not admit that the amount of commodities consumed is fixed or is anywhere near the point which might be reached in this and other countries under more favourable social conditions. We do not believe that prices in the market are simply fixed by the supplies which come in. Prices are fixed by the supplies which come in and the demand which takes them out, and the right course in the long run is not to stop things coming into the market, but to concentrate on trying to get things sold out of the market. If you have a paradox of poverty in the midst of plenty the right policy is to lessen the poverty and make use of the plenty, not to lessen the plenty and accept the poverty as though it was inevitable. That is where the main clash occurs; that is where there is a clear distinction in regard to policy.
  The idea of restriction of supply, which is the policy of the Government, is wrong. The right policy is an expansion of demand. And the way to achieve that is not by one single method but by a combination of many methods in our domestic and foreign policy. In the recent statement we have published, we state quite clearly the lines, to a great extent in detail, which we would follow in regard to an improvement in the organisation of our industries at home, a large policy of national development and measures for raising the standard of living in various ways. With regard to overseas trade we have again clearly declared the policy we would pursue. In winding up the Debate on the Budget the Chancellor of the Exchequer referred to me and said that the policy I would adopt would at a blow remove every duty, quota, and restriction around this country, trusting to foreign nations to respond to the gesture and to allow greater freedom for the sale of our goods. I interrupted the right hon. Gentleman and said that it was not a correct rendering

  765
  of the policy which I had been advocating. Some hon. Members thought that I had said something new and startling, and engaged in derisive cheers. They suggested that I should resume my place on the benches opposite.
  For a long time past we have admitted that in the present state of the world a heroic policy of that sort is not immediately practicable. We have said that over and over again in this House and outside, and in our published statement of policy, and if it is new to some hon. Members I am afraid that it is because they have not been good enough to take the trouble to observe what has been said, not because of any fault on our part. The policy we have urged for the last two years is that, in the first place, a beginning should be made to form a group of the nations of the world who are willing to adopt low tariffs, or no tariffs, and exchange their goods on that basis. In order to secure that it is essential to modify the most-favoured-nation Clause which now obtains, so as to enable such a group to be formed without conflicting with general international law. There are exceptions already to the most-favoured-nation Clause, and a further definite exception should be made in order to enable such groups to be formed.
  In our view the Ottawa Agreements should not be allowed to stand in the way of an arrangement of that sort. Until recently our voice was the only one raised in favour of that policy. The Liberal party alone for the last two years has been advocating that course, but in various quarters this idea has now been accepted as indicating the right line of approach. For example, at the annual meeting of the Chambers of Commerce of Great Britain, a very important body, which met in London last month, the President, Sir Alan Anderson, said—this is the last quotation with which I will trouble the House, but it is so important and so clearly put that I feel sure hon. Members will forgive me for reading it :
  "Figures published by the League of Nations showed that the gold value of world imports in 1933 was 65.2 per cent. below that of 1929 and of exports 64.9 below. In other words, intense nationalist efforts had reduced our common trade, measured in gold, to about one-third of what it was four years earlier."
  He went on to say :
  "In the world were tens of millions of potential consumers underfed and unemployed,
  766
  with markets glutted, bankrupt prices, and the world's trade shrinking as they struggled for it. Seeing all this, we have said to His Majesty's Government that principles on which the world's market flourished have been forgotten and must be restored, that axioms of commercial mathematics are peremtory rules, and that the British Empire and those nations which agree to those axioms or principles should bind themselves together by the mutual grant of most-favoured-nation privilege—
  That is the policy we advocate.
  "and pending the happy day when the world market once more includes the whole world, should show in a smaller circle that commerce can to-day, as in the past, sustain both buyer and seller, and spread employment and demand and happiness throughout the circle. The larger the circle the better, but let us at all events agree to the principles and join the circle and make a start towards recovery."
  That is precisely the policy which we commend to the House. The Government have had three opportunities, this is the third, of propounding that doctrine and pressing it forward and inducing others to agree. The initiative was taken more than two years ago at Lausanne by two of the smaller Powers, Belgium and Holland, which have large possessions in the Indian Ocean and Africa, who signed a Convention, exactly on these lines, agreeing to freedom of trade between themselves and opening the door to every other nation which would come within their circle. The British Government, instead of welcoming and encouraging the proposal, killed it. This Government declared to the Belgians and the Dutch that in no circumstances would the British Government agree to any such proposal or to any such free interchange of goods. They killed at the outset a most promising initiative. The second opportunity was at the World Economic Conference, where not only these two countries, Belgium and Holland, but the Scandinavian countries and some others, were willing to come into a mutual arrangement of that character. The Government gave no countenance to any such proposal, and by this lack of encouragement they contributed largely to the ignominious failure of the World Economic Conference. The two main causes for the failure were the United States not being able to agree at that time to any stabilisation of currency, and the British Government refusing to join in any effective measures for a diminution

  767
  of international restrictions on trade.
  Now we have the third opportunity. It is one of our own Dominions, New Zealand, which comes to us and says, "If we are willing to give you free admission into our markets will you do the same in yours?" And the Government have said "No." That is in effect what the Government's reply amounts to. If we are asked what alternative policy we would have adopted, the answer is that we should have received such an inquiry with the utmost cordiality. We should have said : "At last here is one of our own Dominions, recognising the growing and grave evil of this continuous restriction of trade, raising the question whether their own tariff walls might not be levelled if they could secure the free admission to the British market that they have hitherto enjoyed." We should have welcomed and endorsed that and taken the opportunity to press forward two important considerations which I think the British Government ought to press forward on every possible occasion. One is to secure the abolition of subsidies. Subsidies are a most evil feature of international commercial life. We condemn them in principle and would like to see them abolished, and, so far as subsidies are given by Australia or New Zealand, whether by the Government itself or by trading associations, they are bad and should be stopped : though I am not sure we shall be able to do it with a very easy conscience so long as we give subsidies ourselves and injure the interests of our West Indian colonies and other countries by manuring the sugar-beet fields with the taxpayers' gold in order to secure the production of unwanted sugar in this country.
  The second proposition that ought to have been advanced is that we should have urged the stabilisation of currencies. The deliberate depreciation of currency is another illegitimate form of trade competition. We, who believe in the greatest possible freedom of trade, have never suggested that it is right that any efficient industry in normal geographical conditions should be expected to produce any of its products at a loss. No one believes in the doctrine of cheapness to the extent of believing that efficient industries should be expected to go on for any length of time losing, and producing at
  768
  prices below the legitimate cost of production. When that is brought about by subsidies or depreciation of currency, any step which is proper should be taken to prevent that eventuality. [An HON. MEMBER : "Or cheap labour!"] The question of cheap labour is not quite as simple as it appears. Cheap labour does not always mean cheap production; it seldom does. For instance, the competition we suffer from motor cars from the United States is not the result of cheap labour, and, while cheap labour is one factor, it is seldom or never the only factor. As far as the Government is concerned, whether it is by subsidies from the taxpayers' money or by deliberate depreciation of currency, it is wrong, and in any negotiations the Government may enter into these two points should be borne in mind.
  As to the position of British agriculture, if there were free admission of products from the Dominions—and here I shall probably part company with some of my recent unexpected and unaccustomed allies—in my view if British agriculture were working under right conditions, that is to say, if the producer were not unduly burdened by heavy rent charges or tithe charges; if the farmer were not burdened by taxes, as he now is, and many of the articles he needs to buy for the sake of his business did not cost a price much above what they would otherwise cost—maize, linseed meal and other matters of that kind—while he has to compete with farmers in Denmark and elsewhere who get these products free as a matter of course; if he were relieved of these burdens and British agriculture were organised efficiently and supplies were all of good uniform quality well marketed, I can see no reason why English and Scottish farmers should not compete on equal terms with a country like New Zealand, which has to send its goods from the other end of the world, where wages are certainly not lower than in this country.
  That is the course of policy I would suggest, and I believe that by such a policy we should be rendering the greatest possible service to the British Commonwealth, and by permitting the greatest freedom throughout the world it would help them also. The latest report of the Imperial Economic Committee shows that three-quarters of the trade of the Empire in the year to which it refers

  769
  is with foreign countries and only one-quarter within the Empire. Therefore, to impose restrictions on that trade and diminish it is not in the interests of the Empire as a whole. This country can help the Empire, as it has in the past, by supplies of capital, improved communications, scientific research, common action within the industries which ramify throughout the Empire and by renewed migration as their prosperity increases.
  Progress along these lines has been opened up by the suggestion from New Zealand which His Majesty's Government has rejected. We should have said as a country to our New Zealand fellow subjects : "At last there is a movement in the right direction, and this economic nationalism, which we all agree to condemn but in which we acquiesce so readily, finds here a counter movement and a suggestion of greater freedom in the exchange of goods." In return His Majesty's Government should have made New Zealand a definite offer. They should have met their inquiry with a definite proposal in order to see what response would be achieved, in the hope not only that it might be adopted there but that the example might be adopted elsewhere and a larger and larger area of free interchange of goods might gradually have been created. Particularly we should have welcomed the fact that the initiative should have come from the Dominion of New Zealand, that beautiful land whose development this country has always regarded with the greatest pride and for whose people we have a deep affection. They on their side are deeply and sincerely attached to the British connection. Furthest from us in distance, they are perhaps, of all parts of the Empire, the closest to us in sentiment.
  4.40 p.m.
  Mr. AMERY: The speech to which we have just listened is bound to prove a deep disappointment to Lord Beaver-brook, and I am afraid the halo of the last few days will fade away long before to-morrow morning's "Daily Express" reaches the public breakfast table. I am afraid, however, it has also been a disappointment to many of us in this House who had hoped that on the very serious issues which have been raised by the Government correspondence with New Zealand we should discover what constructive
  770
  alternative policy the Liberal party had to put before us. There was a moment in my right hon. Friend's speech, when he began to talk about the ideal of Imperial unity and referred to the policy of the Leader of the Liberal party in Canada, when I thought we might see the first beginnings of a Liberal Imperial policy, based on preference but advocating the very widest measure of internal Free Trade in the Empire. Even that faded away almost at once, and for the rest of the hour that we have been listening to the right hon. Member he has given us a dissertation, with many quotations, on economic nationalism, the policy of restrictions, the most-favoured-nation Clause, and on any and every subject except what is strictly relevant to the Dominions Office with which we are concerned.
  I do not think it is necessary to attempt to follow him on these lines. I would only say that to attribute all the world's troubles in recent years to economic nationalism is entirely to ignore the effect of the great monetary causes which have brought about the great depression, monetary causes which the nations have attempted to avert by methods of economic nationalism. To say that economic nationalism is responsible is like saying that the umbrellas in the street are the cause of the rain. It may be true that these measures have contributed to the restriction of international trade. But they have also contributed to the revival of internal trade in every country that has adopted them. There has been a great revival in the world in the last 12 months, largely due to the policy of the different countries in concentrating on internal development which is beginning to take effect.
  As the Chancellor of the Exchequer pointed out in his Budget Speech, the only item in which we showed prosperity in the past year has been that item of our production which concerns the home market. Again my right hon. Friend deplores the policy of quantitative restriction. I know the anxiety that is felt in the Dominions. I confess I regard this policy of restriction with some anxiety myself. But the right hon. Gentleman might remember that it was largely out of consideration for the feelings of himself and of like-minded members of the Cabinet that the Government committed

  771
  the fatal mistake of rejecting the policy of tariffs in connection with agricultural products at Ottawa, and drifted into the policy of quotas.
  At any rate we are faced to-day, in connection with this inquiry from New Zealand, with a very difficult and real problem and it is to that problem that I prefer to address myself for the few minutes that I want to detain the Committee. There is no doubt that the New Zealand Government made an offer to discuss this matter with the Imperial Government. It was couched in the form of an inquiry, but it was clearly and obviously an offer to discuss the matter. It is quite true that the opening sentence of the telegram referred to a widespread impression among New Zealand producers, but that does not diminish the fact that New Zealand made this a definite inquiry of its own, and the New Zealand Government would not have dreamt of associating itself with such an inquiry or passing it on if it were not prepared to take it up seriously. From that point of view I frankly regret the answer given by His Majesty's Government. It was disingenuous and evasive to treat this in the language of the Government's reply, as a question put forward by a particular trade interest. It was put forward by the Government of New Zealand and should have received the answer which the New Zealand Government expected it would get.
  In any case, that offer, for I call it an offer, to discuss a very important departure in Empire trade matters was put forward by the New Zealand Government. I am not sure that it would have been put forward had it not been for the fear of restrictive measures by this country. To that extent it does not in the least support the line of argument advanced by the right hon. Gentleman opposite. It was however put forward, and it deserved the most serious and the most prompt consideration. I fully recognise that it opens up considerable difficulties. They are difficulties which, to my mind, need not prove insuperable if we knew definitely what our policy was and if our hands were not tied by other commitments.
  One of the difficulties undoubtedly is the possible effect of a mutual free trade agreement with New Zealand upon our relationships with the other Dominions.
  772
  To that difficulty the Government make allusion in a sentence of their reply. I would however remind the Committee that there is nothing, either in the principle or the practice of inter-Imperial preference, to compel this Government, or any government of the Empire, to make the same mutual tariff agreements with all the other governments of the Empire. That attitude, if I may say so, is a survival from the old Mother country idea, the idea that the mother hen must treat all her chicks with equal consideration. It is not a necessary consequence of the present idea of equal negotiations between equal partners. Although they were all made at the same time our agreements at Ottawa were made separately. Even if we gave generally the same treatment to all the Dominions, the Government of Canada made agreements with us, with Australia, with New Zealand, with South Africa which are all different and in different terms. There is no reason why we must make an agreement in the same terms with New Zealand and with Australia.
  Take a parallel nearer home. In the event of a change of temper and attitude on the part of the Government of the Irish Free State, in the event of an approach to us for a common tariff and mutual free trade between Great Britain and the Irish Free State, should we be compelled to reject such a proposition on the ground that we could not extend the same terms to all the other Dominions? To my mind it was at any rate a perfectly conceivable and legitimate policy that we should say to New Zealand, "We are prepared to go a long way with you in the direction of discussing Anglo-New Zealand free trade on the basis of a new trade agreement and to make it workable, first by imposing a low tariff on the produce of other Dominions which would not be imposed on New Zealand produce, and secondly, imposing a substantially higher tariff against foreign produce, thus preserving to the other Dominions, fully, all the preferences they enjoy to-day and if necessary even more." Further, if free trade with New Zealand injured any part of British agricultural production, we might have used some of the revenue derived from the duties on foreign produce to help British agriculture on the lines on which it is helped by the Wheat Act.
  Mr. J. H. THOMAS: Does my right hon. Friend suggest that we could make a deal with New Zealand, say on butter and meat, which would be more favourable to New Zealand than to Australia and which would be at the expense of Australia?
  Mr. AMERY: I thought I was perfectly clear. I said that, if our hands were free, we could quite well give more favourable treatment to New Zealand than to Australia in return for more favourable treatment by New Zealand of us, while at the same time, at the expense of the foreigner, preserving to Australia, Canada and other Dominions, the preferences enjoyed by them at this moment and even more. More than that, even if we were compelled to resort to the method of quantitative restriction and control we could still say to New Zealand "Come inside our own fold and you shall not be subject to any control to which our own farmers are not subject." As I was saying when I was interrupted the revenue derived from duties upon foreign produce could be used as a subvention for any branch of British agriculture which was threatened unduly by New Zealand competition, on the lines of the assistance given under the Wheat Act.
  Unfortunately—and this is the matter to which I wish to draw the serious attention of the Committee—we are unable to go further with the New Zealand inquiry or offer, without injury to the other Dominions, because our hands are tied in other directions. They are tied first of all in the matter of dairy produce. To give New Zealand some preference against other Dominions and yet retain a reasonable preference for them as against the foreigner is impossible because we are prohibited by the Danish Agreement from imposing more than 15s. per cwt. on imported dairy produce. Our hands are also tied from the quantitative point of view. Denmark and certain other countries have a right under the agreements to send into this country at least 2,700,000 cwts. of butter a year, or 34 per cent. of our imports, whichever is the larger. If, as a result of an Anglo-New Zealand agreement there was a large expansion of English and New Zealand butter production, it would be impossible to fulfil that pledge without endangering the market in this country for butter from other Dominions.
  774
  If the situation is unsatisfactory as regards dairy produce, it is far more unsatisfactory as regards meat. In the supplement to the Argentine Agreement we are prohibited from punting any duties on any form of meat including bacon. Our hands are therefore tied as against any Imperial arrangement of the kind which I suggested as at any rate possible, in that respect. But there is an even more serious aspect of the question which affects all the Dominions irrespective of any negotiations opened up by the New Zealand Government. Under Article 1 of the Argentine Treaty we are obliged not to reduce the supply of chilled beef from the Argentine to below 90 per cent. of the quantity imported in the year ended 30th June, 1932, without reducing the import of chilled beef from the British Empire by a similar quantity. What does that mean? It means that the infant chilled beef industry in the British Empire is not to be allowed to develop at all. So long as the Argentine exports to us are less than 90 per cent. of the figures of 1932—something like 8,000,000 cwts.—and we are committed to that reduction to help our own farmers, there can be no development whatever of the chilled beef industry in the British Empire.
  Let me give the Committee a practical instance of what this means. For years past the people of Southern Rhodesia have been making efforts, by the importation of stock from this country and in other ways, to develop a breed of cattle which would enable them to export chilled meat suitable for the British market. They actually made a beginning last year. They sent a trifle last year and this year the figure shows an increase. They are sending about 2,000 quarters a week—not half of 1 per cent. of our imports of chilled beef, but something of great importance and value to Southern Rhodesia; which makes all the difference to them; and now they have been told that they must cut down that figure and get back, I think it is to the figure of last year. When I think of what the people of Southern Rhodesia did in the War, and the efforts which they have been making to establish British civilisation and British traditions in South Africa, it makes my blood boil to think that a British Government should have put its hand to a Treaty which prevents

  775
  the development of this industry for which they are naturally suited. Take another case. Every day science is providing information which makes it more possible to bring chilled beef here from Australia. But as it has not been imported heretofore, under the terms of the Argentine Treaty Australia is not allowed to create a chilled meat industry.
  The position under the Argentine Treaty, in fact, is that not only are we obliged not to give any preferences to our own Dominions in the matter of chilled beef, but we are obliged to veto the development of the chilled beef industry in the British Dominions. We are forbidden to develop a British chilled beef industry in our Dominions because the Argentine blocks the way. No wonder the Dominions are being forced to look elsewhere for trade. No wonder that South Africa makes a shipping arrangement with a foreign country that will take her meat. I regard that Treaty made by the President of the Board of Trade last year as one of the most disastrous things that has happened in my lifetime. In spirit if not in the letter it is a direct contradiction of all that we went to Ottawa to achieve. I hope we shall get an assurance from the Dominions Secretary that that Treaty will be denounced at the earliest possible moment, and also an assurance that the negotiations now going on with Uruguay are not going to prolong its effect against the Dominions for a further year.
  I admit that the situation is a difficult one and the conclusion which I would draw is, not so much that there is malice or incompetence on the part of individual Ministers, though frankly I doubt if any Conservative could have very great confidence in any negotiations conducted by the present President of the Board of Trade—[HON. MEMBERS : "Oh!"]—from the Empire point of view. The experience of the Argentine Treaty is, at any rate, enough for me. But I feel that we have landed into the present position because we have been pursuing several contradictory policies at the same time. The Minister of Agriculture has one policy; the President of the Board of Trade has an entirely different policy; and the rest of the Cabinet are in the clouds en route for Geneva or wherever it may be, and pay little attention to these matters. It is only one example
  776
  of the problem with which we are confronted all the time. The present Cabinet system does not give us a machine which can frame policy or can see a policy carried out consistently. It is merely a conference or a clearing house where different departmental policies slip past or are sometimes held up and modified. But we have no clear consistent national policy on any subject, and I repeat that that is for lack of a proper co-ordinating machine.
  I do not believe that a body of 20 busy departmental chiefs in a time of crisis such as we are living through, is any more capable of framing policy than it was in the time of the War. We need a more effective instrument of government, and one free from departmental ties, just as we needed one in the Great War. That is the main point to which I would direct the attention of the Committee. I hope, in spite of all the difficulties which have been created by the unfortunate commitments to which we have been tied, it may yet be possible to find some reasonable adjustment of this issue between Empire producers and British agriculturists that will satisfy both sides. But I doubt whether there will be any real satisfaction for both sides until we have freed our hands once more with regard to competition from foreign countries.
  5.0 p.m.
  Mr. J. H. THOMAS: I rise at this stage because I feel there must be some misunderstanding about this Vote. A reduction of £100 in my salary is moved. So far we have had two speeches, and the complaint, and indeed the justification for reducing my salary, is the sins of the Minister of Agriculture and the President of the Board of Trade and the present method of running our Cabinet. In fact, my right hon. Friend the Member for Darwen (Sir H. Samuel) will forgive me if I say that, having listened to him for 55 minutes, I concluded that instead of moving a Vote of Censure or justifying a reduction in salary, he merely treated the Committee to an essay on the world as it ought to be, but not as it is; and I would put it to him that in that connection it does not help us in the least to overstate the case and, in dealing with the Dominions, give an impression that however it may be understood in this House, is represented in an entirely different

  777
  way in the Dominions themselves. For instance, nothing is more mischievous at this time than the implied suggestion, which was afterwards withdrawn when I asked what it meant, about the Western Australian Secessionist Movement, whch may ultimately come before this House and which therefore I am precluded from judging in any way at this moment—nothing is calculated to do more harm than that a movement such as that Secessionist Movement should be connected in any sort of way with anything that is happening in this country.
  Sir H. SAMUEL: I made it clear that that was not my intention. I had no intention whatever of implying anything of the kind. What I meant was that the Secessionist Movement was due to the people of Western Australia feeling the effects of the economic nationalism which I denounced, and that in so far as the policy of His Majesty's Government was maintaining that nationalism, it affected it, but I quite absolve the Government from doing anything directly that in any way touches at all the Western Australian position.
  Mr. THOMAS: That is very important and shows that it has no connection with this Vote. That is my only point in making it clear. In the same way I would draw my right hon. Friend's attention to the fact that on an issue which is introduced as this is, mainly in connection with New Zealand, it is not sufficient merely to condemn the Government and connect all the Dominions with that policy by reading a statement of what Mr. Hull said about tariffs and quotas. I heard Mr. Hull say everything that my right hon. Friend said about tariffs and quotas, but I also heard other responsible foreign statesmen. I have heard them talk about disarmament, but it does not prevent any of them going on both with tariffs and with armaments. Therefore, I am much more concerned in facing the practical situation as we find it to-day. I would remind my right hon. Friend the Member for Sparkbrook (Mr. Amery) that I thought, to say the least, his attack on the President of the Board of Trade, coming from him, was in bad taste. It may be true that he does not trust the President of the Board of Trade, but he knows better than anybody that there was a large number of people who thought the same about him when he was in office.
  778
  It is sufficient for me to say that whatever his views of the President of the Board of Trade may be, there is no Member of the Cabinet who can or would desire to dissociate himself in any way from anything that he has done, and it is important at least, if we are dealing with the responsibility, that we should all bear our fair share.
  I want to say right away that I welcome the Debate because it gives an opportunity of clearing away not only some of the misapprehensions but the wicked and calculated misstatements of the facts that have been made in connection with this New Zealand business. What is the implication? It is that the Dominions at this moment are indignant, are complaining, and are, in short, in revolt against the treatment that they are receiving from the Government. One of the Sunday papers last Sunday week brought to its support the High Commissioners of New Zealand himself. The position of the High Commissioner is that of being the representative of his Government responsible for direct contact with this Government. Sir James Parr was reported as stating in a speech that New Zealand were being treated merely as a football. Yesterday Sir James Parr found it necessary himself to write to the same paper and say that not only was that statement not true, but that he objected to New Zealand being made a football in party politics, and that, so far as New Zealand were concerned, they had no grumble or complaint with anything that we did in this country.
  I put it to the Committee that it is important for us at least to be in a position to say, as I now say, that notwithstanding all the statements appearing in connection with this matter, up to the moment when I am addressing the Committee no complaint of any sort or kind from any Dominion has reached our Office directly or indirectly. On the contrary, we are receiving abundant evidence every day of the strong feeling of appreciation, on the part of the Dominions, of the manner in which we are conducting our side of the Ottawa Agreements. It is very curious that this Debate should be opened by my right hon. Friend the Member for Darwen, because he would be the last that Lord Beaverbrook would desire to open this case, and I am sure that he would be the first to admit

  779
  that Lord Beaverbrook would be more that justified in his suspicions, having read the speech that my right hon. Friend has now delivered; but I cannot help reminding my right hon. Friend, seeing that he has raised the whole issue of Ottawa, that when he found it necessary to address the Women's Lancashire and Cheshire Liberal Council in Darwen in 1932, he dealt with these Agreements, and he said :
  "We now come to the preposterous Agreements signed at Ottawa—in our view most damaging to the interests of the whole Empire and especially to this country."
  I put it to the Committees that we can only test that statement by judging the trade with the Dominions, to the Dominions and from the Dominions, in the pre-Ottawa period of 1931 and the first full year since, namely, 1933.
  Sir H. SAMUEL: The whole of our foreign trade is in question.
  Mr. THOMAS: I will deal with it in its relationship with foreign trade as well, but I put to the Committee this interpretation of my right hon. Friend's statement, that if a bad bargain was made at Ottawa, one of two things should follow : either the Dominions themselves took less from us, in which case he would say, "That is bad for us," or we took less from the Dominions, when the Dominions would say that it was bad for them. I am going to show that, in spite of the world economic depression of the past few years, in the case of every Dominion affected by the Ottawa Agreements, their trade to us, our trade to them, and the relationship of the trade within the Dominions to the rest of the world have all increased as the direct result of the Ottawa Agreements. It is not sufficient to say that the world trade has gone down. That is true, but if I can show that in spite of the world trade going down the trade within the Empire has improved, that is the justification for Ottawa, and that, I submit, is the only point. In that connection the percentage of United Kingdom imports derived from the Dominions in 1931 was 15.15 per cent., and in 1933, 21.84 per cent. That is the balance one way. The percentage of United Kingdom exports to the Dominions in 1931 was 17.82, and in 1933, 19.92.
  Sir H. SAMUEL: Percentages are of no interest. What are the figures?
  Mr. THOMAS: I will deal with the figures as well. I am afraid to bore the Committee with details, but it is necessary really to understand what has resulted from these agreements, and I propose to give the Committee the actual figures. The United Kingdom imports from the Dominions in 1933 compared with 1931 increased 13 per cent., but they decreased from foreign countries 30 per cent. I stop to ask the Committee this question : If the policy of the Liberal party, and if the policy propounded even this afternoon by my right hon. Friend, of a desire to see these Dominions grow and prosper and develop is the right policy, how significant it is that we have increased our imports from them 13 per cent. at a time when there is a decrease of 30 per cent. from foreign countries. No one would argue that that is not to the advantage of our Dominions at least. I put it no higher than that. United Kingdom exports in 1933, compared with 1931, were down to foreign countries by 7.3 per cent., but were up to the Dominions by 5.1 per cent.
  I ask the Committee to draw this conclusion from these figures. The result of those agreements is that the change, such as it is, although there was a depression, shows a marked advantage so far as inter-Imperial trade is concerned. No one who defended the Ottawa Agreements ever did other than say that they hoped these benefits would accrue. Let us examine it from the standpoint of each Dominion, because there has been some criticism about it and my right hon. Friend the Member for Sparkbrook (Mr. Amery) mentioned Southern Rhodesia. We took 16 per cent. of Canada's total exports in 1931 and 23 per cent. in 1933.
  Earl WINTERTON: Can the right hon. Gentleman give the volumes?
  Mr. THOMAS: I am coming to the volumes. There are two complaints—first, that we are treating the Dominions unfairly; and second, that we refused a fair offer from a Dominion that would have helped this country and the rest of the Dominions; and I am going to show that neither of those complaints is true. We took 39 per cent. of Australia's exports in 1931, and 44 per cent. in 1933.

  781
  From New Zealand we took 50 per cent. in 1931 and 51 per cent. in 1933. From the Union of South Africa 44 per cent. in 1931, and 49 per cent. in 1933. From Southern Rhodesia 42 per cent. in 1931, and 47 per cent. in 1933. I want the Committee to keep in mind that it is not my intention to shirk the connection between British agriculture and the Dominions. We will not arrive at a right decision on this matter unless we keep both interests in our minds. We are accused of neglecting the Dominions and running away from them, but let me give the figures for the actual products. Frozen beef from Australia increased 2 per cent., and from New Zealand 84 per cent. as between 1931 and 1933.
  Sir H. SAMUEL: What are the figures?
  Mr. THOMAS: I am not going to be diverted. I will come to the figures. I know how uncomfortable it is for the right hon. Gentleman to have the true relationship of the Ottawa Agreements brought out, but I am going to do it.
  Sir H. SAMUEL: The percentages are quite valueless.
  Mr. THOMAS: They may be for the right hon. Gentleman's purpose. Butter from Australia increased 8 per cent., and from New Zealand 30 per cent. Cheese from Australia increased 35 per cent., and from New Zealand 18 per cent. Eggs from Australia increased 106 per cent. Apples from Canada increased 90 per cent., and from Australia 90 per cent. Wheat from Canada increased from 27,000,000 cwts. in 1931 to 45,000,000 cwts. in 1933. Wheat from Australia increased from 23,000,000 cwts. in 1931 to 29,000,000 cwts. in 1933. Unmanufactured timber from Canada increased 100 per cent.
  I ask the Committee to keep two points in mind in considering these figures. They are the best evidence of our desire to deal fairly with the Dominions and of our anxiety to see them develop and prosper. They also show that no Minister should be unmindful of British agriculture. Do not let it be assumed that our Dominions themselves are unmindful of it. When we discussed with Australia their position, the first thing Australia said was, "You cannot take all our wool, and therefore we do not want to be prejudiced with Japan, and we will do nothing that prejudices
  782
  our position in conducting negotiations with Japan." We did not condemn them for it. We could not take all her wool and she knew perfectly well that she could not take all our manufactured articles. Canada wanted to be free and was free to enter into trade negotiations with America. We could not interfere. South Africa wanted to enter and did enter into negotiations and made arrangements with Italy. We did not complain. The moral of it is that if the Ottawa policy was home production first, Empire next and foreign third, no one can show that these figures do not conclusively prove that we have given effect to it.
  I want to say a word about the particular reference to New Zealand. I was amazed to hear my right hon. Friend the Member for Sparkbrook develop his argument. I am not going to argue whether it was an offer. No one ought to know better than my right hon. Friend—and I venture to say that he does know—that the New Zealand Government found themselves in this difficulty : A number of their own people urged upon them a policy and said : "Take off all your tariffs, let us have Empire Free Trade, and then the old country will allow us to send anything we like to her." That was the position of the New Zealand Government. They did not say to us : "We believe this"; they did not say to me : "Will you consider this on our behalf." They said : "There is a section of our people who believe this." Let the Committee observe that from that day to this there has never been another word from the New Zealand Government of complaint or anything else, and they have never even renewed the subject.
  No one knows better than my right hon. Friend as an ex-Secretary of State that, if the New Zealand Government had asked us the specific question : "Will you give an absolutely free unrestricted entry of everything from New Zealand in return for the removal on our part of tariffs?" that would have been impossible. No one who has given two minutes consideration to it would defend it, least of all my right hon Friend. Suppose that we had acceded to the request of New Zealand, as my right hon. Friend suggests. The first thing to observe is that 25 per cent. of the revenue of New Zealand is from tariffs. Who knows better than my right hon. Friend that New Zealand dare not do it. Why play with it, therefore?
  Mr. AMERY: Does my right hon. Friend suggest that this inquiry was not seriously made by the New Zealand Government? At any rate, I should have thought it would have been treated as an inquiry seriously made, and would have been further explored. I am not prepared to say it would have been granted in its entirety, but it might have been further explored.
  Mr. THOMAS: There are some hon. Members present who did not hear my right hon. Friend's speech, and I will leave them to read the OFFICIAL REPORT to-morrow as to what he said. This thing has to be faced, and I am not going to run away from it. I repeat that no one knows better than my right hon. Friend that 25 per cent. of the revenue of New Zealand is derived from tariffs. He knows perfectly well that they could not think for one moment of adopting this suggestion. For my own purposes, however, I will take it that they were prepared to make the offer. We would then have to allow New Zealand to send goods into this country. Observe that we already take 86 per cent. of her total exports. There is, therefore, a balance of only 14 per cent.
  Earl WINTERTON: That means it would be all the better bargain for us.
  Mr. THOMAS: For the balance of 14 per cent. Australia competes with precisely the same commodities as New Zealand. Is there not Australian butter and New Zealand butter? Is there not Australian meat—
  Earl WINTERTON: And Argentine meat.
  Mr. THOMAS: You cannot run away with that. I am dealing with New Zealand and Australia. If the New Zealand offer were accepted, what would be the position of the British Government? They would have to say to Australia, "You must do the same as New Zealand, or your treatment, so far as we are concerned, must be on a different basis." If we do not do that, then New Zealand would be penalised, because Australia would be getting precisely the same advantages for doing nothing as New Zealand would get for giving us free entry. Develop that to apply to Canada and to apply to South Africa, and who is there out of Bedlam who could assume that that could be
  784
  agreed to? We do not help our own case, and we do not help the case of the Dominions, by refusing to face the facts of the situation. I repeat that the New Zealand "offer" was not taken by us as an offer, because we knew perfectly well than no New Zealand Government could entertain the proposition for two minutes.
  Vice-Admiral TAYLOR: Does the right hon. Gentleman intend the Committee to understand that the telegram from the Prime Minister of New Zealand has not got the authority and the sanction of the Prime Minister and the Cabinet of New Zealand behind it?
  Mr. THOMAS: I am afraid that my hon. and gallant Friend does not sufficiently follow Parliamentary Papers, or he would know perfectly well that I could not suggest anything of the kind. The telegrams I have dealt with have been issued as a White Paper, and if he has read that White Paper he will know perfectly well that what I am now saying is borne out by the White Paper.
  Vice-Admiral TAYLOR: I disagree.
  Mr. THOMAS: That may be so, but that does not alter the facts. Boiled down, it really means that the hon. and gallant Member places a different interpretation upon it from mine.
  Vice-Admiral TAYLOR: Yes.
  Mr. THOMAS: No doubt we shall hear later from the hon. and gallant Member what his interpretation is, and I hope we shall also hear from him whether he advocates any one Dominion being given a particular preference over another Dominion in respect of the same commodity. My right hon. Friend has said, "Oh, but you could make separate agreements." But we cannot run away from the fact that we are dealing with the same commodity. To offer to Australia terms which are different from those which we give to New Zealand, or vice versa, would be taking the first step to disrupt the whole situation.
  Major PROCTER: Has New Zealand asked to be given a preferential position? Is it not her fear that in 18 months' time we shall be putting on another quota and reducing her exports?
  Mr. THOMAS: I have dealt, I hope, with what I assumed was the difference

  785
  between a Dominion Government and the British Government, or, rather, the interpretation of a difference, which is more imaginary than real, placed upon certain correspondence by hon. Members in this House and the Press outside. That is an entirely different thing. I still go back to this point, that I have endeavoured to show that, judged from the inter-Imperial plane, the Ottawa Agreement has been more than justified.
  Vice-Admiral TAYLOR: Hear, hear!
  Mr. THOMAS: Judged from the standpoint of the promise of the Dominions themselves to our industries, whilst there are still a number of matters outstanding, whether we take Australia or Canada, the overwhelming reduction in tariffs by them in favour of British industry proves conclusively that they are endeavouring to fulfil their part of the bargain. The third point I make is that there is no complaint from the New Zealand Government to us. There is no justification for the statement that we have either ignored or insulted them. I go beyond that, and say that no advocate of Empire Free Trade who knows the Dominions themselves and knows the point of view of the Dominions could quote in support of it any responsible statesman in any Dominion. Equally, no one can complain of the broad general outline of the case put by my right hon. Friend the Member for Darwen that, so far as restrictions and quotas are concerned, anything that hampers trade must be bad. But I ask him to keep this in mind, that neither at Ottawa nor in any of its trade agreements has the British Government done other than protect itself after others had imposed restrictions. In other words, there was no other course open.
  A reduction of £100 in my salary has been moved. I am sure that the general feeling of the House will be to increase my salary. This afternoon I have been called upon, not to defend my Department, because the censure has been directed against the Board of Trade, the Ministry of Agriculture and the Cabinet in general. I say that we have endeavoured to give effect to the Ottawa Agreements, and that it is unfair to attack the President of the Board of Trade, who throughout these delicate and
  786
  difficult negotiations has never been unmindful of our own trading interests and has never been unmindful of the Dominions' interests, and has also kept in mind that there is a great export trade from this country which cannot be ignored. Whatever may be said about the Minister of Agriculture, it is equally fair to say that no one has applied more energy and vigour to this problem than he has. Equally, he has not been unmindful of the Dominions. Therefore, in defending any salary, I feel that I can also put in a word for my two colleagues.
  5.38 p.m.
  Major LLOYD GEORGE: The right hon. Gentleman complained at the outset that every Department except his own had been attacked, but I do not think he need worry about that, because in the first place it must be admitted that every one of those Departments must be involved in the Ottawa Agreements, and, in the second place, he said that he was capable of defending the whole lot of them. If by any misfortune this Vote to reduce his salary by £100 were carried to-night, I am perfectly certain that he would get a very good reception when he asked his colleagues to make it up to him, because he certainly has done his best for them. He referred to certain misstatements of fact concerning this White Paper, and went on to say there had been no complaint from any of the Dominions. Quite frankly, I should be surprised if there had been such complaints, because they have done rather well out of the Ottawa Agreements, and ought to be the last people to complain. He gave us figures respecting inter-Empire trade on which I would ask one question. I think he said that as the result of the Ottawa Agreements, or since the Ottawa Agreements, there had been a drop of 7.3 per cent. in our exports to foreign countries but an increase of 5.1 in our exports to the Dominions. I ask" is that 5.1 per cent. of the previous exports to the Dominions, or of the total for the year, or of the total trade"? In any case, I ask the House to observe that the loss of export trade to this country is greater than the gain in our trade with the Dominions, and as the Dominion exports to this country show a very much greater increase I am not surprised to hear that there has been no complaint from them about the Ottawa Agreements.

  787
  The only thing they are worried about is what is going to happen in the future, and I am not surprised that they want to know.
  Mr. THOMAS: In answer to the question which the hon. and gallant Gentleman put to me a moment ago, the United Kingdom exports to the Dominions in 1933 compared with 1931 show an increase of 5 per cent. and the exports to foreign countries show a decrease of 7.3 per cent. That means that the Dominions were taking from us an increase of 5 per cent. while the foreigners were taking 7 per cent. less.
  Major LLOYD GEORGE: The net result, as far as I can see, is that we have lost a little more trade than we had before. If that is a reason for satisfaction on the part of the Government, I am not surprised that the Dominions are very satisfied indeed. We have lost on that deal, as we have lost on a good many others since this Government came into office. The Lord President of the Council, when he went to Ottawa with the delegation which brought us this great result, made a speech in which he advocated greater inter-Imperial trade by decreasing inter-Imperial duties, not by increasing foreign duties. At that time the Dominions did not take that view, and as soon as they stood up to it our delegation caved in. Now, apparently, as one of the Dominions has come round to that point of view, our Government have changed their view, because if this offer means anything it means that the people of New Zealand would be quite prepared to consider a considerable reduction in duties on our goods if there were some hope of us allowing free entry of their goods to this country. The Dominion of New Zealand is to-day taking the attitude which our Government at first urged the Imperial Conference to adopt at Ottawa, but now we find that our Government have followed the bad example eventually set by Ottawa.
  The situation in which the Government find themselves, which is not a very comfortable one, from what I can make out, is inevitable because of their complete lack of policy. When the Government embarked on these remarkable duties they had no defined objective, and the mess they are getting into now with the
  788
  various Dominions is the inevitable result of the way in which they started. The Minister of Agriculture is going one way quite cheerfully and the Government are going the other way, and it is difficult to get the two to come together. If any proof were needed that the Government did not have a fixed policy in their Ottawa Agreements this would be a sufficient proof. When the first Import Duties Bill was brought into the House I do not think the Government realised its consequences, because whatever the arguments to the contrary, it remains a fact that any decrease in imports coming to this country is bound to have an effect, sooner or later, on the exports from this country. I do not think that is a matter for argument. If you are going in for a permanent policy of restricting imports you are bound to lose a certain proportion of your exports, and you alter the basis upon which the economic life of this country was built up. We maintained a great population by our export trade. Whether we like it or not, a large part of our population owed its employment to that export trade. If you now operate proposals which permanently diminish that export trade, you are bound permanently to diminish the chances of employment of those people.
  That is one of the things which the Government ought to have looked into before they started on these schemes, which leave a part of the population to be found work somewhere. What direction was there in this country in which those people deprived of employment by lack of exports could find it? There was only one direction in which there was a large hope of extension; that was the land. That the Ottawa Agreements were come to showed that the Government had no conception of that fact when they set out. If they had come to the conclusion that the land was the only direction in which this country could expand, they would not have agreed to the Ottawa Agreements; that they did, proves that they did not realise it. The one industry which has not been helped by the Ottawa Agreements is agriculture. Some of us pointed to the dangers. I remember saying here two years ago that the agriculturists of this country would still be open to the blast of Dominion competition, and that that competition would be encouraged by the very agreements which we were then discussing. I also

  789
  said that if we were to have Protection, and if it was to be utilised for the agriculture of the country, agriculture had to be protected from everybody, or otherwise there was no point in the policy. I said, "Why not make good use of that Protection and apply it to the industry which needs it most and is capable of the greatest expansion of any in this country?" I do not disguise the fact that I am a Free Trader; I have never disguised that fact. Neither have a disguised my opinion, which I have stated from this Box, that if Protection were to be extended to any industry, the one that would profit most in this country is the agricultural industry. I said also that if Protection were to be tried, it should be tried intelligently; that is the one thing that has not been done by the present Government.
  We are now faced with the result of the policy which so many of us—or rather so few of us—declared would happen when the agreements were being discussed. We had a feeling the whole time that the policy that the Government were following at Ottawa would lead to the very serious results which we see before our eyes to-day. One would have thought that dairy farming was one of the branches of agriculture for which this country was pre-eminently suited. I do not suppose that there is a country better suited for dairy farming in the world than Great Britain. What do we find? At the Ottawa Conference the Dominions were given free imports for a period of years in the very products that this country was best suited to produce, and not only that, but were encouraged to increase those imports. The result of that would be obvious to anybody who had thought the thing out, and in these days it is apparently at last becoming obvious even to the Government. The difficulty in which the Government are at the moment is shown by the figures given by the right hon. Gentleman this afternoon of the enormous increase in the imports from the Dominions of the products which this country is best suited to produce. Those figures show an alarming increase.
  The difficulty in which the Government are placed is that if they leave the position alone, the British farmer is still open to the blast of competition from the Dominions. If they restrict those imports, what happens? We were told at
  790
  the time of the Ottawa Agreements that the ties of Empire were wearing very thin, and that if it had not been for Agreements like those reached at Ottawa the ties might have snapped, but if the Government further restrict Dominion imports I do not know whether that is going to strengthen the ties about which so much was said at that time. In 1932 we said that the result of the Agreements might be exactly the reverse of what the Government said they would be, because we had a feeling that the Empire could not be knit closer together by haggling over percentages. It is not a very long time ago, only two years, and we find sooner than we expected that the results that we predicted are coming to pass.
  The funny thing is that this Government does not understand the policy of Protection. I say that as a Free Trader. The statesman who first advocated the policy said that he wanted a tariff all round with a preference for the Dominions. That is a policy of which I do not approve, but I can understand it, and it is one of which the Dominions could not complain because you would be treating them in exactly the same way as they are treating you. That is the policy which the father of Protection advocated, but those who have followed him have not done half as well. The Dominions put the Dominion farmer first, the British farmer second and the foreign farmer third. The farmers of this country realise to-day that some of their most serious competitors are the Dominion farmers, and they are beginning to realise that more and more. If you are to have Protection, for goodness sake use it intelligently. I say that as a Free Trader who has stood for Free Trade at a time when it was necessary to do so. If you are to have Protection, surely it is essential to use it to protect. At the present time we are simply exasperating foreigners and losing their trade, while not doing anything to strengthen the ties of Empire. Sooner or later our own people are going to be exasperated at the competition which comes from the Empire. Quotas at the present time exasperate the Dominions and also other people, who do not know where they stand. The trouble to-day is due to the fact that the Government have no policy. The Minister of Agriculture is trying to reorganise the agriculture of this country,

  791
  but every attempt he makes is bound to fail unless the Agreements which were greeted with such joy and such extravagant praise two years ago are altered.
  I do not know what effects the alteration of those agreements would have on the relations of the various countries of the Empire. I cannot help smiling when I look back at some of the remarks after the Ottawa Conference. One gentleman who went there on behalf of British agriculture said that the Conference was the greatest step forward ever taken by any Government on behalf of the home producers. A few of us thought at the time that that was nonsense; all farmers to-day know that it is nonsense. I appeal to the Government : Let them admit that it was nonsense and that something has to be done in the matter of those agreements. Let them face the situation as it really is in this country and let them produce a policy to meet it.
  5.55 p.m.
  Sir PERCY HARRIS: Everybody now realises, as a result of this Debate, that we were right to ask the Government to state their position. I agree with the right hon. Gentleman that the Dominions are very sensitive about anything said in this House. Our ordinary domestic Debates only affect us and our constituents, but discussions affecting the Dominions have repercussions which make it most desirable that nothing should be said that might give offence. I am not going to criticise the explanation of the right hon. Gentleman about his reply to the approach of the New Zealand Government. That approach did take the form of an inquiry, and not of a definite offer, but surely that was the right way to open negotiations. Naturally the New Zealand Government did not want to lay themselves open to a snub from this country. To say the least of it, it is unfortunate that the Minister makes the suggestion that the approach was not genuine but was merely to quieten some of the New Zealand Government's agricultural critics in their own country. I do not want to say anything to stir up trouble, but if I wanted to be hard and unkind I would say that the right hon. Gentleman's attitude reminds me of that which he took up on a famous occasion—I think it was in 1930—when he was a Minister in the Labour Government and when in reference to an approach from a Canadian Government
  792
  he used the expression that it was humbug.
  The last impression that the Dominions Minister would like to convey is that the approach of the New Zealand Government was humbug. I am satisfied that that approach was sincere, although, if you like, a result of pressure from their own people in order to see whether our present policy, which they consider injurious to their interests, could be modified. I know that there have been wrong interpretations in the past of our attitude towards Imperial Preference. It is part of Liberal policy, and always has been, to encourage the unity and good fellowship of the component parts of the British Empire, but we have always held that there was a real danger of the differentiation favouring Dominion agriculture because that might very well, in the end, divert the hostility of the British farmer from his foreign competitor to his Dominion competitor. That is the very thing that has happened. Throughout the length and breadth of the country, farmers are inclining to some form of Protection, not so much against the foreign competitor as against New Zealand butter and Canadian cheese. That is the inevitable result of endeavouring to found the Empire mainly upon an uneconomic basis.
  One of my hon. Friends has made it clear to the House and to the country that we have no objection to Empire Free Trade, if that is interpreted in the literal sense. On the contrary, the trouble has always been in the last 30 or 40 years that the Dominions have been wedded to Protection, not only for agriculture but for every industry. We, being realists, and having to face facts, doubted whether the Dominions would fundamentally alter their long established policy. I take the suggestion from New Zealand as a change of heart in the light of experience in the new world that has grown up since the War. They realise more and more what we have been conscious of, namely, that the industries alluded to are thoroughly artificial and built up behind a tariff wall. They have no export trade, and if they were exposed to the withering blast of free competition, they would obviously languish, and many of them would go out of being. They have no exports of manufactured goods; the whole of their export trade, or, anyhow,

  793
  92 per cent. of it, is in agricultural produce. Manufacturers in the Dominions, and in New Zealand in particular, depend almost entirely on their own market.
  Undoubtedly the Dominions, and especially New Zealand, have a real devotion to the Mother Country, and nothing that they would do if they could possibly help it would be injurious to the well-being of our industries or our trade. But, as the right hon. Gentleman quite rightly pointed out, if they find that the British market, which hitherto has been open to them without restriction, is now to be limited by quotas, they will inevitably have to look further afield; and, with the new spirit in the United States of America, with the United States so much nearer to them geographically than the old country, if there were a restricted market here they might very well look to making trade agreements and opening up markets with reciprocal arrangements there. There is also, of course, even the possibility of closer relations between New Zealand and the Par East. We cannot get over the fact that New Zealand is a country situated on the Pacific Ocean. It is on the other side of the globe from us, and its natural economic markets are on the borders of the Pacific. The day may come when, as a result of our policy of unwillingness to give New Zealand that free entry which she had before Ottawa, before this new Empire policy, might encourage her to enter into closer trade relations with the United States of America, and even with countries like Japan in the Far East.
  The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): Would the hon. Baronet pardon my interrupting him? He is asking about free entry as before Ottawa——
  Sir P. HARRIS: Unrestricted.
  Dr. BURGIN: Unrestricted entry—not merely no tariff, but absolutely unrestricted. Is that what the hon. Baronet means?
  Sir P. HARRIS: That is what I suggested. New Zealand in the past used to look almost completely to this country for her market for a great part of her produce—not, of course, for commodities like wool and hides, but for butter and cheese. It is true that she had a very
  794
  satisfactory trade with Canada up to a few years ago, but unfortunately, owing to the restrictive policy of Canada, that market has been largely closed. I am satisfied that the approach—I will not call it an offer, because that might be liable to misunderstanding—I am satisfied that the approach of the New Zealand Government with a view to discussing an open door of free entry or a lower tariff for our manufactured goods is a genuine one. There has been during the last few years a growing sentiment among the bulk of the population in New Zealand that something on those lines should be discussed. I admit that the New Zealand market is a comparatively small one; the Dominion has a population of only 1,500,000. Of these, 54,000 are classified as occupied or engaged in factories, mills and works, coming within the category of being engaged in the industrial life of the Dominions. But, of these 54,000, over 15,000 are engaged in animal food or vegetable production, that is to say, in secondary industries connected or associated with agriculture—especially, for instance, freezing works, which employ a great many men in converting the meat after slaughter into a condition to be exported to this country.
  It is not unreasonable to realise what a critical time this is in the history of that small Dominion. Are they going to pursue a policy of still further developing their industries, of still further drawing men into their towns, as has been done in Australia and Canada; or are they going to take the line, which I think is in their interest and in our interest, that their primary duty is to encourage agriculture and find markets for their agricultural produce? As against the number of people employed in industry in New Zealand, there are no fewer than 83,000 holdings—a very large number; and, of those 83,000 holdings, no less than 68 per cent. are over 1,000 acres, while 38,000 of these holdings are purely dairy farms. The Committee will understand how seriously affected are these 38,000 occupiers of dairy farms by the new policy of the Government. Their very livelihood is threatened. They have to look ahead, and they see that the policy which we are pursuing will have serious reactions on their future. It is interesting to note that, almost to a man, these 38,000 dairy farmers are Free Traders,

  795
  a fact which will not surprise the Committee when it is realised that they depend for their living on finding outside their own country a market for their produce.
  They have suffered materially from the industrial policy of previous New Zealand Governments, and the right hon. Gentleman is no doubt correct in saying that this approach of the New Zealand Government was due to pressure from the electors. That is not surprising to us, for we know what it is to go through the machinery of being elected to Parliament. The agracultural interest in New Zealand, which is very powerful, find that their livelihood is at stake and their interests are likely to suffer from the new policy of the Government, and it is not surprising that that Government, which is largely a Government of farmers—the Prime Minister is a farmer and the Financial Treasurer is a farmer—it is not surprising that, as a result of pressure from these occupiers of holdings, that famous telegram was sent asking if the Government were prepared to discuss this new alignment, this new policy for New Zealand. I happen to have very intimate personal contact with the Dominion. I am constantly in touch with people there, and as perhaps does not happen to most Members of the House, I see copies of the New Zealand papers; and as a politician and a Parliamentarian I watch the reports of their doings with great interest. I happened to come across a report in a paper—I have a copy of it here, which I shall be very pleased to give to the right hon. Gentleman—of a great meeting at the beginning of last year at a place called Hamilton, in the Waikato district, which is the principal centre of the dairy industry. It is described in the paper as a record meeting. The reports says :
  "Hundreds were unable to gain admission to the mass rally organised by farmers. Long before eight o'clock the entire seating accommodation was taken up, and an overflow meeting was held in the street "—
  Mr. J. H. THOMAS: That sounds very familiar.
  Sir P. HARRIS: Yes, it sounds very familiar. I will give the purport of some of the speeches. The first speaker was the chairman of the Cambridge Cooperative Dairy Company, one of the big
  796
  co-operative dairies that take all the produce of the farms and turn it into butter. He said this :
  "Basement will come to the farmer in two directions—a higher price level "—
  and there they have a common interest with our farmers, and the farmers of the world—
  "and in a reduction of his costs by a drastic revision of tariffs."
  A very significant speech was made by Mr. Parlane, who is no doubt well known to the right hon. Gentleman; at any rate, he will be well known to the Minister of Agriculture. This gentleman is the general manager of the New Zealand Co-operative Dairy Company, through whom a great part of the Dominion's-exports of dairy produce comes to this country. He said :
  "New Zealand is almost entirely an agricultural country. Over 90 per cent. of our income is won from the soil; and in consequence, to impose tariffs for the purpose of assisting the few industries which we are pleased to have, but which are not in any way essential to our well-being, and which cannot hope to compete with manufacturers who can adopt mass production methods, is extremely foolish……. Obviously costs of production cannot be reduced sufficiently to meet the position while we have duties on goods made in Great Britain such as 27½ per cent. on shirts, suits and hosiery, 25 per cent. on boots, millinery, furniture, ironmongery, rope and twine, £2 per ton on nails and £1 per ton on cement. In addition to these duties, the local manufacturers have not to meet the heavy transport charges that have to be met by the British manufacturers, and in consequence, even if the duties were entirely abolished, the transport charges alone should be sufficient protection for our local industries."
  He also pointed out that during the last few months no fewer than five ships had left England in ballast. Therefore, there is a real genuine agitation in New Zealand for a freer exchange of goods between their country and ours. Obviously, the gain to us would be large if there could be a change of spirit and a change of policy. If the policy of Protection could be dropped in favour of a policy of low tariffs, it would be a great advantage to almost every industry in this country. The right hon. Gentleman said, and said with force, that the Dominions depend a good deal for their revenue on duties. That is quite true, but a great many of those duties are essentially of a protective character—they are almost prohibitive,

  797
  not only as against foreign goods, but against our goods. They are so high that, adding on to them the cost of freight, the cost of insurance, and on the top of it all the effect of depreciated exchanges, the effect is to stop goods coming in, and not to bring in revenue. If, in return for negotiations, the right hon. Gentleman would be prepared to discuss round a table with the Dominion representatives a change of policy, we might endeavour to persuade them to substitute for a Protective tariff a revenue tariff of 10 or 12 per cent., on the Dutch or Danish lines, bringing in revenue instead of keeping out our goods.
  Mr. J. H. THOMAS: I understand that the hon. Baronet is dealing with the New Zealand offer—
  Sir P. HARRIS: No. I was careful not to use the word "offer."
  Mr. THOMAS: The New Zealand suggestion. How does that square with what he has just said?
  Sir P. HARRIS: The right hon. Gentleman said that it was no use preparing to discuss this problem because of the difficulties in connection with their revenue. I quite agree that that is a real difficulty, but I think I can show that a lowering of their tariff so that our manufacturers could jump over it, instead of finding it a complete barrier and obstacle, would on the one hand increase our trade, and on the other hand would enable them to get in the revenue necessary, in addition to their system of direct taxation, for carrying on the government of their country.
  The Parliamentary Secretary to the Board of Trade in answer to a question by my hon. Friend the Member for Orkney and Shetland (Sir R. Hamilton) the other day rather seemed to suggest that we were exaggerating the importance of the New Zealand market. I agree that at the present moment it is a small market. So is Australia comparatively. But they have been going through a great world depression. Their purchases have been enormously decreased because of their decreased purchasing power, because of the heavy fall in prices and the heavy burden of their debts, which has made it necessary to carry on a policy of restriction of imports and the maintenance of a high exchange rate against this country, which has actually brought imports down. We ought to go back to a normal year. In 1932 imports were only £24,500,000, but
  798
  four years before they were something very near £50,000,000, or £33 per head. It has been pointed out, correctly, by some Empire Free Traders, with whose narrow policy I profoundly disagree in many respects, that these Dominions have a very large purchasing power per head of the population. The question really is whether we are going to encourage their looking to Great Britain for their manufactured goods and discourage their old narrow Protectionist policy and take advantage of the tremendous possibilities of the future for agricultural development.
  I should like to say a word in reference to the English farmers. Of course the Government must necessarily make their interests their first charge and their first responsibility, but is not the best method to help the British farmer to increase the purchasing power in his own market by bringing about prosperity to our industries? The real cause of the serious depression in the market for home-killed meat is the tremendous amount of unemployment and short time, which has decreased the purchasing power of the industrial population. Among the principal buyers of British home meat have been the miner, the unskilled worker, the man who has been accustomed not only to eat beef but to require the best quality of home-killed beef. If, as the result of this new approach, we could stimulate and help our manufacturers, surely that means more employment in the factories and works, increasing the purchasing power automatically in our own markets for English home-killed beef, vegetables, and, not least, liquid milk. I am satisfied that among the main contributory causes of the general depression in this country has been the depression in our foreign trade, which has had its reflections in our agriculture. If there were a general, all-round rise in the prices of all commodities, which no doubt could be brought about by a policy of international co-operation dealing with currency and War debts, that would be a far better way to help agriculture than trying artificially to limit the supplies of essential produce like butter. There is this other very serious fact that, if you want to have discontent, if you want to play into the hands of the worst and most revolutionary forces, you are going to make food dear to our wage earners, not through the action of natural causes but by the intervention of the Government

  799
  and the imposition of tariffs. New Zealand farmers are just as much interested in higher prices for their commodities as British farmers.
  I might have given other extracts about the meeting that I was describing in which there are the same complaints about the higher cost of production and low prices, but no one can say the competition has been unfair. The general farm labourers in New Zealand—I take this from the Government Official Year Book—get wages of 41s. 3d., against the recognised rate in this country of something like 30s. On top of that he has to pay the freight to send his produce right across the globe, and to wait a couple of months before he gets paid, because it takes that time for his goods to reach this country. No one can say that that is unfair competition or dumping. There is no justification whatever for a policy of restriction as against New Zealand on pure economic grounds. It can only be justified on a very narrow policy of economic nationalism and trying to make our country self-sufficient even independent of the other component parts of the British Empire. I do not believe in economic nationalism whether in foreign countries or in the Dominions. After all, New Zealand belongs to the same people, recognising the same King, belonging to the same race, speaking the same language, having the same interests, and financially bound by the closest economic ties owing to our investments in that country. They have, somehow or other, every year to find £10,000,000 to pay the interest on debts incurred in the Mother country. Does it not seem unwise and short-sighted, at the first approach from one part of the Commonwealth of Nations to adopt a new policy breaking down restrictions on the free exchange of goods, to meet it by a mere negative? Our reduction of the right hon. Gentleman's salary is not personal. We assure him of our affectionate friendship for his cheerful and attractive personality, but he is the representative of the Government in this matter. He was the channel through which this unfortunate message was sent. That being so, I have no hesitation in supporting a reduction of his salary.
  6.25 p.m.
  Earl WINTERTON: I feel very favoured at having the right hon. Gentleman
  800
  the Member for Darwen (Sir H. Samuel) present in the Committee. I feared he might have gone out to get some very natural refreshment after the long Debate. There are one or two remarks that I (had hoped to address to him, and I hope he will see his way to answer them. In the first instance, while I have a great admiration for him, both as a statesman and as a figure in the House, I have never attributed to him qualities of satire and sarcasm until to-day. The role in which he has appeared to-day, at one and the same time the leader of the Liberal party and also in favour of an extension of inter-Imperial trade, the one man plus royaliste que le roi, who is anxious to see this extended, shows a sense on his part of high qualities of very rare humour. His history is slightly at fault. He very ingeniously tried to lead us to believe that there had never been any little Englanders in the Liberal party since the days, somewhere in the sixties or seventies when they made remarks about the Colonies. There were certain people in the Tory party at the time who did this as well. I do not care who they were, even if Disraeli was among them. The right hon. Gentleman really forgets the 1906 Parliament. I was the first Member who was elected to this House as a whole-hog supporter of Imperial Preference. When we raised the question, we were greeted with mocking laughter. The right hon. Gentleman forgets the remark of his former colleague the right hon. Gentleman the Member for Epping (Mr. Churchill) about the Imperial Conference. He said the door to preferential trading between this country and the Dominions was barred and bolted. [HON. MEMBERS : "Banged!"] Damned! I had forgotten that my right hon. Friend was ever capable of using such strong language. [HON. MEMBERS : "Banged!"]
  Sir H. SAMUEL: It was Disraeli who said that Protection was damned.
  Earl WINTERTON: May be it was. So that really it is not true that it is a matter of long ago since the Liberal party gave up these ideas. They have held them until very recently. The right hon. Gentleman himself left the Government because they carried out, by the Ottawa Agreements, a system of inter-Imperial trade with which he could not agree. He

  801
  made a very astonishing remark which, I hope, the country will note. The Dominions Secretary reminded him that we have now, after this terrible period of the Ottawa Agreements, in which everything is so calamitous, in his opinion, returned to the position of being the greatest exporting country in the world. An American Senator remarked the other day that it was a thing that American industry would do well to note that for the first time for 20 years Great Britain had once again taken the foremost place. Reminded of that, the right hon. Gentleman said in a specious manner that he would rather that we were second or third than that the general volume of world trade should decrease. Does he suggest that we are responsible for the general decrease of world trade? What else did he mean?
  Sir H. SAMUEL: I said, in effect, that I would rather be second in a prosperous world than first in a world of poverty.
  Earl WINTERTON: That answer is hardly worthy of the right hon. Gentleman. He was saying that the result of these calamitous Agreements was that our trade had gone back, but the exact reverse is true. It is a most astonishing thing that, through the period of these Ottawa Agreements, so far from our foreign trade relatively to that of other countries having decreased, it has actually improved. [HON. MEMBERS : "Relatively."] Surely that is the only test that matters in the world to-day. He and his little band of supporters, who seem to have been in some sort of agreement at their recent Conference, have been going up and down the country telling everyone that as the result of the Ottawa Agreements everything is worse, whereas the exact reverse is the case, as he must gather from the facts and figures.
  The right hon. Gentleman is claimed in some quarters as an advocate of Empire Free Trade, but it appears from his speech this afternoon that he is nothing of the sort, and that he is in favour of using this particular incident—and I am not by any means sure that it has altogether been wisely handled by the Government—like the Leader of an Opposition, as a stick with which the beat the Government. But so far as those of us are concerned who express our views frankly, the essence of the policy of
  802
  Empire Free Trade—that is, the free movement of goods between Empire countries—is that there should be, outside of the Empire, a barrier against foreign goods. The right hon. Gentleman is not in the least prepared to accept that. It is very curious that he should not be prepared to accept it, because he made a very interesting admission. Gradually, slowly, surely the Liberal party are coming round to realise that, in the most improbable event of their party ever having a majority in this House, they will be compelled to make a compact with the Devil and agree that in a world such as the world is to-day there will have to be tariffs. Their way of meeting the dilemma in which they are placed is that they would endeavour to do business with those countries which would do business with us, never mind about the rest of the world. That is the essence of the policy of Free Trade within the Empire, but the right hon. Gentleman is not prepared to carry it out so far as the Empire is concerned, though he would welcome any arrangement by which New Zealand goods could come into this country free of all duty and they receive our goods without any duty being paid. He is not prepared to do the only thing to make that effective, and that is to have duties put upon goods from other countries.
  I come to the right hon. Gentleman the Dominions Secretary. I find myself in agreement with much but not all that he said. I do not think that he made an answer to my right hon. Friend the Member for Sparkbrook (Mr. Amery). The right hon. Gentleman the Dominions Secretary is one of the most adroit Parliamentarians I have ever seen in the House during my 30 years' experience. First of all, he is extremely popular with everybody. He has good humour, and his invariable method of dealing with a question in debate is to attack a case which has never been put by anybody. Amid the resounding cheers of his supporters he says, "How absurd, foolish and wicked to say this" when nobody has ever dreamed of saying it. So far as the reference of the right hon. Gentleman to the President of the Board of Trade is concerned, I do not wish to intervene in a squabble between my two right hon. Friends. I might have occasion to vote or work with them in the future again and I see no reason to intervene in their quarrel, except to say that my right hon. Friend said that he had

  803
  no confidence in the President of the Board of Trade as a negotiator in Empire matters. I think that we are getting rather mealy-mouthed in this House when a Cabinet Minister thinks that it is necessary to characterise a comment of this sort as in very bad taste. I will not pursue the matter, because I shall perhaps be told by the Under-Secretary that I am speaking in very bad taste. I should have thought, for instance, that it was a most mild way of putting it compared with what all of us in all parts of the House used to say in the 1906 Parliament. On the right hon. Gentleman's basis there were no speeches in those days not in bad taste.
  What my right hon. Friend meant, and I believe that is the view held not only by my right hon. Friend but by a great many other people, was that there seemed to be two trends of opinion in the Government on these matters. There is the trend of opinion represented so brilliantly and boldly by my right hon. Friend the Minister of Agriculture, and there is the opinion expressed by the President of the Board of Trade in connection with the Argentine and other Pacts. I am not saying that they should not have these two trends of opinion. One of the great advantages of a National Government is that they can agree to differ among themselves, and that different Ministers can say different things on different occasions about each other's policy. It is a great thing for a National Government, but if it goes too far the main body of supporters of the Government get rather tired of it and something unpleasant happens, as it may do in the next two years unless the present Government mind their p's and q's in this matter. There is no reason why there should be this conflict of aim. Part of the case which my right hon. Friend and I have tried to put forward in various Debates in this House is that there is no reason why there should be this divergence. We have always had one principle and have never deviated from it, that the first duty of the Government in the matter of trade agreements with the Dominions, Colonies or anybody else is to look after the interests of the British producers, and, of course, the British consumers. The second duty, equally clear, is that there should be trade with
  804
  the Dominions and with the Colonies. Believe me, I speak with the utmost seriousness when I say that a great many of us who feel compelled to comment upon the policy of the Government on this matter from time to time are not the sort of people who want to attack the Government for the sake of attacking them. The difficulty has been that things have been done by the Government, certain pacts have been made to which it would be out of order to refer in full, which cut across both those primary interests.
  The right hon. Gentleman has referred to the subject of butter imports, and one would suppose from his speech, and from speeches by other hon. Members, that all butter which was imported into this country came from the Dominions. A statement has been put about in certain quarters, and I do not blame them for it. It is no doubt necessary for propaganda. They say, "Oh, yes, you British farmers want to look to the people who are really your competitors, the producers of the Dominions." Is it true that the principal competitors of the British farmer, for example, in butter, have been the New Zealand producers, who sent us in 1932, according to the Board of Trade returns, 2,518,000 cwts. of butter? Apologists for the Government policy, or those speaking on behalf of the Government, fail to tell us that in that same period Denmark sent 2,519,000 cwts., the Soviet Union 562,000 cwts., and the Argentine 202,000 cwts. If you add these together you will see that they very largely exceed the amount that came from the Dominion of New Zealand. The Government have to make up their minds on this matter, and, in this House and in the country, they have to make the matter clearer than they have done up to now. The Minister of Agriculture, in a very remarkable speech, practically came out bald-headed for a policy of Empire development, first and foremost, without any other consideration. We heard that speech with great delight, and, sooner or later, and perhaps sooner than later, during the present summer, they may be faced with a dilemma, that of having to decide which road to take.
  What my right hon. Friend the Member for Sparkbrook and I said at the time of the Argentine and Danish Trade Agreements has been proved, by what

  805
  has happened since, to be true. We deplored those agreements being made so soon after the Ottawa Agreement was made. They have cut across that agreement. We were told by speakers on behalf of the Government that we had to think of the tremendous trade we do with the Argentine. But look at the trade we do with the Argentine! Look at the restrictions! You cannot get money out of the country for one thing. If a British business makes any money it is almost impossible to get it out of that country. What is the great benefit we have got? It has cut across the general policy and no amount of good-natured chaff on the part of the Dominions Secretary or anyone else will get over that fact. The Government will have to deal with it during the present summer. In the first three months of 1934 the average price of butter imported into the British market was, in the case of the Soviet Union as low as 41s.; in the case of the Argentine, 50s.; Finland, 51s.; Estonia, 55s.; and New Zealand, 60s. The matter of which my right hon. Friend the Member for Sparkbrook spoke concerning Rhodesia's meat is really serious. There is no doubt that the industry in Rhodesia has been greatly hit by these arrangements to which I have referred.
  Those of us who are supporters of the Government view with apprehension what appears to be two schools of thought in the Cabinet. I express great regret at the right hon. Gentleman having, I am sure inadvertently, said a thing which really might have had calamitous results. He said, if I understood him aright, that no one for a moment suggested that Empire Free Trade was possible. If 28 years ago anybody had got up in this House and said that the policy put into operation as a result of the Ottawa Agreements was possible they would have been laughed to scorn. When we used to make speeches in those days urging a policy of Imperial Preference and inter-Imperial trade we could hardly make ourselves heard above the jeers of the Liberal party. It may be possible to have so great an extension of free exchange of goods between Empire countries as to have Empire Free Trade. Whether it is so or not, why attack those of us who work in conjunction with the National Government for holding the views we do? It is a
  806
  great ideal that we should have Free Trade within the Empire and a tariff wall outside. Many of us have worked very hard for this ideal. Some Members of the Government are making the position in the country and that of their supporters very difficult. They know that the great majority of their party are in favour of the policy in question. I suggest that Members of the Government should be careful of attacking what, after all, is the cherished ideal of many of us in this House.
  6.44 p.m.
  Sir STAFFORD CRIPPS: I rather hesitate to invade the political picnic which is proceeding at the present time, with this friendly interchange of greetings from one Member of the party opposite to another, but I feel that the arguments which have been advanced this afternoon have shown pretty clearly that there is not very much possibility of getting any real, planned economy either in this country or in the Empire by the methods which have been adopted by this Government or which are suggested by the Liberal party, both of which seem to us to be utterly futile. This afternoon we have seen the clash of interests—agricultural interests, industrial interests, merchant interests, and if the President of the Board of Trade had been here we should have had the monetary interest, which has not been quite so much in evidence as it is sometimes in this House. As in every other country in the world to-day, all these interests have to be, somehow or other, sought to be regulated by the Government. Agriculture on the one side always wants one policy and industry on the other side always wants another policy, and generally the monetary interest desire a third policy. This afternoon it has been illustrated by the people who want free admission for goods from New Zealand in order to benefit merchants and industry. But we are told that that is impossible because of the agriculturists. Then it is said : "Look what has been done as regards the Argentine?" That was done in order to assist the rentier population in this country to get their dividend from the Argentine. I think the Noble Lord looks at this matter not from the point of view of the rentier population but from the point of view of the agriculturist.
  Earl WINTERTON: I raised an important point, namely, that people cannot get money out of the Argentine. I know of one firm which is almost bankrupt because the Argentine refuses to allow profits made in that country to be brought here.
  Sir S. CRIPPS: The Noble Lord will appreciate that you do not send money out of a country. You send goods out of a country. Money is only a token.
  Sir ARTHUR MICHAEL SAMUEL: We cannot get paid.
  Sir S. CRIPPS: Now the monetary interests are speaking, as I thought they would.
  Sir A. M. SAMUEL: We export manufactured goods made in our factories and made by our labour, but we cannot get paid for the goods we send.
  Sir S. CRIPPS: Because the rentier population are already insisting on taking all the goods that Argentina can send to pay their debts. Consequently, you cannot get your debts paid. It is a very distressing thing for the hon. Member, but it is merely a question whether he prefers the rentier to get the money or the manufacturer.
  Sir A. M. SAMUEL: Nonsense.
  Sir S. CRIPPS: The hon. Member says "Nonsense." A certain volume of goods can come here in payment from the Argentine, but there are two lots of people who want to be paid. They cannot both have it. Either the manufacturer can have it in exchange for his commodities or the rentier for his debts. Unless you can expand the volume of goods that can be exported to this country from the Argentine they cannot both be paid. An arrangement was made with the Argentine in order that the rentier might get paid as much as possible. When that is done the Noble Lord complains that the arrangement made with the Argentine is embarrassing new Zealand and Australia. Of course it is. That is an absolutely necessary consequence, and you cannot help it. In the same way, New Zealand is sending vast quantities of butter here, and some of our agriculturists complain. The New Zealander has to send £17,000,000 of commodities here in order to pay his debt, wholly irrespective of the
  808
  agriculturist or the industrialist. It is idle to look at this problem as if you could plan your trade without any reference to this great one-sided import of commodities which has to take place unless your rentiers are going to say, "We do not require to be paid interest any longer."
  One of the things the Government might consider in this respect is the wiping out of all international indebtedness. We have been driven to that point with America in order to ease the situation. Many other countries have been driven to that point. Germany is being driven to it at the moment. But we are insisting upon the maintenance of these one-sided payments from countries like Argentina, New Zealand, Australia and Canada. If you are going to plan your trade you have either to acknowledge the necessity for that one-sided import in order to satisfy the rentier payment, or else you must wipe it out and say "We are going to plan our industry in order to meet the demands of our industrialists and our agriculturists." Then, if you have wiped out your debt payments and the commodities you are going to get in are going to be in exchange for some commodities you are going to send out, instead of having £12,000,000 worth of butter coming from New Zealand merely to pay a debt, with no contra export of commodities to benefit your industrialist, you will be able to export £12,000,000 worth of goods to New Zealand in exchange for £12,000,000 worth of butter.
  The problem that capitalist society has to consider is that you get to the stage of having piled up international indebtedness to a certain point and you can only get relief by bankruptcy, just as is the case in domestic society. There comes a time when individuals pile up so much indebtedness that they cannot meet their creditors and they have to wipe it out by bankruptcy. There is not any system by which you can do that internationally execpt that some country ceases to pay, and then the debt is wiped out. It is no use saying to a country like New Zealand : "You can import anything you like into this country, by Empire Free trade" or whatever it may be called. Obviously, it cannot be done. You cannot do such a thing if you are contemplating your internal economy with regard to your agricultural situation. If you are to get

  809
  control you must say : "We propose to produce so much in this country. As regards the rest we have to obtain it by exchange, either by barter of actual commodities or invisible exports." Then there immediately comes in the one-sided trade for which the rentier class is responsible.
  We think the time is coming, or has already come, when, if you are going to attempt to plan your trade, you must do something with that one-sided trade in order to get rid of these one-sided payments which are very seriously embarrassing, and have been very seriously embarrassing the whole of our industrial system. But it is no good doing that if you immediately begin to pile them up again by going on with exactly the same system of finance. It is a complete mistake, in our view, to consider that all export trade is good for a country. It is not necessarily good for a country. You send out commodities which would be quite useful for our own people to consume, you reduce the standard of life in our own country by exporting them, and you exchange them for bits of paper which may return you commodities but in a great many cases they have not returned commodities, with the result that the exports have really been in a number of cases free gifts to other countries at the expense of the standard of life in this country. Therefore, to look upon export trade as necessarily being profitable to a country is a complete fallacy, in our view. That position, of course, would not arise if you could plan your trade rather than just allow any profit owner to export goods wherever he thinks, on paper, he can make a profit. That is seriously interfering with the whole conception——
  Lieut.-Colonel SANDEMAN ALLEN: When those goods are exported have not the wage-earners here received their wages, and is it not the rentier or the so-called profit makers who stand to lose? The wage earner has had his wages, but in regard to the exporter it is a case of heads you win tails I lose every time.
  Sir S. CRIPPS: The hon. and gallant Member is confusing money with commodities. People do not eat money, neither do they wear it. If you send commodities out of the country it follows that the net amount of commodities available for the community in that given period of time must obviously be less.
  810
  However you may arrange it, the net wealth of the country in commodities has diminished. Of course, if you consider that that wealth consists of money, then I am afraid that you cannot get a true picture of the position of the country as regards the available commodities which there are for distribution. The theory of the exporter is that he will get back commodities in return, more commodities than he exported, and that they will in future be available for consumption by the community, but what so often happens, as is happening in regard to the Argentine, capital goods have been exported but nothing comes back, because when the time comes there is no possibility of importing sufficient goods back into this country owing to various incidents of international trade. In the result, the commodity volume for home consumption is reduced and you never get back that which you had hoped to get. That is what is happening all over the world to-day. It is that which necessitates the wiping out of international indebtedness.
  The only way to embark upon a consideration of such problems as trade with New Zealand is by a real planning of the system where you have yourselves control over your trade. At the present time the right hon. Gentleman cannot be blamed, because he has no control. Neither have the Government any control of the trade of this country as regards what is exported or imported. In a very loose and general way they try to do it by putting a tax on here, a restriction there or a quota there, but they cannot take the whole trade of the country as a unit and plan it. That is only possible under a profit-earning system, because each unit of production or each unit of business has itself to make a profit, or else it goes out of business and ceases to be productive. That is what lies at the root of the difficulty with regard to making arrangements with New Zealand as to trade, because this country and the present Government have not a monopoly of the foreign trade of this country and until it has such a monopoly it will never be able to solve the problem of Imperial or international trade.
  6.57 p.m.
  Sir JOHN SANDEMAN ALLEN: I have returned recently from New Zealand and Australia, and my first impression

  811
  on coming back is to wonder on which side of the House to sit. There has been a distinct change since I left. I came here to-day particularly interested in the question of New Zealand. I was anxious to hear what the right hon. Member for Darwen (Sir H. Samuel) had to say on the subject, having just spent seven or eight weeks in New Zealand and two months in Australia. During that time I discussed this problem with everybody I met. In New Zealand it was certainly a very live subject. Whether I spoke to the producers, the chairman of the the Farmers' Union, the Chambers of Commerce, Members of Parliament, Ministers of the Crown or the man in the street, every one of them was interested in the subject. Let me say at once that until I came here to-day I never heard that there was a real grievance against His Majesty's Government in this country for the way they had handled the question. No one has had a better opportunity than I have of hearing any complaint, in one way or another.
  What I did find was a great grievance against economic facts. The trouble was to know what was going to happen. That is the crux of the whole difficulty. We have listened to-day to a very interesting discourse on Free Trade and economic nationalism. The right hon. Member for Darwen interested me particularly because he referred to three bodies with which I am concerned, the Associated Chambers of Commerce of Great Britain, of which I am a vice-president, the International Chamber of Commerce, of which I am one of the British members, and the Inter-Parliamentary Commercial Conference, of which I am chairman and president of the council. All these three bodies would, I am perfectly convinced, fail to recognise in the least the description given by the right hon. Member for Darwen of what they have really been doing and discussing during the last five or 10 years. It is quite a different subject altogether, and we should, therefore, put it aside at the present moment.
  As regards the general issue, a very able answer was given by the right hon. Gentleman the Member for Horsham (Earl Winterton), and I do not feel it to be my duty, nor would the Committee consider it suitable for me, to enter into a discussion now on these points, when
  812
  there are present many hon. Members who are much more able than I am to discuss this matter. The hon. and learned Member for East Bristol (Sir S. Cripps) delivered what was, from his point of view, a very interesting discussion on his pet subject, and some of his speech, as everybody will admit, especially his arguments about money and goods, showed him to possess a distinct grasp of the present situation, which is more than I—or, indeed, most hon. Members, could have achieved. Nevertheless, for practical purposes it was beside the question that we are discussing this afternoon. We are here to discuss whether the right hon. Gentleman the Secretary of State for Dominion Affairs should have his salary reduced by £100 for improper conduct in handling those affairs in relation to the Government of New Zealand. Let us, therefore, come back to the real subject which we are supposed to be discussing. However interesting these other subjects are, there are many days and years in which they will be discussed, and no real agreement can ever be reached on them. On the present subject, however, we have to deal with facts.
  I should like, if the Committee will allow me, to talk for a short time about the subject from the point of view of one who has been studying it on the spot. First of all, let me say that as regards progress, something has been said about Ottawa. I am only speaking about New Zealand. In New Zealand there is no difficulty about the quota on meat. I will read what Mr. Gordon Coates has said on the subject :
  "The opinion of those who can judge is that it is a success, and that to New Zealand producers and to the whole industry it has given results which could not have been given by any tariff on foreign meat unaccompanied by the regulation of supply. And these favourable opinions have been formed by men who were extremely doubtful and critical of the quota on meat."
  Thus we see that in one of the primary industries of New Zealand the New Zealanders are satisfied; the whole people are more or less satisfied as far as that Dominion is concerned.
  Now we come to dairy produce. The next point, let me remind the Committee, seems to have been forgotten by some hon. Members when talking about Ottawa : that this question of quota of

  813
  dairy produce was very carefully and fully discussed at Ottawa, and the British Government finally gave a promise that for a certain given period—three years—which expires next year, they would not without the consent of the Dominions impose any restrictive legislation on dairy produce. That in itself was giving notice to the Dominions of what was in the mind of His Majesty's Government as an essential step to take for the proper care of those who follow that type of industry in this country. I do not call it Protection in the ordinary sense of the word. We are living in times when things have changed enormously, and it seems to me that people have entirely forgotten the big changes that have taken place in the world conditions in the past two years—changes wide enough completely to stultify the old arguments. The fact is that notice was given. Let me quote Mr. Coates again :
  "The Ottawa Agreement really represents partial surrender by the British Government of their undoubted right to control imports, and those words about dairy products are of very great though inadequately appreciated importance at the moment."
  The Committee should see that the New Zealand authorities, at any rate, are alive to all these points. At the needs of the Home Government they may not have thoroughly arrived. The people of New Zealand need education. Nevertheless, a great effort has been made to educate them on that subject.
  I should like to say a few words on the subject of butter. Let us go back to 1930, when we found that, roughly speaking, foreign imports of butter into this country and Dominion imports were more or less equal. What is the state of affairs to-day? Foreign imports of butter have gone down in quantity and Dominion imports have increased, so that to-day the last figures represent approximately 60,000 tons increase in Australian and New Zealand imports, and a decrease of foreign imports. Therefore, although we had got practically to saturation point on our markets, a year or two ago Australia and New Zealand made a tremendous effort to increase production. Australia is responsible for two-thirds of that increase of 60,000 tons. Why? Because prices had fallen and Australian producers have been under the impression—perhaps a very natural impression, but I am afraid that it has to be corrected
  814
  —that for a fall in prices it is necessary to increase one's output in order to keep the same income. The result was that butter became a drug on the market.
  The British Government, whether wisely or otherwise, came to a conclusion which, although many of us here hate these restrictions on trade, we must approve that under the extraordinarily difficult conditions it was necessary to take steps so that the whole of the producers of the Empire, and of this country in particular, should not be ruined. They therefore decided that a certain amount of restriction of imports was essential for these producers for the sole purpose of raising prices. That fact has at last got well into the minds of the New Zealanders themselves, but unfortunately it is at the present moment too late, because since then an agreement has been made which will leave the price more or less the same but will benefit the British farmers alone. If they had only recognised in time, what many of us had tried to make known to them, they would have realised that it was in their interest in common with ours that prices should be raised and people saved from ruin. The Committee ought to look this fact in the face and apply themselves to the question which is the subject of Debate this afternoon, and not go off on to side issues.
  The next point concerns the New Zealand dairymen. There is a tendency to talk about agriculture in New Zealand as if it consisted entirely of dairymen but there are also a large number of sheep people interested in wool and mutton all of whom are satisfied and have no complaints to make. It is the dairy people who are in trouble. They promptly began—very naturally, from their point of view, and most people would have done the same, in their position—propaganda in order to hold their market in this country. In the old days there was an unrestricted market in this country, because we never had enough. They began to wonder how they could get the better of somebody else by taking steps to show the advantage of obtaining a free entry of New Zealand products into Great Britain and of British products into New Zealand. That is as far as the propaganda went, and the New Zealand Government, who had to watch and make every inquiry and be prepared to answer

  815
  inquiries, very properly put the matter up to the Home Government to ask what to do. They might, of course—like some Governments—have acted on their own entirely, but the relations between New Zealand and this country have always been very close, and the Government of New Zealand has always loyally and wisely kept in the closest touch with authorities in this country. Their first point was, therefore, while not committing themselves in any way—for it was not a Government inquiry and it is ridiculous to suggest that it was : the wording of it-is perfectly clear—that a certain number of producers were anxious and they wanted some guidance as to the future from His Majesty's Government here.
  They were quite right, they did want guidance as to the future; some of us would want a little guidance as to the future in their place. But they wanted a reply and they got it, a temperate, well-balanced statement, that the producers of this country must look after themselves. When I was over in New Zealand I found that it had staggered the New Zealanders to be told that the total number of inhabitants of this country, men, women and children, who are dependent on the land is certainly five times the whole population of New Zealand. That information took them aback; it was prominently displayed in every newspaper in the country and gave rise to considerable discussion. So it is important to realise that New Zealanders have been weighing up these considerations. For a long time they have had to face their own troubles, and terrible and most distressing troubles they have been. The dairy farmers to-day are much more numerous than they were, because many of them switched over from sheep when wool and meat went down in the slump, and have not yet come back. It is a distressing thing to see how many of them are hardly able to make a living or cannot make a living at all. Nevertheless, the Government has adequately answered this question.
  Another thing that they had not realised was the absolute necessity to this Government of protecting our foreign trade. It is not for me to discuss trade, as the right hon. Member for Horsham has ably surveyed what has
  816
  taken place lately, and it would be out of place for me to attempt to do so. Nevertheless, I know, and I am quite satisfied, that His Majesty's Government has proclaimed, and have practised what they have proclaimed, their determination to protect all the interests of this country, of every kind, and not merely those of one particular section of the community. Away in the far distance, looking at this country and seeing the wood without the trees, being able to see what really has occurred and to see it with our friends and fellow citizens of the Empire, I can say that they and I look upon this country and this National Government as having done great things in the last two or three years. Instead of these petty complaints and arguments they see, as some of us are glad to see, the great recovery and the high position and lead that this country has taken. That has greatly impressed the people of New Zealand, and they are fully prepared to follow as far as they can, but they are very anxious at the present moment. I feel that any censure of the Government is unmerited, and that what they deserve is praise for what they have done. In conclusion, I should like to point out on this subject, as far as the New Zealand dairy producers are concerned, that they have over-produced in regard to the markets of this country.
  Earl WINTERTON: How can that be? How can the hon. Member say that the New Zealanders have over-produced as far as the markets of this country are concerned when they sent us 2,512,000 tons of butter in 1933 while Denmark sent us 2,519,000 tons?
  Vice-Admiral TAYLOR: Is it not a fact that we imported from the foreigner 3,500,000 tons of butter last year?
  Sir J. SANDEMAN ALLEN: I repeat what I said before, that foreign imports are less by 60,000 tons than they were in 1930. If I am wrong, and if any hon. Member is not satisfied, I am prepared to get my information confirmed and to argue the subject further. In any case, whatever the fact is, there is a great supply of butter coming to this country. What New Zealand really wants is a reasonable tariff, with entry into this country as free as possible. The difficulty is that Australia will have nothing to do with any such suggestion and insists upon Protection. I will

  817
  not point out any of the difficulties, I will only say that it is a total mistake to imagine that New Zealand has any grievance on this subject, or that the Government of New Zealand was prepared, or that the inhabitants of New Zealand are prepared to-day, to give up what they have been having for years and accept in its entirety what is popularly known as Empire Free Trade. I think that such a policy is a myth and at present impossible, though I agree that it is a high ideal. We have, however, to deal with human nature, which is the same in most parts of the world, and to alter it, before we shall find that the ideal can be attained. In the meanwhile we have to accept the position as it is. His Majesty's Government have worked on safe lines. I submit that it has acted wisely and well, and that the Government of New Zealand appreciate it and have worked hand in hand with His Majesty's Government. I also believe that the loyal people of New Zealand are prepared, in spite of various things which have been said, to stand by their Government, which saved Great Britain and the Empire in a time of crisis.
  7.16 p.m.
  Sir ROBERT HAMILTON: The hon. Member for West Derby (Sir J. Sandeman Allen) has come to the conclusion that His Majesty's Government have acted wisely and well, but the Secretary of State will know that we on this side have come to a different opinion, otherwise we should not have put down a Motion to reduce his salary. That, of course, is not a personal matter, it is put down in order to raise questions of policy. The hon. Member has brought the Debate back from the rather doctrinaire essay we had from the Front Opposition Bench to the correspondence which has taken place between the Government of this country and the Government of New Zealand. I do not intend to say very much on the question of New Zealand, because there is another matter to which I desire to refer, but it is a great pity, after the Debate has gone to its present extent, that any one should pretend that the message which came from New Zealand was not an offer. To say that it was an inquiry or something else is mere juggling with words.
  The New Zealand Government wanted to know what this country was going to do when they were in difficulties next
  818
  year when their market in this country for butter and cheese was to be cut down. They wanted to know what we were going to do about it; and they sent the telegram. The answer was that the policy of the United Kingdom was such that it really did not permit of the matter raised by the New Zealand Government being carried any further. New Zealand were not content with that, and asked for further enlightenment. I would refer hon. Members to the White Paper, where the New Zealand Government asked :
  "How far it may be within contemplation of His Majesty's Government in the United Kingdom that in administration of such a plan of quantitative regulation there should be an opportunity for continuous representation of views of the Dominion as any such plan would vitally affect the major industry of the country."
  The answer that was sent was that no plan would be complete which did not provide for proper consultation between the Dominion Government concerned and the Government of the United Kingdom. But no consultation was offered, and the whole matter dropped. The telegram which was sent ended :
  "We hope that the above information may be of assistance to you in dealing with a problem which is not only very difficult and complicated, but is also as we fully realise, one of primary importance to New Zealand."
  It is also of primary importance to us and to the whole of the British Commonwealth of Nations. All the Dominions are watching what is happening in the case of New Zealand. To my mind no event of comparable importance has happened during this century. A few years ago it would have been thought incredible that one of our Dominions should come forward with a proposal such as this, but they have been forced to do so by circumstances which they can see coming. Their whole future is at stake, and they ask this country what we propose to do. We say that we cannot deal with you alone, there are other people concerned and that consultation is necessary. But no consultation is offered, the matter is left, and New Zealand is forced to look for other markets. The result is that exporters in this country find their overseas markets reduced, our shipping has less chance of carrying goods and our migrants have less chance of going to the Dominion. How can the Dominions prosper and expand unless there are opportunities and facilities for expansion?

  819
  Three vital interests are affected—our trade, our shipping and our migrants. The very safety, stability and cohesion of the Empire are at stake, and there is no consultation; the matter is left open. It is a matter of great astonishment to me that a proposal of this importance has not received more consideration by His Majesty's Government. The hon. Member for East Wolverhampton (Mr. Mander) put a question to the Prime Minister the other day in the following terms, to find out what the intentions of the Government were with regard to this proposal. He asked the Prime Minister :
  "whether he will consider the advisability of a general consultation with, the Dominions to consider the issues raised by the inquiry of the New Zealand Government as to whether an agreement could be come to providing for a free market for British goods in New Zealand in return for a similar free market for New Zealand goods in this country?
  The PRIME MINISTER (Mr. Ramsay MacDonald : His Majesty's Government in the United Kingdom have received no indication from any of His Majesty's Governments in the Dominions that an arrangement of the kind referred to is desired or would be acceptable to them. In the circumstances, I see no reason to think that any general consultation such as is suggested by the hon. Member would be of advantage."—[OFFICIAL REPORT, 2nd May, 1934; col. 310, Vol. 289.]
  Is that the full and sympathetic consideration which was promised by the Secretary of State in his telegram? It seems to be a curt dismissal of the advance made by New Zealand. Although the New Zealand market is not a large one and the amount of the imports which she has taken during 1933 is comparatively small, yet if you will look back three or four years, prior to the world crisis, you will find that the imports of New Zealand were about double what they are to-day, and there is no reason why we should not look forward to an increase in these imports. If New Zealand reduced the duties on her imports not only would she be able to take a larger quantity but she would not lose revenue, as the Secretary of State seemed inclined to suggest, because many of her duties now have the effect of excluding goods. If she lowered her duties sufficiently to allow the goods to come in she would still retain her revenue, and exporters from this country would get the advantage of an increasing market in New
  820
  Zealand. The opportunity that has been offered may not occur again. The Secretary of State knows how difficult it is to regain a market once it is lost, and to my mind it is regrettable that New Zealand, without consultation on the part of His Majesty's Government, should be forced to look for markets elsewhere when by such consultation arrangements could have been made.
  Let me for one moment refer to some of the criticisms directed against the marketing scheme for milk. The great market in this country for milk is the market for liquid milk, and no one can compete with us in that market. Our object should be to extend the market for liquid milk. But at the present moment a big levy is being taken from the producers of liquid milk in order to subsidise milk going to the manufacturers of cheese and butter. It is an open question as to whether that is a sound method of proceeding, and whether we should not be on much sounder and safer lines if we were to devote all our energies to the liquid milk market, giving advantage to our farmers, and leave countries like New Zealand, with climatic advantages, which must turn their liquid milk into products such as butter and cheese to supply us with these products. That is the sort of question which might have been discussed with New Zealand had the matter been taken up, as it ought to have been, by His Majesty's Government.
  There is one other matter to which I want to refer, although the time is not yet ripe when it can be discussed fully and with advantage. I refer to the announcement made in South Africa to the effect that notice will be sent to His Majesty's Government raising the question of the transfer of Protectorates, for which the British Government is responsible, to the Union Government. The question of the transfer of these Protectorates is delicate and difficult and will need handling with extreme care. I trust that nothing will be said on either side, if discussions go forward, which will make the question more difficult than it is bound to be. No doubt hon. Members have had their attention drawn to a letter which appeared in the "Morning Post" recently from Professor Berridale Keith, which raised certain legal constitutional points of importance to which I should like to draw the attention of the Secretary of State, because they are points which must be dealt

  821
  with if the discussions go forward. It is as well for them to be cleared up, and that we should know exactly where we stand.
  It being Half-past Seven of the Clock, and there being Private Business set down by direction of the Chairman of Ways and Means under Standing Order No. 6, further Proceeding was postponed, without Question put.

PRIVATE BUSINESS.

  CHAILEY RURAL DISTRICT COUNCIL BILL (By Order).
  Order for Consideration, as amended, read.
  Motion made, and Question proposed, "That the Bill, as amended, be now considered."
  7.30 p.m.
  Mr. HERBERT WILLIAMS: I beg to move, to leave out from "be," to the end of the Question, and to add "re-committed to the former Committee," instead thereof.
  I am a little sorry we are passing from the business of the Empire as a whole to that of a comparatively small parish in Sussex, but the Bill raises certain issues of general principle and my concern is solely with them. I have never visited the parish of Chailey, and, as far as I know, I am not acquainted with anybody living there, but this is the first of probably a great many Bills likely to come before the House dealing with rural water supply, and the Committee which considered this Bill has prepared a special report for the information of the House. Their last words are :
  "Your Committee are unanimously of opinion that the House should be informed of these facts before it is asked to take a final decision on the Bill on the Third Reading."
  My Amendment will have the effect of enabling the House to take account of the facts in the Special Report, which no doubt many hon. Members have read, but I should like to draw attention to the more essential features. It is proposed, for example, that the maximum water rate for domestic supply should be 20 per cent. of the gross annual value of the premises. I think in London we pay 6 per cent. and, if my memory is correct, that is on the net annual value, so that
  822
  this rate of 20 per cent. on the gross annual value is about four times the rate that people pay in London for their water supply. If we are to solve the question of rural water supply, it seems to me that methods somewhat different from those proposed for Chailey Rural District Council will be necessary. It is not as if this maximum charge represented the whole cost. Of course, I recognise that in practice later on it may be possible to reduce the charge, but the maximum is the very high level of 20 per cent., and that would not be all the expense to which users of the water would be put, because it says that in addition there is to be a maximum charge of 10s. for each water closet after the first, and 20s. for each bath, not excluding the first. So if anybody in that parish has a bath installed in the premises, in addition to the charge on the rateable value, there will be a further charge of 20s. That is a rather heavy burden which will fall in many cases on people not very well off, and even with these charges it is apparently not contemplated that it can be run successfully, because the Committee in the second paragraph on the top of the second page say :
  "Accepting the Council's estimate of gradually diminishing loss, an estimate based on the somewhat speculative anticipation of an increase in the number of consumers, the loss would entail a special rate varying from 8.34d. in the £ in the first year to 1.03d. in the £ in the fifth year if the whole loss is to be borne by the part of the district supplied."
  There are further paragraphs which hon. Members can read. This seems to me a very extraordinary proposal. Here are people experiencing difficulty with regard to the supply of water for their houses, and the local authority brings forward a scheme with charges which seem to me abnormally high, and yet they will involve a loss. Those of us who live in a great city where we turn on the tap and the miracle is performed of an ample supply of the best water in the world, fail to appreciate the position of those who do not enjoy the modern miracle of tap water. Here is a proposal to introduce the miracle in a village in conditions which seem to me so oppressive that I think it is of the utmost importance to consider whether this Bill should be allowed to go through as it is or whether, having regard to the fact that

  823
  Parliament has recently had under consideration certain legislation of a general character, the Bill should not go back to a Committee. I raise it as a matter of general public policy, and I hope the House will give careful consideration to my Amendment.
  7.36 p.m.
  Mr. LEVY: I beg to second the Amendment.
  I do not propose to go over the ground my hon. Friend has touched upon, but in the Report it will be seen that this Bill raises a question of general policy in relation to water supply in rural districts. There is no doubt that the water supply of rural districts is a vital matter, and it is evidently considered a very vital matter in this particular rural district. I am told that when they raise all the capital that is necessary for supplying the water, only one-third of the inhabitants will have the benefit of it, and the other two-thirds will not be receiving any benefit in the way of water supply, although they are to have their rent raised in order to provide the capital for their neighbours who are to receive this water. In another portion of the Bill, to give the House some idea of the charges, in the rural district council houses let at 7s. per week to farm labourers earning from 30 to 40 shillings, the house is to be supplied with water with the exception that a bath, which is to be an extra, is to be 45s. per annum, and I understand that the maximum charge in the ordinary way for water supply is only 10 to 15 shillings per year. It shows quite conclusively that rural water supplies are depending to a substantial extent upon the county council, because where the county council refuse to contribute to any such scheme, they obviously will be seriously impeded as in this case. Now the Report says that there was no evidence available as to whether the East Sussex County Council would help, but I am informed that it will not, and therefore the whole of these charges has to be borne by the local authority. I further understand that the Treasury cannot help if the county council does not. It may be that this rural authority has not made any special application for a grant and for the reason that it would be no use, as I understand it, for them to make an
  824
  application which would be refused, provided that the county council refused to consider it. In short, the county council has the virtual power of final veto in any of these rural water schemes which cannot be carried out without its help. The Government have thus given away a power of initiative which they ought to possess themselves in making a grant to the rural district.
  This particular district is a typical example of rural areas throughout the whole of the country, and what applies to it will obviously apply to all rural areas. I ask the House to recommit the Bill to the Committee, so that it can be re-examined in order that water shall be supplied to the whole area on an economical basis. I think I shall not be contradicted if I say that water is more vital to public health than any of the other amenities which are supplied, some nationally and some with grants to the various rural and urban areas of this country. Therefore, I hope that the House will agree with me and say that this Bill shall be recommitted so that it can have further consideration.
  7.41 p.m.
  The DEPUTY-CHAIRMAN of WAYS and MEANS (Captain Bourne): I am grateful to the hon. Members who moved and seconded this Amendment for giving me as Chairman of the Unopposed Bills Committee before which the Bill was considered an opportunity of explaining why we have taken the unusual course of submitting a Special Report to the House. As hon. Members doubtless know, a great many statutory undertakings as regards water bring forward Bills each Session which come before the Unopposed Committee, and in the course of years a general practice has grown up on what we regard as a maximum permissible charge. In the case of the ordinary local authority or company we regard 15 per cent. of the net annual assessment as a maximum which ought to be charged as a water rate. In pursuance of the recent policy of this House of providing baths in all houses erected under public powers we have made it a rule in all cases that no charge shall be made for the first bath in any house, and I must say that in my experience, now of three years' duration as Chairman of the Committee, the vast majority of

  825
  cases of undertakings have come before us proposed charges considerably below the scale mentioned to the House tonight.
  This case is quite peculiar. It is a case of a water Bill promoted by a very small rural district council to deal with only one portion of that Council's area. To the west of the Council lies the country served by the Burgess Hill Company, and to its south lies the Borough of Lewes. Neither of these has any surplus water at present, and part of the finance of this Bill depends on the supply of water to the Burgess Hill Company. We are not informed definitely that an agreement has been come to, but it was hoped by the promoters that agreement on these lines would be reached. The Borough of Lewes has not too much water, and if the need is urgent—and on the evidence the Committee has every reason to believe it is—there is nothing to be done but for the rural district council to produce its own supply.
  An additional complication was the fact that the area of the rural council under a recent order of the county council has been largely extended and it is not proposed that the new area which has thus been brought into the Chailey rural district and which cannot in any conceivable circumstances benefit from this water supply, should have any burden plaed upon it. In those circumstances the Committee had to look at the finance of the Bill as it stood. Under the proposals which are placed before us there would be an estimated deficit of over £900 in the first year on the scheme, diminishing by degrees to a point at which there would possibly be a slight profit or, at any rate, only a very small loss at the end of six years. Looking at all the aspects of the scheme we felt that we could not in fairness to the ratepayers, who, after all, are principally concerned, put any further burden on the finances of the scheme by reducing the charges proposed by the promoters. At the same time, from our experience in other cases, we could not regard the position as satisfactory and at a time when many proposals are coming forward dealing with water supplies we thought it right that the House itself should be aware of these figures before the Bill received a Third Reading.
  826
  If the House agrees that the Bill ought to go forward—and we do not recommend that it ought not to go forward—we are very anxious that these figures shall not be quoted as a precedent by the promoters of future Bills. It is my experience that if for any special reason a certain power is granted to a local authority, the Clause embodying that power is brought forward by every local authority promoting a Bill in subsequent Sessions, irrespective of whether the conditions are in the least degree similar or not. As regards the charges proposed in this Bill, the hon. Member for Elland (Mr. Levy) has pointed out that in the case of an agricultural labourer inhabiting a council house and paying 7s. a week for it, with wages varying from 30s. to 40s., the maximum permissible charge under the Bill would be 45s. per annum, which is three times as great as has been allowed in the case of any statutory undertaker up to now. I am authorised however to say that the promoters are prepared to consider a reduction in the charge for the first bath from £l to 10s. which would reduce the maximum permissible charge against the council house in a case such as I have mentioned to 35s. a year. That, in all conscience, to a man whose total earnings may be 30s. a week is heavy enough when he has to pay 7s. a week including rates for his house at this moment. I think that offer of the promoters however is one which ought to be investigated carefully with regard to the general structure of the finance of the scheme.
  Although I do not think the House could be recommended to accept it on Report stage, I think it is a matter which would deserve careful consideration in another place. If, there, it is agreed that it could be done without putting an undue burden on the rates, or on the rest of the locality, perhaps an Amendment could be accepted there and agreed to by this House. The other problem which arises concerning this Bill—and this touches more closely the question of recommittal—is whether we ought to insist on the reduction of the water rate all round and the placing of a heavier burden on the general rate. The view of the Committee was that out of the 16,000 inhabitants of this rural district it is unlikely that more than 2,000 can possibly benefit

  827
  from the scheme. Under such a proposal as I have mentioned they would have to bear a much heavier rate and the rates are not too low in this district. They run in some cases to 9s. 6d. in the £. The people to whom I refer would not only have to bear the heavier rate, but would have to find the cost of getting their own water.
  There is a further point. This scheme, as has been indicated, deals only with a small portion of the district. Some other part of the area which cannot be supplied from this scheme and which at this moment is equally without a water supply, may desire to promote its own scheme. If we place a heavy burden on the rates in respect of this Chailey scheme we should be handicapping seriously any possible development in the other part of the area untouched by this scheme which might need some assistance to the ratepayers there. On the general evidence given to us, we felt it our duty to make the scheme as far as possible self-supporting and accordingly we did not amend it in the way suggested. We deemed it to be our duty to bring these facts before the House in order that hon. Members might realise that these water schemes, if the cost is to be borne by the inhabitants of the localities without any assistance, are going to prove almost prohibitively expensive.
  As to the Amendment before the House, I can only say this. Should there be, in the course of this Debate, any indication that assistance may be granted to Chailey under recent legislation, then I should recommend the House to accept the Amendment for recommittal. In that case, obviously the evidence on which we came to our decisions would no longer cover the whole ground and it might be desirable that the financial provisions of the Bill should be reconsidered in the light of the fresh evidence then available. If, however, no fresh evidence is forthcoming I do not see what useful purpose can be served by re-committing the Bill. We spent a longish time on this Bill. We listened patiently and carefully to all the evidence which the local authority could produce. Speaking for myself, and I believe for the other hon. Members who served on that Committee, I say that should this Bill "Be re-committed and the
  828
  same evidence come before us in the future, we could come to no other decision than that which has already been announced.
  7.52 p.m.
  Lieut.-Colonel HENEAGE: Although not a resident in the district concerned, as one who has had some experience in connection with rural water supplies and the general question of estimates I feel very much alarmed at the report which has been made on the finances of this Bill. I wish to ask the Minister of Health whether he could not make a grant to put the finances of the Bill into proper order. The House has recently passed Measures dealing with water supplies in the hope that local areas would assist themselves in that respect. Obviously, this particular area, while wishing to run its own show, is financially incapable of doing so. I have known of districts which have suffered heavily from rates put on for water supplies from which they got no benefit whatever. The system of putting burdens for water schemes on ratepayers in neighbouring districts is unfair and there is nothing which more disgusts the rural ratepayer than having to subscribe to water schemes from which he gets no benefit.
  Is it not possible to make a grant in a case of this kind under the Measure recently passed allocating £1,000,000 for these schemes? It might be possible to make such a grant even if it were repayable, and so to ease any burden which might fall on the people who are not directly to benefit from the scheme. We should have regard to the amount expected from an agricultural labourer living in the type of house which has been mentioned in connection with a scheme of this kind. If the Minister of Health has not power to make a grant under the Measure I have mentioned, perhaps he has other powers, or perhaps a grant could be made from some other Department. I am glad that this Amendment has been brought forwarded and I shall support it.
  7.55 p.m.
  Sir FRANCIS FREMANTLE: As a Member of the Unopposed Bills Committee I wish to say at the outset how much we owe to our Chairman both for the manner in which he presided over our proceedings when we were going through the evidence on this Bill, and

  829
  also for his speech this evening. I support what he has said. The evidence placed before us was gone into most thoroughly, and I agree with him that if the Bill were re-committed on that evidence the Committee could not come to any conclusion other than that of bringing it down to the House. If there is any fresh evidence, especially with regard to the finance of the Bill, of course it would be useful, but I suggest that, whatever decision the House may take, they ought to pause before rejecting altogether the proposal of the Bill.
  During the past 12 months an immense amount of sympathy has been shown all over the country for areas which have suffered from water shortage. The difficulties in the rural areas have been very great. In previous years of drought the same difficulties have arisen, there have been the same complaints and the same expressions of sympathy, and yet nothing has been done. Here we have a rural district authority taking its courage in its hands and producing a scheme which, as far as we could see, if all the provisions were carried out, would be a successful scheme, although applying only to one-eighth of the inhabitants. We should not stand in their way. It is a question of how much we value those doctrines of cleanliness and the use of water to which we so often give lip service. Do we value those doctrines at the amount mentioned in the Bill? If we do not value them so highly, perhaps the inhabitants of Chailey place that value upon them.
  Here we come in contact with the principle of local government. The Chailey Rural District Council stands to be shot at by proposing this tremendously high rate—up to 8d. in the £, and going down in five years to the point at which solvency for the scheme will be reached—on a small part of a comparatively poor area. They are prepared to stand the racket. They believe that they have the ratepayers behind them. They do not want us to pull the chestnuts out of the fire for them. If they, as representatives of the ratepayers of the district, believe it worth their while to have this high rate in order to avoid future water shortage, the House ought to consider seriously before refusing to allow this local authority to exercise that right. It is not only in cases of acknowledged success that we ought to give these powers. We ought
  830
  to give them occasionally even when they do not succeed, in order that the ratepayers may be a little more attentive to the question of their representation when it comes to local elections. It is by such proceedings that ratepayers learn to value their power and to exercise their responsibility, which as a rule they do not exercise at all.
  There is another point about which I am not clear. We hear a great deal as regards development towards the south coast, and obviously there is a very big tendency towards such development, which will naturally fall between here and the sea. I do not think this is the ideal place for development, but undoubtedly there will be a great deal all round that area, and if there is such development, obviously a water supply is essential. If we are retarding the process of providing a water supply, we are retarding the development there, and I, living in a rural district that hopes to remain rural and not to be developed, am only too delighted that places like Chailey, if they want to be developed, with suburban villas and so on, should have a water supply to attract people there. In that case they would soon ease the ratepayers' burden as regards a water supply. I do not know what bounty may be given out of the hands of the Minister of Health when he comes to reply, or what other possibility there may be in that direction, but I feel very strongly that we should go a very long way before opposing the wishes of the elected representatives of the people in the Chailey rural district in this matter, while at the same time recognising, as the Deputy-Chairman of Committees has already said, that undoubtedly this will be taken as a precedent, and we must recognise that it is a most important precedent that we are establishing or refusing.
  8.2 p.m.
  Mr. CHARLES WILLIAMS: I do not see the point of re-committing the Bill. Apparently it has been gone into most thoroughly, the local people wish to have it, and I cannot see how at the moment we can lay it down as any advantage to re-commit the Bill to the same Committee that has already been into it with great thoroughness. I think it is very wrong indeed as a general principle that you should have a water rate of the extreme height that there is in this case, and I think it ought to be said by a

  831
  private Member that it is not to the advantage of the locality as a whole that this should be used as a precedent, but that we do this as an exceptional case. I am convinced that there are authorities who may lay an abnormally heavy water rate on particular people for this, that, or the other reason. Members of the House of Commons are often accused of interfering or otherwise with local authorities, and when one or two of these very high rates have been made, you will find that people will turn round and say, "Yes, you allowed that to go through the House of Commons, and why did you not protect the normal interests of the locality and see that expenditure was kept within reasonable limits?" For that reason, I hope this Bill will not be regarded as a precedent for the future.
  8.5 p.m.
  The MINISTER of HEALTH (Sir Hilton Young): The House will, of course, apprehend in the first place that this Bill is a private Bill promoted by a rural district council, and that the Government are in no way responsible for it and have no case to make upon the Bill. If I take a Ministerial interest in the matter at all, it is only that it is most desirable that there should be a scheme for the supply of water in this particular neighbourhood, and, of course, there is a Ministerial interest in seeing that a proper scheme, if approved by the House and its Committees, shall be carried through in the interests of public health, a point put very well by my hon. Friend the Member for St. Albans (Sir F. Fremantle). I think we owe a debt of gratitude to the Mover and Seconder of the Amendment for enabling the House to deal thoroughly with so important a matter as this legislation in regard to water supplies, and I am confident that the House will be most grateful too to the Deputy-Chairman of Committees for the assistance which he has given the House in the matter. As I understand his very clear statement, the points to which he wishes to call our attention are principally two—the magnitude of the charges and the charge for the first bath—and if I have followed the advice which he gave to the House also with so much clearness, it was that the real point for us to observe was to enter a caution against
  832
  our regarding these charges as a precedent, but that his advice was not that it would be useful under these conditions to re-commit the Bill.
  With that point of view, so clearly expressed by the Deputy-Chairman of Committees, I am, if I may say so, in entire agreement. It appears to me that it is right and proper that on this occasion we should formally observe that these charges are not to be regarded as a precedent in other cases. The Deputy-Chairman of Committees referred to one matter which he said might be taken as a ground for re-committal, and that would be if there were to be a pronouncement by myself in this Debate as to the possibility of grants for the assistance of the scheme. I am sure the House will understand that such a pronouncement on my part would be quite improper and indeed impossible for me to make. I cannot make pronouncements as to my own intentions in the discharge of Ministerial responsibilities as regards an application for a grant that has not yet been made, and in those circumstances I think the best help that I can give to the House in response to this point that was taken by the Deputy-Chairman of Committees is that we ought to leave entirely on one side any question of grants and consider the Bill simply as it comes before us. In those conditions, as I understand the analysis of the Deputy-Chairman of Committees, there would be no ground for re-committal.
  There are one or two circumstances that I should mention in order to emphasise, on the question of the magnitude of the charges, the exceptional nature of the proposals in this case in order to emphasise that these charges are not to be taken as precedents in future cases. The first is this, that we are here dealing with a very exceptional Measure, namely, legislation proposed by a rural district council. The very great majority of private water Bills are on behalf of urban district councils, and those charges to which the House and its Committees have become used in this respect are charges of the order which are possible in urban districts. Rural district charges are, of course, normally higher than that. Usually schemes for rural districts are not dealt with in Bills, and that is why these charges seem to us at first sight unfamiliar. That also serves to enforce the note that this is

  833
  not a precedent. The House may ask why this particular scheme was put forward by a rural district in the form of a Bill and not in the ordinary form. I have informed myself on the subject, and I understand the reason was this, that there was a desire to make a bulk supply to a neighbouring authority, the Burgess Hill Water Company, and that at the time could not be done without legislative powers.
  The second circumstance which I think explains the exceptional nature of the charges which appear in this Bill is this : I am informed that when the Bill was introduced there was imminent a change in the status of the rural district. Its area was to be enlarged under the review of boundaries now in progress. The rural district council in its original form thought it would be improper to commit the rural district council, in the enlarged form which was about to be established, to any rate contribution towards the water charges. It, therefore, put in the whole water charge in the form of a consumers' charge, whereas the regular course would have been, of course, to distribute the cost between the consumer and a rate contribution. There has been some comment in the House this evening upon that method of financing water schemes. I should point out that that is a perfectly usual method of financing schemes for rural districts—the distribution of a charge over a wider area in the form of a contribution from the rates of a rural district council or even of a county council; and not only is it not unusual, but it is actually expressly authorised by Sections 56 and 57 of the Local Government Act, 1929. In rural schemes, such provisions are indeed quite normal. I just mention this in order to show the House the exceptional circumstances which emphasise the fact that we are not establishing a precedent for future Bills.
  I turn from that to the second point taken by the Deputy-Chairman of Committees, and that is as regards the charge for the first bath—that is, the first bath of two baths in a house, not a sequence per person. If I may say so, I entirely associate myself with the Deputy-Chairman of Committees in establishing the rule against such a charge in Water Bills before the House. I also commend to the House, if I may do so without assumption, his recommendation that this should be made the subject of consideration in
  834
  another place. I understood that the promoters had a tender mind upon this subject, and I should like to say that I think that it should be taken into very careful consideration whether this charge should not be omitted altogether. It needs to be considered in relation to the general finances of the scheme, but if it can be reconciled with the general finances of the scheme that the charge for the first bath in a house should be omitted altogether, I think it would be more satisfactory from the general point of view. In these conditions I believe that the course recommended to us by the Deputy-Chairman of Committees is that which we may with advantage follow—to allow this Bill to proceed on its further stages subject to that undertaking for reconsideration in respect of the charge for the first bath.
  Lieut.-Colonel HENEAGE: Could the Government make a contribution to the rural district council in the event of the county council refusing to make any contribution itself?
  Sir H. YOUNG: I think it would be useful that I should make that point plain. The hon. Member for Elland (Mr. Levy) is not quite accurately interpreting the Bill when he suggests that a contribution from the county council is a condition precedent to a grant. A contribution from the county council will be required in all cases in which it is proper, but it is by no means a necessary condition of a grant.
  8.15 p.m.
  Mr. HICKS: We on this side have listened with great interest to the proposals contained in the Bill, and we are particularly desirous that everything should be done to facilitate water supply to the people of the rural parishes. I was born in a village and I have had the experience of having to travel many hundred yards from the house to a well. The winding up of the water and carrying it to the home and the necessary conservation of the water there subsantially limited the supply, and rainwater had to be gathered for various domestic purposes. If there is anything that the Minister can do to render assistance, I hope he will do it. I think I heard him strike a sympathetic note. I understood him to say that if representations were made it would be possible for the Minister to render some assistance in this case.

  835
  We think, if it is necessary for the general health and well-being——
  Sir H. YOUNG: I ought to correct the hon. Gentleman at once. I never used any expression of that sort. On the contrary, I said it was impossible for me to give any undertaking or enter into any form of discussion on the possibility of a grant for which application had never been made.
  Mr. HICKS: I understand that, but I was trying to give the local authority some encouragement to ask for a grant. On the question of the local authority and the county council being asked to make a subscription, if it is necessary for the general health of the people, it would not be such a terrible burden to spread the cost over the area. Some disease like diphtheria might break out in consequence of the absence of a water supply, and the cost of that would fall on the whole area. Very often in establishing services that are substantially lacking in certain places it is necessary to call on a wider area for contributions. I am not sure what the Minister meant in regard to the question of one bath. I understand that if more than one bath is established in a house, the first bath will not be charged for.
  The DEPUTY-CHAIRMAN of WAYS and MEANS: I am afraid the hon. Member is not correct. Under existing practice, where there is more than one bath the first bath is free, and the house having one bath is not charged. Under this Bill the house having more than one bath will be liable to a maximum charge of 20s. in respect of one bath and 20s. each in respect of the others.
  Mr. HICKS: I gather that the first bath installed has to be paid for. I understood from the figures which the Deputy-Chairman of Committees gave, that in the other instances the bath would cost 35s.
  The DEPUTY-CHAIRMAN of WAYS and MEANS: What I said was, that I was authorised on behalf of the promoters to say that they would be prepared to reduce the charge of 20s. per bath to 10s., and in the case of a council house which is let at 7s. per week, they would make a maximum inclusive
  836
  charge for water to the house and to the bath of 35s. a pear instead of 45s., as was mentioned in the special report before that suggestion had been made by the promoters.
  Mr. HICKS: We are glad that some effort has been made to promote the water supply in this district, and we are anxious that it should be extended over the country. Anything that can facilitate the supply of water to the rural districts in adequate proportions will receive our endorsement. I hope that, although in this instance the charges appear very high, a sufficient public pronouncement has been made to guard against this Bill being quoted as a precedent. If it were, it would not receive much encouragement here.
  Mr. H. WILLIAMS: The purpose which I had in mind in moving the Amendment has been achieved by the statement of the Minister and the Deputy-Chairman of Ways and Means and of the hon. Member speaking for the party opposite; and therefore I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Main Question put, and agreed to.
  Bill, as amended, considered accordingly; to be read the Third time.

SUPPLY.
Again considered in Committee.
[Sir DENNIS HERBERT in the Chair.]
Postponed Proceeding resumed on Question proposed on consideration of Question,
"That a sum, not exceeding £36,618, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1935, for the Salaries and Expenses of the Department of His Majesty's Secretary of State for Dominion Affairs."
Question again proposed, "That a sum, not exceeding £36,518, be granted for the said Service."
8.21 p.m.
Sir R. HAMILTON: When we were interrupted for Private Business, I was about to draw the attention of the Secretary of State to points which I think deserve his attention. I am sorry he

837
is not on the Front Bench at the present moment, for they are difficult legal points, but I hope they will be reported in the OFFICIAL REPORT, where they can be studied. In the South Africa Act of 1909, Section 151 provides that the King, with the advice of the Privy Council, may, on Addresses from the Houses of Parliament in the Union, transfer to the Union the government of the territories in question, the provision for good government in the event of such transfer being contained in the Schedule to the Act. There is now legislation pending before the Union Government under which, if it becomes law in its present shape, the Union Parliament will confer on the Governor-General in Council the right to transfer the native territories to the Union, which would indeed be a very anomalous result. If I am correct in drawing that conclusion, the authority of the King in Council under Section 151 of the South Africa Act would need to be safeguarded, and the effect of Clause? of the Bill to which I have referred on the whole power of the King in Council to transfer the territories, obviously needs scrutiny. It is desirable that we should have clearly expressed by the Government that this right will not in any way be impaired.
The last point to which I wish to draw attention is this : The power of the King to disallow Union legislation having gone, the sovereign power of the Union Government renders nugatory the provisions for good government which are contained in the Schedule to the Act in the case of a transfer being made. Therefore, I presume it will be correct to say that, should a transfer be made, provision for good government will necessarily have to be settled by negotiations between the two Governments. These are shortly the points into which I think is desirable that the Secretary of State take an early opportunity of looking and giving an answer upon, because as will be seen they are preliminary points and also points of special importance when the discussions continue, as they probably will, at some future date.
Opinions with regard to the possible transfer of these Protectorates are strongly and widely held in this country. I have very strong opinions myself, but for the reasons I have given I do not consider that this is the proper time at which to express them. We must wait
838
until we know exactly the form in which the Note from the South African Government will arrive here and opportunity is given to this House to have before it all the correspondence that passes between the two Governments. There is an undertaking by the Secretary of State that nothing shall be done without a full expression of views by this House. As I said, I do not consider the present time opportune for an expression of views, and so I will confine myself to asking the Secretary of State to have the points I have raised looked into.
8.26 p.m.
Colonel WEDGWOOD: The situation for those of us who believe in the trusteeship of England over native races is, indeed, difficult at the present moment. A demand has been made upon us by the South African Government—it has not yet reached this country, but we have had particulars of it in the Press—for the surrender of our control over Bechuanaland, Basutoland and Swaziland, and their transfer to the Union Government. Obviously, if that demand had been made by a foreign Power it would have been met with ridicule, but it has been made by one of the Unions of the Crown. But the position of this country as protectors of those natives is made worse by the knowledge that during the past 15 years or more we ourselves, in exercising our protectorate over those countries, have not so far shown the best results of British rule. Our position is the more difficult because South Africa, during the same period, in fact, ever since the South Africa Act was passed in 1909, has been dealing with the native problem in its own country on lines very different from those which are traditionally the lines of the British Colonial Office.
For six years now the Government of South Africa has been sitting in Committee on its great new policy of dealing with the native question in South Africa. The question of segregation, the question of land for the natives, the question of the political rights of natives and the question of their rights of labour have all been under discussion in the Union for six years, and Measures which are repugnant to British ideas have been drafted and redrafted. Though, fortunately, they have in hardly any cases actually been put upon the Statute Book, they have given a clear indication of white opinion in South Africa—perhaps I

839
should say the Northern parts of South Africa rather than the Cape—on the terrible question of native rights and native interests and the future of the natives.
The real difficulty in South Africa is that there is there a large white working-class population which wishes to prevent the Kaffir from competing in their labour market, and at the same time there is a large farmer class and a large class of mine owners, situated in Johannesburg and elsewhere, whose main object is to get that black labour. Consequently, the legislation that is threatened and the legislation that has been passed hits the native from both directions. The white voter, who has little but his labour with which to keep his head above water, has forced through legislation which prevents the black worker from working in many industries and trades. To a large extent he is segregated in native territories, or, if he gets to Johannesburg, confined in the compounds and in the locations, where he is carefully supervised to see that he shall be the least possible inconvenience to the whites and yet shall be readily available as labour.
On the other hand, there are the segregationists, those who wish to put the blacks into their own part of the country and keep them there, preventing them from going in the white labour market. They are willing enough to provide land but not willing enough to pay for it. They are anxious to get the natives away from the white towns and away from the white man's farms and back into the reserves, but without sufficient land in the reserves to keep them alive.
The natives are just acquiring sufficient education—the only chance of education they have is through the missionaries, at Lovedale College and elsewhere—to realise not merely the injustice of their position, but the hopelessness of their chance of getting justice or getting any alteration. The feeling between white and black is probably worse in South Africa than in the Southern States of North America. With this vision of the hopeless position of the blacks in South Africa we are now asked to hand over these three Protectorates, with their native populations, to the same rule that has already reduced to despair the
840
natives of the Union itself. I would sooner hand them over to any Power, but I would much rather we kept those Protectorates and dealt with them on more modern lines. After all, over the greater part of our Colonial Empire particularly on the West Coast of Africa, one can see the enormous benefits that accrue to the natives through British Colonial administration. There they have their land, they have equal rights, they have education of a sort, they have colleges of a sort. They acquire education, and some ideas of civilisation as well. We have done well. We have done better than any other colonising Power, and it would be a scandal if we surrendered those unfortunate natives of South Africa to ideas and to treatment diametrically opposed to those ideas and that treatment which 150 years of English colonial rule have shown us to be best for the natives and for our reputation.
The situation has been made infinitely more difficult now, and it is well to face the facts. The South African Union is, in truth, no longer part of the British Empire. The South African Union drove us to force through this House the Statute of Westminster. The other Dominions have not implemented that Act, but South Africa has, and it gives them a larger degree of independence and of severance from the Empire than was ever contemplated. Now they are to pass this Status Bill—I suppose that it will be passed shortly—making it quite clear that they have no connection with this country. When I was there last it was obvious that in no part of the world, except possibly Ireland, was it more unpopular to be an Englishman. The ties that bind us to South Africa are ties of antagonism, not merely in war and in the concentration camps of the old days, but antagonism based upon completely different ideas of our duties towards other people and the relative roles of black and white and their influence upon one another.
Australia manages the mandated territories of New Guinea, which used to be British New Guinea, admirably. New Zealand does the same in Samoa. It is only in South Africa that you have an example in mandated territory, in the old German South-East Africa, of instinctive antagonism to anything suggested by this House, by British public opinion or by the Government. If this proposal had been made two years ago, or even one

841
year ago, by the South African Government, it is obvious that it could not possibly have been entertained.
The CHAIRMAN: It would be quite in order for the right hon. and gallant Gentleman to discuss a proposal which had been made to His Majesty's Government, but I do not think it can possibly be in order to discuss a hypothetical proposal.
Colonel WEDGWOOD: It is very difficult. We have read about the proposal in the Press, but we have not—
The CHAIRMAN: That is my point. The right hon. Gentleman can discuss what we might call the general principle, but certainly he cannot discuss such a proposal, notice of which has been seen in the Press, because that is not a matter of which notice can be taken till the proposal has been made.
Colonel WEDGWOOD: The immediate responsibility of the Dominions Office rests considerably upon the pledges that have been given to this House, and upon the interpretation of the Government of South Africa Act of 1909. It must be obvious that changes have taken place since, in the relations between England and South Africa, which make the provisions of that Act inapplicable at the present time, and indeed that has hitherto been the attitude taken up by the Secretary of State. He has told us quite definitely that we shall not cede those Protectorates or wash out our responsibility for them except by the free and unfettered decision of this House, and that is a great step forward. He has told us also, and I hope that the Under-Secretary of State will be able to repeat this to-day, that native opinion in those territories will be consulted. On that point it is very important that we should know quite certainly what is meant by consultation, and what attention will finally be given to the wishes of those Protectorates. In many of them there may be a handful of people who would approve of transfer to South Africa. There are always people who see the advantages of being the first friends of the new Government.
It would not be sufficient to be guided entirely by deputations of chiefs from Swaziland, and still less from Basutoland or Bechuanaland. Swaziland is the best
842
of those, bat the government of Basutoland by the chiefs has not been satisfactory, and I do not think that the opinion of the Basutos should be taken solely from a deputation of chiefs. Bechuanaland, where we have recently made such an unfortunate faux pas, is another difficult spot. I hope that the consultation which the Secretary of State has in mind will be by a visiting committee, preferably of the two Houses of Parliament, to those territories, so that the people who make the visit may meet all classes, and have conversation generally in the bazaars and elsewhere, in order to find out what are the true difficulties as well as the true opinions of the natives in those territories.
I know Swaziland, and I know Basutoland and Bechuanaland slightly. They are different countries. Half the people are working for chiefs on the chiefs' land, and the other half work in the mines and on the farms round about. Those classes of opinion have to be consulted and we have to be assured that those people realise the advantages or disadvantages of changing British control for control by a different race and a different Power. That is profoundly important to us, because the prestige of Great Britain all over Africa depends upon our handling of this problem. Every one of the Colonies there, even the settled and happy Colonies on the West Coast, will feel the repercussions of any cowardice on our part, and that will affect our work in those Colonies and the progress of native education and opinion.
This is the greatest danger that British colonial theory and practice have met with, and I beg the Under-Secretary to let his Department realise that they are not a Department to strike a bargain dealing with trade—a bargain based upon safeguards which we know we cannot safeguard. Their business is to go deeper than a mere matter of bargaining, than a mere matter of safety—it is to preserve our policy in the treatment of native races, and to preserve the good name of England, so that it shall not be said in the future that we deserted these people and handed them over, at some advantage to ourselves, to be looked after by another Power.
8.45 p.m.
Mr. MACLAY: I am glad to have an opportunity of speaking for a few minutes

843
in this Debate, because I would like to make one or two remarks from the point of view of a Liberal, though not necessarily of Liberals who are in Opposition at present. I regret very much the fact that I am speaking on the opposite side to some of my late colleagues; I trust that we may be joined up at some time in the future. It was said the other day that an open door is presented to us, and those Liberals who support the Government may return the invitation and the compliment.
I think that the whole Committee, and, indeed, the whole country, will have welcomed the very clear statement which the Dominions Secretary made to the Committee this afternoon. It was time that such a statement was made. This question of New Zealand has been viewed throughout the country in rather an unreal way, and has been made use of rather from a party standpoint than with the realities of the case in view. At the same time I would like to say that I hope the Dominions Secretary, when be receives an offer like this, will give the country an assurance that he is exploring it to the very end. If I might respectfully say so, there was a certain amount of curtness in the reply which lent itself to misunderstanding in the country. I think that, although Free Trade may not be possible to the extreme limit, we should try to give it in as large a measure as we possibly can.
At the beginning of the Debate we had two speeches of what I would call an extremist character, the one from the right hon. Gentleman the Member for Darwen (Sir H. Samuel), and the other from the right hon. Gentleman the Member for Sparkbrook (Mr. Amery). To me the speech of the right hon. Gentleman the Member for Darwen seemed to be an idealist speech, and I think we all agree with his ideal; but, if I might say so, what strikes some of us on this side is that, while we believe in ideals, we are faced with the question of what we are to do in present circumstances; and, while we would like to follow the right hon. Gentleman in his idealism, it is just not practical politics at the moment. He drew the analogy of the Corn Laws 100 years ago, and suggested that the same tiling was being enacted to-day; but, surely, when the Corn Laws were swept away 100 years ago, it was a question of
844
sweeping away duties on something in regard to which this country could never be self-supporting. To-day it is more a question of agricultural products coming into this country in regard to which the country can be self-supporting, and in regard to which we desire to have some restriction and control. I think the right hon. Gentleman was a little unfair in the figures that he gave regarding exports under Free Trade and under Protection. If I remember aright, he quoted the figures for 1929 as typical figures for this country's exports under Free Trade, and then compared them with the figures of the last two years under Protection. Really, however, that is not a fair comparison. In 1929 there was quite a boom, and the depression came long before the country even spoke of tariffs, namely, in 1930 and in 1931, before the question of tariffs came to be discussed at all.
Everyone in this Committee and in the country will have the greatest sympathy with the Dominions Secretary in his present position. He is faced by two opposing principles. He has the scheme of the Minister of Agriculture on the one band, and he has the high Protectionists and Empire Free Traders on the other. The Noble Lord the Member for Horsham (Earl Winterton) criticised the Dominions Secretary in quite a friendly spirit for daring to say that Empire Free Trade was not possible just now, and suggested that, if he thought it was not possible now, he should not say so. But I think that to-day more than at any other time we want to tell the complete truth about what we are prepared to do and what we are not prepared to do, and that both this country and the Dominions will welcome a clarifying of the position. If it is bad, let them know where they are; if it is good, let them know where they are. More than anything else to-day, as far as the Dominions are concerned, we ought to let them know what is possible and what is not possible. I would humbly suggest that both the extreme Free Trader and the extreme Protectionist are quite wrong to-day. Either policy, so far as one can judge, gets one nowhere. I believe the solution of this question to be one of balance and of dovetailing the requirements of the Minister of Agriculture with a scheme of limited Empire Free Trade.
The Dominions Secretary said that he thought the Committee were on a wrong

845
Vote—that they should be criticising or moving to reduce the salary of the President of the Board of Trade or of the Minister of Agriculture. There I think he is wrong, because I think the position of the Dominions Secretary today is to see that he acts between the Minister of Agriculture and the President of the Board of Trade, and keeps the Dominions fully conversant with the wishes and desires and possibilities of this country. For instance, a previous speaker has said what an immense surprise it was for New Zealand to hear that in this country there were employed in agriculture far more people than the whole population of New Zealand. It is high time that they knew that, and I would ask the Under-Secretary to see that propaganda is disseminated in the Dominions stating the real importance of agriculture to this country, and what a vast number of people are concerned in it.
To my hon. Friends opposite I would say that I think it is perfectly logical to ask, when every other form of manufacturing industry in this country is protected, why should agriculture be left out in the cold? Even the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) has pointed out that some people in this country seemed to think that, because eggs or poultry came from the Dominions, they were easy to compete with in this country. I am sure that Dominion agricultural produce is just as difficult for the British farmer as any foreign produce. If it were possible to get some clearer line which people in this country knew, and which people in the Dominions knew, as to how we were going to dovetail the policy of the Minister of Agriculture with that of more Empire Free Trade, misunderstandings would be less likely to arise.
It seems to me that we are perfectly justified in trying to build up those parts of our agriculture in which we can be self-supporting—eggs, poultry, pigs and such like—and asking the Dominions to realise that for the sake of our own countryside we wish to have some restriction. I need not remind the Dominions Secretary of what happened at Ottawa. As far as can be judged by one who has been in Canada since then, it was a very one-sided bargain, but the Dominions were only doing what they thought was
846
best for their own countries. I do not understand it when I hear Members of this House say that we should not use the Colonies and the Dominions for bargaining. You have to bargain with the Dominions as hard as with anyone else. They are out for their own country, quite naturally. You can have sentiment in business and, when you have made your bargain, if you can give a preference, good and well. That should be clearly understood. If anything can be done in a voluntary manner so much the better.
As a Liberal, I would ask that, if the Government find it necessary, as they may, to restrict some Dominion imports into this country, they should make their restrictions and their tariffs in as temporary a manner as possible, so that we may be able to use them more flexibly and not give our farmers the idea that they are entrenching behind a tariff for ever, and that a Government may come along which will reduce the tariff or take it off. Even a Liberal Government may come back, and it will not necessarily feel bound for ever to keep on these tariffs. That is our objection in some ways to the present tariffs—the permanence that is given to them. A Liberal Government in power to-day would have to retain many tariffs which are on, but I trust that it would put them on in a more temporary fashion, even though the actual effect might be the same. With regard to the question of complete free trade, I should like to draw the attention of the Under-Secretary and my hon. Friends opposite to what is going on in Canada, where the Government just before the Easter Recess produced a Marketing Bill which surprised both Parliaments by its extremely radical nature. It is to provide by Order in Council for the marketing of any product, the control of export and the regulation of import. You have only to see what other countries are doing to see the impossibility of bringing about complete free trade. As far as emigration is concerned, we are told that one of the great difficulties of the Dominions is the want of population. There are plenty of people here who are willing to work but there is no work for them. We are being asked to encourage the import of Dominion produce, which is bound in one way or another to put some of our farming people out of work, and the Dominions are not

847
in their turn willing to allow a single man in, though one can understand the immediate difficulty of the Dominions in regard to their industrial position.
I should like to impress upon the Under-Secretary the need for keeping this question constantly in view. This country is being stifled for lack of emigration. If you take the figures for the past 20 years, you at once grasp how we are being stifled. It is only fair to ask, if they wish to get a larger proportion of their produce into this country, that they should do something in return by way of helping our population, especially the young boys. I should like to hear that the Government will shortly consider the matter. Australia is making herself a danger spot in the world through reserving such a large amount of land for so small a population, and she is only able to do it because she has the power of Britain behind her. She should remember that.
There are various extraneous matters that I should have liked to have taken up. I should have liked to have followed up the solution of the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps), the question of trade monopoly under Government control as against capitalism. He knows I am going to mention Russia, which is the outstanding example. The position is not very greatly relieved in Russia by a trade monopoly in Government hands instead of capitalism. This country under Socialist, Communist or under any other rule, would meet with the same difficulty as the capitalist system, that is to persuade the foreigner to buy our goods. I hope this Debate will clear the air in the Dominions as to our intentions and our willingness to extend to them the utmost Free Trade that we can, compatible with our own interests. We are being forced, owing to nationalism and exchange restrictions, to adapt our minds to new ideas. Some of the remedies that we have to use are evils in themselves, but they seem to me to be necessary to use in the meantime, if we are to bring our people through these very difficult times.
9.3 p.m.
Duchess of ATHOLL: Before I come to the subject-matter of the Debate, I should like to say that I share the
848
anxiety that has been expressed by the right hon. Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) in regard to the possibility of the transfer of our native territories in South Africa. I regard our administration of the territories of coloured races within the Empire as one of the greatest responsibilities that rest upon the people of this country. I hope the Dominions Office will give the most careful consideration to this very big question and will take every opportunity of learning the real views of the people themselves, because I share the right hon. Gentleman's fears that it may not be very easy to ascertain what those views really are. I hope the Government, therefore, will not be afraid to decide this question on what they ascertain, and know by experience, to be likely to be in the best interests of the people of the territories themselves.
With regard to the situation that has arisen in regard to imports from the Dominions, more especially from Australia and New Zealand, in spite of the reassuring and interesting speech we heard from my hon. Friend the Member for West Derby (Sir John Sandeman Allen), I think it is impossible to deny that we find ourselves in a rather difficult position in this matter, partly because we have been ignoring what I believe to be a rather fundamental factor in the whole question. On the one hand the British agriculturist finds that the imports of butter and cheese from those Dominions have increased in the last few years, and that they are coming in large quantites at low prices, and the Government therefore believe themselves to be driven in the interests of the British agriculturist, on the top of negotiations for the restriction of meat exports to us from those Dominions, to ask also or to consider making a request for restriction of exports from those countries which I believe are fully as valuable if not more valuable to them than their meat exports, namely, their exports of butter and cheese.
It is very important that we in this House, particularly those of us who represent agricultural constituencies, should realise that the fall in the price of butter on this market since 1928 has been so great that even though Australia and New Zealand have doubled their exports of butter to us in that time, the total

849
value they received last year for their exports was slightly less than in 1928 for double the quantity. It is still more important to realise that low though the prices are at which Australian and New Zealand butter is coming to us, butter is being imported at a still much lower price from Soviet Russia. [Laughter.] It is all very well for hon. Members to laugh, but if the right hon. Gentleman opposite would study the Board of Trade returns and take the trouble to do a little arithmetic he would be able to arrive at some very interesting and important figures.
These figures show that the Soviet price-cutting began in 1930 with a drop from a price of 156s. a cwt. in 1929 of butter imported into this country to a price of 121s. a cwt. That was quite a good start. But Soviet price-cutting has continued year after year ever since. It has dragged down the price of all other butter coming from other countries; it is continuing to this day, and it is very interesting to see how butter from Soviet Russia has always kept far below the price of any other butter. Since 1929 Australian butter coming into this country has decreased by 64 per cent., from 185s. per cwt. in 1929 to 65s. a cwt. in the last three months. Butter from New Zealand has decreased by 65 per cent. in that period, from 172s. a cwt. to 60s. a cwt.; butter from Denmark in the same period has declined by 59 per cent., from 179s. to 72s.; but butter from Soviet Russia in the same period has declined by no less than 73 per cent., i.e., from 156s. a cwt. to 41s. a cwt.
That is to say, within the last three months, butter from Soviet Russia has been coming in at an average price of a little over 4d. a lb. It may of course be said that the quantity coming from Soviet Russia is considerably smaller than that coming from the other three countries I have mentioned. That is quite true, though the quantity is the fourth on our import list, but I submit with all earnestness that a small quantity of a commodity coming on to a market at a very low price may easily disorganise prices on that market. Prices seem to me to matter far more than quantity, and I have therefore noticed with anxiety Government utterances tending to throw more emphasis upon quantity than upon prices, as I have been assured by traders that what matters most is price. After
850
all, our farmers and manufacturers need not mind what comes into this country so long as it comes in at a price which would give a reasonable price to them which would cover their cost of production and give them a fair profit. We need not mind imports in those circumstances. It is when prices of imports fall utterly below a price which is a profitable one or which even fails to meet the cost of production in this country that imports become so very detrimental in character. In any case, it should be realised that the quantity of butter imported from Soviet Russia has risen from 336,000 cwts. in 1928 to 562,000 cwts. last year.
The CHAIRMAN: The Noble Lady is quite in order in quoting particulars of exports or of imports into this country from other countries, in order to compare them with those from the Dominions, but she must bear in mind that the Soviet does not come under the Minister.
Duchess of ATHOLL: I could never believe in my wildest dreams that Soviet Russia could be part of the British Empire. But I venture to say that as the Minister of Agriculture has said that the root causes of the very serious troubles with which the milk industry at present is faced in this country are the low prices of butter and cheese, I am entitled to take what steps I can to try to arrive at a reason for that very low price of butter; and I submit to you that the figures which I have given show that Russian butter must have been a large factor in the catastrophic fall in the price of this commodity. And there need be no end to it, as we know that everything produced in Russia is produced in absolutely abnormal conditions, including what the hon. and learned Member for East Bristol (Sir S. Cripps) has been lauding to us, a Government monopoly of foreign trade.
If, then, it is the case that this very low price of butter is at the root of all our milk troubles, and if, as I believe, it is also the case that Russian prices are largely responsible for this great fall in prices, then they are also the cause of very great loss not only to the British producers, but to the producers of the Dominions of Australia and New Zealand. We have further to remember that Australia has already suffered from

851
the competition of Russian wheat on our markets. That was established by the Imperial Economic Committee Report some two or three years ago.
But it may be said that Australia and New Zealand also export to us large quantities of cheese and that no cheese comes to us from Soviet Russia. I think it is recognised that the prices of butter and cheese hang together. If milk sold for butter commands a very low price because of the low price of butter, it equally follows that the low price of that milk sold for manufacture will affect the price of cheese. As a matter of fact a very experienced dairyman the other day assured me that they hung together, and that it was butter which controlled the price of cheese, because the consumption of butter was so much larger. In any case the fall in the price of Dominion cheese, though it was, I think, referred to here the other day, has not been so great as the fall in the price of butter. Australian cheese between 1929 and 1934 did not fall more than 52 per cent., from 89s. a cwt. to 41s. a cwt.; New Zealand cheese did not fall more than 53 per cent. in the same time; and Canadian cheese did not fall more than 39 per cent. It seems clear, therefore, that it is the fall in the price of butter which is much the biggest factor.
In the circumstances it may be necessary to ask the Governments of those Dominions to restrict their exports of butter and cheese, but I submit that we owe it to the Dominion producers as well as to our own to do what we can to end this devastating and wholly abnormal competition; and if by ending that competition we can raise the price of butter it should be possible to take off restrictions on Dominion dairy imports at an early date. It is also worth while to remember that the dairy exports of Australia and New Zealand are of very great value to them—value fully as great as that of their exports to us of meat. It may, therefore, well be that if by taking action to stop Soviet butter coming in at abnormal prices we improve the price of butter and cheese here, it will be easier for the Governments of those Dominions to meet us over the restriction of their meat exports to us, which is a very important matter to the British livestock farmer.
852
But dairy exports are not the only respect in which the Dominion producers have suffered, and are suffering to-day, from competition from that same country. Canada and Australia are suffering from the very low price of wheat on our market, and Russian wheat is quoted below all others. The same holds good in regard to barley, oats and timber. All these imports affect Canada, and I think the Canadian Government may be regarded as having acted in a very conciliatory manner when we remember that in spite of the clause in the Ottawa Agreement which obliged our Government to stop any State-aided dumping which was likely to destroy the value of any preference given to Canada, the Canadian Government was satisfied with a recent restriction of Russian timber imports of not more than 12½ per cent.
I bring up this matter now because in the agreement recently concluded with Soviet Russia we have machinery for dealing with imports of this kind. Article 2 of that agreement gives our Government power to prohibit or restrict the import of any commodities from that country that can be shown to be destroying the value of a preference given to any part of the Empire, or to be detrimentally affecting the production of a similar commodity in this country. I have said here before, and I say again, that I am disappointed that the machinery in that article does not allow of more prompt action, but such as it is it is intended to deal with dumping of an injurious character, and as such I am strongly of opinion that it ought to be tried and tested to see what it is worth. Therefore, I beg the Secretary of State for the Dominions, and I also beg the President of the Board of Trade and the Parliamentary Secretary, to give most serious consideration to this question, because it seems to me to lie at the root of two big questions.
The figures which I have quoted, and which I will gladly make available to the right hon. Gentleman, incontestably prove that Russian butter is a very important factor in the catastrophic fall in the price of butter which is a big factor in the depressed condition of our dairying industry. Russian imports are also largely responsible for the very heavy loss which has been incurred by Australia, New Zealand and other Dominions in respect of butter and other commodities. We owe

853
it therefore both to our own producers and to Dominion producers to lose no time in making use of the machinery which we now have to our hands to deal with imports which cause such grievous loss and seem to be likely to prejudice, in fact they have already prejudiced to a considerable degree, the good results that we had hoped to obtain from the Ottawa Agreements.
Mr. J. H. THOMAS: Is it the complaint of the Noble Lady that Russian butter is sold cheaper in Russia than hers? is that the point?
Duchess of ATHOLL: No, I am not concerned at the moment with the price at which butter is sold in Russia. The right hon. Gentleman must know that owing to the conditions there the price of butter in Russia is infinitely' higher than here. The latest price that I have heard quoted was about 60s. a pound. I have been telling the Committee that Russian butter has been coming into this country in the last three months at an average price of a little over 4d. a pound, and that that is a great factor in the terrible and continuous depression in the dairying industry.
Mr. THOMAS: If, for instance, Australia or New Zealand sell to their own people butter at a higher price than here, would that be a cause of complaint?
Duchess of ATHOLL: My belief is that if assistance is being given by the Governments of Australia and New Zealand or by any organisation in those Dominions to the exporters of butter, they may have been induced to do that by the fact that prices here as so low.
9.22 p.m.
Major MILNER: The Noble Lady will forgive me if I do not follow the line she has taken. I desire to refer to the very important question which has been raised by the hon. Member for Orkney and Shetland (Sir R. Hamilton) and the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood). I wish to deal particularly with what, in my view, is the very serious constitutional aspect which arises in connection with the possible transfer of certain native territories to the Government of the Union of South Africa. I hold in my hand certain Bills which have already had a Second
854
Reading before the Parliament of the Union of South Africa. One of the Bills provides for certain Amendments of the South Africa Act, 1909, and another Bill purports to re-enact the South Africa Act, 1909, but omits to re-enact a very important Section of that Act dealing with the matter now under discussion. That Section of the South Africa Act, 1909, Section 151, which has been omitted from the Bill which purports to re-enact that Act, raises a very serious matter which will require all the ingenuity of the right hon. Gentleman to deal with it, in certain contingencies which may possibly arise. That Section reads as follows :
"Power to Transfer to Union Government of Native Territories. The King, with the advice of the Privy Council, may, on addresses from the Houses of Parliament of the Union, transfer to the Union the Government of any territories, other than the territories administered by the British South Africa Company, belonging to or under the protection of His Majesty, and inhabited wholly or in part by natives, and upon such transfer the Governor-General-in-Council may undertake the government of such territory upon the terms and conditions embodied in the Schedule to this Act."
That Section is not, apparently, being re-enacted, but in a Bill which is before the South African Parliament called Royal Executive Functions and Seals Bill, Section 7 is in these terms :
"In the absence of any Act of the Parliament of the Union providing otherwise, the powers of the King to be exercised by His Majesty in Council or by Order-in-Council, under Acts of the Parliament of the United Kingdom passed prior to the commencement of the Statute of Westminster, 1931,"—
of course, the Clause which I have read to the House was so enacted—
"and extending to the Union as part of the law of the Union shall, in respect of the Union, after the commencement of this Act, be exercised respectively by the Governor-General-in-Council or by him by Proclamation in the Gazette "—
So that the first portion of the Clause in the Bill now before the South African Parliament provides that powers which, under the South Africa Act, 1909, can only be exercised by the King-in-Council may in future, if this Bill passes the South African Parliament, be exercised by the Governor-General-in-Council in South Africa. It therefore substitutes for the power which has been exercised by the King-in-Council a decision of the Governor-General-in-Council

855
in South Africa.
The Clause continues—
"unless the Governor-General-in-Council decide that the exigencies of the case require that the procedure prescribed by such Acts "—
those are Acts passed before the Statute of Westminster, 1931—
"be followed : Provided that the King-in-Council shall in the latter case "—
that is, a case which under the Statute of Westminster would be submitted if the South African Government decide—I would point out to the House that the South African Government are to be the judges in their own case—that it is to be submitted to the King-in-Council may be so submitted, but
"the King-in-Council shall in the latter case act or purport to act in respect of the Union only at the request of the Prime Minister of the Union duly conveyed and it be expressly declared in the instrument containing the King's pleasure that the Union has requested and consented to the King-in-Council so acting in respect of the Union."
I submit that that means that, if this Bill passes the South African Parliament, it will be within the power of the South African Government, through the Governor-General in Council, to act in. lieu of the King and Council and to transfer to the native territories—
The CHAIRMAN: I understand now—I had not realised it before—that the hon. and gallant Gentleman is discussing, not an Act of the South African Parliament, but a Bill which is before the South African Parliament. He cannot discuss that here.
Major MILNER: With respect, I am proposing to ask the spokesmen of the Government what action they intend to take, and to ask them to make representations on this very important matter.
The CHAIRMAN: What action they intend to take in the hypothetical event of a certain Bill being passed, and thereby, I gather, to criticise or make reference to the action which they intend to take.
Major MILNER: With respect, up to the point which I have reached in dealing with the matter so far, these are accomplished facts. They are matters which have taken place in legislation which has come before the Parliament of the Union of South Africa and has
856
passed its Second Reading. I am now desirous of asking, and am asking, the spokesmen of the Government what they intend to do, and I am doing so principally in order to avert, or to assist this or future Governments in avoiding, an obvious source of friction.
The CHAIRMAN: The hon. and gallant Member has admitted that this is legislation which has not yet been passed. He cannot discuss in this House legislation which it is intended shall be passed through a Dominion Government.
Major MILNER: With respect, I am primarily putting before the House certain considerations in relation to these particular Native Territories and their transfer, and I am calling the attention of the Committee, and of the right hon. Gentleman the Secretary of State for Dominion Affairs in particular, to certain accomplished facts in relation thereto. I submit respectfully that I am entitled to do that.
The CHAIRMAN: The whole of my point is that it is not an accomplished fact. The Second Reading of a Parliamentary Bill may be an accomplished fact in so far as it is legislation which is pending, but it is not completed legislation and so far as it is legislation which is pending in the Union Parliament, we cannot discuss it here.
Sir S. CRIPPS: On that point of Order. I submit that if there were an Act of another Dominion Parliament which might react upon the power of this House in a matter of this kind, it is important to know whether we have to wait until the opportunity of taking any steps has gone, owing to that Act having been passed. May we not try to anticipate the difficulty by drawing the attention of the Dominions Office to the difficulty that will arise, if that Act should become law, between the Union of South Africa and this country?
The CHAIRMAN: The hon. and learned Gentleman has put a hypothetical case which is not exactly the case upon which I have ruled at the moment. I therefore propose to confine my Ruling to the hon. and gallant Gentleman's speech.
Sir H. SAMUEL: On the point of the principle, if the pending legislation of the Dominions clearly affects, not merely domestic matters, but also matters which

857
are within the competence of this House, is not this House entitled to take cognisance of the matter before it becomes a fait accompli?
The CHAIRMAN: I think I shall have to hear a strong case made out for that purpose, and I cannot say that it has yet been shown.
Mr. J. H. THOMAS: On the same point of Order, with a view to reassuring the House : had the question of Protectorates been raised to-day, I should have told the House that the Government's position was exactly as announced by me last week, but I am assured on the legal point raised by the hon. and learned Gentleman that, no matter what may happen, the position of this country, so far as its declaration and policy affecting the Protectorates are concerned, has undergone no change whatever.
Major MILNER: I am obliged to the right hon. Gentleman for reassuring the Committee. I was saying quite frankly that, reading the Bills——
The CHAIRMAN: It is pretty clear that this country, in regard to any rights or powers it may have over its own Protectorates, acts according to its own Acts of Parliament, and not according to any Acts of Parliament which are passed by any foreign country or any Dominion. I must therefore ask the hon. and gallant Gentleman not to discuss further the Bill which is before the South African Parliament.
9.33 p.m.
Sir S. CRIPPS: On that point, this is an extremely important matter in view of the Statute of Westminster. Under the Statute of Westminster a Dominion Parliament has power to alter the provisions of an Act of this House that applies to the Dominion. It is a matter of vital importance to this House how far those alterations may go and, where—as in a case such as this—you have an Act which applies to a Dominion and the surrounding territory, how far the Dominion can alter the Act of this Parliament with regard to the surrounding territory. That is the vital point which was raised over this legislation. In those circumstances, Sir Dennis, I submit to you that if that Dominion is purporting to pass Acts of Parliament which may affect, or may be claimed to affect under the Statute of Westminster, the surrounding
858
territories as well as the Dominion itself, that is at least a matter which it is vital that we should discuss in this House before the legislation has been completed in the Dominion, when it can only raise very acute controversy, which might be avoided by discussion at this stage.
The CHAIRMAN: I am not prepared to say definitely, and I do not think I am called upon to rule at the present moment, what may be the position of this House in the event which the hon. and learned Member is contemplating, of a Dominion Parliament proposing under the powers of the Statute of Westminster to pass something which would alter an Act of Parliament of this House. I do not think that has arisen in the course of this Debate and, therefore, it is sufficient to say that I adhere to my Ruling, that we cannot discuss the Bill to which the hon. and gallant Member has referred.
Sir S. CRIPPS: I am sorry to be persistent, but the introduction of the Statute of Westminster has perhaps altered the question of procedure and makes the position more difficult. Clause 7 of the Bill which the hon. and gallant Member for South East Leeds (Major Milner) has read, does, in terms, purport to alter Acts of Parliament of this House. It says :
"In the absence of any Act of Parliament of the Union providing otherwise, the powers of the King to he exercised by His Majesty in Council or by Order in Council, under Acts, of the Parliament of the United Kingdom passed prior to the commencement of the Statute of Westminster…. shall be exercised by the Governor-General in Council."
This Bill, therefore, is purporting to alter all Acts relating to South Africa prior to the Statute of Westminster. In every case where in these Acts of Parliament the King acts in Council, the Bill is purporting to replace the King in Council by the Governor-General in Council, and that covers not only the Union itself but the adjoining territories to the Union. In my submission, it is of vital importance that we should be able to discuss whether this Bill will in future make it impossible for the King to act in Council, his powers having been, under the Statute of Westminster and by this Bill, transferred to the Governor-General in Council.
The CHAIRMAN: I desire to protect myself, as far as any Ruling I may give now, as much as possible against extending it beyond the circumstances which I have under consideration at the moment. The hon. and learned Member for Bristol East (Sir S. Cripps) has referred to the Statute of Westminster, which he says has altered the position. It has altered the position in exactly the direction in which I have been Ruling, in that it has amplified the powers of Dominion Parliaments to act independently, and there is the more reason, therefore, against our discussing legislation pending in these Parliaments than there was before the Statute of Westminster was passed. The hon. and learned Member raises certain suppositions as to what may happen in the future. My own view at the moment is that I must rule against anything being discussed which may arise if such suppositions materialise, on the ground that we are not entitled to discuss them here until they become accomplished facts. In other words, we are not entitled to discuss a Bill which is before a Dominion Parliament, although it may be the case that certain Bills before these Parliaments, when they have been passed and have become Acts of Parliament, may be a proper subject for discussion. But that question does not arise at the moment.
Sir S. CRIPPS: Is it impossible for us on any occasion in this Committee or in this House, when we foresee a danger if such a Bill is passed of it creating serious friction between the Dominions and this country, to raise the matter in this House?
The CHAIRMAN: I am not concerned to give a general Ruling of that kind. It is a matter which is much better considered and ruled upon, if and when necessary, after full consideration, and as there is no immediate occasion for me to give a general Ruling, I do not propose to do so.
Sir P. HARRIS: Have we not on many occasions discussed legislation passed by the Irish Free State Parliament when it has interfered with the executive powers of the Imperial Parliament?
The CHAIRMAN: I do not know whether the hon. Member was here at
860
the beginning; if so, he appears to have missed the point entirely.
9.41 p.m.
Major MILNER: I understand your Ruling to be that I do not deal with the Bills which are now before the South African Parliament. I will therefore deal with the policy of His Majesty's Government in relation to native territories. I would remind the Secretary of State that when the South African Act, 1909, was passed it was expected, and presumably intended, that the Union would remain an integral part of the Empire, and in Section 151 certain provisions were made dealing with the right of the King in Council to transfer authority over these territories. I desire to ask the Secretary of State whether it is possible to get an assurance that in all and every circumstance His Majesty's Government will see that no territories are transferred by the authority of any other Government but the Government of the United Kingdom, and after full discussion by the Parliament of this country, and, secondly, whether in the event of any such case arising it is the policy of His Majesty's Government to see that the natives are consulted.
Mr. THOMAS: I give that assurance now. I unhesitatingly say, on behalf of the Government, that every promise, including the promise that this House shall be consulted and shall agree, will be carried out. I give that assurance without qualification, and incidentally may I say that nothing arising out of any legislation of any sort or kind precludes His Majesty's Government giving effect to that pledge.
Major MILNER: Will the Secretary of State be good enough to have the legal questions I have put before the Committee reconsidered, and if he is advised that it is desirable will he make representations to the proper quarters so that danger may be avoided.
Mr. THOMAS: As to the legal questions, my duty is to get the best legal advice available, and the legal advice available to me from the Law Officers of the Crown is that there is no ground for the apprehensions expressed by the hon. and gallant Member. If there is any doubt there is no question as to what our attitude would be.
Sir S. CRIPPS: Does the Dominion of South Africa accept that view entirely?
Mr. THOMAS: I think I can go as far as to say that. The interpretation indicated by the hon. and gallant Member for South East Leeds (Major Milner) is not accepted by anybody that I know. I am advised that it is a legal, technical question, and has to do with the position of the Governor-General acting for the King, who may be unable to sign owing to exceptional circumstances. They are legal matters, and I am assured that the legal view which has been expressed is not accepted by all legal authorities
Major MILNER: Will the Secretary of State be so good as to resubmit the question to his legal advisers and also get a statement from the Government of South Africa and submit it to the House, so that we may be sure that the views of His Majesty's Government and the South African Government are in accord on this matter? I ask him to give the Committee this assurance.
9.44 p.m.
Mr. LENNOX-BOYD: The hon. and gallant Member for South-East Leeds (Major Milner) will forgive me if I do not follow him in the very interesting constitutional questions he has raised. If I make one reference to the question of South Africa, I would say with what entire agreement I listened to the speech of the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood). It is not the first time that the right hon. and gallant Gentleman has come to the aid of those who live in native territories, in Africa and elsewhere, and I think the right hon. Gentleman more adequately represents the point of view of the mass of the people in this country in regard to what trusteeship involves than those, many of whom are found in the Conservative party, who believe the duty of trusteeship is over when you have presented the natives with a ready-made constitution modelled on Western lines.
I would like to make a brief reference to the question discussed earlier in the evening, in regard to the correspondence between His Majesty's Government and the Dominion of New Zealand. This correspondence between the two Governments and the disastrously low prices prevailing for butter, milk and dairy produce
862
in this country, are being used by certain unscrupulous people in rural districts to embitter the home farmer against his Dominion colleagues, and to suggest to him that the prosperity of British farming and the development of Imperial agriculture cannot be reconciled. I do wish that those Members of His Majesty's Government who quite properly emphasise the competitive side of Dominion agriculture would be as vigorous, or even more so, in showing how comparatively easily the two forms of agricultural endeavour can be made complementary. I have heard Ministers of the Crown in rural districts assuring the farming population that it does not much matter who ruins them if they are ruined, and the average farmer goes away convinced that in the Dominion agriculturist he has probably met his most dangerous competitor. I am one of those who believe that this form of propaganda is quite disastrous, that we are in this world drifting towards great economic groups, and that our future vitally depends on the British economic group being firmly and properly established, and if this sort of bitterness is allowed to prevail the Heaven-sent opportunity of a National Government with a large majority will have gone perhaps for ever.
The Noble Earl the Member for Horsham (Earl Winterton), in his interesting and vigorous speech, reproved the Dominions Secretary quite properly, I think, for the contemptuous way in which he dismissed the ideal of Empire Free Trade. He pointed out that 25 years ago the Ottawa Agreements themselves would have seemed to the Parliaments of that time fantastic and impossible. I am inclined to agree with him that there may come a time within the lifetime of many in this House when some form of Empire Free Trade may become practical politics. I hope it will not be those who have vigorously condemned it who will implement it when the time comes. There is something to be said for Free Trade being put into practice by those who believe in it, and something for Protection being put into effect by those who have supported it, but nothing to be said for Imperial Preference being put into effect by those who do not believe in it and whose whole political life has been spent in vigorous opposition to it.

863
On this subject of Imperial rationalisation I think the imports of dairy produce from New Zealand and Australia provide a very great opportunity for discussing among ourselves, in some form of Imperial Committee such as Mr. Bruce suggested, the question of the self-sufficiency of the Empire from the dairy produce point of view. We are nearly self-supporting already. Last year, of 183/4 millions, 8,000,000 came from Australia, New Zealand and other parts of the Commonwealth, and the Dominions Secretary, when he quoted the high proportion of New Zealand exports to this country, unconsciously put forward one of the best possible examples to prove the value of the New Zealand offer.
I would like to put before the Committee certain figures. We have had a series of figures from a variety of speakers, and I think, though I do not suggest the Committee has been intentionally misguided, that it does not quite realise that in the first three months of this year the proportion of imports of dairy produce into this country from foreign countries has increased most significantly. Take the six months ended February, 1934, and compare them with the six months ended February, 1933, and you will see that the imports of butter from the British Commonwealth have gone up 69,000 cwts., but butter from foreign countries has gone up 160,000 cwts. That represents the net increase, but if you examine certain specific imports the figures are more significant. From Russia—which I must apologise for mentioning again—the imports have increased by 95,000 cwts., from Estonia 14,000, and from Sweden 60,000. Those people who think they are helping home agriculture and Imperial trade by telling the British farmer that it is New Zealand butter that is ruining him should, in fairness to the Committee and to the country, publish figures of that kind.
As to eggs, we are supposed to represent here divisions in which hundreds of thousands of smallholders are endeavouring to make a living. In the first three months of this year imports from British countries declined by 27 per cent., a total value of £142,000, while imports from foreign countries have only declined 2 per cent., a total value of £33,000. On the question of cheese, which very properly ranks in the forefront of the discussion,
864
everybody must recognise that New Zealand imports have a preponderating influence in fixing the price. But we should bear in mind that the milk products that we have from New Zealand and Australia are chiefly butter and cheese, which do not compete with the very considerable imports of tinned milk products.
It is the policy of the Government, judging by the published statement of many Ministers, to undervalue altogether the effect of tinned milk products on the price at home, and I think we should examine what has been happening in the last six months. Taking separated or skimmed milk, the imports from British countries, including New Zealand and Australia, have been 31,000 cwts., while imports from foreign countries have been nearly 800,000 cwts. In the first three months of this year, tinned milk unsweetened, from the Dominions showed a decline from £68,000 to £20,000, and those from foreign countries from £91,000 to £83,000. If you take finally separated or skimmed milk, this year there has been an increase from foreign countries of £56,000 and a decrease of £6,000 from the Empire.
I entirely accept the statement of the right hon. Gentleman that there is very little bitterness in New Zealand. He says that the High Commissioner never entered a public protest at the Dominions Office, but that does not alter the fact that in failing to accept more gracefully the offer made by the New Zealand Government, the National Government in the United Kingdom may have missed a heaven-sent opportunity. After all, there is a preponderating series of reasons why we should give New Zealand a warmer and more enthusiastic welcome than any other country that comes to us. She gave us a preference in 1903, many years before other countries did and before we returned the compliment, and as a result our trade grew by two-thirds in the 10 years before the War. In the War she sent one in four of her entire population to support the Allied cause, and since the War, judging by the most recent figures, she is buying £13 a head for every person in the Dominion. When we consider that the highest among foreign countries is the Argentine with under £3 a head, we are entitled to say that New Zealand is, in many ways, our best market. I hope that the Under-Secretary

865
will give us an assurance that the enthusiasm of the British farmer for the dual policy of home development and Empire collaboration shall be encouraged by the Government and not diminished by speeches which ignore the effect of foreign imports on the British and Dominions market.
9.56 p.m.
Dr. McLEAN: The right hon. Gentleman the Member for Darwen (Sir H. Samuel) raised some fundamental economic questions which are worthy of further attention. He criticised the Government for what he called its economic nationalism. Much depends upon what we mean by "economic nationalism." These words often mean different things to different people. If economic nationalism means that we wish to create a self-contained economic unit, possibly it is a bad thing, but if it means national economic planning as a basis of trade and other developments, obviously it is a good thing and this is what the Government are doing, and I think they are to be congratulated upon doing it. To give the House a practical example of what I would call good economic nationalism I take the case of Egypt. I use it as an analogy. The life of that country depends upon the water of the Nile, which used to flow largely wasted through the desert into the sea. Artificial barriers were built across the river, quotas were adopted for the distribution of the water and for the growing of crops both for the home market and for export which resulted in a balanced trade. This, along with a planned national development, a work in which I had personal experience, resulted in prosperity for that country. In this country we have analagous artificial barriers in the form of tariffs and quotas, and these are helping to restore our trade balance and are making possible a planned national development. I submit that if we examine the economic policy and legislation of the Government, as a whole, we shall find that a definite approach has been made towards a national development plan for the United Kingdom which will co-ordinate the development of trade, transport, land and public services.
The right hon. Gentleman the Member for Darwen raised the question of increasing
866
consumption. We all recognise that it is a fundamental problem, but the only practicable method of increasing production is to relate production to markets, and that is what the Government are trying to do. In that way prices are maintained and purchasing power and consumption are increased. Incidentally one may remark that these efforts of the Government will help in preparing the programme of works of national development, so ardently desired by our friends opposite—in fact it seems to be one of the principal planks of their platform. I should like to point out that the efforts of the Government represent the only means of ascertaining if, and when, such public works are economic undertakings. The right hon. Gentleman's policy, if not based upon the methods which are being used by the Government, would end not in national development but in national disaster. A programme of uneconomic public works, if carried far enough, could end only in disaster.
The Government having arranged to put our own house in order, it becomes possible on the basis of what is being done to meet the Dominions and to arrange complementary lines of trade. The Dominions having industrialised themselves, this appears to be the only method of approach to the matter. Until they have settled their own domestic problems they are not in a position to meet us. We hope they will soon be able to do so, but it is hardly fair to blame the Government for the delay. Trade agreements ought to be much more easily made with our own people than with foreign countries, but it must also be recognised that we have to continue, as far as possible, to make trade agreements with other countries so as to extend world trade which is so desirable. I therefore submit that there is neither substance nor economic truth in the criticisms of the Government which have been made on the grounds of undesirable economic nationalism and lack of Empire cooperation.
10.2 p.m.
Mr. HOLDSWORTH: Every Member of the Committee will agree with me that we have had a very interesting Debate. It has been particularly interesting to hear the different reasons advanced as to why agriculture in this country is in its

867
present difficult position. The Noble Lady the Member for Perth and Kinross (Duchess of Atholl) said that she did not mind imports, provided that they were dear enough. She had no objection, apparently, to imports as such. Her only objection was against the consumer in this country getting them cheaply. Then the Noble Lady returns to her favourite theme of Russia. It was once said that Queen Mary had "Calais" written on her heart. I think it could be said of the Noble Lady that she has the word "Russia" written on her bonnet. Whatever subject we are discussing in this House she introduces Russia. We have now had 18 months in which to see the effect of the Ottawa Agreements not only on Empire trade but on our own internal trade. We on these benches denounced the Ottawa Agreements when they were submitted to the House. We were criticised on every hand for doing so. Every form of denunciation was used. Every epithet was hurled at our heads, every gibe and sneer that could be thought of was extended to my right hon. Friend the Member for Darwen (Sir H. Samuel) and his colleagues who resigned from the Government.
I wonder if those who expressed enthusiasm for the Ottawa Agreements are as enthusiastic now. Ottawa is a word that is heard in whispers to-day and not shouted from the house-tops. [HON. MEMBERS : "Not in Bradford!"] I am coming to Bradford in a few minutes. But I do not think that as many superlative adjectives would be used to-day regarding the Ottawa Agreements as were used 18 months ago. I think there would be some acknowledgment, if Members were bold enough to say so, that the criticisms of my right hon. Friend had been justified by experience. I took care during the week-end to read through a great deal of the Debates which took place 18 months ago, and I want to draw the Committee's attention to certain words used by the Chancellor of the Exchequer in those Debates. He said :
"I am confident that what was begun there will in future bring perhaps even greater benefits to agriculture in this Country than it does to our industrial community."—[OFFICIAL REPORT, 18th October, 1932; cols. 33–34, Vol. 269.]
868
I wonder if that confidence still remains? Is it shared by the Minister of Agriculture? Is it shared by those Members in this House who represent agricultural constituencies? I remember seeing on the Order Paper last week question after question put down as to the increase in imports, not from foreign countries, but from our Empire countries. For some 15 months the Minister of Agriculture has been using all the energy and ability which he possesses to bring about organised scarcity. His efforts were stillborn by the very existence of these Ottawa Agreements. In so far as the Ottawa Agreements have succeeded in giving the Dominions a greater share of Great Britain's demands for agricultural produce, just so far have they prevented the fruition of the plans of the Minister of Agriculture. Under the Ottawa Agreements we gave free entry for a period of three years as regards eggs, poultry, butter, cheese, and other milk products. The Minister of Agriculture spent sleepless nights thinking out every form of restrictive quota for foreign agricultural produce, and further sleepless nights devising subsidies for surplus milk produced in this country, at the same time encouraging marketing schemes to make the milk too dear for the people to consume; and in the midst of all that expenditure of time and thought greater supplies are coming from the Dominions.
I have not the time to go completely into the figures but they are very interesting indeed. Take the question of frozen beef. Australia and New Zealand in 1932 sent us 1,535,000 cwts., and in 1933 they sent us 1,871,000 cwts., an increase of more than 20 per cent. How is that affecting the farming industry in this country? With regard to bacon, Denmark's imports into this country have been reduced from 1932 to 1933 by 2,145,852 cwts., and at the same time Canada has increased her imports by 320,000 cwts.; and what would have happened if Article 6 of the Canadian Agreement had been carried out, I do not know. In Article 6 of that agreement provision was made for Canada to send into this country 2,500,000 cwts. of bacon. One could go through different items with regard to agricultural produce, but the time is short. May I just refer to a subject which has been referred to often to-day, namely, butter? New Zealand sent us, in 1932, 2,140,000 cwts. of butter and in 1933 more than 2,500,000

869
cwts. Under the Ottawa Agreement we placed a duty on foreign butter of 15s. per cwt., but we have allowed an increase from New Zealand of butter which is subsidised by the New Zealand Government, a thing which is hindering agriculture in this country.
The same thing applies to cheese. Here again there was an increase of 300,000 cwts. in the year 1933 over 1932 from New Zealand. Again, under the Ottawa Agreements we gave New Zealand and the Dominions the advantage of a 15 per cent. ad valorem duty placed on all foreign cheese coming into this country. Reference has been made to eggs, and the same increase applies there. I am not so certain that the agricultural Members of this House will confirm what the Chancellor of the Exchequer said when he used those words :
"I am confident that what was begun there will in the future bring perhaps even greater benefits to agriculture in this country than it does to our industrial community."
When I was reading through those Debates, I was interested to see a warning which the Chancellor of the Exchequer gave to my right hon. Friend the Member for Darwen, that it was very dangerous to make a prophecy and that the most awful thing that could happen to a man was that a prophecy which he had made should turn out to be false. The prophecy which the Chancellor of the Exchequer made in those words which I have read to the House has proved to be entirely false. There was some disagreement in the House when I suggested that the agricultural Members were not so satisfied with Ottawa now that they have had 18 months' experience of it, but I think it is no secret that the Minister of Agriculture desires as soon as possible to be rid of the undertakings that we made at Ottawa to admit freely the produce of the Empire. I am not arguing which policy is right, but I say, Let the Government make up their minds which of the two policies they are going to follow. They cannot follow both.
I want to refer to the speech of the right hon. Gentleman this afternoon when he gave the House certain percentages. Percentages are very misleading things. What we want to know is, What has resulted from the Ottawa Agreements? If hon. Members would take the care to turn up the Trade and Navigation Returns for January of this year, in
870
Sections 10 and 11, they would find that imports from the Empire went up £1,300,000, while exports went down £2,000,000, and re-exports went down by £1,000,000. In the Debate in October, 1932, I made some very strong criticisms of the Agreements as they affect the woollen and worsted textile industry. This industry has had a great sense of injustice since the increase of duties in Canada in 1930. The rates then imposed brought about a tremendous diminution in the exports of woollen and worsted tissues. In 1929—and I am not quoting this year because, as we were told, it was a boom year; I am quoting it because it was the year previous to the raising of these particular duties—we exported to Canada 23,500,000 square yards of woollen and worsted tissues. The figure for 1932, that is, before the Ottawa duties came into being, was 8,944,000 square yards; or, between these years, a fall of 60 per cent. in the export of woollen and worsted tissues to Canada. In the Ottawa Agreements some of the duties were lowered, but all of them remained higher than they were in 1930. In 1933—I want to be quite fair—there was an increase in the export of these tissues of 734,000 square yards, bringing the total to 9,678,000 square yards. What is this as compared with 1929 before the duties were increased? Less than half.
Mr. HOWARD: That applies to all the world.
Mr. HOLDSWORTH: It does not apply to all the world. In 1913, the year prior to the War—I cite this to show how our trade with the Dominions has decreased—we sent Canada 24,329,000 linear yards. Any one who knows about woollen and worsted textiles knows that I am very conservative if I add one-third to that figure to arrive at the number of square yards, and that makes only a 48-inch width in the cloth. The total was thus 32,500,000 square yards. The Chancellor of the Exchequer in the Debate to which I have referred, used these words, speaking of Canada and Australia :
"The policy which they have pursued in the past has been one of very high protection, and in giving that protection to their industries they have protected them not only against foreign competition but also against the competition of the manufacturers of this country. It will be found that in our Agreements with them they have given up the idea that their home markets are to be reserved entirely to the home

871
manufacturer, and they have adopted three fresh principles which are of the utmost importance to this country."
I will read those principles to see how far they have been carried out in the past 18 months :
"First of all, they undertake that they will not in future protect uneconomic industries.… Secondly, that they will so adjust their existing tariffs and so frame any new ones that in articles which they desire to make themselves the British manufacturers shall have a fair competitive chance with the Dominion manufacturer; and, thirdly, that the decision, or rather that the investigation as to how that principle is to be applied shall be taken entirely out of politics, party or otherwise, and shall be entrusted to something in the nature of an impartial tariff commission."—[OFFICIAL, REPORT, 18th October, 1932; col. 33–4, Vol. 269.]
The Chancellor went on to say that the appointment of that impartial tariff commission would in itself justify the Ottawa Agreement. He finished by asking Members of the House not to impute bad faith to the Dominions. Let us examine how far the Chancellor is justified in his claims. There has been no enormous increase of trade. After a great deal of delay question after question was put to the Dominions Secretary with regard to the setting up of the Tariff Board. Finally, it was set up, and the Wool Textile Delegation was the first to be heard by that board, and the only one to be heard so far in 18 months. The preliminary negotiations were begun in July of last year. The case was fully heard in September, taking three weeks to present. I want to say, what I believe to be perfectly true, that the delegation had a perfectly fair hearing. I believe there is not the slightest doubt of the complete impartiality of the chairman. But as yet there has been no published report as to what action the Canadian Government propose to take on the re-commendations of the Tariff Board. There has been a tremendous delay, a delay of nine months, in implementing whatever decision has been come to by that Tariff Board. One cannot help thinking of the difierence between the weekly output of the Import Duties Advisory Committee in this country and the nine months' delay of the Tariff Commission in Canada. The only public notice of any kind that I have seen I saw in the "Morning Post" on Saturday :
872
"The interim report of the Tariff Board on the British woollen textile case, presented last summer, which was mentioned in the Finance Minister's Budget in the House of Commons, is expected to be completed early next week, and to be the subject of tariff legislation this Session. An important feature of this case is that the extent to which Canada makes concessions to this British industry will certainly determine whether or not other important British applicants will continue their efforts before the Tariff Board."
I want to say to the Dominions Secretary that it is no use asking us not to impute bad faith to the Dominions if we are to wait nine months for a decision to be made on the one and only application that has been heard before the Tariff Board. It is a well-known fact that other delegations are waiting to see what happens to the wool textile application. It is perfectly true to say that they feel it is no use presenting their case unless the decision is to be implemented by the Government of Canada. I suggest that it is the duty of our Government not only to see that we carry out our pledges, once we have given our word, but also to see that the Dominions carry out theirs. Those Agreements were signed for five years. If it takes nine months to hear every application coming before the Tariff Board there will be six applications heard during the duration of those Agreements.
Now I want to deal with the question of Australia again in reference to woollen and worsted tissues. I am given to understand that Australia has intimated that she is willing to consider a similar investigation into the duties on wool textiles—I would like the Dominions Secretary to listen carefully and correct me if I am wrong—if we will concede the principle, in the first place, of a bias in favour of established branches of the industry now at work. Why should we accept that? Anything that is biased is weighted on one side. I ask that we should be treated by Australia in the same generous way as we treated Australia in the Ottawa Agreements, signed 18 months ago. If the spirit of bias is to prevail, the Agreements must be. I will give the Committee the figures of the exports to Australia of woollen and worsted tissues. In 1929—which is the same year as I mentioned in the case of Canada—we sent more than 7,000,000 square yards to Australia. In 1933 that had gone down to 940,000 square yards.

873
What is the use, in all those figures, of simply quoting a slight increase for the year 1932? Everybody knows that the years 1931 and 1932, so far as woollen and worsted textiles were concerned, were the worst two years we have had for 25 or 30 years.
I ask the right hon. Gentleman to tell the Dominions that, in return for the many advantages given to them—and we re-stated definitely 18 months ago what we were prepared to do—we ask for the same treatment from them. It is very interesting indeed, when one examines the Statistical Abstract and the Trade and Navigation Returns, to find that we imported into this country in 1913, from the four Dominions, New Zealand, Australia, Canada and the Union of South Africa, £101,000,000 worth of goods, while in 1933 we imported £146,500,000 worth, an increase of imports of more than £45,000,000. Let us look at exports. To the four Dominions in 1913 we exported £91,289,000 worth of those goods, while by 1933 that figure had gone down to £71,723,000, a decrease of £20,000,000. If one had the time one could conduct a very interesting Debate on the balance of payments which is so often talked about in regard to this question.
I do not want for one moment to say anything that would embitter relations between this country and the Dominions, but we ought to look at these things in proper perspective. When it is claimed that we should treat the Dominions fairly and generously we are at least entitled to claim the same treatment from the Dominions. There can be no complaint of our treatment of them, because of the £45,000,000 increase of imports and the £20,000,000 drop in exports. What I want to ask from the Dominions Secretary is that he should let us have a little more of that plain speaking which he used to use. I agree that we should carry out the Agreements arrived at at Ottawa. We gave our signature, and no one would expect us to do anything else, but the right hon. Gentleman should be equally insistent upon the Dominions carrying out their side of the bargain.
10.2.9 p.m.
The UNDER-SECRETARY of STATE for DOMINION AFFAIRS (Mr. Malcolm MacDonald): This Debate has ranged
874
almost entirely around one topic. Only one other matter has been scantily mentioned, and that was when certain points were raised in regard to the South African Protectorates. Some of those points were in order, and one was ruled out of order, but my right hon. Friend, with his customary impartiality, replied both to the points that were in order and to those that were out of order, and he very considerably lightened my burden in replying on this Debate. I shall confine myself wholly to the question of the correspondence that has passed between the New Zealand Government and our own. As the hon. Member for South Bradford (Mr. Holdsworth) has said, we have had on that subject an extremely interesting Debate. To my mind not the least interesting feature of it is that, during these six or seven hours, the Liberal Opposition seems to have turned a complete somersault. The hon. Member launched out by charging the Dominions with sending more and more agricultural produce into this country, to the detriment of our own agricultural producers, apparently regardless of the fact that his Leader had opened the Debate with a complaint that we had not given a guarantee to the Dominions that they could go on sending us as much agricultural produce as they liked. I think that, if Members of the Committee will read the opening Liberal speech this afternoon and the closing Liberal speech, they will find that, whether they agree with either of them or not, the one is a reply to the other.
The right hon. Gentleman the Member for Darwen (Sir H. Samuel) and his colleagues have initiated this Debate because they are distressed that our Government has refused an offer made by the New Zealand Government. They regard the correspondence which has been published as containing an offer from the New Zealand Government to give us free entry, or something approaching free entry, for our goods into Now Zealand, if we in return would give them a guarantee for an indefinite period of unrestricted entry for New Zealand produce into the United Kingdom market. My right hon. Friend has explained on more than one occasion that he did not interpret the correspondence as containing any such offer at all, and what he has said was borne out in the very interesting

875
speech of my hon. Friend the Member for the West Derby Division of Liverpool (Sir J. Sandeman Allen), who was in New Zealand when this matter was being discussed there, and was in touch with New Zealand authorities at the time.
My hon. Friend said that his view of the explanation of the original letter was something like this : Ministers in New Zealand were in contact with New Zealand farmers. New Zealand farmers kept on putting up to New Zealand Ministers the suggestion that the United Kingdom Government would be willing to give that kind of guarantee of unrestricted imports in return for the New Zealand Government's making the concession which has been mentioned. And my hon. Friend explained that in his view the New Zealand Government merely sent that inquiry through to us so that they could give an authoritative answer to the farmers' questions.
Vice-Admiral TAYLOR: Does the hon. Gentleman maintain now that that telegram from the Prime Minister of New Zealand was not a definite offer from the New Zealand Government?
Mr. MacDONALD: I was going to deal with that point. I was only explaining that one member of this Committee, who was in New Zealand at the time, has given a perfectly reasonable and certainly an interesting interpretation of that correspondence, and I think we have other important evidence bearing out the interpretation that he put upon it. For even within the last few days, since this controversy arose in this House, we have had a very important speech delivered by a very important member of the New Zealand Cabinet, and that speech itself indicates that the New Zealand Government have not had it in their mind that reciprocal Free Trade between the two countries was a way out of the New Zealand agricultural difficulty. Mr. Coates is the Finance Minister in New Zealand, second in importance only to the Prime Minister, and in a speech delivered on 30th April he made no reference at all to this controversy which was raging here and to the suggested offer made by New Zealand, but he said this. This is from the report of his speech in the "Times" :
876
"Mr. Coates declared that the dairy industry was in its present position as a result of its refusal to permit discussion of the British request for a joint effort to improve prices. The best plan was to endeavour to work with Great Britain on a basis of quantitative regulation."
That is a declaration of policy by a Minister of the New Zealand Government.
Vice-Admiral TAYLOR: That is his personal opinion.
Mr. MacDONALD: His personal opinion is very much to the point. One cannot go to a higher authority than one of the most responsible members of the New Zealand Government, and that speech indicates that, if there has been any misapprehension about the correspondence that has passed, it has been on the side of those who suggest that it contained an offer by the New Zealand Government proposing some different policy from that propounded by Mr. Coates.
Then I would deal with another point. It seems to have been suggested in some quarters that this whole idea of regulating Dominion imports into this country is something that is being suddenly sprung upon the Dominions and is causing them the most severe heart-burning, and causing them to consider seriously whether it is worth their while belonging to this Empire at all. But I would remind the Committee that the whole question of the right policy for promoting Imperial trade was thrashed out at Ottawa some months ago, and the Dominions' representatives there understood perfectly well that it was at any rate a possibility that the United Kingdom Government would adopt a policy of such restriction, and, in fact, that policy was started by an agreement with the Dominion Ministers at Ottawa. As regards meat, a certain voluntary restriction was agreed between the Australian Ministers and our own Ministers, and the New Zealand Government themselves gave a certain undertaking [Interruption.] The hon. and gallant Gentleman is not even right in his interjection. He says it was subsequent to the original agreement. It is not so. Let him read the agreement, and he will find that it was written into the Ottawa Agreements themselves.
Then we come to the question of dairy produce. Again, the possibility of restriction of Dominion dairy produce was discussed and was written into the original

877
Ottawa Agreements. Here, for instance, is an extract from the agreement with Australia. Schedule A of the Australian Agreement reads as follows :
"As regards eggs, poultry, butter, cheese and other milk products, free entry for the produce of Australia will be continued for three years certain. His Majesty's Government in the United Kingdom, however, reserve to themselves the right, after the expiration of the three years, if they consider it necessary in the interests of the United Kingdom producer to do so, in consultation with the Commonwealth Government, to bring such produce within any system which may be put into operation for the quantitative regulation of supplies from all sources in the united Kingdom."
Vice-Admiral TAYLOR: The three years is not yet up.
The DEPUTY-CHAIRMAN (Captain Bourne): I think that we should get on better if the hon. and gallant Member for South Paddington (Vice-Admiral Taylor) did not interrupt so frequently.
Mr. MacDONALD: I am only pointing out that this problem is not being thrust suddenly upon the Dominion Government, but that the whole matter was discussed at Ottawa and has been very much in the front of all Empire Governments during the months which have followed. If the Government of Australia or of New Zealand felt that they were in a position to make an offer of Free Trade, of free imports for our goods into their countries in return for some guarantee from us which would wipe out the possibility of regulation, they were perfectly open to make that offer at the time of the Ottawa Agreements. I believe that anyone who appreciates the revenue position, the industrial position and the political situation in those Dominions, will understand perfectly well that neither then nor now were either the Australian Government or the New Zealand Government in a position to make us an offer of a free entry or anything approaching a free entry into those Dominion markets.
Vice-Admiral TAYLOR: They have done so.
Mr. MacDONALD: It has been suggested that we have turned down some offer which would have been of enormous value to us; that the Dominion of New Zealand has made ran offer to us to reduce her rates of duty against our goods, and that we have turned down that offer.
878
That cannot be reconciled with the Ottawa Agreements themselves because, as a matter of fact, written into the New Zealand Agreement is an undertaking by the New Zealand Government to reduce tariffs against our imports to the lowest possible level which is compatible with the maintenance of her secondary industries. New Zealand could not have gone any further in any offer to us than she has already undertaken to go in the Ottawa Agreement which we signed with her. Here is Article 8 of our Agreement with New Zealand :
"His Majesty's Government in New Zealand undertake to institute an inquiry into the existing protective duties, and, where necessary, to reduce them as speedily as possible to such a level as will place the United Kingdom producer in the position of a domestic competitor.…"
We have already got that offer, and not only an offer, but an undertaking, by the New Zealand Government to reduce their duties at the earliest possible moment to the level which will put us on an equal footing with the domestic producer in New Zealand. Does the right hon. Gentleman the Member for Darwen (Sir H. Samuel) suggest that any offer which New Zealand has made recently could possibly go further than that?
Sir H. SAMUEL: Does the hon. Gentleman suggest that that offer from New Zealand meant nothing at all?
Mr. MacDONALD: I have already expressed certain views on that point, and I am certainly not going to elaborate them again now. Here we have an undertaking by the New Zealand Government to reduce their duties at the earliest possible moment to a level which will put our producers on a footing with the New Zealand domestic producers, and any further offer which the New Zealand Government might make could only say that they were going to give us a preferential position as against the New Zealand domestic producers.
On the face of it, it is impossible that any offer could have been made to this country within the last few days which went further than the New Zealand Government have already gone in the Ottawa Agreement. As a matter of fact, the New Zealand Government are already implementing their undertaking. Since the beginning of last year a tariff commission has been sitting in New Zealand,

879
and that commission has been conducting a review of the whole protective tariff of New Zealand, with a view to seeing how far the revenue position in that country would permit the New Zealand Government to carry out the undertakings given in the Ottawa Agreement. Therefore, if hon. Gentlemen on the benches opposite are anxious for a reduction of the New Zealand tariffs against us and if they want to see our producers put on a footing of fair competition with the New Zealand producers, they must be supporters of the Ottawa Agreement between the Dominion and ourselves.
The object of the Ottawa Agreement was an endeavour to establish as much free trade as was practicable in the circumstances of the time between the Dominions and ourselves. I have already indicated how the New Zealand Government undertake to try to establish that state of affairs. But that is not all. As hon. Members know perfectly well, the Australian Government and the Canadian Government also undertook to have inquiries into their tariff schedules and to bring about such reductions in the rates of duty against our imports as would enable our manufacturers to compete fairly with their own. There has been a good deal of progress in that direction since the Ottawa Agreement was signed. I see that hon. Members opposite smile. Let me tell them that reductions of tariffs in Australia, for instance, have been going on steadily for the last two years. One of Australia's undertakings in the Ottawa Agreement was to remove, as soon as the finances of Australia permitted, the primage duty levied against our goods. Australia has now reduced that duty from 10 per cent. to 5 per cent. ad valorem, on approximately 850 protective items and sub-items. In addition, the Australian Government on those same 850 items have instituted a further reduction of one-quarter of the duty, subject to a maximum reduction of 12½ per cent. ad valorem, in part compensation for the rate of exchange.
There we have got very considerable and very valuable reductions of duty on something like 850 items in their tariff schedule. In addition to those reductions, the tariff board in Australia have been sitting and they have recommended, and
880
the Government have carried out, increased duties against our imports on five tariff items, and decreased duties on approximately 182 tariff items. I say, therefore, that, as far as Australia is concerned, as well as in the case of New Zealand, the policy of the Ottawa Agreements of reducing as quickly as possible and as far as practicable the barriers of trade between the Dominions and ourselves is being carried out. In the same way, the Canadian Government have been surmounting their own difficulties. I am not saying that we are entirely satisfied with what the Australians or the Canadians have done; but hon. Members have argued for a policy which was going to reduce tariff barriers, and I am only saying that that policy is being carried out by this Government and by Dominion Governments in co-operation with it to-day.
In the case of Canada there are much greater difficulties, for they had to establish a tariff board. A board was already established in Australia. Then, as my hon. Friend knows, some of our own industrialists must accept a little of the blame for delay, as they have not always been as quick as they might have been in preparing their cases for laying before the tariff board. In the case of Canada, however, duty has been raised on four items of our goods going into that Dominion. The duty has been reduced on approximately 45 items of their tariff schedule. So I must urge that, although we have not been able within two or three years to attain to the ideal state which everybody has spoken about this afternoon, at any rate we are moving in the right direction. At Ottawa we endeavoured to break down as much as possible trade barriers within the Empire, and to establish as far as possible freer trade within the Empire. For our part, we maintained as much free entry for Dominion goods into this country as we possibly could, and we shall maintain that free entry as long as we possibly can consistently with the interests of producers and consumers in our own country.
We have treated the Dominions very well in regard to this dairy produce which has been so much under discussion this afternoon. As my right hon. Friend said earlier in the Debate, there has been a great increase of Dominion imports into

881
this country between 1931, the last complete year before Ottawa, and 1933, the first complete year since Ottawa. In the case of butter, Australian imports in those two years were increased by 8.7 per cent., New Zealand imports by 30.5 per cent. In the case of cheese, the Australian imports were increased by 35.9 per cent., New Zealand imports by 18.9 per cent.—and so on right down the list. I say that that is evidence that we are anxious, as far as we possibly can, to give the Dominions free entry into our markets. If it were to become necessary—if it does become necessary—to impose any restrictions at all upon those imports, those restrictions will in our view be as much in the interests of Dominion agricultural producers as of agricultural producers in this country. I think it was the Noble Lady who pointed out that, although Australian imports of a certain commodity into this country had increased enormously in quantity, the actual money which the Australians received in return for that increased amount was less than they received a year before for a smaller amount of that commodity.
Duchess of ATHOLL: The same applies to New Zealand.
Mr. MacDONALD: The same applies to New Zealand, and it is that kind of fact which makes Mr. Coates say that he wishes the New Zealand producers would accept our policy of regulating imports. The whole essence of our policy will be to increase the price to a remunerative level, both for the home producer and for the Dominion producer, if and when the time comes when that action is necessary in order to maintain prices at that level. We certainly hope that the restrictions will only need to be temporary. We certainly would not seek to impose any restrictions without any consultation with the Dominion concerned, and without an effort at an agreement between us and them on that matter. I see no reason, despite all the difficulties, to suppose that we should not be able to get an agreement in the interests of both parties.
Earl WINTERTON: I presume that at the same time the Government will take steps to deal with the enormous imports from Denmark?
Mr. MacDONALD: I am glad the Noble Lord has intervened if he thought that the impression I was giving to the Committee was that we should take no action at the same time to deal with foreign imports. In any policy of restriction we shall certainly endeavour to abide faithfully by the principles laid down at Ottawa. The Government will pursue a policy in the interests, first, of home producers; secondly, in the interests of Dominion producers; and thirdly, in the interests of foreign producers; and we shall certainly carry out that principle in any policy of restriction which is decided upon. My right hon. Friend earlier gave a series of figures which show that since the Ottawa Agreements were signed our share of the market in every single Ottawa Dominion has increased considerably, and that during the same period the share of these Dominions in our market has increased considerably, that, in fact, since Ottawa, and very largely—to put it no higher—as a result of Ottawa, inter-Imperial trade has increased and is increasing. The policy of this Government in anything it may do in relation to inter-Imperial trade will have primarily as its object the promotion and development of inter-Imperial trade for the welfare of producers and consumers in this country and in the Dominions.
10.58 p.m.
Vice-Admiral TAYLOR: In the two minutes at my disposal I wish to say how much I regret the attitude taken by the Government in their reply to the offer of New Zealand to carry out the full policy of Empire Free Trade. It has been argued that no offer has been made. I ask the Government if it was made, what would be their answer? We have heard a great -deal about the benefits of the Ottawa Agreements to this country and to the Empire, We have been told that restrictions are to be brought in on imports from the Dominions into this country. We have heard very little about the immense volume of foreign imports coming in. We have been told that the policy of the Government is to give this market first to our own producers, then to the Dominion producers, and after that to the foreign producers. I beg the Government, before they start restricting the imports from the Dominions, to restrict the imports from the foreigner. That would be carrying out the policy

883
laid down at Ottawa. I maintain that a direct offer has been made by New Zealand. The Under-Secretary for the Dominions has been at some pains to try to make out that New Zealand could not have gone further than she agreed to go at Ottawa, that she could not reduce her tariffs below those agreed at Ottawa, that she could not give us Free Trade. That was the argument advanced. Why not? What is to prevent New Zealand, if she wishes, removing her tariffs against us? Here is a great Dominion ready to accept the
full policy of Empire Free Trade; a policy scoffed at three years ago, but to-day an actual fact; and we turn it down. What effect must it have on the remainder of our Dominions? I am delighted to have had an opportunity of exposing the scurvy way in which a trade offer from the Dominion of New Zealand has been received by this Government.
Question put, "That a sum, not exceeding £36,518, be granted for the said Service."
The Committee divided : Ayes, 38; Noes, 207.

Division No. 245.]

AYES.

[11.1 p.m.

Acland, Rt. Hon. Sir Francis Dyke

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

Procter, Major Henry Adam

Adams, D. M. (Poplar, South)

Harris, Sir Percy

Roberts, Aled (Wrexham)

Attlee, Clement Richard

Holdsworth, Herbert

Rothschild, James A. de

Batey, Joseph

Janner, Barnett

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

Cape, Thomas

Jones, Henry Haydn (Merloneth)

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

Cripps, Sir Stafford

McEntee, Valentine L.

Smith, Tom (Normanton)

Foot, Dingle (Dundee)

Maclean, Neil (Glasgow, Govan)

Taylor, vice-Admiral E. A. (P'dd'gt'n. S.)

Foot, Isaac (Cornwall, Bodmin)

Mander, Geoffrey le M.

Tinker, John Joseph

George, Major G. Lloyd (Pembroke)

Mason, David M. (Edinburgh, E.)

White, Henry Graham

Graham, D. M. (Lanark, Hamilton)

Maxton, James.

Wilmot, John

Greenwood, Rt. Hon. Arthur

Milner, Major James

Grenfell, David Rees (Glamorgan)

Nathan, Major H. L.

TELLERS FOR THE AYES.—

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

Owen, Major Goronwy

Mr. Walter Rea and Mr. Harcourt

Groves, Thomas E.

Pickering, Ernest H.

Johnstone.

NOES

Acland-Troyte, Lieut. -Colonel

Crossley, A. C.

Hasiam, Sir John (Bolton)

Agnew, Lieut.-Com. P. G.

Cruddas, Lieut.-Colonel Bernard

Headlam, Lieut.-Col. Cuthbert M.

Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)

Davidson, Rt. Hon. J. C. C.

Henderson, Sir Vivian L. (Chelmsford)

Amery, Rt. Hon. Leopold C. M. S.

Davies, Edward C. (Montgomery)

Heneage, Lieut.-Colonel Arthur P.

Apsley, Lord

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

Hepworth, Joseph

Aske, Sir Robert William

Dawson, Sir Philip

Hornby, Frank

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

Dickie, John p.

Horsbrugh, Florence

Baldwin, Rt. Hon. Stanley

Dixey, Arthur C. N.

Howard, Tom Forrest

Balfour, Capt. Harold (I. of Thanet)

Dugdale, Captain Thomas Lionel

Howitt. Dr. Alfred B.

Bateman, A. L.

Duggan, Hubert John

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

Beaumont, M. W. (Bucks., Aylesbury)

Dunglass, Lord

Hume, Sir George Hopwood

Beaumont, Hon. R. E. B. (Portsmith, C.)

Edmondson, Major A. J.

Hunter, Dr. Joseph (Dumfries)

Boulton, W. W.

Ellis, Sir R. Geoffrey

Hunter, Capt. M. J. (Brigg)

Bower, Lieut.-Com. Robert Tatton

Elliston, Captain George Sampson

Inskip, Rt. Hon. Sir Thomas W. H.

Bowyer, Capt. Sir George E. W.

Elmley, Viscount

Jesson, Major Thomas E.

Brass, Captain Sir William

Emmott, Charles E. G. C.

Joel, Dudley J. Barnato

Broadbent, Colonel John

Emrys-Evans, P. V.

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

Brocklebank, C. E. R.

Erskine, Lord (Weston-super-Mare)

Kerr, Lieut.-Col. Charles (Montrose)

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

Essenhigh, Reginald Clare

Kerr, Hamilton W.

Brown, Ernest (Leith)

Fleming, Edward Lascelles

Knight, Holfard

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

Ford, Sir Patrick J.

Leckie, J. A.

Buchan-Hepburn, P. G. T.

Fraser, Captain Ian

Leech, Dr. J. W.

Burghley, Lord

Fremantle, Sir Francis

Leighton, Major B. E. P.

Burgin, Dr. Edward Leslie

Fuller, Captain A. G.

Liddall, Walter S.

Burnett, John George

Ganzonl, Sir John

Lindsay, Kenneth (Kilmarnock)

Cadogan, Hon. Edward

Gault, Lieut.-Col. A. Hamilton

Lindsay, Noel Ker

Campbell-Johnston, Malcolm

Gillett, Sir George Masterman

Little, Graham-, Sir Ernest

Castlereagh, Viscount

Gilmour, Lt.-Col. Rt. Hon. Sir John

Loder, Captain J. de Vere

Cazalet, Thelma (Islington, E.)

Glyn, Major Sir Ralph G. C.

Loftus, Pierce C.

Clarry, Reginald George

Goff, Sir Park

Lovat-Fraser, James Alexander

Cochrane, Commander Hon. A. D.

Goldie, Noel B.

Lyons, Abraham Montagu

Collins, Rt. Hon. Sir Godfrey

Goodman, Colonel Albert W.

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

Colman, N. C. D.

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

McCorquodale, M. S.

Colville, Lieut.-Colonel J.

Grigg, Sir Edward

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

Cook, Thomas A.

Grimston, R. V.

MacDonald, Malcolm (Bassetlaw)

Cooke, Douglas

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

Macdonald, Sir Murdoch (Inverness)

Cooper, A. Duff

Guinness, Thomas L. E. B.

McKie, John Hamilton

Copeland, Ida

Gunston, Captain D. W.

Maclay, Hon. Joseph Paton

Courtauld, Major John Sewell

Hacking, Rt. Hon. Douglas H.

McLean, Dr. W. H. (Tradeston)

Courthope, Colonel Sir George L.

Hales, Harold K.

Macquisten, Frederick Alexander

Crooke, J. Smedley

Hammersley, Samuel S.

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

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

Hanley, Dennis A.

Mayhew, Lieut.-Colonel John

Cross, R. H.

Harvey, Major S. E. (Devon, Totnes)

Mills, Major J. D. (New Forest)

Milne, Charles

Ross Taylor, Walter (Woodbridge)

Sutcliffe, Harold

Monsell, Rt. Hon. Sir B. Eyres

Ruggles-Brise, Colonel E. A.

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

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

Runge, Norah Cecil

Thomas, James P. L. (Hereford)

Morris, Owen Temple (Cardiff, E.)

Russell, Hamer Field (Sheffield, B'tslde)

Thomson, Sir Frederick Charles

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

Salmon, Sir Isidore

Thorp, Linton Theodore

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

Sandeman, Sir A. N. Stewart

Titchfield, Major the Marquess of

Morrison, William Shepherd

Sanderson, Sir Frank Barnard

Tree, Ronald

Nation, Brigadier-General J. J. H.

Savery, Samuel Servington

Tryon, Rt. Hon. George Clement

Nunn, William

Shakespeare, Geoffrey H.

Tufnell, Lieut.-Commander R. L.

O'Donovan, Dr. William James

Shaw, Helen B. (Lanark, Bothwell)

Wallace, Captain D. E. (Hornsey)

Patrick, Colin M.

Shaw, Captain William T. (Forfar)

Wallace, John (Dunfermilne)

Peake, Captain Osbert

Sinclair, Col. T. (Queen's Unv., Belfast)

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

Peat, Charles u.

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

Ward, Sarah Adelaide (Cannock)

Perkins, Walter R. D.

Somerville, Annesley A. (Windsor)

Warrender, Sir Victor A. G.

Petherick, M.

Spears, Brigadier-General Edward L.

Whyte, Jardine Bell

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

Spencer, Captain Richard A.

Williams, Charles (Devon, Torquay)

Potter, John

Spender-Clay, Rt. Hon. Herbert H.

Williams, Herbert G. (Croydon, S.)

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

Spens, William Patrick

Wills, Wilfrid D.

Power, Sir John Cecil

Stanley, Rt. Hon. Lord (Fylde)

Wilson, G. H. A. (Cambridge U.)

Ramsay T. B. W. (Western Isles)

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

Windsor-Cilve, Lieut.-Colonel George

Ramsden, Sir Eugene

Stones. James

Winterton, Rt. Hon. Earl

Ray, Sir William

Storey, Samuel

Womersley, Walter James

Reed, Arthur C. (Exeter)

Strauss, Edward A.

Worthington, Dr. John V.

Reid, William Allan (Derby)

Strickland, Captain W. F.

Rickards, George William

Stuart, Lord C. Crichton-

TELLERS FOR THE NOES—

Ropner, Colonel L.

Sueter, Rear-Admiral Sir Murray F.

Mr. Blindell and Commander

Rosbotham, Sir Thomas

Sugden, Sir Wilfrid Hart

Southby

Original Question again proposed.
It being after Eleven of the Clock, and objection being taken to further Proceedings, The CHAIBMAN left the Chair to make his Report to the House.
Committee report Progress; to sit again To-morrow.
The remaining Orders were read, and postponed.

SUPPLY.

  ADJOUENMENT.
  Resolved, "That this House do now adjourn."—[Captain Margesson.]
  Adjourned accordingly at Twelve Minutes after Eleven o'Clock.