Commons Sitting of 28 March 1935

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKES in the Chair.
NEW WRIT.
For the County of Perth and Kinross (Perth Division), in the room of Mungo David Malcolm Murray, Esquire, commonly called Lord Scone (now Earl of Mansfield and Viscount Stormont in the Kingdom of Scotland).—[Captain Margesson.]

PRIVATE BUSINESS.
Reading Corporation Bill,
Read the Third time, and passed.

METROPOLITAN COMMON SCHEME (PALE-WELL) PROVISIONAL ORDER BILL.
"to confirm a Scheme under the Metropolitan Commons Acts, 1866 to 1898, with respect to Palewell Common, in the county of Surrey," presented by Mr. Elliot; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 51.]
ORAL ANSWERS TO QUESTIONS.
  UNEMPLOYMENT.

    HOURS OF WORK.
    Miss WARDasked the Minister of Labour what progress he has made with his discussions with the employers of labour on the question of the reduction of hours?
    The MINISTER of LABOUR (Mr. Oliver Stanley): I am meeting representatives of employers in the engineering and the iron and steel trades this week, and propose to have similar meetings with other industries at an early date.
    Mr. TINKER: When can we expect a more reasoned reply about these discussions?
    2058
    Shall we put down a question or will the right hon. Gentleman make a statement?
    Mr. STANLEY: I think we had better wait and see.
    Mr. GODFREY NICHOLSON: Is my right hon. Friend considering the question of the mines?
    Mr. STANLEY: That is more a question for the Mines Department. The mines do not come under the Ministry of Labour.
    Mr. T. SMITH: Has the right hon. Gentleman met the mineowners?
    Mr. STANLEY: As I have said, the mines are a matter more for the Mines Department than for the Ministry of Labour.
    Mr. PIKE: Has the right hon. Gentleman met the representatives of the trade unions?
    Mr. STANLEY: I am constantly in touch with the Trades Union Council.

    SPECIAL AREAS (HOUSING).
    Miss WARDasked the Minister of Labour whether he is now in a position to inform the House what action the special commissioner intends to take with regard to the building of houses?
    Mr. STANLEY: I am informed by the commissioner for the Special Areas (England and Wales) that he is proposing to render assistance in the establishment of a public utility society with the object of undertaking, in co-operation with local authorities, the building of houses in Durham and Tyneside.
    Sir PERCY HARRIS: Does that mean that this society will get special assistance over and above the societies which will be set up under the Bill now going through Parliament?
    Mr. STANLEY: The details are not yet settled. The idea is to give assistance in cases where building cannot be carried on without something of this kind.
    Miss WARD: When the society is established, will it be a permanent thing, bearing in mind that the Bill to deal with overcrowding will soon be on the Statute Book?
    Mr. STANLEY: That was the object of adopting this means of working through a public utility society.
    Mr. HICKS: In the event of the public utility society being set up and house building forming part of their activities, will the right hon. Gentleman report to the House the conditions under which the houses will be constructed—whether they will be erected in accordance with the generally recognised conditions, or whether it will be regarded as relief work?
    Mr. STANLEY: The hon. Member had better wait until the utility society is set up.

    DEPENDANTS' BENEFIT.
    Mr. BUCHANANasked the Minister of Labour (1) whether he is aware that at Stanningly Exchange, on or about 10th January, 1935, a claimant to standard benefit named Simpson, who claimed through the Patternmakers' Association, was questioned as to what he contributed to his home when working and what were the earnings of two members of the family, and these were put in order to determine the applicant's right to benefit for his wife; and whether he will take steps to see that no test as to means is applied to persons on standard benefit;
    (2) whether he is aware that at the Dudley Exchange a claimant to standard benefit named W. H. Sanders, who made his claim through the United Patternmakers' Association, was questioned as to the income of his family, consisting of two sons and two daughters, and the amount that they paid into the home; that this information was required in order to determine as to the applicant receiving benefit for a child; and whether he will take steps to see that no means test shall apply to persons on standard benefit?
    Mr. STANLEY: In both cases the inquiries to which the hon. Member refers were put in connection with a claim for dependants' benefit in respect of the claimant's children; and the hon. Member is under a misapprehension in thinking that the inquiries in Mr. Simpson's case related to the claim for his wife. A claimant for dependants' benefit in respect of his children has always been re-
    2060
    quired by the terms of the Acts to show that he wholly or mainly maintains them, and there are numerous decisions by the Umpire governing the existing practice which I have no power to vary. I may add that the purpose of the inquiries is not to ascertain the earnings of members of the household but only the amount which they contribute from their earnings to the support of the family.
    Mr. BUCHANAN: Is the right hon. Gentleman aware that the Leeds man was definitely questioned as to his wife and that he has submitted a sworn statement to that effect? Is he also aware that if the children reside with their father and mother no other person's income has ever been taken into account and that automatically the father is paid for the children if he is on standard benefit?
    Mr. STANLEY: That is not the case. There is no change whatever in the practice which has grown up as a consequence of umpires' decisions. There are umpires' decisions of many years standing on the exact point which the hon. Gentleman has raised.
    Mr. BUCHANAN: Is the right hon. Gentleman aware, in spite of what he has said, that on a claim for standard benefit, if a man resides with his wife and family, he is automatically taken as maintaining his child apart from any other income in the house; and, if that be so, will he take steps to see that the practice is stopped?
    Mr. STANLEY: No change whatever has been made in the practice that has persisted for some years, including the time when my position was occupied by a Member of the party opposite. All I do is to obtain the information which the umpire has laid down as essential to decide the facts of the case.
    Mr. BUCHANAN: Is the right hon. Gentleman aware of any case where the father and mother and child were residing together and where the child's benefit was stopped because some other member of the family had an income?
    Mr. STANLEY: I cannot answer that question without notice.
    Mr. LAWSON: Is not a person entitled under the law without qualification, both for himself and his dependants to

    2061
    standard benefit for 36 weeks, and has that not been emphasised by the policy of the Government in the 1934 Act?
    Mr. STANLEY: The practice under employment insurance has always been that a man can only receive dependants' benefit in respect of children who are wholly or mainly maintained by him, and the hon. Gentleman himself was responsible for a form of application which included this question: "Have you any other children living at home who earn wages? If so, state names and amount paid towards household expenses."
    Mr. TINKER: As this is an entirely new point, will the Minister give us an opportunity of discussing the matter?
    Mr. BUCHANAN: I beg to give notice that I shall ask leave to move the adjournment of the House at the end of Questions, as this is a complete departure and is against the law.

    UNEMPLOYMENT ASSISTANCE.
    Mr. D. G. SOMERVILLasked the Minister of Labour the present average

    Numbers of Unemployed Persons on the Registers of the undermentioned Employment Exchanges.

    Date.

    Barnsley.

    Wakefield.

    SouthKirkby.

    Wholly Unemployed.

    Temporarily Stopped.

    Wholly Unemployed.

    Temporarily Stopped.

    Wholly Unemployed.

    Temporarily Stopped.

    24th February, 1930

    4,304

    825

    2,322

    1,679

    784

    13

    23rd February, 1931

    6,346

    3,860

    3,485

    2,395

    1,229

    15

    22nd February, 1932

    6,791

    2,776

    3,467

    2,905

    1,332

    401

    20th February, 1933

    6,883

    3,638

    4,072

    4,095

    1,920

    1,216

    19th February, 1934

    7,196

    1,819

    3,859

    2,453

    1,738

    1,501

    25th February, 1935

    7,588

    3,249

    3,902

    3,657

    1,822

    1,178

    BENEFIT DISALLOWED.
    Mr. LEONARDasked the Minister of Labour whether he is aware that the employment exchange at Partick, Glasgow, sent Francis Leahy, of 657, Dumbarton Road, to employment as a shipyard labourer for which the accepted remuneration in the district is 41s. per week, and that on receiving 20s. after a full week's work this man terminated his employment, for which action he has been refused benefit, also the right of appeal to the umpire by the chairman of the court of referees who alone constituted
    2062
    weekly expenditure of the Unemployment Assistance Board; and by what amount, if any, this exceeds the anticipated average?
    Mr. STANLEY: The present expenditure on unemployment assistance allowances is at the rate of about £44,000,000 a year. This accords substantially with the anticipated expenditure, as stated in the Financial Memorandum to the Unemployment Assistance (Temporary Provisions) Act.

    STATISTICS.
    Mr. GEORGE GRIFFITHSasked the Minister of Labour the number of persons registered as unemployed, at the latest available date, at Barnsley, Wakefield, and South Kirkby, and the corresponding figures for the same date during the past five years?
    Mr. STANLEY: As the reply includes a table of figures I will, if I may, circulate a statement in the OFFICIAL REPORT.
    Following is the reply:
    the court when the decision was made; and whether the Minister proposes to inquire into the case and take any action in the matter?
    Mr. STANLEY: I am having inquiries made and will communicate with the hon. Member as soon as possible.

    WEST HAM.
    Mr. GROVESasked the Minister of Labour the numbers on the staff of the unemployment assistance board in West Ham, the number of cases which have been dealt with, and the number where determinations have been reduced?
    Mr. STANLEY: West Ham is no longer administered as one area, and I regret that exact information of the kind requested is not available.

  TRADE BOARDS ACT (DAIRY TRADE, LIVERPOOL).
  Mr. CLEARYasked the Minister of Labour whether reports of his factory inspectors on visits made to milk firms in Liverpool have disclosed any breaches of the Trade Board regulations; and, if so, of what nature and what action was taken?
  Mr. STANLEY: Since 1928 there have been four cases in which Liverpool milk firms have been successfully prosecuted on charges of underpayment, failure to keep adequate records, failure to post notices and giving false information. In other less serious cases statutory requirements have been satisfied by the payment of arrears of wages or other appropriate action.
  Mr. CLEARY: Can the Minister give the approximate dates?
  Mr. STANLEY: No, I cannot.

  ARREST, WEST LONDON (LOITERING).
  Mr. WESTasked the Secretary of State for the Home Department whether his attention has been called to the case of Mr. S. Kilner, of Beauclere Road, Hammersmith, who was charged at the West London court with loitering and remanded in custody for a week; whether he is aware that on his first appearance in court he was denied the opportunity of explaining anything, and neither was his solicitor allowed a hearing a week later; that this man has been with his present employer for over 20 years and is given an exemplary character by him; and whether he will consider instituting an inquiry in reference to these cases?
  The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Gilmour): I have made full inquiries into this case, to which my attention had already been drawn. It is not the case that the defendant was denied an opportunity of explaining his actions: he was asked by the magistrate whether he wished to give evidence on oath or to
  2064
  make a statement from the dock, but I understand that he declined to do either. After hearing all the evidence the magistrate came to the conclusion that the charge was proved and, having been informed by the police of the defendant's character and circumstances, he remanded him in custody for a week before deciding how to deal with the case. No cause was shown for re-opening the case when the defendant was brought up a week later, and the magistrate then decided to bind him over under the Probation of Offenders Act. The police acted perfectly properly in charging this man, and there is nothing in the circumstances of the case to call for action on my part.
  Mr. WEST: Is the right hon. Gentleman aware that these statements were vouched for not only by the man's employers, with whom he had been for over 20 years, but by the Press reports of the case; and does he not really consider that, before the police take such injurious action as in this case, they should have more substantial evidence of the guilt of the person who is taken to the police station?
  Sir J. GILMOUR: All I can say is that the magistrate was satisfied with the evidence.
  Mr. WEST: Is not the Home Secretary aware that there is a general feeling of uneasiness in West London about the enormous number of cases of people who are taken by the police just for loitering on the streets? Looking into motor cars is enough to send a man to a cell for a week.

  TRANSPORT.

    ROAD ACCIDENTS (POLICE REPORTS).
    Mr. WESTasked the Home Secretary whether, in cases where one party in a road accident has sustained injuries so that he is unable to collect information himself, he will arrange that such information shall be given free by the police on application by the individual concerned?
    Sir J. GILMOUR: I do not think the fact that a person has been injured is in itself a sufficient ground for waiving the usual charge for furnishing abstracts from the police reports, but the charge can be waived in any case where the

    2065
    chief constable considers it would involve any hardship on the person concerned.

    BUILT-UP AREAS (SPEED LIMIT).
    Mr. D. G. SOMERVILLEasked the Home Secretary whether he will ascertain from the police whether the unconditional enforcement of the 30-mile-per-hour speed limit in the centre of London has caused any congestion in London traffic?
    Sir J. GILMOUR: Yes, Sir; I have been in consultation with the Commissioner of Police of the Metropolis, who informs me that inquiries made by him show that there has been no increase in traffic congestion. One of the most noticeable results of the introduction of the speed limit has been the decrease in the dangerous habit of "cutting in" and "cutting out" and the increased orderliness of the general stream of traffic, which in places is definitely helping to reduce congestion.
    Captain HAROLD BALFOURasked the Home Secretary how many summonses have been issued in the Metropolitan police district up to Saturday last for exceeding the speed limit of 30 miles per hour?
    Sir J. GILMOUR: The number of cases reported for summonses up to and including Saturday, the 23rd March, was 1,274. Only 84 summonses had actually been issued, but application for summonses in the remaining cases is being made.
    Mr. EADY (for Mr. HEPWORTH)asked the Home Secretary whether his attention has been called to the fact that the police are acting as agents provocateurs in the speed-limit areas by proceeding in cars at slow speeds and accelerating to 30 miles per hour or more when other vehicles attempt to overtake them; and what action is being taken by Scotland Yard in view of the complaints made on this matter?
    Sir J. GILMOUR: No, Sir; I have no reason to believe that the police are acting in the manner described. I would refer my hon. Friend to the reply which I gave to a question on this subject by my hon. and gallant Friend the Member for West Birkenhead (Lieut.-Colonel Sandeman Allen) on the 26th instant.

    HIS MAJESTY'S SILVER JUBILEE.
    Mr. SANDYSasked the Home Secretary whether sympathetic consideration will be given to applications for extended hours of sale of intoxicants in the Metropolitan area in connection with the forthcoming Jubilee celebrations?
    Sir J. GILMOUR: As I have made clear on previous occasions, every application for special extension of hours must be considered individually and on its merits. So far as the Metropolitan Police District is concerned, the Commissioner will give full and sympathetic consideration to every application made to him for extension of hours in the evenings during Jubilee week, or for extension during the afternoon in the areas covered by the Royal Procession on 6th May and the afternoon drives which have been arranged for subsequent dates.
    Miss WARDasked the Parliamentary Secretary to the Board of Education whether, in view of the active part school teachers will be obliged to play in arranging Jubilee celebrations for school children, an additional day's holiday can be granted to school teachers to compensate them for their inability to participate in the general holiday on 6th May?
    The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Mr. Ramsbotham): I do not doubt that in cases where teachers are unable to avail themselves of the holiday on 6th May the question of giving them a day's holiday on some other date will be sympathetically considered by the authorities of the schools.
    Mr. PIKE: Does not the Minister think that teachers already have enough holidays in the course of a year?
    Mr. McGOVERN: Have they as many as you have?
    Mr H. WILLIAMSasked the Parliamentary Secretary to the Board of Education whether his attention has been drawn to the fact that a number of medals in commemoration of His Majesty's Silver Jubilee have been shipped into this country from foreign countries; and whether he is prepared to issue a circular advising local authorities who may be contemplating the purchase of medals for distribution to school children to assure themselves so far as is possible that the medals are of British manufacture?
    Mr. RAMSBOTHAM: The answer to the first part of the question is in the affirmative, but my Noble Friend has no information that local education authorities have purchased medals of foreign manufacture. He is strongly of opinion that, where the celebration of the Silver Jubilee takes the form of the distribution of medals or other mementoes to school children, they should be of British manufacture, but, as local education authorities generally have by this date already ordered their supplies, he doubts whether the issue of a circular on the lines suggested would serve any useful purpose.
    Mr. HERBERT WILLIAMSasked the right hon. Member for Petersfield, as Chairman of the Committee of Selection, whether, in order to meet the convenience of the members and officials of local authorities in connection with local celebrations of His Majesty's Silver Jubilee, he will endeavour, during the period of the Silver Jubilee celebrations, to avoid setting up Committees on Private Bills appointed to meet for the first time that week?
    Mr. WILLIAM NICHOLSON (Chairman, Committee of Selection): The hon. Member may rest assured that not only the Chairman of the Committee of Selection but also the chairmen of the different Private Bill committees are always prepared to study the convenience of those who attend these committees.

  BRITISH UNION OF FASCISTS.
  Mr. DINGLE FOOTasked the Home Secretary whether he is aware that on Sunday, 24th March, at about 7.30 p.m., an anti-Fascist procession walking from Hyde Park Corner in the direction of the Albert Hall was stopped by the police; whether he can say what orders were given to the police and what were the reasons therefor; and if he will state what duty the police were performing in stopping the said procession?
  Sir J. GILMOUR: Previous experience has shown that disorder is likely to arise if rival factions are allowed to demonstrate and counter-demonstrate in close proximity to each other. The Commissioner of Police accordingly issued instructions, with my approval, that no
  2068
  anti-Facist procession or demonstration was to be allowed within half a mile of the Albert Hall during the time when a meeting of the British Union of Fascists was in progress in that building. The police were acting in performance of their primary duty to preserve order and to prevent breaches of the peace.
  Mr. FOOT: Can the right hon. Gentleman say under what Statute, if any, those orders were given?
  Sir J. GILMOUR: No, I think it is a matter of judgment and common sense.
  Mr. MAXTON: May I ask whether this is to constitute a suggestion to the police that if any political meeting is being held in the Albert Hall no other political gathering may be held within half a mile of it?

  POLICE.

    PENSIONS.
    Sir WILLIAM JENKINSasked the Home Secretary what percentage of police pensions is paid by the State to local police authorities; what percentage is paid by the local authority out of rates; and what is the percentage of the contribution made by the police force in England and Wales towards the pensions?
    Sir J. GILMOUR: Under the Police Pensions Acts every member of a police force has 5 per cent. of his pay deducted in respect of pension. The balance of the cost of pensions falls in equal proportions on the Exchequer and the local rates.

    RECRUITING (REJECTIONS).
    Sir W. JENKINSasked the Home Secretary (1) what was the percentage of men rejected on medical grounds who applied to join the police forces in England and Wales for the years, 1932, 1933, and 1934;
    (2) what number of applications was received to join the Metropolitan police force in 1933, 1934, and to the latest available date in 1935; what was the percentage of men rejected on medical grounds; and what percentage for causes other than medical?
    Sir J. GILMOUR: I will circulate figures relating to the Metropolitan police in the OFFICIAL REPORT. I regret that I have not got corresponding information for the county and borough forces.

    Metropolitan Police.

    —

    1933.

    1934.

    1st January, 1935 to 23rd March, 1935.

    Completed application forms received

    …

    …

    8 027

    5,893

    1,373

    Rejected as below standard

    …

    …

    70 per cent.

    51 percent.

    42 per cent.

    Attended for examination

    …

    …

    1,682

    2,415

    724

    Rejected on medical grounds

    …

    …

    46 per cent.

    47 percent.

    54 per cent.

    Rejected on other grounds

    …

    …

    20 per cent.

    19 per cent.

    16 per cent.

  CINEMATOGRAPH FILMS (CENSORSHIP).
  Mr. DINGLE FOOTasked the Home Secretary whether, in view of the fact that the British Board of Film Censors recently refused to license a film on the ground that while the film in no way infringed their rules Fascists might cause disturbances at its performance, he will institute an inquiry into the methods of the board and the general question of film censorship?
  Sir J. GILMOUR: I would refer the hon. Member to the reply given by the Prime Minister on the 31st January to the hon. and gallant Member for Cardiff, South (Captain Evans), but I may add that the decision in the case of this particular film does not appear to afford any ground for an inquiry into the general question of censorship.
  Mr. FOOT: Does not the right hon. Gentleman appreciate that if this sort of precedent is followed the Fascists are constituted a second board of censors?

  HERR JACOB (DISAPPEARANCE).
  Mr. DINGLE FOOTasked the Home Secretary what steps are being taken by Scotland Yard to assist the public prosecutor of Basel who is inquiring into the recent disappearance of Herr Jacob?
  Sir J. GILMOUR: I am informed that in accordance with the usual practice the Metropolitan Police are assisting in certain inquiries in this country which
  Mr. PIKE: Will that information contain the reasons why the men have not been selected?
  Following are the figures:
  the Swiss authorities have found it necessary to make in connection with the matter referred to.

  PUBLIC HEALTH.

    INFECTIOUS DISEASES (MILK SUPPLY).
    Lieut.-Colonel Sir ARNOLD WILSONasked the Minister of Health whether he will draw the attention of medical officers of health to the statement in the report of the cattle diseases committee that the available evidence as to the importance of milk in the spread of infectious disease is not conclusive, and that the number of cases of scarlet fever traced to milk in the last 20 years is only 2,500 to 3,000 out of some 2,000,000 cases?
    The MINISTER of HEALTH (Sir Hilton Young: No, Sir. Even if it were established that only 2,500 to 3,000 cases of scarlet fever in the last 20 years were attributable to milk, I should still consider it important that milk should be pasteurised in order to prevent such cases in the future. But, in fact, the Committee on Cattle Diseases considered that infection through milk may be more extensive than appears at first sight, the reason being that it is only where a large number of cases occur that the milk supply is likely to be suspected. Also, as my hon. and gallant Friend is aware, scarlet fever is not the only milk-borne disease which can be prevented by pasteurisation.
    Sir FRANCIS FREMANTL: Do not the actual figures prove the value of the

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    great attention which medical officers have given to milk during the past 20 years?
    Sir H. YOUNG: Undoubtedly so.
    Sir A. WILSONasked the Minister of Health whether he will draw the attention of medical officers of health to the statement, at page 28 of the report of the Cattle Diseases Committee, that the most serious outbreak of disease brought to their notice, involving over 500 deaths, was traced to pasteurised milk infected by a human carrier?
    Sir H. YOUNG: The outbreak in question occurred in Canada, and I understand that, while it was not found possible to determine exactly how the milk became infected, the weight of evidence was to the effect that the infection was introduced before the milk reached the pasteurising depot, and that much of the milk was distributed without having been submitted to the pasteurising process. I see no reason to call the special attention of medical officers of health to the matter.

    HOSPITALS (MATERNITY CASES).
    Mr. PARKINSONasked the Minister of Health whether, arising out of the Manchester case of Mollie Taylor, in which it was found that the porter of the hospital took all bookings for maternity cases, and that these bookings bore no relation to the number of beds available, he will inquire in how many cases this practice of employing a porter obtains, and require that some qualified person, such as a lady almoner, should book the cases in relation to the number of beds available?
    Sir H. YOUNG: Many maternity hospitals are outside my jurisdiction; but I am advised that the method of booking referred to in the first part of the question is quite unusual. My medical officers inquire into the matter at the hospitals which they visit. As the hon. Member is no doubt aware, the published report on Mrs. Taylor's case contained a recommendation that the system of booking at the hospital concerned should be placed under the charge of a responsible officer.

    SCARLET FEVER, DENHAM AND IVER.
    Sir F. FREMANTLEasked the Minister of Health whether he can make a
    2072
    further statement regarding the recent outbreaks of scarlet fever at Denham and Iver, Bucks, the number of cases and deaths involved, the origin of infection, and the administrative conclusions involved, with a view to the prevention of such outbreaks in future?
    Sir H. YOUNG: Up to the present, 90 cases have been reported in which the signs and symptoms were sufficiently well defined to justify a diagnosis of scarlet fever, but there have been, in addition, a large number of mild cases in which the only clinical symptoms were sore throat, vomiting, or slight fever. There have been two deaths. As regards the origin of the infection, I have nothing to add to the answer given on this subject to the hon. Member for Plaistow, on the 21st instant. The outbreak confirms the conclusion that it is practically impossible to avoid similar occurrences otherwise than by efficient pasteurisation, or some equally effective form of heat treatment, of the milk supply.

    MATERNAL MORTALITY.
    Captain ELLISTONasked the Minister of Health whether his attention has been drawn to the necessity of special local study of the causal factors of the continuing maternal mortality; and what action he has taken or proposes to take in the matter?
    Sir H. YOUNG: Yes, Sir. Such special study has been continuously in progress in the Ministry of Health. It was the main object of the special committee on maternal mortality appointed by one of my predecessors in 1928. I have myself recently carried the matter further as regards the local aspect by calling for special reports from the Medical Officers of Health in the areas where the incidence is or has been most marked. I have further arranged for thorough local investigation of the problem in those areas and, for purposes of comparison, in other areas, by officers of the Ministry carefully selected for the purpose. I have secured the services of an eminent obstetrician to advise on the reports of those officers. Where immediate specific steps are recommended, I bring the matter to the notice of the authority for action accordingly. When all the reports are available I propose to consider the position as a whole and to lay a White Paper on the subject before the House.
    Sir F. FREMANTLE: May I ask when that White Paper may be expected—will it be in two or three months, and before the summer?
    Sir H. YOUNG: I am afraid I am not able to give a date, because it depends on the completion of intensive local investigations.
    Countess of IVEAGH: May I ask the right hon. Gentleman whether he has taken into consideration the possibility of making compulsory a confidential notification of maternal deaths in all areas, as is now done in some areas?
    Sir H. YOUNG: Certainly, that point has been under consideration, but at present the purpose is effectively served by the voluntary information which I get in response to my appeal to the local authorities.

    WATER SUPPLY, GREENFORD, MIDDLESEX.
    Mr. TOUCHE (for Sir ISIDORE SALMON)asked the Minister of Health whether he will take steps to ensure an adequate supply of water in the northern, Horsenden, district of Greenford, Middlesex, in view of the repeated complaints made by the residents of the inadequate facilities provided by the Rick-mansworth and Uxbridge Valley Water Company?
    Sir H. YOUNG: I am informed that a new trunk main has recently been brought into use, and that there is now a satisfactory supply to the Greenford area.

  TYNESIDE LOCAL AUTHORITIES (AMALGAMATION).
  Sir A. WILSONasked the Minister of Health whether a decision has yet been reached as to the action to be taken on the recommendation of the Civil Lord of the Admiralty (Cmd. 4728, paragraph 48) that the question of amalgamation of local authorities on Tyneside should receive immediate consideration?
  Sir H. YOUNG: The Government have decided that the recommendation made by my hon. and gallant Friend the Civil Lord of the Admiralty with regard to the unification of local government authorities on Tyneside requires further examination, and that a small Royal Commission should be set up for this purpose. I have summoned a conference of the local authorities most closely concerned in order to discuss arrangements with them.

  TRADE AND COMMERCE.

    MOTOR CARS (IMPORTS).
    Mr. HALL-CAINEasked the Chancellor of the Exchequer whether his attention has been called to the fact that a contract has been secured by the Red Star Line with General Motors, Limited, for the carriage of over 60,000 motor vehicles to Europe from the United States of America during the current year; whether he is aware that a large proportion of this export to the value of over £10,000,000 will be despatched for sale in this country; and whether he is satisfied that the existing rate of duty on foreign motor cars is adequate to protect the home industry?
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I have no information as to the contract mentioned, but I have seen reports in the Press that 2,000 motor cars are to be imported from the United States of America into this country during the next six months on the ships of the Red Star Line. As regards the last part of the question I would refer my hon. Friend to the reply given to my hon. and gallant Friend the Member for Coventry (Captain Strickland) on the 28th February.
    Sir P. HARRIS: Is this not evidence that the right hon. Gentleman was unwise in stopping the transfer of these boats to the English flag, which would have saved a good deal of money in freights to English shippers?
    Mr. CHAMBERLAIN: No, Sir.
    Lieut.-Colonel ACLAND-TROYTE: Will the right hon. Gentleman consider reimposing on all these foreign ears the full tax of £1 per horse-power?
    Mr. CHAMBERLAIN: I should be glad to consider anything in connection with the Budget.

    FOREIGN BEER.
    Mr. BOULTONasked the Chancellor of the Exchequer whether he is aware of the substantial increased importation of foreign lager beer into this country; and whether he is prepared to take steps with a view to preventing this?
    Mr. CHAMBERLAIN: I am aware that there has been some increase in the small total imports of foreign beer, which mainly consist of lager. As regards the second part of the question, my hon. Friend will not expect me to anticipate the Budget statement.

    TAX AVOIDANCE.
    Mr. WILLIAM ALLENasked the Chancellor of the Exchequer whether he is aware that a number of foreign companies are being formed by Surtax payers for the purpose of avoiding the tax; whether the practice of forming such companies is a growing one; and whether any computation has been made of the loss caused to the revenue thereby, either by the Treasury or by the special commissioners of Income Tax?
    Mr. CHAMBERLAIN: I am aware of the growth of the practice to which my hon. Friend refers. I cannot give precise figures of the loss of revenue caused by methods of tax avoidance which develop at different times, but, as my hon. Friend will be aware from the past history of this matter, the situation is always closely watched and such appropriate measures as are practicable are taken from time to time as circumstances require.
    Mr. ALLEN: Will the right hon. Gentleman endeavour to introduce an amendment to the Finance Bill which will put a stop to this practice?
    Mr. HICKS: Is anyone allowed to escape his legitimate taxes? If such a company is formed for the purpose of advising people, not what they should pay, but what they should not pay, is it not perfectly legitimate to give such advice?
    Mr. CHAMBERLAIN: As I understood the supplementary question, it did not relate to illegitimate practices but to practices at present within the law.
    Mr. H. WILLIAMS: In dealing with this matter will the right hon. Gentleman consider reducing the general level of taxation, so that people shall not be tempted?
    Mr. CHAMBERLAIN: My hon. Friend must not ask me to anticipate the Budget statement.

    BUTTER (MARKING).
    Sir JOHN HASLAMasked the Minister of Agriculture whether it is within his knowledge that some of the cheapest grades of foreign butter, including Siberian, are being sold to the public in the North of England as best Kiel butter; and, since this name suggests an origin other than the country of production, if he will ascertain whether such
    2076
    misdescription comes within the scope of the Merchandise Marks Acts, and particularly of the Butter Marking Order, with a view to taking the requisite action?
    The MINISTER of AGRICULTURE (Mr. Elliot): I have seen reports to the effect that "Kiel" is being used in connection with butter from various sources. Under the Butter Marking Order, all imported butter when sold or exposed for sale must bear an indication of origin. If my hon. Friend will give me particulars of any cases where the requirements of the Order are not being complied with, I will look into the matter.

    TOURIST TRAFFIC.
    Mr. HALL-CAINEasked the Secretary to the Overseas Trade Department whether his Department has put forward any requests for an increase in the annual grant now devoted to popularising tourist travel in this country; and, if so, whether he can state the date on which such request was made and the Government decision?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): I have been asked to reply. The amount of the grant to the Travel and Industrial Development Association of Great Britain and Ireland for 1935 was fixed at £4,000, after due discussion between the departments concerned. It is not the practice to disclose details of consultations which take place between departments before Governmental decisions are arrived at.

    DENMARK (IMPORT LICENCES).
    Mr. LIDDALLasked the President of the Board of Trade whether his attention has been drawn to the fact that the Danish Government are refusing licences for the import of British goods by certain Danish importers and, as a result, the interests of British firms, notably Lincoln firms, and their workpeople are being prejudiced; and whether he will make representations protesting against this action of the Danish Government as a breach of either the spirit or the letter of the Danish Trade Agreement?
    Dr. BURGIN: This matter has been engaging my attention for some time and a number of individual cases have been taken up with the Danish authorities. I am having inquiry made into the case to which my hon. Friend has drawn my attention and if he will furnish me with

    2077
    particulars of any similar cases which he has in mind, I will see that appropriate action is taken immediately.

  MONETARY POLICY.
  Mr. DAVID MASONasked the Chancellor of the Exchequer whether, in view of the distress and depression of trade, both internally and externally, affecting adversely our foreign trade which is taking place in the gold bloc countries, and which has been accentuated by the fall in the value of the paper pound, His Majesty's Government will now take steps to advance the establishment of a common monetary standard?
  Mr. CHAMBERLAIN: I am not aware of any steps which could at this moment usefully be taken by His Majesty's Government to establish a common monetary standard.
  Mr. MASON: Can the right hon. Gentleman say when he will be in a position to give some information, and how much distress and depression of trade are necessary before he takes action?
  Mr. CHAMBERLAIN: It is not a question of how much distress and depression of trade occurs, but when conditions are such that useful action may be taken.

  HOUSING (LOAN INTEREST).
  Mr. DAVID GRENFELLasked the Financial Secretary to the Treasury whether arrangements are contemplated for the conversion of existing loans issued by the Public Works Loans Board for housing by small local authorities so as to enable them to borrow on more favourable terms and thus benefit from the prevailing low rates of interest?
  Sir WALTER WOMERSLEY (Lord of the Treasury): No, Sir; it would not be possible to make such arrangements without involving the payment by the State of a subsidy to enable the Local Loans Fund to meet its existing obligations.
  Mr. PALING: May I ask whether the hon. Member is aware that these monies were borrowed when rates of interest were very high and that rates of interest are now very low, and whether, as rates of interest are likely to continue low for a very long time, those people are to be
  2078
  expected to pay these very high rates of interest for ever?
  Sir W. WOMERSLEY: I will convey all that information to my hon. Friend.

  POST OFFICE (TELEPHONE CHARGES).
  Mr. D. G. SOMERVILLEasked the Postmaster-General whether he is satisfied that the recent reductions in the telephone rates have been passed on to tenants in those large blocks of flats in the London area where they are served from a central exchange; and what steps are taken by him to review the telephone rates charged to tenants in such buildings to ensure that no unreasonable profit is made through the operation of these sub-exchanges?
  The POSTMASTER-GENERAL (Sir Kingsley Wood): The question of the charges made by owners of blocks of flats to their tenants for telephone service has been recently examined, and the conclusion reached was that, in general, they were not unreasonable having regard to the services performed. If, however, my hon. Friend has any special case in mind and will furnish me with particulars, I shall be glad to investigate it.

  NAVAL AND MILITARY PENSIONS AND GRANTS.
  Mr. HALL-CAINEasked the Minister of Pensions whether, in view of the number of ex-service men who are still dissatisfied with their pensionable assessment, he will arrange for more frequent re-boarding of these men so that, even if it is not possible to give effect to their views, it may be possible to allay the sense of grievance now felt by them?
  Sir VICTOR WARRENDER (Vice-Chamberlain of the Household): I have been asked to reply. The great majority of the men on the pension list are in receipt of awards which by statute are final, and my right hon. Friend has no authority to order their medical reexamination.
  Mr. G. NICHOLSON: Will the hon. Gentleman convey to his right hon. Friend the point that as this state of affairs has a damaging effect upon the health of some of the men, steps might be taken to provide a remedy?

  BRITISH BROADCASTING CORPORATION (CHAIRMAN).
  Mr. ATTLEEasked the Prime Minister whether he is is in a position to intimate the name of the person to be the new chairman of the British Broadcasting Corporation?
  The PRIME MINISTER (Mr. Ramsay MacDonald): His Majesty has been pleased to approve that the Right Hon. Viscount Bridgeman be appointed chairman of the British Broadcasting Corporation, and that the Right Hon. H. A. L. Fisher be appointed to the ensuing vacancy on the Board of Governors.
  Mr. D. GRENFELL: In appointing persons to fill vacancies upon the Broadcasting Corporation will the Prime Minister give special regard to the claims of Wales on the grounds of language?
  The PRIME MINISTE: Yes, Sir.
  Mr. GRENFELL: What has happened this time? Can the right hon. Gentleman say whether there is any prospect of an appointment?

  BRITISH ARMY.

    WOOLWICH ARSENAL.
    Captain ARTHUR EVANSasked the Financial Secretary to the War Office whether he is aware that objection has been taken by certain authorities to a Welsh site for the Arsenal on the grounds that difficulties might arise in connection with the supply of labour in West and South Wales, and that the project is likely to be abandoned and a site chosen near Maryport, in Cumberland, in preference; and whether he will define the difficulties which are anticipated in South Wales but not in Cumberland?
    The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Douglas Hacking: I am not aware of the objections and preferences suggested in the question.
    Captain EVAN: Am I to gather from the right hon. Gentleman's answer that the statement which appeared in the "Daily Herald" and which is set out in the question is an absolutely unnecessary insult to the working people in South Wales and that there is not the slightest truth in the statement made?
    Mr. HACKING: I saw the statement. I understand it said that authorities had
    2080
    taken objection, but it did not say what the authorities were so that we could get no further.
    Mr. HICKS: In view of the conflict of opinion as to the wisdom of putting the Arsenal in any one part of Great Britain, will the right hon. Gentleman consider the necessity for it remaining in Woolwich?

    SINGAPORE (ACCOMMODATION).
    Lieut.-Colonel WINDSOR-CLIVasked the Financial Secretary to the War Office whether he can give the House any information respecting the provision of accommodation for troops at Singapore?
    Mr. HACKING: The barracks for the Royal Artillery and the Royal Engineer personnel will be completed in the autumn of this year in time to accomodate the additional personnel to be despatched next trooping season. Barracks for the second British infantry battalion will not be ready for occupation until April, 1936. The battalion selected for this station is the 1st Battalion, the Middlesex Regiment, from Egypt, which it is proposed to replace by the 2nd Battalion, the Grenadier Guards.

    BLIND PERSONS ACT.
    Mr. GROVESasked the Minister of Health the numbers of municipal areas which have introduced schemes of financial assistance to the blind persons in their area under the provisions of the Blind Persons Act, 1920, and the number of areas where no such scheme is applied?
    Sir H. YOUNG: According to my latest information, all but 12 of the 146 local authorities under the Blind Persons Act have made arrangements to provide financial assistance for blind persons under the provisions of that Act, In 61 of these areas such assistance is provided exclusively under the Act.
    Mr. GROVESasked the Minister of Health whether he is aware that the London County Council scheme for the provision of domiciliary assistance to necessitous blind persons within its area is provided exclusively by virtue of the Blind Persons Act, 1920, and not by way

    2081
    of relief; and whether he will be prepared to circularise all municipal authorities that such principle and method is the desire of his Department and urge its adoption?
    Sir H. YOUNG: The answer to the first part of the question is in the affirmative. A number of other local authorities have made similar provision, and I have taken, and will continue to take, every opportunity to encourage the remaining authorities under the Blind Persons Act to take the same course, which, indeed, has been recommended to local authorities as being in accordance with the intention of Parliament as expressed in Section 5 of the Local Government Act, 1929.

    SCOTLAND (MILK MARKETING SCHEME).
    Captain McEWEN (for Duchess of ATHOLL)asked the Secretary of State for Scotland whether, in view of the feeling shown at the attempted auction mart at Tranent last week of cows that had been poinded for payment of the milk levy, he will urge the committee of inquiry into the milk marketing scheme to lose no time in presenting a report?
    The SOLICITOR-GENERAL for SCOTLAND (Mr. Jamieson): The Milk Reorganisation Commission have already made a. preliminary examination of the working of the Scottish milk marketing scheme as it affects producers in the East of Scotland, and discussions have taken place in Edinburgh this week with representatives of both the board and producers. The Commission will report as soon as they are in a position to come to conclusions on the questions remitted to them.
    Mr. DINGLE FOOT: Could my hon. and learned Friend say whether the Commission will first of all produce a report in relation to the East of Scotland, or whether they will wait and produce only one report for the whole country?
    The SOLICITOR-GENERAL for SCOTLAND: They will produce a report as soon as they reach the conclusion on which they are to report.
    Mr. BUCHANAN: Could not the hon. and learned Gentleman in the meantime,
    2082
    pending the report, stop any actions for the poinding and selling up of these, in many cases, comparatively good farmers?
    The SOLICITOR-GENERAL for SCOTLAN: I will convey to my right hon. Friend what the hon. Member has said.
    Captain McEWEN: Is my hon. and learned Friend aware that on the occasion in question it was the Minister of Agriculture who was burned in effigy, and that it will be his turn next?
    Captain McEWEN (for Duchess of ATHOLL)asked the Secretary of State for Scotland whether he will represent to the Scottish Milk Marketing Board that, in view of the fact that many owners of dairy herds, in order to keep milk records and for other reasons, feed calves from milk in pails, such milk should be exempted from the levy charged to producer-retailers; and whether he can ensure that the milk required for the household and staff of the producer-retailers should also be exempted from payment of the levy?
    The SOLICITOR-GENERAL for SCOTLAND: My right hon. Friend understands that there would be considerable difficulty in giving effect to the Noble Lady's suggestions, but he has brought them to the notice of the Scottish Milk Marketing Board, and will communicate further with her.

  MANCHURIA.
  Mr. ERNEST YOUNG (for Mr. MANDER)asked the Secretary of State for Foreign Affairs whether any further action is being taken by the Powers belonging to the League of Nations to enforce effectively the recommendations of the Lytton Committee with respect to Manchuria, and when the relevant committee last met?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): The report embodying certain recommendations of the Lytton Commission, and adopted by the League Assembly on the 24th February, 1933, was defined by the President of the Assembly at the time as an offer of collaboration in the settlement of the dispute, and as not possessing the executive force of an arbitral award. It will be apparent from

  2083
  this that there was never any question of enforcing the recommendations. The Advisory Committee on Manchurian questions set up by the League Assembly last met on the 16th May, 1934.

  AUSTRIA.
  Mr. E. YOUNG (for Mr. MANDER)asked the Secretary of State for Foreign Affairs the present position with regard to the re-introduction of compulsory military service in Austria; and whether the League of Nations has been in communication with the Austrian Government on the subject?
  Sir J. SIMON: I have not heard of any proposal to re-introduce compulsory military service in Australia or of any communication between the League of Nations and Austria on the subject.

  ANGLO-GERMAN CONVERSATIONS.
  Mr. LANSBURY(by Private Notice) asked the Secretary of State for Foreign Affairs whether he is in a position to make any statement to the House with regard to his visit to Berlin?
  Sir J. SIMON: The House is aware that the visit to Berlin is one of a series of visits of exploration and inquiry now being paid on behalf of His Majesty's Government to various foreign capitals, and that when these visits are concluded they will be followed by a meeting at Stresa, in North Italy, where I hope to meet Signor Mussolini and Monsieur Laval. In these circumstances it will be obviously undesirable to make a full statement as to a position still under investigation. Unauthorised speculations, such as have appeared in some quarters, should be disregarded.
  I may say, however, that, in the course of the two days' conversation with Herr Hitler, the European problem in relation to Germany was reviewed, and all the topics mentioned in the London communique of 3rd February were brought under discussion. Considerable divergence of opinion between the two Governments was revealed by the conversations, but the result of the meeting was undoubtedly valuable in that both sides were able clearly to understand their respective points of view—a process indispensable to any further progress.
  Mr. MAXTON: May we take it that the meeting at Stresa is to be strictly limited to the three Powers mentioned by the right hon. Gentleman, and that the composition of that meeting will not be altered in any way?
  Sir J. SIMON: The Stresa meeting is arranged to take place between the three Powers.
  Mr. THORNE: May I ask whether the Foreign Secretary is prepared to give the House a considered opinion about Herr Hitler?
  Mr. MAXTON: I hope the right hon. Gentleman has not misunderstood my question. He tells me that the Stresa meeting is arranged only for these three Powers. I am aware of that fact. I am asking whether any conversations that have taken place, or will take place within the next 10 or 11 days, will alter the composition of the Stresa Conference at all, or is that definitely fixed as a meeting of the three Powers?
  Sir J. SIMON: The Stresa meeting, as I have already said, is to be a meeting of the three Powers. I do not think it is possible for me, or for anyone, to speculate as to what may be the course of events after that. The Stresa Conference is to be a meeting of the three Powers.

BUSINESS OF THE HOUSE.
Mr. TINKERasked the Prime Minister whether his attention has been drawn to the position created when notices of Motions are taken on going into Committee Supply; that they cause a breach in the discussion on the Vote of Supply before the Committee, make the business disjointed, and break the sequence of Debate; and whether he will give consideration to see if a more convenient arrangement could be made?
The PRIME MINISTER: No, Sir; my attention had not been called to this matter. The usual procedure was followed this year in moving Mr. Speaker out of the Chair on first going into Committee of Supply on the Navy, Army and Air Estimates, as in previous years.
Mr. TINKER: Now that the matter has been brought to the attention of the right hon. Gentleman would he read the Debate and see if some arrangement can be made

2085
through the usual channels to get a definite time when these Motions shall be called so that we shall be aware of them?
The PRIME MINISTER: That is quite outside my province.
Mr. LANS BURY: May I ask the Prime Minister the business arranged for next week?
The PRIME MINISTER: Monday and Tuesday: Government of India Bill, Committee stage.
Wednesday: It is proposed to move Mr. Speaker out of the Chair on first going into Committee of Supply on the Civil and Revenue Departments' Estimates and to consider Class 7, Votes 3, 7A and 8, which are Building Votes.
Thursday and Friday: The Government of India Bill, Committee stage.
On any day, if there is time, other Orders may be taken.
Mr. LANSBURY: With reference to the business for Wednesday, I should like to ask the Prime Minister whether it will be possible to keep Mr. Speaker in. the Chair after the Amendment which is to be moved has been disposed of in order to have a little time in which to discuss the position of local authorities arising out of the postponement of the second appointed day under the Unemployment Act?
The PRIME MINISTER: I should like to have a, little further notice of that question. It is impossible to say how long the Debate on the Amendment may run, but, so far as I am concerned, I have no objection to the matter referred to by the right hon. Gentleman being raised, but beyond that I cannot say.
Sir P. HARRIS: Can the right hon. Gentleman say when the Iron and Steel Order will be taken for confirmation I Will time be provided so that it may be thoroughly discussed, and not taken after Eleven o'Clock?
The PRIME MINISTR: I have not announced it at the moment, but it will be announced before it is taken.
Mr. LANSBURY: I take it that, if it be possible, arrangements will be made to give some time to that subject.
Mr. CHURCHILL: Does not the Prime Minister think that devoting four days in a single week to the Government of India Bill is too much and is forcing this particular Measure through at a rate which hampers those Members who wish to have every Clause adequately discussed I Does he not think that a procedure which takes four days in a single week upon this subject is hardly in harmony with our arrangement under which this great Measure is passing through the House without the use of the closure or guillotine of any kind, and will he not consider if he cannot possibly arrange to give three days instead of four to this matter? We are most anxious to assist the progress of the Bill within the limits agreed. I put it to the right hon. Gentleman that four days in a week is unduly long.
The PRIME MINISTER: We are very anxious to co-operate—if the right hon. Gentleman has no objection to this method of expressing myself—with him to maintain the harmony which has been kept up to now, but we must get on. We are doing pretty well. We would like to have four days' debate on the matter next week, because, as I have said, we really must get the Bill through in time for its proper consideration in another place.
Mr. CHURCHILL: Even the co-operator should make his contribution. As far as I can gather, the contribution of the Prime Minister will only take a verbal form.

UNEMPLOYMENT (DEPENDANTS' BENEFIT).
Mr. BUCHANA: I beg to ask leave to move the Adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely,
"the action of the Minister of Labour both at Dudley and Stanningley Employment Exchanges in applying a means test to two applicants for standard benefit, thus committing a grave breach of the principles governing Part I of the Unemployment Insurance Act."
Mr. SPEAKER: The hon. Member asks if he can move the Adjournment of the House on a definite matter of urgent public importance, namely,
"the action of the Minister of Labour both at Dudley and Stanningley Employment Exchanges in applying a means test to two

2087
applicants for standard benefit, thus committing a grave breach of the principles governing Part I of the Unemployment Insurance Act."
I do not think that any of these things would come under the meaning of Standing Order No. 8 which governs Motions for the Adjournment.
Mr. BUCHANAN: Is it not, first of all, a matter of very urgent importance that applicants for benefit should not be placed out of reach of the Act? It is one of urgent importance, because it gives rise to terrible suffering among a large section of the population. Consequently, is it not a definite matter when this sort of thing is applied to poor persons, and is it not a matter of public importance when a large number of persons are thus involved? I ask you, Mr. Speaker, seeing that it is a matter of urgent importance, to reconsider your decision and allow this matter to be discussed?
Mr. SPEAKER: I appreciate the urgency of it, if there is anything in it, but it is really a matter of the administration of the law, and it is one which may be discussed next Wednesday.
Mr. BUCHANAN: With all due respect, Mr. Speaker, are you not aware that, as this affects the question of people receiving benefit for their children, it is a matter of tremendous urgency involving action at once, and will you not reconsider it from that point of view. It might become involved with other things next Wednesday and might not be reached.
Mr. SPEAKER: The hon. Member could see that it was reached. Really, this is a matter of the administration of law.
Mr. BUCHANAN: May I make a plea to the Prime Minister and ask him whether, in view of the fact that the matter is urgent and of public importance, it will not be possible, through the usual channels, to arrange to move the adjournment a little earlier—it is a question of grave concern to poor people affected by this new administration—in order to discuss the position to-night? The matter concerns the well-being of many of His Majesty's subjects, and will he not give an opportunity for a discussion on the adjournment to-night?
The PRIME MINISTER: The House is working under an agreement.
Mr. BUCHANAN: Is it not possible to alter it?
The PRIME MINISTER: The Eleven o'Clock Adjournment will be moved in the ordinary way, and this matter can be taken then.
Mr. MAXTON: Is it not for the Government to try to accommodate other sections of the House on matters which they may think of considerable importance? It is quite usual for parties to give and take a little, and surely it is not asking for a great deal in requesting an extra half-hour to-night to raise a matter which we regard as very urgent. I believe that I could persuade the House, if it were in order, that it is urgent, and I ask the Prime Minister to say, as he might say in other circumstances, that, if it can be arranged through the usual channels, he will have no objection to that course.
Sir P. HARRIS: Is it not possible that we might save half an hour on the time-table if good progress is made with the Government of India Bill, and to have the Motion for the Adjournment moved at 10.30?
Mr. D. MASON: Cannot the Minister responsible give an undertaking that he will make an inquiry?

BILLS REPORTED.

  GLAMORGANSHIRE CANAL COMPANY BILL.
  Reported, with Amendments; Report to
  lie upon the Table, and to be printed.
  Bill, as amended, to lie upon the Table.

  BECKENHAM URBAN DISTRICT COUNCIL BILL.
  Reported, with Amendments; Report to
  lie upon the Table, and to be printed.
  Bill, as amended, to lie upon the Table.

  MESSAGE FROM THE LORDS.
  That they have agreed to,—
  Consolidated Fund (No. 2) Bill,
  Increase of Rent and Mortgage Interest (Restrictions) Bill,
  Post Office and Telegraph (Money) Bill,
  Post Office (Amendment) Bill, without Amendment.

  PRIVATE BILLS (GROUP C).
  Sir Henry Jackson reported from the Committee on Group C of Private Bills; That Mr. Stephen Davies, one of the Members of the said Committee, was not present during the sitting of the Committee this day.
  Report to lie upon the Table.

ORDERS OF THE DAY.

  GOVERNMENT OF INDIA BILL.
  Considered in Committee [THIRTEENTH DAY—Progress, 27 th March],
  [Sir DENNIS HERBERT in the Chair.]
  The CHAIRMAN: May I suggest to the Committee that they should endeavour to get to the end of Part VII to-night? If we can do that we shall, I think, practically have saved one of the extra days that we have used. Consideration of the Amendments lead me to suppose that that is not an impracticable suggestion, in view of the fact that there are one or two important points, possibly three, arising on the Amendments on the Order Paper dealing with Part VII where I think I shall have to suggest to the Committee that the discussion might be more conveniently taken at some later stage of the Bill. If that be the case there is all the more reason for trying to save time on what I described yesterday as minor Amendments which do not raise great questions of principle.
  3.41 p.m.
  Mr. CHURCHILL: Subject to your observations to the Committee, surely it is asking too much of the Committee to go so far as the end of Part VII to-night. That would take us up to Clause 174. It means an enormous hurrying through the necessary business, and in view of the way in which the Government are forcing this matter from day to day and departing from the spirit and principle on which this matter should have been conducted—[HON. MEMBERS: "No!"]—I say yes; I do not think you will really be well advised in counting on our making that amount of progress to-night, although we shall no doubt try our best to do so. The attempt to carry Clauses in great batches, in long hops, when ten to fifteen Clauses are taken or may be taken in a single bound, presupposes that ample opportunity will be given to those Members who are participating in this arrangement to consider the effect of skipping so many Clauses. When a number of Clauses are passed by a single Motion from the Chair, by general consent, those hon. Members who are responsible for seeing that the Bill is adequately discussed must have an opportunity of considering not only what is discussed but, still more, what is withheld from discussion. Otherwise
  2096
  we may find some very serious hiatus arising in the procedure on, the Bill. Therefore, I do not think that we can reach anything like the end of Part VII to-night. It may be that our business may lag if we are supposed to watch with special care what we are doing on account of the way in which the matter has been forced upon us.
  3.43 p.m.
  The SECRETARY of STATE for INDIA (Sir Samuel Hoare): I am sorry that my right hon. Friend has made the suggestion that we have been guilty of a breach of faith. I can assure him that there is no breach of faith.
  Mr. CHURCHILL: I never said anything about a breach of faith. The right hon. Gentleman is always using this sort of method. You make a modest criticism, and up he gets and says: "You accuse us of a breach of faith." I said that what was being done was not in harmony with the spirit of the arrangement.
  Sir S. HOARE: I will take my right hon. Friend's words, that it is not in harmony with the spirit of the arrangement. It is in full harmony with the spirit of the arrangement. In the discussions that took place in the business committee upstairs there never was any suggestion that the Government might not be compelled from time to time to take an extra number of days in one or other week. There was no suggestion to the contrary. Apart from that, the Government have not pushed this Bill through without adequate discussion. All that was said from the Chair was an appeal to the Committee to expedite the procedure as far as possible. That is what the Government wish to do. That is the spirit in which the Government approach the discussion to-day and will approach subsequent discussions.
  The CHAIRMAN: May I remind the right hon. Member for Epping (Mr. Churchill) that, with regard to the putting of Clauses in blocks, that is only done where there is neither an Amendment to be called nor any notice of opposition to the Clauses. I have been careful hitherto in putting Clauses in blocks to make certain that there has not been any Member of the Committee who wished to discuss a particular Clause. I am sorry that the right hon.

  2097
  Gentleman apparently differs so strongly from my view as to what is possible for to-day, but I still venture to hold the view that the intensive examination which I have given to the Amendments during the last 24 hours may perhaps turn out to justify my opinion.
  3.46 p.m.
  Mr. CHURCHILL: Far be it from me not to pay every tribute to the manner in which you have facilitated the working of this difficult and very important arrangement, but the fact that on a large block of Clauses there are no Amendments—an Amendment could be put down in a few minutes—is a proof of the desire of hon. Members, after careful consideration, to facilitate the procedure on the Bill as much as possible. The mere fact that no Amendment has appeared to any of these Clauses which are put in a group in no way means that there has not been heart-searching about it. It means that with a view to trying to make a success of the arrangement for getting the Bill through hon. Members have been willing not to press Amendments. If, however, we are to go through the process of endeavouring to help forward the actual progress of a Bill which we consider so disastrous to the country, we must do it within limits, and it is all the more necessary that we should not be hustled by sitting de die in diem. It is not possible in those circumstances to exercise a proper study of the Bill both from the point of view of what must be raised, and from the point of view of what may be done and what may be dismissed without debate. I venture very respectfully to make these observations in consequence of the statement which you have made with a view to helping the Committee.
  3.48 p.m.
  The CHAIRMAN: When I gave way to the right hon. Gentleman, I had only one further sentence I desired to say and that is to express recognition of the way in which the carrying on, of business has been helped in all quarters of the Committee, and I would now express the hope that after—shall I call it—this little conversation we shall get on with as much good temper as possible and as little obstruction as hitherto and also with no more hustling than is proper and that we shall try to get as far as we can to-night.
  Lieut.-Colonel ACLAND-TROYTE: May I ask a question with regard to business? I believe that under the guillotine Friday counts only as a half-day. Does this apply to the arrangement under which we are now working?
  The CHAIRMAN: There is no guillotine.

  GOVERNMENT OF INDIA BILL.

    CLAUSE 116.—(Subsidies for the encouragement of trade or industry.)
    Amendment proposed [27th March]: In page 70, line 30, to leave out Subsection (2).—[Duchess of Atholl.]
    Question again proposed, "That the words proposed to be left out, to the words 'incorporated,' in line 38, stand part of the Clause."
    3.50 p.m.
    Sir JOHN WARDLAW-MILNE: When the Committee reported Progress last night we were engaged in discussing an Amendment moved by the Noble Lady the Member for Perth (Duchess of Atholl) to leave out Sub-section (2), and I was endeavouring to show that the Noble Lady's apprehensions with regard to the reason for the insertion of the Sub-section were not well founded. I was dealing with the past history of this matter and as some hon. Members may not have been present last night, it might be desirable for me to say that the Noble Lady who moved the Amendment and the Noble Lord the right hon. Member for Aldershot (Viscount Wolmer) who supported it, did so because they felt that it was discriminatory legislation against British concerns and British subjects in India. The Noble Lady began by saying that she believed the insertion of this Sub-section was due to action taken at the time of the boycott in 1930–31, and I endeavoured to assure her that it was a much older question than that. I pointed out to the Committee that the terms which the Government of India would require from a company or firm which was to receive a subsidy from Indian moneys had been under discussion for at any rate 20 years. I remember very distinctly the time when trade development boards were set up in certain Provinces in India before the War. At that time, the principle referred to in this Sub-section was laid down by the Government of India, and, therefore, there is nothing new in the principle that the Government of India should lay down conditions requiring that companies

    2099
    who are to receive public money in the form of subsidies or bounties should have a certain number of Indian shareholders and Indian directors, and give reasonable facilities to the trades and industries concerned for the training of apprentices.
    It is an old story, and I can assure the Noble Lady that it has nothing to do with the boycott of 1930–31. It began, to my knowledge, at least 20 years before. If she will turn to the report of the Joint Select Committee she will find that one of the reasons given by the Joint Select Committee for recommending a continuance of this system is the findings of the external capital committee which was set up by the Government of India in 1925. That committee dealt with the question of the inflow of capital into India and the conditions under which it should be employed. I will not weary the Committee with the general terms of reference of that committee, but I should like to quote that part of their report which deals with this particular Sub-section. Let me say that this external capital committee consisted of members of both Chambers of the Legislature of that time, and seems to have had half and half of Europeans and Indians in its composition. In paragraph 27, which I should like to read, the committee said:
    "Where however, very definite concessions are granted to particular concerns, it is obvious that stipulations to safeguard Indian interests can be imposed without any practical difficulty, so long as the stipulations themselves are reasonable. We would therefore agree with the view of the Fiscal Commission and the Legislature"—
    It is evident that this matter was not only considered by this committee, but had been previously considered by the Legislature—
    "that definite restrictions might he imposed in the case of concessions receiving bounties or similar definite pecuniary assistance."
    Later on, in paragraph 28, the committee said:
    "In the case of bounties or similar definite pecuniary assistance, we consider that restrictions might be imposed of the nature described in Section 5 of the Steel Industry Protection Act of 1924, namely:

    (1) in all cases of facilities for the technical training of apprentices, and

    (2) in the case of incorporated companies—(i) that the companies should be registered under the Indian Companies Act of 1913 with rupee capital, and (ii) that a reasonable proportion of the directorate should be Indian."

    2100
    The point I want to make is that this is by no means a new thing; secondly, that it has nothing to do, as far as I know, with the boycott of 1930–31, and, in the third place, that the Sub-section is carrying out precisely the recommendations of the Joint Select Committee, which were based largely upon the report of the external capital committee; an extract from whose report I have just read. As far as I know, there has never been in India or in England from any commercial organisation any objection whatever during all these years to the terms which have been laid down. From my own knowledge, these conditions were accepted by English business firms in India and by chambers of commerce before the War as reasonable in those cases in which a bounty or subsidy was to be given from Indian revenue. It is a matter of opinion whether it is right or not for India to claim justification for making these conditions. That is a matter of opinion, but it is misleading the Committee to suggest that this matter has anything to do with the question of legislative changes at the Centre or in the Provinces, or to any question of constitutional reform. It goes much further back than the Act of 1919.
    There is one other point to which I must refer. The Noble Lord the right hon. Member for Aldershot made a great point about the indignity put upon British trades and suggested that it was impossible for anyone to believe that we should claim the right to make any such conditions in England. I can only speak for myself, but, if the British taxpayer's money is to be given in the form of a subsidy or bounty to any firm in this country, I think that most of us would endeavour to insist that there should be some security for British working people and that the control of the company should be British in fact.
    Brigadier-General Sir HENRY CROFT: Can my hon. Friend quote a single case where that has happened?
    Sir J. WARDLAW-MILNE: I was going on to say that I know of no case, because conditions here and in India are completely different from an industrial point of view. India is developing new industries in which new conditions exist, but this country is very highly industrialised and, so far as I know, that point has not arisen. I should think, however,

    2101
    it is perfectly possible that in connection with key industries we should certainly insist on conditions of that kind, and I do not think it is unreasonable. In any case, whether this exists or does not exist in this country, I say the conditions in India are utterly different, and, although I hope that subsidies will not be imposed to any great extent, I do not believe that any commercial body in India has ever thought it was unreasonable to look after the promotion of their own people and industries, and to give facilities for trading by their own people. I do not want to take the matter further, but I do wish to make it perfectly clear to the Committee that this matter has nothing to do with constitutional reform. It is a matter of opinion whether we are justified in putting in these conditions or not, but, at any rate, they have behind them long practice and precedent.
    4.2 p.m.
    Sir H. CROFT: My hon. Friend who has just given us such an interesting address on this subject has pointed out that the principle, as I gathered, had been accepted in commercial circles in India. That may be so or not, but here we are legislating, possibly, for all time on this question, and we have to consider the whole subject from the point of view of the spirit of partnership in the days to come. It must be clear to my hon. Friend that it is a very extraordinary position to take in permanent legislation, for the reason that it is almost ruling out the fact that British firms in India, and British directors, and so on, are all members of an Imperial system. For the first time, it seems, we are laying down here that there is to be a segregation of the subjects of His Majesty in different countries. The point I want the Committee to consider is this: Suppose we have in this country a subsidy on sugar. Is it reasonable to lay down that, no matter where the capital comes from, the majority of directors—
    Sir J. WARDLAW-MILNE: I am afraid my hon. and gallant Friend did not fully follow the question. It is not a question of companies at present engaged. They, clearly, do not have to comply with these conditions. All that the Sub-section refers to is companies not engaged "in that branch of trade or industry." That is rather a different thing.
    Sir H. CROFT: I quite understand the point. Even so, what difference does that make? If you have a subsidy on sugar, or whatever it may be, in this country, it really seems that we are going back from the whole idea of Imperial unity in declaring that there must not be a majority on a board in this country of Canadians or Australians, and we cannot have two Canadians, two Australians and three Englishmen. That seems to me to be an extraordinary principle to lay down. Even more, we have a right to say that this restrictive legislation should not be put upon the Statute Book. Although my hon. Friend has been among gentlemen who have had a feeling of depression for a long time in India, he must realise that here we are starting something which is completely different from anything which exists, so far as I know.
    Sir J. WARD LAW-MILNE: Did the hon. and gallant Gentleman say "pressure" or "depression"?
    Sir H. CROFT: I refer to the general depression of those engaged in trade in India, and gave up the fight. I feel most strongly that here you have a set of circumstances entirely different from those existing in any other part of the world. All those industries in India have been built up, I think, under the guidance of British industrial leaders, captains of industry who have gone out and given the benefit of their knowledge and skill, and helped those industries to go forward. Under the benign rule of Great Britain you have raised those industries to such a condition that India has become one of the greatest trading countries in the world. The whole structure of India has been built up by British skill, British energy and determination, and British credit. Now we come along and say "Oh, yes; but if ever in future there is a subsidy in India, you must not have more than 50 per cent. of the directors British." The hon. Gentleman seemed to think that in future we must not regard ourselves as having any equal share with Indians, though without our defence, without the British Navy, where would India be? An inferiority complex has got hold of the hon. Gentleman. I think that the whole principle of this part of the Clause is wrong.

    2103
    I will ask one other question for the Committee to consider. Why these restrictions on Englishmen? What about Moslems? Are you going to allow a majority of Moslems to sit on any board in India? Are Moslems any more indigenous to the soil than our own people? Take the dynasty of Akbar, who had not a drop of Indian blood in his veins. Then there were the Greeks, the Syrians, the Persians, the Afghans, and the Moguls? The whole trouble is that we are imagining there is such a thing as Indian people. It is all nonsense, and the hon. Gentleman knows that it is. I ask, why should we discriminate against our own countrymen in the future? We should realise that there is a real partnership of Britons wherever they choose to go in the Empire, and who should have as far as we can lay down in this Committee, equal opportunities? If there were a subsidy in this country, and a company was formed giving employment to British people, I think we should be entirely illogical to try to prevent a majority of Indian directors in such a company. We have never done it in the past, and I think it would be a great mistake in the future. The hon. Member, I think, spoke of key industries, having in mind some secret industry for war purposes, and so on. That might be necessary, but it has nothing to do with general commercial business. I hope the Government will consider accepting this Amendment.
    4.12 p.m.
    Mr. ATTLEE: It is very interesting to hear an Imperialist like the hon. and gallant Gentleman get well off the mark. He is far more an Imperialist, and knows far more about trade than people who have been trading in India for many years.
    Sir H. CROFT: I have traded with India a great deal more than the hon. Gentleman.
    Mr. ATTLEE: I was only comparing the hon. and gallant Gentleman's slightly inferior knowledge with that of the hon. Member for Kidderminster (Sir J. Wardlaw-Milne) and other gentlemen who have traded in India, and who have, apparently, for years accepted this condition. I was very much interested in the doctrine put forward by the hon. and gallant Gentleman, but, after all, if the
    2104
    people of India have been conquered by all sorts of nations, what about ourselves? So far as I know, most of the subsidies we give, at any rate with regard to sugar, go into the pockets of the Dutch. I was struck by the extraordinary way in which the hon. and gallant Gentleman regards all the people who went to India as wonderful philanthropists, going there and giving everything to India, with no idea of making any money out of it.
    Sir H. CROFT: Where will the hon. Gentleman find anything in what I said which would bear that interpretation? If you are talking of your own country, no such gifts have been given by any other country.
    Mr. ATTLEE: If the hon. and gallant Gentleman meant that, why did he boast that we have done all this for India? I do not think we have done it only for India, but that we have had a very good quid pro quo for it. As a matter of fact, we went to India to trade, and this country gained by it just as much as India did. It is an extraordinary thing that the hon. and gallant Gentleman takes that line. I should be very much surprised if when a suggestion was made here that the people of this country should give subsidies to all kinds of people outside, the hon. and gallant Gentleman would not be on his hind legs in protest.
    4.14 p.m.
    Mr. RAIKES: The hon. Member for Limehouse (Mr. Attlee) seemed completely to misunderstand the argument put forward by the hon. and gallant Baronet the Member for Bournemouth (Sir H. Croft). Probably the only people indigenous to India are the depressed classes, but, so far as Great Britain is concerned, we who came in and gave a great deal of security, education, sanitation and so on to India, at any rate should have the same degree of partnership as those conquerors in the past. Is there any question of exploitation ip asking that, so far as we are concerned, we who have given greater benefits than past conquerors, at any rate should have an equal right to see that British trade is looked after? If the Sub-section passes into law, it means that we shall definitely lay down in an Act of Parliament for all time a discrimination with regard to

    2105
    the number of directors of British companies and so on, which shall be allowed, without any reciprocity.
    Reference has been made to the beet-sugar subsidy. I would rather like to know how the Government can square their attitude towards that subsidy with the attitude which they are adopting at the moment towards this Amendment. In connection with this beet-sugar subsidy we make use very largely of Dutch capital and Irish labour, and the British taxpayer has the privilege of paying the subsidy in order to keep things going. If the Government are prepared to go as far as that with regard to sugar, it is curious that they should in an Act of Parliament encourage India to take very powerful steps against any reciprocal treatment of British trading companies in the future. It is on the broad basis of the partnership of British interests being safeguarded, on an equality with so-called Indian interests, and on the ground that we are all British subjects, that I have much pleasure in supporting the Amendment.
    4.17 p.m.
    Sir S. HOARE: I suggest to the Committee that we are really making much too big a controversy of a very limited proposal. It is quite unnecessary to go into all the historical facts which were entered on by my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft). I was very much tempted to follow him, but I would have some little controversy with him about some of his historical facts, and I shall not fall into the temptation. I come back rather to the actual Clauses of the Bill. There is no question whatever of undermining the principle of the British partnership with India. The British partnership is safeguarded in the discriminatory Clauses. This particular Clause is a Clause of much more limited scope. It might be thought, in listening to the speeches that have been delivered, that this Clause was striking at the very foundation of the provisions that we are making against discrimination generally. That is not the state of affairs. All that this proposal does is to allow, at a definite date in future, certain definite conditions to be imposed upon the granting of subsidies financed by money from the pockets of Indian taxpayers. Every existing British company that complies with these condi-
    2106
    tions as to capital and directors and the facilities for trading, is qualified for these subsidies. Moreover, the disqualifications for future companies come into force only after a subsidy Act has actually been passed; that is to say, they do not come into force until first of all the Federal Government has been brought into operation, and, secondly, the Federal Government has passed a subsidy Act. When the Federal Government has passed a subsidy Act, presumably giving a subsidy to a particular kind of trade or company, then still all British existing companies will be eligible for that subsidy.
    Mr. MOLSON: Every existing company engaged at present in that industry.
    Sir S. HOARE: Certainly, that is exactly what I am saying. I do not see the point of the intervention. Of course it is every existing company engaged in that industry. The conditions about the board of directors and so on will only come into operation after that Act has been passed. This Clause has a very limited scope. I should have thought that if there was a complaint to be made it might be made by Indians that we were restricting the conditions too closely. We did, however, feel it just and wise to follow the lines of these proposals, taking into account that we are continuing what has actually been in operation for many years. There is a great deal to be said for continuing a plan that has existed without any grievance being raised, so far as I know, by British industry. I would have thought that with the safeguards I have described, this was a very modest proposal which raised none of the issues which have been suggested in certain speeches—a proposal just enough to the Indian taxpayer and to the British trader and British company. I hope we shall not be led astray into exaggerating the scope of the proposal, but that we shall accept it on the ground that I have put forward, as a proposal which is just in the interests both of Indians and Englishmen.
    4.22 p.m.
    Duchess of ATHOLL: There are two questions I would ask. Can my right hon. Friend assure us that the conditions stated in the Bill already exist in some Act of the Indian Legislature, because we have just understood from my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) that they

    2107
    were only recommendations made by a committee of the Indian Legislature in 1925. My second question is, can my right hon. Friend tell me of any corresponding provisions in any Act of this Parliament as proposed to be applied either to India or any other subjects in the Empire?
    Sir S. HOARE: I can answer those questions at once. When I was Secretary of State for Air I remember that I was responsible for the starting of the Imperial Airways Company. There were very much the same kind of conditions for the board of directors that we are here suggesting for subsidised companies in India. There may be other cases, but that case occurred to my mind because it came within my own knowledge.
    Sir H. CROFT: Does that apply to the citizens of various countries of the Empire, for instance to New Zealanders?
    Sir S. HOARE: Certainly. As far as I remember the intention was to have a definitely British Board. My Noble Friend asked another question. As far as I can remember—I will verify the point —these conditions are set out in' some of the Indian Acts.
    Mr. MOLSON: In the Steel Protection Act of 1924.
    Sir S. HOARE: My hon. Friend reminds me that it was in the Steel Protection Act. That was an Act under which subsidies were given.
    Duchess of ATHOLL: Does my right hon. Friend think that the question of a subsidy to ordinary trade and industry, as indicated in the Bill, is quite a parallel to the grant of a subsidy to such a service as Imperial Airways?
    Sir S. HOARE: I do not see any difference in kind. I think my Noble Friend really exaggerates the dangers in this proposal. I cannot believe that any Government, particularly an Indian Government which has not at its disposal large surpluses of revenue, is likely to give subsidies on a big scale. Certainly that has been the experience of the last 10 to 15 years; although it has been possible to give subsidies they have been given very rarely and with rather a niggardly hand. I do not believe that the danger is as great as some of my hon. Friends think it to be.
    4.24 p.m.
    Mr. CHARLES WILLIAM: I do not wish in any way to contradict my right hon. Friend, but when he says that this is a small subject I would reply that no subject of trade as between this country and India can possibly be a small subject in these days. Because my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) or any other person says that this sort of thing has gone on for 20, 30 or 100 years, that is no reason for not changing it. We are changing many things in this Bill. I can quite understand that as a general principle you may lay it down that if you use Indian money for subsidies the Indians should draw it. But that is not the position in this country. Before we lay these conditions down in the Bill we should at any rate have assurances on one or two points. The most important point of all is the question of the air. We can quite easily imagine an Indian Government subsidising a company which cuts across the whole system of Imperial air development between here and Australia. I do not wish to develop the point, because I am most anxious to work in with the whole agreement.
    Sir S. HOARE: My hon. Friend seems to have forgotten that Imperial Airways would be eligible for the subsidy.
    Mr. WILLIAMS: I have not forgotten that. But that is not the point. What is the position to-day may be completely and entirely changed by the Federal Government in the course of the next few years. I know the safeguards, but I would draw attention to this: You have a special provision at the end of this Clause as regards ships. It has been thought advisable to include that provision because the shipping industry is a very powerful one in this country. The air industry has not the same power as the shipping industry. If I may say so, however, we have in the Secretary of State for India a very great ex-Air Minister. Many of us think very highly of him, if I may say so—in that respect. But I make this appeal to him: I shall be satisfied if he will assure me that he will look into the whole question from the point of view of the air between now and the Report stage, and see whether it is not possible to put in some new Sub-section dealing with air. It is an important matter.

    2109
    Shipping would not have been put in without some special reason. Many of us feel that even if subsidies are included, with the safeguards, and the Government insists on them, they must have them; but I ask my right hon. Friend particularly to look into the air question. If many people outside had had the time to go into the details of the Bill, and if members of the Committee who have not followed the Debate had realised that there is any sort of danger, we would have been able to get something very much on the same lines as the shipping interests have been fortunate enough to get.
    Sir J. WARDLAW-MILNE: The hon. Member seems to think that shipping people are in a special position but if he refers to Sub-section (3) he will see that it merely states that a company shall be deemed to be carrying on business in India if it owns ships which habitually trade to and from ports in India. They are in no different position from other companies.
    Mr. WILLIAMS: I understand that and the point is that people who are dealing with air transport to India should be in exactly the same position. If they were treated in the same way as shipping is being treated I think it would meet the point.
    Sir S. HOARE: My hon. Friend the Member for Torquay (Mr. C. Williams) is not often absent from our proceedings, but I think it must have been one of his rare absences that we actually put air- craft into the same category as ships in this respect.
    Mr. WILLIAMS: I was present and indeed I congratulated the right hon. Gentleman on what he did, but I submit that the claim of the air has not yet been fully met in this respect.
    Question put, "That the words proposed to be left out, to the word 'incorporated,' in line 38, stand part of the Clause."
    The Committee divided: Ayes, 218; Noes, 32.

    Division No. 124.]

    AYES.

    [4.32 p.m.

    Acland, Rt. Hon. Sir Francis Dyke

    Despencer-Robertson, Major J. A. F.

    Hunter, Dr. Joseph (Dumfries)

    Agnew, Lieut.-Com. p. G.

    Dobbie, William

    Hutchison, W. D. (Essex, Romf'd)

    Albery, Irving James

    Doran, Edward

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

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

    Dugdale, Captain Thomas Lionel

    Iveagh, Countess of

    Allen, William (Stoke-on-Trent)

    Duggan, Hubert John

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

    Assheton, Ralph

    Eales, John Frederick

    Jenkins, Sir William

    Attlee, Clement Richard

    Ellis, Sir R. Geoffrey

    John, William

    Balniel, Lord

    Elliston, Captain George Sampson

    Jones, J. J. (West Ham, Silvertown)

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

    Elmley, Viscount

    Jones, Morgan (Caerphilly)

    Bevan, Aneurin (Ebbw Vale)

    Emrys-Evans, P. V.

    Ker, J. Campbell

    Blindell, James

    Evans, Capt. Arthur (Cardiff, S.)

    Kirkpatrick, William M.

    Bossom, A. C.

    Evans, R. T. (Carmarthen)

    Lamb, Sir Joseph Quinton

    Boulton, W. W.

    Fielden, Edward Brocklehurst

    Lansbury, Rt. Hon. George

    Briscoe, Capt. Richard George

    Foot, Dingle (Dundee)

    Law, Richard K. (Hull, S. W.)

    Brocklebank, C. E. R.

    Foot, Isaac (Cornwall, Bodmin)

    Lawson, John James

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

    Galbraith, James Francis Wallace

    Leech, Dr. J. W.

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

    Gardner, Benjamin Walter

    Leighton, Major B. E. P.

    Brown, Ernest (Leith)

    Gillett, Sir George Masterman

    Leonard, William

    Buchanan. George

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

    Lewis, Oswald

    Bullock, Captain Malcolm

    Goff, Sir Park

    Liddall, Walter S.

    Burgin, Dr. Edward Leslie

    Goldie, Noel B.

    Lister, Rt. Hon. Sir Philip Cunliffe-

    Butler, Richard Austen

    Graham, D. M. (Lanark, Hamilton)

    Little, Graham-, Sir Ernest

    Cadogan, Hon. Edward

    Greenwood, Rt. Hon. Arthur

    Lloyd, Geoffrey

    Campbell-Johnston, Malcolm

    Grenfell, David Rees (Glamorgan)

    Lockwood, John C. (Hackney, C.)

    Caporn, Arthur Cecil

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

    Lovat-Fraser, James Alexander

    Cautley, Sir Henry S.

    Griffiths, George A. (Yorks, W. Riding)

    Lunn, William

    Cayzer, Sir Charles (Chester, City)

    Grigg, Sir Edward

    Mabane, William

    Cazalet, Capt. V. A. (Chippenham)

    Grimston. R. V.

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

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Groves, Thomas E.

    MacAndrew, Capt. J. O. (Ayr)

    Cleary, J. J.

    Grundy, Thomas W.

    Macdonald, Gordon (Ince)

    Conant, R. J. E.

    Hacking, Rt. Hon. Douglas H.

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

    Cook, Thomas A.

    Hall, George H. (Merthyr Tydvil)

    MacDonald, Malcolm (Bassetlaw)

    Cooke, Douglas

    Hanbury, Cecil

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

    Copeland, Ida

    Hannon, Patrick Joseph Henry

    McEntee, Valentine L.

    Cove, William G.

    Harvey, Major Sir Samuel (Totnes)

    McEwen, Captain J. H. F.

    Cripps, Sir Stafford

    Haslam, Henry (Horncastle)

    McGovern, John

    Crookshank, Col. C. de Windt (Bootle)

    Hellgers, Captain F. F. A.

    McKie, John Hamilton

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

    Henderson. Sir Vivian L. (Chelmsford)

    McLean, Dr. W. H. (Tradeston)

    Crossley, A. C.

    Herbert, Capt. S. (Abbey Division)

    Makins, Brigadier-General Ernest

    Daggar, George

    Hills, Major Rt. Hon. John Waller

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

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

    Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.

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

    Davies, David L. (Pontypridd)

    Hope, Capt. Hon. A. O. J. (Aston)

    Martin, Thomas B.

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

    Hornby, Frank

    Mason, David M. (Edinburgh, E.)

    Davies, Rhys John (Westhoughton)

    Howitt, Dr. Alfred B.

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

    Maxton, James

    Rea, Walter Russell

    Strickland, Captain W. F.

    Mills, Sir Frederick (Leyton, E.)

    Reid, James S. C. (Stirling)

    Stuart, Hon. J. (Moray and Nairn)

    Mills, Major J. D. (New Forest)

    Reid, William Allan (Derby)

    Sueter, Rear-Admiral Sir Murray F.

    Milne, Charles

    Rickards, George William

    Summersby, Charles H.

    Mitchell, Sir W. Lane (Streatham)

    Robinson, John Roland

    Sutcliffe, Harold

    Molson, A. Hugh Elsdale

    Ropner, Colonel L.

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

    Monsell, Rt. Hon. Sir B. Eyres

    Ross Taylor, Walter (Woodbridge)

    Thompson, Sir Luke

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

    Salmon, Sir Isldore

    Thomson, Sir Frederick Charles

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

    Salter, Dr. Alfred

    Thorne, William James

    Moss, Captain H. J.

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

    Tinker, John Joseph

    Munro, Patrick

    Samuel, M. R. A. (W'ds'wth, Putney).

    Titchfield, Major the Marquess of

    Nation, Brigadier-General J. J. H.

    Savery, Samuel Servington

    Tree, Ronald

    Nicholson, Godfrey (Morpeth)

    Shakespeare, Geoffrey H.

    Tufnell, Lieut.-Commander R. L.

    O'Neill, Rt. Hon. Sir Hugh

    Shaw, Helen B. (Lanark, Bothwell)

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

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

    Simon, Rt. Hon. Sir John

    Ward, Irene Mary Bewick (Wallsend)

    Paling, Wilfred

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

    Wardlaw-Milne, Sir John S.

    Palmer, Francis Noel

    Smith, Tom (Normanton)

    Warrender, Sir Victor A. G.

    Parkinson, John Allen

    Somervell, Sir Donald

    Waterhouse, Captain Charles

    Patrick, Colin M.

    Sotheron-Estcourt, Captain T. E.

    Watt, Major George Steven H.

    Peake, Osbert

    Spears, Brigadier-General Edward L.

    Wedderburn, Henry James Scrymgeour.

    Peat, Charles U.

    Spencer, Captain Richard A.

    Williams, Edward John (Ogmore)

    Penny, Sir George

    Spender-Clay, Rt. Hon. Herbert H.

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

    Percy, Lord Eustace

    Spens. William Patrick

    Winterton, Rt. Hon. Earl

    Petherick, M.

    Stanley, Rt. Hon. Oliver (W'morland)

    Womersley, Sir Walter

    Pickthorn, K. W. M.

    Stevenson, James

    Worthington, Dr. John V.

    Potter, John

    Stewart, J. Henderson (Fife, E.)

    Young, Ernest J, (Middlesbrough, E.)

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

    Stones, James

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

    Storey, Samuel

    TELLERS FOR THE AYES.—

    Ramsden, Sir Eugene

    Strauss, Edward A.

    Captain Sir George Bowyer and

    Rankin, Robert

    Strauss, G. R. (Lambeth, North)

    Dr. Morris-Jones.

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Croft, Brigadier-General Sir H.

    Nunn, William

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

    Davison, Sir William Henry

    Pike, Cecil F.

    Astbury, Lieut.-Com. Frederick Wolle

    Donner, P. W.

    Somerville, Annesley A. (Windsor)

    Atholl. Duchess of

    Emmott, Charles E. G. C.

    Taylor, Vice-Admiral A. A. (P'd'gt'n, S.)

    Boyd-Carpenter, Sir Archibald

    Erskine-Bolst, Capt. C. C. (Blackpool)

    Touche, Gordon Cosmo

    Broadbent, Colonel John

    Everard. W. Lindsay

    Wayland, Sir William A.

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

    Goodman, Colonel Albert W.

    Wells, Sydney Richard

    Cobb, Sir Cyril

    Hartington, Marquess of

    Williams, Charles (Devon, Torquay)

    Colfox, Major William Philip

    Keyes, Admiral Sir Roger

    Williams, Herbert G. (Croydon, S.)

    Courtauld, Major John Sewell

    Knox, Sir Alfred

    Craddock, Sir Reginald Henry

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

    TELLERS FOR THE NOES.—

    Mr. Raikes and Mr. Lennox-Boyd.

    Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.

    4.40 p.m.
    Mr. MOLSON: I beg to move, in page 70, line 38, after "is," to insert:
    "or within such reasonable time as may be prescribed by the Act shall become."
    The Committee has now considered this question at some length and is familiar with the various points which have been raised. It will have been made plain, especially in the speeches of my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) that it is perfectly reasonable that companies, not at present engaged in an industry which at some subsequent date an Indian Legislature may decide to subsidise, should only receive that subsidy if they satisfy certain conditions. But there is no intention that this should be a penal Measure. It is not intended that if a company at some given time does not satisfy those requirements, it should not be able at some subsequent time to satisfy those requirements and thereby qualify for subsidy. There is not only the question of the registration of a company but also the other conditions
    2112
    which may be laid down as, for example, in connection with facilities for trading with the Indian States. I think this is really a draft Amendment and expresses the intention of the Clause.
    4.41 p.m.
    The UNDER-SECRETARY of STATE for INDIA (Mr. Butler): We are advised that this Amendment makes very little difference to the sense of the Clause. Obviously, if a company complied with the conditions at some subsequent time it would become eligible for the subsidy. Since we consider that the hon. Member's desires are largely covered by the Clause as it stands, we would prefer not to accept the Amendment and I hope he will not press it, on the assurance which I have given him.
    Mr. MOLSON: I certainly will not press the Amendment, but I hope the Under-Secretary will undertake to consider whether the Clause, as drafted, might not be interpreted to mean that any company which did not satisfy these

    2113
    conditions at the time when the subsidy-Act was passed would be held to be disqualified from doing so.
    Amendment, by leave, withdrawn.
    Amendments made: In page 70, line 42, leave out "Indian subjects of His Majesty," and insert, "British subjects domiciled in India."
    In page 71, line 2, leave out "Indian subjects of His Majesty," and insert "British subjects domiciled in India."—[Sir S. Hoare.]
    4.44 p.m.
    Mr. MOLSON: I beg to move, in page 71, line 3, at the end, to insert:
    "Provided that a company incorporated, whether before or after the passing of the Act, by or under the laws of the United Kingdom, or by or under the laws of British India, which acquires either the undertaking of a company which at the date of the passing of the Act was engaged in British India in that branch of trade or industry which it is the purpose of the grant, bounty, or subsidy to encourage, or so much of such an undertaking as relates to the carrying on in British India of such branch of trade or industry, shall upon acquiring such undertaking, or such part of such an undertaking, be deemed for the purpose of this Sub-section to have been engaged in British India in such branch of trade or industry at the date of the passing of the Act."
    We have had a long discussion on this Clause and on the purpose which lies behind it, and there is no need, I think, to say very much by way of explanation of this Amendment except to point out exactly what is the addition which we seek to make to the Clause. It deals with the case of companies engaged in an industry which at some subsequent time an Indian Legislature may decide to subsidise. There are two broad categories of such companies. There are the companies which were engaged in the industry at the time when the Act was passed and there are those which engage in it after the Act has been passed. We are not proposing to make any change in the case of the second category but there might be a company which had been engaged in the industry and as such was entitled to receive the subsidy without satisfying any special conditions. That company might desire to sell that undertaking which was to be subsidised, and, as the Clause is now drafted, it would be held that the purchaser of the new undertaking had not been engaged in the undertaking at the time the Act was passed, and therefore it would be
    2114
    required to satisfy the conditions laid down in Sub-section (2).
    It has been suggested that these circumstances would only arise in the case of a moribund company, but I shall show that that is an entirely gratuitous assumption. Even supposing, however, that this was a moribund company, what are actually the conditions? They are, first, that this company was engaged in an industry which the Indian Legislature thought it was desirable to encourage; in the second place, obviously, it is an industry which, even if the concern is efficiently run, in the view of the Indian Legislature could not be run profitably without some direct subsidy; and, in the third place, let it be remembered that this is an undertaking which was started as a private concern and not for the purpose of benefiting from the subsidy. It is not at all inconceivable that such a company should wish to sell its assets, goodwill and the right to receive the subsidy which, rightly or wrongly, the Indian Legislature had thought necessary in order that that particular branch of industry should be kept alive.
    It would not, however, necessarily be a case of a moribund company at all. After all, most companies that are bought from day to day are not moribund. There is a difficulty in such a case in finding a purchaser, and it might well be that a prosperous concern or that part of a concern which was entitled to receive a subsidy under the Indian Legislature, might be bought by some other concern for the purpose of obtaining control of the management. It might be suggested that that could be done by buying a majority of the shares, but that is not possible with Indian companies which have a contract with a firm of managing agents. On the other hand, it might be some particular branch of activity—shall we say, the manufacture of rails in India which might be one part of the activity of a steel company—and it might be that some other company which was the manufacturer of rolling-stock or other requisites for railways might desire to obtain control of that particular part of the steel company's undertaking. In that case, obviously, there would be no question of buying a majority of the shares of the whole of the steel undertaking. It would merely be for the purpose of more efficient management to buy that particular branch of the industry which received

    2115
    a subsidy. As the Bill is drafted, it would not be possible for that to be done without the purchaser of the undertaking coming under Sub-section (2) and being made to conform with the requirements of that Sub-section.
    4.50 p.m.
    The ATTORNEY-GENERAL (Sir Thomas Inskip): This Clause provides, in the first instance, that existing British companies shall be eligible, in the same way as Indian companies, for a subsidy or a bounty. So far as new companies are concerned, the Clause provides that they shall be subject to certain conditions before receiving a subsidy. My hon. Friend wants to put in a proviso that where a new company comes along and purchases the business of an old company, it shall be treated as an old company—that is to say, free from all conditions. It seems to me that there is no justification for that proposal once you have accepted the proposal in the Clause that there shall be two categories of companies, old companies and new companies, because my hon. Friend is really trying to say that that which is in substance a new company shall be treated as an old company merely because it has purchased the undertaking of an old company. That is really continuing the business of an old company in a new form. By purchasing the whole undertaking, lock, stock, and barrel, as a going concern, there is nothing easier than to preserve the identity of the old company and to let it carry on its old business.
    If, on the other hand, it really is in substance a new company and is only a sort of sham old company, because it has purchased the undertaking of an old company which proposed going out of business, I see no reason why it should get that advantage over those companies which are new and do not make any pretence of not being new. The thing is either a new company or it is not. If it is a new company, you ought not to give some advantage to a new company that can secure this facade of an old company. On those grounds the Government is not able to accept the Amendment. The Clause in the Bill goes a long way, I do not say to interfere with the freedom of the Indian Legislature in the future with regard to subsidies which it might desire to grant for the purposes of Indian
    2116
    trade, but it is going too far to suggest that we can give to new companies some advantage which they only acquire merely because they are fortunate enough to be able to buy the undertaking of what may quite possibly be a moribund concern.
    Mr. MOLSON: Will my right hon. and learned Friend deal with the point that I raised about it possibly being a branch of an undertaking and say why, if a reorganisation has enabled that subsidised branch of the undertaking to be taken over by a new concern, it should be necessary to purchase the majority of the shares in the whole of the concern? I pointed out that in the case of companies managed by managing agents in India, there are many cases of contracts running over a period of years that it would not be possible to break, even if a majority of the shares; were bought.
    The ATTORNEY-GENERAL: The Amendment of the hon. Member does not cover that case, but speaks of purchasing the undertaking of a company. That does not mean a branch of an undertaking. If the hon. Member wants to provide for a new company which has purchased, say, branch "B" of the activities of a whole undertaking, he will have to choose new words, but even if he did, I should not be prepared to accept the Amendment, because all that that would mean would be that a new company would be treated as an old company, merely because it had acquired the goodwill of some undertaking in a particular branch of its activities.
    Mr. MOLSON: My right hon. and learned Friend really has not read my Amendment. If he will read it, he will see that it says:
    "or so much of such an undertaking as relates to the carrying on in British India of such branch of trade or industry."
    4.55 p.m.
    Duchess of ATHOLL: I am a little surprised to find this Amendment moved by the hon. Member for Doncaster (Mr. Molson), because it seems so contrary to the effect of his previous interventions on this Clause. I understand the purpose of his Amendment is to reduce as far as possible the number of companies which in the future will be penalised by the proposals under Sub-section (2) of the Clause, and it seems to me rather

    2117
    strange that he should desire to do that in view of his previous remarks on this subject. It seems to indicate that the hon. Member realises, after all, that Subsection (2) may be of a very penalising character in the future to many British firms—in fact, that it proposes to put a great bar on the future development of British trade in India.
    Mr. MOLSON: If I thought it was in any way in conflict—
    The CHAIRMAN: I do not want to interrupt hon. Members too much, but really we are getting beyond the scope of the Amendment altogether.
    Amendment negatived.
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    4.57 p.m.
    Major COLFOX: I wish to ask the Secretary of State whether it is the intention of the Government to differentiate as between British Indian subjects and subjects of Indian States in this matter of being directors of companies, because in paragraph (b) of Sub-section (2) it refers to:
    "such proportion not exceeding one-half of the members of its governing body as the Act may prescribe, are Indian subjects of His Majesty,"
    or, as it now reads, "are British subjects domiciled in India." Does that exclude subjects of Indian States, and, if so, why?
    Sir S. HOARE: So far as our intention is concerned, it would not exclude subjects of Indian States.
    4.58 p.m.
    Mr. MOLSON: Before we part with this Clause, I would like to say something about the claim of the European community in India for equality of treatment, which was accepted at the Round Table Conference by the Indians who were there and as a result of this agreement which was come to it has been incorporated in this Bill. I am sure my right hon. Friend will not misunderstand me when I say that I do not attribute the fact that this chapter is in the Bill to him, because I regard him as being merely one who is anxious to give legislative effect to the agreement that was came to at the Round Table Conference. We
    2118
    claim, in the first place, this equality of treatment with Indians in India on the ground that in the past European capital and enterprise have developed the resources of India to the great advantage of India, and it is almost universally agreed that it is of the utmost importance that that development should continue. Whether in the great jute industry of Bengal, the coal industry in Bihar, oil in Burma, or the development of railways, in each case it has been British capital and British enterprise which has been responsible for these great works, and the Indian delegates at the Round Table Conference recognised the equity of our claim. At the same time, the British Government have, even in the case of the Dominions, a long and honourable record of trying to obtain equality of treatment for Indians, and I was interested to see in the "Times" only two days ago that this principle of reciprocity which underlies this and the preceding Clauses has had an interesting application in London, where, I see, Mr. Udani, an Indian trader, has been appointed to an important trading committee, the committee of appeal of the Incorporated Oil Seed Association.
    Unfortunately, there have been indications that some Indian politicians were seeking to use the powers that had been given under the Montagu-Chelmsford Constitution in order to discriminate against British trade in India. In particular, a Bill was introduced to reserve the Indian fiscal traffic in India, which would not only discriminate against British companies but, in effect, expropriate them without compensation. In 1921, as the Noble Lady the Member for Kinross (Duchess of Atholl) mentioned a few moments ago, special efforts were made to compel British firms to accept conditions which we regarded as unfair and inequitable. The origin of these Clauses is the claim that was made by the European community to the Simon Commission that under any new constitution there should be effective statutory safeguards against discrimination against our interests. The Simon Commission took the view that it would be extraordinarily difficult to draft in an Act of Parliament statutory safeguards which would be effective for defending our legitimate rights without at the same time unduly hampering the right of

    2119
    development of Indian commerce. As a result of that, the matter was examined afresh, and at the First Round Table Conference a proposal was put forward that the best way of effecting these safeguards, which the Indian delegates there agreed to, was by a commercial convention.
    The CHAIRMAN: The hon. Member, if I may say so, is very interesting, but he is getting far beyond this Clause. His is almost a Second Reading speech on the subject of Indian trade.
    Mr. MOLSON: With regard to this question of a convention, that is one of the methods suggested in the Joint Select Committee's report for guaranteeing in the future the protection of British commerce in India, and I was going to ask you, Sir Dennis, in view of the fact that this convention would cover two different points, whether you would allow me to refer also to the protection of British trade with India. If you would allow me to do that, I would move my Amendment merely by saying "I beg to move."
    The CHAIRMAN: I think that I must leave the hon. Member to move his Amendments in his own way, but he must remember that we are now in Committee stage dealing with Amendments, line by line and Clause by Clause in the Bill. There is really nothing in the Clause to justify a general speech on the history of the trade relations between this country and India.
    Mr. MOLSON: In that case, I will only say that this Clause is one of a series which, taken together, will I hope guarantee in an interim period adequate protection of British commerce in India until such time as a commercial convention may be entered into in the future.
    5.6 p.m.
    Duchess of ATHOLL: I think it is rather important, in view of what the hon. Member for Doncaster (Mr. Molson) has just told us of the very strong demand made by the British mercantile community in India to the Statutory Commission that there should be no commercial discrimination, that before we part with this Clause we should realise that it does specifically allow in the future,
    2120
    if the Indian Legislature desires it, for commercial discrimination against British firms. That seems to me a very serious thing, and it is very important that the House should realise it. We were told by the hon. Member for Kidderminster (Sir J. Wardlaw-Milne) that these sort of conditions had been imposed for a long time in India. The hon. Member for Doncaster followed that statement up by giving one case, the case of the iron and steel duties. I submit that it is a very different matter for the British Parliament in a constitution Act definitely to give sanction to discriminatory conditions that have been laid down some 10 years ago by the Indian Legislature. It is very definitely not meeting the demand of the mercantile community made to the Simon Commission. One must imagine that the fact that this Clause has been passed is bound to have a very depressing effect on the British mercantile community in India, whose views, expressed in private, are very apprehensive of the effects of this Bill, though many of them do not like to say in public what they say in private.

    CLAUSE 117.—(Power to secure by convention reciprocal treatment of persons in the United Kingdom and British India.)
    Amendments made: In page 71, line 13, leave out "Indian subjects of His Majesty," and insert "British subjects."
    In line 16, leave out "Subjects of His Majesty," and insert "British subjects."—[Sir S. Hoare.]
    5.8 p.m.
    Mr. MOLSON: I beg to move, in page 71, line 29, at the end, to insert:
    "(2) If after the establishment of the Federation a convention is made between His Majesty's Government in the United Kingdom and the Federal Government providing for the admission into India of the products of the United Kingdom on terms, in the opinion of His Majesty, not less favourable to the United Kingdom than those provided for in paragraph (f) of sub-section (1) of section twelve of this Act, His Majesty may, if he is satisfied that all necessary legislation has been enacted both in the United Kingdom and in India for the purpose of giving effect to the convention, by Order in Council declare that the purposes of those sections are to such extent as may be specified in

    2121
    the Order, sufficiently fulfilled by that Order and legislation, and while any such Order is in force the operation of paragraph (f) of sub-section (1) of section twelve shall be suspended."
    The purpose of this Clause is to provide that if a satisfactory commercial convention can be entered into, between this Government and the future Government of India, these special safeguards may be suspended by Order in Council. The history of this problem is that at the First Round Table Conference it was agreed by all parties that the best way of safeguarding the interests of British commerce in India was by the negotiation of a commercial convention. At the Second Round Table Conference His Majesty's Government, who had accepted it at the First Round Table Conference, came to the conclusion that it would not be possible immediately to effect such a commercial convention, the reason given being that they did not feel it would be proper for them to negotiate a convention with the existing Government of India, which might be regarded as being under the influence of the Secretary of State, for the purpose of binding the hands of a future responsible Government. They have followed this line consistently. For example, in the case of the Ottawa Agreements, when they faced the indignation of the Liberal party in this House, they entered into agreements lasting five years. In the case of India only it was limited to six months. The Joint Select Committee very ingeniously has combined the advantages of the Statutory safeguards and also of the convention. If at some subsequent time it is possible for a convention, which will guarantee to European British subjects in India treatment as favourable as that accorded to Indians, to be negotiated, it will be possible for His Majesty to suspend these statutory safeguards. It is very much the hope of the European community that after the coming into operation of this new Constitution a convention of that kind will be negotiated. That is being provided for in this Bill in order to obtain protection for British commerce established in India.
    The purpose of my Amendment is to provide that the same convention may also provide for favourable treatment of British exports to India, and that, if that convention provides the same kind of safeguards for British trade with
    2122
    India, then in that case the special responsibility of the Viceroy to see that no penal measures are taken against British exports should be suspended in the same way. The Ottawa Agreements have already had an extraordinarily beneficial effect, partly on account of the preferences given, and partly on account of the better general feeling and good will shown to British trade by India. Whereas in the year before the Ottawa Agreements came into operation, our share of India's trade was 35.5 per cent., in the first year that the Ottawa Agreements were in operation it rose to 37 per cent., in 1934 to 40.7 per cent., and in the 10 months up to 31st January last to 41.3 per cent.
    I would urge on the Secretary of State that it would be very much valued in India if a provision of this kind were included. He has mentioned on several occasions that India attaches very great importance to status. I feel that if there were a procedure by which there might be friendly negotiation on equal terms between India and ourselves, it would be a very great inducement to India to come to a satisfactory trading agreement with us in order to obtain the suspension of the statutory safeguards which some Indians are inclined to regard as derogatory. May I remind hon. Members of the minute of dissent of the extreme Nationalist members of the Indian Fiscal Commission which reported in 1922? There, dealing with the matter of Imperial preference, they state that they were strongly opposed to any kind of Imperial preference until such time as India had a responsible Government, and then they said, "We are in favour of the principle of Imperial preference on the distinct condition that India should in this matter be put on the same footing of freedom as is enjoyed by the self-governing Dominions, and that the non-official members of the Legislative Assembly should be given power by legislation or other equally effective means to initiate, grant, vary and withdraw preference as may be necessary in the interest of India in all its aspects."
    5.15 p.m.
    Sir S. HOARE: I approach my hon. Friend's proposal with a great deal of sympathy. I think we should all like to see a voluntary convention take the place

    2123
    of the statutory enactments. In the case of traders and companies, as the Committee has observed, we do make in this Clause the possibility of the alternative convention taking the place of the statutory enactments. My hon. Friend asked the Committee to apply that procedure to tariffs. I have looked into his proposal with sympathy and a good deal of care, but I find that there are drafting difficulties in the way of carrying it into effect. His proposal would mean in actual practice that, if a convention were entered into, the Governor-General's special responsibility preventing penal treatment of British trade would be abrogated for the period of the convention. I am told by the draftsmen that that abrogation might go too far, and, in any case, I doubt whether, in any question which raises issues of such importance the House would be prepared to abrogate even for a period so vital a safeguard. My advice to the Committee, therefore, would be to proceed, not by way of such an Amendment as my hon. Friend proposes, but rather by an alteration in the Instrument of Instructions to the Governor-General in the event of a convention of this kind being agreed between India and the British Government. I think that that is really the method to pursue. It would carry out what my hon. Friend has in mind and would avoid the danger which is in the minds of some of my hon. Friends lest we should abrogate a very important safeguard and go further than we wish.
    5.18 p.m.
    Duchess of ATHOLL: I am relieved to hear the attitude which my right hon. Friend takes to this Amendment, because I think that the speech of my hon. Friend who moved it was unduly optimistic. I do not think it faced up to the realities of the position. For instance, he quoted a report of 1922 of members of a fiscal board who at that period said they favoured Imperial preference. That report was made in 1922 which is a long time ago in the history of modern India, and we know that a great deal of water has flowed under the bridge in the Indian Legislature in regard to increases in. tariffs since that date. My hon. Friend also spoke of the Ottawa Agreements and of the benefits they have brought to India. Those benefits were undoubted, but has my hon. Friend read
    2124
    a report made by a European member of the last Assembly, Mr. James, to the Madras planters whom he represented in the Assembly? A report was made last summer to a committee of the Indian Assembly on the results of the first year of Imperial preference. If my hon. Friend has not read Mr. James's report, I recommend it to him. It is important that he and other Members of the Committee should know that Mr. James, who was one of the European business men in India who came before the Joint Select Committee and gave general approval to these proposals, reported on the extreme hostility that members of the committee of the Indian Assembly had shown last summer to the results of Imperial preference.
    The substance of the report was that the benefits of Imperial preference had been undoubted, but that the hostility shown was such that nothing could convince the members that it was a thing that should be allowed to continue; if the benefits had come from any other country than Britain they would have been recognised and accepted. I would draw the attention of the Committee and of my hon. Friend to the fact that the committee to which Mr. James reported was a committee of the late Assembly, in which the Congress party was not represented, and that therefore it included on the whole much more moderate elements than at present when the Assembly is dominated by the Congress party, whose members were returned on a policy of definite hostility to all forms of Imperial preference. What good is it for my hon. Friend to speak as if the benefits of Imperial preference were so general that everybody recognised them and that the Federal Assembly in future would be glad to continue that line of policy? It entirely depends on the extent to which the Congress party continues to dominate Indian politics and the extent to which it is faithful to its policy of extreme hostility to Imperial preference.
    The CHAIRMAN: I am afraid I let the hon. Member for Doncaster (Mr. Mol-son) go a little wide of the mark, and I must repent of my sins and treat other Members more strictly.
    Duchess of ATHOLL: I was only trying to Correct an impression which my hon. Friend gave to the House with regard to

    2125
    Imperial preference in India. My hon. Friend said he hoped to get an agreement so good that the Governor-General's safeguard would not be necessary. That, of course, was the purpose of his Amendment. If Indian politicians were inclined to give an agreement so good that it would be possible to dispense with that safeguard, I wonder it did not occur to any Member of the present Assembly that they might secure what they wanted, by giving an agreement very much better than the one decided on in January. It is because I wish that it may be possible to get much better conditions in future that I deprecate the hon. Member giving such an optimistic view of things to the Committee, and one that does not seem to me to take account of what has actually occurred. I am relieved to know that my right hon. Friend does not see his way to accept the Amendment, for I am sure that my hon. Friends would view with great anxiety any proposal for abrogating the safeguard contained in Clause 12.
    Mr. MOLSON: In view of my right hon. Friend's reply, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    5.24 p.m.
    Major-General Sir ALFRED KNOX: Before the Committee passes this Clause into law, we should have some explanation from the Secretary of State on one or two points. I should like to ask whether there is any constitutional precedent for a Clause of this kind. It seems to us that it puts it into the power of any Government in future to wipe away at one stroke all the safeguards which we have been discussing on the previous Clauses by the very summary method of an Order in Council. It is true that under Clause 286 an Order in Council has to be passed after a Prayer in this House, but that is not, in our opinion, sufficient safeguard. If this Clause is passed as it stands, it will put it into the power of any future Government to be able to cut away all the safeguards which some of us have been at such pains to get placed in the previous Clauses.
    5.25 p.m.
    Sir S. HOARE: I do not think the hon. and gallant Member need have these
    2126
    fears. The proposal pre-supposes a convention that carries out in the spirit and the letter the provisions which we have been discussing. The Government contemplate that only a convention fully carrying out those safeguards could be regarded as being in substitution for a statutory enactment. The Joint Select Committee came to the view that it was wise to make the alternative of a convention of this kind, for this reason. There was an opinion more than once expressed from the benches of the Indian delegates that, supposing these provisions had been carried out by agreement, they would receive more assent in India than would be the case if there were simply the sanction of a Parliamentary enactment. It was to meet that view that this alternative proposal was made. There was never for us any suggesion of the alternative falling short in any way of the actual statutory provisions. Moreover, as the hon. and gallant Member has himself observed, there will be the safeguard of Parliamentary sanction, namely, a resolution of both Houses. I should have thought that, with that sanction and with what is expressly set out in the Bill, namely, that the convention must carry out the safeguards set out in the previous provisions, the position was quite satisfactory.
    5.27 p.m.
    Duchess of ATHOLL: I am rather puzzled about this Clause, because it provides that the convention must give similarity of treatment as between British and Indian companies and persons. The previous Clause, in Subsection (2), does not give similarity of treatment. Are we to understand, therefore, that the convention which would supersede the previous provisions is something that would be more favourable to British companies in future than the provisions of the previous Clause?
    Sir S. HOARE: The idea would be that the convention should be a substitute for the provisions of the previous Clause—certainly not falling short. If it went further than they went, so much the better, but Parliament would not be asked to accept a convention that fell short of this Clause.
    Sir A. KNOX: It depends on Parliament and the Government at the time.
    Sir S. HOARE: That always happens with everything.
    Duchess of ATHOLL: Does my right hon. Friend think the words "similarity of treatment" are appropriate words to describe the words of the previous Clause?
    Sir S. HOARE: Yes, I do.

    CLAUSE 118.—(Professional qualifications in general.)
    5.29 p.m.
    Mr. MOLSON: I beg to move, in page 71, line 35, to leave out from "prescribe" to the end of the Clause, and to add:
    "conditions as to professional or technical qualifications shall have effect so as to preclude any person who, immediately before the coming into operation of any conditions so prescribed, was lawfully practising any profession, carrying on any business, or holding any office in British India, from continuing to practise that profession, carry on that business, or hold that office, or from doing anything in the course of that profession or business, or in the discharge of the duties of that office which he could lawfully have done if those conditions had not come into operation.
    (2) No Bill or amendment which prescribes, or empowers any authority to prescribe, the professional or technical qualifications which are to be requisite for any purpose in British India or which imposes, or empowers any authority to impose, by reference to any professional or technical qualification, any liability, restriction, or condition in regard to the practising of any profession, the carrying on of any business, or the holding of any office in British India, shall be introduced or moved in either Chamber of the Federal Legislature without the previous sanction of the Governor-General in his discretion, or in a Chamber of a Provincial Legislature without the previous sanction of the Governor in his discretion.
    (3) No ordinance, order, bye-law, rule, or regulation made under the provisions of any Federal or Provincial Law or under any law in force when Part III. of this Act comes into operation, which prescribes the professional or technical qualifications which are to be requisite for any purpose in British India, or imposes by reference to any professional or technical qualification any liability, restriction, or condition in regard to the practising of any profession. the carrying on of any business or the holding of any office in British India, shall come into operation until the Governor-General or the Governor, as the case may be, shall, in the exercise of his individual judgment, have signified his approval thereof."
    This Clause is intended to provide protection for persona, whether Indian or British, who are possessed of adequate
    2128
    qualifications to practise a profession in India. The Clause in the Bill gives unduly wide protection to those who are practising a profession in British India, or performing any functions in British India, and no protection is given to those who may be going to engage in a profession between the time of the passing of the Bill and the time when some professional qualifications are prescribed under an Act of an Indian Legislature. This Amendment seeks to do three things. In the first place, it seeks to restrict the protection to what I may call vested interests by defining more precisely those whom it is intended to protect. Under the words in the Bill—"holding any office or performing any functions in British India"—
    it is probable that even a headman of a village would be included, and I do not think that is the intention of the Government. Secondly, the Amendment extends protection to those who begin to engage in a profession during the time that will elapse between the passing of this Bill and the passing of an Act of the Indian Legislature prescribing these qualifications. Thirdly, my Amendment seeks to make the previous sanction of the Governor necessary before any such new qualifications take effect. This is obviously the part of the Amendment which the Committee will expect me to justify. The European community made representations to the Joint Select Committee that some steps should be taken to prevent Indian Legislatures from prescribing, directly or indirectly, qualifications for the practising of professions in India which would have the effect of preventing Indians or Englishmen holding high British qualifications from practising professionally.
    Nothing in this Amendment is doing anything to force European professional men upon India, it does not endeavour to compel India to employ people with European qualifications, but only to prevent people with European qualifications from being disqualified from practising professionally in India. This claim can be justified both on the grounds of the great services rendered to India in the past by European engineers, veterinary surgeons and others, who have gone out there and both by their own work and by their teaching have done so much to raise the standard of the

    2129
    professions in India. Further, the claim is made because the Committee have already passed a number of Clauses the purpose of which is to protect the European commercial community in India, and it is obviously necessary that they should be able to employ, shall I say, accountants who hold the qualifications of the well-known professional bodies in this country to audit their accounts, and that a company working a coal mine in Behar should be able to employ a mine manager with high British qualifications.
    We ask, therefore, that any Bill which either prescribes directly the qualifications, or which sets up some professional body with power to prescribe qualifications, shall not be introduced without the prior assent of the Governor or Governor-General. We also ask that it-shall be made abundantly clear in the Instrument of Instructions that any such Bill shall be reserved for the signification of His Majesty's pleasure. At the same time this protection would, in our view, be quite useless if it did not extend to the making of Rules by Indian bodies like the General Medical Council or the Dental Board in this country. It would be possible to have a Bill, quite innocuous on the face of it, which might receive the Governor's prior assent and then be reserved and obtain His Majesty's approval, and yet for the professional boards set up to issue subsequently rules which would, in effect, be discriminatory and prevent people with European qualifications from practising in India. Therefore, we ask that any rules of that kind shall not come into effect unless they have received the approval of the Governor or the Governor-General as the case may be. That should apply not only in the case of all Federal and Provincial Acts passed in future, but to the case of barristers and solicitors, where there is at present rule-making power prescribing the qualifications of those who may practise. We ask that this Amendment may be accepted, because it seems to be the least condition which it is essential that Parliament should lay down in order that, in future, there may be adequate protection against a discrimination which, we believe, would not only be harmful to the community in India but also postpone the day when Indian qualifications will in all respects be equal to those in Europe.
    5.37 p.m.
    Major HILLS: In supporting the-Amendment, I wish to call the attention of my right hon. and learned Friend to the position of English and Indian solicitors, which affords a valuable example of reciprocity and has worked very well for many years. A long time ago Rules were made by the High Courts of Madras, Bombay and Bengal, under Letters Patent, admitting fully qualified English solicitors to practise there. All they had to do was to produce a certificate of their admission in England, to pay a small fee, and to produce a satisfactory testimonial as to character. Thirty-five years ago we extended the same privileges to Indian solicitors from Madras, Bombay or Bengal. Under the Colonial Solicitors' Act, those privileges could be granted by Order-in-Council, and Orders-in-Council relating to Madras, Bombay and Bengal were made in 1905. In this matter Indians here are in exactly the same position as Englishmen in those three Provinces. I agree that this concession has been more advantageous to the English solicitor than to the Indian, because very few Indians have come here to practise, but the door has been opened and is open still, and it may be that in future more Indian solicitors, fully qualified in India, will practise here. I believe that up to the present the number who have come is only three.
    Clause 118 is fully protective of the rights of English lawyers practising in India as far as those who are there now are concerned, but, as my hon. Friend the Member for Doncaster (Mr. Molson), has pointed out, it does not protect those who may go to India. I am told that there are many highly-reputable firms who have practised for many years in India and that they have a large clientèle, including a large number of Indians as well as Europeans. They may want to recruit fresh members from England, but unless we pass some protection of this sort it may not be possible for an English-qualified solicitor to be allowed to practise in Madras, Bombay or Bengal without passing examinations or being subject to restrictions which might make his position impossible. If that were so, old-established firms would die out, they must die, because they cannot get recruits, and that would be a very bad thing for India, a very bad thing for the English living in India, and also a very bad thing

    2131
    for the Indians, who do rely very much on English firms.
    There is a further point on which I particularly wish to ask the opinion of my right hon. and learned Friend. The admission of English solicitors in India depends on Letters Patent issued by the three High Courts of Bombay, Madras or Bengal. I do not know how far Subsection (3) of the Amendment of my hon. Friend would make the consent of the Governor-General necessary before any restrictions were imposed. The words of that Sub-section are:
    "No ordinance, order, bylaw, rule or regulation made under the provisions of any Federal or Provincial Law."
    I am not at all sure that rules made by a court under Letters Patent are made under the provisions of any Federal or Provincial law. I feel that I am in default over this, because I ought to have brought up an Amendment to deal with that specific point, which is a very important one; but I must plead in extenuation that the facts of the case were only put into my hand at half-past two this afternoon, and it was impossible for me to frame an Amendment in the interval. But I do plead most earnestly with my right hon. and learned Friend to consider this point, and, if necessary, to introduce words on the Report stage. I would only say in conclusion, that in the past we have for many years maintained an open door for Indians qualified in India, who can come here and be admitted to practise on signing a very simple form—it is on the back of the Order-in-Council—and paying a small fee. No term of service is exacted from them, and they are not asked to pass any examination. They come here on the same terms as Englishmen go out to India. All I ask is that the free entrance of Englishmen into India should be maintained.
    5.46 p.m.
    Sir EDWARD GRIGG: The hon. Member who moved the Amendment stated the broad case for it. The right hon. and gallant Member for Ripon (Major Hills) has based a special argument on it, on behalf of the legal profession. I do not wish to waste the time of the Committee in following what they have said, but I would express my strong sympathy with them. I rise to call attention to another body of professional men, the chartered
    2132
    accountants, whose profession is likely to be of great importance to business in India. The chartered accountants of the country have a reputation which is absolutely unexceptionable all over the world; they are accepted everywhere. It is of extreme importance, from the business point of view, that British standards of chartered accountancy should be maintained in India. Special attention is given in the Bill to the claims of the medical profession. The Clause which follows the one which we are discussing, makes all sorts of special provisions and reserves rights to medical men in India with English diplomas and qualifications. I imagine the argument to be, although I am not familiar with the profession myself, that the standards which are to be set up in regard to medical practice and qualification in India shall, so far as possible, be as good as our own. That is the argument for seeing that people with our own diplomas shall not be excluded from India or disqualified for that reason. I hope that my right hon. Friend when he comes to speak upon the Amendment will explain why it is that such special attention should be given to the medical profession and such small attention paid to other professions, which have their importance, as I am sure my right hon. Friend will agree.
    5.49 p.m.
    Mr. PEAT: I support the Amendment almost on personal grounds, and also because I feel that discrimination against professional men is bad in every sense of the word. Probably I am the only Member of this Committee who has ever spent a night on Ellis Island. I did so because of the discrimination against British chartered accountants in the United States. Owing to some slight misunderstanding I found myself on Ellis Island for one unforgettable night in my life.
    On broader grounds, I feel that discrimination against professional men is thoroughly bad from the point of view of the country which is seeking to keep them out, because efficiency should not be barred, and it would be an advantage to such a country to have the services of efficient professional men. The hon. Member for Altrincham (Sir E. Grigg) mentioned chartered accountants. Chartered accountants are not the only branch of accountancy who have been recognised in India. I am a chartered accountant, but

    2133
    in all fairness I should bring to the attention of the Committee the fact that there are five other associations or institutes which have been recognised in the Indian Companies Act, 1913. They are the Institute of Chartered Accountants, the Society of Incorporated Accountants, the Society of Accountants in Edinburgh, the Institute of Accountants and Actuaries in Glasgow, the Society of Accountants in Aberdeen and the Institute of Chartered Accountants in Ireland. Those bodies have been recognised, and I feel that it would be a great pity, from the point of view of industry generally, if any member of those bodies at any time in the future were not allowed to practise in India. We have a trade with India worth from £400,000,000 to £500,000,000 in estimated capital value.
    Other Clauses in the Bill indicate a desire that the close industrial relationships between this country and India should continue. As long as those relationships continue, there should be perfectly free access to professional men. We do not want to stop Indians from coming into this country, and as long as they give their proper qualifications they are at the present moment in a position to practise as accountants in this country. Therefore, there is good reason for us to ask for equal treatment with that which, I understand, is being given to medical men in Clause 119. We accountants like to think, in our more exalted moments, that we act as medical men to industrial concerns, and we feel that we should like the same treatment as that great profession.
    5.52 p.m.
    Sir JOHN SANDEMAN ALLEN: I very strongly support the Amendment which has been moved so well by the hon. Member for Doncaster (Mr. Molson) and spoken to by several hon. Members. I would emphasise one point. In supporting the proposal that consideration be given to professional men, I am speaking partly from the business point of view. I confirm what has already been said about the enormous interests which this country has in Indian trade, amounting to between £400,000,000 and £500,000,000 a year. I, who am not an accountant, can speak with a knowledge of what is felt by the Associated Chambers of Commerce, and business men generally. I feel most strongly that it
    2134
    is most important that we should guard the position of these professional men upon whom so much depends in our business relations with India. If Indian businesses are not properly looked after by those who are expert out there, there will always be the danger of difficult questions arising. It is for that reason, not only in my own name, but speaking, as I can do, in the name of the business community of this country, that I urge fair consideration, which I know my right hon. Friend will give, for the Amendment which has been so well proposed.
    5.54 p.m.
    Mr. MORGAN JONES: I do not see anywhere in the Bill a definition of the word "profession." I suppose we may take it that the interpretation will be that which we put upon the word in this country. There are people who would like to have their calling named a profession but who are not, in ordinary parlance, entitled to be called professional men. I am not anxious to enter into a controversy in regard to the main principle behind the Clause, but I would like the Attorney-General to tell me whether my anxiety on one point is well or ill-founded. As I understand it, the effect of the Amendment will be that no new conditions as to professional or technical qualifications shall be proposed without the prior consent of the Governor-General. I am thinking of a calling in relation to which we legislated a few years ago in this country, that of dentistry. The dentist is not one of the categories of medical service mentioned in the next Clause. Does this Amendment mean that in regard to people whom we call quacks in this country and who are in the habit of practising dentistry, as used to be the case in this country before we altered the law by introducing a technical or professional qualification, the central Parliament could not do anything without first having the consent of the Governor-General to the introduction of a Bill to deal with the matter?
    The other point I am not sure is a good one, but I submit it. This is a very widely drafted Amendment. It says "any business." There are all sorts of undesirable businesses. Does this Amendment mean that those who follow them are entitled to call them businesses, although in fact they are

    2135
    undesirable? Do I understand that the effect of this Amendment would be that the Indian Assembly would not be entitled to legislate in order to remove an undesirable business without first having the prior consent of the Governor-General? There is, for example, the trade in poisonous drugs. [An HON. MEMBER: "It is a profession."] No, it is a business. In a case like that, would the Central Legislature be precluded from legislating in connection with it without first having the consent of the Governor-General? We should not, in pursuing a quite laudable ambition, circumscribe too much the powers of the Central Parliament.
    Major HILLS: I suggest that the hon. Member is going too far. The Clause is limited to
    "profession, or from being appointed to or holding any office or performing any functions."
    I do not think that the seller of poisonous drugs is a professional man, nor is he being appointed to any office within the meaning of the Clause.
    Mr. JONES: May I quote the passage to which I was referring and upon which I based my remarks? It is in the fourth line of the Amendment and says:
    "was lawfully practising any profession, carrying on any business."
    That is the business.
    Major HILLS: I beg the hon. Member's pardon.
    Mr. JONES: I have no objection to the principle of the Amendment as long as it is understood that it is based purely and simply upon the principle of reciprocity.
    5.59 p.m.
    The ATTORNEY-GENERAL: My hon. Friend who moved this Amendment spoke of the effect of the Sub-sections into which the Amendment is divided-He pointed out to the Committee that the intention and effect of the first Subsection is to prevent a Federal or Provincial law, which prescribes conditions as to professional or technical qualifications, from interfering with what he described as the vested interests of anybody practising his profession in India at the present time. So far as that Sub-
    2136
    section is concerned, it is in substance, though drafted in a rather different way, the proposal which is in the Bill. It is slightly tightening it up. The Sub-section in my hon. Friend's Amendment makes it quite plain that the subject matter which is being dealt with is only professional or technical qualifications. That is not quite clear from the Clause as it stands in the Bill, and, therefore the first Sub-section of the Amendment tightens up, if anything, the provisions contained in the Bill, and states them in a slightly different way.
    The second Sub-section of the Amendment is an addition to anything contained in the Bill. It provides that no Bill or Amendment which prescribes professional or technical qualifications, or empowers any authority to prescribe such qualifications, shall be moved or discussed without the previous sanction of the Governor-General acting in his discretion, or of the Governor in the case of a Province. This is an addition to the Bill, and I think there is a general feeling in the Committee, subject to the point raised by the hon. Gentleman opposite, that there is no objection to it. At any rate, the Government are prepared to accept the first Sub-section, and this second Sub-section also. I will deal in a moment with the point raised by the hon. Gentleman opposite.
    The third Sub-section goes a good deal further, because it says that no rule or regulation or order made by an authority acting under statutory powers is to be valid until it has had the approval of the Governor-General or the Governor, as the case may be. The effect of that provision would be to bring under the control to that extent of the Governor-General or the Governor every single order or regulation or rule that might be made by the body which has control in any particular profession. It can be illustrated by my own profession, that of the Bar. Supposing that there is a Bar Council, and it is charged under statutory authority with the duty of regulating the discipline of the Bar, or the conditions under which people may be admitted to practise as advocates, its regulations would have to come under the cognisance of the Governor-General and be approved by him.

    2137
    It is obviously convenient that professional bodies should be under some committee or council charged with that particular duty in relation to their profession. To take a calling such as that of practice under the Midwives Act, if the third Sub-section of my hon. Friend's Amendment were accepted it would require that every rule or regulation made in connection with that calling should come under the sanction of the Governor-General. Anybody can see that that is a very far-reaching proposal. I think that, broadly speaking, most of us would say that a profession ought to be given, subject to certain limits, the power of regulating the affairs of the persons who practise that profession. Whether they be accountants, or dentists, or lawyers, they should each, subject no doubt in case of necessity to certain statutory provisions setting up the proper controlling authority, manage their own affairs.
    In the case of the professions which have been mentioned this afternoon, there is such a statutory authority, and the internal affairs of those professions are regulated under that authority. Again taking the Bar as an illustration, the Indian Bar Councils Act provides that the Bar Council set up by the Act shall, subject to rules approved by the High Court, regulate the qualifications of persons to be admitted to practise as attorneys or advocates. If this third Subsection of the Amendment were accepted as it is, every single rule or regulation made by the Bar Council acting under that Statute would have to come before the Governor-General. So far as persons who desire to be admitted to practise as solicitors are concerned, that matter, as my right hon. and gallant Friend the Member for Ripon (Major Hills) pointed out, is dealt with by the High Court itself, and the chartered accountants, as was pointed out by my hon. Friend the Member for Darlington (Mr. Peat), are dealt with in accordance with powers given by the Indian Companies Acts to the Governor-General in Council to approve certain representative groups of accountants as those who are entitled to practise that profession. I gather that my hon. Friend the Member for Darlington recognises that the degree of control exercised under the Indian Companies Act is sufficient to give the profession in India the protection that it requires, and
    2138
    then the different bodies that have been chosen by the Governor-General will regulate their own affairs. I should think my hon. Friend would probably demur to any proposal that every little rule or regulation, or amendment of a rule or regulation, made by those different bodies in the case of his own profession of chartered accountant, should have to be submitted for approval to the Governor-General.
    We are not concerned with the medical profession. I do not know what the position may be with regard to the dentists, or the engineers, or many other professions that could be mentioned, but it is obvious that the medical profession have one great advantage over almost every other profession, except possibly that of the Bar, in that they are better organised. They have one general body that speaks for them in this country, and it is not difficult to arrange for reciprocity in the recognition of degrees and diplomas obtained in the two countries concerned; and that position is preserved by a Clause to which we shall come later.
    I have pointed out the difficulties of dealing with this matter in the Way proposed in the third Sub-section of the Amendment, but, on the other hand, the Government do recognise that there should be a certain freedom, on the part of the companies or firms who carry on businesses or professions in India, to choose their technical or professional advisers. It would certainly not be convenient, and I imagine it would not be desired even by Indian firms, that they should be precluded from choosing professional men in whom they have confidence, whether British or Indian, to act as their advisers. I think I am right in saying—my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) will check me of I am wrong—that there are many Indian business firms and companies that do prefer to place their confidence in a professional man who is a British subject domiciled in this country, but carrying on his profession in India. Therefore, whether one looks at the matter from the point of view of the professional man who wants to preserve his existing right to practise his profession, or from the point of view of the British or Indian firm who want to have a free choice of their technical and professional

    2139
    advisers, it seems desirable to take care that such freedom is preserved.
    I am not satisfied that the Sub-section proposed by my hon. Friend is anything like the right sort of proposal. For the reasons I have mentioned, it seems to me to put upon the Governor something with which we think he ought not to be charged. Moreover, it puts the central professional bodies too much under what we should call the control of the Governor, and I believe that none of the professions would really desire that. If we may look at this matter with the most anxious care, to discover a proposal which will preserve the freedom which probably everybody in India desires as to the choice of the best possible adviser, whether he be a British subject domiciled in India or in this country, we will do our best to discover suitable words. Therefore, I propose, on behalf of the Government, to accept the first two parts of the Amendment, but not the third. We will look into the third part, and try to take care that some form of Clause is devised to effect the object I have mentioned. I do not think there can be any idea that the Government would be in a position to guarantee for ever, regardless of qualifications which may properly be required for carrying on a profession in India, a right to practise that profession.
    For instance, I can conceive, even in my own profession, that it would be perfectly proper to require that a member of the Bar or a solicitor in India should have some working acquaintance with what may very likely become a much more complicated system of law, namely, Indian law, and I believe I am right in saying that even at the present time certain requirements of that sort are imposed upon members of the Bar who come from Ireland. I may be wrong, but at any rate it does not seem to be unreasonable that there should be that right in the future. I cannot demand that a man acquainted with our English law should at all times be qualified as of right to practise the profession of a barrister in India, it may be that in the future it will be right to impose some additional qualifications upon him. But, although I recognise that, it does not interfere with the desire of the Government to maintain that freedom of choice which we think is essential to the efficient carrying on of business in India, and
    2140
    essential to the freedom which I am sure everyone would desire from both points of view.
    With regard to the question asked by the hon. Member for Caerphilly (Mr. Morgan Jones), at the moment I am not quite clear that I can answer it definitely and conclusively, but I rather think that the hon. Member's fears are unfounded. He asks: Will the form of the first two Sub-sections of the Amendment prevent the Indian Legislature from legislating so as to stop a quack from practising what he would call his profession? I think the Sub-sections as drafted would not in the least prevent the Legislature, if a man is going to carry on some calling which he calls a profession, but which people who are really in the profession do not recognise as their profession, from legislating in that matter. Taking the case of a man who goes about as a quack selling some pills which he has himself devised, and calling himself a doctor, there is nothing to prevent the Legislature from saying that a man who does not possess the qualifications which the real medical profession requires should be prevented from carrying on that calling, at any rate unless he makes it quite plain that he is a vendor of pills and not a medical man.
    Mr. MORGAN JONES: I am much obliged to the learned Attorney-General, but I am still not convinced. I gave an illustration with regard to dentistry. In this country some years ago anyone who cared to do so could practise dentistry. We brought that to an end by imposing a technical or professional qualification, did we not? How can you bring that to an end in India without having some conditions as to professional or technical qualifications? I am still not clear about the matter, and I hope that I am not being unduly critical.
    The ATTORNEY-GENERAL: I agree with the hon. Gentleman that the point is an important one, but I should have thought that it could be met by the provisions of Sub-section (2), which do not raise an absolute bar against an act prescribing professional or technical qualifications, but simply say that such a Bill should not be moved without the sanction of the Governor-General, and I should have thought that this sanction would clearly be given in such a case as that which the hon. Gentleman has

    2141
    raised. Will he allow me to look further into the drafting of this Clause? I propose on behalf of the Government that the Committee should accept the Amendment, but I will certainly look at the words a little more under a microscope to see whether it is quite clear that there should be no interference with the power of the Legislature to say that people shall not practise a profession, appropriately so-called, unless they really have professional qualifications. These Clauses are not intended to interfere with that power of the Indian Legislatures.
    The hon. Gentleman asked me one other question as to the meaning of the word "profession." It is a word which is often used in our British Acts of Parliament as explaining itself, and it has often been treated as a question of fact. For instance, under the Income Tax Acts, whether a man is carrying on a profession or not, it is used in a way that we ought to understand, and do understand, broadly speaking, but if it is necessary to put in words defining a profession in any way we will consider that point also. The upshot of the principle of what I have tried to lay before the Committee is that, if my hon. Friend will move his Amendment, with the consent of the Chairman and the Committee in the form of the first two Sub-sections, the Government will be prepared to accept those Sub-sections, keeping open the objects which are aimed at and which underlie the third Sub-section for further consideration to see whether or not we can carry out his desires.
    The CHAIRMAN: We ought to be very careful to get this matter in right order. The hon. Member for Doncaster (Mr. Molson) has already proposed his whole Amendment, although the only question actually put to the Committee was, "That the words proposed to be left out stand part of the Clause." The most convenient course will probably be, after we have got rid of the words proposed to be left out, for the learned Attorney-General then to move, as an Amendment to the Amendment, to leave out the third Sub-section.
    6.19 p.m.
    Sir J. WARDLAW-MILNE: I would like to say how grateful I feel towards my right hon. and learned Friend for the attitude he has taken in this matter, and at the same time to say how grateful we
    2142
    are to the officials of the Secretary of State who have taken a great deal of trouble and given a lot of time to the consideration of this very important question. I do not in the least wish to press the Government to go further than they have gone at the moment, except that I want to get one point clear. Do I understand from what my right hon. and learned Friend has said that omitting the third Sub-section from the Amendment of my hon. Friend means that we can look to the Government to bring forward some suggestion or proposal before the Report stage and at the Report stage to deal with the point raised in that particular part of the Amendment? If that be the case, I shall be perfectly satisfied, but I want to impress; on the Government the very great importance of this part of the Amendment of my hon. Friend. It would be useless in our view to pass legislation which would ensure that an Act required the consent of the Governor or Governor-General, if it were possible to pass an Act which empowered the making of rules which did not require such consent or the consent of anybody at all. That is the difficulty we are in. I am in agreement with the undesirability of professional bodies being too much under the rule of government, but it is a fact that, except in the cases which he gave, those of the Bar and of medicine, there are no really corresponding bodies in India at the present time in other professions. Everybody hopes that they will grow up, and if they do, so much the better. But we have to legislate for the fact that they do not exist at the present time, and therefore I impress on my right hon. and learned Friend the necessity for the third Sub-section of this Amendment. I assume that we shall have a revised proposal before the Report stage?
    The ATTORNEY-GENERAL: My hon. Friend may certainly assume that it is the definite intention of the Government to bring forward a revised proposal to try to meet the point of view of my hon. Friends.
    6.22 p.m.
    Major HILLS: Will my right hon. and learned Friend give special consideration to solicitors? I believe that the Bar and the legal profession are the only two professions mentioned which are reciprocal. Solicitors open their doors to Indians, and I believe the Bar does the

    2143
    same, and since the admission of English solicitors to India does not depend upon any Act of Parliament of either Federal or Provincial governments, can he devise something in Sub-section (3) to deal with the point, or will he, if I submit an Amendment to deal with the special case of solicitors, give the Amendment consideration?
    The ATTORNEY-GENERAL: I am afraid that I cannot undertake to give any special treatment to a particular profession. What I have said dealt with the subject as a whole, and I would only point out to my right hon. and gallant Friend that so far as solicitors are concerned, it is impossible to alter the conditions under which they are permitted to practise their profession without legislation. Sub-section (2), which it is proposed to accept, will require the sanction of the Governor-General for any legislation of the sort, and therefore I should have thought that their position is secured and enabled to be dealt with in the same way as other professions.
    Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.
    Amendment made to the proposed Amendment: In line 17, leave out Subsection (3).—[The Attorney-General.]
    Proposed words, as amended, there inserted.
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    6.25 p.m.
    Mr. LENNOX-BOYD: May I make a brief reference to a subject which has not received any attention in the earlier part of the discussion of the Clause? We on this bench fully accept the inevitable conclusion that business men in India in future will be entitled to prescribe the conditions under which their professions will be managed, and we believe that this Clause adequately meets the case of people who are in actual practice immediately before the passage of the Act, but we have received notifications, which, I believe, are quite genuine, from people who will not in all probability be in actual practice at the time of the passage of the Act, but who have been practising some profession in the previous days, and hope to be able to
    2144
    do so in future. Would it not be possible to introduce a form of words to meet the case of these people?
    The CHAIRMAN: I do not know whether the hon. Gentleman has been out of the House, but we have been discussing this matter for an hour, and have made an Amendment on this point.
    Mr. LENNOX-BOYD: I apologise very sincerely, I was unavoidably away, and unaware that the particular point had been raised.

    CLAUSE 119.—(Medical qualifications.)
    6.27 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 72, line 14, after the first "in," to insert "British."
    There are nine Amendments on the Order Paper to this Clause one of which is to insert words so that it shall read "British subjects domiciled in India" instead of "Indian subjects of His Majesty." The rest of the Amendments in this group are to insert, in several places, the word "British" before "India," because the arrangements dealt with concern only British India and not the India including the States.
    Sir FRANCIS FREMANTLE: Is there no arrangement by which later on this may be extended to Federal India, or are we for ever precluded from having any such arrangement in the Federal system?
    Sir S. HOARE: We must deal at present with British India. The whole basis of this Clause is reciprocity between the medical councils of Great Britain and of India. There is no medical council for the Indian States. There is, however, no reason in the future why the Indian States should not accede to this part of the Act when they so wish, but for the moment we deal only with the two medical councils.
    Sir F. FREMANTLE: That is what I wanted to know.
    Amendment agreed to.
    Two consequential Amendments made.
    Further Amendment made: In page 73, line 11, leave out "Indian subjects of His Majesty holding," and insert "British subjects domiciled in India who hold."
    Three consequential Amendments made.
    Further Amendment made: In page 73, line 33, leave out "Burman subjects of His Majesty," and insert "British subjects domiciled in Burma,"—[The Attorney-General.]
    Consequential Amendment made.
    Clause, as amended, ordered to stand part of the Bill.
    Clause 120 ordered to stand part of the Bill.

    CLAUSE 121.—(Savings and interpretation.)
    6.29 p.m.
    Sir J. WARDLAW-MILNE: I beg to move, in page 74, line 24, at the end, to insert:
    "(2) In this chapter 'taxation' includes all taxes, cesses, duties, rates, and other imports of whatsoever kind, and the word 'tax' shall be construed accordingly."
    This is really a question whether there should not be a definition of taxation in the interpretation Clause, and I suggest to my right hon. and learned Friend that it would be desirable to have a definition of the word to include the imposts mentioned in the Amendment. I do not think that the matter is covered anywhere else in the Bill, and I hope that my right hon. and learned Friend will accept the Amendment.
    6.30 p.m.
    Mr. BUTLER: I appreciate the object of my hon. Friend but we have consulted the draftsman and he considers that the words of the Amendment are unnecessary, because the word "taxation" as defined in the Clause does actually achieve the object which my hon. Friend has in view.
    Sir J. WARDLAW-MILNE: Is it defined in the Clause?
    Mr. BUTLER: We understand that the word "taxation" as set out in the Clause covers the sort of taxes, cesses, duties or rates that my hon. Friend has in mind, and it would therefore be unnecessary and would add nothing to the generality of the word itself if we put these words in the Bill. In view of that assurance I hope that the hon. Member will not think it necessary to press the Amendment and to add words which are regarded as being already covered by the generality of the meaning of the word "taxation."
    6.31 p.m.
    Sir J. WARDLAW-MILNE: I do not wish to press the Amendment if the
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    Under-Secretary is advised that the use of the word "taxation" is sufficient. I thought he said that the word was defined. If it is not defined in the Bill all I can say that in previous years there has been trouble on this very point, especially in India. However, I do not press the Amendment if he thinks that it is unnecessary, and I beg leave to withdraw it.
    Amendment, by leave, withdrawn.
    Clause ordered to stand part of the Bill.

    CLAUSE 122.—(General duty to secure respect for Federal laws.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    6.32 p.m.
    Mr. ANNESLEY SOMERVILLE: I am wondering if there is a difference of opinion in regard to any matter between the Federal Legislature and the Provincial Legislature, how far the Federal Legislature, under this declaratory Clause, can depend upon the Provincial Legislature carrying out the Federal law. Let me take as an example one of the subjects in the Concurrent List. Let me take a subject that would not be a serious subject but one which might give rise to a considerable difference of opinion. Mechanically propelled vehicles is one of the subjects in the Concurrent List. The Federal Legislature might enact a speed limit of 25 miles and the Provincial Legislature a speed limit of 35 miles, or vice versa. It would be very difficult for the Federal Legislature to obtain respect in the Provincial Legislature for the speed limit that they had enacted. The whole structure of the arrangement depends upon good will and I hope sincerely that we shall get that good will. It is quite clear to me that the whole system depends on good will.
    6.34 p.m.
    Sir S. HOARE: My hon. Friend is quite right. The structure of this Federation and, indeed, of every Federation in the world depends upon good will. Nowhere in the world that I know of is there any sanction under which the Federal Centre can compel the Unit to act against the will of the Unit, but we have to assume that the Units are going to attempt to carry out their duties

    2147
    under the Act, in good faith. We also have to remember that the Federal Government itself will be composed of representatives of the Units, and the Federal Legislature will be a Legislature elected so far as both its Chambers are concerned by the Provincial Councils and the Federated States. That being so, the Committee will see that there is the closest possible connection between the Units and the Centre and that in itself should make for co-operation and good will. My answer to my hon. Friend's question is the answer that he gave himself, namely, that the Federation must depend upon the good will and the cooperation of the Units. So far as the good will of the Units is concerned, we have done our best to ensure it by making the closest possible connection between the Legislatures and the Governments of the Units and the Legislatures and the Governments of the Federation.
    Mr. A. SOMERVILLE: I thank my right hon. Friend for what he has said, and although the members of the Federal Legislatures are to be elected by the Provincial Legislatures, still the majority of the Federal Legislature may be of a different complexion from the majority in the Provincial Legislatures and therefore difficulty might arise.
    6.36 p.m.
    Sir J. WARDLAW-MILNE: May I say that many weeks have seen spent over this subject, and I think it has been almost as much said that the Federal Centre would be run by the Provinces as it has been said that the Provinces would be entirely at the mercy of the Centre. I think there will be just as many who hold the one view as the other. Probably the truth lies half-way between them. Whether that be so or not, one thing is sure and that is that Indians are human beings like anyone else, and there will be fights between the Centre and the Provinces, as there are in America and everywhere else where there are similar Governments. I think that everything has been done to ensure that Provincial interests will be represented at the Centre.

    CLAUSE 123.—(Power of Federal Legislature to confer powers, etc., on Provinces and States in certain cases.)
    The ATTORNEY-GENERAL: I beg to move, in page 75, line 7, to leave out "Governor," and to insert "Government."
    This Amendment is to correct a mistake. As can be seen, it was Government and not Governor that was intended.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 124.—(Administration of Federal Acts in Indian States.)
    Amendments made: In page 75, line 33, leave out "entrusting to the Ruler or to his officers," and insert: "the exercise by the Ruler or his officers of."
    In line 36, leave out "but any such agreement," and insert:
    "(2) An agreement made under this section."
    In line 39, leave out "that law is properly," and insert:
    "the law to which the agreement relates is."
    In line 40, at end, add:
    "in accordance with the policy of the Federal Government and, if he is not so satisfied, the Governor-General, acting in his discretion, may issue such directions to the Ruler as he thinks fit."—[Sir S. Hoare.]
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    6.39 p.m.
    Mr. A. SOMERVILLE: This is one of the Clauses to which exception was taken by the Princes in their note to the Viceroy. I should like to know whether these Amendments are designed in any degree to meet the objections that were raised.
    Sir S. HOARE: A number of points raised by the Princes on Clause 124 were raised through misunderstandings, and it is a fact that the redrafting of the Clause, and it is nothing more than a redrafting, will go towards explaining some of the misunderstandings that had obviously arisen.

    CLAUSE 125.—(Control of Federation over Province in certain cases.)
    Amendment made: In page 76, line 6, after "appear" insert "to the Federal Government."—[Sir S. Hoare.]
    Clause, as amended, ordered to stand part of the Bill.
    Clause 126 ordered to stand part of the Bill.

    CLAUSE 127.—(Duty of Ruler of a State as respects Federal subjects.)
    Sir S. HOARE: I beg to move, in page 77, line 2, at the end, to insert:
    "so far as it is exercisable in the State."
    This is a drafting Amendment.
    Amendment agreed to.
    Earl WINTERTON: Is the next Amendment also drafting?
    Sir S. HOARE: Yes. I beg to move, in line 6, to leave out from beginning, to "the" in line 9.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 128.—(Broadcasting.)
    6.41 p.m.
    Sir S. HOARE: I beg to move, in page 77, line 13, to leave out Sub-sections (1) and (2), and to insert:
    "(1) The Federal Government shall not unreasonably refuse to entrust to the Government of any Province or the Ruler of any Federated State such functions with respect to broadcasting as may be necessary to enable that Government or Ruler—

    (a) to construct and use transmitters in the Province or State;

    (b) to regulate, and impose fees in respect of, the construction and use of transmitters and the use of receiving apparatus in the Province or State.

    Provided that nothing in this Sub-section shall be construed as requiring the Federal Government to entrust to any such Government or Ruler any control over the use of transmitters constructed or maintained by the Federal Government or by persons authorised by the Federal Government, or over the use of receiving apparatus by persons so authorised.
    (2) Any functions so entrusted to a Government or Ruler shall be exercised subject to such conditions as may be imposed by the Federal Government, including, notwithstanding anything in this Act, any conditions with respect to finance, but it shall not be lawful for the Federal Government so to impose any conditions regulating the matters broadcast by, or by authority of, the Government or Ruler."
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    This Amendment, although it looks a substantial one, is really very little more than a re-draft of the former provisions in the Bill. It deals with the very important question of broadcasting, and is the result of a great deal of consultation that we have had with the Government of India and the local governments of India and with the British Broadcasting Corporation in London. In a few sentences, let me say that the proposals we make are that broadcasting should be a Federal subject. I think everybody whom we have consulted has agreed that it should be a Federal subject and that wave lengths and so on should be under the control of the Federation, but obviously in India the Provinces must have considerable latitude as to their programmes. The suggestion was made to us that it would be possible to have a division between the kind of broadcasting that the Federal Government might undertake and the kind of broadcasting that the Federal units might undertake, but the further we went into an examination of that question the more impossible we found it to make any cut-and-dried provision of that kind. We therefore came to the conclusion that the arrangement should be, first, that the subject of broadcasting should be a Federal subject, that the bigger questions of policy should be controlled by the Federation, that the greatest possible latitude should be allowed to the Units as to their local programmes and that the Governor-General in his discretion should hold the balance between the two and ensure that the Federation was not withholding unreasonably licences and facilities from the Provinces or the Federal Units. That is the object of the redrafting. Substantially it is the same as the provision in the Bill, but in the redrafted form the position is made clearer.
    Amendment agreed to.
    Further Amendments made: In page 77, line 36, leave out from "whether," to "any" in line 38.
    In page 77, line 40, leave out "delegate powers," and insert "entrust functions."
    In page 77, line 41, leave out "or whether any transmitter is a short range transmitter."—[Sir S. Hoare.]
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    Earl WINTERTON: As I have taken considerable interest in the subject of broadcasting in India I should like to say one word on this Clause. The question has presented grave difficulties in the past and the Secretary of State, the Government of India and the various interests concerned are to be congratulated on having arrived at the wise decision enshrined in this Clause. There is no doubt that broadcasting has a great future, and it is extremely important from the point of any government in power in India, under whatever constitution it may operate, that there should be an opportunity of access to broadcasting throughout India. I congratulate the Secretary of State on what he has done.
    Sir S. HOARE: Thank you.

    CLAUSE 129.—(Complaints as to interference with water supplies.)
    6.48 p.m.
    Mr. RAIKES: I beg to move, in page 78, line 26, after "supply," to insert "or in any canal."
    The Amendment is put down for elucidation. The object of this Clause is to prevent any interference with water supplies. As the Clause is drafted it appears doubtful whether it covers water in canals. It is obvious that an irrigation canal may carry water over a considerable part of federated territory, and if one unit in the Federation shuts off the water supply it may cause considerable trouble and suffering to those other parts through which the canal water otherwise would pass. One can realise the serious dangers in India of a shortage of water, particularly in the North West and the hot climates, where you are likely to have plague and drought, and many other troubles, unless the canal supplies can run right through. I feel hopeful that on this occasion the Government will look with an indulgent eye on an Amendment which has no ulterior object except to make sure that water in a canal is allowed to pass.
    6.50 p.m.
    The ATTORNEY-GENERAL: I am sure that my hon. Friend never has any ulterior motive, and on this occasion he is more than usually innocent. The Clause deals with a fascinating subject, that is, what rights people have in water, running water in particular, as well as water in natural reservoirs. There are
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    two kinds of water. There is the water in the natural streams and reservoirs, and there is the water in the canals, with which the hon. Member wants to deal. As far as the waters in the natural streams and reservoirs are concerned there is no statute or common law in India which regulates the rights of people to the use of the water. In this country there is a great body of common law, which is added to by judicial decisions, which regulates the rights of people through whose land the water flows, the riparian owners, and which also deals with the rights of people who use the stream and who have a right to expect it to continue in its natural flow, so that their cattle may continue to drink from it. In India there is no such statute or common law and, therefore, these natural sources of water supplies have been dealt with in a general way and on certain broad lines. That is to say, an area which has a very small rainfall, or no rainfall at all, gets a prior right to the water as compared with those which have a plentiful rainfall. A non-cultivated area will not be preferred to a cultivated area, which is in possession of an irrigation supply or a natural supply of water.
    These are the general principles which regulate the use of water in these natural conditions, but they are not what lawyers call "justiciable rights" which can be taken to a court of law. When you come to canals it is a different matter. A canal is built by powers conferred by local legislation, or constructed in accordance with agreements which are often based upon a proportion of the cost which falls on the different parties entitled to the use of the water. Those are justiciable rights, and can be taken to a court of law. This Clause and the following Clause are intended to provide a method of settling rights in natural sources, rights which cannot be taken to a court of law because there are no legal principles by which the courts can regulate any disputes which may arise. For that reason it is not proposed to put canals into the Clause because they can be disposed of by ordinary tribunals and do not require to be referred to the special tribunals which are set up.
    Mr. RAIKES: I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Clause ordered to stand part of the Bill.

    CLAUSE 130.—(Decision of complaints.)
    Amendment made: In page 78, line 32, leave out "no action should be taken by him in the matter," and insert:
    "the issues involved are not of sufficient importance to warrant such action."—[Sir S. Hoare.]
    6.53 p.m.
    Sir S. HOARE: I beg to move, in page 79, line 22, to leave out from "proper," to "and," in line 24, and insert:
    "Provided that if, before the Governor-General has given any decision, the Government of any Province or the Ruler of any State affected request him so to do, he shall refer the matter to His Majesty in Council and His Majesty in Council may give such decision and make such order, if any, in the matter as he deems proper.
    (6) Effect shall be given in any Province or State affected to any order made under this Section by His Majesty in Council or the Governor-General."
    This is the first of a series of Amendments which have this single objective. We have come to the conclusion that in the cases where the special procedure has been adopted of settling water rights we ought to maintain the ultimate appeal to the Secretary of State. At the present time in cases of this kind there is an ultimate appeal to the Secretary of State, but without these Amendments it might appear that the appeal had been abolished and that the Governor-General would have the final word. In the interests of the Provinces and the Indian States it is better to keep the ultimate appeal to the Secretary of State. Hon. Members will agree that this may involve questions of immense importance to immense populations, whether in the Indian States or in the Provinces, and the object of the Amendments is to retain the appeal which at present exists.
    Amendment agreed to.
    Further Amendments made: In page 79, line 27, leave out "Provided that," and insert "(7) Subject as hereinafter provided."
    In page 79, line 33, leave out "whether by himself or by a predecessor of his," and insert:
    "Provided that, where the application relates to a decision or order of His Majesty in Council and in any other case if the Government of any Province or the Ruler of any State affected request him so to do, the Governor-General shall refer the matter to His Majesty in Council, and His Majesty in Council may, if he considers proper so to do, vary the decision or order."
    In line 34, after "by," insert "His Majesty in Council or."—[Sir S. Hoare.]
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    Mr. MORGAN JONES: I notice the word "finance" in Sub-section (I), and the problem is whether disputes might arise concerning taxation in connection with any of these water supplies. Is it possible that such a problem can be relegated to a commission? I understand that it is merely a question of administration?
    The ATTORNEY-GENERAL: It deals with the use and control of water supplies.
    Clause 131 ordered to stand part of the Bill.

    CLAUSE 132.—(Jurisdiction of courts excluded.)
    Sir S. HOARE: I beg to move, in page 80, line 23, to leave out from "under," to "by," in line 24, and to insert:
    "any of the three last preceding Sections."
    The object of this Amendment is to confine the operation of Clause 132, which ousts the jurisdiction of the federal court, to matters dealt with under Clauses 129–131. That was always our intention, but the original draft did not make it quite clear.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 133.—(Provisions with respect to an Inter-Provincial Council.)
    Mr. CADOGAN: I beg to move, in page 80, line 28, to leave out from "of," to "that," in line 30, arid to insert:
    "representations addressed to him by the Governor-General."
    The point is that it would be preferable that any proposal to establish an Inter-Provincial Council should be presented to His Majesty by the Governor-General.
    7.0 p.m.
    Sir S. HOARE: I think the Amendment makes a definite improvement on the Bill. It makes it much more likely that the Inter-Provincial Councils will be brought into being. We all wish to see them brought into being, particularly for

    2155
    such public services as public health; and I think that the suggestion that the initiative should come from the Governor rather than from the Legislature, which might be prejudiced in a particular instance, is an improvement. I am prepared to accept the Amendment.
    7.2 p.m.
    Mr. MORGAN JONES: I am not quite sure about this suggestion. In a way I am somewhat sorry that it has been moved. I do not quite see why we should interfere with the initiative of the Provincial Legislatures in this matter. I do not see what harm could be caused by leaving them to retain this initiative. I do not see how the Governor could interpret the minds of the people of a Province any better than the Legislature could do. I am afraid that I am not fully-seized of the full case for this change. If I understand the significance of it aright, the change would mean that a Provincial Legislature could do nothing; and they might approach the Governor or Governor-General as often as they liked, but unless the Governor or Governor-General wishes to move in the matter nothing can be done. As it stands in the Bill when the Legislatures have moved in the matter and presented a Bill or an Address to the Governor-General there is a chance of something being done. Why interfere in this way? I should have thought that the Governor, or the Governor-General, would have had enough on his plate already without loading it up any more. Do let us leave something to the Provincial Legislatures. There is no harm in letting them have this power.
    7.5 p.m.
    Sir S. HOARE: It is not a question of there being any further loading of responsibilities upon the Governor or Governor-General. The question really is how to make sure of these inter-Provincial councils being set up. My hon. Friend who put this Amendment down and my hon. Friend who moved it are nervous lest on a particular occasion you might, for some reason or another, get majorities in the local councils against these councils. Our object in accepting the initiative of the Governor is with the object of stimulating these councils rather than of putting an obstacle in their way.
    Mr. JONES: The right hon. Gentleman anticipates that a majority may be against these councils. Even though the Governor brought about the establishment of an inter-Provincial council, what use is it if a majority is against it?
    Sir S. HOARE: It is for the Committee to consider whether this is the most likely way of removing obstacles. On the whole I am inclined to think that the initiative had better come from the Governor, even though, as I hope, in 99 cases out of 100 the Governor will probably be acting with a resolution of his Legislature behind him. I am so anxious to avoid the possibility of these councils not being set up—for some local reason or another in particular Provinces—that I am inclined to think that the best course is the course suggested in the Amendment.
    Sir F. FREMANTLE: I should like to say a word or two in support of this Amendment from the point of view which has been raised—
    Whereupon the Gentleman Usher of the Black Rod being come with a message, The CHAIRMAN left the Chair.
    MR. SPEAKER MR. SPEAKER resumed the Chair.

  ROYAL ASSENT.
  Message to attend the Lords Commissioners.
  The House went; and having returned, MR. SPEAKER reported the Royal Assent to—

  1. Consolidated Fund (No. 2) Act, 1935.

  2. Regimental Charitable Funds Act, 1935.

  3. Cattle Industry (Emergency Provisions) Act, 1935.

  4. Increase of Rent and Mortgage Interest (Restrictions) Act, 1935.

  5. Post Office and Telegraph (Money) Act, 1935.

  6. Post Office (Amendment) Act, 1935.

  7. Ministry of Health Provisional Order Confirmation (County of Holland Joint Hospital District) Act, 1935.

  8. Ministry of Health Provisional Order Confirmation (Guisborough Joint Smallpox Hospital) Act, 1935.

  9. Ministry of Health Provisional Order Confirmation (Huntingdonshire Joint Hospital District) Act, 1935.

  2157

  10. Ministry of Health Provisional Order Confirmation (South Chilterns Joint Smallpox Hospital District) Act, 1935.

  11. Clacton-on-Sea Pier Act, 1935.

  12. Coventry Canal Navigation Act, 1935.

  13. Oxford Canal Act, 1935.

  14. Rochdale Canal Act, 1935.

  15. Weaver Navigation Act, 1935.

GOVERNMENT OF INDIA BILL.
Again considered in Committee.
[Captain BOURNE in the Chair.]
Question again proposed, "That the words proposed to be left out stand part of the Clause."
7.20 p.m.
Sir F. FREMANTLE: I want to say a few words in support of this Amendment from the point of view of the needs and claims of the health services of India. That has been very much on the consciences of a large number of us who are keen on general questions of Indian welfare. It seemed to us that at one time the matter was liable to be neglected. It has been much in the background in recent administration, and has been curtailed most unwisely, owing to economy campaigns, in the last two or three years. There was a chance in this Bill, we hoped of getting things improved. Various representations have been made to the India Office, and the India Office has done a great deal in trying to show practical sympathy with the requirements. I would add my own tribute of thanks to the Secretary of State and the Parliamentary Secretary for having to a large extent met us in this Bill. I want to explain for those who have been concerned in the matter that it is on this proposal for an inter-provincial council that we relied a great deal for getting the advance that has been demanded by successive Directors-General of the Indian Medical Service and by the Public Health Commissioners as being essential, if we are to secure an improvement of the position of the Indian masses. Their position has been going back in recent years owing to the apalling increase of population and the diminution of the amount of food available for them. Reports have been made to the Government by one official after another for several years past as to the
2158
need for a strong central health board to deal with these things and to help the provincial government in their administration.
In this Clause the proposal is to establish an inter-provincial council on an Address from any Legislature. That, I am afraid, does not meet the case. You would get a few legislatures more enlightened than the rest. That would not provide the central co-ordinating advisory power that is required in the shape of a central health board. This Amendment does give that opportunity. One thing on which native administration is keener than anything else is the health problem. The last sentence of the Clause states that:
"An order establishing any such council may make provision for representatives of Indian States to participate in the work of the council."
As a matter of fact the present Public Health Commissioner in representing the central advisory institution on health in India, has had a very large number of applications from some of the more enlightened States for his assistance in. such matters. Therefore one hopes that the health question will now be seen as a whole as applying not only to the province but also by degrees to the whole of Federal India, and that there will be an opportunity for the improvement of the health services and the welfare of the people in the broadest possible sense. It is an opportunity which has never been open hitherto. We believe that with Indian responsibility we may get various measures introduced which it has been powerless for the Administration to introduce hitherto because such measures dealt with the intimate details of Indian life. We can now see really great hope for an improvement of the welfare of the masses of India.
Amendment agreed to.
Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
7.27 p.m.
Mr. A. SOMERVILLE: When I read this Clause I felt some surprise and a good deal of satisfaction. The Clause provides that an inter-provincial council shall be set up on a very wide basis. It is to have very wide powers; it is to inquire into and advise upon disputes between Provinces; to investigate and

2159
discuss subjects in which some or all of the Provinces, or the Federation and one or more of the Provinces, have a common interest; and to make recommendations for the better co-ordination of policy and action with respect to any such subjects. The personnel is wide. It consists of the representatives of the Provincial Legislatures and the States. I asked myself, Is it possible that the Government have adopted the proposal of the Statutory Commission and the Minority Report of the Joint Select Committee?
My Noble Friend the Member for Hastings (Lord E. Percy) has had an Amendment to the Clause accepted. When the Council recommended by the Statutory Commission and the Minority Report of the Joint Select Committee was pressed upon the Government, the Noble Lord laughed it to scorn, and the question was raised, "What was to be the relation of the proposed council to the existing central Legislature?" If I ask what is going to be the relation of the Council set up under the Clause to the Federal Legislature I might be told that this refers only to small councils to deal with particular subjects. But under the Clause it is possible to set up just such a council as was recommended by the Statutory Commission and the Minority Report of the Joint Select Committee. I would that that Council were to be constituted. It would be the right and safe step, the interim step towards the final Federation of India. If that were adopted, Part II of the Bill could be dropped to the infinite relief of—
The DEPUTY-CHAIRMAN (Captain Bourne): We cannot discuss that matter now as we have already decided it.
Mr. SOMERVILLE: I am sorry to have gone outside the Rules of Order, but that is a very attractive subject. I only say that I wish it had been found possible to adopt the course I have indicated, and I would ask if such a council as this is set up, what will be its relation to the Federal Legislature?
7.31 p.m.
Sir S. HOARE: I should have thought that the answer was obvious. There is all the difference in the world between a Council of Greater India, and Council
2160
in connexion with a responsible Legislature and a responsible Executive, and councils such as are contemplated in this Clause, namely voluntary organisations set up by the Ministers in the various Provinces or by the responsible legislatures in the Provinces. It should be evident that there is the greatest possible difference between the two kinds of councils. These are councils within the framework of responsible government, both at the Centre and in the Provinces, whereas the Council for which my hon. Friend has so great an affection, would be a Council with no responsibility at all, set apart from the responsible Governments either at the Centre or in the Provinces.
Clause 134 ordered to stand part of the Bill.

CLAUSE 135.—(Certain succession duties, stamp duties, terminal taxes, and taxes on fares and freights.)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
7.33 p.m.
Mr. SPENS: I have an Amendment down to this Clause which is subsidiary to certain Amendments which are down to the Seventh Schedule, and which raise the whole question of whether or not petroleum, coal and other mines will remain as at present proposed solely subject to the Provincial Legislatures or whether the Federal Legislature should not be given some power over them in order that there may be a degree of uniformity in the law relating to mines and minerals throughout India. If, when the Seventh Schedule is reached, we find it possible to persuade the Government to accept some Amendments with regard to mining law in India, it may be necessary that this Clause in turn should be amended to the effect indicated in my Amendment on the Paper which proposes to insert the words:
"taxes on mineral rights and on royalties on mineral production to the extent mentioned in the Federal Legislative List."
That would be necessary so that if the Federation collected taxes on mineral rights or royalties they should be able to give them back to the Provinces in which the mines are situated, in the same

2161
way as the duties and other taxes referred to in this Clause. I mention the subject now because it is a matter of importance.

CLAUSE 136.—(Taxes on income.)
7.35 p.m.
The ATTORNEY-GENERAL: I beg to move, in page 82, line 6, to leave out "income from agricultural land" and to insert "agricultural income."
The object of the Clause is to lay down the basis for the delimitation of Federal and Provincial taxing powers and for that purpose the expression which appears in the first line of the Clause:
"Taxes on income other than income from agricultural land … shall be levied, etc."
For the purpose of ascertaining what is agricultural land one would have to go to the definition Clause later in the Bill which states that agricultural land is land from which agricultural income is derived. Then you would have to refer to another definition to see what is "agricultural income" and a rather tortuous investigation would become necessary. It seems simpler to use the expression "agricultural income" so that the first sentence of the Clause will read:
"Taxes on income other than agricultural income … shall be levied and collected by the Federation."
The advantage of that change is that "agricultural income" is defined in the Income Tax Act and we thus avoid all the investigation which would otherwise be necessary.
Amendment agreed to.
Clause, as amended, ordered to stand part of the Bill.
Clause 137 ordered to stand part of the Bill.

CLAUSE 138.—(Prior sanction of Governor-General required to Bills affecting taxation in which Provinces are interested.)
7.37 p.m.
The ATTORNEY-GENERAL: I beg to move, in page 83, line 42, after "interested," to insert:
"or which varies the meaning of the expression 'agricultural income' as defined for the purposes of the enactments relating to Indian income tax."
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In consequence of the Amendment which the Committee has just made in Clause 136 it seems necessary to include in this Clause words which will require the sanction of the Governor-General in his discretion, to be given to any Bill designed to vary the definition of "agricultural income." It seemed better to leave the definition where it is in the Indian Income Tax Act so that it may be varied if any difficulty arises, always subject to the previous sanction of the Governor-General, rather than to incorporate a definition in this Measure where, in accordance with the general scheme of the Bill, it would not be open to Amendment.
7.38 p.m.
Mr. MORGAN JONES: I like to look into these proposals with meticulous care as the Attorney-General will appreciate. I am not sure as to the exact effect of this Amendment. Supposing a Budget were introduced which, among other proposals, proposed to vary the meaning of the expression "agricultural income." Does this Amendment mean that there will have to be some special authority from the Governor-General for that variation or would it be enough to have the approval of the Governor-General signified to the Budget as a whole? I am anxious to make sure that the Indian Legislature in its taxation proposals shall not be unduly hampered by the effect of this Amendment.
7.39 p.m.
The ATTORNEY-GENERAL: These Amendments—that which the Committee has just made and that which we are now asking them to make—will, at any rate, give greater freedom to the Legislature than it would have, if we left in the Bill the expression "income from agricultural land." Then you would have had a hard and fast definition in this Bill and it would not have been open to Amendment. The effect of these words is that if there is a proposal to vary the definition, that proposal will require the sanction of the Governor-General before it is introduced.
7.40 p.m.
Mr. MORGAN JONES: I am not sure that I feel over enthusiastic about this proposal. It may no doubt be better than the other proposal but the other one was bad enough. The fear that I have arises

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from the fact that the provision in the Clause will now read:
"No Bill or Amendment whichc imposes or varies any tax or duty …. or which varies the meaning of the expression 'agricultural income' as defined for the purposes of the enactments relating to Indian income tax …. shall he introduced except with the previous sanction of the Governor-General."
I do not know what the definition in the Indian Income Tax Act is, but it does not matter much as regards my argument. What I am concerned about is this. We know that landowners in India are a very powerful body and it is possible that a Provincial Parliament may desire to add to its revenues by extending or amplifying the definition of "agricultural income." My solicitude is as to whether this Amendment raises an effective bar against the taxation of land per se as distinct from the taxation of any other form of property. Is this a concession to the land-owning interest? The Attorney-General may think that I am facetious but I am not. I feel that the land-owning interest ought not to be specially protected through the medium of any such proviso as this. If, on the other hand, the Attorney-General tells me that no such thing as that is implied and that this is a provision which applies to all sorts of financial proposals, well and good. But I take strong objection to any particular exemption from taxation of the land-owning interest by an extension of this interpretation.
7.43 p.m.
The ATTORNEY-GENERAL: I can give the hon. Member the most unhesitating assurance that there is no such intention nor is that the effect of the Amendment. The Amendment is being made solely for the purpose of saving a great deal of cross-reference in ascertaining the boundary between Federal and Provincial taxation.
Amendment agreed to.
Clause, as amended, ordered to stand part of the Bill.
Clauses 139 to 144 ordered to stand part of the Bill.

CLAUSE 145.—(Cash contributions and ceded territories.)
7.44 p.m.
Sir REGINALD CRADDOCK: I beg to move, in page 86, line 12, to leave out Sub-section (2).
2164
This Clause is one of the most complex in the Bill and I must confess that it is very difficult to understand exactly what is contemplated by its several provisions. Sub-section (2), which the Amendment proposes to leave out, provides:
"Subject as aforesaid"—
which appears to refer to the provisions of Sub-section (3)—
"where any territories have been voluntarily ceded to the Crown by a Federated State before the passing of this Act in return for specific military guarantees, there shall be paid to that State, if His Majesty, in signifying his acceptance of the Instrument of Accession of that State, so directs, such sums as in the opinion of His Majesty ought to be paid in respect of any such cession as aforesaid."
One does not know whether the military guarantees are to continue in any case, or are to be discontinued or in what circumstances these contributions in respect of territories which have been voluntarily ceded to the Crown are to be paid back to the Federated States or what portion is to be paid back. That is the particular point upon which this question is raised. There are many other points of doubt in this Clause, and in several cases it is very difficult to know what is intended. For instance, there is the case of the liability for a cash contribution which has been discharged by the payment of a capital sum. That is another point which is left entirely permissive. There appears to be no particular reason why
"His Majesty may agree that the capital sum or sums so paid shall be repaid either by instalments or otherwise, and such repayments shall be deemed to be remissions for the purposes of this section."
It is difficult to understand why at this moment it should be proposed to remit, in some cases a large part and in others a part, by instalments, what are called contributions, which are really tributes given as a mark of fealty from the Princes to the suzerain Power.
The DEPUTY-CHAIRMAN: I think the hon. Member's argument would be better directed to the question of the Clause standing part. We are now dealing solely with the point, where territories have been voluntarily ceded, whether there should or should not be paid such sums as His Majesty may direct.
Sir R. CRADDOCK: But as military guarantees are presumably in some cases

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to be continued, it certainly seems desirable that the Government should explain what are the cases in point, and whether they are all based on the same principle, namely, whether the military guarantees are continued notwithstanding the remission of sums hitherto paid, or whether those military guarantees are now considered to have lapsed. It is impossible for anybody reading this Clause to understand it. It may be cleared up in the very complicated report of the Indian States Inquiry Committee, but this Clause does not give any clear idea as to what principal sums may be remitted and what really is the consideration for these remissions.
7.50 p.m.
The CHANCELLOR of the DUCHY of LANCASTER (Mr. J. C. Davidson): My hon. Friend asked what was the position with regard to ceded territories. Territories are ceded in the main for military guarantees, and when we investigated the position during the visit of the Indian States Inquiry Committee to India, it was quite clear that cash contributions, or in other words tributes, and ceded territories in many cases had a common origin. Therefore, you could not treat cash contributions in one way and ceded territories in another, because in some cases the Indian States having entered into an arrangement by which they were to pay an annual contribution, the contribution had fallen into arrears, and in place of it a territory had been ceded which yielded a revenue equal to the contribution which the State had undertaken to pay. That is why it is essential, I think, to treat a ceded territory in the same way as it is proposed in the Bill to treat a cash contribution.
So far as the capitalised cash contributions are concerned, under Sub-section (4), to which my hon. Friend also referred, in some cases the Indian States, instead of undertaking to pay an annual sum, paid a lump sum down, and obviously, however long ago that was done, the fact remains that they are in the same position from the point of view of the payment of a cash contribution as those who elected to pay an annual sum. If hon. Members will look at page 191, Appendix III, Schedule A, of the most complicated report, as I agree it is, of the Indian States Inquiry Committee, they will find one example, that of Indore,
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where a cash contribution was paid as a lump sum in a capitalised form. So much for that. The real explanation of Sub-section (2) and the reason why the Government cannot accept the Amendment to leave it out is, as I have said, that where the States ceded territories in return for military guarantees and those guarantees are waived, then some compensation, in the opinion of the Government, should be payable to the States.
7.53 p.m.
Sir A. KNOX: Can the hon. Gentleman amplify his reply? I understand that certain military guarantees have been waived, and I should like to know what those military guarantees are. Do not the whole defence of India and the whole safety of the country depend on law and order being maintained in these States as much as in the Provinces of British India, and if we waive our rights in these matters, will not that endanger the position of the States? I should like to ask also whether this Sub-section has any connection with the scene when my right hon. Friend the Member for Epping (Mr. Churchill) was giving his evidence before the Joint Select Committee, when I think it was the Prime Minister of the State of Bikanir explained that if the States did not come into Federation, they would not get any of this money which they were hoping to get, a statement which left a nasty taste in one's mouth, because it seemed as if there was some cash consideration being handed over to the States to induce them to come into Federation. There was a lot of explanation at the time, but we want it made clear that this Subsection has nothing to do with that matter, and we want to know exactly what the military guarantees are that we propose to waive and what considerations are to be given to the States instead of those guarantees. In another part of the Joint Select Committee's report we learn that something like £750,000 is to be given to the States. Will that be included in this Sub-section or not?
7.57 p.m.
Mr. DAVIDSON: It is very difficult to answer in detail on such a complicated subject as this without possibly misleading the Committee by not covering the whole field, but let me take one example. It was understood when I was

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in India, and it has been understood since then, that the State of Hyderabad has waived the question of the ceded territory because that State does not want to do without the guarantee under its Treaty for military protection. It may be possible that other States will say, "We are prepared to undertake the maintenance of law and order in our own State, and we will therefore not require that certain British units shall be maintained within a certain distance of the State," because of developments in their own States since the days when a treaty was made. If that be the case, the State can elect to negotiate some compensation for the territories which it surrendered on the ground that she has surrendered the requirement on her part of military guarantees on the part of the Government. That is the position so far as the ceded territories and military guarantees are concerned.
May I reassure my hon. and gallant Friend at once, with regard to the suggestion which was put forward when the right hon. Member for Epping (Mr. Churchill) was giving his evidence, that in some shape or form the proposals which have now found their way into this Clause were a bribe to the Indian States to come in? Nothing could be further from the truth, and I should have thought that my hon. and gallant Friend and those who are associated with him would have found it very difficult, in view of the attitude they have adopted, to find any evidence that there has been bribery on the part of His Majesty's Government to bring in the States, because apparently they have, or at least my hon. and gallant Friend has, come to the conclusion that the States have decided not to come into the Federation. Therefore, at any rate, even if it were true, which it is not, that these proposals were intended to be in the nature of an inducement—which is very far from the fact—they apparently have been completely unavailing, according to the views expressed by the hon. and gallant Member and his friends.
In point of fact, the report of the Indian States Inquiry Committee, whose recommendations were never questioned, either at the Round Table Conference or in the Joint Select Committee, and have been accepted in
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principle by the Government and have found their way into this Bill, was made solely on the basis of Federation, and no recommendations in the report and no recommendations which the Committee made were applicable to any State except on the assumption—
The DEPUTY-CHAIRMAN: I think we are going rather beyond the Subsection.
Mr. DAVIDSON: I bow to your Ruling at once, but it is rather difficult to give the hon. and gallant Member an answer to his question without going a little wide. I can give him a definite assurance that there is not one word of truth in any suggestion that the proposals in this Bill are in any way a bribe to induce the States to enter federation.
8.1 p.m.
Mr. MORGAN JONES: I find it difficult to understand the case for this Amendment. These territories, taking the phraseology of the Sub-section as it stands, have been voluntarily ceded to the Crown. That is a transaction on one side. As a quid pro quo there are ex-pressedly military guarantees given. That is the other side of the balance sheet, so to speak. On the top of that there comes in a payment of some sort. I am afraid I must have missed it in the speech of the right hon. Gentleman, but I still do not see what is the case for the payment of this extra sum, seeing that the balance has been struck—the territory ceded in return for military guarantees.
8.2 p.m.
Mr. DAVIDSON: Perhaps I did not make myself clear, but in the Clause to which the hon. Gentleman is referring, the States cede certain territories in return for specific, defined and detailed provisions for certain military support for instance of so many regiments of infantry, cavalry and so forth. They were all specific and we felt that if a specific guarantee on the one side was waived and disappeared, it was only right that some compensation should be paid, because the purpose for which these territories was ceded had disappeared. Retrocession being out of the question, we felt that some compensation was payable to the State which had suffered loss of revenue for the maintenance of a force no longer to be maintained.
8.4 p.m.
Mr. JONES: I understand that the provision really is that you have evalued in terms of cash the specific military guarantees and that the sums of money which you are discussing in the Sub-section are the equivalent of that evaluation of the amount of the specific military guarantees. It is in lieu of, and not in addition to?
Mr. DAVIDSON: Yes.
Mr. JONES: Thanks very much. I am much obliged.
8.5 p.m.
Major COURTAULD: There is one point on which the Committee would like to be specific, and that is that the exact sums to be paid in lieu of military guarantees for ceded territories should be clearly specified before there is any argument about the ruler of a State coming in, otherwise there would be a suspicion that there might be some form of bargaining taking place. As far as I can see in reading the Clause it simply says that such sum shall be paid by His Majesty to the ruler of a State on signifying his acceptance of the Instrument of Accession. We are not told that any specified sum is to be paid. It is some unspecified sum, and it might be that the ruler in question, in signifying that he would sign the Instrument of Accession, might bargain that he should be paid a certain sum. This might lead to the suspicion that there was something rather like bribery or inducement. I do not say there is any bribery, although I do not quite follow my right hon. Friend's argument that if the Princes did not want federation that showed that there was no bribery. It may be that the bribes were not high enough. I am not suggesting that, but I think it would be well if we were quite sure that such sums to be paid are laid down before any question arises of a bargain being struck with a ruler who wishes to accede.
Amendment negatived.
8.6 p.m.
The SOLICITOR-GENERAL (Sir Donald Somervell): I beg to move, in page 86, line 15, to leave out "be paid to that State."
This and other Amendments are drafting Amendments in the Sub-section which the Committee has just been discussing
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to make it clear that no question of payment will arise, except in those cases where the State waives the specific military guarantee in respect of which the territory was originally ceded.
Amendment agreed to.
Further Amendment made: In page 86, line 17, after "directs," insert:
"be paid to that State on condition that those guarantees are waived."—[The Solicitor-General.]
The SOLICITOR-GENERAL: I beg to move, in page 87, line 10, at the beginning, to insert "periodical."
This is purely a drafting Amendment. This Sub-section is intended to cover the tributes which are annual or regular payments, and it is to make that clear that this word is inserted.
Amendment agreed to.
Two consequential Amendments made.
8.7 p.m.
Mr. DAVIDSON: I beg to move, in page 88, line 4, at the end, to insert:
"not being a privilege or immunity surrendered upon the accession of the State, or a privilege or immunity which, in the opinion of His Majesty, for any other reason ought not to be taken into account for the purposes of this Chapter."
This is really a little more than a drafting Amendment, but it is intended to reassure the Princes and to make it plain that although the privileges and immunities are limited to the categories mentioned in (a), (b), (c), (d) and (e) on pages 87 and 88, it does not follow that in every single case the privilege can be valued financially.
Amendment agreed to.
8.9 p.m.
Mr. NUNN: I beg to move, in page 88, line 9, after "value," to insert:
"as determined by a person appointed by the Lord Chief Justice of England."
Perhaps for the convenience of the' Committee, in moving the Amendment I might, with your permission, Captain Bourne, refer also to the following Amendment—in page 88, line 13, to leave out "determining from time to time," and to insert
"the determination from time to time by a person to be appointed by the Lord Chief Justice of England of."
That would enable me to deal with the whole of the subject.
The DEPUTY-CHAIRMAN: The Amendment I called upon the hon. Member to move was the one on the top of page 1160. I think it raises the whole of his point.
Mr. NUNN: It will make the discussion full enough if I take it on that. I was merely trying to arrive at the same end, so that we did not discuss two separate subjects at two separate times. I do not think there is much necessity to go over the ground covered by my hon. Friend the Member for the English Universities (Sir R. Craddock) and my right hon. Friend the Chancellor of the Duchy, but the object of these Amendments is to secure that there shall be some independent person to whom the question of the amount of contribution to be remitted, or the amount of what might be called compensation for the ceded territories, should be submitted to a perfectly impartial judgment. That is a matter of very great difficulty. The Chancellor of the Duchy has admitted that his report is not the easiest document to read, and I find a notice here that the question involves some hundreds of States, and something like 75 lakhs of rupees. One can quite understand that a very considerable amount of interest will be aroused in India by the settlement of this question. My hon. and gallant Friend who spoke a moment ago suggested that there might be difficulty arising if this question were not settled before the States entered into the Federation. I can conceive—although one would certainly hesitate very long before suggesting that anything like bribery is going on, and I was very glad to hear what the Chancellor of the Duchy said—the suggestion being made, not necessarily in this country. It might be made in India. There might be an impression conveyed in India that this wicked Government in England was placating the Princes, and actually doing this sort of thing. For the purpose of removing any such impression, I think the Amendment for which I am responsible might very possibly serve. I wish to reiterate that it is a matter of very great difficulty and seriousness, and it does seem to me vitally important that any suggestion that pressure is being brought to bear should be
2172
removed. The Amendment does contain a suggestion of a possible way by which that could be removed.
8.13 p.m.
Mr. DAVIDSON: I am afraid the Government are not able to accept my hon. Friend's Amendment. In the first place, it is quite clear that the value of the immunity will be settled when the negotiations are proceeding for the accession of the State to Federation. The valuation is not a legal question in any sense, and it will be a decision which will be based largely either on ascertained or ascertainable facts on the spot. It can only be arrived at by free and frank negotiations by the parties on the spot, and, so far as my hon. Friend's Amendment is concerned, in the opinion of those best able to judge, it would be only adding a fifth wheel to the coach. In any case it is not a question of legal interpretation or even legal procedure. The valuation is a matter of fact, which can only be ascertained on the spot by those best able to do so.
8.15 p.m.
Sir A. KNOX: Does not the right hon. Gentleman see that by not acceding to this Amendment he lays it open to ignorant people to bring a charge of bribery? There are to be negotiations, and, suppose a certain State does not want to accede to the Federation, it looks as though the Government can put up the price of the cash compensation according as they desire that State to accede or not? That is what ignorant people will say.
Mr. DAVIDSON: I must protest against the constant intrusion of the word "bribery" into this matter. There is no question of a bribe, and, in any case, if the hon. and gallant Gentleman and his friends have read the report for which I am responsible, they will find the basis on which financial negotiations are to proceed. I cannot go in detail into that report, especially on a limited Amendment of this kind, but in it will be found the whole basis of the financial adjustments and the recommendation of the basis on which the negotiations ought to proceed. Although they may have to be brought up-to-date to a certain extent, figures of the values of the different immunities on the one hand, and of the contributions on the other, would make

2173
any extravagant figure that appeared in any treaty of accession obvious to the whole world. I assure my hon. and gallant Friend that there will be no question of trying to bribe any State into Federation.
Amendment negatived.
The SOLICITOR-GENERAL: I beg to move, in page 88, line 15, to leave out Sub-section (8).
This Sub-section provides that:
"Subject to the provisions of the last preceding subsection, if any question arises whether a contribution, privilege, immunity or cession is a contribution, privilege, immunity or cession within the meaning of this chapter the decision of His Majesty shall be final."
This was one of the points in the Clause to which the Princes took exception as something which had not been previously agreed, and in my right hon. Friend's reply, which was printed in the White Paper, the deletion of this Sub-section was agreed to. It is, in fact, unnecessary, because the question as to what are contributions, privileges, and so on must be settled before the Instrument of Accession is signed and agreed to. The Government have, of course, the last word if what are regarded as unreasonable demands are put forward.
Amendment agreed to.
Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
8.19 p.m.
Sir J. WARDLAW-MILNE: I am not clear as to the meaning of the limitation of 20 years in the first Sub-section of this Clause. I would ask my right hon. Friend to state the meaning in view of what he has just said, because, if these payments are in lieu of something which has now gone or some undertaking which Governments in past days have given, it does not seem very fair to limit the remission to 20 years. Either it is a payment that must go on for something that has gone for ever, or it should be capitalised.
8.20 p.m.
Mr. LENNOX-BOYD: I will certainly accept the request of the Chancellor of the Duchy and make no reference to the vexed word "bribery." I am sure that all those on these benches are gratified
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to hear that no pressure of a financial nature has been brought to bear on the Indian Princes to enter the proposed Federation. We would be still more impressed if my right hon. Friend would give us an assurance that a Prince who failed to enter the Federation would in no way be penalised, and that some of the attractive alternatives offered in Clause 145 to those Princes who accede would also be offered to Princes who are not prepared to enter the Federation. Our general contention in regard to this Clause is that it shows up more vividly than almost any other Clause the absurd nature of the Federation which we are proposing to set up. The Chancellor of the Duchy has referred to the report of his Committee. I am sure I am voicing the opinion of everybody when I say that although it was a very difficult report to read in some ways, it was very admirably done. I suggest to my right hon. Friend that there are one or two phrases in it which illustrate in an unalterable way the sort of difficulties against which we shall have to contend in the coming years if this Federation is set up. Sub-section (6) of Clause 145 refers to privileges and immunities, and some of these privileges and immunities consist of the right to levy customs duties, either maritime or internal.
I should be interested if the Chancellor of the Duchy would give us any indication that there is any intention on the part of the Indian Princes to waive their rights to levy maritime and internal customs duties. In regard to maritime duties, my information is that there is very little intention on the part of those Princes who enjoy that right to waive it, and yet the Chancellor of the Duchy in his report said that the idea of a true Federation was difficult to reconcile with the retention of this privilege. He was forced to add that no maritime state was willing to relinquish this right. Even more important are the internal customs duties. As I envisage the Federation, there is to be complete Free Trade over a whole area of British India. The right hon. Gentleman, the Foreign Secretary, in a forceful speech some months ago, drew attention to the way in which the Indian States and British India are so interlaced and interlocked that you pass from one to the other in the twinkling of an eye. He drew a vivid illustration of

2175
how essential it was that the Indian States and British India should march together in common partnership by showing how quickly in travelling in a railway train one passes from an Indian State into British India and out of it again.
What will be the position with Indian States, interlaced and interlocked in this way, retaining the right to impose import duties on goods entering their States? What have we to justify us in believing that this absurd position is going to end in anything but the pious hope in the report of the Joint Select Committee that this anti-Federal outlook will disappear? Fundamental as our objections to this scheme are, we join with the Committee in hoping that, if a Federation is set up, it will be a workable Federation, but what indication is there that the anti-Federal outlook will disappear? I believe strongly that the Princes of India and His Majesty's Government are not talking the same language on this question of Federation, that they have totally different ideas of Federation, irreconcilable ideas; and we believe that the only indication hitherto given of what they are likely to do on the subject of internal customs duties has been shown by their attitude towards the matter raised in another part of this Clause, namely the question of the remission of cash contributions. It is a curious and almost unbelievable fact that even those States whose cash contributions we propose to remit under this Bill, subject, of course, to certain provisos, are not themselves, I understand, prepared to remit cash contributions owing to them by other Indian States which have hitherto paid tribute to them. It really does suggest that the pious hopes of His Majesty's Government are doomed to be disappointed, and that is why I personally hope, though I see no expectation whatever of it, that Clause 145 will not form part of this Bill, and I throw out that suggestion to the Chancellor of the Duchy, who himself has provided the ammunition which really devastates this particular Clause.
Question put, "That the Clause, as amended, stand part of the Bill."
The Committee proceeded to a Division.
Major Davies and Dr. Morris-Jones were appointed Tellers for the Ayes; but there being no Members willing to act as
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Tellers for the Noes, The CHAIRMAN declared that the Ayes had it.
Clause 146 ordered to stand part of the Bill.

CLAUSE 147.—(Value of privileges and immunities to be set off against share of taxes, etc., assigned to Federated States.)
8.28 p.m.
The SOLICITOR-GENERAL: I beg to move, in page 88, line 32, after "shall," to insert:
"if and in so far as the Act of the Federal Legislature under which the payment or distribution is made so provides."
This Clause contemplates the possibility of the Federation distributing to the Provinces and Federated States the product of some specific tax, such as the salt tax. There was a proposal in the White Paper that if that were done any specific immunity which some State had with reference to that tax should be set off against the amount the State would get if the Federal law so provided. Through an inadvertence, the Clause as drafted does not contain the words, "provided that a Federal law so provides." This is one of the points to which the Princes quite rightly drew attention in their letter as showing a difference between the White Paper proposals and the terms of the Bill, and this Amendment will insert the necessary words.
Amendment agreed to.
Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
8.30 p.m.
Mr. EMMOTT: I do not think that the Amendment which has just been made meets the fundamental objections which have always been entertained by the Princes to this Clause. If I am wrong in that assumption I shall be corrected. I desire to say, in only one word, that the principle contained in this Clause is one to which the Princes have never subscribed and one to which they take the strongest objection. I have merely to refer to a paragraph at the bottom of page 9 of the White Paper entitled, "Views of Indian States," in order to point out to the Committee that there it is shown that the Committee of States' Ministers
"raise the strongest objection to the provisions of Clause 147, and submit that the principle sought to be embodied in this

2177
Clause has never been accepted by the States, which are in general disagreement with that principle."
8.31 p.m.
The SOLICITOR-GENERAL: I think my hon. Friend is right to this extent, that objections, as stated in the original letter, did prevail against the Clause as it appears in the Bill, but my right hon. Friend has had information which leads him to believe that they are now satisfied by the Amendment which has been inserted.
Mr. EMMOTT: I am very glad to hear it.
8.32 p.m.
Sir H. CROFT: May I congratulate my right hon. Friend the Secretary of State on having now managed to get into direct touch with the Princes' representatives, and being able to meet to a certain extent some of the objections as we go along. As that has proved so valuable and indicates that it may save time, would it not be possible for the right hon. Gentleman to give an undertaking, either now or at an early stage, that he will get further information from the Princes, in order that we may not have to go through these Clauses again and again? I gather from what has been said that there is a hope that this Amendment will satisfy the Princes. Would it not mean a great saving of time if the pace of this Measure were not hastened so much in the next two or three weeks, until the right hon. Gentleman has got very full information on all these Amendments?
8.33 p.m.
Sir S. HOARE: I am glad to say that we are now getting full information. The counsel working with the various Princes are in close touch with my advisers and myself, and I think my hon. and gallant Friend may rest assured that the discussions are proceeding very favourably; and I am sure that he will be delighted to hear that the points of disagreement are in all cases diminishing and in most cases are vanishing altogether.
Sir H. CROFT: I am sure the whole Committee, who have suffered very much with the right hon. Gentleman over this subject in recent weeks, will congratulate him on being able to make such a statement, but I gather from what he has told
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us that the question has not been referred back to the Princes themselves. I presume the Princes themselves have not had time to consider it; in fact, I think I am right in saying that there has been no meeting; and I presume, therefore, that it is after consultation with the advisers over here that the right hon. Gentleman is hopeful that the Amendment will meet the case.
Sir S. HOARE: My hon. and gallant Friend will be still more delighted to hear that not only have the discussions been going very favourably in London but that the communications which have passed between London and India have been also very favourable.
8.35 p.m.
Mr. ISAAC FOOT: The hon. and gallant Member for Bournemouth (Sir H. Croft) will remember the difficulty which was outlined by the Secretary of State. Some of the legal representatives of the Princes were not in touch with the advisers of the India Office in the first instance. This would only apply to certain legal advisers of the Princes, and the hope was expressed that all the counsel representing the Princes would be able to work in touch with our legal representatives here. If that had been done in the first instance, in relation to all, instead of to some the counsel—
The CHAIRMAN: All this seems to be getting a little out of order.
Clauses 148 to 150 ordered to stand part of the Bill.

CLAUSE 151.—(Exemption of certain property from, taxation.)
8.37 p.m.
The SOLICITOR-GENERAL: I beg to move, in page 89, line 28, at the end, to add:
"Provided that, until any Federal law otherwise provides, any property so vested which was immediately before the commencement of Part III of this Act liable, or treated as liable, to any such tax or impost, shall, so long as that tax or impost continues, continue to be liable, or to be treated as liable, thereto."
The Clause as drafted did not make provision for the existing position, under

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which certain property of the kind described may now be liable to tax. It is obviously undesirable that the Constitution Act should effect any change in the status quo. The purpose of this Clause is to preserve the status quo.
Amendment agreed to.
Clause, as amended, ordered to stand part of the Bill.
Clause 152 ordered to stand part of the Bill.

CLAUSE 153.—(Duty of Federation and Provinces to supply Secretary of State with funds.)
8.38 p.m.
Sir S. HOARE: I beg to move, in page 90, line 17, at the end, to add:
"(2) Without prejudice to their obligations under the preceding sub-section, the Federation and every Province shall secure that there are from time to time in the hands of the Secretary of State and the High Commissioner sufficient moneys to enable payment to be made of all pensions payable in the United Kingdom out of the revenues of the Federation or the Province, as the case may be."
This is a very important Amendment, not because it adds anything new to the intentions of the Government, but because it makes it quite plain that we intend that this Clause should cover the remittances needed for pensions to Civil Servants and others in this country. There has been a good deal of anxiety among the pensioners as to whether they were safeguarded under the Clause. It is the intention of the Government to safeguard them, and I know that that is also the intention of this Committee. This Subsection will now make it quite clear that it will be an obligation upon the Federation and upon the Provinces to provide the Secretary of State with the full funds necessary to meet all the pension claims. We have made it as clear as we can, and I hope that what I have said, as well as the actual Amendment which I am moving, will remove entirely from the minds of any pensioners any anxiety as to whether or not they are safeguarded under the Clause.
8.41 p.m.
Sir H. CROFT: I am sure that the Committee will be very pleased to hear what the Secretary of State has said. It will be observed that the next Amendment on the Paper, which it is now un-
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necessary to discuss, covers very similar points. From what I understand, the Secretary of State makes quite certain, by this new Sub-section, that there will be money in the till in any circumstances for the provision of these pensions, and that is satisfactory. More especially is it satisfactory to anybody who has recently considered the budgets of the Provinces of India, after making allowances for the cuts which are still retained. It will therefore be a matter of very great importance, when this Bill becomes an Act, and becomes operative, possibly after many years, it may be, and we see a change in the financial situation.
This is really a very vital matter, in view of the present budgetary position of the Provinces. It is clear that the Bill will not be able to come into force until very clear evidence is forthcoming that the money can be retained in the till for the pensions. The Secretary of State has gone so far and I am wondering, on behalf of my hon. Friends, all of whom are grateful for small mercies, whether he can give an undertaking that this country will stand absolutely behind these pension rights. I admit that he has gone a very long way, and that that will give great pleasure in many quarters; at the same time, if he has gone so far, I should think he could go a step farther, and absolutely guarantee the money.
8.43 p.m.
Sir S. HOARE: The wisest course is to go so far as necessary, and no farther. We have gone as far as necessary; we make it an obligation that this money should be forthcoming, and the obligation is in the first place upon the Federation and the provincial governments to find the money. The obligation is secondly upon the Imperial Parliament to see that the money is remitted, and is paid to the pensioners. That seems to me to make the position watertight, and it would be unnecessary to take any further action.
8.44 p.m.
Mr. ISAAC FOOT: Following what has been said by the hon. and gallant Member for Bournemouth (Sir H. Croft), may I say that I am also glad that the Secretary of State has added words which may not be actually necessary, but which will go a great way towards relieving a very natural anxiety in certain quarters.

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Most of us who have been in touch with this matter have known that a disproportionate amount of attention, having regard to the general scope of the Bill, has been devoted to this part of the Measure. It was a manifest anxiety of the Joint Select Committee to meet this apprehension, and so far as I can ascertain, it was the desire of the Indian delegates that there should be no reasonable ground for apprehension upon a matter where established rights were seemingly in danger. In these circumstances we welcome the solution which the right hon. Gentleman has suggested. Most of us who are in touch with those who have served in India, and who are now living in this country upon their pensions, which represent most of their livelihood and their future, will be glad that the apprehension which they have felt, and which has been dwelt upon so much on the public platform, may now be removed as a result of the Amendment.
8.45 p.m.
Sir SAMUEL CHAPMAN: I suppose that every Member of the House has had more correspondence on this matter than on any other matter in the Bill. My hon. Friend opposite has anticipated exactly what I wished to say, and I only want to add that, representing a constituency where many retired gentlemen live who depend upon the carrying out of this Clause for their livelihood, I desire to thank my right hon. Friend for having made the matter perfectly clear. We never thought for one moment that it would be otherwise, but now I think that all our constituents to whom we wrote—and I have had to write to many—will be perfectly satisfied with what my right hon. Friend has inserted in the Bill.
8.46 p.m.
Major HILLS: I, also, desire to congratulate my right hon. Friend, for I have been very much concerned about this matter. My object in rising is to ask a question. The new Sub-section states that the money is to be provided for pensions payable in the United Kingdom. I feel sure that the point has been considered, but is it quite clear that these words are wide enough? I suppose that these pensions arise under different Acts or ordinances, and, if it were the case that pensions were payable out of the United Kingdom—say in India, or anyhow out of the United Kingdom—this
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Clause would not cover them. I feel sure that the point has been considered, and, if there is any doubt about it, a small drafting Amendment would meet the point.
8.47 p.m.
Mr. SPENS: I should like to add a word of thanks to my right hon. Friend for the insertion of this new Sub-section. It makes clear a point upon which there has been doubt throughout the country among the pensioners, and I am very glad that it is to be provided expressly in the Bill that among the moneys which have to be sent home from India to this country are the remittances necessary to pay these pensions. At the same time I feel that the Bill, and particularly Clause 45, does envisage a possible breakdown, both as regards the Federal situation and as regards the Provincial situation. We discussed this question at considerable length some time ago, and, while the Clause will provide that moneys shall be sent home, and that, if the moneys are sent home, there shall be the machinery for paying the pensioners, yet at the same time the possibility is not met of a failure on the part of the Federal or Provincial authorities to send the full amount home, and that still leaves doubtful what the position of unpaid pensioners' would be in those circumstances, and what would be their rights as regards recovery. In an Amendment which stands in my name on the Paper I suggest that the Secretary of State might see his way to go one step further, and take upon himself some obligation to find the money in this country in the event of individuals having to take some sort of action, possibly here but more probably in India, in case of a default as regards the payment of their pensions.
I do not wish to spoil the thankful feelings that I have to the Secretary of State for having gone as far as he has gone, but there is not the slightest doubt that there is a very strong feeling among pensioners in the country, both military and civil, as to what would be their position if by any chance there was a default in the sending home of these moneys. It is unthinkable that they, as individuals, should be put to the liability of starting some sort of proceedings against someone to recover their pensions, nor are they, many of them, in a position to do that.

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In these circumstances, I feel that the Secretary of State might say that we are only asking for an indirect guarantee from the British Government in some shape or form, and he has refused to give that in the past. None the less, if he can possibly see his way, on reconsideration, to provide some machinery whereby, if there were a default, immediate payment would be made in this country, and the authorities here would, if they had to pay, take upon themselves the responsibility of recouping themselves from the Federation or the Provinces as the case may be, it would relieve those individuals of what is undoubtedly a very present fear in their minds that, if there were any default, they would have to take individual action. If my right hon. Friend could possibly give further consideration in this matter, and see whether some machinery could be provided to make good a possible default—which, however, I should hope would be unthinkable—he would reassure many hundreds of people in this country who at the present moment are genuinely anxious on this point. I do not say that they have been made anxious in ways of which I approve, but the fact is that they are anxious, and it is to remove that anxiety which has been created, lightly or wrongly, that I would ask my right hon. Friend to see if he cannot suggest some machinery.
Mr. PALING: Could the right hon. Gentleman say what is the total amount of money which these pensions involve?
8.53 p.m.
Mr. WELLS: I desire to reinforce what my hon. and learned Friend has said. This question of pensions has been raised in my area, and also has led to a great deal of opposition to the Bill. What has been said to-night will give a good deal of relief, but the question will arise as to what will happen supposing that the money is not forthcoming, and I hope that the Secretary of State will give some reassurance on that point.
8.54 p.m.
Sir S. HOARE: I am rather sorry that these further points have been pressed. I thought that my one good action would have been counted to me for righteousness, and that I should not be pressed
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to do what I believe to be quite unnecessary. I am not prepared to contemplate a default. Indeed, I go so far as to say that to suggest the possibility of a default is bad policy from our point of view, and is bad policy from the Indian point of view. It immediately creates an atmosphere of suspicion where I believe it is not necessary to create it at all. I cannot contemplate that a default is possible. The whole of these pensions amount to about 4 per cent. of the revenues of India. Is it conceivable that the Governor-General and the provincial Governors, acting, as they will, under the instructions of the Secretary of State, who in turn will act as the agent of the Imperial Parliament in this country, will not be able to provide this comparatively small sum? I think that the position is completely watertight, and I do not believe that there is any reason why any pensioner should feel the least anxiety. It is a mistake, both from the Indian point of view and from the pensioners' point of view, to suggest that there is any risk or that there is any uncertainty. The obligation is upon the Imperial Parliament to see that the money is remitted to this country. It is inconceivable in any contingencies which I can contemplate that this comparatively small sum of money will not be punctually forthcoming.
Mr. LUNN: Will the right hon. Gentleman publish a return of the persons who receive pensions from India showing in what capacity they receive pensions? It is important that the House should be made aware of the people who get pensions.
The CHAIRMAN: I think that that hardly arises on this Clause.
8.56 p.m.
Mr. McGOVERN: I am sorry to have to intervene in what appears to be rather a family quarrel between both sides of this Committee, and I recognise that when yon butt into a family quarrel of which you are not a member you sometimes bring the whole of the family down upon your head. If this Clause is such an important factor, and there are in this country so many people concerned about their pensions, I can conceive that men who have given what, to them, has been valuable and necessary service, would be anxious concerning pensions that had to be paid to them. The Secretary of

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State has not faced up to the important factor, but has completely evaded it. He speaks at that Box as though he cannot imagine failure on the part of the Indian Government to pay these pensions. I can conceive of the possibility very strongly that things might develop in India where the Government might refuse to face up to the responsibility in respect of services largely rendered for the benefit of the Government of this country. If they repudiated those pensions it would be the duty of the Government of this country to respond and to guarantee, in circumstances of that description, the pensions of those who had given services in the past.
At the same time, if this question is such an important one and has played such a tremendous part in the country, I cannot help feeling that the right hon. Member for Epping (Mr. Churchill), if I am not doing him an injustice, would at least have been in his place here to safeguard the interests of these pensioners. He is absent to-night, and it makes me think that he himself is conducting a sham battle and that he must have complete faith in the Secretary of State and in the guarantees which he is giving. I cannot help thinking that the right hon. Member for Epping, in spite of all his protestations in this House, is failing at the crucial moment in this discussion the people whom he says he is out to defend in connection with the Government of India Bill. Speaking as a person who has no great interest in the Bill, I think that the Secretary of State has fairly cutely evaded the point, and if I were an opponent of the Bill and anxious for these pensioners, I should not be satisfied with the undertaking he has given on behalf of the Government, because there is a strong possibility of repudiation in connection with pensions.
Mr. PALING: Is the four per cent. of the total amount paid for pensions the amount sent to this country, and will the right hon. Gentleman state the amount in pounds, shillings and pence which the four per cent. represents?
Sir S. HOARE: I cannot possibly state the pounds, shillings and pence; it is four per cent.
9.0 p.m.
Sir WALDRON SMITHERS: I was not intending to intervene in this Debate,
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but some question has been raised about the stability of the credit of India. I wish to point out that, in spite of the fulminations of the right hon. Member for Epping and the hon. and gallant Member for Bournemouth (Sir H. Croft) and all who are opposing the Bill, during the last few years the price of Indian securities has practically doubled in the Stock Exchange quotations. It is a remarkable thing that, when the other day, capital was asked for the new Indian State Bank, there were queues waiting in the street to subscribe for that issue. India is the richest and one of the most stable countries in the world, and I speak from my own business point of view—
9.2 p.m.
Sir H. CROFT: On a point of Order. May I ask if I shall be allowed to answer the hon. Gentleman upon the point upon which he is now engaged, because I should like to have an opportunity of doing so?
Sir W. SMITHERS: I am only desiring to support the Secretary of State and to state that the credit of India as a country on its own basis is one of the best credits in the world, and that it has improved by the events which have taken place in the last three years while these discussions have been going on.
Sir H. CROFT: The hon. Gentleman has opened up rather a wider subject than that upon which we are engaged. I do not want to say anything which might impair the credit of Britain or the British Empire or British India.
Sir W. SMITHERS: The hon. and gallant Member keeps on doing it.
Sir H. CROFT: I hope that when the hon. Gentleman refers to any speech which I have made he will take the trouble to bring the quotation in his pocket. It is legitimate for anyone to doubt the wisdom of hasty, ill-conceived, as we think, legislation and the taking of at one step that which can only safely be taken by several steps. When the hon. Member comes here and mentions the fact regarding the stability of the credit of the Indian Empire at the present moment, the hon. Member should realise that Indian credit always hung on to British credit, and as long as Britain is in India, I am firmly convinced that that credit will be maintained. After all,

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Indian stocks are trustee stocks at the present time. Does the hon. Gentleman dissent? Are not Indian trustee stocks under the Trustee Act?
Sir W. SMITHERS Sir W. SMITHERS indicated assent.
Sir H. CROFT: I can only assure the hon. Member that if he imagines that any of those who are associated with me would wilfully try to depress the credit of India he is quite wrong.
Sir W. SMITHERS: That is what the hon. and gallant Member is doing.
Sir H. CROFT: The hon. Gentleman is not justified in saying that. All we want is to maintain the strength of the British Empire, and therefore to maintain the credit of the Empire. I would point out that in practically every Province at the present moment, with the exception of two, there is a deficit, if you had restored the cuts it is legitimate for us to say, Are you wise in taking British guidance from India at this stage in a hurry and to the extent indicated in this Measure? The hon. Gentleman beside me attacked my right hon. Friend the Member for Epping (Mr. Churchill) for not being in his place to-night. The fact remains that sometimes we have to meet our constituents at annual association meetings, and so on, and it does happen that that is the case this evening. My right hon. Friend the Member for Epping was certainly under the impression that the discussion would take a great deal longer than it has, and I hope the Secretary of State will accept the statement from me that my right hon. Friend meant no discourtesy in not being here. None of us knew that this particular Clause would have been reached this evening. That was our general impression. I thank the Committee for allowing me to make that explanation. The hon. Member opposite need not be concerned about our patriotism.
Sir W. SMITHERS rose—
The CHAIRMAN: This must not develop into an argument on personal matters. The question of the credit of India was distinctly in order, but the doings of hon. Members cannot be pursued.
Sir W. SMITHERS: I only want to say that the hon. and gallant Member opposite ought to know that although Indian
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Government securities are trustee securities, they are not guaranteed by the British Government. Indian Government securities are only the guarantee of the Indian Government, and in spite of all the attacks upon this Bill—
The CHAIRMAN: The hon. Member cannot pursue the subject further.
9.7 p.m.
Mr. A. SOMERVILLE: There are many Indian pensioners in my constituency who are extremely anxious on this matter, and they will be glad that the Secretary of State has relieved them to a large extent of their anxiety. But that anxiety is not due to any external cause. It is because they know India and the dangers of repudiation among the Congress party. Therefore, I would ask the Secretary of State whether he would go one step further and make the payments for pensions reserved as a first charge on the revenues of the Federal or Provincial Legislatures, as are the Governor's expenses.
Sir S. HOARE: They are non voted.
Amendment agreed to.
Clause, as amended, ordered to stand part of the Bill.

CLAUSE 154.—(Provisions as to relation of Burma monetary system with India.)
9.8 p.m.
Mr. BUTLER: I beg to move, in page 90, line 20, to leave out from "for," to "made," in line 23, and to insert:
"defining and regulating the relations between the monetary systems of India and Burma and for purposes connected with or ancillary to those purposes, and in particular, but without prejudice to the generality of this section, such provision as may appear to His Majesty to be necessary or proper for the purpose of giving effect to any arrangements with respect to the said matters."
This Amendment deals with an important and rather technical subject. The Clause and the corresponding Clause 428, Part XIV, makes provision for the retention of Burma within the Indian currency system after the separation of Burma from India. As the currency system of India is to be managed in the future by the Reserve Bank of India it is necessary to make provision to enable the Reserve Bank of India to continue to function in Burma after Burma has ceased to be part of India. The arrangements necessary

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are being agreed between the Government of India and the Government of Burma. In so far as they can be made by amendment of the Reserve Bank Act, to make it applicable to the changed conditions, the necessary action will no doubt take the form of legislation by the Indian Legislature. There are, however, several matters which may fall outside the scope of such amending legislation and to cover these in India the Clause proposes to take power to issue such Order in Council as may prove to be necessary. As originally drafted the Clause gave power to issue an Order in Council giving effect solely to arrangements agreed upon by the existing Governments of India and Burma. The financial adjustments consequent upon the agreed arrangements do not, however, fall within the scope of the matters to be so agreed between the two Governments, but come within the cognisance of the Tribunal which the Committee will remember was recently set up by the Secretary of State to advise on the formulation of a financial settlement between the two countries. The purpose of this Amendment is to secure that matters connected with the agreement but not actually included in it are dealt with properly.
9.11 p.m.
Mr. MORGAN JONES: I gather that the Reserve Bank of India is to operate for the dual purpose explained and that a number of people will be nominated by the Governor-General to act as bank directors. What provision will there be for seeing that the point of view of Burma is adequately represented among those who direct the policy governing this particular matter?
Mr. BUTLER: I think that is referred to in Clause 428.
Mr. JONES: Yes, but my simple question is this: who will be responsible for seeing that the point of view of Burma is adequately put forward when these things are being discussed?
The CHAIRMAN: The hon. Member will note that that is dealt with in a special part of the Bill, but it is appropriate to raise the matter now.
Mr. BUTLER: Rangoon will elect one of their own directors for this purpose. I think that answers my hon. Friend's question.
Mr. JONES: I will not pursue the matter further, but we will bear it in mind.
Amendment agreed to.
9.12 p.m.
Mr. BUTLER: I beg to move, in page 90, line 27, at the end, to add:
"(2) any sums required by an Order under this Section to be paid by the Federation shall be charged on the revenues of the Federation."
This Amendment is designed to meet a possible but not an immediate contingency. Broadly, the effect of the general financial settlement is expected to be the assumption by Burma of a net indebtedness representing her share of India's general debt and of pensionary liabilities, so that Burma will be India's debtor till she has paid off both the capital sum and interest upon it. For several years to come—the period will, of course, vary according to the scheme of amortisation that is adopted—the amount of the annual payments thus due from Burma is expected to exced any profits that may accrue to her as her share of the surplus profits payable to the Government of India, and subsequently to the Federal Government, by the Reserve Bank, so that the latter will be set off against the former, the result being a net payment each year by Burma to India, and no actual payment by India will be involved. But if Burma still remains within the Indian currency system, as is expected, when the time comes that she has paid off her debt to India, India will then be liable to pay to Burma those profits, and it is necessary, in Burma's interests, looking to that future state of affairs, to provide that this payment when it becomes due from India to Burma is a fixed charge on India. That is the reason, in the interests of Burma in the distant or semi-distant future, for including this new Sub-section.
Mr. MORGAN JONES: I do not quite understand how the Federation is brought into this matter at all. Burma is now excluded from the Federation, it is a Province on its own. Why should the Federation be brought into it? Could it not be done in a more direct way with Burma as a separate Province.
Mr. BUTLER: I thought I had explained that there was a natural connection between Burma and India in the

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fact that the Reserve Bank of India is to conduct the currency of Burma. That is the way the Reserve Bank is brought into it.
Mr. JONES: Still I do not understand how the Federation has anything to do with Burma under this proposal. Why should it be involved?
Mr. BUTLER: As I said in my speech on the first Amendment a Tribunal has been appointed to settle financial and other questions between the Government of Burma and the Government of India. It is in case the interests of Burma are not adequately considered, arising out of the original transaction, that this Subsection is inserted. The two countries are brought into the matter owing to the fact that a Tribunal was appointed to consider the interests of the two countries.
Amendment agreed to.
Clause, as amended, ordered to stand part of the Bill.
Clause 155 ordered to stand part of the Bill.

CLAUSE 156.—(Provision as to customs duties, etc.)
9.18 p.m.
The CHAIRMAN: There are two Amendments to this Clause, but I think hon. Members in whose name they stand will be ready to concur in the view, which I understand has been agreed to by the Government, that it would be more convenient to discuss the rather wide question of the trade of Burma on a later Clause, probably on Clause 346. In that case, I do not propose to call these Amendments.
Sir H. CROFT: I am obliged for the indication as to the attitude you take, Mr. Chairman, on this matter, and on the assumption that the discussion on the later Clause will not be limited but will be fairly wide, dealing with the vital question of the trade between Burma and India, I think that would probably be the more convenient course.
The CHAIRMAN: That is largely the question which moved me to make the suggestion; that it would be easier to get a much wider discussion on the later Clause. Hon. Members will realise that what I may call consequential Amend-
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ments, which may be necessary in the Clauses already dealt with, can be made in the ordinary course on Report.
Clause ordered to stand part of the Bill.
Clause 157 ordered to stand part of the Bill.

CLAUSE 158.—(Federal Government may borrow on security of federal revenues.)
9.20 p.m.
The SOLICITOR-GENERAL: I beg to move, in page 91, line 15, after "limits" insert "if any."
The Amendments to this Clause deal with the borrowing powers of the Federal Government, and similar Amendments to the next Clause deal with the borrowing powers of provincial governments. As the Clause is drafted it says that they may borrow within such limits as may from time to time be fixed by an Act of the Federal Legislature. No doubt there will be an Act fixing the borrowing powers, and the Amendment does not in any way impair the power of the legislature to control borrowing powers. But a situation may arise in which an Act has run out, and in that case it would be undesirable if there was no statutory right to borrow. We therefore propose to insert the words "if any."
Amendment agreed to.
Consequential Amendment made.
Clause, as amended, ordered to stand part of the Bill.

CLAUSE 159.—(Provincial Governments may borrow on security of provincial revenues.)
Amendment made:
In page 91, line 21, after "limits" insert "if any."—[The Solicitor-General.]
Consequential Amendment made.
Clause, as amended, ordered to stand part of the Bill.
The CHAIRMAN: There being no Amendments and no notices to omit in regard to Clauses 160 to 165 inclusive, I will put the Question that these Clauses stand part of the Bill.
Clauses 160 to 165 ordered to stand part of the Bill.

CLAUSE 166.—(Auditor of Indian Home Accounts.)
9.22 p.m.
The SOLICITOR-GENERAL: I beg to move, in page 95, line 21, to leave out "expenditure in the United Kingdom from," and to insert:
"transactions in the United Kingdom affecting."
This Clause deals with auditing. As originally drafted the audit applied to expenditure and did not apply, as an audit usually does, to the other side of the accounts—namely, what comes in. Therefore, instead of the word "expenditure" we propose to insert the word "transactions," which will cover payments out and receipts coming in.
Amendment agreed to.
Two consequential Amendments made.
Clause, as amended, ordered to stand part of the Bill.

CLAUSE 167.—(Audit of accounts relating to the discharge of the functions of the Crown in relation to Indian States.)
Amendment made:
In page 96, line 15, leave out "expenditure" and insert "transactions."—[The Solicitor-General.]
Clause, as amended, ordered to stand part of the Bill.
The CHAIRMAN: As there are no Amendments and no notices to omit on Clauses 168 to 172 inclusive, I will put the Question that these Clauses stand part of the Bill.
Clauses 168 to 172 ordered to stand part of the Bill.
Clause 173 ordered to stand part of the Bill.
9.25 p.m.
Mr. MORGAN JONES: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
I should like to ask the Secretary of State how far he proposes to go to-night. He will agree that we have made very substantial progress indeed. So rapidly have we transacted our business this evening that I must confess that I find myself in some difficulty. Our work in this House is pretty heavy, and we had not anticipated having to go so far this
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evening. I confess that I am not prepared to discuss anything beyond Clause 174, because I have really not had time to examine the subsequent Clauses. In view of the substantial measure of business transacted already, I should be glad if the right hon. Gentleman could find it possible to adjourn at this particular point. I admit that it is not the fault of anybody but ourselves. It is difficult to keep pace with the work of this Committee at present, in view of the fact that we are dealing with a Bill which involves very much research on the part of some of us. We should be rather sorry if the right hon. Gentleman proceeded beyond Clause 174, because we should be glad to have a little more time for studying the succeeding Sections and Chapters.
9.27 p.m.
Sir S. HOARE: I respond at once to the request which has been made by the hon. Gentleman. We have made very good progress to-day, and I am extremely grateful to all sections of the Committee for having so successfully expedited our proceedings. It seems to me that the hon. Member has made a very reasonable request—that we should finish at this Chapter and that at the end of Clause 174 I should move to report Progress. I am perfectly ready to do so.
9.28 p.m.
Mr. MORGAN JONES: I am very much obliged to the right hon. Gentleman and I beg to ask leave to withdraw my Motion.
Motion, by leave, withdrawn.
Clause 174 ordered to stand part of the Bill.
Ordered, "That the Chairman do report Progress; and ask leave to sit again."—[Mr. Blindell.]
Committee report Progress; to sit again upon Monday next.
The remaining Orders were read, and postponed.

ADJOURNMENT.
Resolved, "That this House do now adjourn."—[Mr. Blindell.]
Adjourned accordingly at half-past Nine o'Clock.