HC Deb 25 May 1937 vol 324 cc115-247

Motion made, and Question proposed, That a SUM, not exceeding £205,532, be granted to His Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1938, for the Salaries and Expenses of the Office of the Committee of Privy Council for Trade, and Subordinate Departments, including certain Services arising out of the War."—[Note.—£102,000 has been voted on account.]

3.22 p.m.

Mr. Graham White

In view of the rapidly changing conditions of trade to-day, and having in mind more particularly the change in political conditions governing our trading relations with other countries, I think the Committee will agree that it is very appropriate, at this time, to review the situation and to ask whether the Committee may be taken into the confidence of the Government with regard to many matters in which we are very much interested. It is little more than to months since the right hon. Gentleman the President of the Board of Trade gave us a review of the trading conditions of the country. At that time, he was able to record a satisfactory improvement in our internal trade and was able to point to an increased production in all the main manufacturing activities of the country. That process has continued during the 10 months, and there is further progress to report. The improvement is spreading rapidly in one or two fields where it has been lagging behind, more particularly in the shipping and shipbuilding industry. I am glad to mention that, in the district from which I come, and which is very largely dependent upon shipbuilding, there is under construction now what I believe is a record tonnage of almost any time in the history of the district. That is a source of satisfaction only mitigated by the fact that, in my constituency, we still have a live register of some 9,000 unemployed.

The right hon. Gentleman will be able to record a further advance, to the satisfaction of us all to-day, in all the usual barometers used for the recording of trade. Since last year there has been a decrease of 376,787 in the unemployed. That is a substantial figure, but we must not allow ourselves to forget that there are still 1,500,000 persons unemployed. The right hon. Gentleman was a true prophet when he said last year that, rather than rely upon any increase in our international trade which could be expected for some time to come, We must rely mainly upon our internal trade for the continuance of our recovery in the coming months."—[OFFICIAL REPORT, 15th July, 1936; col. 2082, vol. 314.] That is the position as it exists to-day. It is true that there has been some improvement in our international trade; the recovery in export business, lost in the time of depression, amounted to some £75,000,000 to the end of 1936. Unfortunately, there is no great room for congratulation in that fact, for, at that rate of increase, it will take 16 years before we recover the volume of international trade which has been lost since 1929. We are, therefore, confronted with the position that if there is to be any further decrease in unemployment and any further increase in our prosperity, we must depend upon what steps we can take to increase the volume of our international trade. If we go back in our minds to the Debates which we have had in recent times in regard to the depressed areas, we shall realise that it is to the recovery of our export trade and our international trade that we must look to make any further inroad upon the numbers of the unemployed and the constant calamity of frustrated lives in the depressed areas. There is, however, much that we may look for with encouragement at the present time. There has been a great change since our present economic policy was adopted in 1932. At that time we were confronted with the danger of rapidly falling prices, but to-day our danger is of a different character. Prices are rising too rapidly. At that time, business was dislocated by the accumulation of surplus stores, and stocks were being disposed of at bankrupt prices. To-day, surplus stores have disappeared in most directions, for one reason or another. We are no longer embarrassed with bankrupt sales. In fact, our danger and difficulty arise from positive shortage in some directions and prospective shortage in others.

At that time, we were afraid that if business arrangements and transactions were unsettled, there would be final disequilibrium of international exchange. To-day, we enjoy a considerable measure of stability in international exchange over a great part of the world's surface. It is clear that there has been a great change since 1931–32. There has been something like equilibrium established between supply and demand which has gone far to diminish the fears of those who were concerned with purely defensive measures at that time. The motto of those who were concerned with international trade as responsible Ministers of commerce was "Let him save himself who can," and their efforts were to conserve what trade was left from the financial depression.

These are some of the changes which have taken place, but an even more remarkable change has taken place in the attitude of mind in many countries of the world which hitherto have been addicted to a high protectionist policy, leading them to modify the opinions which they held at that time. I feel that we are now at the parting of the ways in international trade, and I hope that the right hon. Gentleman, when he comes to speak to-day, will take us into his confidence so far as may be possible with regard to the prospects of making arrangements with the United States of America; and he may be able to tell us, perhaps, something of the objects of the mission of M. van Zeeland and the activities of M. Frère, and what they hope to be able to do to restore once more the framework of international trade.

There is, as everyone in this country knows, a very considerable despondency of mind among instructed and thoughtful people at the complete failure to obtain anything like international appeasement, or any decrease of international tension, through political methods. That feeling is very much aggravated by the knowledge, which is only too obvious, that in the purely political approach to these matters a standstill has been reached, and people are, therefore, turning with hope to a new approach to the international situation. It is felt that we can no longer go on as we are, and from every quarter of the world, I think it may be said, evidence is coming forward that there is a manifest wish and belief that international appeasement and a relaxation of international tension are to be found through the re-establishment of the framework of international trade.

The increase of armaments does nothing to dissipate ill will, but only aggravates the situation. On the other hand, every transaction between the traders of the world, whether it be large or whether it be small, is a definite contribution to good will. I think everybody must feel that there is a new atmosphere and a new opportunity at this moment. Only last Saturday night President Roosevelt and Mr. Cordell Hull sent a message in which they expressed their desire to take part in a movement towards co-operation for the improvement of international trade, as being the only sure foundation of permanent peace. I do not know whether the President of the Board of Trade can tell us to whose address that message was directed. It may be that it was directed towards Germany; it may have been directed towards Canada, or towards the Board of Trade in this country.

At all events, I think it would be impossible to exaggerate the beneficial effect of an arrangement between America, France and ourselves, following the tripartite agreement for the stabilisation of the exchanges. It would be impossible to exaggerate the effect on the world at the present time of the visible co-operation of these three great democracies, with whom we might hope to see Canada associated, because the trade of Canada, America and ourselves is especially intimate and especially involved. We know the great anxiety of America to participate in an agreement of that kind. The only thing that is in doubt is the extent to which she might be willing to reduce her very high Customs tariffs. That is a matter which can only be tested and ascertained in the course of negotiations, which we do not, of course, expect the right hon. Gentleman to be in a position to disclose to the House this afternoon. If, however, the three great democracies of the world cannot remove economic friction among themselves, what chance, I would ask the Government, is there of being able to overcome political friction and to present a united front to those who prefer the rule of force? The only alternative is for them to learn to co-operate together for purposes of trade, and to show the dictators of the world that through these processes of co-operation there is a possibility of a better life and a better standard of living for the people than any dictatorship can offer to them.

These things, if brought about, might well alter the whole face of the political situation to-day, and I sincerely trust that there will be no failure in coming to an arrangement of that kind. It would be a disaster for the future of humanity if America should receive a rebuff. We know that, in the present state of American politics, it is only in the economic sphere that she can co-operate with the rest of the world, and it is only in that sphere that she is likely to be able to co-operate with the rest of the world within any time that we can foresee in the near future. If she receives a rebuff in the economic sphere, and there is a failure to arrive at a satisfactory arrangement for that extension of trade which she is so anxious to bring about, she will inevitably be driven back into isolation, with consequences to this country, and, indeed, to the world at large, which may be very serious.

We must never forget in this country that the age structure of our population is changing, and that we are likely to have a decreasing population, while in America the reverse is the situation. Now is the time for co-operation with America. Ten or 15 years hence, even if we had that time before us, it may be too late to deal with her on terms of equality. This is a vital moment in the political and trading history of the world. On what we do in the next few months we shall have to decide, and Heaven knows it will be difficult, whether the economic nationalism which was born in 1931 is to become a permanent institution in the national life of the world, with disastrous consequences and acting as a permanent cause of depression, or whether it is to be but a passing phase, giving way to co-operation and all that that might bring. What we begin to do—what I hope has been begun and is to be continued—in the next few months, may do something to dispel what Burke called that black and savage atrocity of mind which is dominating Europe to-day, and in which deeds are perpetrated which are a denial of the rights of common humanity. We know, from speeches which have been made and from our observation, what is the attitude of other countries towards this problem of co-operation. We have been greatly impressed by the observations of those statesmen whom we are so honoured to welcome here, representing the Dominions overseas—by their repetition of the necessity for examining jointly and severally as the Prime Minister of Australia said, how we can co-operate with others, and its recognition by Mr. MacKenzie King, who has already given such practical testimony of his beliefs in this matter.

We welcome these statements, because they indicate, as suggested in the "Times" that they are prepared to depart from that rigid regimentation of the Ottawa Agreements which has been such a stumbling-block in the way of further progress in international co-operation. We welcome them, too, because they are such a wonderful contrast to the statement by a predecessor of Mr. MacKenzie King, who said that in future those who wished to trade with the British Empire would have to pay tribute to it. That was a very lamentable statement, but a very different feeling and temper prevails now. We know the attitude of France as expressed by her Prime Minister, and more recently by M. Daladier, that, in spite of her abiding agriculture problem and the very special difficulties of the moment, she is prepared to go as far as she can to reduce tariffs. In this case it is important that progress should be made as rapidly as possible, because she has special internal difficulties and the opportunity may be lost. We know the attitude of the Dominions and of foreign countries. What about Germany? I need not remind the Committee of the remarkable statement made by Herr Hitler following the interview that he had with the right hon. Gentleman the Member for Bow and Bromley (Mr. Lansbury) to the effect that he would be willing to take part in an economic conference if such were called. On reflection, I find it difficult to know what other answer he could have given to that question, but the fact remains that Germany is constantly professing peace but Dr. Schacht, who is the leader of the economic department of German affairs, is under no illusions at all about this matter. I am quite clear in my own mind that the time has not yet come when it is possible to take any steps to call together, with any possibility of success, an international conference, when as far as I know the ground has been by no means adequately prepared, but these observations would be well worth the attention of the House. Dr. Schacht said: We know very well that, even if we succeed in replacing with artificial native products a number of raw materials normally supplied by the world market, we can do this only at high cost. So we ought to reject autarchy on principle, because it will necessarily lead to a lowering of the standard of the life of the German people. But we have no choice so long as political conditions do not permit German colonial activity. I hope my right hon Friend will throw some more light upon the policy of the Government in the matter. About 10 months ago he told us that it remained unchanged. We were not prepared to run any undue risks in the future. No one suggests that anyone should run any risk which they can foresee, but we are running such terrible and constant risks of war at present that a little risk which might lead to the development of the processes of peace would be welcome. I do not think the policy of the Government is to-day what it was 12 months ago, and I cannot believe that it should be so. Above all, I hope it is not the policy of the prepared answer given to the most influential deputation organised by the Radical Peace Council which waited upon the Prime Minister and my right hon. Friend a month or two ago. That document struck dismay into the hearts of all who received it. It was a statement that, while agreeing that the cause of peace would be promoted by the exchange of goods and services, it was for other countries to make the first move. All that the British Government could do was to urge other countries to lake the initiative on every possible occasion. There is nothing that is calculated more surely to destroy the influence of the Government than that, while advocating a certain policy, it should confine itself to saying that the initiative must be taken by others, and to refrain from taking action itself.

In the changed atmosphere and in the changing practice of the principal trading countries of the world, does the policy of the Government remain as it was set out in that document? We may assume that a change of some kind has come over the scene. We have had the statement of the Prime Minister in response to a question by my hon. Friend the Member for South-West Bethnal Green (Sir P. Harris) that the Government were prepared to consider a reduction of tariffs. In the last few weeks we have been greatly encouraged by the encouragement of the Mission of M. Van Zeeland and the action that they have taken with regard to the committee at Geneva which is considering the matter of raw materials. We, therefore, hope that the Government will give some indication of the line that they propose to follow in order to take advantage of the new situation that has arisen in the last 12 months, and declare that there must be some modification in the principle of the Ottawa agreements. I do not know whether the people of the country realise how thoroughly unpopular the Ottawa Agreements are abroad, and even among those who concede the principle of Imperial Preference. [Interruption.] It is true that the British tariff is not the highest in the world by a long way, but it is also true that the Ottawa Agreements, plus the British tariff, because they cover such an immense area of trade, are in fact the greatest single obstacle to trade with foreign countries which has been brought about since 1929.

One welcomes the indication of a more elastic mind and a more resilient practice in the trading agreement that has been made between ourselves and Canada. One welcomes also the trading agreement that has been made between Canada and the United States. The development of the Ottawa Agreements along those lines will not utterly preclude the co-operation of foreign countries. The adoption of an intermediate tariff would be a means of drawing other countries into the sphere of international co-operation. Unless something of that kind is done, it is quite useless to invite M. Van Zeeland to conduct inquiries and undertake missions in Europe. We must not adopt the same rigid and definite attitude which we have adopted all along. This is one of the directions in which progress can be made, and in which, I hope, something will be done. We have to make up our minds in the near future, if we have not done it already, exactly what the policy of the trade of this Empire as a whole is to be —that is an essential foundation—and we have also—and this is vitally important—to make up our minds what the attitude of the Empire is to be towards America. I have already indicated my opinion on what the failure to come to satisfactory terms would mean.

I must apologise for speaking much longer than I intended to allow myself to do, but there is one matter upon which I feel very strongly, and that is, whatever policy is being thought of and developed in the mind of the Government at the present time, it must not be so rigid and so unresponsive that it will justify the attitude of the dictators of Europe to-day in saying that there is no room for them to expand, and that they cannot get access either to their raw materials or to markets, which are even more important than the raw materials themselves, unless and until they have a colonial empire of their own. That is of the greatest possible importance owing to the new technique of government, developed in certain quarters of Europe, which consists of exploiting the feelings and passions of the people in order that dictators can turn them to their own advantage. Those in touch with the Press of Germany must know of the allegations made of the starvation of Germany by England. [HON. MEMBERS: No."] I am not quoting my own opinion for the moment, but what is being said is that Germany can have guns but no butter, and that England, owing to her policy, is so rich and self-sufficing that she can have both guns and butter. I want to impress upon the Committee that our policy must not be of a character, in view of the new technique of government which consists of the exploitation of the passions of the people, to justify the aims of dictators. That is another point which I hope will be borne in mind.

We are at this time at a turning of the ways. The fears which drove the nations to economic nationalism have been largely groundless. The nations of the world are now looking to expansion, and in that expansion lies the best hope, and in my judgment, possibly the only hope, of abiding peace. I express my conviction—and here I speak for my right hon. Friend and my hon. Friends—that peace in this world can only be expected to endure when all the countries of the world have the same reason and the same incentive for keeping it. As long as the Imperial countries of the world exercise political and economic control over vast portions of the earth's surface on terms of special privilege and preference for themselves, it is idle to look for that. That is a principle which I would invite the Government to consider. We are not the only Imperial nation. There are many others, and they must all be brought into this matter. I hope that the suggestions which may have been made to M. Van Zeeland include ascertainment of how far the Imperial countries of the world other than ourselves are prepared to co-operate in removing what are felt to be economic injustices and prejudices, which, as long as they abound, will be a constant source of friction and animosity. There is a great opportunity. I do not think that the Ottawa Agreements or the trade agreements, into which the right hon. Gentleman has put so much hard work, are the right way. I have examined the figures with great care and have given some study to them. We know what the trends are, and we can see the maximum economic results of that policy. In my judgment, they are altogether too small —I would almost say too canny—a means to adopt in setting out upon a policy which may have such tremendous consequences for the future of mankind. We should change hostility for friendship, and economic nationalism for co-operation.

Brigadier-General Sir Henry Croft rose

Mr. Shinwell

May I ask the right hon. Gentleman the President of the Board of Trade whether he intends to afford the Committee an opportunity of hearing a review of the activities of his own Department? Would not that he more appropriate in the circumstances?

The President of the Board of Trade (Mr. Bondman)

I am willing to give the Committee such information as it requires, but I understood the arrangement made about to-day's business was that my hon. Friend should open the discussion, that there should be discussion of these various matters, and that I should, a little later on, make a full statement with regard to those matters.

3.55 p.m.

Sir H. Croft

The speech to which the Committee has just listened is one of a type to which we are accustomed as coming from the benches immediately behind me, but the opinions expressed are not shared by any large number of people in this country at the present time. There was a general belittling of such efforts as we have made to promote family trading within the Empire. I will show how extraordinarily effective the Ottawa Agreements have been. There was an attempt to make out—we have noticed it recently again and again in the Press—that it is the economic nationalism of this country or the British Empire which is preventing German trade recovery. There was an idea that we, as the hon. Gentleman the Member for East Birkenhead (Mr. White) admitted, one of the lowest tariff countries in the world, should immediately take steps, before the rest of the world or any of the high tariff countries have shown any real inclination to reduce their tariffs, once more to disarm ourselves. We are told that there is a changed atmosphere in the world. We are all very glad to hear of it, but we desire to see some greater evidence of a real effort on the part of the high tariff countries to move in the direction of freer trade before we commence to disarm.

The hon. Member perhaps failed to realise just what has been achieved in the last five years in this country. When we come to look at the position as it was in 1931 and at the beginning of 1932 and compare it with that of to-day, we find that great changes have taken place. I can think of four. First of all, we have undoubtedly done a great deal to revive inter-Imperial trade. Without our policy, as anyone who has studied this question carefully must realise, there would have been complete ruin among thousands of primary producers overseas. At the same time we have received great assistance in our own country from that policy. During these few years, I think it will be generally admitted, world export trade did not show much inclination to increase until, perhaps, the last 18 months. The imports from the Ottawa Agreement countries into Great Britain increased by no less than £73,000,000. Everyone will agree that that is very satisfactory. We like to see trade increasing with our own kith and kin. At the same time, our exports to the Ottawa Agreement countries increased by no less than £47,000,000. It is sometimes contended that by that remarkable achievement we have deprived our traders of a share of the trade with foreign countries. But it is a notable fact that during this same period our exports to foreign countries increased by £23,000,000 to £24,000,000 and re-exports by £10,000,000. Imperial trade is still very much on the up grade, and providing the process is not checked and the preferential results are not thrown away for the shadow of possible freer trade with other countries, I believe, and most business men agree, that there is a great chance of still further expansion of that Imperial trade.

I would remind the Committee that, in addition, although this is not shown in the trade figures, there has been a great advantage to British shipping in the recovery of Imperial trade. It is noteworthy that the increase of this Empire trade has resulted in the fact that to-day, of Empire imports, 93 per cent. are carried in British bottoms. This has had a very marked effect on a revival in the shipping industry. But the second great point with regard to the result of this policy is that the effect on the home trade is equally satisfactory. It must be generally conceded now that with the power to produce more cheaply under the security which our moderate tariff gives, we have been able to recover our position as an exporting nation and are once more back as the first great exporting nation, although we had sunk to third place less than 10 years ago. These are very startling facts. But what is more important than anything else in this remarkable result is that before the rearmament programme was begun we were actually employing more people in this country than ever in our history, and that after four years of the change of policy. With regard to the benefit of the policy there is, in addition to the great increase of employment and a revival of Imperial and home trade, a new source of revenue discovered, which has poured money into the Exchequer to the great advantage of the taxpayers of this country, who would otherwise have a far greater burden imposed upon them.

With such results I think we may well feel satisfied, more especially because we see that the tendency is progressive and that we have not stopped in this recovery by any means. Imagine, therefore, the concern of British manufacturers and producers when they see suggestions thrown out that this country, having saved its industry, having done something to help its agriculture, should now once more remove the shield and give an example to the world! I am sure there is not a protectionist in the House or in the country who does not desire to see a freer interchange of commodities between the great nations of the world, always subject to the fact that you cannot expect a highly industrialised country with great social services such as ours to welcome sweated goods into this country on the same conditions as those of competing countries with an equal social standing. I remember that a distinguished Member of this House, the late Mr. Wheatley, once said that he would use the British Navy to the last ship to prevent any sweated goods coming into this country. I am not as full-blooded as that, but I think it is a good principle that you cannot uphold your social status if you allow it to be undermined by such competition. That view is now generally accepted.

What I desire to point out, further, is that all the theories that this country has become selfish, that we are behaving improperly in face of the world, will not stand any examination whatever. The truth of the matter is that Great Britain, and after Great Britain the British Empire, are the best and more friendly neighbours that the world has. There is no country in the world which buys so much of the world's commodities as does this country with its so-called tariff restrictions. Last year we imported from foreign countries alone, apart from the Empire, £516,000,000 worth of goods and produce. Who came next? The United States, with a population two and a-half times as great as ours, came second, but with £24,000,000 behind the total I have mentioned. That shows very conclusively that this country is leading the world in the matter of absorbing the products of others. If you add the British Colonial Empire to this story you get a very much bigger market. All the nonsense about our using the British Empire to exclude other countries from trading is really overdone. It is in fact completely false. The truth of the matter is that the imports into the Empire of all foreign countries are increasing slightly more rapidly than our own. As for Germany, everyone knows that Germany is selling more and more to the British Colonial Empire year by year, and everyone is aware that German trade has gone up very considerably in the last three years in the British Mandated Territories which were at one time German possessions.

Those are the facts. When it is said that we are harming the cause of peace by not allowing Germans to trade in those territories, the argument cannot be substantiated, because there is no tariff; a tariff is not permitted in any Mandated territory; and two-thirds of the whole of the Colonial markets of the Empire, in addition to the Mandated Territories, are in such a fiscal position that we are not permitted to put any duties upon foreign goods. Is it suggested that Germany cannot get raw materials because of an export duty on those goods? There is no export duty. The German nation has exactly the same for purchasing products from the ex-German Colonies and from practically the whole of the British Colonial Empire as we in Great Britain have. I do feel that we are entitled to ask the Government not to weaken or belittle their policy, as has been suggested, but to stand firm by a policy which has proved so effective and has done so much not only for our own countrymen but for our kinsmen and citizens of the Empire overseas. It would be dangerous at the present time in any way to weaken our economic defence.

I ask the Committee for a moment or two to consider the question of the adverse balance of trade. Memories are not so short that we forget the dangerous position in 1931. I am not suggesting that we have arrived at anything like that now, because we are balancing our Budget. [HON. MEMBERS: "NO!]Yes; hon. gentlemen need not worry; they will find at the end of the year that the Budget will be just as good as the last four Budgets. The Government have restored British credit once more to the top of the world, in spite of the terrible position in which it was left by the Labour party and their friends. But the question of the adverse balance of trade is one that we cannot ignore. I remember that two years before 1931 the right hon. Member for Camarvon Boroughs (Mr. Lloyd George) at the same time as I, a humble back-bencher, drew attention to what was happening, pointed to the danger of this great increase at that time. The adverse balance of invisible trade in 1936 was £349,000,000. The adverse balance of visible and invisible trade was about £19,000,000—not a very serious figure. But why should we have this great adverse balance of trade? Since 1932 imports of manufactured goods into this country have increased by £55,000,000; they have in fact risen from £157,000,000 to £212,000,000. When we have still over 1,000,000 unemployed it does seem rather extraordinary, the deliberate policy of the Government being to find the maximum amount of employment, that manufactured goods, a very large proportion of which we could manufacture ourselves, show this startling rise. Those are facts of which we must take notice, facts particularly connected with manufacturers.

With regard to agriculture, which comes into the purview of the Board of Trade in that trade agreements are made with foreign countries sometimes without great consideration of British agriculture, I venture to suggest that no one on the Treasury Bench is satisfied with the position at the present time. It is undoubtedly dangerous, and in spite of all our efforts agriculture is now the one outstanding failure in the complete achievement of recovery. Why do I mention these facts? Because of a tendency which will cause confidence to slump in industry if it is believed that the Government really intend to make any fundamental changes in the principles of their policy. If they make any such change in the principles of their policy they will find that those who sit behind them will cease to be continually "Yes" men, as they have been in the past. I am concerned to ask the Government this question because of a very remarkable speech by the British Ambassador in New York, I think it was on 19th May. The British Ambassador is reported as saying: The British Government were willing to accord to American farmers favourable treatment for their produce in Great Britain if the United States Government would grant reasonable reductions of the American tariff on certain classes of typically British goods. I confess that that speech was a shock to a great many of my friends, as it was to myself, and it was indeed a shock to all British agriculturists who, heaven knows, have had a difficult enough time in the last few years. Therefore I ask the President of the Board of Trade, does that statement represent the policy of the Government? I think the Committee are entitled to know, for such an important statement by His Majesty's Ambassador in the United States of America cannot go without some explanation. Is that bald statement the coping-stone of the work of my right hon. Friend the President of the Board of Trade? I cannot avoid thinking that any indication of the kind is not truly the policy of His Majesty's Government. Every one of us would like to see the greatest possible reciprocity between this country and the United States of America, provided that it does not interfere with our friendly relations with the Dominions. We should all agree to that. There is a most friendly feeling growing up. We realise that it is imperative that these two great nations should stand together in these trying times, in the face of a strained and terrible world; but I can conceive nothing more upsetting to British Dominion farmers, at a time when the Imperial Conference is sitting, than that this statement of the British Ambassador should be allowed to stand without explanation, and without some modification. That is why we ask for an explanation from the President of the Board of Trade, if he can give it, this afternoon. What is the truth in regard to our trade with the United States?

Miss Wilkinson

Yes, the truth.

Sir H. Croft

The hon. Lady will agree that I am usually not very far wrong in my figures. I learned 30 years ago, as a young man in Mr. Chamberlain's campaign, never to produce figures of one's own. Therefore, I always go to the Blue Books compiled by His Majesty's Government for my information. What is the truth, according to the Board of Trade returns, of our trade with the United States of America? Are we, judged from those returns, the people who are preventing friendly intercourse in trade? Our imports from the United States last year were £93,300,000, a very substantial figure, and our exports to the United States were only £26,600,000.

Mr. R. Acland

Will the hon. and gallant Member give the figures for Canada? Are they not very much the same?

Sir H. Croft

I have not the figures for Canada, but I am happy to be able to state that our trade with Canada is very nearly balanced. [HON. MEMBERS: "No!"] Our trade with the whole of the Empire, taking the rough with the smooth, is about balanced. However, I do not want to engage in controversy as to whether the Dominions of the British Empire are better customers of ours than the United States of America. I am concerned with the figures of our trade with the United States.

Mr. Dingle Foot

The hon. and gallant Member gave the figures for Canada and said that they were practically balanced. From the figures which I have for last year, our imports from Canada were £79,000,000 and our exports to Canada £23,000,000.

Sir H. Croft

I will accept what the hon. Member says in regard to last year, but if he will take the figures over a period of years I think he will find that they are nearly balanced.

Mr. Acland

No, he will not.

Sir H. Croft

I can assure the hon. Member that if he will take British Empire trade as a whole he will find that it is very largely in the direction of balancing. I would also point out that in regard to Canada precisely what point we desire to see is a greater equalisation of trade. Has not Canada in the last month reduced her tariff on many British goods in order to tend in that direction?

Perhaps I might give the figures for the United States of America for the years 1931–1936. Our imports from the United States during the whole of those years amounted to £526,000,000, and our exports to £120,500,000, an adverse balance of trade of £362,900,000 if we include re-exports of £42,700,000. I am not complaining, but do not let the hon. Member for East Birkenhead say: "Why do we not show the way to increased trade between these two countries?" when it is perfectly clear that the balance is enormously in favour of the United States. There is a feeling in this country that we have been extraordinarily successful in our domestic policy, with the exception of agriculture, that there has been a remarkable increase in employment, that although the tide was going against us up to the time of the present Government taking office, it has gone in our favour ever since. We have seen British credit once more restored, but I beg the Government most solemnly not to trifle with the progress of Imperial trade at this juncture or do anything which might possibly weaken the expansion of that policy.

There is not one of us who does not realise that on the collective good will and the collective defence of the Dominions, the Colonies and this county is based most surely the peace of the world, which rests upon the fraternity of the British people, who have led the world in friendly trade, and in reducing tariffs one against the other. We have led the world in building up the community of ideas between men of different race, character and colour, and if we can make the Empire a success, is not that Empire the greatest example to the rest of humanity to act on the same kind of idea, and to develop the same sort of schemes in the days to come? The Government have done a great work, which is appreciated by the thousands of people from the Dominions overseas who are at present here, and who are just as British as we are. Because they have moved from this country to other countries they have not changed their blood, their character or their personality, but are just the same. If we in this country see the people of Yorkshire, Northumberland, Lancashire, Wales or Scotland having a bad time, if we see the people in the depressed areas having a bad time, although it may be difficult to find measures immediately to give relief, no one can deny that the hearts of all our people are touched. I would ask the Committee to remember that there have been gravely depressed areas in our Dominions overseas. If Empire unity means anything, we ought to treat our people in the Dominions overseas not on the same terms as those who are not with us in the time of trouble, but The friends thou hast, and their adoption tried, Grapple them to thy soul with hoops of steel.

4.25 p.m.

Mr. Arthur Henderson

The hon. and gallant Member has made one of his customary defences of the policy of Protection, which we always expect from one of the arch-priests of that policy. I was a little sorry to hear him tell the Committee that he always makes sure of his facts before he addresses the Committee on such matters as we are discussing to-night, because he then proceeded to make the astonishing statement that the trade between the United Kingdom and Canada more or less balanced. He was challenged by my hon. Friend the Member for Dundee (Mr. Foot) as far as last year was concerned, and he evaded the question by saying that it might not have been 1:he case last year, but that taking the average of the last few years his argument was correct. I have the figures for the years 1934–35–36, and totalling the imports from Canada for those three years I find that they amount approximately to £118,000,000, while the exports from this country to Canada in the same period amounted to approximately £60,000,000. do not think that by any method of mental arithmetic or any other kind of arithmetic it is possible to argue that the import and export trade between this country and Canada balances.

Sir H. Croft

Figures show that the adverse balance of trade between this country and the United States of America is immensely greater.

Mr. Henderson

I am not concerned at the moment with the adverse balance of trade so far as the United States is concerned; I cannot see how that affects the adverse balance of trade between this country and Canada. The hon. and gallant Member made a very eloquent defence of the Ottawa Agreements. I do not propose to indulge in any criticism of the Ottawa Agreements, except to say that unless and until under the Ottawa Agreements we can recover the total volume of the export trade that we enjoyed prior to those agreements, so as to enable us to absorb the 1,500,000 unemployed in this country, we are entitled to object to this country basing its economic policy entirely upon the Ottawa Agreements. I agree as to the increase of inter-Imperial trade since 1932. It is correct to say that the volume of export trade from this country to the Dominions has increased by approximately £40,000,000 or £50,000,000, but there has been an even greater increase in the imports that we have taken from the Dominions. We must not, however, forget the rest of the world and our trade with the rest of the world. If we go back to 1929 and take the volume of our exports for that year and compare them with the volume of our exports not only to the Dominions but to the rest of the world, we find that last year we were exporting less than two-thirds of what we were exporting in 1929. I think I am correct in saying that the value of our foreign export trade last year was £180,000,000 less than in 1929, and that as regards the Dominions we are exporting about £100,000,000 of goods less than in 1929.

The problem that the country is faced with to-day is not merely the question of how we can strengthen the Ottawa Agreements, but how we can recover, if it be possible, our foreign trade. I do not propose to embark upon any theoretical discussion of Free Trade as against Protection. Rightly or wrongly, the tariff system has been riveted around our economic system, and will be there for at least a generation to come. It is impossible, whatever our views may be, to chop and change our economic system every time there is a change of government. Therefore, we have to realise the fact that we are living behind tariff barriers. It is true to say that the imposition of this tariff system in 1931 was only made possible by the more or less passive acquiescence of convinced Free Traders. At that time we were faced with abnormal conditions, due to the world depression. As the hon. Member for East Birkenhead (Mr. White) rightly said, we were faced with an abnormal fall in the price level. During 1931 the wholesale price level fell by more than 40 per cent., and the world required something which would restore the price level. To-day what we require is to prevent any drastic rise in the price level. The wholesale price index figures issued by the "Financial Times" last March revealed a rise of 17.6 per cent. above those for March, 1935, and a 4.1 per cent. rise in the space of a month. This newspaper said: To find a parallel rise in the amount when everything is normal, it is necessary to go back to the years immediately succeeding the Great War. The rise compared with the index for September, 1931, is 36.8 per cent. as regards all commodities—these are wholesale price figures—and 23.8 per cent. as regards foodstuffs. Our problem to-day, therefore, is not to increase the price level, but, if possible, to reduce it, or, at any rate, to control it. In 1931 we were also faced with the fact that, as a result of the bottom dropping out of the wholesale price level and, to some extent, of the retail price level, there was a glut of commodities in world markets, and economists were agreed that it was essential to restrict world production and control world markets. To-day economists are agreed, however much they may differ as to method that the need is to restore the flow of international trade on both national and international grounds. In 1929 we were exporting £729,000,000 worth of goods. Last year our exports amounted to £440,000,000. It may be asked, what is the effect of our invisible export trade? Let me say that the approximate value of our invisible export trade in 1929 was more or less the same as in 1936, with a slight increase for 1936. Having regard to the fact that a large proportion of the 1,500,000 unemployed in this country are connected with the export trades, I should have thought it was common ground that it was vital to restore our international trade. It has also become more and more accepted in all schools of thought that one of the most fundamental causes of war is the economic aspect of international relationships. Mr. Cordell Hull, the Secretary of State for the United States of America, speaking a few weeks ago said: An adequate revival of international trade would he the most powerful single factor in lessening political tension and in averting the danger of war. No outcome of an armed conflict can possibly bring the nations greater benefits than they would derive from a peaceful and fruitful exchange of goods and services, developing together a liberal spirit on a basis of fair dealing and mutual regard for each others needs and rights. No one will disagree with that statement of the position.

Sir Patrick Hannon

Did Mr. Cordell Hull make any suggestion that he would lower American tariffs in order to facilitate the development of international trade?

Mr. Henderson

There is no doubt that Mr. Cordell Hull has made it perfectly clear that he is prepared to enter into negotiations with this or any other country with a view of increasing the flow of international trade, and a fair interpretation of the remarks I have quoted is that he would be prepared to do a deal by lowering the tariff barriers of his own country in return for facilities by our own or any other country.

Sir P. Hannon

Did he say so?

Mr. Henderson

I think he has said so, although I have not the quotation with me.

Mr. Foot

He did say so.

Mr. Henderson

My hon. Friend says that he has made the statement, but even if he has not it does not weaken my argument.

Mr. Crossley

That would be difficult on the American interpretation of the Most-Favoured-Nation Clause, which is somewhat different to our own.

Mr. Henderson

I do not think the Most-Favoured-Nation Clause is of very great value at the present time. Many countries have avoided this particular clause by the establishment of quotas, and so far as practical politics are concerned the Most-Favoured-Nation Clause has not the same value it had 12 or 15 years ago. The Parliamentary Secretary knows that a number of countries have avoided their obligations under commercial treaties in which the Most-Favoured-Nation Clause is contained by the establishment of quotas, thereby reducing the amount of goods which can be imported from countries enjoying this particular clause. Therefore, as far as the United States of America are concerned, I do not think it presents any appreciable difficulty. In fact the United States Government, when they have entered into commercial treaties with some of the South American Republics, have agreed to the insertion of a clause which recognises the obligations of the country, with which they are negotiating, under other treaties in which the Most-Favoured-Nation Clause finds a place. Therefore, I do not think we should have any difficulty with the United States as far as that is concerned.

I support the view that the Government should make it clear where they stand with regard to the United States Government on this matter. Are they prepared to enter into negotiations with a view of completing a commercial agreement between the two countries? Will they agree to do so in conjunction with other Governments in the British Commonwealth of Nations. I think an agreement between the British Commonwealth Governments and the United States Government for commercial purposes would result in the United States being found ready to reduce tariff barriers. Let me ask the Government this question. Did the United States Government in their negotiations with the President of the Board of Trade say in terms that they would on no account reduce their tariff barriers? If so, let us be told, and then we shall be able to appreciate the absence of any attempt on the part of our own Government to enter into a commercial treaty with the United States. If that question has not been put to the United States Government, may we be told whether the British Government intend to enter into negotiations with them? The President of the Board of Trade has apparently the same view on this matter as hon. Members on this side. Sometime ago, speaking at the National Liberal Club, on 24th February, 1937, he said: We have never surrendered our belief that the open door is much the wisest policy for trade. You have direct evidence of the fact that we welcome foreign goods into the country. We do not believe in one-sided trade, and there cannot ultimately be anything like one-sided trade. Our imports have to be paid for. That is a fact which many protectionists seem to forget. The time is rapidly coming when we shall be able to say, I hope, to the Secretary of State for the United States, 'We believe that your doctrines that peace and free trade go together are sound doctrines. We agree with you that the best thing that could happen to the world is to have a free exchange of commodities and services. We have, by our national policy, opened the door to these commodities.' No one who had visited the United States could imagine that our happy relations with her would ever be severed, but how beneficial it would be to the world as a whole if our fiscal policy and that of the United States were running on parallel lines. May I ask whether any attempt is being made to ensure that our fiscal policy shall run on parallel lines with that of the United States, or are we to take it that this was only an eloquent peroration for the benefit of the Free Trade members of the National Liberal Club?

Sir H. Croft

We should have to raise our tariffs.

Mr. Henderson

In answer to the hon. and gallant Member I go back to the speech of Mr. Cordell Hull in which he said: The best thing which can happen to the world is to have a free exchange of commodities and services. I suggest that a free exchange of commodities and services rules out high tariff barriers. I go further and suggest that we should co-operate not only with the United States, but with France, Belgium and the Scandinavian countries and with other democratic countries. At the same time, however much we may be suspicious of countries like Germany and Italy, I do not think we ought to go in for any exclusive kind of commercial organisation, but that we should stabilise the position by entering into agreements with the United States and other democratic countries so that there may be an incentive to those who remain outside to come in and enjoy the benefits of these international treaties. If we are going to do a deal with other countries we may have to modify Ottawa. It is no good giving a first-class ticket to our own Dominions and a third-class ticket to other countries and then expect them to trade with us on exactly the same terms as if there was not this differentiation. The Government, sooner or later, will have to face the possibility of some modification of the position as laid down under the Ottawa Agreements. Stabilised peace depends on economic appeasement and stability, and if the Government could do something to bring about a condition of economic appeasement and stability throughout the world it would be well worth the price we may have to pay.

4.45 p.m.

Mr. Lyons

The hon. Member will forgive me if I do not attempt to follow him in many of the matters to which he has referred, but there is one remark he made upon which I should like to make a few comments. He said that the tariff policy which now exists in this country, and which, as he truly and fairly said, must be our policy for a generation, was imposed in 1931, largely with the approval and support of former free traders.

Mr. Henderson

If I used the word "largely" I would like to withdraw it, because I meant to say that it was brought about with the passive acquiescence of many convinced free traders.

Mr. Lyons

I am obliged to the hon. Member for his correction. He is right in saying that it was brought about with the support of people who had been free traders. The position in which we found ourselves in 1931 made many people realise, perhaps for the first time, that control over imports was not so much a matter of political policy, but mainly a question of economic expediency. I willingly recognise that there was a good deal of support given in 1931 by people who had for years supported a policy of so-called free trade because they realised that in the world as it was and considering the difficulties of this country, some sort of control over imports was absolutely essential; and that policy, which was started in 1931, has worked smoothly and has had happy results which have been watched closely by all sections of the community.

I would observe, in passing, that in the many interests with which I am associated in my own constituency, I have never come across anyone who, after the five or six years during which that policy has worked since it passed its experimental stage, wanted to abandon it and to go back to the old system which was nothing more than a system of free imports without free trade in this country. We can have no more one-way traffic in trade. This matter should be examined from every angle, because it was a great change in the fiscal system of our country, a change upon which, I think, public opinion as a whole would wish to congratulate the Government which by that action, together with many others which they have taken, have re-asserted our credit, restored confidence and enabled industry to enter a new lease of life; trade and commerce generally have gone to new ways of prosperity and real employment has been made. Hon. Members know that it was the scheme of the Government that, in addition to the flat rate level which was imposed by the Act of 1932, there should be an outside tribunal to consider impartially the appeals that industry made to it for increasing the rates of duty imposed by the Act. I wish to ask the President of the Board of Trade whether, inside the framework of the Act, some machinery could be put into motion to check the flow of manufactured goods about which my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) spoke so forcibly a few minutes ago. It seems that, however well the tariff may now be operating, there is coming into this country, to the prejudice of a number of industries and their employment, a large amount of goods that we could readily manufacture ourselves to the great benefit of the industrial population—

The Deputy-Chairman

I must point out to the hon. and learned Member that any criticism which he desires to make of the operation of the Import Duties Act, 1932, must be made on the Treasury Vote, and not on the Board of Trade Vote.

Mr. Lyons

While wishing to observe this or any other Ruling which you may give, may I submit that the machinery which now exists might be adapted without it being said that I am criticising the Treasury on it?

The Deputy-Chairman

I am afraid that does not cover the point. If the hon. and learned Member will be good enough to look at the Import Duties Act, 1932, he will find that the administrative responsibility is on the Treasury, except in the case of certain articles where there is unfair foreign discrimination. In that case it rests with the Board of Trade, but in all other cases administrative responsibility is on the Treasury.

Sir P. Hannon

Is not my hon. and learned Friend entitled to call attention to the effects of actions taken by the Import Duties Advisory Committee on the Board of Trade Vote?

The Deputy-Chairman

That depends upon how far the hon. and learned Member goes in calling attention to the operation of the Act itself. Any question arising out of the Act must be raised on the Treasury Vote, since it is the Treasury which is responsible.

Mr. Lyons

Would I be within your Ruling if I were to ask whether the right hon. Gentleman the President of the Board of Trade could make representations to the Treasury, which is the appropriate Department?

The Deputy-Chairman

The hon. and learned Member may suggest that the President of the Board of Trade should make suggestions to the Treasury with regard to matters arising out of the Board of Trade Vote.

Mr. Lyons

I am very much obliged to you, and I will try to keep within your Ruling. I would ask the President of the Board of Trade, who was so instrumental in putting this machinery into motion, to make representations to the Treasury whereby there may be a review rather more frequently and consideration more quickly, than is the case now. I have put questions on this matter to the right hon. Gentleman and in reply I have been told by him and by the Parliamentary Secretary that the tribunal appointed to consider these applications is fully entitled, under the Act, to make a review on its own initiative. It is also fully entitled to make a review on the application of people employed in the industry to whom the application for a tariff means so much. Can the right hon. Gentleman, when he speaks, tell us whether there have been many cases, and if so what cases, in which this machinery has been put into operation by the Committee on its own initiative; and whether there have been many cases, and if so what cases, in which an alteration has been made when application has been submitted by persons employed in the industry? I would also ask whether he would recommend to the Treasury that there should be some speeding-up of the machinery which now exists under the Act by which British industry could receive a little more generous treatment than it does to-day? I would like to say, in passing, that the spending power of the people in industrial constituencies has been increased very largely and that they have been given a sense of security because of the work flowing from the control of imports imposed by the National Government in 1931. I have made my observations not by way of criticism, but by way of suggestions which might be helpful in speeding-up the machinery or moving the onus from the British applicant to the foreign manufacturer, and giving still further benefit to those who are dependent upon the prosperity of trade and industry in this country.

I would like now to make one or two observations with reference to Imperial trade. Some criticism was made of the Ottawa Agreements by the hon. Member who opened the Debate. I think that the trend of public opinion in this country to-day is more and more in favour of cementing in every way possible trade between the various constituent parts of the Empire. More than ever we realise to-day that a prosperous British Empire is the foundation for world peace and prosperity. I believe that more than ever before public opinion in this country is in favour of extending trade inside the British Commonwealth of nations whenever and wherever it may be possible. As a result of the Imperial Conference which is now sitting, I hope that not only will the Ottawa Agreements remain the foundation for inter-Empire trade, but will be extended in every conceivable manner. Many of us feel that, although there may be shortcomings in the Ottawa Agreements that were made in the summer of 1932, they may properly be regarded as the commencement and not as the completion of a great Imperial policy.

Reference has been made to trade between this country and Canada. Let it be remembered that, by an announcement made a few weeks ago, for the first time a greatly extended list of articles was reduced in duty. There is for this country free entry for a very large range of goods into the Dominion of Canada. That is one of the results that has accrued from bringing together industrially this country and the Empire. A declaration has been made by those responsible in Canada that the Tariff Board of Canada will not increase the duty against any British commodity. [An HON. MEMBER: "The Tariff Board is done away with."] The Canadian Tariff Board is not done away with; it will not be able to put up the duty against any British commodity, and it is there to recommend further reductions. I hope we may have a counterpart of the Canadian Tariff Board sitting in this country from time to time to save British manufacturers the anxiety and expense of going to make application on Candian territory. I do not think that is an impossible proposition, and I think it would tend very largely to satisfy 1he proper claims of British industrialists who desire to make application for a still further reduction of duties.

It would indeed be wrong to do or say a single thing in these anxious moments which would tend to split the Empire. Cemented by trade as well as by sentiment, its peoples sharing a love of peace and justice, the British Empire has been the one factor standing out in a troubled world which has meant peace over a vast area, which is leading the world back to prosperity and which has secured for the various peoples inside its boundaries the greatest possible amount of freedom and personal opportunity. It stands to-day as the bulwark of liberty. Now is not the time to ask what matters are being considered at the Imperial Conference, but I would respectfully make a representation to the right hon. Gentleman the President of the Board of Trade that the question of Empire content, which has affected many industries in many ways should be dealt with more firmly by this great Conference. I hope that before manufactured articles are allowed a preference as British-made commodities or Canadian-made commodities going to other parts of the Empire, there will be insistence on the highest amount of Empire content being present in those articles. I hope that the President of the Board of Trade may be able to say that, arising out of the agreements of the Imperial Conference, a minimum of 75 per cent. Empire content will be insisted on before any manufactured article is considered British for the purpose of free entry into this country.

I wish to join in the appeal which has been made for some sort of commercial agreement with the United States of America, and I hope the President of the Board of Trade will be able to tell us to-day whether some result has come from the visit which he recently paid to that country. There is much in common between the peoples of this country and the United States of America, and in my view the friendship of these two countries is the foundation of the peace of the world, for they are two of the great democracies now existing. I hope that for the benefit of trade not merely between these countries, but trade and well-being in general, the President of the Board of Trade may be able to tell us that he will take every opportunity available to come to an understanding and agreement on trade matters between this country and the United States of America, so that, enjoying the same outlook, they may come closer together with us in trade, making still greater the ties of the English-speaking peoples.

5.0 p.m.

Sir Arthur Salter

The moment chosen for this Debate is a very opportune one, because I believe that not for many years, to be precise not for nine or ten years, has there been so strong and so general a desire to increase world trade and to remove some of the worst impediments which now obstruct it as there is at the present time. We have had several references made to-day to the declarations of policy in America both by Mr. Cordell Hull and by the President. We have also had the manifestation of the Oslo Powers; and in addition this very week the French Government has obtained new powers to change quotas for less prohibitive forms of tariff duties. I might also cite the recent speeches of the Prime Ministers of Canada and Australia. I believe that that desire is not only widespread throughout the world, but that it is widely entertained in this country and on both sides of this House.

I believe the Government themselves strongly wish an extension of world trade. They have given several indications of it, although, in the Memorandum to which my hon. Friend the Member for East Birkenhead (Mr. White) referred, they did not give us very much encouragement two months ago. But they have given certain recent encouragements. Among others they have invited, with France, the Prime Minister of Belgium to make a scheme. I am glad that he has invited M. Frère, a colleague of mine in several parts of the world for a number of years, to help in this matter. I am sure that, so far as his technical ability is concerned, M. Frère's work will be good and sound. But it is obvious to all of us that the character of his scheme must depend mainly on the indications he gets from the principal trading countries of the world as to the kind of contributions that they are prepared to make. I do not know what communication M. Van Zeeland has received from this country. I should be very sorry to have to infer it from the same Memorandum to which the hon. Member for East Birkenhead has referred, the Memorandum of 22nd March, because all through that there was what I would call a note of negative complacency. It was stated that the main obstacle to world trade at present consisted of industrial quotas and exchange controls, of which we ourselves were not guilty, and that therefore what we must do is to exhort other countries.

Why that emphasis on these particular forms of impediment? What about agricultural quotas? What about Imperial preference? What about our new system of protection? I am not now attacking that policy; I am only saying that it is a very important factor in the general trade position. The hon. Member for East Birkenhead made a challenging statement which was greeted with some scepticism, but which I believe to be absolutely true. I believe it is true that, if we take into account the place which Great Britain occupies in the trade of the world, the size and importance of the British market, and the novelty of the new commercial policies that have been introduced, and then consider the cumulative effects of Imperial preference with the Dominions, the new protective system here, the abandonment of the open door, and the establishment of agricultural quotas, it is literally and absolutely true to say that in the last five or six years, since the depression, the commercial policy of no single country in the world has had so great an effect as has that of our country in restricting and deflecting the trade of the world. As I say, I am not now attacking the policy, but only pointing out its very great importance.

I do not question the sincerity of the Government's desire to see world trade increased, but what I do doubt is whether they have a sufficient determination to take the necessary measures to make the necessary contributions that we ourselves will have to make if the end is to be attained. As I speak to-night, my mind goes back to exactly 10 years this month, almost to this day, when the right hon. Gentleman the President of the Board of Trade and myself were both at Geneva, when he was representing the International Chamber of Commerce and I was an official concerned in the organisation of the Conference. We know then how strong and how general was the desire, not only of this country, but of the world, to secure a reduction in trade restrictions. We know all that has happened since, and we know too all that has not happened. We have learned certainly how great are the difficulties created, not only by vested interests, but by the mere complexities of the protective systems, which were great then and very much greater now.

There is one very great difference, as regards ourselves, between then and now. The kind of contribution which we have to make is a very different one now, because then we were outside what was the system adopted by most of the countries of the world, but now, for good or ill, we are inside that system. We are equal participants, and undoubtedly if anything effective is to be done, we shall have to be equal contributors to the changes in domestic policy that will have to be made. As I say, I think we shall make a very great mistake if we in any way depreciate or attempt to mitigate the importance to the world of the new policies introduced by his country. I was sorry to hear the hon. and gallant Member for Bournemouth (Sir H. Croft) suggesting that we were, after all, very much better customers to the world than are the United States, because we bought more foreign imports per head of the population than did America.

Sir H. Croft

More in total, in spite of the fact that the population of the United States was two and a-half times as great as ours.

Sir A. Salter

Why is it that we buy more? It is precisely because in America there is a population two and a-half times greater than our own, which has the inestimable advantage of free trade throughout the whole of that huge population. If the hon. and gallant Member would look at the trade returns of Austria, he would be surprised to find that Austria imports a good deal more per head of the population, possibly even more now than before the War. Why? Simply because what were then domestic imports from inside the Dual Monarchy have now become foreign imports. That instance, I suggest, shows that attempts to depreciate the extent of our own protective system or to measure by means of comparisons of that kind are misleading and really will lead us to very wrong conclusions as to our policy. If anything successful is to be done, we have to make as substantial a contribution as any other country towards the measures that have to be taken.

I do not desire merely to talk of general principles; I would like to make a few practical suggestions as to the lines upon which I should like to see the British Government proceed. First of all, I believe we should all like to see the Government making a very real and sincere attempt to get a commercial agreement with the United States of America. I need not elaborate all the reasons, which are familiar to the House. I know that in order to share the full benefits of an agreement, it would perhaps be necessary to add one about the war debt—and personally I should like to see us make another attempt in that direction—and it would perhaps be desirable to develop the tripartite currency agreement. I cannot, however, discuss those matters now, for I should be told, I have no doubt, that they are a matter for the Treasury Vote. I am sure that the Committee would like to see a very serious effort made to secure a commercial agreement with America, and it is clear from all the communications that have been made, both public and private, by those who represent America that if we were prepared really to make some change in our policy we should find a perfectly adequate and satisfactory response from America.

Suppose then we did that, I should also very much like to see a triangularisation of trade agreements between ourselves, America, and Canada, which has already made separate agreements both with ourselves and America, which would have the effect of extending the general results. Then I should like to see an attempt to carry that step further, and I thus now come to the question of Imperial preference. I am not now criticising Imperial preference, but I should like to see the form of Imperial preference in some respects modified, and some of the principles adopted in 1932 changed. In particular, I should like to see a change, which has perhaps begun in some small measure in the recent arrangement made with Canada, in the direction of removing or reducing the number of cases in which a fixed margin of preference is guaranteed, and replacing those by guarantees as to maximum duties and possibly a guaranteed percentage of preference on any duties that may otherwise be imposed against foreign countries. What I have always disliked so much about the Ottawa Agreements is that they have required us to put on a tariff, or to increase a tariff, or to maintain a tariff which we should not have put on for our own purposes, in order that we might then give a preference, a reduction from that tariff, to the Dominions. I believe that the time is now ripe when the Ottawa Agreements could, by negotiation with the different Dominions, be changed in the direction which I have suggested, and if that were done, it would open a way for a widening of trade relations over a large part of the world.

Next I should like immensely to see a return towards the principle of equality of opportunity for the trade of all countries with our dependent Empire. It is true, as the hon. and gallant Member for Bournemouth said, that as regards the greater part of the Colonies for the administration of which this country is responsible, either Mandate provisions or special treaty provisions now require practical equality of trading opportunity. Our preferences are limited to a relatively small proportion of the Colonies, for which we are responsible. It is true that it is a relatively small mess of pottage that we get anyhow, but it is enough to destroy the great political advantages of our old historic tradition of equality of opportunity for the whole world, as regards the dependent non-self-governing Colonies, a tradition or a principle which, I believe, was very largely both the justification and the safety of the British Empire in the nineteenth century.

I would very respectfully ask whether it is not possible to make some return towards the reassertion of that principle. It is said that that would deprive the Colonies of the benefits of preference and that those benefits are substantial in some cases. The vital principle here is that the Colonies are restricted in bargaining only to other parts of the British Empire. It is the specific advantage claimed and secured by the metropolitan country that is here in question. As a comment upon the argument that these preferences are in the interests of the Colonies themselves, it is perhaps sufficient to refer to the notorious case of the overriding of the Ceylon Government, when Ceylon did not.wish to have a quota against Japan. I hope very sincerely that the Government will consider whether they cannot get back towards the principle of equality of opportunity in the Colonial trade.

Most important of all, as regards immediate policy I hope the Government will seriously try to encourage the low tariff movement. I hope they will not make the Most-Favoured-Nation Clause, or rather the precise rules under which it is applied an insuperable obstacle to such low tariff arrangements. I am sure the system of purely bilateral agreements, subject to the limitations which now exist, cannot go much further. I am sure, too, that if every country is to wait for every other country to march with equal step we shall not get very far in clearing the way for international trade. What does stand in the way, is the sacred principle of the Most-Favoured-Nation Clause, or rather, not the principle itself but the precise rules under which it is applied. I well understand the historic importance of this clause in British commercial history. I recognise the suitability of the principle, during the greater part of our history when we were a Free Trade country. I recognise, further, that that principle still has a considerable service to give in the world, but I am sure that if the countries which principally uphold it, are unwilling to make any exceptions, even in favour of the most desirable forms of grouping, for the liberalisation of trade, the effect will be, first, to make the clause an obstacle to every desirable advance and, secondly, to make it inoperative and useless for all the principal purposes for which it was intended.

May I point out one illustration of the way in which the clause works? Five years ago we were engaged in negotiating Imperial preferences between ourselves and the Dominions. We were making arrangements between countries which, in respect of commercial policy, are as self-governing and completely masters of their own policies as sovereign States. The arrangements then made were between countries dispersed over the world with no original or natural economic ties as close as those which would unite two contiguous countries. We made arrangements partly on the basis of imposing new tariffs against foreigners in order to have something upon which we might be able to give a preference, and of course, confined those arrangements to members of the British Empire, admitting no foreign countries. We said, and we were legally correct in saying, that that was not inconsistent with the Most-Favoured-Nation Clause. Simultaneously Belgium and Holland desired to make an arrangement under which, without increasing tariffs against any other country, those two countries so closely associated, would reduce their tariffs against each other. They gave an invitation to any other country to come into that arrangement upon similar terms. In those circumstances, while we proceeded as we had a right to do, to negotiate imperial preferences with the Dominions we used the legal powers which we had in our commercial treaties and the power of the British market, to block that extremely desirable attempt to liberalise trade between Belgium and Holland—an effort of liberalisation which might have extended a great deal further and, as I say, was accompanied by no increase whatever of tariffs against any other country.

I am not asking, in these circumstances, that the Most-Favoured-Nation Clause should be abandoned. What I would respectfully urge on the Government is that they should consider the principle endorsed in a resolution at the Monte Video Conference by the United States of America and nearly all the countries of Central and South America under which countries having Most-Favoured-Nation Clause privileges and rights, said they would be prepared to refrain from claiming those rights against countries which entered into a multi-lateral convention having for its object the liberalisation of trade, that convention being open to other countries. I believe that if the British Government would join with other countries in assenting to a principle of that kind, they could make this clause, which at present has became almost a laughing-stock, in the form in which it now works, in a world of quotas and exchange controls and clearing systems to which usually it does not apply, serve a really useful purpose. I believe that it could thus be used to attract countries, to come from the more obstructive and worse forms of restriction back to tariffs and, having come back to tariffs, to join with other countries of like mind in extending the area of lower tariffs. That is the principal suggestion which I put before the Government.

It is of enormous importance that Government policy on this matter should be formed as a whole and based upon all the relevant considerations, and not allowed to be specialised and departmentalised too much. I am even more afraid of the complexities of the present system as a handicap to reform than of the vested interests as such. I wish that the Government with one mind and one will would consider the political advantage of co-operation with the other great free countries in this matter, the special economic advantages of doing so at this moment when we are in danger of an inflationary rise in prices—and shortage of supplies exactly the opposite condition from that which prevailed at the time when our tariffs were imposed—and, in addition, the immense importance of maintaining the fabric and framework of our international trade in anticipation of what may be required, when the recession comes after the present boom I am sure that with a policy based upon all these considerations as a whole it would be possible to give instructions to those entrusted with particular negotiations, which would carry them through to success. I am equally sure that if each negotiation is taken on its own particular, specialised merits without the impetus of a policy broadly conceived in the way I have indicated, the difficulties in each case will be such that little or nothing will be done. My last word concerns what is perhaps the most important consideration of all. It is a platitude, but at the same time it is a most serious fact, that commercial policies in the world of to-day are, among the factors that make for peace or war, of incomparably greater importance than they were in 1913.

5.24 p.m.

Mr. Runciman

The speech to which we have just listened will make the Committee realise what an admirable international servant my hon. Friend was during the period when he was stationed at Geneva. I remember our relationship in those days, some 10 years ago, and I have no doubt that he also remembers the fact that the Resolutions which were passed in the Conference at Geneva in 1927 were passed almost unanimously. They fell down, not on what was in the Resolutions themselves, but on the fact that when I proposed that those Resolutions should be adopted by the various Governments represented at the Conference, not a single Government of any description in any part of the world was prepared to adopt them. That was lesson number one on negotiations. I am sure my hon. Friend remembers the disappointment of M. Theunis on that occasion, and I think every one of his colleagues thought that it was impossible to make any progress along those lines.

The next disappointment we had was in the gallant efforts that were made by Mr. William Graham. I need not refer to them, because they have been described many times in the past. But the fact remains that Mr. Graham also did his best, by negotiation; along lines which might perhaps be followed by M. Frère in the present exploration which he is conducting to endeavour to induce the various Governments whom he interviewed to reduce their tariffs, and to give us in Europe the benefit of a low tariff system. Mr. Graham did not go any further, but he did wish to get as far as that. What was the result? Mr. Graham returned to this country disappointed and disillusioned, and he was not the first person who has been disillusioned over tariffs. It is a very unfortunate thing that in no country in the world has there been evolved a tariff system which is likely to give complete satisfaction either to its authors or to its beneficiaries. Its authors are apt to feel, sooner or later, that they have gone too far, while its beneficiaries are always apt to feel that they have not gone far enough.

That general feeling of dissatisfaction was very evident in the years immediately before 1931. My hon. Friend the Member for Kingswinford (Mr. A. Henderson) drew attention to the fact that 1929 was the basic year for all purposes of comparison. I am not going into a discussion as to what is the appropriate year to use for purposes of comparison, but I think I am justified in saying that the change brought about in our policy in 1931–32 has not been altogether bad, and I think I detected in the speech to which we have just listened a certain amount of satisfaction at the fact that some good results have come from the negotiations of the last few years. I do not press the point too far, but I would emphasise the view which I hold myself, that if you attempt to carry tariffs too far they become a menace and if you attempt to dispense with them you reduce your bargaining facilities. If you try to dispense with them altogether in a world which has adopted them as world policy, you suffer, and I think we in this country have suffered more than any other country in the world in that way. Those are simple and straightforward facts and do not require any acute or profound economic knowledge. Hon. Gentlemen opposite may not like them, but there they are, and they have to be faced. Our trouble is that those of us who have to deal with these matters have to deal with some very awkward customers—men who are profoundly convinced of the truth of the doctrine that by taxation you can make a country rich. I have never held that view. I do not believe you can. I believe that if you attempt it, you will meet with some bitter and costly disappointment.

Mr. Foot

With regard to the right hon. Gentleman's last observation about other countries, may I ask him at what date that became true?

Mr. Runciman

I do not think any great importance attaches to that. It is very obvious to anybody who has had experience of conducting tariff negotiations. A very distinguished economist and statesman in Europe said to me about two years ago, when I asked him why on earth he had taken his country into the tariff area, "Everybody is in the mad-house, and I cannot afford to be outside." That was the saying not of a member of this Government, not of the President of the Board of Trade, but of one of the most profound thinkers in Europe, whose country had steered clear of tariffs until about five or six years ago, when he found, as he said, that he could not afford to remain outside. If that is our position, let us take a survey of the world as we find it, disagreeable as it may be. My hon. Friend the Member for Burslem (Mr. MacLaren) regards these things with merriment, but I can assure him that if he were a negotiating agent employed to survey Europe again, he would not laugh about them. He would realise how serious are the problems surrounding the tariff question. It is not a question of one economic doctrine triumphing over another, but a question of the livelihood and well-being of whole tracts or countries, of the people employed in them, and of people who draw interest from their investments in them. These things are in the nature of human questions, and they have to be taken seriously as among the most serious tasks of statesmanship.

Mr. MacLaren

When I am laughing in this House I am most serious. I happen to be Irish. No one views this matter more seriously than I do. What makes me laugh is that the right hon. Gentleman who with myself on this side of the House, put up a fight for Free Trade, now tells us that because someone said that the whole world is in the madhouse, he and I should go along with them.

Mr. Runciman

It is extraordinarily difficult to follow the hon. Gentleman if he is really serious that when he laughs he is really mourning.

Mr. MacLaren

If the right hon. Gentleman reverses the process it is complimentary to himself.

Mr. Runciman

Let me turn to the speech of the hon. Member for Oxford University (Sir A. Salter). He made four practical suggestions. The first was that we should have a form of Imperial preference altered to suit the altered conditions of the times. He did not specify in detail—and one would not press him to do it—the form of preference, but said that it must be constantly under review. I agree that to accept a form of preference and never be prepared to alter it, whatever the circumstances, would, of course, be unreasonable. I can satisfy the hon. Gentleman on one point, and that is, that in making a new survey of the world such as we are now involved in, we will certainly not overlook the fact that there is more than one way in which preference can be applied.

We must not be asked to abandon the preference system altogether. It is now an essential part of our Imperial policy, and we cannot abandon it, and do not think of abandoning it, especially in view of the fact that, based on that policy, there have grown up large bodies of workmen, skilled men, business organisations, factories, workshops and the like, which are the result of the policy which the present Government have been following. I know that it is suggested in some quarters that such expansion of trade as we have experienced is not due to our tariff policy at all. I must say that if that is the view held by those who criticised the Government this afternoon, I find it difficult to understand them. Why do they condemn our tariff policy if it has no influence on our foreign trade? The truth is that nothing of this kind can be enacted by this House or set in motion by the Government without having some effect on trade. I agree that in such a matter as the preference system the machinery, but not necessarily the principle, might very naturally and properly be brought under review.

My hon. Friend laid great stress on the policy of the open door. On this subject I would ask one simple question. There has been an interruption of the policy of the open door in the case of some of our Colonies. That interruption was due entirely to the fact that we were in those Colonies meeting competition from countries where low wages and low standards of living are the rule—so low that it is almost impossible to contemplate equal competition with these Asiatic countries. It has been one of the problems of the Governors of those Colonies, of their legislative assemblies and of their financial organisations, in surveying their trade, to make up their minds that, as they could not by means of a tariff secure themselves against the competition of these low-wage countries, they must take steps which were even stronger. We are not prepared to prevent their doing it. As far as I have been able to understand the attitude which is adopted by them, quite naturally it would be impossible for us to compete on equal terms with countries which have this enormous disadvantage, or advantage, according to the point of view one takes.

Sir A. Salter

Surely the Governors of those Colonies were not asking for protection of any native industries against cheap competition? Surely they were not asking for tariffs in order to protect Colonial producers against low-wage competition from outside? As far as the Colonies were concerned, the effect of the duties was that the natives had to buy these goods at higher prices. Surely the purpose of protection was to protect the producers not of the Colonies themselves but of either this country or the Dominions.

Mr. Runciman

My hon. Friend will remember that it amounted to almost total prohibition in many cases. In each case the form of prohibition was the result of the action of the Legislative Assemblies. It is true the Governors played their part, but the Legislative Assemblies were responsible. I only mention that in passing because it is related to the problem of competition from low-wage and low-standard countries. I doubt very much whether in future you are likely to make a very strong impression in negotiating with these low-wage countries unless you are prepared to take drastic steps for the control of those trades.

My hon. Friend also referred to a subject which has often been under discussion in this House, namely, the low tariff club, and he made particular reference to the Ouchy Agreement. I would like to emphasise, in passing, that the Ouchy Agreement is not to be confused with the Oslo policy, although a good many people—not my hon. Friend the Member for Oxford University—seem to think that the two things are the same. The Ouchy Agreement was reached in 1932. One part of the proposal was that Holland and Belgium should grant a lower scale of duties to each other than they granted to countries outside. We were asked what we had to say about it, and we naturally said, "Will you kindly tell us what effect it is likely to have upon our duties?" They said, "Your goods will come under duties on a higher scale than those which come from Holland or Belgium, as the case may be." I said I was afraid that in the interests of our manufacturers and exporters I could not agree with that, for it would put our exporters and manufacturers at an unfair disadvantage. I had something else in my mind which is also of great importance to a trading country like ourselves. It is that we are susceptible to retaliation, and if we had come into such a low-tariff club, what would other countries have said in reply? They would have involved us in a retaliatory war. They would not have taken it lying down. They would undoubtedly have attacked all those who were parties to that low-tariff arrangement because they were not allowed to come in.

Sir A. Salter

Is it not the case that it was open to every country to come in?

Mr. Runciman

I would -point out that they would have been in a majority, and we would have been at the greatest disadvantage. Under such conditions we could not see our way to agree to the low-tariff club. I know that there are some people who seem to think that if only we had been in it at the start it would have spread over a wider area. I take the opposite view. If we had gone into it we should have found ourselves in conflict with some of the most important of our customers and business associates. I observe, in passing, that my hon. Friend, with all his authority and experience, has come to the conclusion that it would be foolish to get rid of the Most-Favoured-Nation Clause altogether. I only mention that so that it may be put on record.

Sir A. Salter

But put on record with the important change I suggested in the rules for its present application.

Mr. Runciman

May I point out to the Committee in a short survey which I propose to give of our foreign trade policy at the present time, that we have to deal with a very difficult and awkward situation in many of our negotiations. It is impossible in the course of a debate to say openly and frankly what are the points over which there is a tussle going on in some committee room or another between our representatives and others. It would certainly not further the rapidity or the ease with which those negotiations could be conducted. We must conduct them behind closed doors. I have many times had to say to my hon. Friends on this side that I could not agree with the suggestions which they made that there should be a complete disclosure stage by stage of negotiations which were being carried on. Those who have had most experience in these matters are the least inclined to press for that. America is one of those cases in which disclosure is difficult.

I went to America at the beginning of January for the good of my health. It was a very interesting trip. In the course of my sojourn there I had the pleasure of seeing a great deal of the President, who is one of the most remarkable men of our age, and I also had many conversations with Mr. Cordell Hull, who plays a considerable part in these affairs. At no time in these conversations did I ever disguise from the President or the Secretary of State the difficulties which must naturally arise in reaching agreement between them and ourselves. Mr. Cordell Hull is rightly proud of the fact that he has made trade agreements on a bilateral system with no fewer than 16 countries. I naturally thought it necessary to point out that we have made agreements with rather more than that number, so that we could regard our experience as good as theirs. Since then we have been trying to find a foundation on which we could build, and bit by bit we have examined the whole ground—a most laborious business. Hundreds of items that appeared in the schedules have had to be examined one by one, and in each case we could be quite sure that the difficulties are great because of the business interests that are concerned. I want to foster those business interests.

Mr. MacLaren

Hear, hear.

Mr. Runciman

I am in trouble with my hon. Friend, for I do not know whether he agrees with me or disagrees. When we are dealing with the representatives of America we have to be very definite. I had the privilege of hearing from inside with great candour exactly what they felt with regard to many of these negotiations. While I was on the other side of the Atlantic the agreement with Canada was reached and signed. The present Canadian Agreement, I think, from our point of view, and, I am certain, from Canada's, is an improvement on its predecessor. I should prefer, if one could have that as a precedent, to proceed along the lines of improving what we have already got rather than abandoning our whole policy. What is to be done with regard to America in the future? If I could do so, I should be glad to indicate to the Committee exactly the point which we have reached. We are about to discuss this week, in the Imperial Conference, some economic questions which have a direct bearing upon our American discussions and our relationship with America. I can only say that so far as they are concerned we are doing our best to observe the same spirit as inspires the representatives of the Dominions, and to give the impression in America, which we most sincerely have at heart and consistently feel, that no contribution within the functions of Government could be a greater achievement for the extension of world trade than an agreement between this country and America. But, of course, it must be on sound lines. The Americans will not agree to anything that is not on sound lines from their point of view, and I do not think we can be blamed if we adopt exactly the same attitude. It is with the idea of reaching agreement that we have undertaken these discussions, and not with the idea of setting up obstacles. We wish to get an agreement, and I have no doubt that with patience and perseverance it will be possible to reach a point where it will be possible to say that both America and ourselves have obtained great benefits from the agreement which has been achieved.

I observe that in these debates a good deal of tribute is paid to phraseology which may mean nothing or a great deal. What is meant by "Liberalising the tariff system?" I have been engaged on work of that description for the last five years. I have been "Liberalising" the tariff system by securing a reduction of tariffs in foreign countries in which we wish to import British goods. Our trade agreements have carried that out. Another phrase which is in common use is that we should lead the nations to economic appeasement. I am quite prepared to make any contribution to appeasement, whether by tariffs or any other means. I believe that the predominant interest of the world to-day is the peace should be secured.

Sir H. Croft

Before the right hon. Gentleman leaves the subject of America can he give an answer to the question I put in regard to the speech of the British Ambassador in New York?

Mr. Runciman

I must confess that I did not know that a speech of that nature had been made until the hon. and gallant Member referred to it, but I sent for it and I find the report is incomplete. However, I will make the necessary inquiries.

Sir H. Croft

I did not press the right hon. Gentleman to answer now.

Mr. Runciman

Thank you. I can say quite frankly to my hon. and gallant Friend that no one has any authority to say that we are prepared to sacrifice agricultural interests or any other interests, but that is not saying that agricultural interests will not take an Imperial view of these problems, just as would the representatives of other industries. However, I will make inquiry into this matter and see exactly what was said.

May I turn the Committee away from these matters of high controversy, however entertaining they may be, and come to a short survey of what has happened during the last four or five years? The first and the most important of all the industries which have been affected by the change of policy during the last five years is the iron and steel industry. All of us who are connected in any way, directly or indirectly, with the iron and steel industry know the plight it was in some five years ago. There has been the most remarkable change in its prosperity. Our manufacturers are now partners in the Continental cartel, which covers this country as well, and they have secured a very large share of the foreign trade of the world, and the effect of that has been universal. I do not know of any change which has been more rapid than the change in the conditions of those who were involved in the misfortunes of the iron and steel industry some five years ago and those who are now enjoying steady employment and those who are making handsome profits out of the iron and steel trades. Let me say in passing that they have a good deal of leeway to make up. I trust, however, that they will succeed in doing so, because unless we have as the very foundation of our industry a prosperous iron and steel industry I am quite certain that we shall not be able to regain and maintain our economic strength.

Closely allied with the iron and steel industry is coal. We have had many discussions on coal questions, but not very many on the actual business side of the sale and distribution of coal. The demand for coal has been phenomenal during the last 12 months. I do not know how far it will be possible for British mines to keep pace with the demand for coal. We require coke for the coke ovens. We cannot smelt without enormous supplies of fuel. We require a great deal of scrap, scrap playing now a larger and ever-increasing part in the manufacture of iron and steel. Where those raw materials are to come from in the next few years is one of the problems, or group of problems, into which business men are inquiring in all the "black countries" of England, Scotland and Wales. One thing of which we can be sure is that we will not slip back in the near future into the misfortunes and the depression of five or six years ago. There appears to be assured to these heavy trades a considerable degree of prosperity and activity during the future which is in sight.

The demand for iron and steel has increased the demand for coal at the same time that the demand for coal abroad has gone up, so that we are finding it difficult to meet the demands which are covered under a good many of our trade agreements. We must not fall short in the supplies that we sell under those trade agreements. I say that with a full knowledge of the risks we run in the future. If we are not careful we shall find ourselves, when this present boom is over, with our foreign trade considerably curtailed. We ought to devote ourselves very largely to preparing the ground for the future when the present demand for these great raw commodities will be at the ebb. It may be that the armament programme will be completed more quickly than we had anticipated, but when it is completed it will leave a gap, and, if my advice ever reaches the ears of those who are engaged in these great industries, I want to see preparations made for the filling of the gap and for the maintaining of the personal connections between our Own people here and our consumers abroad, without which there can be no harmonious trade.

If there is to be any rapid improvement in the coal trade I hope that it will be evenly distributed. One of the most distressing things about the inquiries and discussions in which we have been involved in the past has been the unequal geographical distribution of our industries. In the part of the world with which I am most nearly connected, the North Country, we feel anxiety as to what is to happen to what we call our "West Country collieries." They are working pretty actively at the present time, and I hope that some of them which have been out of action for years will once more come into yield. At all events, any encouragement that can be given by the Government to this industry, particularly in the export trade, will undoubtedly be given. It is one of the -constant anxieties of my hon. and gallant Friend the Minister for Mines, because he realises, just as we all do, that unless we have our order books well filled in the gap period after the present rush is over we shall have once more great numbers of men thrown out of work. We must at all costs avoid that.

I hope that the widespread prosperity in the iron and steel trades and in the transport trades and, once more, in the export trades, will enable us to do something to help the derelict areas, and I need hardly say that in making a survey of the coal trade one can never leave poor South Wales out of account. What is happening there now will, I trust, give some degree of hope, although it has not taken as definite a form as we might desire. However, when we come to a revision of the trade agreements, in which coal plays such a large part, I hope there will be no attempt to whittle down the claims of the coal trade, for it needs all the assistance which can be given to it. May I, in making a short survey of the comparative prosperity of our chief industries, draw attention to the fact that this is reflected in all industries which are concerned with metals, whether as users or as makers, and that there is no sign at the present moment of any abatement of these enormous demands? Moreover, in the chemical industry there is at the present moment a greater output than at any time in the history of this country, and that is a very good index of the activity and prosperity of the users of its products.

When we turn to textiles it is only fair to say that wool and woollens are comparatively prosperous—comparatively—because I know they never admit anything more than that, but it is true that in the West Riding there is a degree of activity and prosperity such as has not been known for many years past. The cotton industry is passing through very troublous times, but even there there are signs of renewed activity. I hope that in the very near future it will be possible for more attention to be given to specific proposals in the cotton trade, that those concerned will not be merely talking at large and, with a great, broad brush painting lurid pictures, but actually getting down to the difficult problems which have to be faced by the controllers of its great concerns. I would also like them, in making a survey and making any preparations for the future, to see to it that the foreign trade will be catered for, so that our foreign connections will be maintained as much in the cotton trade as in metals or coal or shipping. Engineering appears to be prospering almost beyond the dreams of anything we could have conceived five years ago. Shipping, I am glad to say, has recovered. Shipbuilding is probably in as great a state of activity as at any time since the War, and one of the most pleasing sides of that is that a very large number of the ships now under construction are fitted with modern engines of the newer type and have new forms of hull conformation. They have absorbed a great deal of machinery for the reduction of labour in the handling of their cargoes and the like. Indeed, the vessels which are now being produced in our English and Scottish yards are the most up to date and efficient vessels to be found anywhere in the world, and that is one way in which we are preparing for the depression whenever it may come.

In conclusion I will say one or two words on the trade of this country as a whole. During the time I have been at the Board of Trade, and this is my second term of office there, I have found an amazing extension of the close connection between State departments and officials and those actually engaged in business. There has been a tendency in some quarters—I hope it will be realised that I say this without intending any offence—to lay too much stress upon the part which can be played by Governments and Government officials in the prosperity of our country. Let us regulate by all. means, and it may be that more regulations rather than less will be our fate in the future, but for initiative we must depend on private individuals who are working alone, very often in seclusion, sometimes not disclosing their achievements until years after they have ripened. These are the people on whom we must rely in the future if we are not to see a complete collapse in our trade as soon as the present temporary demands are over. But we shall have to do something more than regulate, and I trust that as the time comes for making a fresh survey of the relations between business and Government that it will be borne in mind that above everything else we must cultivate consumers at home and abroad. To exploit either would be disastrous. To give the impression that we are taking advantage of these very active and exciting times in order to extract—extort, I might even say—high prices out of the consumer, whether at home or abroad, would be the worst of bad policies. It is in the hope that we shall be able to hold our own by sheer efficiency and by the high standard of our goods, with full sympathy with those that consume them, and I hope, pay for them, that I beg that in future our business communities will lend themselves to a wise and sympathetic survey of their duties.

6.1 p.m.

Mr. Shinwell

This is not the first time that I have dared to cross swords with the right hon. Gentleman. I gather from reports that this may be the last occasion on which he may address hon. Members as the representative of trade, and I should like to say that, whatever views we may hold regarding his policy, we have nothing but admiration for his remarkable ability and clarity on this subject. I think all hon. Members on this side would welcome a lowering of trade barriers, yet we are under no illusion. We refuse to believe that, in existing world circumstances or in such circumstances as we can conceive arising in the next few years, it will be possible to return to unlimited and unrestricted Free Trade. Indeed, the Labour party are not enamoured of a fiscal system where no restrictions or limitations are imposed. We are opposed to the imposition of tariffs, either for purposes of revenue, or as the means of limiting imports, but, nevertheless, in modern times, and certainly under a régime such as is envisaged by hon. Members on these benches, some scientific regulation of industry and of imports and exports is essential. Free Trade, a free interchange of goods and services or, as one hon. Member described it, Liberalising tariffs, is all very well, if there were not an important obstacle to overcome. That obstacle is capitalism itself. So long as capitalist countries search for markets and desire an expansion of markets, and are inevitably compelled, because of their peculiar position, to engage in cutthroat competition,.3 free interchange of goods and services appears to be impossible.

While it is very fine and large to indulge in phrases such as we have heard this afternoon, those phrases are, in my judgment, meaningless beside the realities of the existing economic situation. At the same time, we are by no means disposed to accept the dictum of the right hon. Gentleman that an improvement has manifested itself, in consequence either of the Protectionist policy introduced in the early part of 1932, or of the Ottawa Agreements. I noted that the right hon. Gentleman did not go further than to agree that the change was not altogether bad. In making that statement, he administered a cold douche to rabid Protectionists, like the hon. and gallant Member for Bournemouth (Sir H. Croft) and others, who have all along claimed the unlimited virtues of the tariff policy. He said that tariffs could be extended too far, and with that we agree, but that is quite unlike the statements that were made in 1931 and 1062, and no party is more pleased than we are to detect a return to a semblance of sanity in the ranks of the Government.

We are not so much concerned about those barren, fruitless, fiscal controversies as we are about the present position and the future of British trade. By far the most interesting part of the right hon. Gentleman's speech was that section, very brief and perfunctory I thought it, relating to the position of British trade and its possibilities in the future. I would draw attention to one important utterance for which he was responsible. He said that when the present boom was over, trade would be seriously curtailed. As far as I can recall, that is the first time that a member of the Government has given expression to such an opinion. Indeed, when Members on these benches have expressed a similar view, it has been opposed by hon. Members opposite. In reply to questions which have been frequently asked by hon. Members on this side and below the Gangway, the Government have stone-walled, and have pretended that, irrespective of the Government's armaments programme, the normal development of trade was not likely to be arrested for many years to come. Now the right hon. Gentleman has departed from that opinion, so frequently expressed, and has agreed with us for the first time that the boom will come to its conclusion. He went further, and said that it might be that the armaments programme would be completed more rapidly than was anticipated, and that we ought to be preparing the ground. May I ask what the Government means by "preparing the ground"? How do they propose to prepare the ground? I did not detect from the right hon. Gentleman's speech any vital, or indeed relevant, utterance which would lead us to suppose that the Government have the matter well in hand. All that the right hon. Gentleman ventured to do was to give a word of advice to industrialists, and to express the hope that they were taking note of the existing situation. We are extremely anxious that this Government, or some alternative Government, should devote themselves assiduously to preparing the ground for that period which may come very shortly when, as a result of the disappearance of the armaments programme and of the boom arising from it, we shall be left high and dry, and our unemployment figures will be vastly increased.

Now I turn to the questions raised by the right hon. Gentleman arising out of the coal situation. I propose to touch on the subject briefly. He said that, like the steel and iron industry, the coal industry had undergone a remarkable revival and was exceptionally busy. I think he said that there was some difficulty in meeting the demand for orders from abroad. I have in my possession a document, extracted from the Blue Books, which fails to bear out that optimistic opinion; on the other hand, it shows that between 1932 and 1936 our exports in coal have declined by II per cent. That is a very serious reduction. In spite of the Protectionist policy and of Ottawa, in spite of the abnormal recovery in trade and despite the arms programme and the boom consequent upon it, there has been an actual decline of over 10 per cent. in our coal exports. While it may be that we are consuming more coal at home, we are certainly not consuming as much at home as we were before 1929. In any event, we are not despatching as much coal abroad. I would direct the right hon. Gentleman's attention to one of the trade agreements which, I imagine, he himself negotiated, at all events with the assistance of his hon. and gallant Friend the Secretary for Mines. I refer to the Anglo-Polish Trade Agreement and its subsidiary coal agreement, out of which we found it possible to sell more coal in the Scandinavian markets. Unfortunately, coal was deflected to other British markets in Europe and elsewhere, and, as a consequence, South Wales suffered the most severe blizzard it has ever experienced.

That brings me to the general principle underlying the promotion of trade agreements. On these benches we welcome reciprocal trade agreements, except that I should say, speaking perhaps for myself, that I should have preferred the reciprocal trade agreements to have been promoted before the introduction of a tariff policy—if, indeed, that tariff policy would then have been necessary. I believe it is held in some quarters that the tariff policy was useful as a bargaining factor, but it cannot be disputed that the tariff policy which preceded reciprocal trade agreements with certain countries had a devastating effect, because of retaliation. If trade agreements are to be promoted, they must have regard, not to particular areas in this country—for example, the North East, or South Wales, or the cotton area of Lancashire—but to the industrial and trade position of the country as a whole. If the promotion of any particular trade agreement has the effect of deflecting trade from one part of this country to another, there is something inherently wrong in such a trade agreement. Therefore, it seems to me that the Government, when these agreements are denounced, as they inevitably must be, and new agreements are promoted, should take cognisance of that situation.

I want now to turn to the more constructive side, if I may use that term, of this question. We are concerned in the promotion of better trade internally and internationally, and the question for us is as to how that improvement can be effected. To begin with, it is quite useless to talk about the removal of trade barriers unless at the same time we are prepared to deal with the vast volume of international debt which constitutes such a heavy burden, not Only upon non-Imperial countries, but upon the Dominion countries as well. The primary producing countries in recent years—and this cannot be challenged—have been unable to dispose of their goods while at the same time they have been compelled to meet the demands naturally made on their financial resources by loans previously contracted. Obviously, such a position cannot continue for long without inevitable bankruptcy and an almost complete cessation of international trade among the countries concerned.

Let me in this regard direct attention to the extraordinary position of Argentina, and here I would venture to ask the Government what their policy is. We have investments in Argentina amounting to something like £450,000,000, and the investing public naturally expect a return on those investments, but at the same time there has been a curtailment of Anglo-Argentine trade. It is true that the recent Anglo-Argentine trade agreement improved the position to some extent, or rather, I think I ought to say, did not worsen the position. But nevertheless we have to make up our minds what it is that we want from Argentina. Do we want repayment of the debts which she has contracted with us, or do we want to exclude her goods for the purpose of bringing further benefits to British agriculture? We have to make up our minds which road we are to travel, and, so far as I can ascertain, the Government do not seem to have made up their mind on that matter.

I should like to ask the right hon. Gentleman whether, in the discussions that are shortly to take place at the Economic Conference, and in particular in relation to the revision of the Ottawa Agreements, there is to be any discussion of the monetary position. How long will it be possible, for example—I am speaking now with regard to the revision of the Ottawa Agreements—for the Dominion countries to meet their financial obligations unless they find some outlet for their goods? I noticed recently that the Labour Government of New Zealand offered to enter into a reciprocal trade agreement with the United Kingdom which seems in some respects to depart from the strict letter of the provisions of the Ottawa Agreements, and it would be interesting to know whether the Government have made any response to such an offer. It is on these lines that we of the Labour party believe that there is some prospect of an improvement in international trade taking place.

Furthermore, although this is not a matter strictly within the purview of the right hon. Gentleman, it is necessary to ascertain what is the Government's agricultural policy. I am speaking not so much from the standpoint of marketing arrangements and the like as from the standpoint of trade. Have the Government made up their mind—and this is very relevant to what has happened here this afternoon in connection with the proposed agreement between the United States and ourselves and their agricultural position—have the Government made up their mind as to whether we are to produce along certain agricultural lines, or whether we are to engage in comprehensive universal agricultural production irrespective of the position of the Dominions, the United States, Argentina, or any other country: For our part we would welcome a clear approach to a solution of this problem if the Government would come to some fixed determination as to the kind of agricultural produce that is most suitable for production in this country, and, having made up their mind, would stick to it.

We do not believe that there is much prospect of any great improvement in British trade, either internally or internationally, unless some measures are taken to improve the standard of living of the people in this and other countries. There has been some talk this afternoon and on other occasions with regard to the need for eliminating competition. It is said that goods produced under unfair, indeed sweated conditions in other countries are imported into the United Kingdom to the detriment of our own industry. Clearly tariffs will not avail in that connection, but have the Government thought of promoting international labour agreements, either through the International Labour Office or in some other fashion, in order to raise the standard of labour conditions in those countries which are our chief competitors, and, in particular, in those countries where it is alleged that the standard of labour conditions is lower than ours?

So far, the Government's conduct in that connection has been far from satisfactory. They have rejected the opportunity that has frequently been in their possession of supporting international labour conventions, and in one case they refused to ratify a convention which would have assisted in the elimination of one of the most important competitive factors in the European coal market. If the Government are serious about the need for advancing British trade, internationally at all events, it seems to me that they must assist those elements, and particularly those trade union elements, in this and other countries who are so anxious to promote international labour conventions. Finally, we desire to know whether the Government propose any steps to improve the standard of living in our own country. I am not speaking merely of nominal wage rates, but of real wage rates, and in that respect I would refer the right hon. Gentleman to the increase in retail prices which has taken place in recent days, and would ask whether it is the intention of the Government to do anything in that matter. Moreover, there has recently been a sharp rise in the price of building materials, which may seriously affect the construction of houses for the working class. It is easy enough for the private builder to pay the additional price asked for building material, because he can pass the additional cost on to the consumer more or less—sometimse more rather than less; but that is not open to the municipality. Perhaps the right hon. Gentleman or the Parliamentary Secretary might look at the matter and see whether it is possible to do anything in that direction.

I make no complaint about the somewhat short, perfunctory review which the right hon. Gentleman has given us. No doubt he was asked to deal with certain matters by the hon. Gentleman who spoke from below the Gangway. But I would have welcomed a statement from him, and perhaps we may now have it from the Parliamentary Secretary, on his investigations and operations regarding the activities of the share-pushing fraternity. He did promise to do something in the matter, and I believe a committee was set up. Moreover, a warning was issued by means of a leaflet through the Post Office, as a result, no doubt, of Parliamentary pressure exerted from these benches. But what has happened? Have there been any prosecutions, and, if so, how many have there been recently? This is a matter which affects a very large section of the community, the lower middle class. Members of the middle class itself, no doubt, and many working-class people, have been caught in the snare laid for them by these international crooks, and we are entitled to ask that the right hon. Gentleman should devote some of his attention, or certainly that his Department should devote some of its attention, to dealing with this matter.

6.30 p.m.

Mr. Holdsworth

I beg to move, to reduce the Vote by £100.

I think we all listened with great interest to the President of the Board of Trade, but, speaking for myself, I must say that I felt a great sense of disappointment at his speech. The main point of it was directed to a reply to the speech of the junior Member for Oxford University (Sir A. Salter). It was a very remarkable speech which took a broad survey of the whole of world trade and contained suggestions as to what we might do in order to assure for the world a greater measure of prosperity. The President failed to respond to that broad appeal. I remember quite well the appeal that was made by the Lord President of the Council, when Prime Minister in the Labour Government, that in many matters this House should constitute itself a council of State. I believe that very often on these great issues we have missed the good that we might do because we align ourselves into different conflicting opinions and rather like to score as if we were a debating society. I do not intend to follow that line. We are all concerned with the prosperity of this country and of the Empire.

I am always amused when hon. Members opposite take the Empire unto themselves. No one has a greater belief in the British Empire than I have, and no one desires more than I do to see it more prosperous, but I am not quite certain that the trade policy which the country and the Empire are following gives an assurance of that prosperity which we all want to see. Further, I believe there is little purpose to be served in a mere academic discussion of Free Trade versus Protection. For good or ill this country has changed its fiscal policy. I have to acknowledge with regret that what the hon. Member for Kingswinford (Mr. A. Henderson) said is probably true, that we have it, whether we like it or not, for a term of years. It is also true that throughout the world during the past few years the barriers to trade have become more formidable. Economic nationalism has become the policy of almost every country in the world. But during these past few months the evil consequences of that policy have become apparent. Statesmen of every country, almost without exception, are crying out for a greater measure of freedom of trade, and that is why I felt a sense of disappointment with the President's speech. I hope the Parliamentary Secretary will make up for that defect and that we shall respond wholeheartedly to the appeal that has been made by these statesmen.

The leading statesmen of every country have been making greater appeals for a greater measure of freedom of trade. [An HON. MEMBER: "They want our trade."] I do not think they want our trade. That is one of the mistakes that hon. Members opposite make, that there is a static amount of trade to be shared. That is pure nonsense. There is an opportunity of increase after increase if you will only have a sensible economic system. There is not a yard measure that you can take and say there are 36 inches of trade and no more. The more they trade with one another the more prosperous they become and the greater the extension of trade throughout the world. Surely the hon.

Member has learned at his time of life that you cannot have prosperity in this country at the expense of other countries. The prosperity of all nations is bound together. It is not a question of taking from one and giving to others but of all of us prospering at the same time. For months back there has been a chorus singing in unison an anthem entitled "Let us trade together." You find it in every country in the world. There never has been a time when concerted action to revive world trade could count upon such general support as at the present moment. We were told in 1932 that the great reason why the World Economic Conference did not succeed was the instability of exchanges. We all remember the American delegate corning over and we remember the French delegate saying that no agreement on tariffs could be made because the exchanges were out of relationship one with another. That position is modified to-day. There has been some kind of tripartite agreement between France, the United States and ourselves, and I believe that the little difference that there is between the rates of exchange to-day in the great countries of the world is so trifling as to be capable of solution if we tackled it with the determination to find a solution.

There has not been enough said to-day about the relationship between economic warfare and militaristic warfare. I believe it is impossible to have peace in the world so long as economic warfare exists. Last week almost every Member of the House went to see the Fleet. I think we all felt a thrill. We all acknowledged the magnificence of that Fleet. I believe it was necessary to provide for it. I have never voted against any provision for it. But whilst watching that magnificent spectacle I could not help feeling how tragic it was that all the money, all the ingenuity of man, should have to be put to this purpose. We shall never get over that difficulty as long as we take the narrow view of the hon. Member who interrupted me, that we cannot be prosperous except at the expense of anyone else. I believe the two things are interrelated and, unless we are prepared to tackle the question of a greater measure of freedom in trade, there is no hope of peace in the world. There could be no more propitious time than this to take this step. It is easy to get agreement with regard to trade when trade is prospering—far easier than when it is difficult. The natural thing when trade is difficult is for every country to try to defend itself and to put a barrier round itself. The time when we ought to be taking steps to achieve the desired end is when there is an opportunity, such as the present time. Whatever has led up to it, countries, particularly primary commodity producing countries, are more prosperous. They are more able to purchase. They want to keep going the business that they have built up, and I believe that is the moment when we ought to contribute to any movement which makes for a greater measure of freedom of trade.

What is our Government doing towards this end? I do not believe that this country can act in isolation. I do not believe, whatever Government came into power, that it could wipe away tariffs tomorrow morning. We are not putting that forward. We know the impracticability of that suggestion. It is mere school-boy debating business to put that up in order to knock it down. This is the distinction between us and the party opposite. You believe that tariffs will save everything, and that is the ultimate object of your policy. [HON. MEMBERS: "No."] Am I misrepresenting the hon. and gallant Baronet the Member for Bournemouth (Sir H. Croft) when I say that? We believe that the ultimate end should be the elimination of tariffs. [An HON. MEMBER: "All round."] Exactly I have said that we cannot act in isolation, but I do not want the complacent attitude which says, "We are all right, let us stick to it." We are fairly prosperous, but we can be more prosperous. Every nation in the world can become more prosperous by lowering the barriers to trade. The point on which I disagree with the hon. Baronet is when he complained because we asked for leadership on this question. I believe that Great Britain ought to give that leadership. I have heard Ministers of the Crown at dinners making speeches and appealing, as the President of the Board of Trade has done to-day, to the people to develop the export trade, but we cannot have more exports unless we are prepared to take payment for them, which means giving as well as taking.

What is our policy? Has the Government formed any clear idea of the goal towards which economic policy should be directed? What do we really want? How far are we going in attempting to make ourselves self-contained so far as agriculture is concerned? It is a big question. If the Parliamentary Secretary cannot answer it perhaps he will hand it on. Is the Government of the opinion that industrial development has reached its limit? Is there any co-ordination between the Minister of Agriculture and the President of the Board of Trade? Our industry has given itself the highest standard of living of any European country. Are we now to ask many of our people to accept a peasant standard of living? I believe there is a lot of nonsense talked about putting millions of people back on to the land. I cannot imagine a man who has been used to living in a city like Bradford, we will say, with all the amenities of a civilised society, enjoying the pictures, the parks, the libraries and so on, and when he is out of work you say to him, "We will send you to a little village and there you can have a wage of 32s. a week —wonderful fresh air and so on." Those people are not going to accept that kind of wage.

We should make up our minds how far we intend to go in trying to become self-contained as far as agriculture is concerned. We would be far better occupied trying to build up greater industrial development, which would give the people a higher standard of living than ever we can hope to obtain from agriculture. I am sometimes suspicious that the Government have no definite policy in mind, and that they merely use expedients if and when difficulties arise. Is there any Minister or are there any Ministers correlating agriculture and industrial policy. I am not saying this in criticism of Ministers. We pass so much legislation in this House, we make the administrative difficulties of Ministers so multitudinous that it is impossible for them to apply their minds to policy. There ought to be a number of Ministers without portfolio to study policy. I understand that in the course of the next few days we are to have a new Prime Minister, and I would like to see, with the coming of that new Prime Minister, the introduction of new methods. I seriously suggest that we could with advantage appoint a number of Ministers really to try and correlate policy. I see the Minister of Health smiling very much indeed. He is a right hon. Gentleman for whom I have a great admiration. It is absolutely impossible to ask the right hon. Gentleman to follow all these questions of policy, and all that is involved in them, with his many duties at the Ministry of Health. It is not humanly possible for him to do it. The government of this country is suffering owing to the lack of time on the part of Ministers for the real study of policy.

I have read the reports of the speeches which have been made at the Imperial Conference. A remarkable speech was delivered by Mr. Mackenzie King on the question of trade, and it was backed up, strangely enough, by Mr. Lyons, and the one fly in the ointment seemed to be our representatives. They appear to be trying to shelve the question; it is not an opportune moment to discuss it. I am gravely perturbed about the attitude of our representatives. If ever there was a great opportunity, with all the representatives of our Dominions in London, all having come with good will towards this country on a great occasion, surely this is the very moment when we ought to have conversations with regard to Imperial relationships as to trade, and also relationships with other countries on this particular question. Are we prepared to discuss with these representatives questions of trade? Be frank about it. We have to find some measure of agreeing with other countries, and we cannot do it without first of all getting the Dominion representatives to agree to the policy which we may suggest. Here they are. Why not take this opportunity of sitting down in serious discussion and really thrashing out a policy which will lead to the desired end? I make an appeal to the Government. I do not want to speak in any controversial way at all. We all ought to try and bring about greater prosperity not only for ourselves, but for the world in general. We should not lose the opportunity of the world movement towards achieving a sound world economic policy.

There are one or two domestic matters to which I want to refer. I have had a good deal of correspondence with the hon. Gentleman from time to time and he has treated me very courteously, but I wish he could tell me whether anything has been done to meet the legitimate demands of the independent firms with regard to their supplies of steel. Are the Board of Trade continuing to see that the pledge given by the importers under the cartel arrangement as to the distribution of supplies is being carrid out? I now come to what the hon. Gentleman will consider to be the King Charles's head of my case, namely, the question of the cotton spinning industry. I put a question some time ago with regard to the scarcity of supplies of particular cotton yarns. Questions have also been asked about the actions of the Spindles Board, and the hon. Gentleman told me that it was not possible to give a reply before September. I happen to take a particular trade journal which, some weeks ago, gave the number of spindles which have been bought up under the Act. If that information is possible to a trade journal, surely it should be available to the Board of Trade? Why cannot we have the information given in this House? In the "Manchester Guardian" of 28th April, there was the following advertisement: Cotton spinning mills. We have enquiries for Cotton Spinning Mills fully equipped with Machinery both for Egyptian and American Cotton, and also for an Empty Cotton Spinning Mill in good condition. We shall be pleased to receive particulars of such properties, which will be treated with strict confidence. I made a speech on the Cotton Spinning Industry Bill, and said that it was absolutely impossible a time of depression to measure the particular demands in any given trade. Within twelve months of the passing of the Act, and at the same time that the Spindles Board are destroying spindles, an advertisement appears in the chief paper circulating in that particular industry inquiring for cotton spinning mills. Are the Board of Trade watching this particular case? The question can become so serious from the point of view of consumers of cotton yarns, that the Board of Trade ought to be watching the position. I have always been told that one of the functions of the Board of Trade is to watch the interests of consumers. I have been given information that in mills where liquidators are in possession, with the idea of winding up the concern, they are not allowed to do it for at least twelve months. I want the Department of the right hon. Gentleman to watch very carefully indeed what is being done in Lancashire. I am not going to make charges against spinners in Lancashire—I do not know sufficient about the industry —but I understand that the price of cotton yarns has gone up by leaps and bounds. I believe the question of delivery is fearfully difficult, and that there is a danger of a portion of the machinery being destroyed and of the remainder being put into such a position that they will be able to demand prices out of all proportion to what would have been demanded had the full complement of machinery been in existence.

Another matter of particular importance about which I want to say a word or two is that of Italian debts, and I should like some assurance on the point. The question is one which interests Bradford particularly. The hon. Gentleman the Parliamentary Secretary knows that in the Agreement of 6th November, 1936, debtors in Italy were responsible for the full sterling amount due to United Kingdom creditors in respect of goods imported into Italy from this country after the 17th March, 1935, or exported from the United Kingdom before the 18th November, 1935. In these cases, prior to the devaluation of the lira, the equivalent sterling values were deposited by the Italian importers at the current rate of exchange. Now that these deposits are getting through the clearing house, the actual sterling received is equivalent to the amount of the depreciated lira. Consequently, the people who sent out these goods are losing a proportion of that payment, between the day of deposit and the date of transfer through the clearing house. Information has been given to me that in a large number of cases the Italian debtors either refuse to make the necessary supplementary deposit provided for in the Agreement to ensure the payment of the full sterling value, or they ignore the requests—and I know of cases where requests have been made—from the United Kingdom creditors, to forward that particular balance. I acknowledge frankly that as far as Bradford is concerned, we always feel that the Board of Trade are very helpful in most matters we bring before them, but on this particular question the Board of Trade have been somewhat remiss.

It has been suggested to the Bradford exporters that we should go to litigation in the Italian courts in order to recover these balances. Our experience is that Very often, in so far as Italian litigation is concerned, we have suffered delays running from two to six years. The point I want to make to the hon. Gentleman is that the Government of this country, and the Italian Government, signed the Agreement, and the traders accepted it in good faith. There is no question as to the terms. Everybody agrees that the exporters in this country should receive full payment at the present rate of exchange, but it is not fair to suggest to the traders that the onus of recovery should be put upon them. It would be a simple matter for the Government to press on the Italian Government that they should demand from their nationals that they keep to the terms of the Agreement signed by the Italian Government. It is unreasonable to say to people who have taken all the risks which are involved in the export trade to-day, after the Government have signed an Agreement on behalf of them, that, if they cannot recover the full amount, they will have to go to litigation in Italy.

The Board of Trade are too weak-kneed. They ought to be quite definite and tell the country concerned that their nationals are not carrying out the terms of the agreement which they have signed in good faith. I should like some definite assurance. The Bradford traders have been advised, I understand, that the Government cannot do anything and that they themselves must take the necessary steps. But I want to make an appeal to the President of the Board of Trade. It is quite a simple matter for the Government to take up their case with Italy and for a dictatorship country to tell their nationals to pay according to the agreement. No city will respond more to the appeal of the President of the Board of Trade to develop our export trade. These men are to be admired for sticking to the export trade over a period of years in a time of unprecedented difficulty. I know that other cities have done the same. In return for the risk they have taken they have a right to ask the Government to back them up when the Government have signed an agreement on their behalf.

I have taken far too much time and I end almost as I began by making an appeal to the President of the Board of Trade. I am certain that there is no one who desires a greater measure of freedom, of trade than he does, but I want him to respond to the general appeals which have been made throughout the world by statesmen of -every country. It is a glorious opportunity. It would do more than anything to restore amicable relations between the nations of the world. Our Government can give a lead if they have the will to do it. I trust that they will exercise that will and restore the world to a saner economic position as far as international relations are concerned.

7.4 p.m.

Mr. Chorlton

Before I go on to my general remarks I should like to say one or two words directed first to Italy. The agreement which has been drawn up and signed has worked well. There is more Italian money here. With regard to the hon. Member's remarks about the cotton trade, I do not know why he thought fit to attack the cotton trade in the way he has done.

Mr. Holdsworth

I have not attacked it

Mr. Chorlton

Oh, yes you have.

Mr. Holdsworth

I am very sorry to interrupt the hon. Gentleman, but I made no attack upon the Lancashire cotton trade, none whatever, and I had no intention of doing that.

Mr. Chorlton

I am glad that the hon. Member has withdrawn his attack.

Mr. Holdsworth

I never made it.

Mr. Chorlton

When we have general and praiseworthy remarks on the score that there should be freer trade I have always waited to hear when the general proposition would come forward as to how it should be done. We all agree that there should be freer trade, but the difficulty is how it is to be worked out. Are we going to enter into any conference with reference to freer trade with the idea that we are to give something when our own basis for negotiations, our tariff scale, is so much below that of everybody else, or is it thought that we should first get out a sort of table based on the tariffs of others and then use that as the basis of our negotiations? If not, all that we have built up in these last years we are going to lose; the recovery of trade in this country, which has been so largely due to tariff measures, is going to fall away again. That is why I do not understand old Liberals coming forward with this proposition for freer trade and never giving any details as to how the thing is to be carried through. Could the Parliamentary Secretary give us any help as to what basis the Government are going to work on? We have the Imperial Conference. How are we going to deal with the other countries, not only foreign countries, but the Dominions?

One must not forget that when the Ottawa Agreement went through it did not get a good Press in Lancashire. The textile trade was badly hit. We all know the keen and hard bargaining of Mr. Bennett. I am not objecting to it in the slightest. It was friendly bargaining, but keen enough. How are you going to deal with a country like Holland? We take twice as much from Holland as she takes from us. From the Dutch West Indies we take £12,000,000 against £1,000,000 which they take from us. In Europe there is Czechoslovakia, a market which is protected to an extraordinary degree, and we take four times as much from them as they take from us. Coming to the Argentine, we take £45 000,000, and £15,000,000 is what we get. No doubt we must look to the Empire first, but they have been throughout keen bargainers; we may judge by the effect on textiles.

Now may I ask the Parliamentary Secretary if he can give us some idea of the balance between agriculture and trade? We are developing agriculture for defence purposes on the one hand. If that is the main reason, we must remember that a country like Japan is actually storing iron ore, and is storing oil to a far greater extent than we are. If food is our main consideration for defence, we can just as well store it as anything else. I am not trying to press on the Government that there should be a change in our agricultural defence policy, but where does it stand in relation to industry? The two principal industries that have suffered are coal and cotton, and you cannot move the people from either coal or cotton into agriculture. Are you going to wait for developments to take place for more people to go to work, or for a gradual moving over by the people themselves from one employment to another? In effect, is there any relation between our agricultural policy and our industrial policy?

With regard to foreign trade, I would like to speak about the agreements, out of which so much good has come. I wonder if the President of the Board of Trade can give us any hope of doing still better. I feel to-day that I am fortifying the President against the attacks of those freer trade people who would let so much into the country and ruin the employment which has been secured. I want the President of the Board of Trade to go farther and faster. We have a long way to go before we get to the stage where we can bargain with other people. We listened to these people in the matter of defence, and look where we landed. If we listened to our friends the Liberals we shall be landed again. I say to the President: "Go ahead. You are not going fast enough." We want stronger action, and by that means unemployment will be decreased until there is very little left. In dealing with the Scandinavian countries, a place like Finland, for instance, receives from us about £18,000,000 against about £4,000,000 which she spends here. Denmark has greatly improved, but we still take far more from Denmark than she takes from us. Is there any hopes of further improvement from these countries, or is it thought that we have reached the maximum?

I think that the hon. Member for Oxford University (Sir A. Salter) referred to the Colonies and quotas. He mentioned Ceylon. Upon what does he base his ideas and his hopes? I suppose that he has worked the thing through in his own mind and thought that there would be more employment in this country and better wages from his proposals. Japanese competition has been one of our worst competitors in textiles. That competition is based upon an average wages cost of production of a little over £1 a month for each Japanese worker. How can we compete against that? Is it not possible to make some compensatory recognition in our Colonies which are trading with Japan as a result of this low wages cost, which gives Japan such a big advantage? Japan has a virtual monopoly of trade in East Africa. In the most difficult part of Africa, the Congo basin, is it not possible to make some regulation to overcome the trading conditions which have resulted in practically all the trade from that area going to Japan? It is interesting to note the action that has been taken by Belgium in relation to Japanese goods. The Belgian customs authorities have introduced a regulation whereby goods when delivered in the Congo area are revalued to something above their invoice value, and the duties are charged upon those figures. Up to now, so far as I know, that is the only case where a Government has taken action. If Belgium can take such steps cannot the Board of Trade do likewise? Japan has practically captured the trade of Central Africa by means of this low-wage rate in its influence upon production costs.

Turning to India, the problem of the textile trade there still awaits solution. India at one time provided Lancashire with the largest proportion of its trade, but there has been such a falling off that the Lancashire trade with India has dropped from 7,000,000,000 yards to 2,000,000,000 yards. The reason for that drop is the high tariffs put on by India. We have been unable to obtain any reduction of the tariffs. Lancashire has shown great willingness to come to an amicable arrangement. The development of good will has been suggested as a means to that end, and Lancashire has shown great willingness by greatly increasing the amount of Indian cotton that has been purchased. Naturally, their hope has been that the sale of finished cotton goods from this country to India would increase, but there does not seem to be the response from India that one would expect. India has had pretty much of an open market in Ceylon and other British Colonies, but, so far as this country is concerned, there is not the slightest indication of any reduction of the tariff against us. There has been a lack of sympathy shown by India which has been most disappointing to, those who have tried to build up an extension of business entirely on the basis of good will with India. India has negotiated an agreement with Burma, and while our cotton goods going into Burma have to pay full duty, the Indian mills deliver their goods into Burma without payment of any duty. I should like to know what steps the Board of Trade is taking or intends to take with regard to the new trade agreement with India in order to remedy this state of affairs. The agreement between India and Burma ought not to have been allowed without equivalent treatment being ensured for the trade of the United Kingdom. We had a deputation from Lancashire to the Board of Trade on this matter recently, when the case was clearly put, and we are hoping for an early pronouncement from the Government on the subject.

With regard to the negotiation of trade agreements, I should like to know a little more about the machinery of the Board of Trade in regard to treaties. I have been given to understand when I have been abroad that when a foreign country sends over a negotiating body in connection with a treaty, it selects the most skilful men for the purpose. In one case Sweden actually took a man who had lived in England for many years, naturalised him, and made him the leader of the Swedish deputation negotiating the trade agreement. We always rely upon our own civil servants within the Board of Trade. There ought to be specialised representatives of different aspects of the situation on the negotiating committee, serving as experts. If that were done I believe that we should get along much faster and make much better bargains. It is said that those who do the negotiating for the Board of Trade, although they are able men, are not sufficiently acquainted in detail with the businesses in regard to which they are making agreements. Practical knowledge ought to be made available from those who are actually engaged in the industry.

I was glad to note that the junior Member for Oxford University spoke about the Most-Favoured-Nation Clause. Although he did not get much change out of the President of the Board of Trade, he did put a case for some modification. It is difficult to follow the implications of the Most-Favoured-Nation treatment, and difficulties often arise when we are making bilateral bargains with other countries. For instance, what is the use of our making a bargain with Norway, if Norway says, "Under the treaty, consequent upon the Most-Favoured-Nation Clause, you will have to give the same conditions to Finland"?

I should like to bear testimony to the singular success that has attended the policy of the President of the Board of Trade during the years he has been in his Department. My complaint is that he has not gone fast enough and far enough. I cannot understand why he should be attacked by hon. Members who cannot make any constructive proposition as to what should be done to maintain our trade position or to increase it. I would urge the right non. Gentleman not to allow these people to frighten him. Let him proceed with his policy of helping the traders of the country. We certainly want help in our part of the world. We need all the best help that we can get from the Board of Trade, and the more it considers itself as the active authority for assisting the trade of the country the better it will be for all of us.

7.25 p.m.

Mr. Ellis Smith

We are indebted to those hon. Members who have introduced this question, because we could not be considering a more important subject. I listened with interest to the speech of the hon. Member for East Birkenhead (Mr. White). He made a close analysis of the conditions of trade, and I could agree with most of what he said, but there were in his speech several passages which are to be deprecated. He referred to the agitation that is being deliberately developed in Germany, and said that Germany had certain grievances in regard to raw materials and colonies. Anyone in this House who attempts to agree with or to support that policy fails in fulfilling the duty of a representative in this House. That agitation and that policy have been deliberately framed in Germany for the purpose of creating an atmosphere in the world which will lend itself to their taking advantage of it when, in their view, the opportunity presents itself.

I am concerned with the working classes, and I would ask the hon. Member and any hon. Member who agrees with him whether the working classes in Germany were any better off, speaking relatively, when Germany had an Empire than they are to-day. The fact is that this policy has been deliberately launched so that Germany may act internationally in the same way that they have dealt with their internal problems. We are prepared to consider the difficulties of the people of that country, and when they are prepared to bring forward a policy which will bring about real international co-operation we shall be prepared to do everything we can to facilitate negotiations; but to support the present policy of Germany in any way is only to assist them in doing for the people of the world what they have done internally for the cream of their own people.

I should like to deal with the iron ore supplies of Australia. I had a question this afternoon, which was not answered satisfactorily by the President of the Board of Trade. If he will excuse me for saying so, he appears to me to adopt a mid-Victorian complacent attitude in regard to the problems of to-day. That attitude is not meeting the needs of Britain at the present time. The right hon. Gentleman is, perhaps, resting on his oars, and it may be that our remarks ought to be addressed to some right hon. Gentleman or to some right hon. and gallant Gentleman. Therefore, we are handicapped in this matter until this week-end. We are, however, dealing with fundamental policy, and whoever is fulfilling the duties of the office we recognise that he is only carrying out the policy of the Cabinet as a whole. Therefore, my remarks are addressed to the Cabinet and not to the individual who may be holding the office at any given time. In regard to the iron ore supplies of Australia, I should like to point out that more and more in Europe there is a growing shortage of iron ore. Britain is suffering more and more from this shortage, and yet in Australia there is an abundance of supply of the ore. Australian public opinion is demanding that those ore supplies should be used for the benefit of Britain and the countries making up the British Commonwealth of Nations.

This is what has happened. Steps were being taken by the Commonwealth Government, and by some of the State Governments, to safeguard these supplies for Britain, but while they were being taken a London financial company got them into their control, and proceeded to exploit them. As a result the whole of these supplies of iron ore are being shipped to Japan. This is not a political question, and the point I want to make is this: In this country we have built up relatively high standards for our people. We have a 48-hour week; it should be 40 hours according to international standards. In addition, we have the right of collective bargaining, and other privileges which have been negotiated between the trade unions and employers. More and more the low standards in Japan are becoming a menace to the higher standards in this country, and now we find that this London financial company has been allowed to get control of the whole of these iron ore supplies in order to ship them to Japan. I hope that during the Imperial Conference, while the representatives of Australia are in London, the Board of Trade will take steps to see that these supplies are safeguarded for the benefit of Great Britain. I have been raising this question for some time, and I have had letters from members of the Australian Parliament expressing their own concern. They desire that the Board of Trade should grasp this matter as soon as possible, and I express the hope that the Department will deal with the question at once.

The next point I desire to raise is with regard to the annual meeting of the Unilever combine. The Board of Trade are concerned with the safeguarding of the food supplies of this country in the event of another war. We remember the troubles of the last War, how our mothers and wives had to line up for supplies of margarine and sugar. Are the Board of Trade satisfied with the present position in regard to safeguarding the food supplies of this country in the event of similar conditions to those in 1914 to 1918? It is on this point that I want to draw attention to the annual meeting of the Unilever combine, and the serious position in which this country is in in regard 10 its food supplies. I think the Board of Trade have a right to deal with such a matter. At this meeting the chairman said that they had made a profit since 1929 on food alone of £14,000,000, and he went on to show that they had great interests in Central Europe. He also dealt with the legislation which was being introduced in other countries, and went on to say: It is, naturally, our aim to carry out corresponding simplifications on the Dutch side, although there we are rather handicapped by existing Dutch legislation. We are studying this matter closely, and I hope that such difficulties as there are will not be insurmountable. The point I want to make is that these cartels are now international. This country is not getting the benefit it should from the supplies from South Africa and Australia. The chairman of this company also said: The low butter prices in England continued to be a considerable drawback to a further recovery. In England a price of 10d. per lb. retail has been common, and sales of butter remained on a very high level. It is chiefly the continuously increasing production in New Zealand which is responsible for this glut. What is the logical conclusion to be drawn from that statement? It is that food prices in this country are too low. Why are they too low? The reason is that the successful administration of New Zealand has increased the output in butter and margarine and fruit during the past few years. I suggest that it is time the Board of Trade investigated cartels of this description. A man who can make a statement of that kind is not a patriot, and such a policy is a menace to the people of this country. It should be the policy of the Board of Trade to investigate these cartels so that our food supplies shall be safeguarded and not left in the hands of international cartels of this nature.

But the most important question I want to raise is the development of a constructive trade policy. I could produce documentary evidence from the "Financial Times" and from the "Manchester Guardian" financial editorials, to show that the policy of Dr. Schacht, the commercial policy which Germany is pursuing, has for its object the undermining of the position of Britain in the future. We have a good deal for which to be thankful for the way in which the leaders in the past have pioneered the trade of this country, and rather than see this trade slip out of our hands, rather than go on in a haphazard way with a mid-Victorian attitude, I want to appeal to the Board of Trade for an up-to-date constructive trade policy so that we shall not suffer in trade and world commerce in the same way as we have on other questions. It may be that some hon. Members will not agree with me in regard to the need for a constructive trade policy. Let me remind them of one or two statements which have been made recently. There is the statement made by Mr. R. J. Turner, Chairman of the Institute of Exports at a dinner of the Incorporated Sales Managers Association last week. He said: A new but simple system of balanced trading was required whereby a country's imports would be made equal to its exports. The recent offer of Mr. Savage, Prime Minister of New Zealand, to spend in this country the entire proceeds of New Zealand's exports to us was a step in the right direction. That is not the statement of a Socialist or a member of the Liberal party, but of a gentleman speaking on behalf of the Institute of Exports representing the main exporting industries of the country. There is also a statement made by the Birmingham Chamber of Commerce, right in the heart of protection. They have made a similar statement. The point I want to make is that both Free Trade and Protection are now out of date, and that a new scientific trade policy is required if we are to hold our own in trade rivalries of the next few years. There is also a statement made by Mr. Norman Davis, the Ambassador-at-Large for the United States when he arrived in England a few days ago for the Coronation proceedings. This is what he said: America is quite prepared to join in any scheme for the lowering of tariffs. In addition, the League of Nations Union the other day passed a Resolution to this effect: We welcome the appeal made by Mr. Cordell Hull in his speech of 5th April to the countries of the world to give up the present armaments race and join in a concerted effort to rebuild international, political, and economic relationships upon a basis of friendliness and co-operation, and urges His Majesty's Government to seize every opportunity of co-operating with the United States in the interests of world peace. I suggest that if the Board of Trade wish to be worthy of the people who have built up the trade of this country and worthy of the men who have held office in the Department in the past, they should now take the initiative in this matter. They should go to the League of Nations and say that the time has arrived when we are prepared to negotiate trade agreements and to lower our tariff barriers in order that mankind may receive the benefits of the material production of the world. They should go to the Colonies and say that they are prepared to negotiate trade agreements. Why has this not been done? In my opinion it is because there are certain vested interests in this country whose interests would not be served by such a policy. The maximum amount of co-operation should be built up within the British Commonwealth of Nations, but there are certain financial companies which have sunk money in China and in Africa and in other places who are preventing this economic co-operation between the nations comprising the British Commonwealth of Nations.

The time has arrived when the Board of Trade should thrust these financial interests on one side and debate with Australia and New Zealand and the other Empire countries the question of economic co-operation in order to make the British Empire a power in the world for more economic co-operation and for international co-operation in order to preserve peace. I think we should go to Geneva with a view to arriving at economic disarmament. Let it not be forgotten that we missed our opportunity with regard to military disarmament, that men such as Lord Londonderry went to Geneva and made speeches which we remember, and that Mr. Arthur Henderson died of a broken heart because of the failure of the Disarmament Conference. But let us benefit from our mistakes in the past and our experience. Let us seize this opportunity, when the whole world, with the exception of three or four countries, is clamouring for economic co-operation, and let us realise that we still have time to bring it about. Let us take the initiative at Geneva for that purpose.

I admit that there has been a great deal of improvement in our internal position, but is anyone satisfied with that position? I ask the President of the Board of Trade whether the improvement is a healthy one. The recovery has mainly been internal, and in certain countries it has been almost exclusively internal. In this country a certain amount of improvement has been brought about because of the stimulation given by the expenditure on armaments. But is this improvement good for the future? I know it will be said that steps are being taken to avoid the effects, but the steps that will have to be taken to avoid the real effects will have to be taken by international co-operation. Consequently, I ask the Board of Trade to take to take the initiative at Geneva, among the countries of the British Empire and among all those countries which are prepared to negotiate with Great Britain, in order that we may trade together and cooperate with one another. The time has arrived when we should do that.

Already we have had one example of success in that direction. When France was in a very difficult position some time ago, a currency stabilisation agreement was arrived at which improved the position in France and in Europe. France, Great Britain and America have benefited from that action, which is a good illustration of what I am asking should be done now, except that now our action should not be restricted to currency stabilisation, but should be extended so as to benefit the whole field of trade. The time has come when if mankind does not deal with this problem, mankind will be throttled by it. Nature, and the efforts of man applied to nature, is producing everything in abundance, but mankind is not getting the benefit of the supplies of Nature.

In Italy and in Germany they are trying more and more to develop trade internally, and are increasingly adopting a policy of economic isolation. Does anybody believe that that policy will last for ever? Does anyone believe that that policy will not end in a certain way? The fact is that life is being throttled in those countries. It is not natural to develop a policy in that way, and the only reason they are adopting such a policy is that for the time being the vested interests, represented by the chemical, colliery and steel industries of Italy and Germany, are determined that that policy shall be pursued. Rather than that we should become involved in it, let this House, which represents the people of this country and not vested interests of the kind which Fascism represents in Italy and in Germany, ask the Board of Trade to take the lead in a new way which will give the world hope and enable mankind to benefit from economic co-operation instead of being rushed into war in the way which certain policies will inevitably do unless they are reversed.

7.52 p.m.

Sir Charles Granville Gibson

I have listened with great interest to the speech of the hon. Member for Stoke (Mr. E. Smith), who made a special plea to the President of the Board of Trade that we should have a new economic policy in this country. [HON. MEMBERS: "Hear, hear."] Hon. Members say "Hear, hear"; but I would point out, as one who knows a little about industry and who has visited almost every country in Europe and all our Dominions, that we are to-day the leading exporting country in the world. In no country in the world is there a greater degree of contentment, happiness and wealth among the people than there is in this country. It has been said that we should have a new economic policy, but I think the policy which the President of the Board of Trade has pursued during the past six years has helped to lift this country out of the morass into a position of which we ought to be exceedingly proud.

It is only once a year that we have this opportunity of paying a tribute to the Board of Trade for the work which they do for trade and industry. As deputy-President of the Association of British Chambers of Commerce, I believe I can speak for trade and industry, and while we are not always pleased with everything which the Department does, I say unhesitatingly that there is no Department of any Government in any country in the world which is more efficient than our Board of Trade. In Chicago a few years ago, I remember that a gentleman well known in the business world said to me, "You have a great advantage in your country over us; your statesmen are are steeped in generations of statecraft and trade and industry, and our statesmen over here are only just learning." I say without hesitation that from the President of the Board of Trade, the Parliamentary Secretary, the Secretary of the Overseas Trade Department down to all the officials, there is not a finer body of men in the world, or one which does more to assist trade and industry than they do. When I say it is for the benefit of trade and industry, it follows as a necessary corollary that the benefits apply indirectly to all those who are employed in trade and industry in this country.

In his speech the President of the Board of Trade referred to the difficulties with regard to certain agreements with some countries which have a lower standard of living than we have in this country. The hon. Member for Seaham (Mr. Shinwell) said that, in spite of putting on tariffs against goods coming from those countries, they could not be kept out. That is not the case. For instance, we had hundreds of thousands of pairs of rubber-soled tennis shoes coming into this country from an Asiatic country, but a specific duty was imposed, and the imports have dwindled to exceedingly small dimensions. The hon. Member for Seaham asked why we cannot make some trade agreements with those countries which have lower standards of living. It is easier to ask that than to get it done. In Japan a few months ago, I had the opportunity of going over a silk mill. It was one of the best-fitted and best-equipped mills that I had ever been in. The conditions of employment in that factory were ideal. The women were working 60 hours a week for an average wage of 7s. a week, plus is. 6d. for their keep, and the skilled workmen were receiving 15s. I ask hon. Members how people in this country, with their standard of living and wages, can compete with that type of competition? There is no hope of countries which go on producing their goods under those conditions coming to any reasonable arrangements with us. We never had the slightest hope of making any trade agreement with any country until we became a tariff country. A few years ago one of my friends in Paris, speaking with the Minister of Commerce of that time, asked him why France did not lower her tariffs which had operated so harshly against British exports to France, and the reply was, "We can see clearly that in a few years time you will become a protectionist country, and when that time comes, we shall be compelled to talk with you." That has been the case.

The hon. Member for South Bradford (Mr. Holdsworth) said that the trade policy of this country is not an assurance of our prosperity. Let hum go to his own town of Bradford and he will get an answer. When the President of the Board of Trade came into office at the end of 1931, there were 29,000 people unemployed in Bradford, whereas to-day there are not 6,000. Those people are all working. That is due not only to the improved conditions of world trade, which all of us agree do exist and which are improving, but in a great measure to the National Government having brought forward a policy of Protection. Even though the President of the Board of Trade had all his life been steeped in Free Trade doctrines, he realised, as many of us did, the changed condition of world affairs, and the fact that if we continued the system which we had been working for so many years, we should be absolutely down and out. Let the hon. Member for South Bradford go to Manchester, which was once the citadel of Free Trade in this country, but which is now out-and-out Protectionist, let him go to the West Riding of Yorkshire, and he will find that the answer will be that the situation in the West Riding has been saved because of the Protectionist policy of the Government. I do not speak as one who is a wholehearted Protectionist, but I say that the policy of the Government has undoubtedly worked wonders in industry and trade in this country.

The President of the Board of Trade pointed out a real danger which has to be faced. He said that probably in a short time—he might have meant one, two or three years—when the rearmament contracts were finished and the rearmament programme completed, there might be the danger of a falling-off in trade. That is a reasonable assumption, and one in which the hon. Member for Seaham seems to have taken pride. Those people who can take on rearmament contracts ought to do so. It is their duty to do so. Their first duty is to work for the safety of the country, and it necessarily follows that some of their wholesale and export trade must be neglected. I think the President struck the right note when he made a plea for our paying special attention to the main tenance of our export trade. During the past year I have had the opportunity of visiting many factories in Canada, New Zealand, Australia and South Africa, and I sometimes wish that the President of the Board of Trade would make a plea for heads of businesses periodically to visit their customers in various countries, because it would help enormously.

Mr. Kelly

What about the workpeople?

Sir C. Granville Gibson

Workpeople sometimes go, but I would tell the hon. Member for Rochdale (Mr. Kelly) that the man who is the head of a firm or who is a director is in a peculiar position, in that people who are in foreign places like to see him. I do not mind confessing that I have experienced the benefits of it in my own business. It pays time after lime for principals to go and see their customers in foreign parts, and if many of the heads of our industries, instead of sticking at home all the time, would go hunting for business and looking out for it, there would be more of it. Therefore, I say that the President struck the proper note when he said that we should not overlook the importance of foreign trade, because there is no doubt that people in trade and industry, as in any other walk of life, take the line of least resistance, and if we have a temporary boom, we go out for the home trade, because it is easier to get than the foreign trade. So we neglect the foreign trade, but the day will come, as certainly as to-morrow follows to-day, when these orders for rearmament will finish, and we shall then see that we ought to have done what we could have done to maintain our foreign trade, and we shall want more of it than ever. In connection with the chamber of commerce movement, we are continually pointing out to our members that they should not spare any efforts in order to maintain our export trade, because upon its maintenance depend to a great extent the safety and the prosperity of this country when the days of rearmament are past.

In conclusion, I might mention that the hon. Member for Seaham stated that he was opposed to the imposition of tariffs and that when the present boom was over trade would be considerably curtailed. To be quite fair to him, he went on to say that he realised that in the present state of affairs it was impossible to hope for Free Trade. I am one of those who hope that the policy which is being pursued by the Board of Trade will continue to be carried on and that wherever possible there will be a lowering of tariff walls. I am not one of those who want to see Protection at all costs or who want to see inefficiency bolstered up at any time. I believe that the policy of Free Trade, if true Free Trade, is the best policy, but so long as other nations keep their barriers high against us, we have no alternative but to see to it that our industries receive fair protection, a policy which has helped so much in the past six years to bring to them a measure of prosperity which they had not had for many years before.

8.5 p.m.

Mr. Tinker

The last speaker talked about the great increase in trade and said that we hold more export trade than any other country in the world. We all welcome that and realise the benefit to this country. He then went on to thank the President of the Board of Trade and his staff for the way in which they have dealt with a difficult task, and again one cannot criticise that. The point that I want to touch upon is in reference to a remark made by the President in his speech. That speech was very clear and lucid, and I think he took us more into his confidence than any other Minister has done in the past when he told us that at some or another we could look forward to a diminution of trade, that the present boom would pass. I expect that he meant that the armaments boom would come to an end and that then we should be faced with extreme difficulty in filling up that breach. He said that he hoped that those who were concerned in trade would try to get as many orders as possible and to be in readiness for that period when it arrived. Again, that is what we all appreciate.

The point that I want to put is a point touched upon briefly by the hon. Member for Seaham (Mr. Shinwell), who asked what were the intentions of the Board of Trade in the event of trade slackening and of these orders not coming. We find that after every period of boom there is a slump, and hitherto we have never been prepared for that slump. The slump has come, difficulties have been created, and the last example that we had of it was what resulted in what are called the depressed areas. One can anticipate such a period happening again, and I want to ask the Government whether they are making or are going to make any preparations for that time. We are talking on this Vote about administration, and the position of the country depends very much on the action of the Board of Trade. When trade agreements and tariff policies fail, the Board of Trade must be ready for the emergency. Are there any plans in preparation for that period?

We must impress upon the Government the difficulty that is in our minds with regard to that question. Many times I have tried to get it before the House, and I have been told to wait for this Vote and that then the President of the Board of Trade will deal with it. It is for that reason that I am so anxious now to get my point of view put forward. We all know what happens. Certain parts of the country are hit more hardly than others. The last slump hit Durham, Scotland, and South Wales more hardly than other parts, and Lancashire was affected very strongly too. Because of that and because of the lack of preparation for it, I ask that we should have from the President of the Board of Trade a statement as to what he is doing for the future. Is he preparing in his Department for a look-ahead policy? Suppose a slump does come and hits Lancashire, we will say, very hard. What preparations are being made for such an emergency: It is no use the Prime Minister or anyone else saying afterwards that we are depending on the captains of industry to do something. The time to get ready is now.

When we criticise the Government, it is our duty to put some policy before them and to give them a lead, and I would suggest that the President should ask the members of his Department, some prominent persons, to be always on the watch for any slump in trade. If, for instance, they find that in Lancashire certain industries, such as the colliery industry or the cotton industry, are showing signs of waning and cannot carry on, the Board of Trade should be ready with some method of dealing with the position. They should prepare new industries and be ready to put those new industries into that part of the country where it is expected that a slump will take place. If we do that, we shall avoid much of the difficulties that have arisen in the past. When we look at the enormous sums paid out for unemployment benefit and realise what is meant in that direction, and when we realise that a slump means greater scarcity of employment in some parts of the country than in others, we shall see that it is time that something was done. By this dislocation of trade, a big part of the population is being taken to one section of the country from another.

I am given figures which show that one-fifth of the population of the whole of England is centred around Greater London at the present time, and that means that when these slumps take place, parts of Lancashire, Durham, or South Wales are driven, out of sheer necessity, to those parts of the country where new industries are being set up. Realising that these slumps do take place, and that after a slump has taken place new industries will have to be created, or something else done to meet the situation, we should be in readiness for it and not displace huge bodies of unemployed people from one part of the country to other parts of the country, but try, as far as possible, to create new industries in that part of the country where unemployment is showing itself as bound to come. After all, when stagnation comes and difficulties arise, it is not merely one part of the country that has to face it, but it means desolation over the whole country, and because of that I have taken this opportunity to put forward a point of view that it is very difficult to put at any other time.

When we argue from these benches that a Minister should be appointed specially for this work, we are told that it cannot be done, because it would mean legislation, and I agree that it would. The President has told us what he anticipates, and it is the duty of his Department to look ahead and to be in readiness for the possibility, indeed the probability, of a slump. When the nations of the world meet, as they must in a year or two, to settle the question of armaments we shall arrive at a period when there will be no need for building up armaments in the way we are doing now. Everyone knows how much the present so-called improvement in trade is due to that cause, and when that has been taken away we must be in readiness to provide work for our people until trade resumes its normal course once more.

8.16 p.m.

Mr. Foot

My hon. Friends and I who out down this Vote for a discussion today have been disappointed at the course taken by the Debate, and particularly by the reply which we have received from the Front Bench. We put down this Vote in order to get a pronouncement from the Government as to their intentions in the sphere of commercial policy. The right hon. Gentleman the President of the Board of Trade addressed us with his usual fluency and skill. He made some gloomy prophecies about what will happen in the next year or two after the present boom, but he told us nothing of the immediate intentions of the Government or of the action which they propose to take to enlarge international trade. No doubt hon. Members read the correspondence in the "Times" a few days ago which was begun by a letter from Sir Arthur Willert. There was one phrase used by him which has remained in my memory: The general offensive against economic nationalism. We are trying to find out to-day what part, if any, the British Government propose to take in that general offensive. It is unnecessary to recapitulate all the signs of a move towards freer trade in different parts of the world. We have heard of the mission of Mr. Van Zeeland and of conversations among certain Powers and we have all seen reports as to the possibility of a trade agreement between the United States and the United Kingdom. It would have been interesting to have been told the general attitude of the Government towards this tendency in the direction of lower tariffs. But, even in a general form, we have been given no information by the President of the Board of Trade. It appears to us that this is one of the most vital matters which could come before this Committee at the present time. In the last few months there has been a considerable change of outlook on this question in unexpected quarters. On 24th April there was a leading article in the "Times" on the subject of greater freedom of trade from which I quote one sentence: The present race towards self-sufficiency h admitted by everybody to be a danger, not only to the economic well-being, but also to the peace of the world. That is what we have been trying to emphasise this afternoon, and it is remarkable how little support we have had from any speaker on the opposite side of the Committee. I do not think any supporter of the Government has shown in this discussion the slightest realisation of the urgency and importance of the subject. It seems to us, at any rate, that in this matter the world has got into something like a vicious circle. Because of "the race towards self-sufficiency," peace is being jeopardised, and the more peace is jeopardised the more precarious it becomes, and the more anxious are the various nations to obtain self-sufficiency. This situation needs not merely a mission by some statesman from one of the smaller Powers canvassing the other Governments in Europe. It needs action by one of the great Powers, preferably Great Britain, in order to break the vicious circle, but there is no indication, either in the speech which we heard to-day or in recent utterances on behalf of His Majesty's Government, that they have any intention of moving in the direction of freeing international trade.

Hon. Members will recall what happened last year when France went off gold, and when following on that event a number of French tariffs were reduced and a number of French quotas were abolished. There was some discussion at Geneva on what might be done, and how the opportunity for freeing international trade might be used. The attitude of the British Government was stated by the right hon. Gentleman who is now Minister of Agriculture and was then Financial Secretary to the Treasury. So far from giving any advice or any indication of possible reciprocal action on the part of the British Government, he went out of his way to say that the difficulty of this country would be to resist the demand that would come from our industrialists for still higher tariffs. Then there was the interview which the Prime Minister had a few weeks ago with a delegation on this subject. The right hon. Gentleman said in general terms that the Government were anxious to see a freer exchange of goods and services, but, he went on: The main obstacle was the existence of the present system of quota restrictions on industrial goods and exchange control. It is difficult to see why this distinction should be drawn between industrial quotas and agricultural quotas and why one is not as great a hindrance to international trade as the other, but the Prime Minister drew this rather disingenuous distinction, as it seems to me, between the two. He went on to say: It was clear that action in these matters had to be taken by other Governments since there were no exchange control in the United Kingdom and the only quota restriction on industrial goods was a flexible duty and quota control on imports of iron and steel which formed part of an industrial agreement with the chief supplying countries. All the British Government could do was to take every opportunity to urge action upon the Governments concerned in this sphere. The initiative did not rest with this Government. It is interesting to analyse that passage. It is fairly clear that the only form of freeing international trade which the Prime Minister contemplated was getting rid of industrial quota restrictions and exchange controls. There was no indication, nor has there been any indication at all recently on behalf of the Government, that they visualise in the future any reduction of tariffs—I am not speaking of unilateral reduction of tariffs but of mutual reduction of tariffs—in order to achieve the ends which we are told they have in view.

We have heard a good many rather musty arguments to-day, principally from the hon. and gallant Member for Bournemouth (Sir H. Croft). I wonder what has become of the argument which we heard so frequently in 1931 when various former members of the Liberal party were endeavouring to justify their change of view. They told us that they had always been in favour of Free Trade, and would still be in favour of it, if other countries were prepared to practise it, but that they were against any system of unilateral free imports. Apparently the Government, judging by recent utterances, do not contemplate a reduction in British tariffs, however far other countries may be prepared to go. Certainly there has been no indication that they are so prepared in any recent speech that any Minister has made. We have not been told to-day what encouragement His Majesty's Government are prepared to give to other countries if they move in the direction of lower tariffs and getting rid of restrictions.

The hon. Gentleman the Junior Burgess for Oxford University (Sir A. Salter) raised the question of the Ouchy Convention and the action of the British Government on that occasion. The President of the Board of Trade explained—what we all knew.—the reasons why they took that action, although he entirely failed, and did not even attempt, to meet the main point of the junior Burgess, which was simply that we prevented Belgium and Holland from taking precisely the same kind of action that we ourselves took at Ottawa. Is it still the intention of the Government to block any move of that kind supposing the Ouchy proposal were revived? Would the Government again insist on their most-favoured-nation rights to block any such proposal from going through? This is not simply a fad that we in this part of the Committee have. In a great many different forms recently this question has been raised. I agree that we ought not to abandon entirely the Most-Favoured-Nation Clause, but I would put forward the plea which was put forward by the hon. Member for Oxford University that the time has come when we must visualise some modification of it. I think it is true to say that there are precedents even in our own commercial agreements. Perhaps the Parliamentary Secretary will correct me if I am wrong, but I think that in our commercial agreement which we made about 1924 with the Baltic States we gave them permission to apply lower tariffs among themselves.

I will take the proposal which has come forward under this heading, not from the Liberal party, but from a body which is representative of all parties, namely, the Next Five Years Group in which supporters of the Government are included. A good many hon. Members read the book, "The Next Five Years," which was produced only a year or two ago. The proposal was made that Great Britain should announce that she would not in future consider the clause as applying to reductions of tariff negotiated under certain conditions. They suggested that the chief of those conditions should be that there should be a certain minimum number of countries, that it should be a real tariff reduction agreement and not merely an agreement to raise tariffs against non-tariff countries, that the agreement should embrace the larger part of a country's trade, and that it should be open to accession by any other country on the same terms, that is to say, by a lowering of opposing tariffs. These are precisely the things contemplated by the Governments of Holland and Belgium a few years ago. There were a good many supporters of the Government who attached their names and gave their support to the document which included those proposals.

We have heard various references to-day to the question of a trade agreement with the United States. Nobody, of course, ever pays very much attention to what back bench Members have to say. If I may say so without seeming immodest, I was very pleased to read recently the discussions on this matter, because for three or four years in this House, in the Debates on the Board of Trade, I have suggested that approaches should be made towards a trade agreement with the United States. I have always thought that if such a trade agreement could be made it would be worth all our former trade agreements with foreign countries put together. On these occasions mention is always made of the bilateral agreements which have been made with the Scandinavian and other countries, but we have not been told lately very much about the future of this method. It seems to me that the process, which has been adopted since the early part of 1933, of making bilateral agreements along the lines of the Danish agreement is very nearly at an end. It would be interesting if we could be told with how many countries negotiations are now proceeding. Are negotiations for an agreement of that type proceeding with any country? As far as one knows there is no country with which such negotiations are now going on. Those agreements were rather restricted in their character. They were restricted for the most part to certain specific commodities, such as coal, for instance, going into the Scandinavian markets. As these agreements cannot go very much further and there cannot be many countries which can enter into them which have not already done so, the value of those agreements is not very large when compared with the whole volume of our overseas trade.

The Parliamentary Secretary to the Board of Trade (Dr. Burgin)

Will the hon. Member indicate why in his view there is a limit to the number of countries with which such agreements can be entered into?

Mr. Foot

For one reason the slowing down during the last two or three years of the process of making agreements which began in 1933–1934. In those days there was a quick succession of agreements, but I do not think that there has been any fresh country included in the list recently.

Dr. Burgin

It is a continuous process.

Mr. Foot

I suggest that whereas from 1933 to 1935 there were a large number —some 10 or 11 agreements—concluded, there has been nothing like that number concluded in the last 12 or 18 months. Perhaps the right hon. Gentleman can tell us with which country the Government are now negotiating or proposing to negotiate in the near future. Unless he can give us that information, we are justified in coming to the conclusion that this process is slowing down. Will the right hon. Gentleman also take the trade agreement countries and tell us what increase in trade there has been with those countries between 1932 and 1936? When I speak of trade agreement countries, I mean the countries with which genuine trade agreements have been made, because I notice that when the Government give an answer at Question Time, they do not distinguish between countries with which trade agreements have been made, such as Denmark, and countries with which agreements have been made simply for unfreezing frozen credits, such as the agreement with Brazil. Obviously the trade figures with Brazil throw no light on what can be done by the method of trade agreements, and perhaps the right hon. Gentleman can give us the figures for the countries with which we have made commercial agreements proper.

My friends and I believe that it is impossible to proceed very far at the present juncture without considerable modification of the Ottawa policy. The Ottawa Agreement—and here again we are sometimes misled by speeches from the Front Bench opposite—are sometimes represented as if they were a contribution towards the liberation of world trade. When that statement is made, my hon. Friends and I emphatically join issue, because in our view, which I think is borne out by the experience of five years, the effect has been not an increase in world trade but simply a diversion of world trade. We have diverted trade from one group of countries to another.

In the "Economist" for 1st May of this year there was an exceedingly interesting survey of the effect of the Ottawa Agreements. A great deal of information was given there with which I shall not weary the Committee, but I w ill quote one example. They give the figures of cotton piece goods and yarns imported into Canada, and show that in the year 1931–32 there was imported into Canada from the United Kingdom cotton piece goods and yarns to the value of 4,207,000 dollars and that in the year 1935–36 the imports had risen to 7,068,000 dollars. Over the same period Canada's imports of American cotton piece goods and yarns fell from 4,870,000 dollars to 1,997,000 dollars. That is to say, the purchases from the United States were down by 2,873,000 dollars and the purchases from the United Kingdom were up by 2,861,000 dollars. The figures are almost equal. That shows that as a result of the Ottawa Agreements there has been no increase in that particular branch of trade but only a transfer of Canadian orders from one country to another.

Sir John Haslam

You are not complaining of that?

Mr. Foot

No, I am not complaining. Naturally if orders are to be placed I should prefer that they come to this country rather than to the United States, but I am dealing with the argument sometimes put forward from the Treasury Bench that the Ottawa Agreements made a contribution to the expansion of world trade. They have not resulted in any expansion of trade, but only in a diversion of trade from one group of countries to another, and are not in themselves making any contribution to the difficulties with which the whole world is faced. I was going to suggest various modifications which might be made, but I do not wish to weary the Committee and various concrete suggestions have been put forward by my hon. Friend the Member for East Birkenhead (Mr. White) and by the junior burgess for Oxford University. We in this part of the Committee do attach great importance to the suggestion that the Government are considering scrapping the guaranteed margins of preference. We said the other day that we think it is a disaster that just at this time, by the new Canadian Trade Agreement, the Government should have tied their hands for three years.

Above all, we wish to see a return to the policy of the open door. It is a subject which we raised a week or two ago in the House, and I want to mention it now for the reason that after that Debate I was taken to task by a gentleman writing in the "Times" who gave the figures of imports into the Crown Colonies and Mandated Territories from foreign countries outside the Empire. That answer has been given in a number of speeches and publications, lately. We in this part of the Committee have never, of course, suggested that trade between the British Crown Colonies and foreign countries has been brought to a standstill by the Ottawa Agreements. It would be a very remarkable thing if it were so, and, of course, that particular trade has been affected by the general upward movement in trade throughout the world in the last year or two. Our complaint is that at Ottawa we did abandon the traditional policy which was the great justification of the British Colonial Empire. We abandoned the policy which had been laid down in clearer terms than by anybody else by Joseph Chamberlain, because 40 years ago he said that in our Colonial markets "we offer the same opportunities, the same open field to foreigners as we offer to our own subjects, and upon the same terms." Nobody suggests that foreigners cannot buy and sell in our Colonial markets, but they can no longer sell upon the same terms as ourselves. It is that reversal of policy against which we protested in 1932, and we think that all our forebodings have been justified by the march of events since then.

It is remarkable to me to see how many of the prophecies we made in 1932 have been justified by what has happened since. One of the prophecies concerned the effect that a tariff policy would have upon our export trade. We frequently hear of the rise in British exports, but it is as compared with the very worst years of the slump—and it would be disastrous if there had not been a rise—but people are inclined to forget the tremendous falling off there has been in British exports as compared with any normal year before this. The last normal year was 1929 and the export of United Kingdom manufactures was, in round figures, £729,000,000, and last year it was only £440,000,000. Total exports in 1929 amounted to 039,000,000 but were only £501,000,000 last year. In spite of any boasted improvement, that indicates a very substantial falling-off in trade.

What has been in the minds of most hon. Members who have spoken in this Debate has been to ascertain what is to happen in the next year or two, when the present armaments' boom comes to an end, and the most significant thing said by the President of the Board of Trade to-day was his warning of what might happen in a year or two. It was one of the most remarkable prophecies which has come from anyone sitting on the Treasury Bench in recent months. It was a warning that there might be a serious curtailment in our overseas trade. The armaments' boom will come to an end some time, and a slump is almost bound to follow the boom, and we are told that in order to meet that situation the President of the Board of Trade and the Board of Trade as a Department are urging manufacturers not to overlook the importance of their export trade. It is very easy for the right hon. Gentleman to utter those irreproachable sentiments from the. Treasury Bench, but manufacturers and Members of the House and the great public outside would be very much more impressed by the appeals of himself and his colleagues if only they and the Government of which they are members showed a little more appreciation of the urgency of the problem of liberating international trade.

8.43 p.m.

Sir J. Haslam

I should not have attempted to speak to-night but for one or two speeches made from the Liberal benches behind me. Complaint was made by the hon. Member for Dundee (Mr. Foot) that there have been very few speeches on this Vote from the Government side of the Committee. There are two reasons for that. The bigger reason is that we realise the benefits that have come to the trade of this country during the last few years, and we are to a very large extent satisfied with the present position and the actions of the President of the Board of Trade. In addition to that the Government have such an overwhelming majority here that some of us cannot in normal times find room on the benches opposite and have to come to this side of the House, because of the paucity of the number of Members sent by the constituencies to represent the old doctrines of so-called Free Trade, which we have never had, though we did have the policy of free imports. We have heard to-night about the "musty arguments" used by certain speakers. I hope the hon. Member for Dundee will not be offended when I say that I remember the same argument that he is using now in a post-war year being used with very great effect years before the War. He quoted the Ten Commandments and said they were a Divine Law. I never heard that Free Trade was a Divine Law. If the hon. Member knew his Bible better he would acknowledge that, and he would say that the doctrine of free imports was never a Divine inspiration.

As representing a purely industrial constituency, one that has benefited perhaps]east of all, in the natural order of things, by the actions of the Government, I am grateful, and my constituents are grateful, for the action taken by the present occupants of the positions of President and Parliamentary Secretary to the Board of Trade. We realise that if any Department of the Government is more efficient than another it is the Board of Trade, and I am prepared to say so on the Floor of this House. Criticism has been offered of the actions of the present occupants of those offices, because, in the dim and distant past, they held certain views about free imports. My experience teaches me that the best gamekeepers are former poachers. They know the ropes, and they are not prepared to stick to musty arguments. They are prepared to learn something from present experience, but, at the same time, are not so super-enthusiast that they rush wildly in. They pass sane legislation, such as we have had since the present occupants of the Board of Trade posts took those offices.

One hon. Member, I think it was the hon. Member for Stoke (Mr. E. Smith), referred to the lamented death of Mr. Arthur Henderson, and said something about a broken heart. Shall I tell him of a member of his party who died with a broken heart, trying to get the nations of the world to come to trade agreements with this country? I refer to the late Mr. William Graham, one of the brightest intellects that ever stood at the Opposition or the Treasury Front Bench. He spent the last years of his life trying to persuade foreign governments to come to some agreement with this country. He failed, miserably, because he had nothing to offer. My experience of making a bargain is that you must be able to give something in return if you expect to receive some benefit. The trade agreements have been an immense benefit to the trade of this country, and particularly to the cotton trade of Lancashire. Mention has been made of the Ottawa Agreements. I admit that they have not achieved all that the authors of them expected and some of us hoped, but very few agreements or ideals, when once put into practice, achieve all that we hope for. But those Agreements have achieved a good deal. If we want an argument, surely it is to be found in the figures given by the hon. Member for Dundee, in which he acknowledged that over £2,000,000 worth of cotton piece-goods were formerly imported from America, where they were manufactured. They are now made in Lancashire by Lancashire operatives, and I personally rejoice in that fact.

Figures have been quoted about employment. Some of us were at St. Paul's Cathedral yesterday, and we looked in vain for a monument to Sir Christopher Wren. We were told that if we wanted to see his monument we must look around us. If we want to see a monument to what the Board of Trade have done in the last few Years, we must look around at the condition of the people in this country, and at the employment figures. Take my own town. I have already said that, in the natural order of things, it would benefit among the least of any towns, because it is entirely dependent upon exports. What has happened? When the Conservative Government went out in 1929, signing on at our Employment Exchanges were slightly under 10,000 people. In two years and four months, when the Socialist Government went out, we had nearly 30,000 signing on; to-clay the number is less than 8,000, and I attribute the decrease largely to what has been done by the Board of Trade. That is why I am standing here to-day. It is not often that I speak in this House, but I feel I owe a duty to by constituents and to the Board of Trade.

We have a habit of criticising people in this country, when we have reason to criticise, and we save all the plaudits until they have gone. Rumour has it that the President of the Board of Trade is leaving his present position. I hope it is not true, for the sake of the trade of the county from which I come, or, at least, I hope that whoever succeeds him, if the right hon. Gentleman does go, will follow in his wise footsteps. I believe it was the hon. Member for Rochdale (Mr. Kelly) who interrupted and said that workpeople ought to go out to America as well as the masters.

Mr. Kelly

To have a look.

Sir J. Haslam

They used to go years ago. The highest ambition when he and I were young men was to emigrate to God's own country.

Mr. Kelly

I did not suggest emigration.

Sir J. Haslam

The hon. Member wanted them to go and have a look round?

Mr. Kelly


Sir J. Haslam

In the old days, they used to go out for a living, but nobody ever dreams of going to America to-day for a living. They stop in God's own country, the best place on earth. It was not the best place on earth five or six years ago, but there has been a mighty change. We ought to give credit where credit is due; I think it is due to a great extent to the Board of Trade. Much has been said about the platitudes that certain American statesmen have come out with, when they have landed at Southampton or Liverpool. Some newspaper reporter has met them, and they have come out with pleasant platitudes about freer trade. My reply to that is that example is better than precept. We set America an example, for 70 or 80 years, of free imports into this country, and the more we begged of them to reduce their tariffs the higher they made them. It is only when we are in a position to retaliate that they come out with those platitudes about freer trade. We want freer trade, but the only hope of getting that freer trade is by being in a position to offer something in return.

Why are certain nations coming here, as they have done in the last few years—and they are still coming, in spite of what the hon. Member for Dundee says—and asking for trade agreements? Did any nation ask for trade agreements with this country previous to our having a system of tariffs? They absolutely ignored us and laughed at us, but to-day we have nations coming, and we are in a position to negotiate with them, and to bring about agreements that have been beneficial to the people of this country. Mention has been made of the open door. We had an open door in this country, but even in the prosperous days of the open door, when the party to which the hon. Member for Dundee belongs was predominant in this country, we always had, as the late Sir Henry Campbell-Bannerman said, millions of people living on the verge of starvation. If the Liberal party want to return to position again in this country they will not have to stick to those musty arguments which we have heard to-night—I use their language, not mine. The people of this country, work-people, manufacturers and everybody concerned, have made up their minds that the only policy for this country in these days, in present conditions, is to be in a position to argue and to bargain with foreign nations, and with our own Dominions, if necessary.

One great criticism which I want to offer of the Ottawa Agreements is that, although we have carried out the letter and the spirit of them, some of our Dominions have not done so up to 100 per cent., as we have. I am hoping that they will eventually see the reasonableness of our proposals, and will recognise that trade can never be a one-way traffic, but must run in both directions. I am sure that those who at present represent the Board of Trade on the Front Bench will see that that point of view is impressed upon the Dominions.

The hon. Member for Stoke-on-Trent spoke vehemently against any trade agreement being made with Germany. I am one of those who never try to interfere with the internal government of any country; I feel that we have quite enough to do to look after the internal government of our country, and why we should want to exclude Germany, or Italy, or any other country, because they have a system of government of which we do not approve, passes my comprehension. If it were not for the German trade, one-third or one-half of the mills of my own town would be closed down. We are dependent on the German trade, and, therefore, I hope that the Government will not allow their antagonism to the system of government in Germany to prevent them from coming to some trade agreement with that country, and helping the trade between the two countries as much as possible. It does not matter to us what sort of government they have in Germany, Italy, Portugal, Spain or elsewhere. If we can trade with them, and they will pay for the goods, by all means let us trade with them. An ordinary tradesman in a town or city would not refuse to trade with people because they were not of the same political faith or the same religious persuasion as himself, and why should we do internationally what we are not prepared to do locally?

Much has been said, also, I think, by the hon. Member for Stoke, about capitalists and people forming cartels and so on, and mention has been made of Unilever and the price of margarine. I. wonder whether the hon. Member for Stoke knows how many gallons of milk it takes to make a pound of butter, and whether he knows that butter is cheaper here than in any country where it is produced. That cannot go on for ever, and I think that the chairman of the combine, although I have no interest in it whatever, has a right to complain when a product is being sold in this country at a price below the cost of production in the country in which it is produced. To argue against cartels and against financial people because they complain that butter is being sold in this country at a price below the cost of production, owing to competition, is, I think, dragging in financial operations when it is perfectly unnecessary to do so.

An interjection was made, while the hon. Member for Pudsey and Otley (Sir C. Granville Gibson) was commenting on the efficiency of the machinery in cotton mills in Japan, to the effect that that machinery was made by Lancashire engineers. That is why it is efficient. But surely Members on the Socialist benches are the last people in the world who would say that the engineers of Lancashire—and Lancashire is still the largest engineering centre in the world, in spite of Birmingham, Coventry and the rest—should not make machinery to be used in Japan or elsewhere. It is unavoidable, though we regret it. I have read somewhere that the greatest enemies of any family are the members of its own household, and, unfortunately, the greatest enemies of the cotton trade have been two or three people from Lancashire. One was the late Lord Leverhulme, who taught the orientals and niggers how to wash their loin-cloths. Previously they used to throw them away when they were soiled, but he took them Sunlight soap, and renewals were not so frequently necessary. Perhaps the second greatest enemy of the Lancashire cotton trade was—unconsciously—a firm in my own town, that of Dobson and Barlow, who invented humidifiers. Up to the time of that invention, fine counts could only be spun in a very damp climate; it was bad for rheumatism,. but good for the cotton trade. Owing, however, to the invention of these humidifiers, fine counts can now be spun, not merely in a warm climate, but on the equator; indeed, I might almost go further if it were not for the fact that some of those present might object to the description. Fine counts can now be spun almost anywhere. But one cannot say that progress and invention must stand still; it is inevitable, and we have to face it.

We rejoice in the fact that the home trade of this country has improved so enormously. The unemployment figures are still large, but they are only half what they were five years ago. There are more people employed in this country to-day than at any time since records have been kept. But we cannot live for ever by taking in one another's washing; we must live by our export trade: and therefore I hope that the Board of Trade will continue to make trade agreements, and will not be afraid of using the weapons that they have in their hands at the present time. It is a habit of English people, and I think the Board of Trade are particularly British in this respect, to allow the foreigner to have the best of the bargain, thinking that sooner or later he will reciprocate and will appreciate our generosity. We have been doing that for 100 years in regard to free imports, and we have been doing it for five years since we took control of our own markets. The imposition of tariffs and the control of our own markets have given our people in certain trades in this country a position that they could never have hoped to attain, and never would have attained, under a system of Free Trade. I hope that the control of our markets will be utilised by the Board of Trade in telling our Dominions, and telling foreigners also, that if they desire the use of our markets they must open their doors to us. Much has been said to-day about the open door. I want to see the open door of foreign countries rather than the open door here. We have had a policy of the open door, as I have said, for seventy or eighty years, and it is time we ccmpelled the door of the foreigner to open. The only way in which we can do that: is by what we have done during the last few years—by a system of reasonable.and rational protection.

We are in some respects a high-tariff nation. I am glad that our tariff is not as high as those of some other nations. We want to treat well those nations that treat us well, but there are nations who refuse to treat our exports on a reasonable basis, who will not put the financial situation in a satisfactory condition. No one knows those nations better than the Parliamentary Secretary. I hope that there will be renewed efforts to see that the currency basis is made satisfactory, particularly in the Near East. It has been said that gratitude is a lively sense of favours to come. We are grateful to the Board of Trade for what they have done for several years past. They have attained a very high standard, and they will be judged in the future by the standard which they themselves have set up. I believe that the standard of the Board of Trade is higher now than it ever has been within living memory, and I hope that, whether the present President goes on or whether a successor has to take his place, the standard will be maintained. If it is, no one will rejoice more than the working people of this country.

9.5 p.m.

Mr. Leonard

The hon. Gentleman who has just spoken made copious references to the speech of the junior Member for Oxford University (Sir A. Salter), which to me was a speech of great importance and one which I trust will be countenanced by the Government when they come to consider what has been said to-day. That hon. Member ended his speech by stating that the Board of Trade was a Department which had very close relationship with the question of peace and war. I accept that statement, because I have always looked upon the Department as one whose policy, in conjunction with similar departments in other countries, in great measure determines the activities of the Departments of War. It brings to my mind the statement of Mr. Cordell Hull that the next war would be fought to decide who shall sell and where they shall sell. I think recognition has been given to that fact from all sides of the House from time to time. In my opinion the difficulties of the world with regard to trading arise from the great advantages that have been placed at the disposal of the captains of industry by science and invention, because there is not in this and other countries sufficient purchasing power to buy back the large amount of commodities created by the productive machinery. Just as the tradesmen in a town cannot trade if the occupants of the town are beggars, neither can this country trade with other countries if the other countries are beggars.

We have heard references to countries which are hampering us in our production and our commerce, and are producing things so cheaply that they involve us in difficulties in disposing of our own commodities. What is the use of looking at Japan? We are not in control of Japan. What about the British Crown Colonies? I should like to know whether, in the agreements entered into covering the trade of the colonies, they are making any endeavour to better the conditions of the common people in the colonies, because that would be a direct method of bettering conditions in this country. I do not think that the people in this and other well-developed countries have any hope of escape if they leave the so-called backward peoples to wallow in the slough of despond that they are in at present. I should like to know whether it is possible to have some pressure brought to bear on the conditions at present enjoyed by the coolies and so-called backward races, who are doing work with machinery supplied by British engineering firms as well as we are doing it, and, may be in some cases, doing it better owing to the deftness of their fingers; because if that is not attended to I am afraid I see no great hopes in the future. With regard to our own Crown Colonies, we should see whether some expansion of trade cannot be brought about by greater recognition of the need for the people to have better conditions than they have at present.

The Temporary Chairman (Sir Robert Young)

It is not permissible on this Vote to discuss conditions in the Crown colonies.

Mr. Leonard

Trade means people consuming things, and I am looking to the possibility of the Department of Trade having some say in the question whether any advantages of a trade character being applied to the colonies will be determined by what is going to be done with regard to the general well-being of the people there.

9.11 p.m.

Mr. Kelly

I am afraid that I cannot join in the song of praise that we have been listening to from supporters of the Government. I wish I could. I wish the conditions in this country were such as to allow one to think of the Board of Trade as being a Department of perfection. I wish one could compliment it upon having done for this country what would have meant a raising of the standard of life and security of income for the bulk of our people. Most of those who have spoken seem to imagine that, provided only that limited liability companies show a balance which looks prosperous, everything is going well. What is the Board of Trade doing with regard to the i,600,000 who are unemployed? They are denied an income and they are compelled by the unwritten law of the country to look to their fellow citizens to employ their services and to use their skill, ability and industry, and in return give them some shillings per week with which they may purchase. What is being done by the Board of Trade to see that those who are told that they are not required in our industrial and commercial pursuits are employed in order that they may have an income? It will be time to hand out praises to the Board of Trade when they have dealt with this problem of employment. Are things so well with the people who are employed? I notice that those who are not dependent upon weekly wages are doing very well, but I cannot see the same satisfactory conditions of things for those who are employed in our industries in Lancashire or elsewhere.

The hon. Member for Bolton (Sir J. Haslam) referred to a statement made by a former Prime Minister of this country, in which he spoke of the time when 13,000,000 were on the verge of starvation. [Interruption.] I am taking the words of the hon. Member who was referring to the late Sir Henry Campbell-Bannerman. Is the condition of this country so much improved, when there are millions of our people to-day who are not able to spend enough money upon food, compared even with that particular time? This is not the moment for praise but for asking when the Board of Trade intend to deal with the problem of industry in order that there may be greater security. Many Members who have spoken have asked that there should be a looking forward to a time, a year or two hence, when they expect a slump in this country. It is not to that time that we should look, but to the immediate moment. There are people in every one of our counties, even in this part of the country which is referred to as prosperous —in London and Greater London—working under conditions that are not a credit to this country, and there are many unemployed, as one can see if he cares to go round to the Employment Exchanges. [An HON. MEMBER: "Over- worked and underpaid."] Those of us who have to deal with these matters in London and Greater London realise that fact to the full.

Surely, this is not a time to be praising the Board of Trade for having reached a position where they stand far higher, in regard to their accomplishments, than at any period in the lifetime of the Department. There is still a great deal to do before we reach even something for which to say "Thank you," let alone render songs of praise to the President of the Board of Trade and the Parliamentary Secretary, as has been done this afternoon and evening. I am sorry that the hon. Member for Pudsey and Otley (Sir C. Granville Gibson) is not present. I interjected when he was reminding the Committee what an advantage it was for heads of firms to go on a tour round the world and how they not only learned so much, but how they advantaged industry. I interjected that though it was good for the heads of these concerns, it would also be good for the workpeople if they were able to visit those places. Probably they would come back with reports which would differ from those of which we hear.

Lieut.-Colonel Sir William Allen

They might not come back.

Mr. Kelly

That might he true, particularly if they visited the North of Ireland, but if they went to Belfast they might not come back because they have a habit of shooting people there when they go to arrest them. The hon. Member referred to a visit he paid to the silk mills of Japan, and we had to listen to the hon. Member for Bolton making an attack upon the Socialist party with regard to the engineering trade of Lancashire. I happen to be one of those interested in that particular part of Lancashire, but no one interjected from the Socialist benches. Surely, it is time that the hon. Member for Bolton realised who are the members of his own party. It was the hon. Member sitting next to him who intervened by referring to Platt Brothers.

Sir J. Haslam

The hon. Member for Rochdale (Mr. Kelly) has been trying to get me on my feet again and he has succeeded at last. I think the interruption came from the hon. Member for South Shields (Mr. Ede), who is sitting next to him, but I may be mistaken.

Mr. Ede

The hon. Member for Bolton (Sir J. Haslam) is quite mistaken. There is no reason why he should confuse me, but what happened was that the hon. Member for East Surrey (Mr. Emmott) interjected the word "Platt's" and I cheered the remark, because I am always glad to find a Member of the hon. Member's party well informed.

Mr. Emmott

I merely intervene to assure the hon. Member for South Shields (Mr. Ede) that he is attributing to me an intention which I did not possess.

Mr. Kelly

I was under the impression that the hon. Member for Bolton would know quite well that it must have been somebody with Oldham connections who would use the name of "Platt's" in such an intimate way, and yet the attack was made upon the Socialist benches for having suggested that we ought not to supply machinery to other countries. We are willing to export to other countries, which know the advantages of the products that come from our people. I ask that the Board of Trade should find out whether or not it is possible at this time, seeing that the income of the working people depends upon their employment, for these 1,600,000 who are presently unemployed to be engaged upon some work to enable them to have an income so that they may have a reasonable standard of life.

I ask the Parliamentary Secretary, when replying, to give more information than has been given up to now with regard to the firms who have been advantaged by tariffs. I do not accept the claim that the workpeople have been advantaged by them. They have been given no greater security by reason of them, but why have many of the firms who have been advantaged by tariffs gone to Germany for their ships, when the finest shipbuilders in the world are to be found in our own country? May we be told who are the people who are running to Germany in order that Germans may be employed in the building of our ships? I also ask whether anything is being done to find employment in the mining industry, both with regard to coal and to metals. It is astonishing that those who are engaged in the tin trade in this country are prepared to close down the tin mines of this country because they can make easier and greater profits by obtaining tin from Malaya, Bolivia and from Nigeria and other parts of the world. Why is it that our tin miners cannot be employed in the raising of this metal in this country? I hope that we are to have that matter looked into.

I am sorry to deal with details because until now the discussion has been on very broad principles, but I am anxious to know, in connection with this particular part of the Estimate, why there is something dealing with the Enemy Property Department? Why is this Department still in existence, and may we know how this property is being disposed of? It must be remembered that there were scandals in the Board of Trade when this Department was known as the Ex-Enemy Debts Department. Some of those who were in the employ of the Department fled the country when questions were raised from this side of the House. Others of them were sent to prison. I hope that there is now in the carrying on of that Department a closer supervision. We might be told just what this Department is dealing with at this time. I do not know why it has changed its name. It was referred to in 1927 or 1928 as the Ex-Enemy Debts Department. Evidently we have found some more enemies since that time as the prefix has now been dropped from the title and it is referred to as the Enemy Property Department. I hope that we are going to be told what this Department is engaged on, how soon it is going to be closed, and whether care is taken that people have not the freedom to dispose of property and take some portion of it for themselves until the matter is raised in this House. I hope that I may receive some reply to my questions, and above all I hope that the Board of Trade are going to deal with the question of finding greater employment for our people.

9.27 p.m.

Mr. Emmott

So great is my affection for the hon. Member that I do not grudge him any satisfaction which he may have obtained from an interjection which I made, and which, apparently, he found useful to his own argument; but I repeat the statement which I made in reference to his colleague sitting beside him, that in his reference to me he was attributing to me an intention that was not mine. In this interesting Debate not the least interesting speech which has been made was that addressed to the Committee by the hon. Member for Dundee (Mr. Foot), who, for reasons which I perfectly understand, is for the moment not in his place. I think that some of the arguments which he addressed to the Committee deserve some answer, or some attempt at answer. Fairly early in his remarks he addressed himself to a statement which had at some time been made by the Prime Minister in which the right hon. Gentleman drew a plain distinction between tariffs on the one hand and quotas and exchange controls on the other, and the hon. Member seemed very much to object to that distinction, founding, indeed, a considerable part of an interesting argument on that objection. I should like to suggest that that distinction is a perfectly sound distinction, and rests upon certain essential differences which do, in fact, distinguish tariffs on the one hand from quotas and exchange restrictions on the other.

Where you have a quota you have something which absolutely prohibits trade beyond a certain level. Up to the limit of the quota trade may develop, but beyond that, by reason of the operation of the quota, development is quite impossible. That is not at all the result of, I will not say all, tariffs, but many tariffs, and it is perfectly accurate to say that it is not necessarily the result of the tariff. With regard to exchange controls—and I hope that the right hon. Gentleman the Parliamentary Secretary will agree with this, because I think that it ought to be plainly and more frequently stated than it is—they are affected by incidents from which the tariff is quite free. Where you have an exchange control you have a device which affects international trade with embarrassing and sometimes prohibitive delay. You have something which may in an unpredictable fashion alter the cost of international trade, which may alter the charge which falls upon the purchaser of goods. In exchange control, again, you have something which necessarily operates to create, as at least it is operated to-day, complete uncertainty whether the person who has entered into a transaction for the sale of goods will get the money which he may require or whether he may not be obliged to take goods instead. All these incidents affect the exchange control. None of them affect the tariff. Therefore, the distinction drawn by the Prime Minister is perfectly sound. No greater error is made than to place quotas, exchange controls and tariffs all in the same category, and to subject them all to equal condemnation, as is done by those wile still adhere to the principle of free imports.

Mr. Foot

I did not seek to place exchange controls and tariffs on the same footing. I agree that there is a distinction between them. All I was saying was that it would appear from this passage which I read from a speech by the Prime Minister that he did not visualise any reduction of tariffs. He referred only to removing exchange controls and industrial quotas.

Mr. Emmott

If I have not made my argument clear I regret it, but I do not think that the hon. Member has quite followed me. I am now coming to his point which is concerned with the attitude of the Government to the maintenance of the tariff system. The hon. Member argued that the Government by the statement which he quoted, and by others, have proved an unwillingness to reduce tariffs in any circumstances. That was the point which he made. He said that it was not as though-the Government had refused to make an unilateral reduction, but that they had displayed an unwillingness to reduce tariffs in any circumstances. I am certain that that is quite untrue and that that is not the position of the Government. They have never made any public declarations which lend themselves to that interpretation. There are many circumstances in which the Government would be more than willing to consider a reduction of certain tariffs. But there is another answer to the hon. Member's argument, and it is, that when the Government are considering suggestions made by other Governments for the reduction of tariffs, they are not merely entitled but bound to take into account the relative difference between various tariff systems. That is a most material consideration to be borne in mind. And it is a point so obvious as almost to require apology for mentioning it. There are very great differences between the levels of different tariff systems, and that is the most obvious fact which must be taken into account by the Government when considering any suggested reduction or modification of tariffs.

The hon. Member went on to refer to a matter on which a good deal has been made this evening in this House and also without the walls of Parliament. It was referred to this afternoon by the right hon. Gentleman. I mean the reduction of trade which may be anticipated upon the cessation of those demands which spring from the national armaments programme. Too much should not be made of this consideration. I am not suggesting any criticism of what the right hon. Gentleman said, because he did not make too much of it, but I think too much has been made of it in public argument within and without this House. In this matter we must not assume too much. We must not assume that there will necessarily follow any damaging decline in industry consequent upon the cessation of rearmament. The industrial activity which is following and will follow upon rearmament will certainly increase generally the efficiency of our industrial system. As the activity of industry increases, the skill of industrial workers will not only be maintained but improved. Technical processes will improve; and, not the least important point, the cost of industrial production will be diminished. These are all elements which will in time facilitate the recovery of trade. They will facilitate the recovery of both domestic and foreign trade, and they may well operate, when the moment comes, to make it far easier than is at present anticipated for us to revive our domestic trade, and to recover even many of the foreign markets which may appear for the time being to have slipped from our grasp.

Before I pass on to notice one or two other points, I should like to make this comment, that both in this Debate and in many public discussions on this subject I think attention has too exclusively been concentrated upon that trade which crosses the national frontiers. It is a legacy of the domination of our minds by the ideas of the Manchester School that we regard too much and pay too exclusive attention to that trade which can be measured by the fact that it crosses national frontiers; but the trade which consists in the exchange of goods across the counters of the shops that are spread throughout the length and breadth of the land is not less important, and amounts in the aggregate to a very great deal.

The general argument which has been addressed to the Committee to-day in criticism of Government has been that the commercial policy of His Majesty's Government is essentially one founded upon Protection and upon that Imperial Preference which is grafted upon the system of Protection, and that the system of Protection combined with Imperial Preference is one which is an obstacle to the development of international trade. I believe that that is a perfectly false view. The true view, which I confidently submit to the Committee, is that the essential purpose of Protection is the development of the national power of production. The base from which all trade springs is the national power of production. I am not forgetting the importance of the processes of distribution and exchange. I realise the importance of the distributive trade in regard to the persons it employs and the wealth it distributes. But while I do not forget those matters, I say that the base from which all trade springs and upon which it is founded is the national power of production, and the broadening and strengthening of this base is the purpose and essence of Protection. The hon. Member for East Birkenhead (Mr. White) referred to what he described as the rigid regimentation of the Ottawa Agreements, which he said constituted a great obstacle to international trade. I can discover no rigid regimentation in the Ottawa Agreements, and I absolutely deny that they have constituted a great obstacle or indeed any obstacle to international trade. The hon. and junior Burgess for Oxford University (Sir A. Salter), whose interesting speech so held and impressed the Committee, said that the commercial policy of no single nation had been so influential in restricting and deflecting the trade of the world as the policy pursued by His Majesty's Government. I was amazed by that statement. He asserted that the policy exemplified by the Ottawa Agreements had deflected the trade of the world. Let me consider the point of deflection. I wonder whether the hon. Member heard the speech of my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft). If he did, he must have noticed that the statistics which my hon. and gallant Friend gave showed that at the same time that our exports had been increasing to countries constituting the Empire, they had als been increasing in more or less degree to foreign countries. There is no evidence of deflection there. But I may be told that that does not disprove deflection. Indeed, the hon. Member for Dundee attempted to prove deflection of trade by quoting certain figures to establish the fact that when Canada was taking more textile goods from us she had taken less textile goods from the United States.

I assert that it is absolutely impossible, indeed, absolutely wrong to attempt to prove a deflection of trade by the selection of statistics relating to one particular commodity. That is a wholly false economic argument. The whole purpose of commercial agreements is to increase trade. But that statement may be too wide, or at least lacking in that detailed particularity which we need to assist our discussions. The purpose then of commercial agreements of which the Ottawa agreements are an example, is to increase and accelerate the exchange of goods and the circulation of money, between different countries. Where, that happens, where there is an increase or acceleration in the circulation of money or the exchange of goods, there is an enhancement of purchasing power, which, I assert, necessarily and indeed automatically distributes itself in different channels, and flows out in different directions. I say that it is wrong to attempt by this method to prove that agreements such as this have resulted in a deflection of trade from one country to another.

But there is another and a more complete answer to this argument about the deflection of trade, which is supplied by a member of the hon. Member's own party, the hon. Member for East Bradford (Mr. Holdsworth). An interruption by the hon. Member for Bury evoked from the hon. Member for East Bradford the retort that the hon. Member was still under the influence of the old and false conception of the static nature of trade, and he accused my hon. Friend of imagining that the amount of trade is constant, and that what is given to one is merely taken from another. But that is exactly the assumption underlying the argument of the hon. Member for Dundee. Really, the whole argument against the Ottawa Agreements that they have led to a deflection of trade from one region to another rests on that utterly false assumption. Of course, there is nothing of a static nature in trade. Trade is a flow of goods in exchange, and that exchange can be diminished or increased in response to various influences in particular periods of time.

The junior Burgess for Oxford University having asserted that these agreements have merely resulted in a deflection of trade, also asserted that they had resulted in a restriction of trade. I contend that he can find no support whatever for that position in the available statistics showing the trade which has proceeded from this country to other countries in recent years. I only propose to trouble the Committee with one set of figures which show how our external trade has increased since the time the Ottawa Agreements began to be effective. I take the figures of retained imports to this country in the years 1933, 1934, 1935 and 1936. In 1933, they were £626,000,000; in 1934, £680,000,000; in 1935, £701,000,000; and last year, £788,000,000. Let me also give the figures of the exports of our own products and manufactures. In 1933, they were £368,000,000; in 1934, £396,000,000; in 1935, £426,000,000; and last year £441,000,000.

Sir A. Salter

I did not say that the only effect of the Ottawa Agreements was to restrict trade. They had another purpose and another effect, but they have had the effect of restricting trade with other countries. This is proved by the fact that although the actual amount of our exports and imports has gone up, the proportion of our trade with foreign countries under the general recovery has gone down compared with the general trade. While they have increased, as was intended, the trade with the Empire, they have had the effect of restricting and lessening the trade which would otherwise have taken place with other countries.

Mr. Emmott

I am not so sure that that proposition is incontestable, but I confess that I am not now furnished with the statistics relating to the proportion of trade which I should require to possess in or5er to disprove the assertion of the hon. Member. But I took down the sentence in which he specifically stated that the commercial policy of no single nation had been so influential in restricting and deflecting the trade of the world as the policy pursued by His Majesty's Government, and that sentence stood in close relation to his argument relating to the Ottawa Agreements. It is that assertion which is explicit in that statement—that the policy of the Government has been more influential than the policy of any other Government in restricting and deflecting the trade of the world—to which I was addressing myself, and which, I suggest, rests on no secure foundation.

The hon. Member for East Birkenhead referred in terms of some surprise to the answer given on 22nd March to a deputation which the hon. Member identified.

The junior Burgess for the Oxford University also had some unfavourable comments to make upon that statement. The hon. Member for East.Birkenhead asserted that dismay was caused by the answer to the deputation, which in effect hinted, if it did not say so, that it may be, after all, in the circumstances of the world in which we live, for other Governments to consider whether something ought not to be done to reduce the levels of their own tariff systems before we come to the precise and practical point of considering a reduction of our own. The hon. Member objected to the attitude expressed in the answer, that it is not for us to take the first action in this matter. I think the answer given to the deputation was unexceptionable. Are we not to consider the difference which exists between the tariff levels of other countries and our own? To take only the case of the United States and ourselves: we have a very low tariff system while that of the United States is much higher. Objection can only be taken to the answer given to the deputation by those who consider that the difference between various tariff systems is quite unimportant. Surely no reasonable or well-informed man can take that view. The hon. Member for East Birkenhead took objection to the whole principle and not merely to the operation of the Ottawa Agreements. He called upon the Government to modify the principles of the Ottawa Agreements, which he described as the greatest obstacle that had been constituted to international trade since 1929.

We wholly dissent from that position. On the contrary, our urgency is of another kind, and we say that we hope that at the Imperial Conference which is now taking place, and in the conduct of our commercial negotiations which will occupy some period of this year, the Government will not abandon but will fortify the commercial principles which they are now observing. In the words of the President of the Board of Trade, we hope that they will improve what we already have. Nothing could be more simple or clear. These commercial principles are founded on, although they are not completely limited within, the principle of protection, and the principle of Imperial Preference is grafted on to the principle of Protection. The Government admit that these principles may require some modification in operation. There are certain features of the Ottawa Agreements, for instance, which have proved to be inconvenient in practice and which show the necessity for a modification of the operation of these principles; but the principles themselves let us by all means preserve and strengthen.

9.57 p.m.

Sir John Wardlaw-Milne

I would like to say at the outset that I entirely support the view of the hon. Member for East Surrey (Mr. Emmott) as to the valuable results which this country has obtained from the Ottawa Agreements. I am not able to follow him in his controversy with the hon. Burgess the Junior Member for Oxford University (Sir A. Salter) as I did not happen to be here during the speech of the Junior Member for Oxford University; but this Debate, of which I have heard a great deal, has raised one or two points on which I would like to say a few words. The hon. Member for South Bradford (Mr. Holds-worth) made a statement from the Liberal benches which I think ought to be noted. He stated, if I understood him correctly, that it was not now the policy of the Liberal party to get rid of tariffs, their real objection to the tariff system being merely that they believed the Conservative party held tariffs to be an end in themselves. He accused us of holding the view that tariffs in themselves are a desirable system, and that they are the only policy that will cure the trade ills of this country.

I am afraid the hon. Member has not read very carefully the speeches which have been made by Leaders of the Conservative party over a very large number of years, for if he had he would have known that, at any rate, a very large number of those speeches dwelt on the fact that, in the period before tariffs were re-introduced, it was impossible to do any bargaining with other countries on the basis on which we were then working and when this country alone was a Free Trade country and the remainder of the world was Protectionist. I assure the hon. Member that there are many hon. Members on this side of the House who held the view then as they do still and who have expressed it publicly in the days of Free Trade, that the only way of bringing about real freedom in trade was to introduce some measure of Protection. I think the experience of the last few years shows that that view was very largely correct. It is not beyond the memory of a great many hon. Members how assiduously the President of the Board of Trade in the Socialist Government of 1924 endeavoured to come to an agreement with the other Free Trade countries while we were still Free Traders, and how bitterly he felt the failure of his efforts.

The hon. Member for Seaham (Mr. Shinwell), in his interesting speech, made one statement which, I think, is worthy of special comment. He was dealing, I think very wisely, with the difficulties of trade in present conditions, and it is not unnatural perhaps that he should have started by saying that the real trouble was that we were moving in a Capitalist world and that nothing could be done until Socialism took the place of Capitalism. Of course, that is what one would expect from him, and he was only doing his duty in putting forward that view; but he ended his remarks with a peculiar sentence to the effect that nothing could be changed until we got a new economic situation. It seems to me that the outcome of the argument he was then putting before the Committee was not that he wanted a new economic situation, but that he wanted a new political situation, which is a very different thing. It was difficult, in listening to the hon. Member's argument, to see how even if a Socialist party were in power in this country, we would be able to compete with other countries merely because we happened to have a Socialist party in power rather than a National Government, or a Conservative or a Liberal party. To my mind, the difficulty of competition at least while all countries are not working on the same Socialist basis and entirely self-contained remains. The hon. Member did not explain how that difficulty was to be overcome.

From the hon. Member's speech, however, and, indeed, from most of the speeches to which I have listened to-day, it is clear that the one thing with which hon. Members on all sides of the House are most concerned is the question as to whether we are or are not in a "boom" period and, if we are, w hat is going to happen when that period passes. In dealing with that point. I would like, in the first place, to ask whether any of us is sure that we are in a "boom" period. We are in a period of distinctly better trade, but it has to be remembered that better trade may come from distinct and different causes. First, it may come from the filling up of the gaps of the depression period. That undoubtedly is the cause of part of our prosperity at the present moment, for I think that if there is one thing on which we are all in agreement, it is that there has been an economic blizzard in years recently passed and therefore there was a period of depression which we are now filling up. Another cause of this better trade is the changed condition of the monetary situation of the world. I venture to say that we are probably not really in a "boom" period; but if we are, the question of whether we can continue to be prosperous and not again suffer a serious depression is surely a question as to whether we can put our economic and monetary policies in order, and come to agreement upon them with other countries. There has been a great change throughout the world in the last few years in the economic outlook, owing to the increasing acquisitions by the world, from different countries, particularly from Russia, of gold, which is still the basis of trade here as elsewhere, in spite of the fact of our going off the so-called Gold Standard.

The question which I want to put to the Parliamentary Secretary to the Board of Trade is this: In the negotiations which I understand are going on in connection with the renewal of our trade agreements with various countries all over the world is the co-operation which was so well begun by the making of the three-party currency agreement going to be extended, not only in currencies, but in economic policy? Are the Government pressing on with securing an international economic policy with all countries which can agree to work with us? To my mind, that is the one thing which will do more than anything else to prevent depression, not only here, but in other countries as well. It would probably not be in order, and certainly in the short time at my disposal it would not be right, for me to go into the monetary problem in any detail, but this is surely the moment—and I agree with much that has been said on that point—for this country to give a lead in this matter of extended economic co-operation. It is not at all easy to do. It is simple for all of us to suggest that the Government should do it, but many of us know how difficult it will be to get an agreement of this kind.

It is perfectly clear that where you can get an arrangement with countries which are economically and financially in much the same condition as we are in ourselves, if there are any other countries with as well balanced Budgets, or as nearly balanced, shall I say, as our own—I will not put it any higher than that—it is much more difficult to get an agreement with others not so fortunately placed. Our difficulty is that we want trade also with countries that are not in that fortunate position of being able to inspire confidence, and it is extremely difficult to get an agreement with such countries, because clearly we cannot make quite the same terms with them as we could with people in whose credit we feel secure. I do want to ask the Parliamentary Secretary to the Board of Trade whether he can assure us that the excellent arrangement which began as a currency agreement between France, America, and this country some nine months ago is being extended, not only from the currency point of view. Is this moment being taken to try and extend these proposals into an economic agreement between the countries concerned and between all other countries which are willing to work on the same basis and bring us a foundation upon which international trade can really succeed? It is so easy to say that we should trade with everyone, but it is so extremely difficult to get it working on a basis which will show results.

I agree with what has been said that there never has been a time, if one is to judge by what one reads, when there appears to be a better opportunity for getting agreement in these matters than there is to-day, and I am positive that I am right in stating that there has never been a time when this country has been looked to for a lead more than is the case to-day. I hope the Parliamentary Secretary will be able to tell us that that is one of the matters which the Government are doing all they possibly can do to bring about extended agreement and co-operation. All these agreements between nations in the next few months will require revision and consideration, or a great many of them, at any rate, and we are in a position, I suggest, to dictate— I use that word without offence—certain terms to other nations for their benefit in trade as well as for our own development. entirely agree that any arrangement for freedom in mutual trading is more likely to put an end to war than anything else, and that an economic agreement for extended exchange of goods may do more to bring peace to the world, than anything else.

10.10 p.m.

Sir Francis Acland

Before I come to my main argument, I should like to comment on one thing that we have heard two or three times in this Debate, and I do not think the hon. Member for East Surrey (Mr. Emmott) will dissent when I say that he was partly responsible for the argument, namely, the comparison between the years, say, from 1929 to 1933 and the present time. A good many, things could be said against the late Labour Government, but I am not concerned with that here. I believe, however, it is a fact that they do not bring out as much as they might in their replies to attacks about their failure, that between the years 1929 and 1931, unemployment rose less, wages fell less, and stock and share values fell less in this country than in any other comparable country where the figures are recorded. Nothing, after all, is easier to do than to take a year like 1933, when recovery had begun, and to compare it with the present time, when recovery has considerably advanced, not only here, but in, most other parts of the world as well, and to say that it is due to Protection. We get that sort of thing at election times on the platforms, and it is all in the day's work, but it is not a good enough argument for this Committee without something in the nature of proof. You might as well say that it is because two leading members of the Government happen to have a "B" in their names, or something of that kind. It is not any proof when you take an early year at the beginning of a boom and a later year and say it is due to one thing or another thing, whatever you happen to pick on to suit your argument.

Let me assure my right hon. Friend, if I may call him so—and I should like to be able to use that title and congratulate him—that I am not going to deprive him of the customary half-hour if I can help it, but I have certain things that I would like to say. The majority of the Committee regard it as being as absurd to argue in favour of greater freedom of trade as if you were arguing that the earth were flat. It may be that Protection has come to stay, and even if it is theoretically unsound it is practically unescapable, and they regard any other point of view as an outworn shibboleth, as the hon. Member for Bolton (Sir J. Haslam) indicated in his breezy and admirable speech. We differ, but I should like hon. Members opposite to realise what our disagreement is and how and why we differ. If we are to differ, let us differ on sound and real lines rather than on imaginary lines, and let them realise that we advocate the removal of barriers to-day, not because of some old-fashioned theory which is now outworn, but which worked well once, when the world was different and better, but which is an absolutely up-to-date prescription for prosperity in our own time. We are not thinking primarily of the prosperity of other countries but of the prosperity of our own.

In our view, although there is now more employment and prosperity than there was previously—at which, of course, we rejoice—the present revival of trade seems to show too many signs of being in the nature of a boom. It depends too much on armaments and allied industries and has in it not enough of a permanent character to carry us successfully through the difficult times which are certain to come, we fear, when, if ever, the international armament race has abated. The President of the Board of Trade referred, very fairly I thought, to the gap and the difficulty of that gap. Looking forward to that difficult time, just as we believe that general rearmament—I am not talking about our's now—makes world war more likely, so we hold that nationalist economics as now practised impoverish the world and, what is more to the point for our immediate purpose, we believe that that impoverishment defeats the object of nationalist economics if that is assumed to be the well-being of the individual nations. In other words, economic nationalism means world depression and as long as we have world depression, we shall not see any full national revival in particular countries.

So we put forward as a definite practical policy for the present moment, which would, we believe, have valuable results in the near future, that an announcement should be made publicly—not confined to the closed doors, as they naturally must be, of these bi-partite discussions with other nations—of our willingness to consider a reversal of present policy, such as a reduction of all tariffs to the 10 per cent. level. That is what Ministers, not so long ago, when they set before the country in the Election before last what they intended to do, regarded as normally sufficient for their purpose. We believe that now —not a year or two hence but now—industries such as silk and artificial silk which get 43⅓ per cent. or spectacles and motor-cars which get 33⅓ per cent. or jewellery and leather which get 30 per cent. or glass, cutlery, tools, paper and linoleum which get 20 per cent. could maintain their present prosperity with considerably lower duties. We believe in particular that the rising costs of building which affect many things unfavourably such as the new school-building programme and incidentally many things which the Minister of Health has at heart, could be sensibly checked, if the duties which now range from 15 to 20 per cent. on manufactured and semi-manufactured articles entering into house-building were reduced. That could be done, considering that there is nothing less than a ramp in building costs at the present time in many directions, without real danger to our home producing industries.

We say further that if the policy which we advocate tended, for a time, towards a general increase of imports, that should be allowed to adjust itself in the old way by movements of the exchange. We know that a fall in the value of sterling, in terms of other currencies, is regarded by many people as serious. To us it seems a natural way of discouraging excessive purchases by our people from abroad and encouraging greater purchases by them from us. To the objection that whatever we do other countries will not buy our goods, we oppose the figures which show that last year we sent £224,000,000 worth of exports to foreign countries and £217,000,000 worth to the Empire, of which exports £340,000,000 worth were manufactured articles. Although these figures are nothing like as good as they have been or as they might be, they are quite considerable. On that trade we depend largely for our prosperity, and in our opinion there is no way of fostering and expanding it so certain and so far-reaching as to have the lowest possible barriers on the import side.

If it is said that we cannot now, even temporarily, disturb our rates of exchange with important countries, which might be the temporary result of the policy I am suggesting, because of a tri-partite currency agreement with France and the United States, we suggest that those countries would be more ready to come along with us if we were to give a definite lead. To some extent they have given it more definitely than we have. That agreement which is a good one—and I congratulate the Government on it—was meant to be an aid rather than an obstacle to greater freedom of trade. It was limited and directed to removing the possibility of competitive exchange depreciation and thus to removing one of the arguments for the maintenance of tariffs, namely, that they are necessary to protect trade from unfair competition due to undue depreciation of a competitor's exchange rates.

Indeed, if I remember aright, in that tri-partite agreement the three Powers expressed the hope that it would tend to a reduction of international trade barriers. That is a hope that we share, but we do not think that we should necessarily wait to give a lead until they have put their cards on the table. I believe it is a great opportunity now, when trade is so much better than it was, for us to give a bold lead, and we have, as I have suggested, good grounds for thinking that those countries and others would come along with us. I believe that in a year or two, assuming, as we all hope, that we avoid a war, the Government will be faced, if they are to avoid an enormous increase of unemployment, with three alternative policies to be adopted, either as alternatives or supplementaries—either to keep on in munitions employment hundreds of thousands of people who are not really necessary for making munitions; or to develop public works in a way which the Government never have shown any notion of undertaking; or to free trade so as to secure general expansion. Admittedly, that would be an extremely difficult thing to do.

At times of slump and when our and other armament programmes were tending to come to an end, the dislocation of particular vested interests would be much more obvious than a general stimulus. People would say with some show of reason that if ever there were a time when it was not desirable to do anything of that kind it was when we were concentrating as far as possible on retaining and conserving what we have got. That is why we say that the time to reduce barriers is now, and we put forward this as a definite practical proposal for to-day. As I have said, we ought not to wait too much upon other countries, or try to operate too much by bilateral agreements, though I am not denying that the work is very difficult. I think even the main author and patentee of bilateral agreements must be in some cases a little disappointed with their effects, and surely there are obvious signs that something bigger than bilateral agreements, as the President of the Board of Trade has hitherto known them, is now possible.

I do not want to remind the Committee of what other Members have mentioned, namely, the movements which are undoubtedly going on in France and in the United States, or still less of any utterances made by leading Empire statesmen, because the last thing I want to do at a time when the Conference is actually going on, is to draw any utterances of theirs into what might seem to be party politics. We must leave that with best hopes. But we do hope that a leading Member of the Government however high the office he may be called upon to hold, will not be debarred by an hereditary loyalty from considering such suggestions as I have ventured to put forward as a practical possibility. No one nowadays, in the face of facts as we see them, can regard Protection as a real end in itself, The hon. Member who preceded me, in an interest- ing speech, said as clearly and definitely as anybody that he hoped for a genuine reduction in tariffs. The best that can be said of Protection is what is said about rearmament, that it is a regrettable necessity, and we believe that now there is an unexampled opportunity of getting rid, very largely, of that regrettable necessity from our system.

I will conclude by asking for big and bold action now, and on that point I will recall something I heard the other day which rather amused me. It was recalling what was said to have happened after one of the numerous international conferences on economic questions to which we as usual had sent high experts. When they meet the representatives of other countries there is usually unanimous agreement over what shall be done and then as a rule nothing happens. It is related that after one of those conferences our representatives returned. They were economists—and economists, after all, although we sometimes forget it, are also human beings—and they had done their best to recommend not only what was economically desirable but what was practically possible. They were very properly thanked for their services by some important Minister who, when the thanks were over turned to them and said, "But now, really Gentlemen, what about it?" They were quite surprised to think that apparently the Minister had not appreciated what they had said, and he was equally surprised to think that they had meant what they said to be taken literally.

We do not want to press the Government to tell us now how they are getting on with their inquiries either as respects France or the United States, or other parts of Europe or the Dominions. The President of the Board of Trade said they were making a survey of the world, and that is right, and, as I have said, I do not want to quote, as if I were making any point against them, what has been said by leading Imperial statesmen, but I think I may assume with some certainty that the general effect of the inquiries which have been and are being made is that great things are now possible if only this Government will give a big lead. Other Governments are now in a very much more forward position than they have been for some considerable time, and with the present revival things are much more favourable for an alteration than they have been. I hope that this time the Government will not say to their advisers, when they return after feeling the pulse of different countries, and making their reports, "Now, really, what about it?" but that they will take advantage of the many winds now playing in the direction of greater freedom and initiate a big change of policy. Let us act by all means, if we can, with other nations, but let us get away from the statement of the Prime Minister that the initiative rests with those other nations. Let us take the initiative ourselves.

10.30 p,m,

Dr. Burgin

This is the occasion upon which the work of the Board of Trade is subjected to scrutiny, and when the Debate lasts for the whole of the Parliamentary day it is natural that the subject should roam over a very wide field. We have had an abstract discussion on academic questions relating to an ideal trade policy for a country of Western Europe, and we have had severely practical questions of detail to Ministers on the operation of individual sections of their policy. Obviously, in any reply, I can but make a selection of some of the points that have been raised, and endeavour to bring the Committee back to a sense of proportion of the real subject under discussion. Let me, with the indulgence of the Committee, attempt to do that in the few minutes that remain.

I suspect, although hon. Members on one side refer to the freeing of trade and hon. Members on the other side may refer to its regulations, that there is in reality, in all parts of the Committee, a much greater measure of agreement than would appear on the surface. I expect it would be quite untrue to say that no one in any part of the Committee would not subscribe to the idea that it was desirable in the interests of the United Kingdom, of the Empire and of the world, that a freer exchange of commodities and services should take place the wide world over. The differences that have emerged in the discussion are as to the way in which that increase in international trade could be bought about, and what help would be given or hindrance created by the adoption or failure to adopt certain lines of policy. With the exception of a relatively small number of people, who conceive themselves to be able by their own hands to supply their own wants, it is true broadly, that every man, woman and child in the world depends in some measure or other upon the exchange of services and commodities. It is axiomatic that by far the greater proportion of the population of the world is concerned in the production of some primary product, either above the ground or below it. The great contribution which the Government of the United Kingdom have made to the resumption of world trading conditions has been in arresting the fall in commodity prices, the restoration of some element of confidence in the world and the giving back to the producers of those primary products a return for their labour and service which has made them again purchasers of industrial goods.

Reference is made to the fact that a large part of the improvement in the trade of the United Kingdom has been concerned with internal trade, but is it not natural that you must proceed gradually? You must first restore confidence in your own immediate surroundings, and then, firmly planted on that confidence, increase the area in which confidence reigns. In that way confidence was restored in 1932; the internal market began to receive attention and has expanded beyond dreams. That represents 44,000,000 people or thereabouts.

With regard to the Ottawa Agreements, whatever else they may have achieved, and much has been said on both sides, let the Committee bear in mind the fact that the Ottawa Agreements have been responsible for spreading the confidence that reigned in the internal market, thus restoring it, not to 44,000,000, but to something over 400,000,000 people, representing the population of the Empire. That is very nearly a quarter of the entire world. After starting with the United Kingdom market and improving the confidence within it, extending that confidence to the Empire and thus covering roughly a quarter of the world, the policy of bilateral agreements was then commenced, gradually, country by country, extending the area of the world's surface and the proportion of the world's population throughout which confidence reigned. That is a very considerable performance. What is the result? The result is that the decline in international trade has been definitely arrested. That is a great achievement; to stop something going the wrong way is in fact an advance. The decline in international trade has been arrested, and the share of this country in world trade is increasing. No doubt it would be better if our share were increasing in a trade that was itself increasing, but do not let us underrate the value of what has in fact been achieved. A decline in the gross total of international trade has been arrested, and our own proportion has been increased.

In 1932, our proportion of the world's export trade was just under 10 per cent. It was exceeded by the United States and by Germany. Last year, our percentage of international trade was 10.6, and the only country that exceeded us was the United States. Let us bear in mind, too, while we are talking of the share of international trade, that a large percentage of the trade of the United States is in raw materials—petrol and cotton are examples that will occur to the minds of Members of the Committee—whereas a large proportion of our United Kingdom exports represents manufactured goods. That makes the achievement all the greater. The recovery in our trade, which has continued steadily, was perhaps at a greater rate than was thought probable even last year. Our improvement has gone on in the home market for the normal products of industry, in addition to whatever effect has been caused by the Defence programme. It is quite an illusion for the Committee to believe that what have been described as boom conditions can to any large extent be attributed to the Defence programme. I want the Committee to take it as a sober statement of fact that there has been an expansion in the home demand for the normal products of industry, apart from the effect that has been caused by the Defence programme.

After these opening observations, let me come to some matters that have arisen in the discussion. The hon. Member for Seaham (Mr. Shinwell) put to me a large number of questions during the course of a very interesting speech. He will forgive me if I have not the opportunity now for dealing with them, but he asked me to tell the Committee what the policy is with regard, for instance, to such a country as Argentina—whether this country requires repayment of its debts, or whether it desires to exclude goods from Argentina. Those are not alternatives. This country desires a return on the capital investments which it has made for the development of that great South American country, with such infinite possibilities of expansion; it also desires to provide a great market for its cereals and various other products, and in return to sell to that country manufactured goods, not overlooking the very large volume of textiles from Lancashire and elsewhere in the country that are sold to Argentina in exchange.

I would ask the hon. Gentleman to allow me to deal with share pushing by way of question and answer rather than by giving him a detailed account now. The information is all at his disposal. There is considerable activity in connection with the matter and if he will put a question down it will be dealt with.

In the earlier part of the Debate the hon. Member for East Birkenhead (Mr. White) referred to the fact that under the trade agreement with Germany there was perhaps a suggestion that she was confined to the choice of either guns or butter, whereas it was alleged that the British Government could have both guns and butter if it so desired. I refer to the matter in passing only because these rhetorical observations have their place, but I would remind the Committee that in trade agreements between the United Kingdom and foreign countries lesson No. 2 of the negotiation—my right hon. Friend gave lesson No. 1 — is that for an agreement to be satisfactory it must be mutual, and if we claim advantages from a foreign country, we must see that advantages considered by them to be a fair equivalent are given. What was the position with Germany? Whenever Germany sold goods in this country sterling credits were produced as a result, and 55 per cent. of the sterling equivalent here was used by Germany for the purposes of the purchase of United Kingdom goods, 10 per cent. went to pay off old trading debts and 35 per cent. dealt with the repayment of financial obligations. So that Germany, although she was indebted to us on many accounts at that time, was able to purchase here goods to the value of more than a half of every £100 of the goods that she sold. How can it be said that there was any restriction placed upon Germany, giving her the alternative of guns or butter, when she was able to use 55 per cent. of her sales for any pur- pose she liked? The 10 per cent. which was used to repay old debts has resulted in over £5,000,000 being paid to industrialists in this country who had exported goods to Germany and had hitherto failed to obtain payment.

The hon. Member for South Bradford (Mr. Holdsworth), in accordance with his usual wont, addressed to me a number of questions. Again he will forgive me if I take but two and deal for a moment merely with the question that he raised as to the Spindles Board and the question of the Italian lira balances. No statement has been made by the Spindles Board. I have no knowledge of the trade journal to which he referred. If there is anything in that trade journal giving figures, those figures do not emanate from the Spindles Board and they are quoted without authority. Of course, it would not be difficult for a number of mills which have sold their spindles to chronicle the facts that they have been sold and for some intelligent person to add them up, but the resulting total would not be the number of spindles bought but the number of spindles sold by certain mills. The hon. Member said that there were advertisments in the "Manchester Guardian" suggesting that there were people interested in buying spinning mills with or without machinery, and he quoted the advertisements as an instance of inconsistency, spindles being bought up for restoration and at the same time being sold for use. As the trade is becoming more profitable through the operation of the Spindles Board, it is not unnatural that people should be thinking of acquiring spinning mills.

The cotton industry has had some successes recently in bringing the prices of yarn on to a more profitable basis. The hon. Member is much too good a business man to want anybody to continue to manufacture something at a loss. It is neither healthy within the trade nor without. The successful basis of trade is that whoever is operating secures a fair return for his labour be he employer or employé. That is not less true of cotton yarns than it is of any other commodity, and yarn prices have been brought back to a more profitable level. The hon. Member for South Bradford will recall, as will the other Members of the Committee, that cotton has itself risen; that the prices of the ingredients con- tributing to the yarn have gone up. Demand has increased, and it has been necessary to increase production. A substantial increase cannot be made all at once; and so it is true that users of some quantities and qualities of yarn have not been able to secure the whole of their stocks at once, but in general there is not and has not been a shortage of yarn, nor is there, nor need there be the prospect of any such shortage. There is definitely, on the information in the possession of the Board of Trade, no lack of cotton spindles.

The Committee will remember that with regard to Italy the hon. Member for South Bradford said that under the operation of the United Kingdom-Italian Trade Agreement certain deposits had to be put up by Italian purchasers of British goods, that these deposits were to be of a given rate of exchange, but that ultimately, when the deposits were realised, they came through at the decreased rate of exchange, and in consequence the English exporters lost the difference. Repeated representations have been made to the Italian authorities on the matter, and the Italian Government have issued a decree laying down the direction that the debtors ought to deposit the amount. They have issued a number of circulars on the subject. The debtors are fully aware of their obligations. Whatever pressure can be brought by representation to the Italian Government has been brought and is continuing to be brought, and if advice is being given to Bradford exporters to go to Italy in search of their money, it is for the very obvious reason that an agreement has been made between two Governments which is perfectly clear in its interpretation. If a question arises between a national of the one country and a national of the other under an agreement, very often the shortest cut in a dispute between nationals of two countries is to courts of law. The hon. Member for South Bradford can rest assured that if there are opportunities open to the United Kingdom Government to bring further pressure to bear on the Italians that will be done.

Mr. Holdsworth

It is rather important. Why I quoted the suggestion that Bradford firms should take legal action was because the Commercial Attaché at Rome advised that action. Do I understand now that this is rather a different policy as compared with what the Commercial Attaché said, and that the Government are willing and will continue to do what they can in order to avoid litigation wherever possible?

Dr. Burgin

Quite independently of the rights of "A" against "B." Whenever it is brought to the notice of the Government Department that a national is suffering by the failure of another country to implement an agreement, there is always the opportunity of diplomatic representation. That kind of pressure will continue to be brought. Whether any particular exporter is content to wait or take what is clearly the legal remedy open to him at once must be a matter of decision for himself. Nothing that I have said should in any way dissuade the Bradford exporter from using these remedies if he so wishes. But the Government Department will continue to use its influence.

The hon. Member for Rochdale (Mr. Kelly) raised questions about wages and employment for the unemployed and asked a number of other questions with regard to British firms ordering ships abroad and about the Enemy Debts Department. Let me deal with wages. There are 13,000,000 insured workpeople between the ages of 16 and 64 in industry in the United Kingdom outside agriculture. Of these 13,000,000 in the year 1936 something over 4,000,000 work-people secured increases in wage rates of £487,000 weekly full-time rates of wages.

Mr. Kelly

What does that mean now?

Dr. Burgin

Let me just finish the statistics and then I will give way. Roughly a quarter of the entire insured population received an increase amounting to just under £500,000 a week, and in the first four months of 1937 a further 2,750,000, making, with the 4,000,000, more than half of the entire insured workpeople of the country, received a net weekly increase of a further £287,000, so that we have more than half the insured workpeople receiving something like £750,000 sterling extra full time wages.

Mr. Kelly

I do not deny that these increases have taken place, but it would be of great interest to know what that means to the individual worker, and how much a week the workers are in receipt of at this time.

Dr. Burgin

When the hon. Member who knows the facts already puts any part of it in question form the answer will be given. With regard to the Enemy Debts Department, that Department is naturally bringing its labours to a close, but there are certain matters which are still dependent on decisions in the High Court of Justice. Until those decisions are given liquidation of the Department cannot take place. It is quite evident that you cannot close an account so long as some question of principle remains undecided. The hon. Member for Kidderminster (Sir J. Wardlaw-Milne) asked whether the policy of the tri-partite agreement was to be followed up and extended and the answer is, "Yes."

The subject which I wish to say a word about now is the policy of trade agreements. The hon. Member for Dundee (Mr. Foot) asked about trade agreements, and I interjected to point out that the Government policy of continuing bilateral negotiations was a continuous one, and that I myself saw no reason for him to assert roundly that that policy had reached the limits of its usefulness and that on the contrary negotiations continued. In the last year trade agreements have been made with Peru and Cuba, and there have been a new supplementary agreement with Denmark, a new Argentine agreement, new quota agreements with Italy and Yugoslavia, and an exchange of Notes with Brazil. That is a fairly useful programme during the course of 12 months, and I know of no reason to suppose that the hon. Member and those associated with him by putting down this Motion have stopped that useful process.

Hon. Members in different parts of the Committee have asked the question, "Cannot the Government of this country give a lead?"; "Cannot some big bold lead be given?" In litigation there is a useful procedure under which a party to an action is allowed to go to Court and ask for further and better particulars of the allegation. I wish that procedure was open to me at this moment. I should like further and better particulars of the big bold lead which the Government could give. It is all very well to dash down the slope of a suburban station and jump into a train, but I should prefer first to know whether it was the right train.

It is useful to consider whether the objections to bilateral agreements that have been raised by hon. Members, that the process is slow, that it covers a limited area, that it deals with matters that are likely to cause difficulty, are well founded. If hon. Members will look back into the history of the negotiations they will have little cause for encouragement in the suggestion that multilateral negotiation is likely to be any quicker or to produce any greater prospects of success. Reference has been made to Oslo, to Ouchy, and to low tariff groups. I have yet to hear that there is a group of countries that wants to form itself into a low tariff group, and I have yet to hear that if they did they would not be in a minority among the countries of the world.

This country wants the right to trade with the entire world. It is our greatest interest to trade with the greatest number. It would be a suicidal policy for this country to agree to give special consideration for a small group if in so doing they jeopardised the prospects of trading with a greater and more important number of countries. That is why the multilateral agreements break down when put to the test, and why these proposals for groups of law tariff countries will not work out in practice. If, however, any proposal of a definite character is made, it will always receive our careful consideration.

Mr. J. J. Davidson

The right hon. Member referred to the fact that there had been an increase of £750,000 in wages. Can he give us any idea, apart from question and answer, as to the rise in the cost of living during that same period?

Dr. Burgin

Yes, I could give an answer, and the answer would be that it is infinitesimal compared with the rise in wages.

Question put, "That a sum, not exceeding £205,432, be granted for the said Service."

The Committee divided: Ayes, 92; Noes, 142.

Division No. 189.] AYES. [3.12 p.m.
Agnew, Lieut.-Comdr. P. G. Gluckstein, L. H. Peake, O.
Albery, Sir Irving Goodman, Col. A. W. Perkins, W. R. D.
Allen, Col. J. Sandeman (B'knhead) Grant-Ferris, R. Peters, Dr. S. J.
Allen, Lt.-Col. Sir W. J. (Armagh) Grattan-Doyle, Sir N. Petherick, M.
Anderson, Sir A. Garrett (C. of Ldn.) Gridley, Sir A. B. Pickthorn, K. W. M.
Anstruther-Gray, W. J. Grimston, R. V. Pilkington, R.
Apsley, Lord Guest, Hon. I. (Brecon and Radnor) Pownall, Lt.-Col. Sir Assheton
Assheton, R. Harbord, A. Radford, E. A.
Astor, Hon. W. W. (Fulham, E.) Harvey, Sir G. Ramsay, Captain A. H. M.
Haillie, Sir A. W. M. Harvey, T. E. (Eng. Univ's.) Ramsbotham, H.
Balfour, Capt. H. H. (Isle of Thane[...]) Heilgers, Captain F. F. A. Ramsden, Sir E.
Baxter, A. Beverley Hepworth, J. Rathbone, J. R. (Bodmin)
Beaumont, M. W. (Aylesbury) Herbert, Capt. Sir S. (Abbey) Rawson, Sir Cooper
Beaumont, Hon. R. E. B. (Portsm'h) Higgs, W. F. Reid, W. Allan (Derby)
Bernays, R. H. Hills, Major Rt. Hon. J. W. (Ripon) Robinson, J. R. (Blackpool)
Blaker, Sir R. Hope, Captain Hon. A. O. J. Ropner, Colonel L.
Bossom, A. C. Hopkinson, A. Ross, Major Sir R. D. (Londonderry)
Boyce, H. Leslie Horsbrugh, Florence Ross Taylor, W. (Woodbridge)
Brass, Sir W. Hudson, Capt. A. U. M. (Hack., N.) Rowlands, G.
Briscoe, Capt. R. G. Hudson, R. S. (Southport) Runciman, Rt. Hon. W.
Brocklebank, Sir Edmund Hulbert, N. J. Russell, R. J. (Eddisbury)
Burgin, Rt. Hon. Dr. E. L. Hume, Sir G. H. Russell, S. H. M. (Darwen)
Campbell, Sir E. T. Hunter, T. Salmon, Sir I.
Gary, R. A. Hurd, Sir P. A. Salt, E. W.
Cazalet, Capt. V. A. (Chippenham) James, Wing-Commander A. W. H. Sanderson, Sir F. B.
Chamberlain, Rt. Hn. N. (Edgb't'n) Jarvis, Sir J. J. Savory, Sir Servington
Channon, H. Kerr, H. W. (Oldham) Shaw, Major P. S. (Wavertree)
Chorlton, A. E. L. Kerr, J. Graham (Scottish Univs.) Shaw, Captain W. T. (Forfar)
Christie, J. A. Keyes, Admiral of the Fleet Sir R. Shepperson, Sir E. W.
Clydesdale, Marquess of Lambert, Rt. Hon. G. Simon, Rt. Hon. Sir J. A.
Cobb, Captain E. C. (Preston) Lookie, J. A. Smith, L. W. (Hallam)
Colville, Lt.-Col. Rt. Hon. D. J. Lees-Jones, J. Southby, Commander Sir A. R. J.
Cook, Sir T. R. A. M. (Norfolk, N.) Lennox-Boyd, A. T. L. Stewart, J. Henderson (Fife, E.)
Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs) Lewis, O. Stourton, Major Hon. J. J.
Cooper, Rt. Hn. T. M. (E'nburgh, W.) Liddall, W. S. Strauss, E. A. (Southwark, N.)
Cox, H. B. T. Lindsay, K. M. Strauss, H. C. (Norwich)
Cranborne, Viscount Llewellin, Lieut.-Col. J. J. Tate, Mavis C.
Crookshank, Capt. H. F. C. Loftus, P. C. Taylor, C. S. (Eastbourne)
Cross, R. H. Lyons, A. M. Thomson, Sir J. D. W.
Crossley, A. C. Mabane, W. (Huddersfield) Touche, G. C.
Crowder, J. F. E. MacAndrew, Colonel Sir C. G. Train, Sir J.
Do la Bère, R. McEwen, Capt. J. H. F. Tree, A. R. L. F.
Denman, Hon. R. D. McKie, J. H. Turton, R. H.
Doland, G. F. Macnamara, Capt. J. R. J. Wallace, Capt. Rt. Hon. Euan
Donner, P. W. Magnay, T. Ward, Irene M. B. (Wallsend)
Dorman-Smith, Major Sir R. H. Maitland, A. Waterhouse, Captain C.
Dower, Capt. A. V. G. Manningham-Buller, Sir M. Watt, G. S. H.
Drewe, C. Margesson, Capt. Rt. Hon. H. D. R. Wedderburn, H. J. S.
Duckworth, W. R. (Moss Side) Markham, S. F. Williams, C. (Torquay)
Dugdale, Captain T. L. Mayhew, Lt.-Col. J. Windsor-Clive, Lieut.-Colonel G.
Duncan, J. A. L. Mellor, Sir J. S. P. (Tamworth) Winterton, Rt. Hon. Earl
Dunglass, Lord Mills, Sir F. (Leyton, E.) Wood, Hon. C. I. C.
Elliot, Rt. Hon. W. E. Mitchell, Sir W. Lane (Streatham) Womersley, Sir W. J.
Elmtey, Viscount Moore, Lieut.-Col. Sir T. C. R. Wright, Squadron-Leader J. A. C.
Emery, J. F. Moreing, A. C. Young, A. S. L. (Partick)
Emmott, C. E. G. C. Morris-Jones, Sir Henry
Everard, W. L. Morrison, Rt. Hon. W. S. (Cirencestor) TELLERS FOR THE AYES.—
Fleming, E. L. Munro, P. Lieut.-Colonel Sir A. Lambert Ward
Furness, S. N. O'Neill, Rt. Hon. Sir Hugh and Major Sir George Davies.
Acland, R. T. D. (Barnstaple) Bremfield, W. Davidson, J. J. (Maryhill)
Adams, D. (Consett) Buchanan, G. Davies, R. J. (Westhoughton)
Adams, D. M. (Poplar, S.) Cape, T. Day, H.
Alexander, Rt. Hon. A. V. (H'lsbr.) Charleton, H. C. Dobbie, W.
Attlee, Rt. Hon. C. R. Cluse, W. S. Dunn, E. (Rother Valley)
Banfield, J. W. Cocks, F. S. Ede, J. C.
Barr, J. Daggar, G. Edwards, Sir C. (Bedwellty)
Batey, J. Dalton, H. Evans, D. O. (Cardigan)
Evans, E. (Univ. of Wales) Kirkwood, D. Sexton, T. M.
Fletcher, Lt.-Comdr. R. T. H. Lee, F. Shinwell, E.
Foot, D. M. Leonard, W. Short, A.
Gallacher, W. Logan, D. G. Smith, Ben (Rotherhithe)
Gardner, B. W. Lunn, W. Smith, E. (Stoke)
Garro Jones, G. M. Macdonald, G. (Ince) Smith, Rt. Hon. H. B. Lees- (K'ly)
George, Major G. Lloyd (Pembroke) McGhee, H. G. Smith, T. (Normanton)
Gibbins, J. McGovern, J. Stewart, W. J. (H'ght'n-le-Sp'ng)
Green, W. H. (Deptford) MacNeill, Weir, L. Strauss, G. R. (Lambeth, N.)
Greenwood, Rt. Hon. A. Mainwaring, W. H. Thorne, W.
Grenfell, D. R. Mander, G. le M. Thurtle, E.
Griffiths, J. (Llanelly) Maxton, J. Tinker, J. J.
Hall, G. H. (Aberdare) Montague, F. Viant, S. P.
Harris, Sir P. A. Morrison, Rt. Hon. H. (Hackney, S.) Walker, J.
Henderson, A. (Kingswinford) Morrison, R. C. (Tottenham, N.) Watson, W. McL.
Henderson, J. (Ardwick) Muff, G. Wedgwood, Rt. Hon. J. C.
Henderson, T. (Tradeston) Naylor, T. E. Welsh, J. C.
Holdsworth, H. Noel-Baker, P. J. Westwood, J.
Jenkins, A. (Pontypool) Owen, Major G. White, H. Graham
Johnston, Rt. Hon. T. Parker, J. Whiteley, W.
Jones, A. C. (Shipley) Potts, J. Williams, T. (Don Valley)
Jones, Morgan (Caerphilly) Riley, B. Wilson, C. H. (Attercliffe)
Kelly, W. T. Rowson, G. Woods, G. S. (Finsbury)
Kennedy, Rt. Hon. T. Sanders, W. S.
Kirby, B. V. Seely, Sir H. M. TELLERS FOR THE NOES.—
Mr. Mathers and Mr. Groves.
Division No. 190.] AYES. [10.58 p.m.
Acland, Rt. Hon. Sir F. Dyke Griffiths, J. (Llanelly) Oliver, G. H.
Adams, D. (Consett) Groves, T. E. Owen, Major G.
Alexander, Rt. Hon. A. V. (H'lsbr.) Hall, G. H. (Aberdare) Paling, W.
Banfield, J. W. Hall, J. H. (Whitechapal) Parker, J.
Barnes, A. J. Harris, Sir P. A. Parkinson, J. A.
Barr, J. Harvey, T. E. (Eng. Univ's.) Potts, J.
Batey, J. Henderson, A. (Kingswinford) Pritt, D. N.
Bellenger, F. J. Henderson, J. (Ardwick) Ritson, J.
Benn, Rt. Hon. W. W. Henderson, T. (Tradeston) Roberts, Rt. Hon. F. O. (W. Brom.)
Broad, F. A. Heldsworth, H. Rowson, G.
Bromfield, W. Jenkins, A. (Pontypool) Salter, Sir J. Arthur (Oxford U.)
Brown, C. (Mansfield) Jenkins, Sir W. (Neath) Sexton, T. M.
Cape, T. Johnston, Rt. Hon. T. Shinwell, E.
Chater, D. Jones, A. C. (Shipley) Smith, E. (Stoke)
Cocks, F. S. Jones, Sir H. Haydn (Merieneth) Smith, T. (Normanton)
Daggar, G. Jones, Morgan (Caerphilly) Stewart, W. J. (H'ght'n-le-Sp'ng)
Dalton, H. Kelly, W. T. Taylor, R. J. (Morpeth)
Davidson, J. J. (Maryhill) Kennedy, Rt. Hon. T. Tinker, J. J.
Dobbie, W. Kirby, B. V. Watson, W. McL.
Dunn, E. (Rother Valley) Lawson, J. J. Welsh, J. C.
Ede, J. C. Lee, F. Westwood, J.
Edwards, Sir C. (Bedwellty) Leonard, W. White, H. Graham
Evans, D. O. (Cardigan) Leslie, J. R. Whiteley, W.
Evans, E. (Univ. of Wales) Logan, D. G. Williams, E. J. (Ogmore)
Foot, D. M. Lunn, W. Williams, T. (Don Valley)
Gallacher, W. McGhee, H. G. Windsor, W. (Hull, C.)
Garro Jones, G. M. MacLaren, A. Woods, G. S. (Finsbury)
Graham, D. M. (Hamilton) Maclean, N. Young, Sir R. (Newton)
Green, W. H. (Deptford) Mainwaring, W. H.
Greenwood, Rt. Hon. A. Mathers, G. TELLERS FOR THE AYES.—
Grenfell, D. R. Milner, Major J. Sir Hugh Seely and Mr. R. Acland.
Griffith, F. Kingsley (M'ddl'sbro, W.) Morrison, Rt. Hon. H. (Hackney, S.)
Acland-Troyte, Lt.-Col. G. J. Emery, J. F. Munro, P.
Adams, S. V. T. (Leeds, W.) Emmott, C. E. G. C. Nall, Sir J.
Agnew, Lieut.-Comdr. P. G. Emrys-Evans, P. V. O'Connor, Sir Terence J.
Allen, Col. J. Sandsman (B'knhead) Entwistle, Sir C. F. O'Neill, Major Rt. Hon. Sir Hugh
Allen, Lt.-Col. Sir W. J. (Armagh) Erskine-Hill, A. G. Orr-Ewing, I. L.
Aske, Sir R. W. Flides, Sir H. Palmer, G. E. H.
Assheton, R. Fleming, E. L. Perkins, W. R. D.
Atholl, Duchess of Fremantle, Sir F. E. Radford, E. A.
Beaumont, M. W. (Aylesbury) Furness, S. N. Raikes, H. V. A. M.
Beaumont, Hon. R. E. B. (Portsm'h) Fyfe, D. P. M. Ramsay, Captain A. H. M.
Blaker, Sir R. Goldie, N. B. Ramsden, Sir E.
Bossom, A. C. Grimston, R. V. Rathbone, J. R. (Bodmin)
Boulton, W. W. Guinness, T. L. E. B. Reed, A. C. (Exeter)
Braithwaite, Major A. N. Gunston, Capt. D, W. Reid, W. Allan (Derby)
Brass, Sir W. Hannah, I. C. Remer, J. R.
Brown, Brig.-Gen. H. C. (Newbury) Harbord, A. Rickards, G. W. (Skipton)
Burghley, Lord Haslam, H. C. (Horncastle) Robinson, J. R. (Blackpool)
Burgin, Rt. Hon. Dr. E. L. Haslam, Sir J. (Bolton) Ross, Major Sir R. D. (Londonderry)
Campbell, Sir E. T. Heilgers, Captain F. F. A. Ross Taylor, W. (Woodbridge)
Cary, R. A. Heneage, Lieut.-Colonel A. P. Rowlands, G.
Castlereagh, Viscount Hepworth, J. Runciman, Rt. Hon. W.
Cazalet, Thelma (Islington, E.) Higgs, W. F. Russell, S. H. M. (Darwen)
Channon, H. Hope, Captain Hon. A. O. J. Samuel, M. R. A.
Chorltan, A. E. L. Hopkinson, A. Sassoon, Rt. Hon. Sir P.
Christie, J. A. Horsbrugh, Florence Shaw, Major P. S. (Wavertree)
Clarke, Lt.-Col. R. S. (E. Grinstead) Hume, Sir G. H. Sinclair, Col. T. (Queen's U. B'lf'st)
Clydesdale, Marquess of Hunter, T. Smiles, Lieut.-Colonel Sir W. D.
Cobb, Captain E. C. (Preston) James, Wing-Commander A. W. H. Smith, L. W. (Hallam)
Colfox, Major W. P. Jones, L. (Swansea W.) Somervell, Sir D. B. (Crowe)
Colville, Lt.-Col. Rt. Hon. D. J. Keeling, E. H. Southby, Commander Sir A. R. J.
Courthope, Col. Rt. Hon. Sir G. L. Kerr, Colonel C. I. (Montross) Spens, W. P.
Cox, H. B. T. Kerr, J. Graham (Scottish Univs.) Strauss, E. A. (Southwark, N.)
Cranborne, Viscount Lamb, Sir J. Q. Strauss, H. G. (Norwich)
Craven-Ellis, W. Leckie, J. A. Strickland, Captain W. F.
Critchley, A. Lees-Jones, J. Thomson, Sir J. D. W.
Crookshank, Capt. H. F. C. Leighton, Major B. E. P. Titchfield, Marquess of
Cross, R. H. Liddall, W. S. Wallace, Capt. Rt. Hon. Euan
Crowder, J. F. E. Llewellin, Lieut.-Col. J. J. Ward, Irene M. B. (Wallsend)
Cruddas, Col. B. Lloyd, G. W. Wardlaw-Milne, Sir J. S.
Davies, Major Sir G. F. (Yeovil) Loftus, P. C. Waterhouse, Captain C.
De Chair, S. S Lyons, A. M. Williams, H. G. (Croydon, S.)
Dorman-Smith, Major Sir R. H. MacAndrew, Colonel Sir C. G. Windsor-Clive, Lieut.-Colonel G.
Duckworth, W. R. (Moss Side) MacDonald, Sir Murdoch (Inverness) Wood, Hon. C. I. C.
Duggan, H. J. McKie, J. H. Wood, Rt. Hon. Sir Kingsley
Duncan, J. A. L. Margesson, Capt. Rt. Hon. H. D. R.
Eastwood, J. F. Markham, S. F. TELLERS FOR THE NOES.—
Eckersley, P. T. Mayhew, Lt.-Col. J. Lieut.-Colonel Sir A. Lambert
Elliot, Rt. Hon. W. E. Mellor, Sir J. S. P. (Tamworth) Ward and Mr. James Stuart.
Ellis, Sir G. Morris-Jones, Sir Henry

Original Question again proposed.

Sir Percy Harris rose

It being after Eleven of the Clock, The CHAIRMAN left the Chair to make his Report to the House.

Committee report Progress; to sit again To-morrow.