§ 7.48 p.m.
§ Mr. MAINWARING
I beg to move,That, in the event of an outbreak of war, this House is of opinion that His 1314 Majesty's Government should be immediately invested with whatever powers may be necessary to ensure that the national need shall not be exploited by private interests and profitmongers.It will be generally agreed that to-day the danger of war is a very real and present one. I doubt whether the responsible authorities in any country rest with easy heads and consciences in these days, because everyone is fearful of what to-morrow might bring. The question to which I draw attention is, therefore, a deeply urgent one. I do not waist it to be assumed that participation by this country in any outbreak of war would receive my support or that of the party to which I belong. Our support of any war would be governed by the factors behind it, the parties participating and 1315 the interests involved. We do recognise, however, that such a situation would constitute a national emergency irrespective of the particular countries and interests that might be involved and that brought it about. Nor need it be assumed that my object in putting forward this Motion and the views of the party to which I belong apply only to wartime profiteering. It would be wrong to assume that our objection is to wartime profiteering only. It should be well known to everybody that as a party we stand for the complete elimination of the principle of profit. We object to it violently, and there is nothing we desire more than to see an end to such a system. Indeed, we would trace the causes of war to the operation of that very principle. We, therefore, take the stand that we would remove profit-making root and branch.
It must be admitted that we have for very many years unceasingly stood for the creation of some authority within the country that would effectively deal with unreasonable profit-making. It may be that this House is unprepared to deal with the wider issue in that way, but I am not without hope that the House may be inclined to deal with profiteering in a condition of national emergency and danger. Even in their own interests hon. Members on all sides may be prepared to join us in preventing profit-making in conditions in which the national interests as a whole are at stake. The term "profiteering" has by common usage come to be applied, not to the principle of a slight rake off or the making of a profit, but to the realisation of excessive profits, not as the result of ordinary business management, or by some skilful management of a higher order, or by improved technique, but from the very conditions in which the mass of the people are being unjustifiably exploited. War conditions offer enormous possibilities in that direction. Indeed, one might say that it offers unending opportunities to the financial and business sharks who inhabit this country in such large numbers. Owners of money, of credits, of material and of businesses of a thousand and one kinds can, and do, in such circumstances hold the nation to ransom. No one would care to deny that fact, because, whatever we may choose to think of our country, and however much we may seek on 1316 occasion to idealise the people, harsh facts are difficult to deny, and the experience of the last War ought to indicate that among the people of this country are some whom none of us would care to honour in the slightest degree.
In contemplating these possibilities, I would like to see the Government clothe themselves with the authority necessary, not to limit profit-making in these circumstances, but to prevent any profit-making whatever, so that the very element of profit should be removed utterly in a condition of mational emergency. Were this country and other countries to adopt that as a measure of national defence, it would constitute the greatest safeguard against war. The vast majority of the interests that would be involved in war in this country would never contemplate a war were they not able to draw one farthing of profit out of it. What could be wrong in a proposition of that character? The owners of finance, of credit, of material and of businesses own the country, and it is their interests that are at stake. Are we then to agree that they must be paid to defend their own interests? I do not know whether we Welsh people are weaker than others, but we are rather inclined to sing, "Land of our fathers." It may have been the land of the fathers, but it is far from being the land of the sons.
To-day the country is literally owned by the interests I have mentioned, and it is absurd, when their very possessions are endangered, that at that very moment they should be allowed to hold the country up to ransom in defence of their property. If it be right to conscript the lives of those who have no such stake and no interests to defend, it should be equally right to use the possessions of these people without allowing them either loss or profit and only to guarantee a safeguard of the interests that they consider to be endangered. Those who join the armed forces carrot be safeguarded from loss in one form or another. If a life is lost, the loss has to be borne by the family, but the property owners whose possessions may be used in defence of the nation are safeguarded and guaranteed their return. One of the features of a war situation is the constantly rising and soaring prices of the necessities of life to the common people. That is so for several reasons. One of the most prominent of them is the opportunity pre- 1317 sented to business men throughout the country, owing to the general condition of scarcity that immediately sets in, of raising prices. When a war situation is created, the pursuance of that war and a continuation of that situation becomes to these men a business proposition and they are concerned to see to what extent prices can be raised and to what extent they can rake off a profit to themselves.
At the present time there are wide ranges of businesses in which widespread plans are already prepared, and they can be applied at any moment if war breaks out. It can be asserted with every confidence that through the whole range of business and industry plans are already prepared for profiteering in the event of such a situation arising. It is their business to do it, and if I were a business man possibly I should do the same thing. That does not in any way justify the Government or this House ignoring the possibility of taking effective steps to prevent such a situation being exploited. Apart from opportunities of profiteering in connection with the necessities of life to the common people there are other factors. There is the provision of the materials for His Majesty's armed forces, and what a history the last War presents us in that respect. I wonder whether the Government would dare to publish a bare statement of facts concerning the tremendous extent to which the national emergency was exploited, and the untold fortunes that were accumulated simply from providing the essential means to carry on the War on the part of the millions of men who were called into the armed forces.
The public outcry on both these counts was not heeded while the War was on. The Government, it is true, were compelled to take certain steps, such as food control and the limitation of prices to some extent. All of it was much too inadequate and exceedingly limited. Indeed it would be admitted at once that no effective steps were taken during the War, with the result that although the Excess Profits Duty which was imposed did take a small rake-off, tremendous sums were realised. The Excess Profits Duty between 1915 and 1932 realised over £1,100,000,000, and after the Government took off that amount one can rest quite satisfied that they retained very much larger sums than that. It is indicated by 1318 the very fact that another estimation has been made that the possessions of people in this country during the War actually increased by £5,000,000,000. The amount of value involved in that is best indicated by the fact that that is a sum which exceeds the total national income of the country for one year. In a period lasting some four years the profiteers in this country accumulated an additional personal wealth of a sum equal to the total national revenue for one year. Indeed it exceeds it by a considerable sum, and does not fall very far short of two years of material production of wealth.
Apart from that, the method of financing the War constituted a further imposition on the people of the country. I will not attempt to detail those methods, but there are sufficient publications, even Government publications, to indicate to what a ghastly farce the financing of that War amounted. This is the spectacle we have. Those who gave their husbands and sons, hastening with grey-heads and breaking hearts to their graves, and those who gave their money rejoicing in their material gain. For one reason and another the operations of the business people in raising prices of the essential means of life to the common people and the exploitation of the Government in the urgency of their need and the financial methods employed all succeeded in hurling us into a vicious circle of soaring prices on the one hand, and on the other hand the vain effort of the general mass of the working classes and the salaried people of this country to endeavour to keep step with rising prices by increasing their wages and salaries, and with wages and salaries always lagging behind.
It is not the workers of the country-who exploit a situation of that kind. The exploitation to which we are referring comes from a section which hon. Members and right hon. Members on that side of the House represent. It is the patriotism of the Government and its supporters that is being challenged. I remember as a miner in 1914 the gesture we gave to the Government when we said through the mouth of our then President, Mr. Robert Smillie, "Let the Government take steps to prevent rising prices, and we guarantee that we will not ask for an increase in wages." That was the spirit of the working classes. In 1319 vain did the Government look to their own supporters to take a similar honourable view of the emergency. During the last War the Government woke up too late, even if it can be said that they woke up at all. In 1949, after the War was successfully or unsuccessfully over, there came the Profiteering Act. At that time the main dangers and opportunities had passed, but even then the situation was regarded as a very serious one.
Even in the advancing months of 1919 when stupendous fortunes had been realised, the President of the Board of Trade then, in introducing the Profiteering Bill, had the effrontery to say that the introduction of that Bill at that moment was itself evidence of a growing social consciousness. It was necessary for the Government which had been in charge of the War for four years to wait until 1919 before they realised that. That consciousness is here to-day before the next war starts, and they need not wait for evidence of growing social consciousness before preparing their plans so that they can be put into operation at the first shot. It is not enough to deal with the situation of a war as it was dealt with on that occasion. In 1919, so widespread were the opportunities taken advantage of by business men, that at one period there were 500 prosecutions per week against men who profiteered. That was when the worst dangers and the wider opportunities had been passed by. Even those 500 only dealt with the small fry, the petty little retailers up and down the country. The big fish had already departed with the spoils.
That experience is more than sufficient justification for this Motion coming forward to-day. The sorrow of a lost son or husband is borne by one generation, but untold generations will continue to pay the financial debts. The patriotic fortune-hunters will go on for ever, so far as we can see, continuing to draw interest on accumulated profiteering. This House to-day has an opportunity of expressing its opinions and desires. It is not enough, as is suggested by the Amendment on the Paper, that we would welcome action from the Government. This is a private Members' day. It is an opportunity on which the average Member of this House ought to say what 1320 he thinks. There is no one in this House who is so entirely hard-faced as to defend a similar state of affairs as we experienced during the last War. This is an occasion when we should tell the Government what needs to be done. I do not think it is right for anybody to give the Government the backdoor method of getting out of the responsibilities which devolve upon them.
There is plenty of evidence of the need for this action being taken, and I am certain there are Members in all parts of the House who will subscribe to the opinion which I have expressed. They may not agree entirely with my own view with regard to profits or general social philosophy, but no man in this House or outside would dare publicly to defend a repetition of the circumstances and the widespread system of profiteering and of exploiting the nation which occurred in the years of the late War. Therefore, I seriously ask the House to carry the Motion on the Order Paper.
§ 8.14 p.m.
§ Mr. DAGGAR
In rising to second the Motion so ably moved, may I say at the commencement that the need for the consideration of this Motion is a serious reflection on what is generally termed civilisation? That we should be engaged in discussing the need for preventing men from profiteering at the expense of their fellows is deporable. It is almost enough to destroy one's faith in humanity. It must have been on a similar occasion to this that an American writer described man not as a fallen angel but as a promoted reptile. But ray faith in humanity is repaid in the knowledge that it s a minority of men who take advantage of the conditions created by war. There may be an element of danger in this discussion. Personally, I think so. It may create the impression that Members of this House have succumbed to the deadening effect of belie in the inevitability of war. To that belief I do not subscribe. On the other hand, the passing of this Motion would perhaps discourage those persons who would otherwise benefit financially from the existence of war, and for that reason I support it.
The Motion is designed to prevent profiteering in the event of war. As the word is comparatively modern, I desire 1321 for a moment to discuss its meaning. When the Profiteering Bill of 1919 was introduced into this House, the President of the Board of Trade, Sir Auckland Geddes, summarised the provisions of the Bill and gave his opinion of what profiteering really meant. He said that to profiteer was to make unreasonably large profits, all the circumstances of the case being considered, by the sale to one's fellow-citizens of an article which is one, or one of a kind, of common use by or for the majority of the population. Some of those terms are vague. I should prefer the words "elimination of profits" to the word "profiteering." The words "unreasonably large profits" remind me of a difficulty over defining the words "not too bad" A publican wanted his premises renovated and engaged a workman to make the necessary alterations. The man was offered a glass of beer and was afterwards asked by the publican what he thought of it. "It is not too load," he said. The publican inquired, "What do you mean by that?" "Well," said the man, "if it had been any better you would not have given it to me, and if it had been any worse I should not have been able to drink it" I would suggest, instead of profiteering, the phrase" the making of inordinate or excessive profits out of the State's or the consumers' distress or difficulty, especially by contractors and traders in war time."
I regret that the Motion does not provide for the entire elimination of profit-making during war time, because I am convinced that one of the causes of war would be removed were we to eliminate profit-making from the production of the weapons of war. This is not a question of theory, nor do I want to make allegations against the integrity of all men. It is not a subject about which it is impossible or futile to make predictions because we know that owners of capital are prepared to exploit any situation. Experience justifies that observation, and I shall produce the evidence necessary to substantiate it. He would be a strange Member of this House who sought to convince any other Member of the correctness of his attitude towards any question discussed in the House, whether that Member occupied a seat below the Gangway or above the Gangway, but there are people outside the House who pay some attention to 1322 our discussions, and it is in their interests that I propose to give evidence in support of my previous statement.
When the Profiteering Bill was introduced in 1919 an hon. Member observed, "The time to check the profiteer is now," and I repeat that by saying that now is the time to make provision against profiteering in the event of war breaking out. It is interesting to read that Debate, because it shows to what lengths some people will go in order to exploit the nation in time of distress, and we can only imagine what would have been the results had Parliament not restrained them during 1919. The Sankey Commission, which was set up in 1919, reported that the total profits and royalties in the coal mining industry, exclusive of the profits of coke ovens and by-product works, amounted in the five years 1914–18 to £160,000,000, which was £25,000,000 more than the total pre-War capital of the mining industry in Great Britain, £135,000,000. On 24th May, 1917, Mr. Bonar Law stated in this House that he was a shareholder in 14 ships, all of them paying well, and that, taking the average of those ships, the rate of dividend he had received for the past year was 47 per cent., after paying Excess Profits Tax. He went on to say:I do not say that that is typical of the whole shipping community … but for every £100 I put in I received £47 last year after Excess Profits had been paid." [OFFICIAL REPORT, 24th May, 1917; col. 2576, Vol. 93.]It may be, as Mr. Bonar Law said, that that was not typical of the whole of the shipping community, but Sir Leo Chiozza Money states in his book "The Triumph of Nationalisation" that down to the time in 1917 when the Ministry of Shipping took over the entire mercantile marine and made it serve national purposes the shipowners had made a profit of about £350,000,000—that is in the 31 months since the beginning of the War. In 1920 a Select Committee of the House of Commons issued a report which dealt with the suggested taxation of war-time increase in wealth, and it was stated that in 1919 the Board of Inland Revenue had submitted a memorandum to the Committee. In it attention was drawn to an estimate of the increases in wealth which would, at the termination of the War, be subject to a tax were the general capital levy to be imposed. The estimate to which I refer appeared in the "Economic 1323 Journal" of 7th September, 1918, and was made by no less an authority than Dr. J. C. Stamp. He gave the figure of £5,250,000,000 as his estimate of the increase in wealth due to the War. It is true that the Board of Inland Revenue submitted another memorandum in January, 1920, in which it was stated that Dr. Stamp's figure was too high and put the amount at £4,000,000,000, a difference of £1,250,000,000, but even their revised figure showed the degree of profiteering that took place during the War. Those who received that increase in their income ought, in my opinion, to have been forced to pay their share of the War. If that increase had been subjected to a special form of taxation it would have been unnecessary for the people of this country to pay £1,000,000 per day in interest upon a debt largely incurred during the last War.
According to a statement made by the present Postmaster-General, when he was Minister of Pensions, at a meeting of the British Empire Service League on 25th July, 1933, this country and the Dominions have paid in compensation for deaths and disablement caused by the War no less than £1,100,000,000, and he said we were still paying at the rate of £1,000,000 per week. It should be remembered that it was not only the owners of large undertakings who exploited war conditions, because during six months in 1919 there were no fewer than 5,908 prosecutions against retail traders, of whom 229 were sentenced to varying terms of imprisonment, and no one knows the degree to which profiteering would have arisen had not the Government taken certain measures to abolish it. For instance, we were informed by the then Prime Minister, the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) that as a result of forming the Ministry of Munitions they were able to reduce the cost of shells from 22s. 6d. to 12s. each, which saved this country no less than £35,000,000. He also pointed out similarly with regard to the Lewis gun, which was reduced in price from £165 to £35, saving £14,000,000. By various methods they were able to save £440,000,000 for this country. All that shows how difficult it is to mix profit with patriotism, and it shows also the need for this Motion. In the light of those facts, it is no exaggeration to state, as one writer has stated, 1324 that capital with a certain 10 per cent. profit will ensure its employment anywhere; 20 per cent. certain will produce eagerness; 50 per cent. positive audacity; 100 per cent. will make it ready to trample on all human laws and for 300 per cent. there is not a crime at which it will scruple or a risk it will not run, even to the chance of its owner being hanged.
I anticipate similar objections being raised to-day to those which were raised when the Bill was introduced. It was stated that the Bill would create an additional bureaucracy, and that it was an interference with trade and competition. One hon. Member made the brilliant observation that the Government were heading towards the worst characteristics of Soviet rule. Very few people would be influenced to-day by such primitive platitudes. The President of the Board of Trade stated in this House that even a congenital idiot could make profits in wartime. I am sure he will be pleased to know that in a more general sense our great dramatist, Mr. George Bernard Shaw, agrees with him; realising the modesty of the President of the Board of Trade, I am sure he would rather I put it that way than that I said that he agreed with Bernard Shaw. Shaw, in one of his latest plays, says:The meanest creature call become rich if he devotes his life to it, and the people with wider and more generous interests become or remain poor with equal certainty. Plutocracy is the very devil socially, because it creates a sort of Gresham's law by which the baser human currency drives out the nobler coinageI agree with the statement made by the right hon. Gentleman. That we should permit these people to make such profits warrants a stronger condemnation and a much more drastic description. To allow profiteering in such circumstances is reprehensible and morally wrong, and cannot be right politically, socially or economically. I contend that the Motion is in the right direction and, if carried, will be a step towards the ultimate prohibition of the private manufacture of arms for profit, and the complete abolition of private trade in the means of destruction and human slaughter.
§ 8.28 p.m.
§ Mr. MABANE
I beg to move, in line 1, to leave out from "That," to the end of the Question, and to add instead thereof: 1325this House would welcome proposals by His Majesty's Government to take whatever powers may be necessary to ensure that the need for organising the economic resources of the nation to provide adequately for defence in time of peace or in time of war shall not be exploited by private interestsWhatever the House may think of the manner in which the hon. Member for East Rhondda (Mr. Mainwaring) has presented his case, I am sure the House will agree that he has ventilated a topic of extreme importance at the present time. In the Debate on Defence not so long ago, the Prime Minister in the course of his speech made a comment with which most hon. Members will agree. He said:I am anxious to say something on what to my mind is far the most important part of these proposals, and that is the subject of supply."—[OFFICIAL REPORT, 9th March, 1936; col. 1841, Vol. 309.]The hon. Member for East Rhondda by his Motion to-day has enabled the House to review in perhaps as complete a manner as possible this important question of supply. The question of supply is much more important in modern war than it has ever been in the past. Not so very long ago, warfare was something in the nature of a private industry but, as the functions of the State became crystallised, it was necessary for the State to nationalise this industry of war. Even at the beginning of the last War we were apt in this country to think of war as an occasion on which we sent our armed forces to deal with the war, to win it, and in due course to return home, while we paid them for what they had done. As the War progressed, we began to realise that war had become something quite different, that it could not be properly conducted unless the whole nation were regarded as in the War and that it was an occasion on which the nation must spend its united efforts. I doubt whether we have fully comprehended the force of that truth even yet. I think it has been more fully comprehended in Germany. I observe that General Ludendorff, who took such a leading part in the last War, has recently published a book with the unusual title, "Total War." He says that in the modern sphere, the fighting forces and the people constitute one mighty unit. Because war has assumed that character, it is very important that we should con- 1326 sider the problems put before us to-day in the Motion of the hon. Member for East Rhondda.
When I read that Motion I was surprised at its mildness. It appeared to cut right across the protestations so often made by hon. Gentlemen opposite that they desire to eliminate entirely the private manufacture of armaments. I was interested to hear at the beginning of the speech of the hon. Member that he did not intend that to be the case. I should like to indicate at the outset the difference between his position and that taken up in my Amendment. It was clear that the hon. Member for Abertillery (Mr. Daggar) had not read the Motion which he seconded or, if he had read it, he had not comprehended it. The principle difference between the Motion and my Amendment is that the Amendment omits the phrase, "in the event of an outbreak of war." The hon. Member for Abertillery said that the time to proceed with these matters was now, but the Motion does not do it. I sincerely trust that he will therefore throw over the Motion and will support my Amendment. The implication in my Amendment is that this matter has not escaped the attention of the Government and that proposals may be expected on this important matter. A final point of difference between my Amendment and the Motion is that, in deference to the point of view of the junior Member for Oxford University (Mr. Alan Herbert), it omits that awful word "profitmongers"
Let us deal with that phrase, "in the event of the outbreak of war." If we are to neglect to make provision in this important matter until war has actually broken out, we shall take our action too late. As was stated by the hon. Member for Abertillery quite rightly, if this matter deserves attention it deserves attention now, and not in the event of the outbreak of war. What was the experience of the last War? Dr. Addison, in the course of the Debate on 8th November, 1934, told the House something of the experience during the War and of the chaos into which we fell. It was clear from what he said that had provision been made before that War broke out, we should have been able to avoid some of the difficulties which arose. The preamble to the Motion speaks of a possibility of a war. It is unfortunate that we have to use that phrase. The hon. 1327 Member who moved the Motion said that it was a phrase which we must use, but if there is a possibility of war, surely the time to make preparation for contingencies that might arise in the unfortunate event of the outbreak of war is in time of peace, when we are not likely to take decisions hurriedly or in error.
Secondly, my Amendment implies that the Government already have this matter in hand, and I think there can be no doubt that that is true. On many recent occasions the Prime Minister has declared, in debate and in replies to questions, that any exploitation of the national need is repugnant to him, and, indeed, to the Government; and those of us in this House who know the Prime Minister so well will I am sure agree that nothing is likely to be so repugnant to his nature as the exploitation of a national need for private gain. I sincerely hope that this feeling, which I am sure exists strongly in the breast of the Prime Minister, will be translated into strong action. We have also had the recent White Paper on Defence, which refers to this very matter. The reference is not, perhaps, in terms so complete as we should wish, but nevertheless the latter part of the White Paper on Defence is the first concrete evidence we have had of the Government's intention to deal with this very important matter.
The subject of our Debate to-night has another very important significance at the present time. The country, as the Mover of the Motion said, has the strongest feeling on this matter. I am certain that the country is prepared whole-heartedly to support the Government's proposals for defence if it can be satisfied that in the widest sense a national duty is being undertaken, but if there is any suspicion that improper private gain is being made out of the provision for national defence, I fear that the country will be likely to turn against the proposals of the Government. I would also like to suggest that this matter has an important bearing on the cognate topic of recruiting. Nothing is so likely to stimulate the feeling that we wish to stimulate, that a career in any of the Services is a career worthy of any man, as a firm belief that on no account will any provision made for defence result in private gain. I believe that the 1328 patriotic instinct is uppermost in this matter. The hon. Member for East Rhondda appears to feel that he has a complete monopoly of virtue. I have often observed in. Debates that hon. Members opposite arrogate to themselves all the finest instinets that may blossom in the hearts of men—
§ Mr. MABANE
Judging from the small number of the party opposite that the country has sent to this House, I think the country has judged that view not to be correct.
§ Mr. MABANE
Including Dumbartonshire last week—I am taking it by and large. It is very illuminating to observe that Members of the party opposite are apparently consistent in asserting their right to arrogate to themselves a monopoly of virtue, to regard, say, patriotism as a qualtiy that is in inverse ratio to income; bur I am sure that the great majority of Members of this House would not give any credence to such a doctrine, and certainly the country would not do so either.
§ Mr. MAINWARING
Naturally, what the hon. Member now says is correct, because the majority of the Members of the House do not belong to this party.
§ Mr. MABANE
I gather that the hon. Member persists in his extraordinary doctrine that patriotism varies inversely with income.
§ Mr. MABANE
That is an important admission to have gained from him. I do not take that view at all. There are some "bad hats" in every section of society, but I believe that in every section of society the main instinct in this matter is patriotic in the best sense of the word, and I am certain that those engaged in industry to-day, whether as employers or as employés, will willingly submit to any proposals that may be made in order to secure that there is no exploitation of this or any other programme of defence; and I would add that, in case there should be any such exploitation, we ought to take powers to deal with it.
1329 If the hon. Member would get away from the class bias that is in his mind, he would find that not only the Members of this House but the people of the country are in general agreement with him on the matter of principle. Indeed, I doubt very much whether there will be any difference in the House to-night on the matter of principle. The hon. Member for Abertillery said that he anticipated that the same objections would be made as were made in 1919, but I think he is going to be disappointed—or rather, I hope it will not be a disappointment to him, because, while I do not want to say anything disrespectful of the House of 1919, probably some of us who are now here and were then occupied in France had very bitter feelings about some of the things that were going on then.
But, while we shall reach with seine ease that agreement in principle, the matter becomes more difficult when we consider in detail how it should be done, and I think the value of this Debate lies in the fact that these difficulties can be explored, and that some of us who humbly sit on the back benches may offer, from our experience and observation, some suggestions which we would ask the Government to consider. In the first place, looking to the past, we have the experience of the War period. I have searched the Statute Book for the period of the War, and I can find no evidence of any very effective or drastic means being then taken to control industry. The only provision that I can find which dealt with this problem is one Section of the Defence of the Realm Act, passed in November, 1914, which empowered the Admiralty or the Army Council virtually to take over any industrial plant if it so desired. That was simple, but, in my view, not by any means complete. Notwithstanding that attempt to provide for the taking over of industry at that time, we know that very great profits were then made, and we also recognise that few things had a more harmful effect upon the morale of the troops than the knowledge of what was happening at home. The experience was common to all countries. I observe, again quoting from the recent book of General Ludendorff, that he says:The inequality of reward as between the civilian and the soldier in wartime is a powerful fomenter of discontent.1330 The morale of our troops in France was magnificent, but some of us found it rather trying to have to sit in the trenches arid read of some of the things that were going on at home. There were undoubtedly profiteers. I am not here to defend them; no one could have been more bitter about them at the time than I was; but, as I look back now more soberly, I am compelled to the conclusion that a great part of the large profits then made were made involuntarily—that they were a direct consequence of the inflationary process that was going on. I suggest to the Mover of the Motion that, however anxious a manufacturer might have been not to make profits, the mere sweep of the inflationary process forced profits upon him, and I think that that ought to be a valuable guide to us as to what we should do in the future. The hon. Member himself said that it should be a part of the duty of the Government in future to prevent this rapid rise in prices, and I agree that he is right, but I think he must recognise that that rapid rise in. prices, that inflationary process, was a powerful factor in creating those conditions to which he himself rightly objects. Therefore, I appeal to him and to the House to be guided in this matter by reason and not by prejudice. The problem, as it appears to me, divides itself into three parts. There is, first, the matter of profits that arise directly—the profits of those who contract directly with the Government, or of their subcontractors. Then there are the profits made by the whole of the trading community, who are not, directly or indirectly, contracting with the Government at all; and, thirdly, there is that aspect on which I have just touched, namely, what I may term the monetary or financial aspect of the problem.
When we deal with the first, the matter of profits arising from contracting for the Government, we must recognise that it is incorrect to treat the provision of war material as a thing apart. It is not. As soon as we come to approach the problem—I observe that the Mover recognised the truth of this in an earlier speech—we know that the problem of definition is almost insuperable. He said so himself. What is war material? It is an old question in the House to which he himself rightly said the answer is extremely difficult. In an earlier Debate the right hon. Gentleman the Member 1331 for West Birmingham (Sir A. Chamberlain) said: if we were to be really logical in our definition and adopt the proposal made from the other side that the private manufacture of armaments should be prohibited, we should find that there was very little left for Socialism. The whole of industry would he socialised, so wide would be the scope of any definition which would be logical. But, while that is true, I think, on the other hand, that, if we impatiently tried to limit our definition too closely and brought within it only those firms which are most obviously engaged in the manufacture of war material, we should be in danger of falling into inequitable practices, because we should perhaps tend to confine our control to a number of very limited industries engaged obviously in the production of war material—
§ Mr. MABANE
No, but I am speaking at the present time. And we should let go cost free quite a number of industries which might be making profits and which ought to make some contribution. Therefore we must not be too logical. We shall probably find, if we want to tackle the job, that we have to apply different methods in different cases and apply the often illogical but quite right methods of the British people.
Let me endeavor to suggest a few methods. First of all when we have to deal with the matter of direct contractors. We have heard something about that in the White Paper. It has suggested the matter in which the contractors are to be controlled. It says that the Government are determined that the needs of the nation shall not serve to pile up extravagant profits for those who are called upon to meet them. I feel that we ought to have some more light on that phrase. I should like to know exactly what an extravagant profit is. It is very difficult to get a definition. When we turn over the page, we find that the Government propose methods whereby the costs and the prices of those who contract shall be controlled. But there is a great difference between a profit on cost and a profit on capital. What may appear to be quite a moderate profit on cost will, at the end of the year, come out an enormous gross 1332 amount as a profit on capital. It is important to bear in mind, too, that the attention of the country will be concentrated, not on the percentage profit on the cost but on the final aggregate figure and, if by any mischance some firms that have contracted produce substantially increased profits, the country will concentrate on those figures. It will not be concerned so much with the bare percentage. It will say, "This man has made £250,000 for himself." There is one other phrase that I should like to know something about in the White Paper. We read, on the one hand, that it is important to retain the good will of industry, for in peace time firms cannot be compelled to undertake contracts on terms which they consider unreasonable. That phrase would-rave read more happily if it read, "on terms which may be fairly considered unreasonable," because there might be a vast difference between terms which a contracting firm considered unreasonable and which perhaps individual Members of the House sitting in a judicial capacity might themselves consider unreasonable. There are some details of organisation later on the page and the House will be very glad if the Financial Secretary could elaborate in some way the organisation that is proposed.
While I am glad to read those proposals in the White Paper, I am by no means satisfied that they are really enough, either in the present situation, when we are engaging in exceptional expenditure on defence, or in time of war, because, as well as the benefit that will accrue to private contractors directly contracting for the Government, I am satisfied that there will be a great benefit spread over the whole range of industry. The expenditure of large sums of money now, or larger sums in time of war, will be pumping the lifeblood through the arteries of industry more rapidly and will increase the price. I think it proper that we should make some provision that those firms which so benefit should make some contribution, and I firmly believe that they would be willing to make a contribution. Let us recognise that, if we are spending money as we now propose, and as we certainly should have to spend it in the case of an outbreak of war, what we spend will have to be paid for either 1333 then or in the future. I sincerely hope that we shall pay at the time and shall not pass on to a future generation a legacy such as was passed on after the last War. We ought to do our best to pay as we go. Industry would not be unwilling to consider some special tax—call it a national defence tax—on excess profits that arose.
I know that, as soon as you begin talking about excess profits, difficulties arise. There is the difficulty of the base against which you are to calculate them, but it appears to me that a base could be found, a better one than we used in the last War, when the immediately preceding years were taken. It might be possible to allow firms to take their best two years in the last 10 years and make that average the base against which to make the calculation. Notwithstanding the difficulties of agriculture and the difficulties of new businesses, industry would not be averse from paying a tax of that kind, because the expenditure has to be met, and, if I were in business, and bad to choose between an increase in the Income Tax and a special tax of this character, I should prefer a special tax of this character. It may be entirely opposed to the views of the Mover of the Motion of those who are engaged in business, but I am certain that the House would find that those engaged in business were perfectly willing to consider this sort of tax, particularly as industry to-day is both manned and managed to a far greater and ever increasing extent by people whom themselves were in the last War and do not want the experience to be repeated.
That leads me directly to my third point, that of the finance of the military problem. If we make some effort to pay as we go, either now or during the course of a war, we shall be doing the best possible thing to safeguard against inflation. I am always horrified when I read in the Press suggestions that we are going to borrow money for this special purpose—that there is to be a defence loan. I am certain that the Government will be making a grave mistake if they engage in anything in the nature of a defence loan. By paying as we go we should be adopting the best possible safeguard against inflation. It was not the rapaciousness of individuals but the mere 1334 operation of monetary inflation which was responsible for the major part of the high profits in the last War. Let it be the purpose of the Government, by the deliberate management of our monetary system, to do their best to maintain a stable price level. I believe that our monetary system has been arranged with consummate skill since 1931, for never before in modern history has the price level remained so steady. If we could insist that the Government did their best to secure a stable price level, one of the principal causes of excess profits would disappear.
§ Mr. E. J. WILLIAMS
The hon. Member will agree that we have maintained that stable price level because we have gone off the Gold Standard.
§ Mr. MABANE
Certainly. If the hon. Gentleman had done me the honour of listening to, or reading some of my speeches in this House, he would know that I persistently urged that particular point of view.
§ Mr. WILLIAMS
The previous National Government was elected to save the Gold Standard but failed to do so.
§ Mr. MABANE
The hon. Member is usually incorrect in his facts. If he will recollect correctly, he will realise that we had gone off the Gold Standard before the Government for 1931 was elected to office. [Interruption.] I do not want to enter into a discussion of the Gold Standard, as I am certain that I should be out of order, and so perhaps the hon. Member will leave that to some future occasion, and allow me to concentrate my attention upon the matter now before the House. It appears to me that there are really two problems, the first of which is to secure the State against any exploitation as a result of the exceptional expenditure foreshadowed in the White Paper on Defence, and that demands immediate attention. The House, I am sure, is glad that certain proposals have been made in the White Paper, but the House would be better pleased still, and I am sure that the country would be if the Government could elaborate a little more the proposals that they are willing to make to secure that the present exceptional expenditure on Defence is not exploited for private purposes. The second problem is to devise means for meeting the much wider problem that would arise 1335 in the event of an outbreak of war. Now is the time to do it, and because I believe that this is the time to do it, I put down the Amendment on the Paper.
I am certain that these problems can be solved within the bounds of our present economic system. This is a proposition with which hon. Members opposite may find themselves in disagreement. I am certain that it can be done better by taking out the elements of compulsion. We can tackle this problem by the cooperation of the whole of industry, not by compulsion. If you adopt this method you are likely to succeed. I gather that the hon. Member who moved the Motion advocates compulsion. I am satisfied that if, first of all, this Government, or any Government, were to adopt officially the attitude that he adopts to those engaged in industry, that they are some kind of unpatriotic criminals, and endeavour to impose upon them measures of compulsion, then, not merely would he not succeed in the object which he has at heart, but he would involve the nation in the gravest possible disaster. Therefore I appeal to the House not to support the Motion in its original terms, but, on the other hand, to vote for the Amendment which stands on the Order Paper in my name and that of my hon. Friends.
§ 8.59 p.m.
§ Mr. SCRYMGEOUR-WEDDERBURN
I beg to second the Amendment.
If there had been no Amendment on the Paper, I should not have been unwilling to vote for the Resolution which has been moved by the hon. Gentleman the Member for East Rhondda (Mr. Mainwaring), but I am glad to support the Amendment because I think that, for the reasons which my hon. Friend has explained, its terms are preferable to those of the Motion. I think that my hon. Friend is already aware that, while I am in agreement with the main part of his observations, I cannot accompany him into one or two of the conclusions which he drew towards the end of his remarks. I do not share the view that the comparatively moderate expenditure upon armaments which is about to be undertaken by the Government is likely to produce such a general expansion of profits over the whole field of industry as my hon. Friend appears to contem- 1336 plate. Within the last, few years the country has experienced a gradual but steady industrial revival, which manifested itself, first of all, in the lighter industries and the distributive trades, and has lately begun to extent itself to the heavy industries, quite apart from any prospect of increased Government expenditure. It is no doubt possible that the renewal of monetary circulation and the increased purchasing power which would result from some further expenditure on the part of the Government might have the effect of accelerating this industrial revival. But I think that it would be quite impossible to calculate what fraction of the earnings of any industry ought to be attributed indirectly to the action of the Government. I believe that anything in the nature of a national defence tax, such as my hon. Friend suggested, would prove in practice to be a most vexatious and inequitable imposition which would produce the greatest amount of friction and discontent, and would not be likely to bring in any substantial return to the Revenue. If anything in the nature of an excess profits duty should ever become necessary, it would mean that the policy of the Government had failed. I am altogether against the idea that we might first allow the profiteer to materialise, while at the same time we should, as it were, prepare an ambush out of which at some convenient moment we should pounce upon him and deprive him of his nefarious gains by a heavy tax. We want to prevent the profiteer from coming into existence at all. As for the profits which are likely to be made by the contractors or sub-contractors of the Government, I am fairly well satisfied for the moment with the statement which is contained in paragraph 59 of the White Paper of the Government, although in respect of one or two facts the statement might have been male more specific. It is declared that,Control to prevent excessive profits will be effectively exercised by inspection of books, adequate technical postings, audits on behalf of the Stale and arbitration in cases of dispute.I should like to ask my hon. and learned Friend, the Financial Secretary to the Treasury, to explain in his reply what is meant by "adequate technical costings." It is possible that an industry might be operating, say, on a turnover 1337 of £100,000 a year, and making a profit of 10 per cent. on its turnover, that is to say, a net profit of £10,000. If the turnover, as a result of the increase of Government orders, is increased to £1,000,000, a profit of 10 per cent. on that would be £100,000. The firm might reduce the percentage of profit by one-half, from 10 per cent. to 5 per cent., and still be earning £50,000, which would be five times as much as before. I do not think that the public would be satisfied with that, and would rightly demand that the question of what constitutes reasonable profit shall be determined not in relation to turnover but in relation to overhead costs and capital charges.
Before I leave this subject there is one further point I should like to make. Those who have studied the history of the late War will remember that in its initial stages a great deal of difficulty was experienced by the Government on account of the private ownership of certain mechanical inventions whose possessors were reluctant to share their trade secrets with others, or to abandon their rights as patentees. I think it would be in the national interest, and, if necessary, I would be prepared to support legislation to that effect, that the Government should acquire the ownership of all mechanical processes which might he used in the production of any kind of machinery necessary to supply our defensive requirements.
May I now turn, for the remaining part of my remarks to a different aspect of this subject Hon. Members opposite and the hon. Member for Huddersfield (Mr. Mabane) have devoted the greater part of their speeches to the possibility of excess profits on the part of industrialists. I should like to ask the House to consider what I believe to be the more important question, the excess profits which might be made not by industrialists but by financiers. I have never regarded the manufacturing class as the principal war profiteers. I think that the only manufacturers who profited permanently from the War were those individuals who were fortunate enough, or if you like selfish enough, to go out of business altogether in 1919; who sold out all their interests, realised their gains, and put their money into fixed securities. These individuals, you may say, permanently profited from the War, but I do not think that the manufacturing class as a whole 1338 profited in the long run, because the abnormal gains which they derived from the inflation which took place were equalled, and in many cases exceeded, by the abnormal losses which they suffered from the deflationary policy which was carried out when the War was over. I have always thought that the classes of the community which were permanently enriched as a result of the War were not those who received money from the spending Departments but those who lent money to the Treasury.
During the War we increased our international debt by approximately £6,500,000,000. It is quite impossible to estimate with any accuracy what fraction of that sum was raised by real borrowings from the savings of the people, but I think it is estimated by most economists at something in the neighborhood of £2,000,000,000, which would represent a fairly large proportion of the entire national income for the whole of the War period. Another £1,500,000,000 was raised by the enlargement of the Floating Debt, that is by direct advances from the Bank of England or the issue of Treasury Bills. That leaves us with a balance of somewhere in the neighborhood of £3,000,000,000, which was not raised by taxation, which was not raised by borrowings from the savings of the people, and which had somehow or other to be created ex nihilo. How was this money raised? The banks were persuaded to allow exceptionally large advances against collateral security to those of their clients who were willing to use the money to purchase War Loan. That is to say, the clients of the banks were allowed temporarily a large overdraft. An equal amount of new credit money was placed to the credit of the Government, who immediately spent it on munitions, while at the same time the Government issued an equivalent amount of War stock which became the property of the investor, who could subsequently either pay off his overdraft or sell his War Loan to some other person who had accumulated funds for the purposes of investment.
Let me give an example of what I mean. It may be remembered that in 1916 the Bank of England issued a circular to the public offering to lend money at three per cent. to anybody who would use that money for the purchase of Four per cent. War Loan, which was then being issued by the Government. Suppose I 1339 am an investor who takes advantage of this to acquire £1,000 of War Loan. I deposit perhaps £1,500 of railway debentures as my collateral security. Against that I receive an overdraft of £1,000. £1,000 of new money is placed to the credit of the Government, who immediately spend it, and I receive £1,000 of War Loan. Apart from my original gain of one per cent. interest my position to begin with is exactly even. My new asset of £1,000 War Loan is precisely equal to my new liability of £1,000 overdraft to the bank. Now suppose I save money at the rate of £200 a year and use that money to reduce my overdraft. After five years, that is by 1921, I shall have extinguished my overdraft and shall have become the free owner of £1,000 War Loan. I hope that I am making myself clear. I have given the example of a small investor for the sake of simplicity, but the greater part of the War Loan was, of course, taken up by large financial corporations who could afford to carry a large overdraft in their banking account. That is to say several thousand millions of War Loan was issued to investors who did not pay for it by money which they possessed, but by overdrafts which they undertook subsequently to make good. That meant, of course, an immense amount of inflation.
War-time inflation was not caused by the printing of Treasury Notes. They only represented the additional quantity of small cash for the hand-to-hand transactions of the people, which became necessary in consequence of this vastly greater inflation of new credit money. What happened was that the £3,000,000,000 of new credit money was created out of nothing. The Government pretended to borrow this money from people who did not possess it. Later on, after the War, this pretence of borrowing was converted into a posthumous reality by the annihilation of £3,000,000,000 of new investment capital which had accumulated in the ordinary way and which was absorbed by this huge artificial debt which had been manufactured during the course of the War. That meant that after the War money rates remained exceedingly high and industry was unable to obtain the new capital it so urgently needed for its re-equipment after four years of War wastage. I do not intend to discuss 1340 whether the policy of post-War deflation was right, for that would take us too far from our subject. I wish to confine myself to this observation only—that during the War the public was allowed' and even encouraged to lend money to the Government at very high rates of interest—4 per cent. in 1916, 5 per cent. in 1917 and before the end of the War, 54½ per cent. After the War, those holders of War Loans were not only able to enjoy those exorbitant rates of interest for a very long period of time, but, as a result of deflation and the consequent fall in prices, they found that the real value of their incomes was nearly doubled.
While the attention and indignation of the public were concentrated against the manufacturers or Government contractors who very often lost afterwards more than they had gained, the holders of War Loan, who gained on every side, were very largely ignored. At the end of the War, there were some statesmen, including, I think, Mr. Bonar Law, who wished to correct that state of affairs by means of a capital levy. But a measure of that kind, applied during a period of deflation, would probably have done more harm than good, and would certainly have ruined large numbers of people who had made no profit out of the War. It is of no use first to allow the evils of an inflated debt at exorbitant rates of interest to be incurred, and afterwards to try to correct those evils by a clumsy and ineffectual attempt to redistribute the wealth of the nation. What we ought to do is to prevent the evils of an inflated debt at high rates of interest from ever being incurred.
For that reason I am very glad that the Government spokesman in this Debate, instead of being the new Minister for the Co-ordination of Defence, who has to deal with Government contractors, is my hon. Friend the Financial Secretary to the Treasury, whose Department is responsible for our financial affairs. The House will, of course, remember that the moment my hon. Friend took office last November, the credit of the country immediately rose to such an unexampled height that we were able to borrow money at an unprecedently low rate of interest. £200,000,000 were borrowed at 2 per cent. for a, fair period of time, and £100,000,000 at only 1 per cent. interest for a rather shorter period. I think that will constitute a very valuable reserve 1341 which might possibly be used, if it should be necessary, for the financing of our rearmament programme. No doubt, as my hon. Friend said, we would all prefer that it should be paid for out of revenue, but next year we are, I believe, to build two battleships, and there are many of us who hope that the proposals for the building of new cruisers and destroyers will be rather greater than those which are contemplated in the White Paper. If we do not find it convenient to meet the whole of this amount out of revenue, it will be very important, if it has to be met out of short-term borrowing, that it should be possible to do that borrowing at the smallest possible cost to the public. Of course, that is true to an infinitely greater extent if the calamity of another war should ever come upon us. I believe that the necessity of keeping down rates of interest is of far greater importance even than the necessity of keeping down the profits of manufacturers who are working on contracts for the Government.
I will conclude by saying that during the last four years the Treasury has acquired a degree of influence over the money market which it never possessed before. It is now able to influence to a great extent the prevailing rates of interest on money which is borrowed. I think it has achieved that power mainly by establishing a control over domestic issues and by the imposition of the Treasury ban on foreign loans. The control which this gives to the Treasury has enabled all the accumulation of credit to be kept in our own country, to be used for our own purposes and to keep rates of interest very low. There is nothing which alarms me so much as to hear men who are eminent in finance and business circles, or even in political circles, contemplate the removal of this Treasury ban and the renewal of the free export of British capital. If this ban on foreign lending is removed, money will inevitably go to seek employment where it will earn the highest yield. That will mean that interest rates in our own country will rise, which would undermine the whole of our industrial policy, and would make it impossible for us to finance either our present expenditure on armaments or expenditure which might become necessary in the event of war, at a reasonable cost to the taxpayer, in order that the burden—to which my hon. Friend referred 1342 —on future generations may be as low as possible.
My main reason for intervening in this Debate and seconding the Amendment of my hon. Friend is to ask the House to assent to, or at least to consider, this proposition that this new influence over the monetary system of our country is one which ought not to be abandoned by the Treasury, but that the Treasury ought to retain in its own hands a power which ought to be preserved and extended.
§ 9.24 p.m.
§ Mr. E. J. WILLIAMS
I am sure that hon. Members who have listened to the Debate will be glad that my hon. Friend the Member for East Rhondda (Mr. Mainwaring) was fortunate in the ballot, and will be grateful to him for having selected a subject such as the one which we are discussing this evening. I am sure hon. Members on all sides of the House were pleased to hear the speeches that have been delivered so far both from this side and from the other side. It seems to me that the margin of difference between the Amendment and the Motion is very narrow, and I think it would take almost a microscope to find out exactly what is that difference. It would appear that the Amendment is anxious to get the Government to do something, whereas the Motion itself is anxious that the Members of the House by a vote should impress upon the Government the necessity of doing something at once. That seems to me to be the slight difference between the Amendment and the Motion.
§ Mr. MABANE
The whole difference is that whereas the Motion desires action to be taken only when war breaks out, the Amendment desires the matter to be considered now.
§ Mr. WILLIAMS
I am sorry, but I did not hear that explanation. Although the House is very empty to-night, we are discussing the most vital matter we have had for quite a long time. It can be truthfully said that the subject we are now discussing was the subject that produced a crisis, and a crisis produced the National Government. And when I interrupted the Mover of the Amendment, I think he will admit that I would have been correct if I altered the word "elected" to "formed". The National Government was formed to save the Gold Standard. It did not save the Gold 1343 Standard and what has happened since in the price level, either nationally or internationally, has really been in defiance of the National Government. With regard to what the Seconder of the Amendment said about cheap money, I think that it would be accepted by most economists that the reason we have cheap money is because people cannot invest it at a profit. The fact that you have cheap money is in itself the greatest indictment against this economic order. It is because people cannot invest money as they did for many years in other spheres of investments internationally that you have a surplus on the market, and consequently the Government are able to obtain money cheaply.
One knows that the Government were really driven to face the issue that is contained in this Debate. In this respect I substantially agree with what the last speaker had to say. I am afraid that he cannot deny the statement that was made by my hon. Friend the Member for Abertillery (Mr. Daggar) when he said that £4,000,000,000 was accepted as profit made and that that was largely made by manufacturers. At that time it would be practically impossible for the rentier to have a substantial return on his war investments, so that the manufacturers made up to about £4,000,000,000 by the year 1919. However, I will not join issue with him when he stresses the importance of dealing with the financiers. To me it is the vital issue; it is the issue that led to the crisis, not only in this country, but throughout the world in 1931. I do not want to use figures to what may be described as a few pounds, but in a general way. I think that most hon. Members would agree that the average rise in commodity prices, if one struck an average between the immediate pre-war and the immediate post-war years, would be round about 120 per cent. That would represent the commodity price level throughout the War.
It is said in influential circles—and I am prepared to accept the figures cited by the last speaker—that the War cost about £7,000,000,000. The persons who invested that money invested it at an average of about 5 per cent. I am leaving compound interest, excessive interest that was charged on re-borrowing and so on, entirely alone. We know through the Budget in post-war years 1344 that it has cost the Exchequer well over £300,000,000 a year. That may include some pensions and things of that kind. Prior to the conversion scheme it was costing £1,000,000 a day. The Government were ultimately faced with this problem. It was in fact the main issue in the crisis. It has now been brought down to about £224,000,000. That is how the Government may have spare money for armaments. They also, of course, repudiated the American debt. That £365,000,000 in interest was paid until 1931. That enormous sum was paid to the rentier for lending money during the War, but that sum did not represent real values, for, meanwhile, we had had a process of deflation taking place. That average level of commodity prices had come down from 120 to 44 per cent., so that that £300,000,000 represented in real values practically £900,000,000 a year.
§ Mr. MABANE
Surly the hon. Gentleman has made a grave error? The fall in prices was not from 120 to 40 but from 120 above 1914 to 40 above 1914.
§ Mr. WILLIAMS
The cost of living got up to 180 per cent. above 1914 and came down to 40 per cent. above 1914, which meant that in real value persons were getting twice and three times the value of their investments. I am leaving questions of compound interest and the manipulation of the banks, in which they were never able to set up assets against their borrowings and in which they created paper credit, alone. That enormous weight the nation had to carry up against its productivity year after year in the post-war years, and that is the substantial reason for the volume of unemployment in this country. That is the substantial reason for the depressed areas. That is the substantial reason for the crisis economically throughout the world. It was not carried by this country only but by other countries as well. It was difficult for any nation to escape this problem. Capitalists in recent years found that they were unable to obtain credit from the banks fur industrial purposes because the banks were able to obtain substantially more in interest on war stock than they could hope to obtain if they permitted their capital to be invested for industrial purposes, particularly in view of the enormous fall in the wage level, in relation to the increasing productivity of the country. 1345 They were not prepared to advance money for capital purposes when there was already a surplus of commodities which could riot be purchased, owing to the reduced purchasing capacity of the workers.
The Government ought to face the proposition in another way. It has often been said that if human life has to be conscripted in order to save the nation, then the wealth of the nation ought also to be conscripted for that purpose. I do not attempt to stress that case merely on ethical grounds. If a nation has to save itself in such circumstances, then it is essential that it should, in it own economic interest, say that while war has to be prosecuted the wealth of the nation should be used to prosecute that war. If another war breaks out, which God forbid, civilisation is as much in danger from the economic consequences as from the bombing of civil populations. I stress this point in the hope that it will be appreciated that, on the long view, and considering the interests of the great majority of people, war does not pay economically.
One understands that there is a type of mind which believes in the capitalistic philosophy, which believes in speculation and which does not pause to think of the ethical or economic results. But a multiplicity of individuals each acting for his own ends in this way may mean in the end calamity for the lot. The fact is seldom realised, even by the capitalists themselves, that when a war is over the people are faced with the problem of paying the price. We have the reprehensible state of things in this country that men who fought in the last War and were damaged and who recovered sufficiently to get back into industry for a time, have ultimately found themselves deprived of employment like thousands of miners in South Wales. I do not know whether hon. Members have taken notice of the figures given by the Secretary for Mines recently showing that in 1920 there were 271,000 miners employed in South Wales, and last year there were only 133,000. Those unemployed miners and their families are paying the price of the last War.
Unless the Government are prepared to face these realities and to lay it down that, should war break out, wealth will be conscripted at once, that problem may 1346 be aggravated a thousandfold in the future. I hope the Financial Secretary to the Treasury will appreciate the economic arguments that we are advancing. I do not deal with the emotional side of the question at all. I think that is appreciated by most hon. Members. To me, however, it is great paradox to find Members on the other side who lost relatives in the last War and who are able to appreciate that aspect of the problem and yet are not prepared to face the economic realities. They talk glibly about speculation on the production of air armaments, about watching exchange prices, and already they are waiting with open hands to take anything in that line that is coming now and to exploit what is not yet a critical emergency but the uncertainty in international affairs. Having accepted the philosophy that profit is right in any circumstances they do not take other considerations into account at all.
When speaking of wealth being conscripted, we refer not only to the profits of manufacturers from contracts, but to the borrowing of money as well. The credit of the nation ought to be at the disposal of the Government. The finances of the nation ought to be taken under complete control and in case of war used as one instrument for the prosecution of war. Money ought not to be more sacred than men. Men, munitions and money—those three agents ought to be conscripted in the event of any future war in order that the prosperity of the country may not unduly suffer.
§ 9.44 p.m.
§ Mr. HANNAH
There is no substantial difference between hon. Members in various parts of the House concerning the main subject of the Debate. We all emphatically repudiate the idea that money should be made out of war. Yet I cannot help feeling that this Motion, as it appears on the Paper, is deplorable. Taking these ordinary English words, in their ordinary English meaning, I ask hon. Members to imagine their being adopted by this House and read as a Resolution of this House by certain foreign governments. It practically implies that we expect this country to get involved in war if unfortunately hostilities should break out in Europe. The Motion is exceedingly unfortunate in its wording, and so I feel a particular grati- 1347 tude to the hon. Member for Huddersfield (Mr. Mabane) for having moved an Amendment to which the same objection does not apply. I do not accuse hon. Members opposite of in any way whatever being more warlike than supporters of the Government, but on many occasions they are not very careful about the language they employ. What exactly do they mean when they accuse the Government of pusillanimity, cowardice, and weakness in having done nothing to check Japan in setting up the State of Manchouquo, or Italy in going into Abyssinia? What could we have done except go to war? Is that what they want? I cannot help feeling that it is deplorable that nearly every speech that has been made on the other side of the House has contemplated this country getting engaged in war.
Last week end I was in my own constituency, and I was extraordinarily impressed by the fact that everybody whom I met in the street, everybody who came to speak to me, everybody with whom I was in any way brought into contact, rubbed it in, "We don't want to make an alliance with any European country. We don't want war." If that was merely the opinion of Bilston, it would be extremely important to myself and to the Black Country, but I am absolutely confident that in saying, "We will have nothing to do with the squabbles of the European nations," Bilston was speaking, not only for the Black Country and the Midlands and England, but for the entire British Empire and so, with the most tremendous enthusiasm, I pass on that message from Bilston to this House.
§ 9.48 p.m.
§ Mr. DAVID GRENFELL
I am sure the whole House is very grateful to the hon. Member for his enthusiastic delivery of the message of Bilston, but is he quite entitled to say that the party on this side stands for war?
§ Mr. HANNAH
If I ever said anything of the kind, I want to take it back most emphatically. I would have said nothing of the kind, and I most emphatically repudiate it.
§ Mr. GRENFELL
I am glad, then that we are at peace with the hon. Member once again, but I was under the impression that he criticised this party, and especially the Motion, in which we are 1348 calling attention to the possibilities of war. The hon. Member has been in this House long enough to know that we are very concerned indeed with the possibilities of war, and that it is the chief preoccupation of all serious-minded persons in this House, outside, and all over the world at the present time. Of course, we are not anxious to have war, and we certainly did not insert in this Motion any provocation to war. I do not know why the hon. Member for Huddersfield (Mr. Mabane) should have dissociated himself from the preamble to the Motion. We on this side do not want to incite to war nor to give the impression that we are resigned to the certain possibility of war in Europe, but you must have a preamble to every Bill, and you should have a preamble to every case that you make out, and in order that hon. Members like the hon. Member for Huddersfield may understand why we moved this Motion, we have framed a preamble which I think explains itself to the majority of Members in this House.
The Motion is intended, not so much as propaganda, as to be both a warning to our own country and a declaration of policy. Hon. Members in this House must say whether they agree with us in this policy or not. My hon. Friends have cited examples of the evils which we wish to avert by the adoption of this policy. There are four hon. Members in the House who recognise the difficulty of differing publicly from the Motion and who have put down an Amendment, but after hearing the hon. Members who have spoken for it, I am convinced that it is not an Amendment; it is a distraction. The hon. Members who have spoken have found themselves on very difficult and strange ground. They approach very tentatively, they come forward and they go back, and they are plainly confused, but they must not be allowed to confuse the House on this very plain issue. It is true that we are proposing something less than Socialism. That is plain to everybody who understands what Socialism means, and we do not mind being told that by the hon. Member for Huddersfield, because he was once, I believe, a very good Socialist [Interruption.] I am sorry to have been misinformed. But we should not be condemned on that ground by hon. Members who voted against the Motion on Socialism a few days ago in this House.
1349 We are proposing consciously—and we invite the co-operation of this House—a deterrent to war and to wax propaganda. We believe, and I think we share the opinion with a large number of hon. Members opposite, that in every country of the world we have a good deal of support. The United States Legislature has been concerned very seriously with a Bill to give effect to the idea that no private protfieering should result from a national effort in war. The French Parliament too has passed, I think, a law dealing with this matter. The hon. Member is quite wrong when he criticises us for not embarking upon legislation, for not seeking to adopt war-time legislation in times of peace.
§ Mr. MABANE
May I take it then that the hon. Member is satisfied that a national need should be exploited by private interests in times of peace?
§ Mr. GRENFELL
No, but I am quite satisfied that the Amendment states truly what hon. Members opposite desire, and if he desires to abolish profiteering in times of peace, let him come over here. He has lost his way in coming to this House, and he ought to have come to this side if he is truly a Socialist, because a person who objects to profiteering as a part of ordinary commercial and industrial activity is a Socialist. He cannot be anything else. If a person objects to profiteering, he is a Socialist because he believes in giving in return only as much exactly as he receives, full measure in return for what he gives.
§ Mr. GRENFELL
I invite any hon. Member of this House to draw the distinction between the two. We are proposing a deterrent to war and to war propaganda and war provocation, and we offer this Motion for the serious consideration of the House, because we are aware of the very grave danger from the presence among us of the incentive to profiteering or profiting, whichever the hon. Member would prefer, out of the miseries and trials of the people. The glittering prizes are won, not by those who fight, but by those who buy and sell during the abnormal conditions of war. The lessons of the last War have largely been for- 1350 gotten, but the debts remain as a monument of the financial follies which the nation then tolerated. As the hon. Member for Rhondda, East (Mr. Mainwaring) said, we borrowed in thousands of millions and promised to repay in hard cash with interest the fictitious loan so raised. The Motion does not indicate the detailed methods by which that was done nor the categories of profiteers to which reference may be made in a debate of this kind. I think we should call attention to the profiteering by the banks which were among the worst profiteers. They made enormous profits by their system of finance, and they covered up those profits and balanced them against the fall in the price of securities. They did not disclose the full measure of profits they made, but on the return of the value of the securities the appreciation in bank capital was revealed. Enormous profits have been shown even at the present time by the return of Consols to a standard more approaching that of before the War.
Profiteering was also carried on in the most essential services of food and clothing supplies and other civilian necessities, and prices went up all round in consequence. Hon. Members know a great deal of what occurred in the case of coal, steel and shipbuilding. Coal rose in price from 1913 to 1920 by five times, and the receipts of the industry were multiplied five times, even though production was very much reduced. The price of steel and shipping freights were also multiplied five times. I have a record of the three main industries in the part of the country to which I belong. We have in South Wales the coal, the steel and the tinplate industries, and I find that the combined income of these three was multiplied almost four times from 1913 to 1920. It is true that they have fallen once again. In 1920 the combined proceeds of the three industries was £125,000,000. To-day the market has fallen and the production is £52,250,000. There have been inflation and deflation, an opening out and a closing up of credits and prices, and in every transaction, in both the inflationary and deflationary periods, the banks and financiers benefited. This profiteering is not disclosed in the bank returns and records of transactions, and is thus largely hidden from the eyes of the public.
1351 This form of profiteering caused a great concern during the War. For a period during 1916–17 there was unrest and a Commission was appointed to inquire into the causes of it. Something was said during the Debate about cheap money. Money is obviously dear when there are more borrowers than lenders. In time of war, when everybody sees the prospect of profiteering, everybody is willing to borrow money. Profiteering accounts for dear money, but after a war, when there were too few borrowers, the price of money naturally goes down. The reason why money is cheap to-day is that we borrowed thousands and millions of pounds, as has been described so well by my hon. Friend the Member for East Rhondda (Mr. Mainwaring), and we have now a debt of £8,000,000,000. The country's obligations in a number of various enterprises are higher than they were before the War, and there are not sufficient borrowers for those who have money to lend. We have for the moment cheap money, and that is a sign that the vessel of State has been overloaded and that the whole business of national and private enterprise has been overburdened by the huge debt they have to carry.
There was a great controversy with regard to the conscription of wealth and life during the War. That is an issue the country will have to face. In face of threats of revolt the people of this country in 1916 were persuaded to accept a measure of conscription. There was, however, no conscription of wealth, and the huge burden of debt that has been piled on us is due to that fact. This Motion frankly faces the fact that profiteering and war run together. All down the pages of history we find hard words written of those who have exploited their country's need, who have robbed the soldier of his boots, of his shirt, and of his weapons of defence, and of those who have even supplied the enemy with arms for love of gold. The war profiteer has been commemorated in the parables of all nations. He has been denounced and condemned unless he has climbed too high to be safely attacked. Members on those benches during the War sat in rows of hard-faced men, as they were described by impartial observers who came to see this House. There 1352 they sat entrenched in both Houses of Parliament betraying the real interests of their country and looking for opportunities to enrich themselves, and they have become too high up to be safely attacked. Even though the profiteer is denounced as he deserves to be denounced, he turns up to play his dishonourable part whenever the smell of powder is in the air and Mars and Mammon control the stage together.
Our experience in 1914–18 ought to have convinced us that we cannot run the risk of a similar experience again. The world is not the same world as it was then. You cannot do the things with people to-day that you could do with people then. This policy of anti-profiteering in war-time for which we stand has received some support from the Prime Minister himself. In the White Paper there are suggestions of some limiting form of control, but we want to know how far the Government are prepared to go. The replies given by the Prime Minister to questions do not go far enough and do not commit the Government to anything. The hon. Member for Huddersfield pretends to give us support. The Amendment is only a verbal departure from our Motion, but the hon. Member suggested that a tax on profits should be imposed. He cannot get it both ways. If there be no profiteering, how is he going to get a tax on the war profits? How is there to be any excess profits if there is to be no profiteering? Does he approve of a tax or of the abolition of profiteering?
§ Mr. MABANE
I distinguish between two things. There are those who are contracting directly, and I suggested that the measures proposed by the Government deal with them. Then I want to go beyond them so that some contribution should be made by the general body of industry that was not directly concerned in contracts.
§ Mr. GRENFELL
The ion. Gentleman is solely concerned with profiteering in war, but if he wants to abolish profiteering he must deal with all of production because everything is war production in war time. He cannot allow any kind of transaction to escape.
§ Mr. MABANE
Would the hon. Gentleman mind telling the House how he would do it? In my speech I endeavoured to point out how it could be done. The hon. Gentleman has not made one suggestion.
§ Mr. GRENFELL
The hon. Member apparently wants me to describe the kind of board which will be set up, but that is not my job. It is the job of the Government. There must be machinery set up, and I would produce my machinery to-morrow. There must be conditions to which people have to conform. It is up to the Government to accept the principle. The Government is responsible for maintaining the front not only against enemies outside, but for protecting the home fronts, the vital fronts. The real strength of the nation is the strength and unity of the front at home. This nation is more peace-minded than it ever was before. It cannot be induced to go to war again for a like cause. It will not go to war unless there are strong guarantees that many of the abuses from which the country suffered between 1914 and 1918 will never be repeated. We learned much in those years. Shall we again fall into the old errors? Will any Government be able to borrow money in Europe in the next war? Can we in this country borrow money to fight for two or three years at the rate of expenditure experienced in the last War? We must fall upon the method of paying as we go. There will be no borrowing in the next war. This country may be able to borrow, but it will not be able to permit individuals in any walk of life to gather riches from the sacrifices of their fellow-countrymen. We hope war may never come to our generation. On this side of the House we shall strengthen every contribution of the Government to establish the peace of the world through collective security. If we are faced with the prospect of war we warn the Government now, as representing the working people of this country—
Marquess of TITCHFIELD
I am not denying the hon. Member a claim to represent the miner, but I represent the working man as a Noble Lord just as well as the miner's representative represents the workers.
§ Mr. GRENFELL
I am sure nobody tries to represent the worker better than the Noble Lord does, but I claim to represent the miners better than the 1354 Noble Lord, just as he is able to represent Noble Lords better than I am. I mean no offence at all. Profiteering is an insidious form of activity which weakens the strength of the country. It acts like a cancer in the hearts and minds of the people. In this House and outside there are examples of men who undeservedly got rich during the last War. Let us ask the Government to ensure that that kind of thing does not happen again. There is no national strength or security unless every man pulls his weight, and there is a common sacrifice.
§ 10.11 p.m.
§ Mr. W. S. MORRISON
There has been a wide debate on this very interesting and vital subject. I shall endeavour to recall the House to what is the subject-matter of the Motion, namely, what is well known as profiteering. There may be quarrels about the definition of the word, but it conveys a pretty accurate expression to every hon. Member, and we need not bother about subtleties of interpretation. I find it very difficult to quarrel with the Motion or with the Amendment to the Motion. As it is a Private Member's Motion I do not propose to suggest that hon. Members should vote for one or the other. There is complete unanimity on the part of Members on the other side in agreeing with the hon. Member for Huddersfield (Mr. Mabane) that profiteering in wartime is against the instinct of the people and ought to be stopped. The main difference between the Amendment and the Motion is that the hon. Member for Huddersfield seeks to extend the operation of this anti-profiteering machinery from war conditions to such conditions as we may have in peace-time, when we are engaged in repairing the deficiencies in our armaments. From that point of view it appears to me that the Amendment of my hon. Friend is of a more far-reaching description than the Motion.
The hon. Member for Rhondda, East (Mr. Mainwaring), who introduced this Motion, will forgive me if I do not enter into a contest on the question of Socialist theory. I prefer his Motion to the arguments which he used in support of it, and as to the Motion itself, it is very difficult for anyone to quarrel seriously with it. The speech which the hon. Member delivered in support of it made use of that device which is fre- 1355 quently used by hon. Members opposite, of conveniently dividing mankind into sheep and goats. That is a device which makes it very easy to discuss topics in a convincing manner. If the hon. Member will abandon with me that contest to-night I hope he will find we are not so very far apart. I propose to abandon that contest because I am sure the hon. Member would not expect me to answer this Debate on the assumption that the war which the Motion envisages will coincide with the triumph of Socialism in this country. In other words, if we have to think of a war at all it will not coincide with Socialism.
We have to think of the present system. There are two entirely different problems. The one is what the State has to do in time of war and the other what is to be done in time of peace. I do not quarrel with hon. Members for drawing attention to the possibility of war. Much as every party in this House detests the idea, of such a catastrophe again overtaking the world, it is the duty of every Government, no matter what its complexion may be—it would be the duty of hon. Members opposite if they were in our place—to have in view measures which it can take to mitigate the rigours of that dreadful possibility, and I myself do not in the least associate the fact that hon. Members opposite have moved this Motion with any acceptance by them, or by us, of the theory that war is inevitable and must come.
The Motion deals with profiteering in time of war. Profiteering is only a part of the problem which faces every Government in that dreadful emergency, and if a war did take place—which God forbid—we should find it necessary to mobilise all the resources of the country so as to ensure that there was the adequate production of all that was required for the war. Not only would the Government have to do its best to secure the adequate production of war material, but it would have to intervene to prevent the needs of the civilian population and the requirements in the way of food and transport being dislocated by the sudden demands of war. It is obvious that this duty could not be discharged without the assumption by the Government of the day of wide powers of control, and the House will agree that the time to devise such measures is not when the war has broken 1356 out but when we have time to look about us coolly and calmly.
Profiteering is one of the things to be looked at. It is clearly a monstrous thing that any section of the community, as the Motion puts it, should seek to exploit the situation of she nation to its own sectional advantage. Profiteering is an evil in the body politic which is both material and spiritual. It is a material evil in time of war because if the situation is exploited in such a way that too much of the nation's resources is going in this particular direction, it means that the effort of the nation is not as economical and as formidable as it would be if those resources were not being wasted. It is also what I have ventured to term a spiritual evil in the body politic, because a great deal of the nation's strength in the hour of danger depends upon the solidarity of its people. No nation can contemplate profiteering without seeing how it tends to divide people. It fills those who are called upon for heavy sacrifices of life, of wealth, of industry or of leisure, with feelings which tend to destroy that solidarity which is essential if we are to have the nation functioning properly.
Of course, this Motion is largely prompted, as the Debate has shown, by stories of the accumulation of vast and unjust profits during the last War, and the fear is, as I understand it, that the last War happened so long ago that we have forgotten the lessons of control in the economic sphere which it taught us, and that if another war should supervene we should be found in the same position as we were in 1914. I can assure the House that nothing of the kind is the case. In 1914 this country had no experience of the problems that are involved in war on the modern scale. We had a small force and cur equipment of arsenals and factories for supplies for that force were on a correspondingly small scale. No one had any idea of the vast expansion of production that would become necessary; and, naturally, when control was established in this and that direction it was control of a fragmentary, piece-meal, hesitating aid often experimental character. Very often, too, that control, starting as it did with a complete absence of experience, was applied too late, and when the evil which it was sought to mitigate had already attained such proportions as to be out of hand.
1357 I can assure the House that in this respect we have had our lesson and have profited by it. Immediately the War was over it was recognised that this dearly-bought experience should not be suffered to perish through the mere passing away of those who had been concerned in administration during that War. The problems involved, particularly in the key industries, in regard to profiteering, have been actively under consideration by various Departments of the State for years.
§ Mr. MORRISON
The Government's plan covers the whole field, including this important matter of profiteering and the control necessary to enable the Government to use the industry and the commerce of this nation for this purpose. Such plans have been worked out, but I do not represent them as that sort of mysterious, cold schedule which we are often told exists and in which everything is worked out to the last minute. Plans of this kind must never be static. I assure the House that these plans are constantly under review and brought up to date.
§ Mr. MORRISON
Hon. Members ask me for information as to the plans themselves. I am sure that the House will not expect me at this hour—
§ Mr. E. J. WILLIAMS
May I interrupt the hon. and learned Gentleman7 He made reference to plans touching the manufacture of war material. Are the Government going to take control of credit?
§ Mr. MORRISON
I can assure the hon. Member that the plans are no mere matters of one problem; they envisage all the problems, including financial ones as well, although hon. Members must not be surprised if they do not find in them their own pet nostrums. From the magnitude of the problem it follows that the plan touches many operations and that many experts must give their particular contribution to the solution of the problem. The position is this: If 1358 ever the dreadful emergency arose, the Government would come to the House of Commons and ask for power to put into operation a system of control to ensure that the most economical use was made of the nation's resources in order that the evil against which this Motion is directed might not arise.
So much for the war that is envisaged; but let us remember that we are still at peace. I hope that we shall long remain so. It is in this time that the second part of this Amendment would arise, in regard to steps being taken to repair the deficiencies in our defences. That is peace-time activity, and is quite different from the kind of governmental control which becomes necessary in time of war. It is activity undertaken in the hope that it will help peace to endure until the world reaches a calmer time. In that spirit we should approach the second problem comprehended in the Amendment moved by my hon. Friend the Member for Huddersfield. It is a very different problem from the problem of war. For one thing, the quantities of production involved are immensely smaller than the demands of war upon the nation. The programme in the White Paper about which hon. Members make criticisms from time to time is a very small affair, raising none of the problems of war time. The production for this programme is being undertaken by an industry which has not been conducted for war purposes, but is still in the main engaged in manufactures for peace. We hope that it will remain so, but the programme is one which is to be superimposed on an industry, busily engaged in the operations of peace, to make it an industry engaged in the business of war.
The Government's policy in this matter is that the programme for repairing our defences should not interfere with the peace-time activities of our industry, as far as that can be avoided. That makes the problem of preventing excess profits a very different one from what it is in times of war. In times of peace, the normal safeguard relied upon by the Government is competitive tender, but to-day, when this programme is being superimposed upon an already busy industry, we find that competitive tender cannot invariably be relied upon to check abnormal profits. It is, however, by no means a factor that has entirely dis- 1359 appeared; in many cases competitive tender is still open to us as a check upon excess profits. But the Government have always recognised the fact that competitive tender can no longer serve as the only safeguard to prevent undue profits. The system which exists to-day for that purpose is no immediately extemporised thing; it has been worked by the Treasury and the Defence Departments since last May. It is a system by which the Defence Departments concerned have a special form of contract procedure involving access to the contractors' books, and our technical officers can not only check the actual profits made, but, where necessary, can give technical advice which will enable costs to be reduced. Hon. Members who may cherish the delusion that manufacturers can keep duplicate books for the purposes of the Government's inspection should at least not cherish the equal delusion that the officials of the Government are so easily deceived as they might imagine.
The question arises, what is a reasonable profit, and what is not? That problem cannot be solved in any cut-and-dried, rule-of-thumb manner. I am informed that one of the mistakes made in the Ministry of Munitions was to work out a sort of profit-on-turnover basis, so that, if an industry were making a profit of, say, 5 per cent., it was assumed that it might perfectly fairly be allowed to go on making a profit of 5 per cent. Any such short-cut leads to the most indefensible results, because it is a commonplace that, when you have a vastly increased production of goods, you expect the percentage profit on the turnover to be very much less, while the industry is still adequately remunerated. In other words, these economies of large-scale production should be as far as possible secured to the nation. There are, however, difficulties. It is not possible to lay down a definite rule, but I may say that there is a very strong advisory committee assisting the Air Force in the matter of contracts and profit-adjusting, under the chairmanship of Sir Hardman Lever, and the success of that committee will probably lead to the adoption of a similar procedure, using the best technical advice that we can, to assist us in the case of the other Services. But that is a mere suggestion.
1360 It is necessary for the Government to secure a willing industry to work with them. We do not take the view of human nature that hon. Members opposite take. We believe that industry will play the game with us, and when I say industry I mean all concerned in industry. [An HON. MEMBER: "What is the game that they will play?"] The game that one expects a British subject to play when it is a question of national emergency. We believe that we shall get a willing industry to assist the nation. That does not mean that we should merely rely on assurances given to us. If we were forced to fight a war, undoubtedly control of a very pronounced character would be necessary in the public interest in order to prevent not only profiteering but the breakdown of supplies. In those circumstances, of course, the Government would have to come to the House to ask for powers. In the meantime the Government of the day, if that dreadful day dawns, will be in possession of a scheme worked out which will enable them to exercise the duties of the Government in those dreadful circumstances. But, with regard to peace, we do not think it necessary to take any of those wide powers in order to make certain that the armament programme is carried out without undue cost.
The present method of costings will be a sufficient help to us and a sufficient safeguard of the public. The hon. Member for West Renfrew (Mr. Scrymgeour-Wedderburn) indicated that perhaps the financial requirements of this programme of improved defence might have unfortunate repercussions upon the money market and upset the policy of free money which has been such a marked contributor to the nation's recovery. That is not so. As far as we can see at present, there is no reason to suppose that the demands of this programme will in any way interfere with the continuance of abundant cheap credit. I am prepared to accept either the Motion or the Amendment.
§ Amendment, by leave, withdrawn.
That, in the event of an outbreak of war, this House is of opinion that His Majesty's Government should be immediately invested with whatever powers may be necessary to ensure that the national need shall not be exploited by private interests and profit mongers.