Commons Sitting of 7 February 1939

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

PRIVATE BUSINESS.
All Hallows Lombard Street Bill,
Read a Second time, and committed.
Bristol Waterworks Bill,
Colne Valley Water Bill,
Dover Coal Dues (Abolition) Bill,
Read a Second time, and referred to the Examiners of Petitions for Private Bills.
Exeter Extension Bill,
Read a Second time, and committed.
Jarrow Corporation Bill,
London and North Eastern Railway (Superannuation Fund) Bill,
To be read a Second time To-morrow.
London Midland and Scottish Railway Bill,
Read a Second time, and referred to the Examiners of Petitions for Private Bills.
London Passenger Transport Board Bill,
To be read a Second time upon Tuesday next.
Maryport Harbour Bill,
Read a Second time, and committed.
Newquay and District Water Bill,
North Metropolitan Electric Power Supply Bill,
Read a Second time, and referred to the Examiners of Petitions for Private Bills.
Saint Nicholas Millbrook (Southampton) Church (Sale) Bill,
Read a Second time, and committed.
Sheffield Corporation Bill,
To be read a Second time To-morrow.
South Staffordshire Water Bill,
Read a Second time, and referred to the Examiners of Petitions for Private Bills.
Southern Railway Bill,
To be read a second time upon Thursday.
Stalybridge Hyde Mossley and Dukinfield Transport and Electricity Board Bill,
To be read a Second time To-morrow.
Sunderland Corporation Bill,
To be read a Second time upon Monday next.
Tiverton Corporation Bill,
Read a Second time, and committed.
Walsall Corporation Bill,
To be read a Second time upon Tuesday next.
Wear Navigation and Sunderland Dock Bill,
To be read a Second time To-morrow.
Willenhall Urban District Council Bill,
Read a Second time, and committed.

ORAL ANSWERS TO QUESTIONS.
  SCOTLAND.

    WATER SUPPLIES, HEBRIDES.
    Mr. Malcolm MacMillanasked the Secretary of State for Scotland whether any proposals have recently been placed before him by the county councils of Ross-shire and Inverness for communal water supplies in the Isle of Lewis and the Southern Isles of the Outer Hebrides; and, if so, what action he proposes to take?
    The Secretary of State for Scotland (Mr. Colville): The answer to the first part of the question is in the negative, and the second part, therefore, does not arise.
    Mr. MacMillan: In view of the fact that there has been a deterioration already in the conditions of water supply in these islands, will not the right hon. Gentleman take some action with the local authorities in the matter?
    Mr. Colville: I am aware of the difficulty experienced in that area, but the question of expense has a large influence on the matter.
    Mr. J. J. Davidson: Can the right hon. Gentleman say how the lack of water facilities there is acting against air-raid precautions?
    Mr. MacMillan: Has the only objection of the right hon. Gentleman arisen in connection with finance; is it not a matter of public health also?

    HIGHLANDS AND ISLANDS COMMITTEE (REPORT).
    Mr. Henderson Stewartasked the Secretary of State for Scotland whether he can now announce the views of the Government upon the recent Highlands report of the Scottish Development Council; and what action it is proposed to take in the matter?
    Mr. Robert Gibsonasked the Secretary of State for Scotland whether he has considered the report of the Highland and Islands Committee, particularly with reference to the appointment of a development commissioner; and what steps he proposes to take to carry out this recommendation?
    Mr. Colville: The report of the committee referred to was published at the end of November last. It covers all aspects of the economic life of the Highlands and Islands and its recommendations are stated to relate to a long range policy of 15 to 20 years. I have the various proposals under active consideration and am already in consultation with the local authorities and other bodies concerned. It is my intention to press on with the consideration of the report as quickly as possible but hon. Members will appreciate that having regard to the range and complexity of the subjects dealt with it will not be possible to announce decisions for some time yet.
    Mr. Stewart: Will my right hon. Friend consider giving his first consideration to the acute distress in the fishing and agricultural industries in the Highlands?
    Mr. Colville: I do not think that I can promise to give priority to one particular subject. A great many important subjects are dealt with in the report, and they are all engaging my attention at the present time.
    Mr. MacMillan: Is the right hon. Gentleman aware that this House unanimously accepted a Resolution de-
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    manding that the Government deal urgently with distress in the Islands and Highlands, and that the Government have taken two years to get a report; and have we to wait for 20 years before action is taken?
    Mr. Colville: If the hon. Member has read the report, as no doubt he has, very carefully, he will see the very great complexity of the subject and the difficulty of suggesting concrete proposals.
    Mr. T. Johnston: Inasmuch as the right hon. Gentleman is in consultation with the local authorities in this matter, may we take it that he will give no countenance to any proposals for a commissar to take over the business of local authorities as recommended in this report?
    Mr. Colville: I do not think that the right hon. Gentleman will expect me to answer that question until I have had time to consider all its implications.

    SPECIAL CONSTABLES.
    Mr. Henderson Stewartasked the Secretary of State for Scotland whether he can make any announcement regarding recent changes in the organisation of the Special Constabulary in Scotland?
    Mr. Colville: I have drawn the attention of all police authorities and chief constables to various steps that can be taken to improve the organisation, training and equipment of special constables. I have also taken action to provide that each county council shall be responsible, throughout the district policed by them for appointing and dismissing special constables, for making regulations for their organisation and training, and for paying the expenses of equipping, training and employing them.

    DEPARTMENT OF HEALTH (SECRETARY).
    Mr. Johnstonasked the Secretary of State for Scotland whether he is aware that the Secretary to the Scottish Department of Health has been transferred to the Treasury in London, and that an officer with Treasury experience only has been substituted as Secretary to the Scottish Department of Health; whether these changes were made at his instigation; and how they are calculated to improve the efficiency of the administration of Health Department business in Scotland?
    Mr. Colville: The former Secretary to the Department of Health for Scotland w as promoted to a senior post in the Treasury. I am satisfied that the selection of his successor was made in the best interests of Scottish administration.
    Mr. Johnston: Does the right hon. Gentleman mind answering that part of the question which asks, "whether these changes were made at his instigation?"
    Mr. Colville: They were not made at my instigation, but they were made with my approval.
    Mr. H. G. Williams: May I ask my right hon. Friend whether he has found any objection by English people when a Scotsman has been appointed by the Government in this country?
    Mr. Colville: The officer mentioned in the question comes of an old Scottish family.

    AIR-RAID PRECAUTIONS.
    Lieut.-Colonel Sir Thomas Mooreasked the Secretary of State for Scotland the nature of the representations received from local authorities or other public bodies in Ayrshire with regard to the official schemes for evacuation, non-evacuation, and billeting?
    Mr. Colville: Four of the 15 town councils in Ayrshire who were asked to carry out the survey of accommodation for the purpose of the Government evacuation scheme have represented that their areas should not be designated as receiving areas. I have promised to consider these representations in the light of the results of the survey. Three of the four town councils have agreed to proceed with the survey, and I hope that the remaining town council will also agree.
    Sir T. Moore: Will my right hon. Friend remember that Ayrshire, and especially the West Coast, has a considerable number of harbours, ports, armament factories and other places that might be likely to attract hostile aircraft?
    Mr. Colville: These circumstances will be taken into account, but the important thing is to get on with the survey.
    Sir T. Mooreasked the Secretary of State for Scotland the nature of the replies received to the circular letter from the Scottish Education Department urging
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    the need for the avoidance on the part of children of playing with gas masks; and what steps have been taken to give publicity to the advice of the Department on this subject?
    Mr. Colville: The circular letter to which my hon. Friend refers did not call specifically for any reply. I have ascertained, however, that in all areas where a distribution of gas masks to children has been made, publicity has been given to the contents of the circular by the means suggested in its second paragraph.
    Mr. Davidson: Will the right hon. Gentleman consider withdrawing the gas masks from the four areas that do not want any children to be evacuated there?

    WESTERN HIGHLANDS AND ISLANDS MAIL CONTRACT.
    Mr. Kirkwoodasked the Secretary of State for Scotland whether he has considered the letter from the Tiree Association protesting against the granting of the mail contract to Messrs. MacBrayne for a further period of 10 years, and urging the development of a daily air service, taking one hour from Glasgow instead of 14 hours by rail and boat as at present; what reply he has given thereto; and what steps he is taking to improve air communications with the Western Isles with a view to bringing the amenities of civilisation within reach of the inhabitants of those islands?
    Mr. Colville: I have received the letter referred to in the first part of the question. I have sent a letter in acknowledgment and have informed the General Post Office and the Air Ministry of its contents. I am informed by my right hon. Friend the Postmaster-General that the air service to Tiree has not yet reached a stage at which it could be used for the carriage of mails. My right hon. Friend the Secretary of State for Air has adopted measures for encouraging the development of air services in this country by means of subsidy and radio and meteorological facilities, and these measures will apply to air services to the Western Isles.
    Mr. Kirkwood: Is the right hon. Gentleman aware of the urgency of the question of speed, and that the time taken is far too long in this case; and seeing that the only means of transport for these islands is by sea, he might push on with the idea

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    of getting them reached by air and not wait for 10 years, for anything may happen in that time?
    Mr. Colville: I agree with the hon. Member that flying in the Western Isles during the last few years has been very helpful, and I want to see it improved.
    Mr. Malcolm MacMillan: Is the right hon. Gentleman aware that the letter from the Tiree Association has certainly not expressed the views of the people in the Western Isles of Scotland who desire our improved steamer service to continue, apart from the air service; and, furthermore, regarding the last part of the question, is he aware that civilisation was in the Western Isles long before it penetrated here?
    Mr. Malcolm MacMillanasked the Secretary of State for Scotland whether he has considered representations from the elected representatives of the Outer Hebrides regarding the excessive freight charges by the MacBrayne Steamer Company, especially on foodstuffs and exports of local fishermen; and whether he has urged, or is urging, the substantial and early reduction of these charges?
    Mr. Colville: I have received a resolution in the sense referred to in the first part of the question. With regard to the second part, I would refer to Article 23 of the contract with Messrs. David MacBrayne Limited which deals with freight charges.
    Mr. MacMillan: Does the right hon. Gentleman realise that there is to be no reduction within two years, but that these burdens upon the people are operating now, and not two years hence? Will the right hon. Gentleman take some steps in the matter?
    Mr. Colville: I think that question had better be discussed when the contract is debated.
    Mr. Gallacher: Is it not a fact that while the rates charged are high the wages paid to the clerks are low?

    ISLE OF SKYE (STEAMER SERVICES).
    Mr. Kirkwoodasked the Secretary of State for Scotland whether he is aware that at present, owing to the fact that Broadford Pier is closed and, as the steamer from Mallaig calls only three days
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    a week at Armadale Pier, people from the South of the Isle of Skye have to go 25 miles to Kyleakin, cross to Kyle of Lochalsh, and thence make a two hours journey by boat to Mallaig; and will he take steps to secure a daily call at Armadale Pier and thereby secure a lasting benefit to the people of the Isle of Skye?
    Mr. Colville: As regards the first part of the question, I am glad to be able to inform the hon. Member that the Department of Agriculture for Scotland have offered the county council of Inverness-shire a grant and loan towards the cost of reconstruction of Broadford Pier. With regard to the second part, the possibility of altering the present services so as to provide for a daily call at Armadale was one of the questions affecting services discussed with the company in connection with the new MacBrayne contract, but it was not found practicable. There is, however, a ferry service daily between 1st May and 15th October.
    Sir Murdoch MacDonald: Is the Minister aware that a boat really does pass daily between Kyle and Mallaig and might well call at Armadale daily as well as at Mallaig and thus give the service asked for?
    Mr. Colville: I do not think I could discuss details at Question Time. Perhaps there may be an opportunity in the Debate.
    Mr. Kirkwood: Would the Secretary of State for Scotland ask that the boat should call at Armadale Pier, which is the pier of Sleat, the southern part of Skye? To reach Mallaig from Armadale people used to go to Broadford, 16 miles by road. Broadford being closed they have to go to Kyleakin, 25 miles by road, then cross the ferry to Kyle of Lochalsh and get the steamer there. Is the right hon. Gentleman aware that to cross to a place five miles across the Sound of Sleat, people have to travel by road 25 miles and then sail for two hours?
    Mr. Colville: It is a question of timing the calls at other ports.

    CLINICS AND DAY NURSERIES.
    Mr. Mathersasked the Secretary of State for Scotland the number of antenatal and post-natal clinics, respectively, in the country in 1937, distinguishing between local authority and private

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    centres; and the number of day nurseries and places for children under five therein.
    Mr. Colville: The number of ante-natal clinics in Scotland in 1937 was 178, of which 164 were provided by local authorities and 14 by voluntary agencies; the number of post-natal clinics was 181, of which 171 were provided by local authorities and 10 by voluntary agencies. The number of day nursersies was 22, of which 14 were provided by local authorities and 8 by voluntary agencies, with approximately 650 places.

    MIDWIVES.
    Mr. Mathersasked the Secretary of State for Scotland the number of midwives employed under the 1937 Maternity Services Act directly by local authorities, through voluntary organisations, and by arrangements with those in private practice, respectively; and for 1937 the percentage of births in Scotland attended by midwives, and the percentage in which medical assistance was required by the midwife.
    Mr. Colville: No midwives are as yet engaged in service under the Maternity Services (Scotland) Act, 1937. Of the total births notified in Scotland during 1937 the percentage attended by private midwives was approximately 24. Medical assistance was required by midwives in approximately 8 per cent. of the total births, equivalent to 33 per cent. of the births attended by midwives.
    Mr. Mathers: Is the right hon. Gentleman satisfied with the development of these services up to the present time?
    Mr. Colville: I want to see more rapid improvement, and I hope that the formulation of the arrangements under the Act, to which I have referred, will shortly bring about that improvement.
    Mr. Westwood: Can the right hon. Gentleman say who are the real obstacles to the acceptance of the schemes which are being prepared by the local authorities under the Midwives Act?
    Mr. Colville: I would rather not say.
    Mr. Westwood: Is it the medical profession?
    Mr. Colville: There have been certain difficulties, but I am hopeful that these will be overcome, and I am anxious to
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    press on in order to get the improvement to which the hon. Gentleman refers.

    HOUSING (ROSS AND CROMARTY).
    Mr. Malcolm MacMillanasked the Secretary of State for Scotland whether he will make a statement regarding the number of applications received and the number accepted for the receipt of assistance under the 1938 Housing Act in Ross and Cromarty, including Isle of Lewis; and when building is likely to begin?
    Mr. Colville: No formal applications have yet been made to the County Council of Ross and Cromarty for assistance under the Housing (Agricultural Population) (Scotland) Act, 1938. The county council's scheme was approved in November last and since then application forms have been sent to about 130 persons who have made inquiries. The county council have made arrangements for their housing officers to visit intending applicants and give them any necessary guidance.

    PUBLIC ASSISTANCE.
    Mr. Westwoodasked the Secretary of State for Scotland the number of persons who were in receipt of public assistance in Scotland, giving out-door and in-door numbers, respectively, as at 15th June, 1931, and 15th January, 1939?
    Mr. Colville: At 15th June, 1931, the numbers of persons, including dependants, in receipt of out-door and in-door public assistance in Scotland were 173,611 and 12,042 respectively. The corresponding figures for 15th January, 1939, were 230,639 and 10,694.
    Mr. Westwood: Does not that prove that there is no real prosperity under the National Government?
    Mr. Colville: No, Sir; there is a variety of factors which account for these increased payments.
    Mr. Lewis: Is it the fact that a considerable proportion of these people who are now receiving public assistance in Scotland were originally immigrants from Ireland?
    Mr. Henderson Stewart: Does it not also mean that the treatment offered is better now than it was in the time of the Labour Government?
    Mr. Davidsonasked the Secretary of State for Scotland the nature of the recent representations made to him by Scottish local authorities on the question of local relief paid to ex-service, old age, and widow pensioners; and whether an inquiry is to be held on this question in the near future?
    Mr. Colville: A number of Scottish local authorities have represented to me that they should be relieved of the charges which they incur in supplementing old age, widows' and orphans' pensions and have made proposals of a varying character to this end. I have received full particulars from these authorities, and I do not think that any further inquiries are necessary at present.
    Mr. Davidson: Has the right hon. Gentleman investigated the reports submitted to him by the local authorities?
    Mr. Colville: Yes, Sir, I attended a Meeting in Glasgow a short time ago, and thereafter I received a good deal of information from the Glasgow Corporation and other local authorities. I am examining it carefully. It raises a large question of policy on which I cannot make a statement now.
    Mr. Davidson: Does the right hon. Gentleman agree that this policy, which places a burden upon the local authorities, ought to be made a national charge?

    DALBEATTIE (AUDITOR'S REPORT).
    Mr. Mathersasked the Secretary of State for Scotland when the report of the auditor on the defalcations in the office of the town clerk of Dalbeattie, at the beginning of 1938, will be available?
    Mr. Colville: I am informed that the auditor has completed his preliminary examination of the accounts and proposes, subject to the necessary procedure as to notice and opportunity for inspection of the abstract by ratepayers, to hold the public audit on 8th March. The terms of the auditor's report will be made available in the usual way after the audit is completed.
    Mr. Mathers: Will the right hon. Gentleman kindly say what is "the usual way?"
    Mr. Colville: The terms of the auditor's report is made available for inspection by ratepayers.

    OLD AGE AND WIDOWS' PENSIONS.
    Mr. Davidsonasked the Secretary of State for Scotland the total amount paid in old age and widows' pensions in Scotland for the years ended September, 1936, 1937 and 1938?
    Mr. Colville: As the reply contains a table of figures I propose, with the hon. Member's permission, to circulate it in the OFFICIAL REPORT.
    Mr. Davidson: Can the right hon. Gentleman say whether the total amount has increased during these years?
    Mr. Colville: Yes, by almost £500,000.
    Following is the reply:
    All are approximate figures.

    Year to 30th September.

    1936.

    1937.

    1938.

    £'000.

    £'000.

    £'000.

    Widows' pensions

    2,562

    2,536

    2,552

    Contributory old age:

    (65–70)

    2,098

    2,203

    2,261

    (over 70)

    2,914

    3,086

    3,324

    Non-contributory old age (including blind).

    1,744

    1,659

    1,624

    Totals

    9,318

    9,484

    9,761

    AGRICULTURE (STATISTICS).
    Mr. Davidsonasked the Secretary of State for Scotland the total acreage in Scotland cultivated for agricultural productive purposes for the years 1937 and 1938, respectively, and the number of agricultural workers employed during the same period?
    Mr. Colville: As the reply contains a number of figures, I propose, with the hon. Member's permission, to circulate it in the OFFICIAL REPORT.
    Mr. Davidson: Can the right hon. Gentleman say whether the figures indicate a reduction in agricultural production in Scotland for the year in question?
    Mr. Colville: Some diminution is indicated.
    Mr. Davidson: Can the right hon. Gentleman say whether there have been fewer workers employed?
    Mr. Colville: May I suggest that the hon. Member should read the statement that I send to him.
    Mr. Davidson: Is the right hon. Gentleman giving the statistics because he is afraid to answer the question?
    The figures are as follow:

    —

    At 4th June, 1937.

    At 4th June, 1938.

    Number of acres of land under crops and grass.

    4,571,166

    4,560,380

    Number of regular workers.

    94,913

    90 968

    Number of casual workers.

    15,842

    13,372

    Total number of workers.

    110,755

    104,340

    MUNICIPAL BORROWING.
    Mr. Kennedyasked the Chancellor of the Exchequer whether he has considered representations by Scottish local authorities regarding recent alterations made by the Bank of England in the conditions governing the issue of corporation bills; that the said alterations will impose on ratepayers a heavy burden of increased interest expenditure in connection with borrowings for municipal purposes prior to the completion of rate collection; and whether he proposes to take any action to deal with the fact that only a small minority of the largest authorities will be able to continue the issue of bills?
    The Chancellor of the Exchequer (Sir John Simon): I understand that no such representations as those referred to in the question have been received. The position is as follows: The Bank of England recently decided to accept for discount, and as security for advances, approved Money Bills of local authorities to whom Parliament has granted specific and limited powers to borrow by such Bills. This decision, in fact, represents not a restriction but an extension of these facilities so far as Scottish local authorities (other than Glasgow) are concerned. Such facilities at the Bank of England had previously been restricted to four authorities in all, of whom the only Scottish authority was the Corporation of the City of Glasgow. The right hon. Member's question presumably refers to the effect on those Scottish local authorities, who do not possess specific powers of the kind f have mentioned, of the recent decision of the London Clearing Banks and of the Scottish Banks not to accept municipal bills as security for money market loans unless eligible for discount at the Bank of England. I do not think it would be
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    proper for me to intervene with those bodies on a matter which is clearly within their discretion in the conduct of their business.

  COAL INDUSTRY,

    SUPPLY BASIC TONNAGE (SALE).
    Sir Thomas Rosbothamasked the Secretary for Mines whether he is aware that the White Moss Coal Company, Limited, Upholland, have disposed of their supply sales quota to the Sutton Manor Collieries, Limited, and, as the result, several hundred men will be thrown out of work; and what steps he is taking to prevent such transactions taking place in a Special Area?
    The Secretary for Mines (Captain Crookshank): I am aware that the Sutton Manor Collieries have purchased the supply basic tonnage of the White Moss Coal Company, Limited, but since this transaction will enable the Sutton Manor Collieries to expand their output, it does not follow, as my hon. Friend suggests, that several hundred men will be thrown out of work. The White Moss Company have in fact stated publicly that one of the pits comprised in their undertaking has been acquired also, and will continue to be worked by the Sutton Manor Collieries, and I am informed by the company that the majority of the men who will be displaced by the closing down of their other pit at Upholland will be found work at Sutton Manor as soon as developments there permit. I am not prepared to take steps to prevent the sale of supply basic tonnages. Such sales are essential in cases where steps are being taken to concentrate output in the more efficient colliery undertakings.
    Mr. Tinker: Is the right hon. and gallant Gentleman aware that in this case it will mean the closing down of a colliery and will put several hundred men out of work? Will he make an appeal to the coalowners to consult with him before they deal with these quotas, because it means closing down collieries, and advise them on the course that they ought to take? Surely some steps ought to be taken by his Department in matters of this kind.
    Captain Crookshank: I have said that my information is that the majority of the men who will be displaced will be found work again.
    Mr. Tinker: That is a tale. It will not happen.
    Mr. A. V. Alexander: Is the Minister satisfied that this will not mean the reduction of reserves of domestic supplies? That has happened previously.
    Mr. R. J. Taylor: Does the Minister appreciate that while 51 per cent. will be employed, there may be 49 per cent. unemployed?
    Mr. H. G. Williams: Is not this act a sequel to the Coal Mines Act, 1930, which was promoted by the party opposite?

    SAFETY IN MINES.
    Mr. Ellis Smithasked the Secretary for Mines whether he has given consideration to the recommendation made on page 367 of the report of the Royal Commission on Safety in Coal Mines, in which they state the electricity regulations have been in their present form since 1913; that a detailed examination of the regulations should be made by electrical engineers, and that a committee should be set up to conduct the examination as soon as possible; when he intends to appoint a committee; and who are to be invited to serve on the committee?
    Captain Crookshank: Yes, Sir, I am taking steps to implement this recommendation at an early date, and, if the hon. Member will repeat his question in a fortnight's time, I hope to be in a position to give him the names of the members of the committee and its terms of reference.

  TRADE AND COMMERCE.

    AUSTRALIAN AND NEW ZEALAND MEAT.
    Mr. Sorensenasked the Secretary of State for Dominion Affairs whether any fresh agreement has been reached with New Zealand and Australia as the result of the recent meeting of the Empire Meat Council respecting a reduction of quota; and what assistance he is rendering to the Government of New Zealand to enable it to supply the British market with meat without an increase of the retail price to the consumer?
    The Secretary of State for Dominion Affairs (Sir Thomas Inskip): I understand that the Empire Meat Council, who are considering the question of imports of mutton and lamb into the United Kingdom for the current year, are holding a
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    further meeting to-morrow. In the meantime I am not in a position to make a further statement on the matter. As regards the last part of the question, I have no reason to suppose that the Council will not take the interests of the consumer fully into account in any conclusions which they may reach.
    Mr. Sorensen: Is the Minister aware that the Government of New Zealand is displaying considerable reluctance to accept any reduction in the quota, and is it not also true that frequently the reduction of imports increases out of all proportion to the reduction in home production?
    Sir T. Inskip: The second part of the hon. Member's question is a matter of argument. As to the first part, as I have said in my reply, the New Zealand Government have made representations in connection with the reduction of mutton and lamb imports, naturally against any such proposal.
    Mr. Sorensen: Is the Minister aware that his reference to a matter of opinion cannot be accurate, seeing that Argentine meat rose by one penny per pound while home-grown meat was reduced by one farthing per pound?

    CEMENT.
    Mr. David Adamsasked the President of the Board of Trade (1) whether he is aware that the marketing of cement in this country has, by agreement as to prices among producers, become a virtual monoply, and that as a result users of cement here are being charged excessively for the same; and what steps he proposes to take to deal with the situation;
    (2) whether, in view of the present diminution of building, due partly to the high costs in this important key industry, and in view of the present and prospective requirements of the nation in its defence preparations, he will consider the urgency of recommending to the Import Duties Advisory Committee the removal of the import duty upon foreign cement?
    The President of the Board of Trade (Mr. Oliver Stanley): I am aware that the Cement Makers' Federation have arrangements for regulating the price of cement sold by their members. If users of cement are of opinion that the removal of the import duty on foreign cement would be advantageous to their interests,

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    it is open to them to make representations to the Import Duties Advisory Committee.
    Mr. Adams: Is the Minister aware of the very substantial rise which has taken place recently in British cement?
    Mr. Stanley: There has been a rise, but it is not an abnormal one, and it is explained by the producers that one of the chief factors in the rise has been the increased cost of coal.
    Mr. Petherick: Will my right hon. Friend take careful note of the conversion of hon. Member's opposite to the advantages of competition?

    BRITISH AND GERMAN INDUSTRIES (CONVERSATIONS).
    Mr. Bellengerasked the President of the Board of Trade what is the nature of the negotiations now proceeding between representatives of the Federation of British Industries and members of the corresponding organisation in Germany; and whether he is prepared to make a statement?
    Captain Peter Macdonaldasked the President of the Board of Trade whether he can make any statement with regard to the arrangements that are to be made for trade discussions between the Federation of British Industries and the German Industrial Group; and what particular British industries will be represented?
    Mr. Stanley: Informal conversations have been taking place between officials of the Federation of British Industries and of the Reichsgruppe-Industrie, which is the corresponding organisation in Germany, with a view to devising means for settling the problems that arise from competition between industries in the two countries. These conversations, which have been proceeding with the full knowledge and approval of His Majesty's Government, are to be followed at the end of this month by formal discussions between the two organisations. I hope that it will then be possible to initiate direct negotiations between a number of British industries and the competing industries in Germany, but I am not at present in a position to say which particular industries will be represented. I may add that there are already in existence a number of agreements between British and German industries respecting trade in home and export markets, and I hope
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    that British industrialists will avail themselves extensively of the opportunity to make direct contact with their German competitors. With good will on both sides it should, I feel sure, be possible to solve many of the problems that have arisen or may arise affecting the trade of the two countries and so to obviate the need for recourse to other measures.
    Mr. Bellenger: Do these negotiations deal exclusively with Anglo-German trade or do they cover much wider markets in South-Eastern Europe? If so, what is the Government's policy? Is it to encourage negotiations between industries in this country and Germany, or have they a more comprehensive policy?
    Mr. Stanley: As to the third part of the supplementary question, the hon. Member, when he reads the answer, will see that the negotiations cover Anglo-German trade and competition in neutral markets as well. With regard to the second part of his question, it is our intention that the position of South-Eastern European markets should be discussed and also any others.
    Mr. Shinwell: If these negotiations result in an agreement between the traders of both countries, will this House be informed of the result before an agreement is actually ratified?
    Mr. Stanley: It will be an agreement between the industries. I cannot answer a hypothetical question like that.
    Mr. Shinwell: But an agreement of this character may affect national interests, and having regard to the fact that what is now being done is being done with the approval of the right hon. Gentleman, is it not desirable that this House should be acquainted with the result before any agreement is ratified?
    Mr. Stanley: I recognise that point, and I shall certainly make it my business to get from the industries as much information as is possible.
    Mr. Alexander: May we be assured that this country will not be committed to an obligation like that of the steel cartel without the approval of the House?

    WHEAT MARKETING AGREEMENT.
    Mr. David Adamsasked the President of the Board of Trade the date on which the international conference for the

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    working out of the wheat marketing agreement will meet; and whether, in view of the fact that the British Government's delegates have expressed its willingness to support a restriction scheme designed to secure minimum prices above the current market quotations, determined steps will be taken to prevent a rise in the price of bread in this country?
    Mr. Stanley: No arrangements for calling an international conference on wheat have been settled but the Wheat Advisory Committee, on which the main wheat importing and exporting countries are represented, decided at their meeting in January, to appoint a preparatory committee (which is now sitting) to prepare the ground with a view to the holding of such a conference if a sufficient basis of agreement is disclosed. No commitments have been made by His Majesty's Government or any other Government, though I. believe it is generally felt that an undue fall in wheat prices might have a serious influence on world trade. I would remind the hon. Member that His Majesty's Government were a party to the London Wheat Agreement of 1933, but he may rest assured that they would not lose sight of the possible effects of any agreement on the price of bread.
    Mr. Adams: In view of the fact that the British delegates are in favour of a restriction scheme, does the Minister not agree that certain steps should be taken to protect consumers?
    Mr. Stanley: I have said already that the British delegates are not committed to any scheme.

    MOTOR INDUSTRY.
    Sir Joseph Leechasked the President of the Board of Trade whether he will request his economic advisers to ascertain whether the diversity of styles, types and sizes of motor-vehicles for private use creates an avoidable factor of national economic waste; and to report whether the amalgamation of motor manufacturing firms and the elimination of unnecessary variations of pattern, followed by expansion of the motor mass-production policy, would strengthen the national economic structure?
    Mr. Stanley: A highly technical question of this kind is, I think, best considered by the motor industry itself, but
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    I should be willing to give any help I could in any investigation they decided to undertake.

    EMPIRE PRODUCE (EXCHANGE).
    Mr. Johnstonasked the President of the Board of Trade whether he is now in a position to make any statement regarding the proposals submitted to him in the summer of the year 1938 for the improvement in the British herring-fishing industry and the West Indian citrus fruits industry by an exchange of products; whether the Herring Industry Board, the Colonial Empire Marketing Board, the West Indian chambers of commerce, and the Governors in the West Indies have now been consulted as to details; and what steps he proposes to take in furtherance of a scheme of produce exchange between two Empire communities who are both in increasing destitution because they are unable to market their respective products?
    Mr. Stanley: I regret that consideration of these proposals has been retarded by the reconstitution of the Herring Industry Board, but I hope that the new board which only recently entered upon its duties, will be able to consider them at an early date. I understand that the Colonial Empire Marketing Board have already had the proposals before them and will examine them further as soon as they are acquainted with the views of the Herring Industry Board. My right hon. Friend the Secretary of State for the Colonies has been in communication with the Governor of Jamaica in the matter and hopes to receive an early report from him.

    SHIPPING AND SHIPBUILDING.
    Mr. Johnstonasked the President of the Board of Trade whether he is aware that orders for merchant ships placed in British yards during the first nine months of 1938 amounted to only 168,000 tons; that during the year 1938 British shipowners had launched to their account in continental shipyards nearly 200,000 tons of shipping; whether he can give the name of the firm of British owners which had seven motor tankers built for it during the year 1938 in German shipyards; and what steps he is taking to prevent British owners placing such orders abroad?
    Mr. Stanley: I am unable, from official sources, to confirm the figures given in the first two parts of the question, but

    733
    I may point out that figures of orders placed are not strictly comparable with figures of ships launched, and that the tonnage of merchant ships launched from British yards during the year 1938 for registration in the United Kingdom was 824,199 gross tons. The answer to the third part of the question is that seven motor tankers built in German shipyards during the year 1938 were recorded as owned by Inver Tankers, Limited, when they were registered as British ships. As regards the last part of the question, the House has already been informed that there is no action within the power of the Board of Trade to prevent shipbuilding orders being placed abroad, but, as the House is aware, the whole position of the shipping and shipbuilding industries is now receiving the consideration of the Government.
    Mr. Johnston: When does the Minister hope to be able to put before the House proposals for dealing with what is a most alarming position, and is he aware that it is contrary to British national interests that ships should be not only built in German yards, but broken up in German yards and used as scrap in German armament factories?
    Mr. Stanley: I have already informed the House that the Government recognise the urgency of this matter, and I hope there will be no undue delay before proposals are brought forward.
    Sir Percy Harris: Will the right hon. Gentleman give an assurance that none of the ships built abroad is entitled, either directly or indirectly, to get a subsidy?
    Mr. Stanley: At the present moment none of the ships get subsidies.
    Miss Wilkinson: In view of the statement which the right hon. Gentleman has just made, does he not think the time has arrived for inquiries to be made by the Government into the activities of National Shipbuilders Security, Limited, which is one of the chief factors for this?
    Mr. Macquisten: Is not the reason for buying these ships from Germany this, that Germany owes these people a great deal of money, and this is the only way they can get their money?
    Mr. Leslieasked the President of the Board of Trade (1) whether he is aware that one of the best equipped shipbuilding yards in England,
    734
    situated on the Tees-side, has seven berths empty out of eight, and 60 per cent. of skilled workers unemployed; and, in view of the fact that the Mercantile Marine is an essential adjunct to the Navy in time of war, what action does he intend taking to meet our deficiency in merchant vessels;
    (2) whether the Government have further considered rendering financial assistance to shipping companies; and, if so, whether such assistance will be restricted to British-built vessels?
    Mr. Kirkwoodasked the President of the Board of Trade whether he is aware of the decline in the numbers of merchant ships of all types and classes now being built or repaired in the shipbuilding yards of Great Britain, which is not offset by the naval shipbuilding programme; whether, in view of the unemployment which will ensue if no remedial measures are taken and the fact that Scotland in particular is adversely affected, he will consider promptly calling a conference of all the interested parties in Scotland with a view to evolving a scheme to benefit all engaged in the engineering and shipbuilding industries, the prosperity of which is vital to our country; and whether in the meanwhile he will examine the practicability of giving further assistance to British shipping provided that to qualify for such assistance ships must have been built in and repairs carried out in British shipyards?
    Mr. Kirbyasked the President of the Board of Trade whether he can give the House a statement of Government policy in relation to foreign competition in the coastal shipping industry, saying what is the state of such British trade now as compared to five years ago; and whether the Government propose to counter such foreign competition by subsidising the British coastal shipping companies?
    Mr. Stanley: The subjects mentioned in the questions are covered by the representations which, as the House is aware, the Government have received from the shipping and shipbuilding industries, and the position of those industries is now receiving the consideration of the Government. The House has already been informed that a statement will be made as soon as it is possible to do so.
    Mr. Leslie: Is the Minister aware that there are approximately 2,000 fewer vessels sailing under the British flag than in 1914, and that we have 5,000,000 more people to feed; and is it not the case that, as long as this country has to rely on the overseas countries for food supplies, it is essential to have merchant vessels as much as air-raid precautions?
    Mr. Stanley: It is because of this fact that the Government are considering this as a matter of great urgency.
    Mr. Leslie: Will the Government consider that service to the country ought to come before profits, and, therefore, give no financial assistance to companies which have vessels that are not built in British yards?

    COTTON INDUSTRY.
    Mr. Hamilton Kerrasked the President of the Board of Trade whether he is aware that the exports of British cotton piece-goods to Central and South American countries for 1938 were barely more than half their yardage and value for 1937; and what steps he proposes to take to arrest the decline in this section of British export trade?
    Mr. Stanley: Total exports of United Kingdom cotton piece goods to those Central and South American countries for which statistics are available were approximately 188 million square yards, valued at £4,700,000 in 1938, compared with 295 million square yards, valued at £7,260,000 in 1937. As regards the second part of the question, His Majesty's Government will continue to bear the interests of the cotton industry in mind in connection with whatever opportunities arise, through trade negotiations or otherwise, for improving United Kingdom export trade in Latin American as in all other overseas markets.
    Mr. Kerr: Is my right hon. Friend aware that the balance of trade between this country and South American countries is decisively in favour of the South American countries, and cannot this factor be used as a bargaining point?
    Mr. Stanley: That may be the case with regard to South America as a whole, but it is not true of particular countries.
    Mr. Kerrasked the President of the Board of Trade what steps are to be taken during 1939 to renew with the Dominions negotiations for new trade agreements
    736
    which were suspended when those with the United States were opened; and whether he can give any assurance that in connection with these negotiations adequate arrangements will be made to promote the interests of the cotton textile export trade?
    Mr. Stanley: No negotiations with the Dominions were suspended as a result of the negotiations with the United States of America; indeed, a new trade agreement was concluded with Eire on 25th April last. Trade discussions also took place last year with representatives of His Majesty's Government in the Commonwealth of Australia and the conclusions reached are set out in the White Paper (Cmd. 5805) issued on 20th July. Discussions are still proceeding with His Majesty's Government in the Union of South Africa while those with His Majesty's Government in New Zealand, which were adjourned in July, 1937, have not yet been resumed. I can assure my hon. Friend that in all trade agreement negotiations every effort is and will continue to be made on behalf of the interests of the cotton industry.

    FILM INDUSTRY.
    Mr. Dayasked the President of the Board of Trade whether he is aware that, although the Films Act, 1938, has been in force for nine months, there has been no noticeable benefit to the volume and value of British studios output; and, in view of this, will he consider the appointment of a departmental committee to examine the position arid prospects caused by this Act, for the purpose of introducing amending legislation to remedy the present situation?
    Mr. Stanley: As regards the first part of the question, I have nothing to add to the answer which I gave to my hon. and gallant Friend, the Member for South Paddington (Vice-Admiral Taylor) on 20th December. The Cinematograph Films Act provides means for adjusting the quotas from time to time to meet changing circumstances and the Cinematograph Films Council have the matter now under consideration.
    Mr. Day: Is the Minister aware that the only increase of any kind since the passage of this Act has been an increase of unemployment in the film studios, and will he see that something is done to remedy that?
    Mr. Stanley: I have said that the Act itself provides for the quotas being increased, and that matter is now under consideration by the Films Council.
    Mr. Day: Does it provide also for the making of films?
    Mr. Stanley: It has also provided for the making of good films during the past year.
    Mr. T. Smithasked the President of the Board of Trade whether he is aware that American interests have curtailed production so that instead of 500 films being imported into this country annually only about 350 will arrive in future, which means still less British films unless the quota is increased; and what steps he proposes to take to deal with the matter?
    Mr. Stanley: I am aware that there has been a decrease in the present renters' quota year in the number of films imported from the United States, but I have no evidence to show that production in that country is being curtailed as a permanent policy. The renters' quota on long films increases from 15 per cent. to 20 per cent. as from the beginning of April next, and I have recently asked the Cinematograph Films Council to consider the quota position in subsequent years.
    Mr. Smith: Is the right hon. Gentleman aware of the increased anxiety among those whose living depends on the production of British films, and, in view of that, will he expedite the decision in regard to British films?
    Mr. Stanley: I know that the Films Council are considering it as a matter of urgency. The hon. Member will realise that one of the reasons for the reduction has been the small number of films imported from America owing to the great falling off in production in Hollywood.

    RUSSIAN OIL (GLASGOW CORPORATION PURCHASE).
    Captain P. Macdonaldasked the President of the Board of Trade whether, in view of the recent decision of the Glasgow Corporation Transport Sub-Committee to purchase 2,200,000 gallons of diesel oil from Russia instead of from one of the British companies, he proposes to take any steps to ensure that this Russian oil will at least be imported in British vessels?
    Mr. Stanley: It is not within my power to ensure that this oil will be imported in British vessels; but I have forwarded my hon. and gallant Friend's suggestion to the Glasgow Corporation, and I hope that it will receive their sympathetic consideration.
    Mr. Neil Maclean: Is it not the case that the Corporation of Glasgow have nothing to do with the vessels bringing the oil over, and that two-thirds of this oil which has already been supplied has been brought to this country in British and Russian ships?
    Mr. Stanley: What I have done has been to ask the Corporation of Glasgow to do what I am sure they will do, that is, to see that, if it is within their power, British ships will be used.
    Mr. Maclean: Will the Minister see to it that every other company and corporation in this country which orders goods from abroad will insist on those goods being brought in British ships?
    Mr. Stanley: I certainly hope that every company and every individual will do what I am sure the Glasgow Corporation will do, and that is to give sympathetic consideration to British shipping.
    Captain Macdonald: Will the right hon. Gentleman ask the Glasgow Corporation how they expect to maintain employment on the Tyneside if they are going to buy oil from abroad?

    RUBBER FOOTWEAR.
    Mr. McLean Watsonasked the President of the Board of Trade whether his attention has been drawn to the continual increase in the quantity of rubber footwear imported into this country from Hong Kong; and whether he proposes to take any steps to see that manufacturers in this country get an opportunity of competing for the home trade on fair terms?
    Mr. Stanley: I am aware of the further increase in these imports. The Import Duties Act provides for free entry under that Act of goods from the Colonies, but the possibility of regulating supplies on a voluntary basis is at present under discussion between the industries in the parts of the Empire concerned.
    Mr. Watson: When does the right hon. Gentleman expect to have the inquiries completed?
    Mr. Stanley: I cannot say, but they are going on at the moment.
    Mr. H. G. Williams: Have not representations on this matter been made steadily for several years past?
    Mr. Stanley: Yes, and the negotiations are the result of them.
    Miss Horsbrugh: Has my right hon. Friend noted that those who previously opposed the regulation of imports from the East are now in favour of it, and will he press on with the work?

    WEIGHTS AND MEASURES ACTS.
    Mr. Westwoodasked the President of the Board of Trade whether he has considered a communication from the National Federation of Grocers' and Provision Dealers' Associations with reference to the inadequacy of the present Weights and Measures Acts to protect the public, including the wholesale provision dealers; and what action does he propose to provide the protection desired?
    Mr. Stanley: I have considered the communication to which the hon. Member refers. Legislation would be required to bring wholesale transactions within the scope of the Sale of Food (Weights and Measures) Act, 1926, and, as I stated in my reply to the hon. Member's question on 20th December, the question of legislation will be considered when the review of existing regulations has been completed.

  CHIEF DIVISIONAL FOOD OFFICER.
  Mr. Bellengerasked the President of the Board of Trade what is the present domicile of the recently appointed food controller, Major-General Sir Reginald Ford?
  Mr. Chaterasked the President of the Board of Trade whether the Food (Defence Plans) Department propose to replace Sir Reginald Ford as Divisional Food Control Officer for the London and Home Counties area, by someone who is able to reside whole time in the district of Great Britain in which he will act in an emergency, as principal food officer?
  Mr. Manderasked the President of the Board of Trade whether it is proposed that the Chief Divisional Food Control Officer for London and the Home
  740
  Counties, Sir Reginald Ford, shall continue to reside in Brussels?
  Mr. Stanley: Major-General Sir Reginald Ford, the Chief Divisional Food Officer for London and the Home Counties, is at present residing temporarily, and for private reasons, in Brussels. I do not consider it necessary to make it a condition of these appointments that the holders should reside permanently in their areas in time of peace, and I do not regard Sir Reginald Ford's temporary residence abroad as affording any ground for making a change in this appointment. I may add that, in addition to the Chief Divisional Food Officer for London and the Home Counties, there is a Divisional Food Officer for the Greater London Area, one for the Home Counties (North) and one for the Home Counties (South).
  Mr. Bellenger: Does this officer receive any remuneration for these duties?
  Mr. Stanley: He will receive a small retaining fee.
  Miss Wilkinson: Do I understand that these appointments are purely ornamental?
  Mr. Stanley: No, certainly not. The hon. Lady will realise that in these days of improved air travel Brussels is very much closer to London than, say, the West Country.
  Mr. Alexander: May I ask the President whether he considers it reasonable, after all the work that has been done to assist the Government by people in this country, that he should appoint an officer in this position and of the age of the gallant General?
  Mr. Stanley: Sir Reginald Ford was appointed because he has a special knowledge of transport matters, which I think everyone will agree is a very great qualification.
  Mr. Mander: Does it not give a very bad impression of the Government's seriousness in this matter to allow this gentleman to live abroad? Would it not be about as reasonable to allow the Prime Minister to live in Berlin?
  Mr. Bellenger: I beg to give notice that I shall raise this matter on the Adjournment at an early date.

  MERCANTILE MARINE.

    LINE-THROWING APPLIANCES.
    Mr. R. J. Taylorasked the President of the Board of Trade whether his attention has been called to the heroism of the Blyth Volunteer Lifesaving Brigade in saving the lives of the master and two of the crew of the coasting steamer "Skary" which grounded on Cambois Beach, Northumberland, early on the morning of 24th December; whether he is aware that the efforts to get contact between the shore and the ship continued from approximately 11 o'clock on 23rd December to 3 o'clock on the morning of 24th December; and, in view of the difficulty which often obtains of establishing contact from the shore and of the comparative ease with which contact could be made from the ship to the shore, is he contemplating the advisability of making it compulsory for all ships to carry line-throwing guns or similar apparatus?
    Mr. Stanley: Yes, Sir. The Board of Trade highly appreciate the work done by the Blyth Volunteer Life Saving Brigade. The question of the compulsory equipment of ships with line-throwing appliances has recently been under consideration and, following a recommendation of the Merchant Shipping Advisory Committee, new statutory rules have been issued under which, as from 1st January, 1939, all sea-going passenger ships whatever their tonnage and all sea-going cargo ships of 80 tons gross and upwards must carry an approved line-throwing appliance.

    SHIPS (FOREIGN PURCHASES).
    Mr. R. J. Taylorasked the President of the Board of Trade whether he will issue a return showing the number and gross tonnage of British merchant ships sold to foreign owners during the years 1933–38 inclusive, and also the nationalities of the purchasers of the vessels?
    Mr. Stanley: The particulars which the hon. Member desires for the years 1933 to 1937 have already been published in the December issues for these years of the monthly return G.R. 128 prepared by the Registrar-General of Shipping and Seamen. The issue containing the information for 1938 will be published in a few days. Additional information for the years 1933 to 1937 is contained in Table
    742
    12 of the Annual Statements of the Navigation and Shipping of the United Kingdom.
    Mr. Taylor: Has the right hon. Gentleman any reason for thinking that these ships which have been sold cheaply to foreign countries and foreign owners are now competing very severely with the shipping of the United Kingdom?
    Mr. Stanley: Some have been sold for breaking up.

    REGULATIONS (FOREIGN SHIPS).
    Mr. Petherickasked the President of the Board of Trade whether he will introduce legislation with the object of extending the application of full Board of Trade regulations to all foreign ships entering British ports.
    Mr. Stanley: Generally, the provisions of the Merchant Shipping Acts and the regulations made thereunder already apply to foreign ships in ports in the United Kingdom, and I am not aware of the necessity for further legislation on the subject.
    Lieut.-Commander Fletcher: Is it not the case that many foreign countries impose far lower standards in maritime matters than the right hon. Gentleman's own Department, and does not that amount to unfair competition?
    Mr. Petherick: Is not my right hon. Friend aware that there have been many complaints on the part of British owners and seamen that the regulations are not comparable and are not strictly enforced?
    Mr. Stanley: No, I am not aware of any complaint that the regulations are impossible, and I shall be glad if my hon. Friend will let me know of the specific provisions he has in mind.

  PRIME MINISTER (FOREIGN VISITS).
  Mr. Manderasked the Prime Minister whether he will consider the advisability of paying a visit to the President of the United States of America, as a continuation of his recent visits to national leaders.
  The Prime Minister (Mr. Chamberlain): My visits to other countries have in all cases been in connection with special circumstances, and although I

  743
  should gladly extend them it must be remembered that the absence of the Prime Minister from the country for more than a brief interval gives rise to a good deal of inconvenience which it is desirable to avoid.
  Mr. Mander: Does not the Prime Minister feel that there might be great public advantages in making personal contact with this vigorous democratic leader—the greatest man in the world at the present time?
  The Prime Minister: I understood that the hon. Member in asking a supplementary question just now, was illustrating the inconveniences of having the Prime Minister abroad from this country.
  Mr. Charles Williams: Has the Prime Minister noticed that everyone nowadays recognises the value of his visits?

  EMERGENCY REGIONAL COMMISSIONERS.
  Mr. Garro Jonesasked the Prime Minister whether the Lord Privy Seal was giving expression to a part of the policy of the Government when he stated on Thursday last, that, in the event of any of 12 national regions being cut off from the centre of government in any region, absolute power in that region should thereupon devolve, for the whole period of the emergency, upon a single commissioner nominated by the Government in peace time?
  The Prime Minister: Yes, Sir. The Lord Privy Seal in the statement he made on Thursday last, was expressing the policy of His Majesty's Government. In the event of a breakdown of communications in time of war, a Regional Commissioner, in consultation with the regional representatives of Government Department, would exercise the powers vested in His Majesty's Government until communications had been satisfactorily re-established.
  Mr. Garro Jones: Does not the right hon. Gentleman think that it would conduce to a greater good-will in the working of these proposals, affecting as they do so closely the lives and liberties of the people, if he were to secure the mandate of the House of Commons for these plans?
  The Prime Minister: I am sure I can rely upon the hon. Gentleman to do his utmost to promote good-will.
  Mr. Arthur Greenwood: In view of the vagueness of this statement and the possibility of a fairly early Debate on this matter in the House, will the right hon. Gentleman arrange that a White Paper shall be issued elaborating these proposals; and may I further ask him, in the presence of the right hon. Gentleman the Lord Privy Seal, whether he will arrange that, in future, important pronouncements of policy are made first to this House?
  The Prime Minister: I do not think this can be described as an important statement of policy. It is an incident in the general scheme of policy. On the question of a White Paper I will consult with my right hon. Friend to see whether that is possible.

  INDUSTRIAL ADVISORY PANEL.
  Mr. Garro Jonesasked the Prime Minister in approximately how many cases, up to the end of January, have complaints from contractors or unofficial persons been made to the Advisory Panel of Industrialists; how many of these have been communicated to him; and whether he will instruct the members of this body that if they intend to proffer any further reports such reports, to have the maximum value, should encompass both favourable and unfavourable factors in rearmament?
  The Prime Minister: I am informed that up to the end of January the Advisory Panel of Industrialists have received nine complaints from contractors or unofficial persons. The panel has not, however, found it necessary to refer any of these cases to me. As regards the last part of the question, it is clear from the third paragraph of the panel's letter to me, which was published in the Proceedings of the House on and February, that the panel have made a general examination of the whole field of rearmament, with particular reference to the items which, in their opinion, seemed of more immediate importance. The suggestion in the last part of the hon. Member's question seems to me, therefore, to be wholly unjustified.
  Mr. Logan: May I call the right hon. Gentleman's attention to one case in

  745
  Liverpool? I do not wish to mention names, but in accordance with the desire of the Department I sent on the case to this industrial body and no reply has yet been received regarding a firm which could give employment to 700 or 800 people in the city of Liverpool. Will the right hon. Gentleman inquire about that?
  The Prime Minister: Yes, Sir.
  Mr. Garro Jones: If this panel of industrial advisers has received only nine complaints, is not that indicative of the futility of this form of procedure; and does it not show that contractors are as much afraid of making complaints to this panel as they were of making complaints directly to the Department?

  WAR RISKS (COMPENSATION AND INSURANCE).
  Colonel Baldwin-Webbasked the Chancellor of the Exchequer whether, with reference to War Risks (Compensation Insurance), it is intended to take the replacement value of all properties, whether privately owned or otherwise, regardless of their actual market value; and, further, is it intended to compensate all property owners pro rata up to the extent of funds available?
  Sir J. Simon: The best basis for measuring loss is, as my hon. and gallant Friend will realise, a very difficult matter to decide and it is still to be settled. As regards the second part of the question, I assume that the reference is to immovable property, and if so, the statement which I made in the House on 31st January indicated that compensation would be payable in accordance with a scale which would in any event pay in full up to a certain limit of loss; if the total loss could not be thus dealt with, the scale would thereafter be graded. Such a scale would be of general application.
  Colonel Baldwin-Webb: May I ask whether the Chancellor realises that there is considerable anxiety and uncertainty in this matter with regard to both small and large properties, and in dealing further with the question, will he consider adopting or recommending for adoption, a procedure similar to that adopted by the shipping industry in the last War?
  Sir J. Simon: I am sure the hon. and gallant Gentleman appreciates that what
  746
  was done in the last War in relation to the shipping industry, if the case were to arise again, could not be regarded as easily applicable to the whole range of properties in these islands which is an infinitely larger problem. I have fully in mind the point which the hon. and gallant Member has raised.

  OLD AGE PENSIONS.
  Mr. Gallacherasked the Chancellor of the Exchequer whether he has considered a resolution sent from a mass meeting of Dundee citizens urging consideration of the demand of the Old Age Pensioners Association for increased pensions; and what steps does he propose to take to meet this demand?
  Sir J. Simon: I would refer the hon. Member to the reply which I gave on 2nd February to a similar question by the hon. Member for Consett (Mr. David Adams).
  Mr. Gallacher: May I ask the Chancellor whether there is any intention on the part of the Government of doing justice to these old folk, in connection with the question of increased pensions? May I further ask him how it is possible for Ministers who are drawing £100 a week to give this most deserving section of the community 10s. a week? It is a scandal.

  EVACUATED AREAS SCHEME (CHILDREN).
  Mr. Sorensenasked the Chancellor of the Exchequer whether he is aware of the disparity amounting to approximately 5s. per week per child between the scale laid down by His Majesty's Government for the maintenance of children evacuated from dangerous areas during a time of national emergency and that allowed for children of recipients of public assistance, unemployment assistance, and unemployment benefit; and whether he will take steps to raise the latter scales to the level of that applicable to children who may be evacuated?
  Sir J. Simon: I cannot accept the view that the two scales are really comparable Apart from other considerations, the billeting of other peoples' children may well involve the readjustment of house-

  747
  hold arrangements, with added responsibilities and perhaps considerable inconvenience, and these justify a considerably higher allowance than that which is granted for the maintenance of children in their own homes. This fundamental difference has long been recognised by public assistance authorities who pay higher allowances for children billeted on strangers than for children who belong to a family in receipt of assistance.
  Mr. Sorensen: Does the right hon. Gentleman not agree that by far the larger proportion of the higher amount paid in respect of evacuated children, would be devoted to supplying them with food; and if this higher amount is necessary to provide adequate food for children in those circumstances, surely the lower amount which is now paid by public authorities must be inadequate for that purpose; and will he not take some action to remove the very cynical impression which has been created by this disparity?
  Sir John Haslam: Before answering that question, will the right hon. Gentleman state the amount which was allowed by the last Socialist Government and the amount which is being allowed by the present Government?
  Sir J. Simon: I hope that the hon. Gentleman w ho put this question on the Paper will be good enough to consider the answer which I have given and then he will be able to help to remove that cynical impression to which he has referred.
  Miss Wilkinson: Is it not a fact that in many cases these evacuated children would be sent to homes which are appreciably better off than the homes in which the children of the unemployed usually live; and is not this really a case of giving to people who are better off a higher amount than is being given to the poor people who have nothing else on which to live?

  LIGHTHOUSE SERVICE.
  Mr. Leslieasked the President of the Board of Trade whether he is aware that many light-keepers in the employ of the northern lighthouse service are on duty an average of 92 hours per week and in foggy weather often up to 116 hours within seven days; and what proposals he has made to remedy these conditions?
  Mr. Stanley: No Sir. I am informed by the Commissioners of Northern Lighthouses that they know of no station at which the hours of duty are as suggested by the hon. Member.
  Mr. Leslie: If I supply the figures will the Minister go into them and see whether it is not possible to employ more men?
  Mr. Stanley: I will certainly go into anything which the hon. Member brings to my notice, but the Commissioners say that there are no lighthouses where the hours of work are as stated.

  GAUMONT-BRITISH.
  Mr. T. Smithasked the President of the Board of Trade whether his Department were solely responsible for making the final decision to appoint an inspector to investigate the affairs of the Gaumont-British Corporation?
  Mr. Stanley: Yes, Sir.
  Mr. T. Williamsasked the President of the Board of Trade whether his Department has now acceded to the repeated requests made on behalf of 90 per cent. of the shareholders of the Gaumont-British Picture Corporation representing up to 10,000,000 shares for facilities to prove malicious intent on the part of certain persons who applied for an investigation into the company's affairs?
  Mr. Stanley: In arriving at a decision on the application for an investigation into the affairs of Gaumont-British under Section 135 of the Companies Act, I took fully into account all the representations made to me by the directors of the company, including those which were directed to allegations of malice; but having regard to the provisions of the Section and to all the information before me, I did not regard it as essential to a proper consideration of the application that I should depart from the normal practice in these matters by complying with a request from the directors for a nominal list of the shareholder applicants, who number over 3,000. I would point out that Section 135 of the Act provides an important safeguard to a minority of shareholders, and it is a matter of public importance that shareholders should not be deterred from applying by the fear of undue pressure which might be brought to bear on them if their names were disclosed.
  Mr. Williams: May I ask the right hon. Gentleman whether the reply he gave me on 22nd February last year was a mistake—that a list of signatures would be made available?
  Mr. Stanley: I really do not recollect that I gave that answer then.
  Mr. R. C. Morrison: In view of the position that may arise during this investigation, will the right hon. Gentleman take steps to expedite it so that a decision can be come to as soon as possible?
  Mr. Stanley: I am sure that everybody who is interested will agree that, provided the investigation is carried out properly, it should be carried out as speedily as possible.
  Sir Reginald Clarry: Is my right hon. Friend satisfied that the small statutory 10 per cent. necessary shareholding does not lend itself to exploitation by a minority for its own particular purposes?
  Mr. Stanley: The Statute has made certain provisions, and it is my duty to carry them out.

  FOOD STORAGE.
  Mr. Sorensenasked the President of the Board of Trade whether he is aware that the Canned Foods Advisory Bureau are circulating householders advising them to store tinned foodstuffs; and whether he proposes to take steps to prevent such hoarding, as it creates the impression that the country is in imminent danger of a condition of seige?
  Mr. Stanley: I am aware that advice about the storage of tinned food is being circulated by the Canned Foods Advisory Bureau. As I have already explained to the House, the Government do not regard the acquisition of small reserves of food by householders in peace time as undesirable.
  Mr. Sorensen: Surely the right hon. Gentleman agrees that it is the wealthy people rather than the poorer people who can afford to purchase these stores, and in these circumstances will he agree that this hoarding of foodstuffs, as if a war is to break out next Monday at nine o'clock, can only generate more of those jitterbugs to which one of his own friends has referred?
  Mr. Stanley: I disagree entirely. I gave a long and considered reply on this matter last week.
  Mr. George Griffiths: Does not the Minister think that this is an insult to the unemployed who do not have enough to live on for a week at a time, never mind storing?

  MINING INDUSTRY (WELFARE FUND) BILL.
  Reported, with Amendments, from Standing Committee C.
  Bill, as amended (in the Standing Committee), to be considered To-morrow, and to be printed. [Bill 66.]
  Minutes of Proceedings to be printed. [No. 51.]

ORDERS OF THE DAY.

  CZECHO-SLOVAKIA (FINANCIAL ASSISTANCE) BILL.
  Order for Second Reading read.
  3.47 p.m.
  The Chancellor of the Exchequer (Sir John Simon): I beg to move, "That the Bill be now read a Second time."
  This Bill authorises assistance from public funds and public credit to the Czecho-Slovak State. Hon. Members will recall that the Prime Minister, in the course of his statement following upon the Munich Agreement, told the House on 3rd October that the Czecho-Slovak Government had put forward a request for help to raise a loan of £30,000,000 to be guaranteed by His Majesty's Government. The new Czecho-Slovakia expected to have to make provision for the assistance of a large number of persons who were moving from ceded territories, and the reduction in the area of the State would inevitably call for heavy outlay in readjusting the economic life of the nation. Those were the grounds on which we were approached. His Majesty's Government, as the Prime Minister then said, immediately took this request into consideration, and it was pointed out in the Prime Minister's speech that we had in mind that, while assistance was needed promptly, the terms and conditions of a guaranteed loan raised matters which could not be decided immediately; for example, the question of what Governments should participate in the loan, for the French Government as well as ourselves would naturally be concerned. The French Government as well had to be brought into any discussions.
  Obviously, any negotiations for arranging a guaranteed loan in which at least three parties were involved must take time. As it has turned out, it has taken a good deal of time. If hon. Members will turn to the Schedule to the Bill, they will see that the agreements there printed were executed only on 27th January of that year. That was a difficulty which had to be got over, but we felt that, especially in view of the refugee difficulty, assistance should not be postponed on that account, and the Prime Minister stated to the House on 3rd October that a letter had been addressed to the Bank
  774
  of England requesting the Bank to provide a credit of £10,000,000 sterling which would be at the disposal of the Czechoslovak Government for their urgent needs. I wrote that letter, and in that letter I stated, as the House was informed, that we should ask the House of Commons to pass the necessary legislation to reimburse the Bank from the Exchequer. We had hoped and we had expected to carry those negotiations through to a conclusion in time to present that legislation when the House resumed its sittings after the Recess in November. In the actual handling of it it proved to be a complicated matter, and in spite of our best efforts the Agreement was, as I have said, finally reached only at the end of January, and we now take the first opportunity of introducing this Bill.
  I see opposite the right hon. Member for Gorton (Mr. Benn), who has once or twice made comments on the constitutional aspect of this proceeding, and I must say a word or two to establish the constitutional regularity of our proceedings, as to which there really is no question at all. There is no ground for saying that the £10,000,000 provided by the Bank of England was public money. You cannot pay out public money from the Exchequer without the authority of Parliament. It is equally wide of the mark for anyone to imagine that the Bank received some private undisclosed assurance. I have had no communication with the Bank except the letter the terms of which were stated to the House, and the only statement made to the Bank was exactly what the Prime Minister stated to the House on 3rd October, namely, that Parliament would be asked to pass legislation to reimburse the Bank from the Exchequer. That is exactly what I am asking Parliament now to do.
  I agree with the right hon. Gentleman that in all normal circumstances, indeed, I would rather say in all circumstances, where the contrary course is not absolutely necessary, Parliamentary authority should be sought in the first instance. Nothing that has been done in this instance and nothing that I am now saying should be regarded as qualifying that proposition. Here we had wholly exceptional circumstances in which the Czechoslovak Government needed instant help. When the matter was stated in the House of Commons on 3rd October that view

  775
  was shared in all quarters, and the course taken was generally felt to be justified. In the two or three days' Debate which followed the Prime Minister's statement, though there may have been differences of opinion, and controversy on other things, there was no controversy about this, and I recall that the right hon. Member himself, when he took part in the Debate, said on 6th October:
  "We all want to grant this sum of £10,000,000 to Crecho-Slovakia."—[OFFICIAL REPORT, 6th October, 1938; col. 487, Vol. 339.]
  Mr. Wedgwood Benn: Of course I remember that statement. It expressed a sentiment which, I think, was shared by all in the House, but it was based on the assumption that we were to have a Czecho-Slovakia very different from what it is to-day.
  Sir J. Simon: All that I am saying is that on the constitutional point there really is no ground for suggesting that any irregularity has been committed. I am now asking for the authority of the House of Commons to make a payment out of public funds—up to the present no such authority has been given—for a purpose which commanded the general support of the House of Commons.
  I will now state briefly the rather complicated arrangements which have been made to carry out this purpose of giving financial assistance to Czecho-Slovakia. For this purpose it is necessary to have both the Bill, with its Schedules, and also the White Paper, which contains in more detail some of the Agreements. I want the House first to note that the Agreements, wherever necessary, are stated to be entered into subject to Parliamentary approval. If hon. Members will turn to the First Schedule and look at Article 2 they will see that it begins:
  "The Government of the United Kingdom will, subject to Parliamentary approval."
  It is that approval we now seek. What happened was this: The advance of £10,000,000 was made by the Bank of England. It was placed by the bank at the disposal of the National Bank of Czecho-Slovakia for the use of the Czechoslovak Government. From the first we emphasised that our purpose was, more particularly, to meet the demands which Czecho-Slovakia would in the immediate future have to face in respect of the maintenance and settlement of refugees from
  776
  the ceded areas. We drew attention to the problem of the ultimate settlement of those German-speaking refugees who did not wish to return to the ceded territories. We stated that if it should prove possible to arrange for a certain number of them to emigrate, to leave Czecho-Slovakia altogether, His Majesty's Government would expect that the cost of such emigration should be met out of the advance, including the payment to emigrants of such sums of money as might be necessary to enable them to enter the countries where it was intended they should settle.
  At the same time we communicated with the French Government, who at once expressed their readiness in principle to share in the grant of financial assistance to Czecho-Slovakia, and as a result of prolonged and detailed discussions, during which, as the House will see from the White Paper, great particularity has been developed and precise assurances secured, we have reached the agreements, the effects of which I will now briefly explain. The effect is this: Taking the Second Schedule to the Bill first, His Majesty's Government and the French Government have agreed that they will jointly and severally guarantee a loan of £8,000,000 to be issued by the Czech Government here in London. That is the effect of the agreement in the Second Schedule to the Bill. In the White Paper it happens to be Document Number 1. Secondly, as between the French Government and ourselves any payments that may be made in case of a default on the part of the Czecho-Slovak Government will be shared equally between His Majesty's Government and the French Government. That is Agreement Number 4 in the White Paper. It finds no place in the Schedule to the Bill because it requires no Parliamentary authority. I may say, in passing, that the Czecho-Slovak Government has a good and honourable record in respect of keeping its engagements, and the undertaking does not imply that we are expecting that there will be any default. Of course, the existence of that undertaking by the French Government and ourselves does greatly assist the raising of the money, but it does not imply that there will be any failure in the service of the loan
  Next comes this point: Out of the proceeds of this guaranteed loan £6,000,000 will be used to repay part of the £10,000,000 already advanced to Czecho-Slovakia, and the balance of £4,000,000

  777
  out of the £10,000,000 will be granted as a free gift. The form of the transaction is that the Treasury pays to the Bank, under the authority that it will now get, £10,000,000, with interest at 1 per cent., and the Czecho-Slovak Government pays to His Majesty's Government, out of the proceeds of the loan, the £6,000,000 I have mentioned, at the same rate of interest. The French Government is making a contribution of approximately equivalent value to our free gift of £4,000,000, though that contribution does not take the same form and does not provide new money. The French Government have offered an undertaking to take over from the Czecho-Slovak Government responsibility for interest on and ultimate repayment of the 5 per cent. Czecho-Slovak loan of 1937–1942, to the nominal value of approximately 700,000,000 francs, which was issued in France. If the French Government had not done that, that would have remained a burden on the Czecho-Slovak Government. The French contribution takes the form of relieving them altogether of that obligation, present and future, and it no doubt will be a very useful addition to the assistance that they are getting. If we treat that as equivalent to another £4,000,000, the total financial assistance given by His Majesty's Government and the French Government will amount approximately to £16,000,000; £8,000,000 as a free gift, and £8,000,000 the proceeds of the guaranteed loan.
  Mr. Mander: Has the £10,000,000 all been paid for?
  Sir J. Simon: The advance to the National Bank of Czecho-Slovakia was drawn, £5,000,000 at first and £5,000,000 later, but the arrangements, to which I am now calling attention are to secure how the money is to be spent. If I have rightly understood the feeling which a large number of hon. Members have about this business, it is that they are not so much concerned with the precise mechanical details but that one of the things they would like to know is how far it has been possible to secure that the assistance so provided will be used for the purposes intended. That, I feel, is a very general sentiment, and it is one that the Government and myself fully share; and if I have to offer any explanation or excuse for the fact that a good deal of time has passed since this was
  778
  announced at the beginning of October, the main reason is that we really exerted ourselves, and not, I hope, altogether unsuccessfully, to secure agreements and arrangements which are satisfactory—a not very easy thing in the circumstances, because after all, when you are dealing with a Sovereign State, you must make your arrangements in such a form as is proper, having regard to that fact. Anyhow, very great trouble has been taken to make it plain that this money which we are thus helping to provide will be used for the purposes intended, and I believe—I have examined the matter with a great deal of care—the arrangements are about as good as can be made.
  I shall call attention to what the arrangements are. For that purpose the important document is the White Paper. The White Paper repeats the two Agreements that are in a Schedule to the Bill. They are not printed in quite the same order. The first Schedule to the Bill contains the Agreement which is Agreement No. 3 in the White Paper, and the second Schedule to the Bill contains the Agreement which is No. 1 in the White Paper. There are two other Agreements. If hon. Members will turn to page 10 of the White Paper they will see an important letter written by the Czecho-Slovak representative, Dr. Vilem Pospisil, to the Foreign Secretary, which constitutes an important part of the Agreement. It contains references to four Annexes, which are to be found on pages 12, 13, and 14 of the White Paper. I will try to summarise what the effect is. These are the points that should be noted. First of all as to our free gift of £4,000,000. That is to be paid into a special account at the Bank of England.
  Mr. de Rothschild: That sum has not been drawn?
  Sir J. Simon: It forms part of the original advance of £10,000,000, and will be transferred to a special account in the Bank of England. It is to be in sterling and is to be drawn upon only on the basis and for the purpose and by the methods that are referred to in Dr. Pospisil's letter; the payments, that is to say, are to be payments to the Czecho-Slovak Refugee Institute, and whatever payments are made on application for that purpose must be authorised and will be controlled by the British liaison officer, a gentleman who has already been in Prague helping

  779
  in the arrangements and is now going there again and is to have complete oversight and to be in touch with every single transaction. I think I may therefore fully claim that as regards the £4,000,000 of our free gift, really careful provisions have been made with the complete good will of the Czecho-Slovak Government, and we are satisfied that the arrangement secures most effectively that the money shall be devoted simply and solely to the assistance of those refugees who want help.
  If hon. Members will turn to page 12 of the White Paper they will see what is the definition of a refugee. It is the widest definition we could possibly have. There is an express stipulation that refugees are to be helped regardless of religious belief, political opinions or racial origin. In substance the definition covers everybody who cannot now find a home in Czecho-Slovakia. That is the intention. That is the first thing and the most important thing. I ought to say that the Czecho-Slovak Refugee Institute is an organisation that has been set up in Prague by the Czecho-Slovak Government to deal with this refugee problem. I have pointed out that there is an interlocking arrangement by which none of this fund held in the Bank of England in sterling can be taken away except with the authority of the British liaison officer, who will join in authorising any payment out of it. Secondly, but this is a matter which does not directly affect the British Government, a similar arrangement has been made about the French free contribution. The amounts which the Czechoslovak Government would otherwise have to pay periodically as interest and ultimately in repayment of capital of that French loan, are to be paid by the Czechoslovak Government into a special account, and they are to be similarly used solely for the purpose of assisting the emigration of refugees.
  Now we come to the other part of the transaction, the £8,000,000, which is not a gift or grant at all but is a loan which the Czecho-Slovak Government will raise and which they will be liable themselves to repay but in respect of which they have the advantage of the British and French guarantee. I would call attention to the contrast which is pointed out in Annex II on page 12 of the White Paper. The Annex says:
  780
  "The financial facilities to be granted to the Czecho-Slovak Government shall be allocated as follows:

  (a) for payment of expenses of emigrants as and when required in accordance with the scale set out in Annex III and with the terms of Annex IV

  £4 millions

  (b) for the general purposes of the reconstruction of Czecho-Slovakia, including the relief and settlement of refugees in Czecho-Slovakia as at present constituted

  £8 millions."

  The House will observe the contrast. As regards the £4,000,000, it is to be directed to assist refugees to emigrate, to go away, when they of course will need foreign exchange; the £8,000,000 is rather addressed to what is extremely important and I dare say what in point of numbers is a much greater problem, namely, the relief and settlement of refugees in Czecho-Slovakia, with no doubt a wider reference to the economic reconstruction of Czecho-Slovakia. At the bottom of page 12 of the White Paper there is this paragraph:
  "In the allocation of funds under paragraph 1 (b) the Czecho-Slovak Government undertake that priority will be given to those items of expenditure which will be of special assistance to refugees in Czecho-Slovakia. It is understood that these funds may be applied by the Czecho-Slovak Treasury temporarily for any urgent requirements of national reconstruction provided that the whole of the amounts so applied for purposes other than the requirements of refugee shall be replaced by the Czecho-Slovak Treasury as and when required for expenditure in connection with the relief and settlement of refugees in Czecho-Slovakia as at present constituted. It is understood that one of the primary methods of relief of refugees in Czecho-Slovakia will be the provision of productive employment through public works."
  I shall return to that in a moment. The paragraph goes on:
  "The Czecho-Slovak Government will as soon as practicable after the end of each quarter supply the United Kingdom and French Governments with a detailed statement of the expenditure actually incurred by them under paragraph 1 (b)."
  I have made a distinction, therefore, between the £4,000,000 and the £8,000,000. I wish to say again, because I regard it as an essential part of the plan, that this Agreement has been secured, I believe, with the general good will of everyone; I am not placing the virtue of one Government against that of another. The relief which is thus being provided, is to be given regardless of religious beliefs, political opinions, or racial origin. I think the whole House will be glad that that has been stipulated, and will be as

  781
  much concerned as we have been to see that it is carried out.
  Mr. David Grenfell: The right hon. Gentleman has not referred to paragraph 3 on page 13, in relation to the French contribution.
  Sir J. Simon: Does the hon. Gentleman mean at the end of Annex II?
  Mr. Grenfell: Yes.
  Sir J. Simon: I thought I had referred to it in a sentence. I am much obliged for the hon. Gentleman's question, because it is important to make the matter clear. I think the House understands that the French contribution really releases in the hands of the Czech Government a certain sum which otherwise would have had to be used for the service and repayment of their French loan, and that the provision is the amount in francs that the Czecho-Slovak Government would have had to provide. It will be utilised for the same purpose as the £4,000,000 from His Majesty's Government, to assist refugees who wish to emigrate.
  I would point out now that Annex III is important. It fixes the scale of payments in foreign exchange which is to be provided for emigrants. Unless this provision is made it is hopeless from the financial point of view for these people to attempt to go.
  Colonel Wedgwood: To where can the emigrants go?
  Sir J. Simon: I think there are places where they can go. Some of them are coming to this country. It is the more necessary to make this provision because most foreign countries which admit emigrants will not be willing to do so unless there is available, in the case of each emigrant family, the minimum sum which is required by those countries. With that fact in mind, Annex III has been drawn up as part of the agreement, and I do not think the House will say that I am wasting time if I read part of it. It states:
  "Each individual (or, in the case of a family, each family) who has complied with the legal requirements of the Czecho-Slovak Government with regard to emigration, but who has no available money of his own, will receive from the Czecho-Slovak Refugee Institute before emigration the sum of £200 (or the equivalent in the currency of the country of immigration), together with the cost of transportation of himself and his family (if any) to the country of destination."
  782
  That relates to the case of penniless people and is very necessary if they are to be able to emigrate.
  Mr. E. J. Williams: Are they expected to repay the money?
  Sir J. Simon: Oh, no. The next paragraph deals with the case of individuals who, though very hard up, still have a little money of their own. It states:
  "(a) Each individual (or family) having the necessary funds available in Czecho-Slovak currency will receive before emigration, against payment in Czecho-Slovak currency at the official rate, the sum of £200 (or the equivalent in the currency of the country of immigration), together with the costs of transportation of himself and his family (if any) to the country of destination."
  Imagine a poor refugee with a small sum of money in Prague. That money is necessarily in Czecho-Slovak currency and even if he were permitted to go where he could make use of it, it would be necessary to give him foreign exchange for that purpose. This provision is intended to supply him with that foreign exchange because he is to live in another country where the foreign currency and not the Czecho-Slovak currency is in circulation. We regard this as a provision of the greatest practical value. I will read to the House one more paragraph relating to the people in better-off circumstances:
  "(b) If any individual (or family) has further funds available in Czecho-Slovak currency, he shall, in addition to the sum which he is entitled to receive under sub-paragraph (a) "—
  that is, the £200—
  "be entitled to transfer into sterling (or into the currency of the country of immigration) at the official rate of exchange a sum of 50,000 Czech crowns "—
  I think that is equivalent to about £250—
  "subject to a charge not exceeding 30 per cent., e.g., a net transferable amount of 35,000 Czech crowns. Any sums collected by way of the charge referred to above shall be applied for the benefit of the refugees."
  The Government in affording this foreign exchange are not to make this large deduction for themselves but for the general purposes of the fund.
  Colonel Wedgwood: Under (a) or (b)?
  Sir J. Simon: That comes under (b).
  Miss Wilkinson: Is not 30 per cent. an extraordinarily high rate of charge?
  Sir J. Simon: It says "not exceeding." I do not know what the circumstances

  783
  are, but the important point is that the money does not go to the benefit of the Government that makes the charge but is really a contribution to the fund for people who are even poorer. The people who are getting this help of so much foreign currency and who are better off, are to make this contribution of 30 per cent. and it will go to the general assistance of the poorer. Bear in mind that this is the case of persons who are substantially richer. This is a useful provision to have in. If the hon. Lady will look at the scheme as a whole she will see that the provision is not put in in order to provide loopholes but for the purpose of making a scheme which will work by general assent. I will not say more about it now.
  Captain Cazalet: Do we understand that the maximum which they can take out is about £450 in sterling?
  Sir J. Simon: Under this arrangement, yes. There is nothing in the agreement to prevent a man from making arrangement outside.
  Lieut.-Colonel Sir A. Lambert Ward: Is it not a fact that the Czecho-Slovak State have very stringent regulations with regard to the export of currency and that an emigrant from Czecho-Slovakia cannot take money away with him?
  Sir J. Simon: Yes, I should think that is so. It is certainly so with some other countries on the Continent. I should think that this is a provision which will work. Let there be no doubt that it will greatly facilitate the whole operation of emigration.
  Miss Rathbone: What happens if the man is a really rich man with more than 50,000 Czech crowns? Has he to leave the remainder of his fortune in Czecho-Slovakia?
  Mr. George Griffiths: He will be all right.
  Sir J. Simon: That appears to be a matter of Czecho-Slovak law. I have attempted to give the House a picture of the scheme as a whole and I most seriously claim for it that although it is the result of a most laborious piece of negotiation it will justify the time which was occupied. I regret that we were not able to present the Bill immediately after the arrangement was first proposed. At the
  784
  Treasury we have had a whole series of close negotiations with French and Czecho-Slovak representatives. For my own part, I believe that the conclusion of the matter, and more particularly all the details in this letter of Dr. Pospisil and the Annexes which form part of the letter, thoroughly justify the occupation of the time and the effort which has been made. I am sure the House will know that I am speaking my deepest feelings when I say that although you cannot expect a Chancellor of the Exchequer in difficult times like these to rejoice when he sees another Bill which is going to make another claim upon the public purse—and, of course, I do not do so—I hope that the House as a whole will be prepared to accept this arrangement.
  I shall not discuss questions of policy with which Debates in this House have already been concerned. Let us take things as they are. Czecho-Slovakia is a small country, more restricted in area than it was, acquiring, as it has, a large addition to its own population, sometimes Czecho-Slovaks and sometimes it may be, those who have moved into Czecho-Slovakia from German or Austrian areas. From that point of view I ask that the Bill shall not only be carried but generally approved.
  Before I stop I would deal with another matter about which some hon. Members have been gravely exercised. They have been concerned whether or not this provision may really inure to the benefit of third parties. On that matter we have, at any rate, been diligent. It will not be possible to spend the whole of the £8,000,000 immediately for the refugees, in any case. The rate at which you deal with them is not as fast as that. That was why we agreed that, while priority will be given to such expenditure as will be of special assistance to refugees, part of the £8,000,000 may temporarily be applied to certain urgent requirements of national reconstruction, provided that the whole of the amounts are replaced as and when required for refugee purposes. Expenditure on maintenance of refugees cannot be expected to solve the problem as a whole. It cannot in any case, and we have agreed that one of the primary methods of relief shall be the provision of productive employment through public works. That was the passage to which I referred just now in the White Paper. The Czecho-Slovak Government informed

  785
  us that in speaking of public works they had primarily in mind the construction of certain roads which are of vital importance to them in the new economic development of their country. Many of the road and railway communications existing in that area now run through the territory of other countries and a considerable reorganisation and modification of their road system is necessary.
  I wish to add this: The Czecho-Slovak Government have given us a definite assurance that no part of these funds will be expended on building roads with a military object. The so-called German road is, as the House knows, being paid for by Germany. In addition, the Czecho-Slovak Government have undertaken to give us a detailed statement of the expenditure on all the above services actually incurred by them during each quarter. That some Members of the Opposition may find gaps in this scheme is, I suppose, certain. I can only say that it has been the subject of a great deal of work by my officials, and I present it to the House as being a really effective effort in a particular corner to deal with the terribly difficult, the desperately difficult, problem of refugees.
  4.31 p.m.
  Mr. Wedgwood Benn: I was rather surprised to hear, from a constitutional purist like the Chancellor of the Exchequer, an attempt to make some defence of the procedure adopted in the matter of this Bill. This is a private obligation of the Chancellor's contracted with the Bank of England. I am not sure that you could get a precedent for it without going back to the time when Mr. Fox came down and asked the House of Commons to pay the debts of the Prince of Wales. That was some time ago, but the present Government twice in this year have pledged public money—it is really quibbling to say that it is not public money—without the consent of the House and in both cases without any need. The first case was in regard to food storage, where they bought food and then required the House to give them an indemnity. There was no need for them to do that at all. The food could have been purchased in a secret way under statutory powers and with perfect propriety. The second case is this case. There was no need for the House to be apprised of all the details of the agreement which has been made between the Government and the Czecho-
  786
  Slovak and French Governments. All that need have been done was for the Government to put down a Motion, saying, "This House will to-morrow set up a Committee," and on such a Motion the difficulties could have been explained and Parliamentary assent obtained.
  I do not say this only as a Member of the Opposition, but as a Member of the House, that it is greatly to be deprecated that the Government should be getting into the habit of spending public money without coming to the House for its assent for that purpose. We are bound, in the times in which we live, to delegate a great many powers to executive officers with very wide authority. That is inevitable—we live in arduous times—but that cart only be done with safety if we can be sure that the financial control remains in the hands of this House. Without financial control here, Parliamentary democracy comes to an end. It is very artfully done. The Comptroller and Auditor-General may never get a look at this at all. All the accounts of the Bank of England will not go to him Everything is in perfect order, and nobody is committed to anything. The Bank of England has privately advanced money, and we then repay the money to the Bank, so that the matter would not be the subject of comment or come under the review of the Comptroller and Auditor-General. I think we are entitled to stress this point, and I wish it were possible that the House should make its opinion on this matter clear and effective, because it represents a real danger to Parliamentary government.
  I will give just one instance, which the Chancellor will remember. I do not see anyone in the House except the right hon. and gallant Member for Burton (Colonel Gretton), who would remember the circumstances. In 1910 the present Chancellor of the Exchequer was, I think. Home Secretary or Attorney-General.
  Sir J. Simon: Solicitor-General.
  Mr. Benn: Thank you. It was thought at that time that the Liberal Government would fall owing to the defection of the Irish vote, and the Conservative party was very busy organising divisions and attempting to throw out the Government, if the Irish vote failed them, on a snap division and so get their resignation, and then form a Government. The difficulty

  787
  was that the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) was very short of Supply, so that there would be no money, if the Government were defeated on a snap division, with which to carry on the Government. That was exactly the problem that faced Sir Austen Chamberlain and Mr. Balfour and the leaders of the Conservative party. If hon. Members would take the trouble to read Sir Austen Chamberlain's very interesting book—I think it is called "Politics from Within"—they would find that the Conservative leaders in 1910, Mr. Balfour and Sir Austen, were discussing a project for raising a loan in the City in order to carry on in defiance of Parliament, where they could not secure a majority until they had had an election, an election in which they were certain or very hopeful that they would be successful. According to this account by Sir Austen Chamberlain, Mr. Balfour said, "We must be prepared to act in defiance of the law," and he added, "The Comptroller and Auditor-General is the real difficulty." It is largely in the form of a dialogue, but I think it was Sir Austen who said, "Suppose we wanted a loan," and he went on to say that "Natty"—my hon. Friend the Member for the Isle of Ely (Mr. de Rothschild) will know to whom he was referring—had told him he could get a loan from the City easily. Therefore, this is not a small or trifling point. If this House is to permit the Government to raise private loans and then to come back to the House and attempt to secure Parliamentary consent, I say that the real control of Parliament over the Executive has disappeared.
  Now let me come to the Bill itself. It is a very sad Bill, when you think that a State which occupied so high and honourable a position in Europe as Czecho-Slovakia did a few months ago should be in the position in which it is to-day. It was a State that was sovereign, it was a State that paid its own way. Dr. Masaryk and Dr. Benes had given an impetus to the reconstruction of Central Europe, and economically Czecho-Slovakia was on the upward grade. As the "Times" said:
  "Nowhere on the Continent do minorities enjoy greater freedom than in Czecho-Slovakia."
  Lieut.-Colonel Sir Lambert Ward: On what authority was that?
  Mr. Benn: Only the "Times." [An HON. MEMBER: "I do not believe it."] I believe the despatches, but I do not believe the leaders. It is a State of which someone said:
  "It is a State built up on a basis of high ideals, a free democracy based on Christian ideals."
  That was by the Archbishop of Canterbury—[Laughter]. This is not a matter, in my judgment, for joking; it is a heartbreaking matter. Now you have a broken and a subject State, writhing under foreign control, bound to come here for help, for what help we can give. Why do we have to vote money for Czecho-Slovakia today? It is because she has lost her assets. What assets? Let us take some of them, and first, railways. At 14 points the main line is broken by German territory. You cannot go between the two chief towns in Czecho-Slovakia, from Prague to Brno, without crossing German territory, and I am told—I am sure the Chancellor has gone into the assets of the Czecho-Slovak State, because we are guaranteeing them a loan—that every train that passes through German territory is subject to a tax of 500 crowns daily. That is one of the reasons why we have to provide this money. Another is the question of railway stock. The Prime Minister will remember that when the Munich Agreement was debated in this House we asked what was meant by "installations." We had some idea that an installation meant something that stood where it was put, but I see that the Minister of Communications of the new Czecho-Slovak State has stated that under the Munich Agreement they have lost 800 locomotives, 3,270 passenger waggons, and 23,000 goods waggons. That is another of the reasons why the Chancellor of the Exchequer has to come here and ask for money with which to assist the Czecho-Slovak State.
  Take coal, lignite, brown, and hard coal. Lignite and brown coal have been almost completely lost, and of hard coal two-thirds has been lost. Take the figures for brown coal, which is the more important. In December, 1936, they had 1,600,000 tons, and in 1938, 137,000 tons. When their locomotives are made, as they are, to consume brown coal, this loss of brown coal really means that they have

  789
  to reconstruct all the machinery that depends upon that type of fuel. Take the public debt. They have lost towns and buildings and the millions of pounds which they had spent upon them. Take Ruthenia, one of the three federated States. They have lost their capital, and they are now compelled in the new capital to put up public buildings in wood. When Czecho-Slovakia took over this territory from the Austrian Empire, under Section 203 of the Treaty of St. Germain, they had to assume responsibility for the debt of the territory to which they succeeded.
  I would like to ask the Chancellor of the Exchequer—all these arrangements were to be left, under the Munich Agreement, to an international Commission—What has been done? Surely you cannot come to the House of Commons and ask for money for Czecho-Slovakia unless you have seen at least that the terms of the Munich Agreement, so far as the financial position of Czecho-Slovakia is concerned, have been carried out! When did this international Commission meet last? What did Sir Nevile Henderson, or the distinguished official from the Ministry of Agriculture who conducts so much of our foreign negotiations, do? Has this question of the apportionment of the public debt been arranged so that Germany assumes her part of the responsibility in regard to the territory acquired by her? Has that been gone into? I do not think that a prudent Chancellor or, shall I say, a Chancellor with a Gladstonian spirit should come to the House of Commons and ask for money for another State until at least he knows that the people of that State, to whom we are anxious to give the money, have had their own assets properly protected.
  There is another point. We are going to guarantee this loan to the Czechoslovak State. What Czecho-Slovak State? What frontiers? Are we going to guarantee a loan to a State whose frontiers we do not know? One of the favourite allusions of Government speakers here and in another place during the time of the Munich Conference and afterwards was this question of guaranteed frontiers. Can we have a plain answer to those questions? Perhaps the Prime Minister, who is here now, will tell us, Does a territorial guarantee of Czecho-Slovakia exist to-day or not? There is no reply. Suppose that tomorrow there is a change in the policy,
  790
  and Poland and Hungary are permitted to take Ruthenia and have a common frontier, and Ruthenia goes out of Czecho-Slovakia, with all the mineral resources which have been the subject of such careful investigation by metallurgical experts from Berlin in the last few weeks. Obviously the State would not then be so well able to bear the interest on a public debt as would otherwise be the case. But we do not know; we never have known. We have been told repeatedly that there was a guarantee of security, and yet today we can get no answer as to whether such a guarantee is in existence, and we must guarantee a loan to a State whose frontiers we do not know. I know, of course, that the real answer to these questions is that we dare not offer a guarantee, because Germany will not allow us to do so. They have made it plain that they do not intend to have British fingers stuck in the Eastern European pie.
  So much for the general side of the Bill, I will come now to the £4,000,000, and that is a part of the Bill of which we can all heartily approve. It is a gift, and I do not know why it was not possible to say, "We will give £10,000,000 to save the victims of the Nazi regime." It was done in the case of the £4,000,000, and I cannot understand why it should not be done in the case of those who remain in the State. However, the £4,000,000 for expatriation is a matter which alone would make it impossible to vote against the Bill.
  Let us look at some of the details of this matter. When these people leave Czecho-Slovakia, the cheapest way for them to come, say, to London, or to any zone of safety, would be by a third-class train from Prague to London. That costs £3 us. But Herr Hitler will not allow them to come that way, and we have to pay, out of the £4,000,000, twice that sum in order to ship them from Gdynia, or three times that sum to ship them by air from Prague to London. The total sum involved is only a small one. There will be, we hope, some 10,000 of these people who will be able to escape, and therefore the whole sum cannot be more than £50,000 or £60,000. But it goes against the grain that the House of Commons should be asked to put its hand in its pocket because Herr Hitler will not allow his victims to escape by the cheapest and shortest route.

  791
  Again, these people are the salt of the earth—industrious, skilled workmen practising trades which perhaps are not known in this country. Many of them also have capital. The Chancellor spoke at some length about the export of capital, and said that they can only bring 50,000 crowns, or, less the deduction of 30 per cent., 35,000 crowns. Suppose that they have more money and wish to leave, why cannot they bring it with them? One knows, of course, the questions that are asked about how much currency you have in your bag when you leave almost any State in Europe, but one reason why they cannot bring it is because the Czech crown, which was so stable and honourable a currency before Munich, is now a tied and controlled currency.
  Sir A. Lambert Ward: It has not been possible to bring currency out of Czecho-Slovakia for four or five years.
  Mr. Benn: Certainly there is control at the present moment, and one of the reasons for that is that Czecho-Slovakia, financially and economically, is falling into the German circle.
  Sir A. Lambert Ward: That did not apply four years ago.
  Mr. Benn: I am speaking of what applies to-day. If Czecho-Slovakia has to buy her coal from Italy and Germany, obviously she will not have so much foreign devisen to give to the man who wants to pay a railway fare. Supposing that Czecho-Slovakia has been told that the plan is—I will read from the "Times," if the hon. and gallant Gentleman will allow me—that:
  "Prague would continue to take Sudeten goods and some German goods, and, in return, Bohemia and Slovakia would sell to Germany agricultural products and what remains of their mineral1 resources."
  Czecho-Slovak trade with other countries would be sharply cut down. That is one reason why there is not enough devisen to give money to people who want to leave.
  Sir A. Lambert Ward: There is not enough devisen to allow the money to be brought out.
  Mr. Benn: Obviously, the hon. and gallant Gentleman is very well informed about this matter, but I am only dealing with some of the reasons which make it
  792
  necessary to restrict the capital which these emigrants can take with them. Recently the Germans took a large quantity of cement—the consumption of which is very great in Germany—from Czecho-Slovakia, and that was done on a clearing arrangement. Instead of sending their cement abroad, and receiving free currency, which might have been at the disposal of these emigrants, all that they got was a clearing, whatever that may mean, of some impossible kind.
  Hon. Members: Aspirin.
  Sir A. Lambert Ward: I quite agree with the right hon. Gentleman. I was only pointing out that all these restrictions in regard to the export of currency were in force three years ago.
  Mr. Benn: I do not think I am qualified to contend with the hon. and gallant Gentleman, with his expert information, but at any rate it is arguable that what has happened to Czecho-Slovakia has much weakened her, and that is one of the reasons why, when we get these highly desirable emigrants, with their skill and character, we cannot get them with their capital, because of the German control of the Czech State at the present time.
  Of course, the refugees who are there now are not the only refugees; there are more to come; and in particular I want to ask the Chancellor of the Exchequer about the optants, about whom he has not said one word. Those are the people who are left behind in the Sudetenland and who, under the Munich Supplementary Declaration, were to be given the right to opt. They have only six weeks left in which to exercise the right to opt. We know what has happened. I am really ashamed to refer to the "Times" again, after the castigation I received from the hon. and gallant Gentleman opposite, but we know from the "Times" that the Gestapo arrived almost immediately after the cession, in order to round up Marxists, Socialists and other undesirable individuals, and put them where they ought to be. We know, also, that there were rumours about concentration camps at Karlsbad and Teschen. A Czech friend of mine told me that he had many acquaintances in Sudetenland, and that he had written to them, but had never received a reply except once, when the reply was.

  793
  a printed postcard from Dochau saying that they were allowed to receive Christmas parcels. There were 400 Czechs there. When the Prime Minister came back with the Munich Agreement, we understood that these Czechs, who had been left behind in enormous numbers, would have an opportunity to escape, but up to this moment we have not heard a word about that. The Chancellor of the Exchequer has not referred to it. And yet, of the six months from 29th September, which will expire on 29th March, there are only six weeks left for these people to get out. Can the right hon. Gentleman tell us something about this, because he is right when he says that the House is very eager indeed to help the refugees? As far as the Germans in Czecho-Slovakia are concerned, they are not allowed to opt; they have to sign a form saying that they do not wish to do so in defiance of the wishes of the Führer. They are told that they have a role to fill.
  There is another type of people who will be included among the refugees, namely, the Jews. Everywhere where the shadow of the swastika falls there is Jewish persecution. The notion that it exists only in Germany is the greatest possible mistake. Every neighbouring country is compelled by the Germans to pursue a similar policy. If you go to Memel to-day, you can buy a house quite cheaply, because, although Memel is not Germany, the Jews have moved to Kovno for safety. In Danzig, although it is protected by an international Statute, all the Jews are being forced to leave by pogroms, robbery and the rest; and the same applies to Hungary and other countries. In any State where the shadow of Herr Hitler's rule falls, the Jews will be persecuted, and Czecho-Slovakia will be compelled to adopt a similar policy. M. Chvalkovsky, the Foreign Minister, would, it is generally understood, have been the choice of Czecho-Slovakia for its Presidency if his grandmother had not been a Jewess, and a new law examining into citizens' attestations, or the right of citizenship of residents in Czecho-Slovakia, was published two or three days ago. So far as Slovakia is concerned, you see everywhere the swastika flying alongside the Slovak colours, and a concentration camp has been instituted for Socialists, Jews and other untrustworthy elements.
  794
  Do we suppose that all this is being done by the good will of this State of Christian ideals, as the Archbishop described it? It is done under dire pressure from Berlin. We read to-day in the newspapers that a cultural mission has arrived in Prague from Berlin, to assimilate, by literature, films and the like, the cultures of the two peoples. I am not traversing in the least anything that is in the White Paper about the use of this fund for people regardless of race or religion. That is so. I am merely pointing out the facts, and asking for information as to what additional burden will fall upon the fund owing to the demand, covert or open, which is growing in strength, from Berlin, for assimilation of Czech policy to German policy in relation to the Jews.
  Let me now say just a word about the £8,000,000—the loan. The Chancellor of the Exchequer drew attention to page 13 of the Memorandum, where particulars are given of this, which is the more important part of the whole transaction. I would like to ask him this question: It was understood that £10,000,000 was made available some weeks or months ago to the National Bank of Czecho-Slovakia. Has he had any account of how the money has been laid out? It is customary in this House, when financial Estimates are laid, that some account should be given of the actual or projected expenditure, and I would therefore be glad if we could be told in the course of the Debate by the Chancellor of the Exchequer, or the Financial Secretary, or whoever replies, whether he has had any account from the National Bank of how this £10,000,000 has actually been laid out. It can be laid out for any purpose urgently, and it is intended that it should be replaced as and when the refugee requirements permit. In considering this question of how the money will be laid out, the House must bear in mind the painful fact that Czecho-Slovakia is subject to-day to the Reich. It is a vassal State. There may be some of the people there who are willing to work with Germany, but I am sure that no Czech desires to be a vassal of Germany. The fact, however, is that Czecho-Slovakia to-day is a vassal State. When, shortly after the Munich Agreement, M. Chvalkovsky, the Foreign Minister, visited Berlin, he said:

  795
  "Plainly we have to assimilate our policy to the policy of the German Reich, economically and politically."
  They assimilated their political policy by the abolition of parties. To-day there are no parties in Czecho-Slovakia. There is an Opposition and there is a Government, but in effect there are no political parties. To illustrate again the subjection under which they lie, I would ask the Chancellor of the Exchequer or the Under-Secretary of State for Foreign Affairs, who represents this side of the case, why there have been no elections in Bohemia since the Munich Agreement. Elections are to be held in Ruthenia on 12th February, and they were held in Slovakia a short time since. Why is it that in this State, this happy little Switzerland that the Chancellor said we were going to have after the Munich Agreement, there have been no elections? The answer is that they have not dared to have elections, because the Government would have been defeated and a Parliament would have been returned which could not possibly work in the servitude which the Berlin Government requires of the Czech Government. Perhaps the Under-Secretary will deal with this point—I am sure he will if he speaks in the Debate—and will let us know why it is that no elections have been held in Bohemia and Moravia. The subjection in which Prague lies to Germany cannot be illustrated better than by this simple incident. In a neighbouring village, which happens to lie in Germany, one German policeman could turn out the whole electric supply of Prague. The control of the whole supply lies in that village, which is in German territory. That simple illustration shows clearly how completely the subjection has been made effective.
  In deciding upon what public works this money is to be spent, the Czech Government will have to have regard to their relations with Berlin. I notice that only a day or two ago a newspaper—it was not the "Times," but the Government paper in Prague—said:
  "We must join the Central European bloc, under Germany's predominant influence. We must consider Germany's situation, and avoid creating new industries in the Republic similar to those which are already numerous in Germany."
  You will find references again and again by correspondents of newspapers, the "Times" and others, pointing out that
  796
  the Sudeten Germans are making the firmest possible stand against the erection of competitive industries in what remains of Czecho-Slovakia. No wonder they say in Prague that the present President of Czecho-Slovakia is the first President of the second republic in the Third Reich. The Chancellor said that this money is to be spent on productive employment for Czech refugees. Many hon. Members share his fear that such employment might inure to what he referred to euphemistically as "a third party." It is more than possible that the productive work will inure to the benefit of the third party.
  The House will remember that when the Hungarians made their claim on the Czechs, for some reason which was difficult for the Hungarians to understand, Bratislava did not fall to Hungary; it was left in Czecho-Slovakia—a point which was referred to by the hon. and gallant Member for Carlisle (Brigadier-General Spears). The reason was, of course, that there was a known project for a Danube canal, and it was necessary that the Germans should retain this piece of territory, and leave Bratislava in the hands of Czecho-Slovakia, a vassal State, for the purpose. I see that one of the Ministers over there has stated that the canal will be constructed jointly by Czecho-Slovakia and Germany, that the Czech share will be £70,000,000, and that it will employ 25,000 workers. Is that one of the public works? What could be better than to employ refugees on this canal? It would keep them at work for a long time, on a great public project. So the guaranteed loan may possibly mean that the German submarines will have a new entrance to the Black Sea. Let us take another case. The Chancellor was insistent that this money should be spent on roads, but not for military purposes. I do not see how you can ensure that. Do you put up a notice, "This road not to be used for military purposes?" There are several soldiers in the House. Perhaps they can explain how these roads are excluded.
  I will not speak about the great road from the German frontier through Czecho-Slovakia. The Germans have also got an arrangement by which they can run military trains and munition trains right through. I will not speak about that road; I will take another road. It is the motor road connecting Western Bohemia with the eastern provinces. It

  797
  is to be commenced next Spring, and will be 600 miles long and will employ thousands of men. I believe the road is to be started at the Rumanian end. This road is necessary for the Prague Government. At the present time the only communication with the Province of Ruthenia, or what they call Carpathian Ukraine, is by road. This road is in ribbons, because of the military lorries which are being used to carry down soldiers to maintain order in the provinces. There is a road from west to east; here is the £8,000,000 loan. It is merely to send down public officials from Prague to the capital of Ruthenia. Yet it is a road which will lead direct to the Rumanian frontier. It is intended, in the minds of those who would like to see it constructed, for that purpose. It is a road which, with all their rights over this little State, the Germans can use, if necessary, for the purpose of keeping the Hungarians in order. It is a road which ultimately leads to the Black Sea and Russian Ukraine.
  What the Government have overlooked is this. The minds we are facing to-day in Germany are strategic minds. Some people think the Germans went to Munich to carry out some principle of Wilsonian self-determination. If they wished to liberate minorities, there are plenty in Poland and in Italy. They went to Munich in pursuit of great strategic objectives to the East. There is more than a danger that we are contributing our mite to establishing what exists almost completely to-day—a political, economic and military domination of the East by Germany.
  5.9 p.m.
  Mr. Harold Macmillan: The Bill which is now before the House represents the last act of a tragic story and I am not surprised that the Chancellor of the Exchequer, in introducing it, pitched his speech on a very low note. This is a subject on which it is difficult for anyone who has any personal knowledge of any of its ramifications to speak without considerable emotion. I will try to say what I have to say without exaggeration, and I will try to avoid sentimentalism or overstatement. As I understand what the Chancellor has said, the financial effect of these agreements is to increase the sum from the £1,000,000 originally advanced to £12,000,000, of which £4,000,000 is to
  798
  be a free gift of the British Government, to be spent on refugees outside Czecho-Slovakia, and £8,000,000 is to be a guaranteed loan, to be spent primarily on refugees inside Czecho-Slovakia.
  May I say a word on those refugees who are coming out of Czecho-Slovakia, some of them into this country and some into others? Why is this sum necessary? It is necessary for two reasons. First, because of those refugees who had originally left Austrian and German territory and sought asylum in Czecho-Slovakia, and were being demanded back by the German Government. There is grave fear that they may have to return to Germany, and, unless they can be evacuated rapidly, they may become the victims of persecution. There is a second reason: the inhabitants of the Sudeten territory, those people who were liberated by this principle of self-determination, and who, alas, find that their liberation means that they are deprived of all their resources. The right hon. Gentleman rightly pointed out the difficulty of transferring currency. To my personal knowledge, some of these people who are now fugitives from the Sudeten territory, and some who are even living in Sudeten territory, have been deprived of their possessions because they were disliked by the present Government.
  One has to be careful of stating cases: certainly I will not state names, but I know a case of some refugees who are now my own guests. They had to leave because they were politically hostile to the Government. They had sufficient fortune to maintain their own families. In one case, only the head of the family, who was disliked by the Government, had to leave. This man thought that his family would be all right, because he had left sufficient to keep them; but that has been seized and turned into block marks, which cannot be taken out. This refugee problem is partly the result of Munich, and partly the result of the terms of the Munich Agreement having been broken, and widely broken, by the Governments concerned.
  The remaining £8,000,000 is to cover "general purposes of reconstruction," in Czecho-Slovakia, including the relief and settlement of refugees, but the Chancellor has made it plain, and the right hon. Gentleman who has just spoken made it still more plain, that this money may be

  799
  spent on other purposes, provided that an equal amount of money is replaced by the Czech Government. So the £8,000,000 is really to be spent for the benefit of the Czech refugees now in Czecho-Slovakia. I will not go into details of the danger of these moneys accruing for the benefit of third parties, but the position really is that this £12,000,000 is now to be spent as to £4,000,000 on refugees who leave the country, and £8,000,000 on refugees who are still within the confines of the borders of Czecho-Slovak territory. What, then, has happened to the long-term reconstruction of the economic life of Czecho-Slovakia, which, when this money was first granted by the Bank, was the purpose of the loan? When the original advance was made in October, 1938, it was in connection with a request to help to raise a loan to Czecho-Slovakia of £30,000,000. That was the sum mentioned by the Prime Minister in the Debate. The £10,000,000 was represented as an instalment justified on the principle—and I use the Prime Minister's own words—that:
  "'He who gives quickly gives twice'."
  He spoke of it as being related to a "final" figure as an advance or instalment. I quote his words again:
  "How this advance"—
  the £10,000,000—
  "will be related to the final figure which may be decided upon hereafter is for the future.''—[OFFICIAL REPORT, 3rd October, 1938; col. 46, Vol. 339.]
  The reason which the Prime Minister gave at that time for the loan was that we must recognise that Czecho-Slovakia had been put in a position where she has to reconstruct her whole economy, and that in doing that she must encounter difficulties which it would be practically impossible for her to solve alone. At that time no mention of any kind was made of refugees. The Government were not prepared to admit that there would be a refugee problem. The Home Secretary said—he is not in the House at the moment—that "the limited and controlled cession of territory" and the conditions regarding the safety of the new minorities created by the Munich settlement "would be carried out in a fair and reasonable manner." What then, has become of the £30,000,000 of which this £10,000,000 was to be an advance? I know that at the time many of my
  800
  friends who consulted with experts felt that it might have been a much larger sum, perhaps £100,000,000, really to rebuild the economic structure of Czecho-Slovakia. Why is it that the appeal for a loan adequate for this purpose which the Prime Minister told us on 3rd October would meet with a sympathetic and even generous response, is no longer even under the consideration of this House? Why, is it that we have had to do what one has to do in business, in politics and in other transactions: we have had to write down the whole transaction. We have had to whittle it away and we have had to admit, what the Chancellor of the Exchequer hinted at with great diplomatic decorum, that we are unable to carry out the original purpose of this loan because of the complete transformation of the situation, and because the critics of the Government at that time have proved to be right. Only in October of last year the Prime Minister told us that:
  "It is my hope and belief, that under the new system of guarantees, the new Czecho-Slovakia will find a greater security than she has ever enjoyed in the past."
  The Home Secretary told us in the same Debate that
  "I believe that the international guarantee,"
  in which we have taken part will more than compensate for the loss of the strategic frontier and that the new Republic would be made
  "as safe as Switzerland has been for many generations in the past on the Continent of Europe."
  There is an unconscious humour in the last remark, when one considers the present efforts of the Swiss patriots to fight the insidious propaganda of Nazi Germany; when Switzerland is being ordered by Germany to control the free expression of her writers and journalists, and when she is rapidly, almost feverishly, fortifying her frontiers upon the North and upon the East. But would the Government spokesmen to-day repeat the statements in which they visualised Czecho-Slovakia settling down in peace and in security, confident that the political and economic independence, and the territorial integrity of the new Republic, would be freed from the noxious burden of an incompatible population and enter into a new, prosperous and free life? All that has just gone and we may as well be frank about it.

  801
  The right hon. Gentleman the Member for Gorton (Mr. Benn), has adduced by chapter and verse many facts which this House may just as well know and admit. The population of Czecho-Slovakia has been reduced from 15,000,000 to 10,000,000; the area of the country has been reduced by 30 per cent.; and it carries the same burden of debt with two-thirds of the population. Fifty per cent. of her productive forces have gone to Germany, and 90 per cent. of her fuel resources have gone to Germany. Slovakia and the Carpatho-Ukraine have become the autonomous territories, and the rolling-stock has been stolen contrary to the conditions of Munich. Political parties have been banned. There is no freedom, and there are no elections and no free Parliaments. The Jews have been disfranchised, and, to refer to what has already been noticed, the greatest irony of all, some of this money may now be spent upon completing the Oder-Danube Canal, for which it was thought necessary without the slightest justification to seize a territory of 70 villages and transfer 20,000 people who are non-German.
  We know that assurances had to be given, and have been given, by the Foreign Minister of Czecho-Slovakia that they will pursue what is called a loyal attitude towards Germany. Berchtesgaden was bad enough, then Godesberg, and then Munich. The conditions are far worse than anything ever demonstrated at Godesberg which we were then prepared to resist. I do not know of any words which can describe these conditions except those again of the Prime Minister. The conquest and subjection of a State by a foreign enemy which
  "dominates by the fear of its force"—
  which is precisely what he said in his broadcast on 27th September—he would feel—
  "must be resisted."
  It has happened and it has not been resisted.
  I am not going to oppose a Bill which, at any rate, gives £4,000,000 to those victims of this settlement who had to leave their country. I have seen enough of them during recent months to vote money willingly if it were ten times this amount. It is the least we can do to cover some of the shame and indignity to which we have been subjected. We ought to face the situation and take this opportunity of
  802
  asking the Government, do they admit these facts? Are they still trying to cover them up and pretend that it might have been a fair settlement, and would have been a fair settlement perhaps, as they argue, if it had been fairly operated and implemented, but which is, in fact, a tremendous blow, perhaps an irreparable blow to the whole structure and stability of Europe.
  Is it too late? We might have given £10,000,000, £12,000,000, £20,000,000 or £50,000,000 and wasted it all, but surely it is not too late. In recent months we have recovered a great deal of our sense of pride and power. We are rebuilding our armed forces, and every day we seem to be gaining in national unity and determination to resist before it is too late further pressure of the kind which we have had to give in to before. Have we abandoned altogether the Eastern Front? Are we attempting to rebuild confidence and to bring together the smaller nations which are still looking for relief? They may be dominated to-day by Germany. What else can they do? They are not willingly dominated. We only need give them a lead in both financial support and trade. Leadership can still be given which depends upon the foreign policy of the Government as well as upon the policy laid down in this Bill to-day, instead of getting out of it cheaply by carrying out what we said we would do and putting a little more into the pool. It is the same when you have a bankrupt friend. You know that if you pay a little more it will not go to him. It all goes to the creditors and will perhaps bring up the payment from 1s. to 2s. in the £. Is it to be that kind of thing, or is it to be a useful service to rebuild a front which, I think, can still be rebuilt if developed with energy and power. The answer turns on Czecho-Slovakia, Rumania, Hungary. It turns on Russia. When we were on the eve of war the Foreign Office issued an official statement on the Tuesday night that, in the event of war, England, France and Russia would stand together. Is that still the policy of the Government? What has happened to our Russian policy?
  Mr. Deputy-Speaker (Sir Dennis Herbert): I am afraid that the hon. Member is getting far away from the provisions of the Bill.
  Mr. Macmillan: I apologise if I have wandered from the point which is covered by this Bill. Quite honestly, I believe far more in the unity of the nation to voice what we all want to voice. I am not here to say that this Bill is wrong. I support it. I am not here even to say, "We were right and you were wrong." If we are to be of any use in the future we may as well admit the truth that we have had to write down from the £30,000,000 suggested four months ago, from the £50,000,000 that we talked about, with the idea of reconstructing a free, independent, economic, self-dependent Czecho-Slovakia. We have just had to write it down and do the best we can to deal with the most unhappy victims of persecution. That is what this Bill is for, but at least let the House know, and the country realise, that this is not the picture that was painted four months ago. Let us in that spirit be determined to face reality and not live in a world of unreality and self-deception in which, I am afraid a great part of the people of this country still allow themselves to be deceived.
  5.29 p.m.
  Sir A. Lambert Ward: It was not my intention to intervene in this Debate but the hon. Gentleman the Member for Stockton-on-Tees (Mr. Harold Macmillan), in his speech committed one or two such glaring inaccuracies that I feel I must contradict him. He said—and I took down his words very carefully—referring to the fuel or coal supply of Czecho-Slovakia, that 90 per cent. of her fuel supply has gone to Germany. A statement like that is hopelessly inaccurate. In the days before the unfortunate instances took place, between 25 per cent. and 30 per cent, of the entire fuel supply of Czecho-Slovakia came from the Teschen area.
  Mr. Harold Macmillan: What I said was that under the settlement 90 per cent. of the fuel resources had gone to Germany and Poland.
  Sir A. Lambert Ward: No.
  Mr. Macmillan: I stand corrected.
  Sir A. Lambert Ward: That entirely alters the position. The hon. Gentleman in making an important speech should be more careful in making statements of that kind. It entirely alters the bearing of the subject. In regard to the statement
  804
  as to the coal supply at Teschen, which has been lost to Czecho-Slovakia, I do not think anyone will mind my saying that the Czecho-Slovak claim to the Teschen coal area is not a very sound one. Let us go back a few years and rehearse what took place, and how Czecho-Slovakia came to be in possession of that area. I think I am right in saying that it happened in the days when Poland was fighting with her back to the wall against Soviet Russia. The frontier delimiting the Teschen area had already been decided upon, but the Czecho-Slovak authorities were not satisfied, and, taking advantage of the opportunity which the parlous state of Poland gave, they simply sent armed military forces into Teschen and occupied the area, where they remained for 20 years. If the hon. Member considers that is a just claim to that particular area, all I can say is that I very much differ from him.
  With regard to the statement regarding the roads, it is impossible to define what is a military and a non-military road. All roads are useful for military purposes, but a road which leads directly to another country's frontier is looked upon as being more of a military character than one which runs parallel to the frontier. I think this money could not be better spent than in developing the road system of Czecho-Slovakia. The road system of that country has been notoriously backward for the last 20 years. It is one of the worst in Europe. There is a good system of communications across Germany and to a very large extent across Austria, but in Czecho-Slovakia the road and the railway systems are hopelessly inefficient. The road and rail system of Czecho-Slovakia would return 50 per cent. in value for the money spent upon it. What was necessary before the days of the Munich Agreement is infinitely more necessary now. As the right hon. Gentleman said, the roads and the railways in and out of Germany and Czecho-Slovakia and in and out of Czecho-Slovakia and Hungary lead to a very serious loss of time and are a detriment to trade generally. I should not have thought that the sum which the German Government are demanding from the Czecho-Slovak railway authorities for the running of their trains over what is now a German Government rail road, is excessive. The figures given by the right hon. Gentleman were accurate. He said

  805
  that 350 crowns per train was the amount. That, I am given to understand, states correctly the sum, and it is not excessive.
  Brigadier-General Spears: The Czechs have to pay insurance on trains passing through what is now German territory, and are liable for all risks to their trains in German territory and to German trains in Czech territory. This arrangement is not reciprocal. These risks are not borne by the Germans in regard to their trains in Czech territory.
  Sir A. Lambert Ward: I believe that is correct. It is a fact that the German trains pay the same in going through Czecho-Slovakia as the Czech trains pay in going through Germany, with the exception of the insurance, which is not a very serious item. I do not think it amounts to very much. In regard to what was said about the territory of Pressburg, formerly Bratislavia, forming a junction with the Oder-Danube Canal, and the possibility of sending submarines to the Black Sea, that possibility already exists, by the fact that the Rhine-Danube Canal, which has been turned into a ship canal and will be completed in two or three years time, will afford any facility which is necessary.
  Mr. Benn: It means just doubling the facilities.
  Sir A. Lambert Ward: The facilities provided by the Rhine-Danube Canal will be so ample that doubling will not be necessary. In regard to the actual amount that is being advanced, I am very glad to hear that the Opposition do not intend to divide against the Bill, because it is the least we can do to help the new State of Czecho-Slovakia. I said so in a short speech which I made on the Munich Agreement, and I reiterate it now. It is the least we can do to help. There is not the slightest doubt that Czecho-Slovakia were led astray, not by us but by our Allies, for whom we have some responsibility.
  Mr. Crossley: Is it not a fact that what my hon. and gallant Friend said on the Munich Agreement referred to the sum of £30,000,000?
  Sir A. Lambert Ward: I do not think that I referred to any actual amount. I expressed approval that an amount of money was being voted to assist the Czechs in their difficulties. As far as I
  806
  remember, I do not think I criticised the amount or expressed the wish that it should be larger or smaller. As I have already said, we owe something to this country, which has been the victim of very unfortunate circumstances. It is not our fault but to some etxent the fault of our Allies, France and Russia.
  Mr. Duff Cooper: Have we any alliance with either country?
  Sir A. Lambert Ward: I understand so. I only know what has been said in this House.
  Mr. Mander: The hon. and gallant Member says that Czecho-Slovakia was let down by our allies, our allies being France and Russia. Does he really mean that?
  Sir A. Lambert Ward: I certainly mean that if the Czech Government in the pre-Munich days had not thought that they would be entitled to support from both France and Russia, they would have come to an agreement with the Sudeten Germans which would have been very much more to their benefit. When I was in the Sudeten area in August of last year no one there even suggested that an alliance with Germany was a desirable thing. All they wanted in those days was home rule, if I may so call it, on the lines of our own Dominions, or something on the lines of Swiss Federal home rule. The Sudeten areas at that time would have been absolutely satisfied with that, and I think they would have got it if the Czech Government had not been encouraged to stand out by promises that were made largely by France.
  Mr. Benn: Has the hon. and gallant Member read Lord Runciman's letter—
  Sir A. Lambert Ward: Most carefully.
  Mr. Benn: —saying that what caused the breakdown in a hopeful situation was encouragement from Germany.
  Sir A. Lambert Ward: That was at the very last stage of the discussions. There was not the slightest doubt that the Czech Government would have seen their way to grant some form of home rule long ago if they had not been encouraged by France to stand out against the demands of the German-speaking population of Czecho-Slovakia. My object in rising was to correct some of the incorrect remarks

  807
  that have been made. I conclude by congratulating the Government on bringing in this Bill and doing something to help a country which has been let down, though not by us.
  5.40 p.m.
  Mr. Mander: In listening to the hon., and gallant Member who has just sat down I could not help feeling that he belongs to that group in this country who seem to me to be as dangerous in their way as the Nazis in Germany. I do not know which is the most dangerous—the innocence of the Prime Minister and the Government or the arrogance of Herr Hitler and the Nazis. The Measure which we are considering is of very great importance to Czecho-Slovakia and to Europe generally, and it is of special importance to the Chancellor of the Exchequer. The constitutional question has been dealt with in an extremely able way by the right hon. Gentleman, whose words were wise, and I hope that in future no steps will be taken to spend money without statutory authority. It would have been possible for the Chancellor of the Exchequer earlier in the autumn to have come to the House and have got some general authority enabling him to make grants, but he chose not to do that. Therefore, we have the situation to-day that in the event of this Measure being rejected on Second Reading by the House of Commons the Chancellor of the Exchequer, so far as I can see, will be personally liable for the sum of £10,000,000. I imagine that even the overflowing funds of his own party organisation will hardly be sufficient to meet that deficit.
  Sir J. Simon: I shall borrow from my friends on the other side of the House.
  Mr. Mander: The Chancellor of the Exchequer made no reference in his speech to what I think is a very important passage in the letter from Dr. Pospisil to Lord Halifax, in which it is stated that what has been done falls short of the request for assistance made by the Czech Government. Whoever replies will, I hope, be good enough to say why we were unable to meet the request of the Czech Government. They are not satisfied, because this falls short of what they asked. Therefore, we are entitled to some information. It has been pointed out that the situation which faces us to-day is of a wholly different kind from that of the spacious days of
  808
  early October. Then, we were contemplating a loan of at least £30,000,000. In the King's Speech there was this statement:
  "My Ministers have already arranged for an advance of £10,000,000 to be placed at the disposal of the Czecho-Slovak Government, to meet urgent requirements."
  The idea then was that they could do whatever they liked with the money. There was no question of any of it being paid back. It was suggested that probably more would be given. Moreover, at the time when the Czech Government were being pressed very hard by the British and the French Governments to agree to the painful proposals dictated to them, assurances were, I understand, given that financial support would be afforded to them. We all know that what actually happened was that the unfortunate Czech people have been handed over gagged and bound to the oppressor. They are not in a position to resist, and that is why the Government are going back, inevitably, on the idea they had at that time.
  What is the Czecho-Slovakia with which we are dealing to-day, compared to what was contemplated? Some reference has been made to it. It is extraordinarily different from the free and happy life that was envisaged by Ministers at that time. The Chancellor of the Exchequer euphemistically referred to certain areas which he said had been ceded. I think "captured by force" would have been a more accurate description of what actually happened. Germany has obtained a great deal more than the Godesberg proposals, which were regarded as outrageous at the time and rejected by the Prime Minister and this country. About 2,850,000 Germans have gone to the Reich, 850,000 Czechs have gone to the Reich, and in the sacred name of self-determination I suppose that 150,000 Czechs have gone to Poland and 200,000 Czechs and Ruthenians have been handed over to Hungary. All the fortifications on which tens of millions of pounds were spent at the instigation and with the encouragement of the British and French Governments have been handed over to the enemy.
  Industrially the China porcelain works have gone, two-thirds of the glass, half of the textiles, one-third of the timber and chemicals, and while the Skoda Works still remain within the bounds of the new State, they are bound in the end

  809
  to come under German domination. Not only is the Czech Army and Air Force no longer available to fight on the side of democracy and liberty but the great Skoda Works, instead of supplying the democratic forces as they did, will now be supplying the enemies of the democratic forces. That is a very serious element in the situation. One hon. Member has referred to what was done with regard to the electric light of Prague. Let me give another example. A German official inside Germany can now by a turn of the hand cut off the water supply of the town of Pilsen. Further, the 300,000 Germans who are living in Czecho-Slovakia are being organised on Nazi lines. They are deliberately advised to work themselves up into an organisation for useful Nazi purposes in the future, and anti-Semitic legislation is in force already. It is estimated that the Czecho-Slovak State has lost over £1,000,000,000. I understand that the Germans are claiming a considerable portion of the gold reserves and the social insurance fund, and in addition that Germany is unwilling to take any share of the national debt of the territory which has actually come to her. It is perfectly clear that the country is becoming a vassal State. We have to recognise it, and that is the reason why it is not possible to act in the generous and lavish way in which I think most hon. Members, whatever they may have thought about the events at Munich, were willing to do last Autumn.
  I should like to ask some questions as to the uses to which this fund can be put. At first it was at the free disposal of the Czech Government, but that has gone. I understand that £10,000,000 has been handed over and that it is going to be paid back. I should like to ask in what way the money which has already been spent has been spent? Can we have some information about that? It would be interesting to know what the position would be if the liaison officer who is controlling the expenditure of the new money disagrees with the plans which are put forward. I assume that we have a veto, that if we do not think any particular scheme is a wise way of spending the money we could prevent it being carried out. I should like to make a reference to an important paragraph on page 10 of the White Paper, in which it is laid down that no refugees will be
  810
  forced to leave Czecho-Slovakia "if they thereby run the risk of danger to health, liberty or life." Does that mean for any destination? Does it mean that not only none of the people on the danger list would be forced to go to the democratic or similar States in Europe, but that they will not be forced to go to Germany? That is the important point.
  If that is so, if there is a definite undertaking, I should like to know how it is to be carried out. What power have the Czech Government if they are told to-morrow that they must hand over certain individuals? They have to do as they are told. We want more information as to the precise meaning of these words and how they are going to be carried out in practice. In Annex I of the White Paper a wide definition is given of "refugees," and I assume that it includes not only Austrians and Reich Germans who may have taken refuge in Czecho-Slovakia in the old days but also Sudeten Germans and those who formerly lived in what is now Hungary and what is now Poland. Then there is the important question of reconstruction. Here I should like to read some words from a report published recently by the Royal Institute of International Affairs which gives some interesting information as to what has happened. It says:
  "Not only have her commercial centres and richest agricultural land been ceded to Hungary, but the main railway line connecting Ruthenia with the west now passes through Hungarian territory, and the only communications left to her are three north-south sections of railway and a few ill-kept hill roads, which further emphasise her natural north-south economic basis.… The Czech-German settlement resulted in the cutting of the railway system at no fewer than 58 points."
  Is any of this money liable to be spent on railways? That certainly is of great military importance. We are told that in connection with the great new road, which is going to be German territory contrary to the Agreement of Munich, from Breslau to Vienna, none of the money can be spent on that. But surely that road is to have ancillary roads, and what is important is that none of this money shall be spent on roads which would be naturally and inevitably feeders of the great German military roads going from north to south. A question has been asked about the east-west road from Jasina to Pilsen. I think we should have a definite assurance that none of this

  811
  money is going to be spent upon that. The hon. and gallant Member for North-West Hull (Sir A. Lambert Ward) referred to the bad condition of the roads in Czecho-Slovakia. I am afraid that his experience must have been a great deal less happy than mine. I have toured all over the country in a high-powered car at a great pace and found the roads as good as anywhere in Europe. The utmost care will have to be exercised to see that in spending money on reconstruction work we are not in fact assisting Germany in her military plans. On page 14 of the White Paper reference is made to:
  "The transfer into foreign currency of interest, dividends and rents on investments or property owned in Czecho-Slovakia by a refugee who has emigrated and also of the capital amounts concerned."
  It makes it clear that the transfer of money from other countries will be permitted. In so far as that is practicable it is an important question from this point of view. There are a number of Sudeten Germans now in Czecho-Slovakia who are interested in factories in the territory which has been handed over. They have lost their market in that area, but a great deal of what they made was exported to the United States and that market, that good will, remains. Many of these people would be glad to come over to this country, to transfer their money and set up factories which would give employment, non-competitive employment with articles made here, and so encourage this export trade to the United States. I do not think there is much likelihood of much of the money being spent on factories in Czecho-Slovakia because the Germans have made it clear that they do not intend to allow any possible competitive factories to be set up. They have prohibited it.
  Finally, it seems to me that we are looking at a very sorry spectacle to-day; the failure of the hopes of the Government—not a failure of all our hopes because many of us felt that nothing could come out of it—in believing that they were doing something to give a new start and a better and happier life to the people of Czecho-Slovakia. No one can pretend that that exists for a single moment. They are subservient. We are becoming subservient, too. I trust the time will never come when we are a vassal State, but we are steadily moving to my mind
  812
  in that direction. Here is this little country a shining example in the centre of Europe, with all her democratic ideas, betrayed by her friends. All they can do is to bow their heads in acquiescence at their fate for the moment. But while they bow their heads their spirit is unbroken. They have no intention of losing the ideals for which they stand. I believe they will keep alive in their hearts the flame of their culture until the darkness of the night passes and once more the sunshine of liberty illuminates their land and allows them to hold up their heads once more.
  5.59 P.m.
  Mr. Boothby: I want to reinforce certain of the questions which have been put to the Government during the Debate. I hope the Under-Secretary will give us some indication of the position of the Government first of all with regard to the guarantee of the frontiers of Czecho-Slovakia. Do they regard the frontiers as having been finally settled, and will they guarantee them or not? There are two other questions which I regard as of great importance. The first is the question of compensation. The Germans have made no attempt to carry out the compensation clauses of the Munich Agreement. Are we going to put any pressure on Germany to deal more fairly with Czecho-Slovakia? It is one of those things which can be rectified. Then there is the vital human question of the refugees, the Czechs in Sudetenland or the Germans who still have a chance under the Munich Agreement to get out if they choose. What is being done about that? Are they all in concentration camps? Are the German Government going to give them a chance to get out if they choose? I feel that the Government might do so much still for Czecho-Slovakia and for the refugees by bringing a little pressure to bear on Berlin. We have had quite enough pressure from Berlin. Could not we now start to put a little gentle, tactful pressure on Berlin for the sake of these unfortunate people? I ask my hon. Friend to give us some indication as to the position with regard to frontiers and whether our guarantee of the frontiers still holds good, and also with regard to compensation and optants.
  Every hon. Member who has spoken in the Debate has struck a rather mournful note. I noticed that even my hon. and

  813
  gallant Friend the Member for North-West Hull (Sir A. Lambert Ward) referred to Munich as an unfortunate incident, which represents a considerable change from the attitude which he took up some months ago. I remember the generous emotion which prompted the original gift to Czecho-Slovakia. It was felt by the Government, and by all of us, that there was a real hope of enabling Czecho-Slovakia, even after the Munich Agreement, to have a good life. I remember very vividly the day following Munich. A feeling of profound gratitude towards Czecho-Slovakia swept over us an; throughout the whole country there was gratitude towards Czecho-Slovakia for saving us from war at that time. It was a national feeling. I remember the immediate response of the Government to the urgent appeal which some of us made for financial assistance, without delay, to the Czecho-Slovak Republic, which had made this great sacrifice. There was the grant of £10,000,000, with the promise of another £20,000,000, and perhaps more, if necessary; there was the guarantee of the frontiers; the hope for the future.
  A great deal of water has flowed under the bridge since then. We are in very much more reduced circumstances, and I hope reduced pride, now than we were then. I never had any illusions about the Munich Agreement. I never thought that much good could come of it; but I am bound to admit that I thought more good would come of it than has. The consequences have been so much worse than even the most apprehensive of us feared at the time. Why, after all, has there been this reduction from the £30,000,000 to this very elaborate but quite modest arrangement in the Bill? I suppose the reason is that the Government concur in the view that was so forcibly expressed by the right hon. Gentleman the Member for Gorton (Mr. Benn), that Czecho-Slovakia to-day is in the grip of Germany. The right hon. Gentleman described Czecho-Slovakia as being a vassal State. I think that is an exaggeration, I think the right hon. Gentleman overdid it; and I am not sure that we do not all overdo this idea of Czecho-Slovakia being a vassal State.
  There is no doubt that at the present time Czecho-Slovakia is under the military domination of Germany. She is; and why? Because we put her there. It is
  814
  not her own fault. To some extent Czecho-Slovakia has to conform politically and economically to Germany at the present time, but I submit that, considering the military position in which she is, she has stuck up for her own rights remarkably well. She has made agreements with Germany which were not too bad, and I understand she is still making economic agreements with Germany from which she will emerge with a good deal of economic independence. I think it only disheartens the Czechs, and is an overstatement of the case, to talk in this House about Czecho-Slovakia as though she were a hopeless case and only a vassal State of Germany. I believe that is not so. Czecho-Slovakia has bowed her head—and in my opinion rightly so—to the inevitable. They were ordered to submit by us and the French, and they submitted, for they had no option but to do so. They were ordered to submit by us by telegram from Munich.
  Viscountess Astor: To prevent a European war.
  Mr. Boothby: I agree, but in circumstances of almost inconceivable difficulty, they have kept their national pride, their national spirit and their national soul, if you like to put it so, in a way which few people would have done. That is not a country which I should ever describe as a vassal State. I wish now to draw the attention of the House to one or two economic facts. In the first place, my right hon. Friend the Chancellor of the Exchequer mentioned that never since the War has Czecho-Slovakia defaulted on any loan made to her, or been behindhand in any interest payment. Secondly, in the course of the Debate, figures have been given as to what Czecho-Slovakia has lost, and it has been stated that she has lost 90 per cent. of her fuel production. She has lost more than that. She has lost about one-third of her industries and one-third of her purchasing power as a result of the Munich Agreement. I will give the House a few examples. Of the glass industry, she has lost 75 per cent.; toy industry, 63 per cent.; textile industry, 58 per cent.; wrought metal, 28 per cent.; clothing, shoe and leather industries, 18 per cent. The national revenue in the former Czecho-Slovakia amounted to Kc. 58 milliards, and after the territories were ceded, it fell to approximately Kc. 38 milliards. There was a terrific

  815
  economic sacrifice far in excess of the territorial sacrifice, and of course, to it were added all those assets which, at the time of the Munich Agreement, we supposed were fixed, but which have since turned out to be rolling as well. The third point I wish to make with regard to the present economic state of Czecho-Slovakia is the astonishing results of the foreign trade in the last quarter of 1938. In spite of all the political and economic disturbances, the new Czecho-Slovakia showed an export surplus on her trade balance sheet of Kc. 230,000,000—that is, £1,750,000. That was a very remarkable achievement—not the achievement of a wholly vassal State.
  By passing this credit, grossly inadequate though I believe it to be, we are helping Czecho-Slovakia to regain a little bit more of her independence, to consolidate her finances and to hasten economic recovery. In 1937 she imported from us over £3,000,000 worth of goods, and from the Empire more than £4,000,000 worth. We took from her £7,000,000 worth. Therefore, there is a good prospect of still doing trade with Czecho-Slovakia if we help her. I submit to the House that it is our bounden duty even now to do everything we can to help Czecho-Slovakia in the economic field during the difficult and anxious time through which we and she are passing. As my hon. Friend the Member for Stockton-on-Tees (Mr. Macmillan) pointed out, we are getting stronger, and in a few months' time, and certainly in a few years' time, we may be in a position once again to exercise such influence on the Continent of Europe as will restore to Czecho-Slovakia, after her heroic struggle, her complete political and economic independence. If Czecho-Slovakia has lost either of these two things, it is not her fault.
  I believe the achievement of the Czecho-Slovak people is without parallel in the whole of history. One day in September found them all standing resolutely to arms, manning with fine troops, fully mobilised, the strongest fortified line in the world, apart from the Maginot line, and absolutely ready, coolly and calmly, to take the first shock in the battle for civilisation. That was their position on one day. The next day found them, as they not unnaturally saw it, utterly and shamelessly betrayed by their friends and allies. That was their view, and nobody
  816
  can deny it. We have our own reasons for thinking that we had no other course to take, but that was obviously how the situation presented itself to them when they received that deluge of telegrams, each one that reached them, shortening the number of hours in which they could give an answer agreeing practically to the dismemberment of their State. Let hon. Members try to conceive what a tremendous psychological adjustment they had to make in 24 hours, from the moment when they were keyed up to fight and the moment when they were forced to make an abject surrender without firing a shot. They must have been a tremendously tough people to go through all that without the slightest loss of morale, without any indiscipline, calmly and coolly withdrawing stage by stage from the fortified lines which they had built up with such care, on which they had spent money for years, and which they valued above everything else; their armies retreating in an orderly way, handing over the ceded territories on date, with no riots in Prague, or Bratislava, or anywhere else. I think that instead of calling Czecho-Slovakia a vassal State, we ought to take off our hats to Czecho Slovakia for having given us an example, during the last few months, which very few nations in the world could have given.
  Everybody will admit one thing, whether he agrees with the Munich Agreement or not. The Czechs were sacrificed in the cause of peace. As Mr. Masaryk said in the United States of America, if it means real peace, the sacrifice was worth while; but in the meantime, I think we ought to do everything that lies within our power for these people. I wish this loan were a bigger one, and I hope it is not the last. We ought to do much more than we are doing now for the refugees, not only for the Jews, but for the Czechs. We ought to bring pressure to bear on Berlin, gently and tactfully, of course, but still to put a little pressure on Berlin to mitigate the position. I do not suppose it has ever occurred to the Government for one second to put pressure on Berlin, but it can be done, and I think it would have an extremely good effect. It would be desirable from every point of view. I conclude by repeating that, so far from this Bill being inadvisable, my only complaint is that it does not give sufficient assistance to this

  817
  nation at the present time. I hope that this loan is not the last. I hope that not only in this way but in every way in the economic field—for instance, through the extension of export credits—we shall help this little nation to keep its spirit at any rate, and to keep as much of its independence as it possibly can. I believe that in the long run, if we do that, they will be grateful to us, and they will win back complete political and economic independence.
  6.14 p.m.
  Colonel Wedgwood: I propose to approach this question from the point of view of a realist. The first fact we have to remember is the betrayal, a fact which will not be forgotten by history or by the Czecho-Slovak people. The second fact we had better realise is that, although we may well compliment the Chancellor of the Exchequer on reducing our expenditure from £10,000,000 to £8,000,000, the £10,000,000 was going to a free people struggling for freedom, whereas it is now going to Germany. The next fact I want all hon. Members to observe is that the refugees are not being helped half as much as this Paper appears to show. The question is divided into two sections, one, the reconstruction of Czecho-Slovakia representing £8,000,000, and the other the refugees representing, nominally another £8,000,000 including the French contribution.
  Take reconstruction first. The real vice of this Agreement and this Bill is that no control is exercised by this House or by this country, which is advancing the money, over the way in which the money will be spent. Anyone drawing up this scheme could have insisted on that control and could have got it, but the Government have betrayed that country again by leaving the expenditure of the money entirely in the hands of the Czecho-Slovak Government, and the Czecho-Slovak Government does not represent the people of Czecho-Slovakia but dances to the tune called by the German Government. Incidentally, do not we wish that we could have £8,000,000 for reconstruction in this country, instead of spending it in another country? How will this £8,000,000 be spent? In part it is to be spent on reconstructing Czecho-Slovakia and employing the refugees who fled from the Sudetenland to Prague, and in part on constructing factories in place of those which have been lost.
  818
  I do not believe that the Germans will in the least object to that. Part of our money will be spent in erecting factories to compete with our own. These will be up-to-date factories, the last word in the production of pottery, glass, woodwork, and all those things in which the Czechs have been, up to now, our strongest competitors. All the factories which formerly made those things have now gone over to Germany. They have been stolen by the German Government and our former competitors will be clamouring that this money should be used to build fresh rival factories in Prague and elsewhere inside the remaining territory of Czecho-Slovakia. I do not see that that is doing any good to the working class of this country. Our money is to be spent in constructing works for the people of another country. The Government say they have assurances that this money will be spent on roads, not military roads but roads which do not matter in the least. They may tell that to the horse marines. Having got the money without any conditions on how it is to be spent, those who have got it will spend it in the way that suits them best and what suits them best is what they are told by Germany to do. Therefore, you will have this east and west road and this great military artery to Rumania, to secure the Rumanian oil and in due course bring pressure to bear on Rumania, and all that is being done at the British taxpayers' expense.
  That is not all. We are not taking any steps to see how these unfortunate refugees are to be employed. If a lesson is taken from Germany we shall see there also, along these new roads, the establishment of labour camps where people will be employed under warders drawn from the Nazi army. We know how strong the Nazi movement is there. It is the only movement now allowed to exist in Czecho-Slovakia outside the Government party. They walk about the streets of Prague wearing their swastikas and dominating the place, just as the conquistadores from Spain dominated Mexico. You will have people shot trying to escape from these labour camps. There will be no question about what will be paid for the labour. It will be kept alive. Those refugees who are unpopular with the dominant Nazi party will be put into such camps and it is inevitable that they will be treated in the same way as people

  819
  are treated in similar camps in Germany to-day. There is nothing to stop it. No steps were taken at Munich to protect refugees flying from Sudetenland. Now the Government are advancing £8,000,000 of the British and French taxpayers' money, and are taking no steps to see that the money is not used to exploit an unfortunate lot of people who have no votes, no power to stand up for themselves and nobody to stand up for them.
  The Press will not be allowed to see how this great work of reconstruction is being carried out. I doubt whether even the British liaison officer will be allowed to see these camps. All he will be able to do will be to receive the quarterly account and to know that the money has been spent and that therefore a fresh demand can be made on the British Treasury. I have seen the way in which roads and other public works are constructed in Eastern countries. Other hon. Members may have seen or have read of the way in which peones and prisoners were exploited and put to compulsory work in South America. They may have seen, as I have seen in East Africa, wretched natives toiling day after day, without remuneration, without adequate food, without medicine or doctors, employed in making bridges and railways, and wearily carrying on their backs endless basketfuls of earth. I am not at all certain that the worst part of this scheme is not the possibility, nay I fear the probability, that the money which we are voting will be used to set up a system which no man in this House, to whatever party he belongs, could possibly tolerate in any part of the British Empire.
  That is one side of the question—the reconstruction side. I am afraid that the other part of the scheme which has been so much praised to-day, the £4,000,000—or should I call it £8,000,000—which is being spent on emigration is nearly as bad from the point of view of the assistance given to the refugees. Emigrants from Czecho-Slovakia and Sudetenland are of two kinds. There are those who want to get out but cannot get in anywhere else, and there are those who do not want to get out but who are being pushed in elsewhere. It is well-known that you have to deal with three different types of refugee in Czecho-Slovakia. You have the Czechs flying from Sudetenland, the German Socialists flying from
  820
  Sudetenland, and the Jews everywhere. The attitude of the present Czech Government as regards the Czechs and Germans who have fled from Sudetenland is quite frank. They want them to go back to their homes and they do not want to spend money on the Jews. They would like to get rid of them but not to the tune of £200 each.
  Is it not obvious, in those circumstances, what emigrants will be helped? The decision as to who will be helped appears to rest solely with the Czecho-Slovak Refugee Institute. Incidentally, we should like to have that view confirmed later. We should be told what the powers of the British liaison officer will be in deciding how much money is to be spent on refugee Jews and how much on refugee Czechs and Germans. But as I read it, it is in the power of the Czecho-Slovak Refugee Institute to decide who is to have first call on our £4,000,000 which is to be used for assisting refugees who emigrate from that country. Obviously, those will be assisted first who can be assisted over the nearest border and if you look at the map now you will see that Czecho-Slovakia is completely surrounded by the German Reich and by vassal states. There is no means of getting out of it, except through countries where the will of the Reich is dominant.
  The Germans certainly will not take the Jews, but they are willing to take back the Czechs, and they are willing to take back and deal with the German Socialists who fled from the Sudetenland. They are particularly willing to take them back when they come each with £200 of good, solid British currency, which they never had before in their lives. That is just what the Germans want at the present time. Even if the definition of refugees in this agreement did include all the Jews who wanted a refuge to which they might fly from Czecho-Slovakia, so long as the decision as to who is to get the £200 rests with the Czech Government, I do not think much will go in the direction of the Jews.
  But let us look at the definition of a refugee. I think it is clear that definition No. 1 on page 12 of the White Paper excludes all those Jews who reside now and who resided previously in the present Czecho-Slovakia. Although now they are subject to nearly all the disabilities that are inflicted upon Jews in Germany, those

  821
  Jews who will want to get out, just as much as any Jew in Vienna or Berlin wants to get out, will be excluded from the benefits of this agreement by that definition as I read it. The Chancellor of the Exchequer used much wider words. He said that all Jews living in Czecho-Slovakia who wanted to get out would benefit from the Bill. He cannot have read the Bill, or else he must have some information beyond that contained in page 12 of the White Paper. Residents in the present Czecho-Slovakia who resided there before are not, according to this definition, refugees. Further all those Jews resident in the Sudetenland and in the territory ceded to Hungary, who did not get out before the Germans came in, and who were unable to escape into the present Czecho-Slovakia, are also excluded. The stateless Jews seem to me to be excluded. None who got in after September, 1938—and that includes many from the November pogroms in Germany—stand to benefit or can hope to benefit. Last, but not least, none of those Jews who are unable to get visas into foreign countries and who therefore cannot emigrate, can benefit under this Agreement.
  I have already had three cases from Czecho-Slovakia and they are typical of the way in which this Agreement is framed—of the lack of sympathy shown for the people who need our help most at the present time. The first case was a pottery manufacturer from Sudetenland. He communicated with my son to ask whether anything could be done. Nine hours before the Germans were due to arrive the Gestapo had seized his town. They had been taken off to prison and his own mother, aged 70, had been taken out in her night clothes and run up and down the streets—a sort of humorous touch. She escaped and got to Prague. The man is in prison. I thought this was a suitable case about which to write to Lord Runciman, the Lord President of the Council, for, after all, it was a typical case of those people whom we had promised to protect. I never even got an acknowledgment of my letter. I am certain that it was sent on to the Czecho-Slovak Refugee Institute and it was felt that a reply was unnecessary. It will be observed that there are not only no emigration facilities but no hope for that man. He is in prison, I understand, until he agrees to hand over his factory to the Nazis. When he does that he will be
  822
  free, but if he becomes free he will be unable to get a visa and to come under the terms of the Agreement drawn up by the right hon. Gentleman, unable to benefit in any way, with no chance of compensation or of anything but starvation.
  Another case is of a family I once knew in a town called Mucachevo now Munkacs. The girl, who was a school teacher, wrote to me and said they had been handed over to Hungary, and under Hungarian law had all been set adrift. The father had lost his profession and she had lost her job. I was asked whether I could help them to get into America or Australia. I sent that case to the Czecho-Slovak Refugee Institute. I got back almost immediately—which is an unusual thing when you are dealing with refugee questions—the information that the people in Munkacs were unable to benefit from the scheme because they were not in Czecho-Slovakia. There again we get a class of people who are ruled out. The third case, which came only this morning, came from an old school friend of my daughter, who is in Märisch Ostrau, which is still in Czecho-Slovakia. She and her husband had been refugees from Vienna and had gone to Märisch Ostrau, and were carrying on a little business there. She wrote to me in desperation saying that her sister's husband had been gaoled and asking whether they could get anywhere in the Empire. They said they must get out now because they had just received orders to leave the country. If they remained in the country they would be entitled under this agreement as refugees to £200 when they emigrated, plus their railway fare, or steamer fare to Australia if they could get there. As this agreement is going through, however, they and I suppose all people like them, are receiving orders to quit the country, so that before the agreement comes into operation they may be outside the scheme of benefit.
  I can see that the mere passing of this Bill and the implementing of this Agreement will cause a fresh wave of terror in Czecho-Slovakia and an attempt to get rid of the few Jews who might benefit from the scheme. These three cases seem to be typical of what no one here knows or imagines to be in this Agreement. Under it, it is easy to get the Czechs just across the frontier into Germany with £200 of good British

  823
  currency. Suppose there are 50,000 Czech refugees in the present Czecho-Slovakia due to go back to the old Czecho-Slovakia. At £200 a piece it means £1,000,000 going straight into Germany. If the Germans charge a head tax or any special tax on emigrants going into Germany, that, too, is refunded out of the British taxpayer's pocket. In addition to the 50,000 Czechs who may be going back to the Sudetenland there are at least 50,000 Germans also willing to go back if they could secure immunity and if their past could be forgiven. Would it not be easy to have their past forgiven if they could hand over £200 to the Reich officials when they got to the other side? I cannot see anything to stop the whole of the £200 being taken from the politically undesirable and appropriated by Nazi officials.
  But it is worse than that. Every emigrant authorised by the Czecho-Slovak Government to go into Germany, whatever his previous history, can take with him £200 of our money What is to stop the Nazis who are in Czecho-Slovakia making a habit of returning as refugees to Germany with £200, coming back again, and doing the trip again until there is very little left in the fund to give to anybody except those who, agreeably to the Germans, will be re-admitted into Germany. This is all possible under this scheme. It would not be possible if we were dealing with a Government which was sympathetic to our Government and our ideals, but we are dealing with a Government which is under the orders of the German Government. The German Government are anxious above everything to get foreign currency. Here is a chance of getting £4,000,000—ultimately £8,000,000—of foreign currency under a ramp which will be of no benefit to the unfortunate Jews for whom we in this country can no longer do anything just because we have retained no control over the way in which this money is expended. When it is a question of getting a refugee into this country we meet with sufficient difficulties from the Home Office, but, at any rate, we can cross-examine the Home Secretary and vote against his salary. What is done with our money in Czecho-Slovakia is apparently no concern of ours. It may be all misappropriated.
  I have not the slightest doubt that most of what is spent on reconstruction will
  824
  find its way into the sticky hands of officials and contractors. In the case of the £4,000,000 which is specially earmarked for the benefit of refugees, I have shown the House a perfectly simple and straightforward way in which all that money can be appropriated by Germany with the least possible difficulty. The whole scheme is a means whereby £16,000,000 of our currency, of our credit, can be transferred to Germany. However it is spent, sooner or later that £6,000,000 will find its way as a subvention to the totalitarian State. We are not dealing with private persons, but with a totalitarian State. This £16,000,000 credit will be used to buy raw materials for German industry. It will be used to buy raw materials for making bombs to drop on our people. It will be used for making cannon to destroy our armies. It will be used in every way to the detriment and destruction of this country. I cannot see how the House can vote for such a scheme as this. We meant it honestly to help the brave people whom we had endangered. It is going, as we must see now, entirely to the oppressor. There is no balm which we can lay to our souls that it will help the Jewish people who are being hunted about Europe to-day. The money is all going to Germany, and I am not going to vote for it.
  6.41 p.m.
  Mr. Duff Cooper: This is not a proud day for the House of Commons and the sooner it is over the better. We have the feeling that this is not a very happy business but that in the circumstances we cannot do other than what we are proposing to do. Some months ago, in a moment of great relief, there was an uneasy feeling in the minds of many that one country had suffered unduly, and there was a generous impulse in the hearts of all that if that slight twinge of conscience which was present even then could be salved by a money payment, there should be no restraint upon the amount of money that we were prepared to spend. I do not believe the Chancellor of the Exchequer or His Majesty's Government are more to blame than any other Member of the House of Commons, for had they been able to bring forward a Motion on the 3rd October in favour of spending ten, twenty or fifty millions to assist the state of Cecho-Slovakia, it would un-

  825
  doubtedly have been passed unanimously. Events since then have altered the minds of many.
  I had not intended to speak, and I do not think that unless the hon. and gallant Member for North West Hull (Sir A. Lambert Ward) had intervened, I should have spoken. I noticed that even in his speech there was an awakening to a new vision of the situation. He referred to what was once known as the great triumph of Munich as an unfortunate incident, and I am really speaking because I hope that the Under-Secretary for Foreign Affairs, who, I understand, is to reply, will deal with what I consider a most unfortunate utterance that fell from the hon. and gallant Member for North West Hull. He admitted that Czecho-Slovakia had been let down, and he attempted to shift all the blame upon the great friendly country, to which he referred inaccurately as our ally, France. I think he added Russia under the apparent impression, equally erroneous, that Russia is also an ally of ours. There is no truth whatever, I maintain, for the allegation that the Czecho-Slovak Government were encouraged during the summer and autumn of last year to maintain an intransigeant attitude by the French Government. It is most regrettable that a supporter of His Majesty's Government should make that accusation, and I sincerely hope the Under-Secretary for Foreign Affairs will answer that charge. If wrong was done at Munich it was done by France and England together, and if blame is to be borne we should not seek to shirk our share of it.
  The hon. Member for East Aberdeen (Mr. Boothby) asked the Under-Secretary to give a clear statement as to how the question of our guarantee of the frontiers of Czecho-Slovakia now stands. Far be it from me to seek to answer the right hon. Gentleman's questions for him. I have no doubt that he has a very adequate and satisfactory reply. The plain truth of the matter is that we cannot possibly guarantee the frontiers of Czecho-Slovakia to-day. We have reduced the money we promised to give them, and we must now let the guarantee go to the winds. The Chancellor of the Exchequer himself referred to the road which is to be built through Czecho-Slovakia from north to south and east to west as "the German road." How can you guarantee the frontiers of a country
  826
  that has a foreign road running across it? Czecho-Slovakia has no frontiers to-day. It has been stated in print and it has not been contradicted that during the negotiations of the international commission appointed to draw up the frontiers of Czecho-Slovakia the only person who ever spoke against the German claims or sought to modify them was the representative of the Italian Government. The Government of Czecho-Slovakia were prepared to resist if any one would support them, but as nobody would support them, they quite rightly, in face of inevitable facts, decided to bend their neck beneath the yoke, and to bend it properly. No guarantee could be given by any sane government of the frontiers of Czecho-Slovakia to-day, because those frontiers are where Germany cares to say they run.
  Those are facts of which we ought to be aware, they are facts which cannot now be changed, but we ought at least, even at this late hour, to be clear in our own minds as to what it is that we are doing. The Chancellor of the Exchequer has made an admirable case showing how this money is all to be spent upon projects which would have the approval of every Member of this House. Is that really of great importance? The Czecho-Slovak Government are certainly going to spend £10,000,000 or £12,000,000 or £20,000,000 on some of many activities which would have the approval of this House, but money spent on those activities simply releases other money to be spent upon other activities. It really does not matter whether it could be proved that all this money was going to be spent on strengthening the German frontier or whether it could be shown that it was all going to be spent on schools or benefit for the unemployed. As the right hon. and gallant Gentleman has just said, it is money which is going to be spent at the dictation of the German Government. It is not for us to blame the Government of Czecho-Slovakia. You cannot blame a prisoner for showing obedience, and even subservience, to the will of the gaoler, especially if you have been partly responsible for getting him into the gaol.
  My hon. Friend the Member for East Aberdeen struck a more optimistic note, I think, than anybody else in the House. He would like to increase the sum which we are paying to Czecho-Slovakia, and he notes with great satisfaction the good

  827
  trade returns of Czecho-Slovakia during the last few months. Those good trade returns are largely owing to the fact that Czecho-Slovakia is now working within the German orbit, and it may be, and, indeed, we should all hope it will be, that the people of Czecho-Slovakia, industrious as they are, will achieve great prosperity, as great a prosperity as they enjoyed before the War. Great commercial prosperity they may win, but they have lost something which is more precious to them, and that is their liberty.
  I have not the acquaintance which the right hon. and gallant Member has with the people of Czecho-Slovakia, and have never visited that country, but every day through the post applications come to me, which are as pitiful as any of those which he recounted from unfortunate people who are only longing to get out of their own country. I could have wished, perhaps, that this money had been given where it would have been far better spent. To Lord Baldwin's Fund for Refugees, rather than to the Czecho-Slovak Government, because although we may not wish to use harsh words, and although we may object to the term "a vassal State," we cannot get away from the fact that in the shape of military roads Germany is branding the swastika upon the face of Czecho-Slovakia, and that badge of shame will remain there until the frontiers of Europe are redrawn.
  6.50 p.m.
  Miss Rathbone: With the exception of the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) I think it has been noticeable that every speaker in the Debate has welcomed this Bill and has had very little criticism to offer upon the actual terms of it. I think we are all glad that the Bill should assure substantial assistance for the refugees from Czecho-Slovakia and that those refugees should include men of all races, creeds and political opinions, but most of the discussion has been devoted to painting a dark background to the Bill and to the events which made it necessary. Many Members have expressed doubts, especially the right hon. and gallant Member, as to whether the money may not actually, whether directly or indirectly, be strengthening the German forces. But according to the terms of the Bill, all the money is eventually to be devoted to the assistance of refugees, half of it for
  828
  emigrant refugees and half of it for refugees in the country, and I submit that it is not quite true to say that the money would have had to be spent by Czecho-Slovakia anyhow and that therefore we are releasing money which Czecho-Slovakia will be able to spend upon purposes of which we might not approve, because it is clear that Czecho-Slovakia, with her restricted resources, could not be expected to devote considerable sums to assist in the emigration of persons some of whom have been and the great majority of whom will not in future be her nationals. That accounts for £8,000,000 of the £16,000,000 with which the Bill deals directly or indirectly. As to the other £8,000,000 which may be temporarily devoted to works of national reconstruction, I would draw attention to the fact that the whole of that £8,000,000 is eventually to be paid back for the purpose of dealing with refugees within the country, as the money may be required.
  The doubt in my mind, on the lines of that expressed by the hon. Member for East Aberdeen (Mr. Boothby), has been whether this Bill really does full justice to our obligations towards Czecho-Slovakia. I come from a great commercial city, Liverpool, and my traditions are those of a business house, and I ask whether if one has made something like a bargain, whether explicit or implicit, one would be justified in repudiating it some time afterwards because of a doubt lest the other party would use the money in a way of which one could not approve. That would not be considered honest business in the commercial world.
  What is the position with regard to our obligations to Czecho-Slovakia? It is true that in the speech which the Prime Minister made on 3rd October—and similar words were used by the Foreign Secretary in another place—there was no definite promise of £30,000,000, or any sum but the £10,000,000, which was to be advanced to meet urgent needs. The Prime Minister specifically said that the ultimate figure would depend upon various factors which would have to he settled later, but anyone who reads that speech must see that the Czechs were fully justified in basing upon it expectations of a much larger sum than £10,000,000. Moreover, they were justified in basing upon that speech an expectation of money which they would be free to spend not only upon refugees,

  829
  which were never mentioned in the course of that speech, but upon the reconstruction of their country. The Prime Minister said of Czecho-Slovakia:
  "We must recognise that she has been put in a position where she has got to reconstruct her whole economy, and that in doing that she must encounter difficulties which it would be practically impossible for her to solve alone." —[OFFICIAL REPORT, 3rd October, 1938; col. 46, vol. 339.]
  I think that justified the Czechs in expecting that they were to receive a very much larger sum than £10,000,000. Is it quite true to say that any money which they spend upon national reconstruction—and they are only to be allowed to allocate money out of this loan to that temporarily—will necessarily set free money which will somehow or other be used to snake them a more subservient vassal of Germany? In the work of reconstruction Czecho-Slovakia has many things to do, arising from the great sacrifice which she was asked to make, which really do not affect her military relations with Germany at all, but affect her internal economy and social life. As an instance of that I may mention her huge social insurance reserve, which has now been depleted by the demand of Germany that one-third of that reserve should be paid over to her. Is she not entitled to have something to spend on purposes of that kind? We know that in fact Czecho-Slovakia did expect more, and is bitterly disappointed at getting so little.
  I look at it in this way—apart from the question of honour, apart from whether we are quite fairly carrying out the promises which we made to her, is it altogether wise to give Czecho-Slovakia reason to feel that she has been completely deserted by the great democracies and that in future she may well look entirely to Germany because she can hope for nothing from anyone else? I believe it is true that at Berchtesgaden or Munich she was given a definite assurance that if she did make the terrific sacrifices asked of her for the sake of European peace, she would receive every kind of financial and other assistance to help her to reconstruct the life of her State. If I were a Czech I think I should share the doubts of the Czechs whether the payment of even £16,000,000 half of it gift and half of it loan, and all eventually to be spent upon refugees, was a complete implementing of the promises thus made. The
  830
  Czechs did pay the price and the money price was only a small part of what they have had to pay.
  There are other issues. A year ago Czecho-Slovakia shared our ideals, our belief in democracy and justice, loyalty to allies and respect for international law. Although that spirit of Czecho-Slovakia is now dumb we are sure that it is not dead, and what I fear is that by our fear of doing anything which should somehow or other strengthen her dependence upon Germany we may actually strengthen that dependence by teaching her that she has only Germany to depend upon, and so kill her belief in those ideals which we have so far shared in common. I think there is another unfortunate result we may achieve. Other small nations, if ever they are asked to make some sacrifice in the interests of European peace, may well draw the lesson that nothing is to be hoped for from the democracies, not even succour in the hour of their deepest distress. On 3rd October the Prime Minister paid this tribute to the people of Czecho-Slovakia. He said:
  "Czecho-Slovakia has earned cur admiration and respect for her restraint, for her dignity, for her magnificent discipline in face of such a trial as few nations have ever been called upon to meet."—[OFFICIAL REPORT, 3rd October, 1938; col. 45, Vol. 339.]
  But admiration and respect are not all that we owe to Czecho-Slovakia, and not all that we allowed her at that time to expect from us, and the doubt in my mind is not so much as to the provisions of this Bill, which are welcome as far as they go, though I think we shall need further explanations of some of the provisions and safeguards in Committee. The real doubt is whether we are really paying the debt that we owe to that people for the sacrifice that we demanded of her, a debt which we owe not only to Czecho-Slovakia as a State but to every one of her citizens who is now leading a shrunken life, with poorer prospects of employment and poorer social services because of the sacrifices which have been forced upon her.
  7.2 p.m.
  Sir Walter Smiles: When a supporter of the National Government speaks, it is only right that we should cast our minds back to when the Prime Minister came back from Munich. I remember how grateful I was to him then, and how grateful I believe the majority of the people of the country were. But when the right

  831
  hon. Gentleman who spoke from the Front Bench quoted from newspapers and seemed to think that every Member who supports the National Government should agree with all the leading articles in the "Times," then I differ. It is enough for us to support the Prime Minister. It is enough for us to support the Cabinet and those who speak from the Front Bench, but when we are asked to support some of the newspapers that he quoted, and a right reverend gentleman who speaks in another place, I think this last straw is too much for the camel to bear. The hon. Member for Wolverhampton East (Mr. Mander) said he did not know which was the most dangerous, the arrogance of the dictators or the innocence of the Prime Minister.
  My reaction to this Bill is definitely one of stinginess. I like the British taxpayers' money to be spent upon the British people but I saw something of the money that was spent upon refugees, and I think all of us would agree with voting that money for refugees. At Christmas time I travelled to South America, and we had more than 200 refugees on board. I met a good many of them. Some were Czecho-Slovakians and Jews. They were very nice people indeed and very clever, as I know to my cost, because I played bridge with them. They were definitely under the impression, and they gave me the impression, that the funds we sent to Czecho-Slovakia have been of great use to them. They told me that their passage had been paid by funds from Czecho-Slovakia and they told me also, what I did not know at the time, that the exact sum that they would have when they arrived in South America and started work was £200, so that some, at any rate, of this money that has been given by the British Government has been of use to the people who suffered most.
  It is the money that is to be spent on reconstruction that I am anxious about, there are lots of places that want reconstruction in this country and there is no doubt that, if we reconstruct Czecho-Slovakia in the most up-to-date way, she is going to be a competitor of this country. I do not know whether she is going to be a vassal State or not, as the right hon. Gentleman opposite said, but we know that they make textiles, linens and cottons, and we also know that there are
  832
  lots of mills in this country which should be reconstructed and have more up-to-date machinery, but I have not heard it suggested from the Front Bench that we should spend £3,000,000 or £4,00,000 in equipping our own mills properly. Even if new houses are built in Czecho-Slovakia, there are lots of houses that require building in the United Kingdom and I have not heard that arrangements for new houses should be made on such a generous scale. We are to build new roads in Czecho-Slovakia but there is a road that we have been waiting for for two or three years from one end of Lancashire to the other, and there are roads round London which are still held back for want of finance. The right hon. Gentleman opposite complained that Germany would not allow these refugees to go the cheapest way to the sea through Germany and had to go through Poland. At any rate, if they were paying for their tickets they were paying for them across Poland, and I do not object at all that they paid a few shillings more to sail from a Polish rather than from a German port, but I hope that the money for their tickets is going to be spent on British steamers because we shall get back some of the money at any rate.
  I have been looking up the Debate on the loan that we made to Austria six years ago, in February, 1933, and it was very interesting to refresh my memory of what various people said. Frontiers have been mentioned to-day. I notice a remark by the present Secretary of State for War about the frontiers of Austria. He said the "Independence of Austria was inalienable otherwise than with the consent of the Council of the League of Nations." How far have we gone from that to-day? I have not heard the League of Nations mentioned in this Debate. It seems to me that the frontiers of Czecho-Slovakia will have to depend upon themselves, just as the frontiers of the British Empire will have to depend upon ourselves. We cannot depend upon anyone to help us. We have to help ourselves and, if we have money to spend, we have to see that it is spent on our own defences and our own armaments, and the reason why I am very chary about this Bill is that I believe we may be giving money which is not likely to be of any use to anyone in the British Empire, and is perhaps more likely to be used against us than for us. The hon. Member for

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  Wolverhampton, East, quoted some papers from the Institute of International Affairs at Chatham House. I was very surprised to hear him mention that Institute because I thought every debate and every paper there was strictly private and confidential and should never be mentioned. We have to consider whether we shall ever see this money back again. Many of us have friends who come to us to borrow a £10 note. We find it cheaper to say, "No, I will not lend you £10, but I will make you a present of £5." Both we and the borrower are better satisfied. What is the use of calling this a loan when it may be exactly the same as the loan that we made to Austria? I doubt whether we shall ever see the money again and I would sooner make a loss on a gift, because what is given to a friend is never lost, than on a large loan, which Czecho-Slovakia will never he able to repay.
  7.10 p.m.
  Mr. Gallacher:
  "The Devil was sick, the Devil a saint would be;
  The Devil was well, the Devil a saint was he."
  I am reminded of that by the speech we have just heard. How grateful he was to the Prime Minister when he came back from Munich. He tells us that, and I guarantee that when the Prime Minister promised a loan of £30,000,000 to Czecho-Slovakia the hon. and gallant Gentleman cheered as loudly as anyone. But to-day he has no concern with Czecho-Slovakia. I, however, am concerned about Czecho-Slovakia but I am not prepared to support this method of dealing with the question. We are discussing desolation spread over Central Europe and how to deal with it—deep, bitter desolation, the fruit of the Prime Minister's policy of appeasement. Will anyone deny that? It is playing with the question to deal with it in this manner, handing over millions of money to Germany.
  I am prepared to support all the millions that can be spared to assist Czecho-Slovakia to get on her feet but not the handing of money which will go into the hands of Germany. We want not only money but a policy. The hon. and gallant Gentleman had a sort of consciousness of that when he said that there had been no mention of the League of Nations in this discussion. The policy
  834
  of helping Czecho-Slovakia to get on her feet should be a policy associated with the League of Nations. In other words, we should be prepared, in advancing money to rebuild Czecho-Slovakia, to lay down the condition that it should be a completely free and independent Czecho-Slovakia. If you are not going to stand for that, there is no use in handing over the money. No one can ever advocate injustice, no matter what form it takes, but what sort of cowardly attitude is it to say, "A terrible injustice was done, but we had no other course." Of course you had another course. You have always the course of standing for what is right and just, but when anyone suggests that we should stand for what is right and just, we are told "No, it might land us into war." Taking the just course is not the course that leads to war. It is when you take the wrong course that evil comes upon you. When you take the cowardly part you set the forces in motion that lead to war. In providing this money we should have a clear, resolute policy laying it down as clearly as can be done that there is to be a free and independent Czecho-Slovakia and that neither Germany nor any other country has any right to cross her frontier.
  The Home Secretary the other day used an American expression and referred to "jitterbugs," but it is on the other side that they are always jittering. There is continual reference to the Munich Agreement. There never was a Munich Agreement. There was a Munich betrayal, but not a Munich Agreement. On Wednesday, 20th September, Members gathered in the House. Were they jitterbugs? They listened to the Prime Minister's speech for an hour and a half, yet Herr Hitler had in his possession a letter which our Prime Minister wrote, and I would like an opportunity of quoting from that letter to show that we are facing now a Czecho-Slovakia which was handed over body and soul to Germany, and that the only result of expending this money will be to pour it into Germany. If we are to spend money we should do so in order to bring that country out of the fix that we put it in. I want to make it clear that we are not discussing some accident. Germany is to make roads through and across Czecho-Slovakia; that is not an accident, but was all arranged and agreed to beforehand. Before this House met on that occasion Herr Hitler had a letter which said:

  835
  "You can get all essentials without war and without delay."
  What is "all essentials"? Military roads are essentials. Then there is the part of the letter which says that while the Czecho-Slovakian Government cannot be trusted, the might of Britain and France would be used to force that Government to submit.
  In the face of that letter, which was in Herr Hitler's hands before this House met, how can any hon. Member on the other side of the House say that the blame for the present situation falls upon France and Russia? How can they say that the situation could have been saved in August if the Czecho-Slovakians had made concessions to the Sudeten Germans when it is notorious that in May the Prime Minister of this country had already decided in favour of Sudetenland being handed over to Germany? Would Herr Hitler have been prepared for anything less than that in the month of August, when the Prime Minister of this country had said in May what I have outlined? There has been a deliberate and calculated betrayal of Czecho-Slovakia and its handing over completely to the power and might of Germany. There is no use in our handing out money to continue a policy of that kind. I would like to see a policy directed towards the freeing of Czecho-Slovakia and providing whatever money was necessary to have Czecho-Slovakia remain free.
  Now I would say a word or two about refugees. The stories that one hears and reads in letters from many of those people are terrible. How can any Member on the other side support a policy or try to find justification for it when it imposes unspeakable torture on thousands of people? Thousands of men and women with helpless children are homeless and wandering the roads, suffering the most bitter torture and agony. I have a friend who is heart-broken. It is hardly possible to describe his condition of mind. His young wife is in Prague. She is German and has two little children, aged two years and four years. She must get out of Czecho-Slovakia within two weeks or she will be handed back to Germany, when it will either be the slow torture of the concentration camp for her or the executioner's block. That is the situation. One of the very best lads I have known was over here and travelled in
  836
  many parts of England and Scotland with me. He was a grand fellow, one of the finest that you could desire to meet and a hard working lad. He was sent back to Germany and the executioner struck his head off on the block. That is the sort of thing that is going on. Thousands of people in Czecho-Slovakia are threatened to-day, as the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) has stated, with being sent back to Germany unless they can get out in a few days. How are they to do it? The situation that confronts the masses of the people is terrible. There are Socialists, trade unionists, co-operators, Communists and the great body of Jews. You cannot solve this problem or save those people and their innocent children by a policy of this kind, and by handing out a few million pounds in this way.
  I want to see these refugees saved. I want the freedom of Czecho-Slovakia restored. I want the cowardly and treacherous betrayal of Munich wiped out, as far as it is possible to wipe it out, by the power that we have in this country being used, in unison with France, Russia and the United States, to bring back freedom and independence to, and to rebuild, the Czecho-Slovakian Republic.
  7.22 p.m.
  Mr. Bracken: I would also wish that great countries like Russia and the United States were brought more into the European picture. I should particularly like to see them as co-contributors to this loan. As this Debate has proceeded it has been made clear that this grant to Czecho-Slovakia is based largely upon charity. We might have expected a little help from our American friends and many other countries, including Russia, who feel so deeply the wrongs inflicted on Czecho-Slovakia.
  Mr. Gallacher: I am certain that if those countries were invited to co-operate in a policy of freeing and financing Czecho-Slovakia they would respond.
  Mr. Bracken: I am also certain that if the hon. Member were willing to go to Russia with hat in hand to collect money for helping Czecho-Slovakia the Chancellor of the Exchequer would probably advance him the money to buy his ticket. I shall not attempt to emulate the hon. Member. He has spoken rather like one of our

  837
  bishops, with the same ferocity and amount of uplift that one finds in such discourses. I want to get down to something very much smaller.
  This is one of the oddest Bills ever introduced into the House of Commons. The Government promised to pay millions of pounds to Czecho-Slovakia without bothering to obtain Parliamentary sanction. Four months passed during which this House passed all sorts of Bills, good, bad and indifferent, and we did not hear anything more about the large sum that was to be paid to Czecho-Slovakia. I am bound to say that the guardians of the public purse have been kept properly in their place. I am not in this case putting all the blame on the Chancellor of the Exchequer; I dare say he would welcome a little help in resisting such demands. When I heard the references to Gladstonian finance I wondered what Mr. Gladstone would have said about a Government that paid out a large sum of money, entered into other fairly widespread commitments, allowed four months to pass and then came to the House of Commons to bring in a Bill like This procedure is more suitable to the Reichstag than to a free Parliament, and it is out of accord with the best traditions of this House.
  Let us look at this very interesting transaction. Months ago we advanced £10,000,000 to Czecho-Slovakia. We now tell the Czechs that they can regard £4,000,000 out of that sum as a gift and that they must repay £6,000,000 to the Treasury. To do this they are given facilities to raise a loan of £8,000,000 in London, with the British and French Governments acting, of course, as guarantors. The British Treasury repays itself by planting Czecho-Slovakian securities on the English investor. If in the future the loan is in default, investors will be called upon as taxpayers to pay off this obligation to themselves. I think this is what the Americans call backing the four horses of the Apocalypse both ways.
  In his eloquent speech my right hon. Friend the member for St. George's (Mr. Cooper) asked himself a number of questions and gave what appeared on the whole to be very satisfactory answers. He asked to whom we were lending this money. Was it to a small democracy? The appeal for a small democracy always has a great effect on this House, but does anybody honestly believe that you could
  838
  reconstruct the life of a small democracy with a loan of £8,000,000? That is what it amounts to, the rest of the money being for refugees. I wonder what you could do even to start building up the life of a small democracy on that sum. The Financial Secretary to the Treasury, who has had some experience of industry, will no doubt develop that point when he later speaks on behalf of the Government. [Interruption.] My hon. and gallant Friend informs me that he is not to speak, a fact which will be regretted by us all. My right hon. Friend the member for St. George's said that this small democracy had shown some very undemocratic tendencies. That is true. The anti-Semitic legislation which it introduced can hardly be regarded as a contribution to democracy. I suppose that muzzling the Press would hardly be looked upon as a contribution to democracy. And having to put up with your country being bisected by a great military road under Nazi control is not what you would call planting the seeds of democracy very firmly in the new Czecho-Slovakia.
  I am afraid that by this loan we are just gilding a new brand of Nazi-ism, and that is why I do not like it. I am bound to say that anyone who remembers the Austrian loan ought to be extremely suspicious of this loan. I agree with the prophecy that we shall find the proceeds of this loan pouring into the Reichsbank in the end. I was very pleased by some of the observations of my hon. Friend the Member for Blackburn (Sir W. Smiles). He said some very sensible things. While great sympathy has been expressed with the poor Czechs let us remember that we have some poor people in our midst, believe it or not. Ought we not to be very sorry for them? Not enough is being done for the poor in England. If we have millions of pounds to spend, should we not think of spending them on the poor and the down-and-out in this country? The Chancellor of the Exchequer knows Bristol well. As we all know, Bristol is one of the richest cities in England. In 1937, which was a very prosperous year, a survey of poverty was made in Bristol. I recommend hon. Members to read that survey. If they do, they will see that 20 per cent. of the population of Bristol are under-nourished. They will also read a description of poverty in that city which will make them

  839
  as sorry for Bristolians as they are now for Czecho-Slovaks. If I may say so, our benevolence in this House and in other quarters of this country seems to be in blinkers. We see and pity the poor abroad, but misery at home passes unnoticed.
  I am sorry to say that there does not seem to be much possibility of a Division on this Bill. If there were a Division, I should certainly have to vote against it. If the Bill were not passed, we should have to give an indemnity to the Chancellor of the Exchequer. We would gladly give him an indemnity. But we would also teach the Government a lesson, the lesson being that it is time they learned that Parliamentary sanction of expenditure must be obtained before the Treasury is committed, and not four months later. They might also learn another lesson, and no bad lesson either, which is that "charity begins at home."
  7.32 p.m.
  Sir Robert Tasker: I was glad to hear the hon. Member for North Paddington (Mr. Bracken) say he was sorry for the poor of this country, as I was to hear the right hon. Member for St. George's (Mr. Cooper) referring to a statement made by my hon. Friend the Member for North-West Hull (Sir L. Ward). Perhaps I might call his attention to a statement in the Czech newspaper "Pravu Lidu" towards the end of April, 1938, by Dr. Kriz, Secretary to the Minister, Mr. Becknye, as follows:
  "It is unreasonable to fear that our allies will desert us. However evasively they may speak, our allies—France, Russia, and, let us say openly, Great Britain too will immediately march to a world war."
  I think there is no justification for bringing in the British Government as one of their allies, though I do not think anyone will deny that the Czechs regarded the Russians and the French as their allies in the event of Germany attempting to overrun Czecho-Slovakia. Why should Britain run the risk of another European war to ensure a longer life for Czecho-Slovakia? As I listened to this "feast of reason and flow of soul, it appeared to me that if Czecho-Slovakia had not been mentioned, I should have thought hon. Members were referring to Hungary, because what happened to the Czechs happened to the Hungarians also, only much worse. An attempt has been
  840
  made to excite our compassion because the Czechs have been deprived of, it was alleged, 90 per cent. of their coal, but the Hungarians were deprived of 100 per cent. of their coal, most of their salt, and nearly the whole of their timber. There is no compassion, however, for them. If it is urged, as one of the reasons why we should give money to the Czechs, that they have lost about a third of their territory, Hungary lost 75 per cent. of hers, but there is no word of compassion for her. I have yet to learn that the British prisoners of war were as well treated in any part of Austria, as it then was, as anybody else, yet when the American Ambassador went to Budapest to inquire about our prisoners of war, he was told, "We have a race meeting on to-day, and they are all at the races." That is how the Hungarians treated our men. If we must give millions of pounds away, let us give it to the Hungarians before we give to the Czechs.
  I am not moved with the depth of feeling which has been exhibited by hon. Members in various parts of the House to-day. It is true that I was not here during that emotional period in September last. I thought the better place in which to find out the real facts was on the spot, and my hon. and gallant Friend the Member for Accrington (Major Procter) and I made Budapest our headquarters, finding out what we could of the real situation in Czecho-Slovakia. We found that these very peaceful people had mined all the bridges, closed the frontiers and massed machine-guns and artillery to prevent any Hungarian entering Czecho-Slovakia from Hungary. Who were these people? Czecho-Slovakia is neither an ethnographic nor a historical geographical unity; it is a State without physical unity; it is the most artificial, least uniform, and least compact of all European States. Slovakia was an integral part of Hungary for a thousand years before the War. They do not even speak the same language as the Czechs. Why pretend, as some hon. Members do, that the Czechs have been a good, virtuous, model democratic people? Had they gone there to see how they treated those who were under their domination, they would not have expressed the views which they have expressed this afternoon. In my view, if the people of this country have four or any other number of millions of money to give away, let charity begin at

  841
  home. When I get up and plead for our unemployed or for our old age pensioners, I am afraid that I get very little sympathy. I would rather see this £4,000,000 given to the re-establishment of the British people by the formation of roads or in some other direction—I would not care if it were unproductive—which would be doing some good to my own fellow-countrymen.
  I regard the criticisms which have been levelled at the Treasury as to the method by which this obligation has been placed upon the British people as well founded. It does not seem to me to be a businesslike proposition for the Bank of England to enter into a commitment—it must have been at the instigation of the Government—and then for the Government to come to the rescue of the Bank of England. There is no doubt that the Front Bench pledged itself to the loan of a certain sum of money. All that money is going to be a gift. I believe it will be just as much a gift to Czecho-Slovakia as the money which has been invested in South America was a gift to the defaulting States and that the money which was loaned to Austria was a gift to Austria. As to raising a loan of £8,000,000 to pay back £16,000,000, I observe that the percentage to be paid on the £6,000,000 is 1 per cent., but the £8,000,000 must be made more productive in income than that before it will be over-subscribed.
  I agree with the last speaker that if this Bill were to go to a Division, I should have to vote against the Government. [An HON. MEMBER: "No; you would listen to the Whips."] Hon. Members opposite are afraid of their Whips, but I have never been afraid of the Whips, having always pleased myself. Observe that I am not expecting to be promoted to the Front Bench. I came here just to do my duty to my constituents and to my country and I leave all the rewards, decorations, and ribbons to my hon. and right hon. Friends on the Front Benches on each side of the House. I was remarking that I should have to vote against the Government, as I have done before. I hope my right hon. Friend who is to wind up the Debate will take into consideration the criticisms which have been levelled against this proposed gift and give the House some further explanation than that which has been vouchsafed by my right hon. Friend the Chancellor of the Exchequer.
  7.41 p.m.
  Brigadier-General Spears: I am not going to follow my hon. Friend the Member for Holborn (Sir R. Tasker). I was a little pleased with his remarks until he went on to explain, in the first place, that he was not here in September, which perhaps explains why he does not realise that the loan which we are now discussing is, after all, a debt of honour. As far as his remarks about Czecho-Slovakia are concerned, they are explained by the fact that he went to study Czecho-Slovakia in Budapest, Hungary being at that time on the point of pouncing on Czecho-Slovakia if she had the opportunity.
  Sir R. Tasker: Hungary was not allowed to arm and could not pounce on Czecho-Slovakia.
  Brigadier-General Spears: When my hon. Friend and his companion went to pursue their investigations in Czecho-Slovakia, apparently they met with machine guns and artillery, so that their study of the situation in Sudetenland seems to have been somewhat limited in character. I would like to ask how much money will actually be available to the Czechs for reconstruction. After all, that is the whole point of the Bill, for out of this £8,000,000 first of all the refugees have to be satisfied. The burden of the White Paper is that all the needs of the refugees must be satisfied first, and that only under very exceptional circumstances can the Czech Government use the fund at all. How much money did the Czech Government or the Czech delegation say they needed as a minimum to keep going as an independent State? That seems to me to be the main point, and I am afraid that there is not enough money available to enable the Czechs to defend their independence, as they obviously wish to do. I believe that there is a possibility, if insufficient funds are available for Czecho-Slovakia to remain an independent economic unit, that she will be forced into a Customs union with Germany, which is the last thing she wants to do, and it is very much to our interest to prevent that happening and that the minimum sum should be made available to her to achieve her purpose of remaining independent.
  I should like also to know something about the question of installations. Is there a Bill outstanding by Germany against Czecho-Slovakia in the matter of installations? It was very much on the

  843
  tapis some time ago. Has the matter been settled? What are the claims of Germany against Czecho-Slovakia? Surely it is important to know. Further, is Germany asking to be paid in gold for the coal, for instance, which Czecho-Slovakia needs in order to keep going what industries she has? If the German Reich makes claims for gold on the National Bank of Czecho-Slovakia, that again very much affects the security of the loan. I feel that the disparity between the sum of which we are talking to-day and the £30,000,000 which was spoken of in September shows the gap between what was hoped for then and what has been realised. If Czecho-Slovakia were the country we had been led to hope she would be, there would be no difficulty about this loan. Her home industries would have been able to offer double the security that would be needed for a loan of £30,000,000. Now, however, we are dealing with a country which, as has been well said by my hon. Friend the Member for Stockton (Mr. Harold Macmillan), is being submitted to the whims of an over-powerful neighbour, and, in that very lamentable state of affairs, I think we are in honour bound to do what we can to help Czecho-Slovakia. It is the only way in which we can pay for Munich. We have peace; let us pay for it. I think that we ought to watch this question of Czecho-Slovakia, and be prepared to lend more money, if need be, to ensure her being able to remain economically independent of Germany.
  7.48 p.m.
  Mr. Grenfell: The hon. and gallant Member for Carlisle (Brigadier-General Spears) is prepared to trust the future of Czecho-Slovakia to a greater extent than I can at present. That country has suffered mutilation and injustice which I hope are not beyond repair, but which have reduced it to a condition of serious disability, and that is the reason for the promise which was made in this House—a promise made by all of us. In the emotion of that day, and on the judgment possible on that occasion, the House certainly did agree to make a grant of £10,000,000, and, in the mood of that time, would have been quite willing to give the larger sum to which the hon. and gallant Member has referred.
  844
  I am a little in doubt as to whether I should make any contribution to the gloomy background of his speech, but I confess I have been very much saddened by the position of Czecho-Slovakia and its people. Since those days in the latter part of last September, I spent three weeks or a month in Czecho-Slovakia on two occasions, in October and November. I went there for the purpose of trying to arrange for the emigration of as many as possible of those thousands of people who had left the Sudetenland before this House met on 28th September, and who were then in the neighbourhood of Prague in various settlements in towns, villages, large houses, and even in tents. There were known to be in that district, within a radius of 40 miles from Prague, some 40,000 or 50,000 refugees. I arrived there in the second week of October, and found that there was no plan at all for beginning the emigration. With friends we helped to initiate the departure of the first of those who had come there, who were living in conditions of very great distress. I am sure that this House would not have grudged the money already spent, and I played the part that I did on the anticipation that a contribution of this kind would become available.
  In this country in recent months we have shown a wonderful generosity and a wonderful sympathy for that large body of homeless and friendless people in various parts of Europe who are now becoming far too numerous for the peace of mind of a good many of us, and whose numbers have every appearance of increasing. We have talked to-day of the refugee problem in Central Europe. I have been occupied with that problem for many weeks past, and so have other Members of the House. There is also a tremendous refugee problem which is not dealt with in this Bill, but which must call for our attention, in the tremendous flow of fugitives from Spain, which is horrible to witness and contemplate.
  With regard to Czecho-Slovakia, let me indicate to the House how these people are disposed. They have left their homes, their roof and shelter, their friends and relatives, and have wandered away on foot, by train, and in all kinds of vehicles. We wanted to make a census of the people whom we were to include in our plans for emigration, and we had to send out from Prague 15 people to 15

  845
  centres, some of whom were away for two days, in order make even an approximate census of the refugees in the neighbourhood of that city. They came back with an account of 40,000 or 50,000 people, of whom more than 25,000 were members of the Jewish race. The majority of the remainder were German-speaking people from the Sudetenland, most of whom had come away on account of their political activities and associations. When we had the census, we realised the magnitude of the problem, and then came the next stage in the operation of emigration.
  Various hon. Members have spoken of their visits, and my right hon. Friend told us of his visits to Warsaw, Danzig, Prague and Budapest. One has to be in Middle Europe in these days to realise what a difficult place it is to get away from. Currency control, and regulations and restrictions of all kinds, stand in the way. Passports and visas are very difficult to get. The right to travel from the country is becoming a more unobtainable privilege day by day. I remember that, when we started to organise the emigration of which have been speaking, we found that 250 men were in immediate danger of being sent back to Germany, and they said they were certain of punishment if they ever found themselves on German soil again. We came to this country, and, to the credit of the Foreign Secretary, we had no difficulty in getting visas for these 250 people. But, having obtained the visas, and having made efforts to organise their departure in parties, we found that there were no train connections. Nobody knew whether a party leaving Prague would have to go to the port of Gdynia, on the Baltic, to Constanza, on the Black Sea, or to a port on the Adriatic. These men, who had left their homes and had abandoned everything, found themselves in despair, up against an immovable wall of obstructions which confined them to the spot on which they were.
  After various essays, beginning with the use of Gdynia as the port of departure, my first party from Prague took no less than 60 hours to make the journey. It took 14½ hours to get back from Warsaw. But from that time until a fortnight ago, no fewer than 950 people have reached the shores of this country, and all the organisation has depended upon the receipt of this loan and the use of the
  846
  money for this purpose. We have relied upon private charity, which has brought these people here, and private charity must be used for the relief of other people in other circumstances who may not qualify for the loan that we have at our disposal to-day. This loan has arrived when we have to deal with the further problem of bringing people to this country, not for settlement here, but for transfer to some of the Dominions and to the American countries, North and South. We have the problem of emigrating no fewer than 7,000 people, according to my estimate.
  The White Paper tells us of the wise provision that has been made. I know it will be said that £200 is an enormous sum with which to provide a family, and I have heard references to the unemployed in this country to-day. But into the story of this emigration come men who have left behind far more than £200 of their private wealth, who have left their houses, their small savings, everything, and find themselves penniless and dependent on the charity of this House and of the British public. These people, able now to rely on the organised assistance of this scheme, are planning in very close detail. I admire more than I can say the wonderful organising instinct of the Sudeten-Deutsch people who are in this country at the present time. I am delighted to find that a body of people of this kind have such confidence as to work out their plans for the next two years for settlement in Canada. Some 36 years ago, I was a workman in Canada, and I was never without a pound in my pocket at any time. I know that it requires courage and confidence to enable men to leave this country and go to Canada, build their homes, make their roads, and plough and prepare the land for cultivation, with only £200 to begin with.
  None of this money is being wasted in pampering these people. They are given the barest chance to make a start and live under conditions in which they hope to win their bread with honour and credit to themselves and everyone else. This is a loan to Czecho-Slovakia to enable her to provide for her people who are fugitives on political grounds, and this is the way in which the money is being spent. The right hon. Gentleman has told us that it costs £6 or £6 10s., and sometimes more, to bring a refugee to this

  847
  country, but by the time his travelling expenses here are paid, his expenses here, and his further passage money to America, the cost may be £20, £25 or £30 per person. Under this scheme all that money is paid to British steamship companies, British hostel keepers and hotel proprietors, and, after the further steamship voyage to Canada, to the Canadian railways. If a person settles in a British Dominion, every penny of this money will be spent in a British country by a customer for British goods. This money is not all being paid to Czecho-Slovakia. To the extent that £4,000,000 is to be spent on emigration, it will be spent outside that country, mainly in British countries if, as I hope, the British Dominions will rise to this opportunity of having the help of as fine a body of people as Europe can produce.
  I have devoted a good deal of my time, to my pain—I make no apology for saying this—and in the last two and a half years I have given much of my energy, to the people of Spain and Middle Europe. I am sure the House will never go wrong if it encourages these people in distressed Europe—miserable people that we are to have allowed distress to overtake so many in Europe. We cannot divest ourselves of the responsibility. We must take part in the organisation. I am afraid at times that it may become too heavy and onerous for us to carry. I can see how easy it is to liquidate a State and deprive people of that pride in their nationality which belongs to every people and every nation. That will have serious consequences yet for all the people of Europe. But I am not going to-day to spend time in acrimonious controversy in this House. I would like to say a word or two about the other forms of expenditure in Czecho-Slovakia. If the organisation is equal to the task, every penny of £8,000,000 can be spent in emigration. I hope hon. Members will play their parts in connection with that, as I shall. Then there is another £8,000,000 proposed, half of it to be spent in road-making and relief work in Czecho-Slovakia.
  We shall not divide against the Bill, and I hope that it will leave this House with sympathy for the Czechs, which we have not got now. I talked to a very intelligent young Czech. He was a waiter in a hotel, and a real gentleman. He said, "My father was a cavalry officer in the
  848
  Austrian Army. He lost his leg in 1916, when I was only a few weeks old. My mother struggled to rear me. She came back to the Czech village where she had been reared, and I lived in that village all my life. Our village has 100 houses and a cemetery. The cemetery is across the road from the place where the people live. The new frontier has passed through that village, and has left my village, my Czech native home, with only two houses and a cemetery for Czecho-Slovakia. The other houses are German. I cannot go back to live there because I am so opposed to the things represented by German culture and authority, but I must see my mother. I will ask some relative to ask my mother to come out of that village, because I will not go there if I can help it." That is one case of a young man, cultured and sensitive. I spoke to many others. A great injury to their national pride has befallen those people. They were, and still are, a brave people. I do not think they will give away one inch of principle beyond what they are compelled to give. I believe they will sustain the principles of democracy and of their nationality and religion. I hope that they will sustain them, and that when the time comes we shall see that the money is not spent on military work by anybody.
  8.7 p.m.
  The Under-Secretary of State for Foreign Affairs (Mr. Butler): I am sure the House will have been moved by the closing sentences of the hon. Gentleman on a subject which is very close to his heart. I have listened to him often on the subject of refugees from Central Europe and from Spain, and I should like to testify to his sincerity to-night. It is in this mood that I ask the House to give a Second Reading to the Bill. I am glad to hear that hon. Members opposite are not in favour of having a Division on the subject. I will confine myself, therefore, to answering the questions put in the Debate. The most apt way to sum up the Bill is that this is a Bill without which the refugees would go short. I have frequently disagreed with the hon. Lady the Member for English Universities (Miss Rathbone), but that phrase which she used is the most apt in describing the Bill. I should like to concentrate on this aspect of relief. If we take into consideration the natural wish of the House to help Czecho-Slovakia, to help this gallant country with a good reputation for

  849
  solvency, I feel that some of the remarks of the right hon. Gentleman the Member for Gorton (Mr. Benn) may not help that country, particularly when he referred to Czecho-Slovakia as being "a vassal State." I do not regard Czecho-Slovakia either as being a vassal State or, in the words of the hon. Member for Stockton (Mr. Harold Macmillan), as "a bankrupt friend." I regard her, as I described her, as a gallant country with a good reputation for solvency. It is in that light that the Government ask the House to consider Czecho-Slovakia, and to give a Second Reading to the Bill.
  My hon. Friend the Member for East Aberdeen (Mr. Boothby) mentioned certain economic facts which must reassure us as to the extent of the economic independence of Czecho-Slovakia at the present time. He also adduced certain figures about her export trade, which point to that same conclusion in another way. There have been many political arguments brought forward in the Debate. I cannot give the right hon. Gentleman any information why there are not elections in Bohemia. If I were to do that, I should indeed be putting Czecho-Slovakia in the position of a vassal State, because I should be answering for matters which concern the internal affairs of Czecho-Slovakia herself. But I do not intend to do that; I have quite enough to do in speaking for my own Government as it is.
  The right hon. Gentleman the Member for St. George's (Mr. Cooper) invited me to enter into the question of the crisis which occurred last autumn in connection with this country. I do not propose to do so; indeed, I doubt whether I should be in order; but I will just say that the Government accept full responsibility for what occurred then. It will be remembered that my right hon. Friend the Chancellor of the Exchequer, in that well-known speech of his at that time, put the two alternatives before the House. We recognise that Czecho-Slovakia, in accepting the second alternative, which avoided war, has suffered much. As we have said before from this side of the House, we think she would have suffered infinitely more had the horrors of war devastated her country. We consider that difficult as are the problems, numerous as are the difficulties, and serious as are the responsibilities which any person in public life must feel rest on his shoulders when
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  he realises the difficulties of the refugees, they are infinitely less than the horrors of modern war.
  It is in the spirit of humanitarian assistance to Czecho-Slovakia in her difficulties that I will approach one or two questions that have been raised. The first is about the size of the loan. The hon. Member for East Wolverhampton (Mr. blander) pointed out that in his letter the Czech representative indicated that he would have liked more money, and that the sum did not come up to his expectations. If hon. Members will turn to the Prime Minister's original statement of 3rd October, they will see that, in fact, there was no promise that the amount of £30,000,000 would be given. The amount was mentioned because that was the request of the Czecho-Slovak Government. The Prime Minister, in that Debate, used these words:
  "It is evident that the terms and conditions of a guaranteed loan and the question of what Governments would participate in it, may raise matters which could not be decided immediately"—
  and he referred to the need for consultation with other Governments. That consultation took place, and, with the French Government, we came to the conclusion that this was the sum we would pay to the Czecho-Slovak Government.
  Mr. Harold Macmillan: Will my hon. Friend read on?
  Mr. Butler: Yes.
  "This is one of those cases where the old proverb applies, that 'He who gives quickly gives twice'."
  Mr. Macmillan: Will he read on?
  Mr. Butler: Yes.
  "His Majesty's Government are informing the Czecho-Slovak Government that we are prepared immediately to arrange for an advance of £10,000,000 which would be at that Government's disposal for their urgent needs. How this advance will be related to the final figure which may be decided upon hereafter is for the future.''—[OFFICIAL REPORT, 3rd October, 1938; col. 46, Vol. 339.]
  It is that very question which has been decided in consultation with the French Government, and announced by the Government in the Bill. There is no question of a promise having been given by the Government.
  Mr. Mander: The amount asked for was £30,000,000.
  Mr. Butler: I have just said that the amount asked for was £30,000,000, and we, after consultation with the French Government, have been able to make the arrangement included in this Bill. We should have liked to have given all we could but considering the objects for which the Bill was introduced, I think we shall find the amount is a suitable one for the purposes in view. I have been asked by the hon. Member for East Wolverhampton and the right hon. Gentleman opposite how the £10,000,000 was spent. I would answer that question in this way: We have general indications of the way in which part of the money has been temporarily used up to now. We know that some of it has been used for refugees going to Palestine, and some of it for the Refugee Institute at Prague, but the final way in which the money will be used is as explained by the Chancellor of the Exchequer. The £4,000,000 is a gift for dealing with emigrants and £8,000,000 is for refugees in general in Czecho-Slovakia in respect of which we are to get detailed accounts approximately every quarter. This Bill, with its arrangements, really covers the way in which the money is to be finally spent.
  The hon. Member for Gower (Mr. Grenfell), who closed the Debate for the Opposition, referred to the fact that the money which was being allocated for the purposes of emigration would, in fact in many cases, be used on British soil and for emigrants who populate parts of our Empire. That is the sincere wish of everybody on every side of the House. The present extent of emigration from Czecho-Slovakia may be summed up as follows: Emigration for about 10,500 people has either taken place or is in course of being arranged to various parts of the world. The position as regards the Dominions is that the possibilities of migration to the Dominions are a question for decision by the Dominion Governments themselves. At a very early stage the Sudeten German representatives asked that this question should be discussed with Dominion representatives. It is hoped that arrangements may be made for the admission of a substantial number to various places. The Commonwealth of Australia have recently announced their readiness to issue some 15,000 permits spread over three years for refugees.
  Mr. Boothby: For Czech refugees, or any refugees?
  Mr. Butler: It may be assumed that they will sympathetically consider allotting a certain number of those permits for Sudeten refugees. It will be seen that the Dominions are giving this matter sympathetic consideration, and I support what the hon. Gentleman said about the value of some of these refugees as stock for emigration to our Dominions. I have myself travelled in Australia and I know what they owe to certain stock which has meant a great deal to her development. There does not seem in the House to be a great difference of opinion about the £4,000,000, but the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) asked one or two questions. He asked how priority was given by the Central Czech Refugee Institute at Prague to the different types. It reminded me of the time when I was at the Ministry of Labour when we were asked how priority was given in the granting of jobs at Employment Exchanges throughout the country. In this case, I hope that the matter will be carried out with perfect fairness.
  Every person who comes under that definition is entitled to £200 and passage money. The definition, as hon. Members will have seen is a very wide one. There is no question of priority except priority of getting admission to another country. He also raised the question of stateless Jews. There is some doubt whether stateless Jews will be included in the definition, and as a result of discussion which has taken place, further consideration is to be given to them. He then asked whether there was not likely to be an ugly rush of people to leave the country prior to the introduction of this Agreement. I think that that is answered by the fact that the Agreement is retrospective, and if he will study paragraph 3, on page 10, he will see that it applies to all refugees who emigrate, including those who have emigrated since 15th October, 1938.
  There are other detailed points which are of some importance. There was the question whether the new Czech legislation of the last day or two would render ineffective the promises given in the letter from the Czech representative, Dr. Pospisil, to the Foreign Secretary, which is included on page 11 of the White Paper. We have been in touch with the Czecho-Slovak Government and through our representatives we have received assurances that the Czechs are doing their

  853
  utmost to find new homes for refugees and that no breaches of the assurance in this letter will be found in the new decrees which have just been passed.
  I was asked a question by the hon. Gentleman the Member for East Wolverhampton as to the machinery which we could rely upon to see that these particular pledges were carried out. He asked specific questions about whether they would be forced to go to another country by the Czech Government. My answer is that the Czech authorities have said in this letter that no refugees will be forced to leave Czecho-Slovakia if they will thereby run the risk of danger to health or life. That, taken with the phrase "without any discrimination for racial origin or reasons of religion," illustrates that the Czech Government wish to carry out in the letter and the spirit the undertakings they have given to us. I do not wish to enlarge upon this assurance at the present time.
  I still have a question asked by the hon. and gallant Gentleman the Member for Carlisle (Brigadier-General Spears). He asked how much money would be available for the reconstruction of the Czech State. That has been referred to by several hon. Gentlemen. The hon. Member for Stockton-on-Tees, I think, would have liked more money for the purpose of this reconstruction. Paragraph 2 in the second Annex on page 12 of the White Paper says:
  "It is understood that these funds may be applied by the Czecho-Slovak Treasury temporarily for any urgent requirements of national reconstruction."
  It goes on to say that they should come back later for the use of the refugees. That is one manner in which the Czecho-Slovak State will gain benefit from reconstruction by the use of this money. The mere fact of a road or some other matter being improved by the use of this money will surely redound to the advantage of the future economy of the Czech State. Besides that, the money that is to be used by refugees themselves is bound up in this declaration with the prosecution of further public works. It says:
  "It is understood that one of the primary methods for relief of refugees in Czecho-Slovakia will he the provision of productive employment through public works."
  Therefore not only will the money be temporarily used in work of national economy, but money will be used in relation to the refugees themselves by public
  854
  works for the refugees and not merely by giving them maintenance. The money applied to refugees and the money used temporarily will affect Czech economy in the future. Considerable stress has been laid on the question of roads. My right hon. Friend said that no part of the funds would be expended in building roads with a military object. Surely, that assurance is of some value. There is a difference in the design of a person who sets out to build a road wtih a military object, and a person who constructs a road upon which at some time in the future a soldier or a mechanised unit may proceed. The right hon. Gentleman has illustrated the need for better communications in Czecho-Slovakia, and it is one of the commonsense features of this Bill that we are providing an opportunity for the Czech road system to be improved. I cannot guarantee that no military formation will ever pass over the roads, but we are satisfied that the roads in question will not be built for a military object.
  Mr. Benn: Will the money be available for the west to east road;
  Mr. Butler: I cannot give details at this stage, but I must accept the assurance given us by the Czech authorities, and leave the matter there. I think that I have covered most of the questions put to me by hon. and right hon. Members, and I have little more to add.
  Mr. Benn: I am sorry to intervene, but the hon. Member has not mentioned two matters which I think are of importance. One is the optants, those who were kept in the Nazi net. They had six weeks to get out. The second point is the guarantee as to the frontiers of Czecho-Slovakia.
  Mr. Butler: As regards the guarantee of the frontiers. I have hesitated to speak, because that is not a matter that falls under this Bill; but in answer to the right hon. Gentleman I might say that I have nothing to add to the answer which the Prime Minister gave to the hon. Member for Kingswinford (Mr. A. Henderson) on 31st January, when he said:
  "Apart from the references to this question which I shall be making in my statement at the end of Questions"—
  That is the statement on the Rome conversations—
  "I can only say that it is still under consideration by the various Powers concerned."—[OFFICIAL FICIAL REPORT, 31st January, 1939; col. 26, Vol. 343.]

  855
  That is the position in regard to the guarantee, to which I have nothing to add. In regard to the question of the optants the definition of those persons who fall under the operation of this Bill is included in Annexe No. 1, which includes those who are not qualified to opt, or if qualified to opt are unable to support themselves in Czecho-Slovakia as at present constituted. It is immaterial whether Czecho-Slovak nationality has in fact been enjoyed or not. There is a further provision, in order to make the definition very wide, which says:
  "Such other persons as the Government of the United Kingdom, the Government of the French Republic and the Czecho-Slovak Government may agree later to include."
  Mr. Mander: I should like to call attention to page 14 of the White Paper, paragraph 5. Is it contemplated that under that provision substantial sums of money can be transferred to this or other countries by Czech industrialists for the purpose of setting up factories?
  Mr. Butler: That is a matter upon which we have been in touch with the Czech authorities. It will all depend upon the devolpment of the situation. At a period of crisis in a country's financial history there is always stringency. At a later period it may be possible to consider a matter of that sort, and I should have to leave a final answer until we see how the situation develops. I am sorry that I forgot to deal with those points, but there have been so many.
  In conclusion, I would ask the House to give a Second Reading to this Bill, which is of a humanitarian character, to help the refugees who have suffered through recent events. I am sure there can be no hesitation in the minds of hon. and right hon. Members in all quarters of the House in deciding to proceed with the Second Reading of the Bill.
  Question, "That the Bill be now read a Second time," put, and agreed to.
  Bill read a Second time.
  Bill committed to a Committee of the Whole House, for Thursday.—[Captain Margesson.]

POST OFFICE (WESTERN HIGH LANDS AND ISLANDS OF SCOT LAND MAIL CONTRACT).
8.31 p.m.
The Minister of Transport (Mr. Burgin): I beg to move:
"That the Contract, dated the 13th day of December, 1938, between His Majesty's Government and David MacBrayne, Limited, for the maintenance of transport services in the Western Highlands and Islands of Scotland, and for the conveyance of mails in connection with the said services, be approved."
It falls to my lot to move the confirmation of this Motion, which stands on the Order Paper in the name of my right hon. and gallant Friend the Financial Secretary to the Treasury. I do so by virtue of Section 17 of the Ministry of Transport Act, 1919, which gives power to me to pay a subsidy in connection with transport services. I would ask the indulgence of the House if I trouble them with a great deal of detail in presenting a contract which contains a number of unusual features, all dealing with a somewhat exceptional position. By Standing Order 71, page 35, it is provided that:
"In all contracts extending over a period of years, and creating a public charge, actual or prospective, entered into by the Government for the conveyance of mails by sea, or for the purpose of telegraphic communications beyond sea, there should he inserted the condition that the contract shall not be binding until it has been approved of by a Resolution of the House."
The Contract that I am submitting is for 10 years; it creates a public charge, it is entered into for the conveyance of mails by sea, and in consequence it is one that is not binding until it has been approved by Resolution of this House. That is why I as Minister of Transport am moving its confirmation and why the Contract comes before the House to-day. The Highlands and Islands of Scotland are modestly described in one of MacBrayne's publications as the world's finest scenery, and at the end of a winter's day my mouth waters at the prospect of visiting by some of these steamer services places on the west coast of Scotland and in the islands whose very names conjure up delightful reminiscences of holiday experiences. I find it rather hard to bring my mind to bear on the legal phraseology of the Contract, for I would prefer to think in anticipation of the delight of having a passenger ticket on one of MacBrayne's boats. It may be interesting

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to Scottish Members to know that I am personally familiar with the greater number of these passenger services, that I have visited most of these parts at different periods of the year, and that I know something at first hand of the importance of the services covered by the contract. I prefer, if the course commends itself to the House, to go through the draft contract article by article, and to offer explanation, where explanation is required, of the provisions of the contract itself. I propose, not unnaturally, as there is a subsidy involved, to devote a certain amount of time to an explanation in detail of the monetary circumstances, showing how the increase of Government subsidy is arrived at, but before dealing with the articles in detail I should like to explain the setting in which this contract is placed, and to show why in February, 1939, we are dealing with the contract here.
The importance of the Highlands and Islands of Scotland need not be stressed. Transport facilities require no commendation from me. As always, away back in the distant past, it has been recognised that a proper and effective service between the mainland and the Islands is an essential part of the economy of the country. MacBraynes is a household word. In 1928 a desire was expressed that the service should be improved and a Select Committee of this House looked into the whole matter and made a report which was ordered to be printed on 24th July, 1928, and which, of course, is an official document. In the year 1928 MacBraynes offered to withdraw, and did in fact withdraw, from tendering for the carriage of mails and goods. The London Midland and Scottish Railway and Coast Lines offered to set up a new service. A new company was formed in which there was a railway investment of substantially half of the capital, and a contract, dated 13th November, 1928, ordered by the House of Commons to be printed on that day, resulted. That contract gave effect to the scheme set out in the Select Committee's report to which I have referred, and the contract dated 1928 remained in force for 10 years.
It came to an end on 31st October fast. As negotiations for a new contract had not at that time been concluded, there was a short extension of the old contract for a period of a couple of months until the end of the year, and the contract to which I am now asking the
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approval of the House was executed on 13th December, 1938, and is to run from 1st January, 1939, for to years and thereafter to continue subject to six months' notice on either side, subject, of course, to the prior approval of this House. If the House approves the contract it will then be retrospective and will date back to 1st January. The House will therefore see that the whole question of these steamer and other services was inquired into in 1928, and that the scheme which found favour with the House was embodied in a contract which lasted for 10 years and provided for a Government subsidy of £50,000. The new contract continues the provisions of the old where they were found acceptable, makes changes where changes have been required by altered conditions, provides for a better fleet, newer vessels, more capital, and involves as a corollary the granting of a greater Government contribution. The new Government contribution is to be £60,000, in circumstances which I will explain.
The details of this commercial arrangement made between the Government on the one hand and Messrs. MacBrayne on the other I now propose to describe in some detail. I have told the House that the contract is between the Minister of Transport and the Postmaster-General on the one hand and the shipping company on the other. The Postmaster-General is concerned because there is a large carriage of mails, and my hon. Friend the Assistant Postmaster-General will be available should any question arise as to the Post Office's part of the contract. I propose, therefore, with these words of introduction, to approach the contract, to deal with it article by article and to give the House the benefit of comments and observations as we go through the contract carefully. I have no doubt that the House will find that the terms upon which these arrangements have been made are terms which commend themselves to a deliberative assembly and that this is essentially a commercial bargain which the House will desire to approve.
May I add one other fact. The terms of this contract had been negotiated and settled before the publication of the Highlands and Islands Report at the end of November, 1938. Account could not be taken of the terms of that report in the negotiations for the present contract, but

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I shall make it perfectly clear that the present contract is without prejudice to a consideration of the references to the Western Islands and Highland services in the examination of the report as a whole. There is nothing in the contract which I am asking the House to approve which in any way fetters or restricts the powers of the Government to deal with the matter on a larger basis, and to give consideration to this report should it be so required.
Mr. Kirkwood: Does that mean that people other than MacBraynes say Mac-Callum Orme who have vessels, will be able to go to the Western Isles, their vessels being subsidised, so that we may get better vessels than we have at the moment?
Mr. Burgin: As a matter of fact, MacCallum Orme have been subsidised for a long time. The contract which I am now asking the House to implement is a contract between the Government and Messrs. MacBrayne, and is without prejudice to a consideration by the Government of the whole of the Highlands and Islands report, and the House need not therefore think that the matters referred to in that report, which came out after these negotiations, are in any way compromised by the approval of this contract. I am coming to the House and asking for a 10-year extension of a 10-year contract, with the alterations which have been necessitated by changes in the circumstances.
After these opening observations I hope I may ask the House to look at the actual contract published as a White Paper, which has been in the hands of hon. Members since December last and which we may now proceed to examine. The first two pages are the Treasury Minute, the official commendation by the Lords of the Treasury of the terms of the contract, which involves a charge on public funds and gives the reasons which have induced their Lordships of the Treasury to give their approval of this document. I emphasise at once that I am dealing here with a shipping company, a company in which the London Midland and Scottish Railway Company has an investment. But it is a shipping company managed by a board of directors; it is a separate limited liability company, with separate capital, and I shall have to pass
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in a moment and refer to specific provisions in the Articles of Association which show how the company is, in fact, managed. I make the point in passing that it is a shipping company dealing substantially with shipping services. I think I have dealt in a sufficient detail as I need for the moment with the circumstances which have led to the new contract, and I now desire to go through the provisions of the contract itself.
The contract is divided into several parts. The first is general, the second is services, the third is conveyance of mails, the fourth finance, and the fifth penalties. The Schedule sets out in detail the services which the directors have to perform. Articles 1 refers to the Standing Orders of this House; the contract is not binding until it has been approved by a Resolution of this House. It provides that the contract is to run from 1st January, 1939, subject, of course, to its terms, for 10 years and thereafter unless determined by either side by six months' notice. By Article 2 the Minister has the right to nominate a director to serve on the board of directors of the company. There is a provision that the directors shall be British subjects, that the contractors may not assign the contract, and that no Member of the House of Commons shall benefit from the contract, and there is an arbitration article. I should like for a moment to refer to the power of the Government to nominate a director.
The House may be interested to know how the directorate of this company is constituted and what is the intention of the contracting parties in making that provision. The directors of the company are appointed in pursuance of Article 71 of the articles of association, which provide that the number of directors shall not be less than three or more than seven, in addition to the Government director, and in addition to local directors. There is a provision under which local directors have rather less power than the full directors. The main board consists, broadly speaking, of five persons—two nominated by the shipping company, two nominated by the railway company, and a Government director. I need not give the names of the specific nominees of the different interests. The local board consists of three appointed by the shipping company, and three appointed by the railway company.

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The object of there being a Government director is, of course, to make quite certain that the Government have the fullest right of access to and knowledge of everything that happens within the company. There is nothing that can be denied to a director. Under English company law, the rights of a director are very considerable indeed, and the Government director, who has been Lieut.-Colonel Norman MacLeod, has the full rights of any other director. The Government are satisfied that a proportion of one in five on the main board gives them all the power of supervision, information, right to examine and control that they desire. It is not, of course, a majority control. There never was any question of the Government director having a majority control, and the Government, who have negotiated this contract, are entirely satisfied with the right to nominate one member of the main board as a director looking after the interests of the public, as public money is concerned. I do not know that any point arises on the arbitration article. It is a common form of arbitration provision, a repetition of one in the earlier Contract, providing that if there is a difference under this Contract the matter shall be referred to a suitable arbitrator to be appointed under the Arbitration (Scotland) Act, 1894, and that the decision of the arbitrator shall be final.
If hon. Members will turn to page 4, they will see that we embark upon Part II, one of the operative parts of this Contract. Article 6 says that the contractors shall maintain the services set out in the Schedule—which are substantially those which the contractors have operated in recent years under the old Contract—and provision is made for the alteration of these services by agreement. We then get to Article 7. There is a number of paragraphs to Article 7 with which I will deal in detail. Paragraph (1) is a new requirement. The contractors shall, when they begin to operate an additional transport service, give notice to the Minister, and the Minister may require that service to be included in the "General Services." The House will appreciate at once the object of that provision. It is to prevent the contractors from keeping some new and remunerative service entirely outside this Contract, and it says that if the contractors embark on a new service which turns out to be remunerative, the Minister shall have power to say that that
862
service shall come within the purview of the main Contract. I do not think anybody can foretell with exactitude what the development of the Highlands and Islands is likely to be, and it may well be that services not at present included in the Schedule may turn out to be the best of the bunch. As this is a Contract on a sharing system, this very properly provides that the Minister may himself say that one of the provisional services shall come under the heading of "General Services" and be counted in the general accounts for accountancy purposes hereafter.
Paragraphs (2), (3), (4) and (5), are similar in general effect to the old Contract. They enable the Minister to require the contractors to undertake additional services, and to make alterations in existing services, and it gives them the right to receive an additional payment should there be a financial loss. The financial loss is to be estimated in cases of difference by an expert committee consisting of the President of the Railway Rates Tribunal, and the member thereof experienced in commercial matters, together with a person experienced in shipping affairs appointed by the Minister after consultation with the contractors and the Chamber of Shipping. That expert committee is the same as the committee to which increases or reductions in freights, charges and fares are to be referred under a later article of the Contract. Under the old Contract a financial loss was determined by a single arbitrator. It is thought that these terms are an improvement, and a body composed of the President of the Railway Rates Tribunal, together with two experts, is judged to be a more manageable and more up-to-date tribunal.
Mr. Kirkwood: Does this mean that in the event of there being some means of transport other than sea transport—that is to say, air transport—it must be left to this company to develop that method of transport? There is nothing in this Contract that would hinder this line being developed, if necessary, outside this company?
Mr. Burgin: The hon. Member is quite right. There is nothing in this article which limits air transport to this particular company, and either I or my right hon. Friend the Secretary of State for Scotland will, at a later stage in the Debate, deal with the question of air ser-

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vices if the hon. Member so desires; but perhaps for the moment he will accept my assurance that what he was saying is quite outside the purview of this article. What this article says is that if, in addition to what is in the Schedule, which is the only contractual obligation under which Messrs. MacBrayne are working, some other or different service is required, the Minister may order them to do it, and if as a result they suffer a loss, that loss shall be calculated in a particular way. It is a separate matter from that which the hon. Member has in mind.
Under Article 8 the contractors are to make all proper returns and information. Although there is a Government director on the board, it is always as well to have a contractual obligation as well, because it gives a proper ground, should there ever be any difficulty, and one can apply to the proper tribunal. Article 9 is important. It deals with the question of a new fleet. The contractors shall, as soon as possible, supply a new vessel for the Islay service, and before 31st December, 1940, shall provide also a new vessel for the Stornoway service. The whole question of the fleet is one of great importance, as hon. Members will appreciate, and if time had permitted, I would have liked to give something of the romance of the way in which the MacBrayne fleet has from time to time been altered. Broadly speaking, one judges the fleet of a company by three factors, namely, the number of ships, the average age and the total tonnage. Under the old contract Messrs. MacBrayne had 18 ships, the average age was 36 years and the total tonnage 4,523. Under the new contract they have at present a fleet of 19 ships, the average age is 25.6 years and the total tonnage 9,103. I mention these figures so that they may be put on record and so that the House may realise something of the way in which the fleet has to be built up if it is to be available for performing the increased services which are demanded of it. The new Islay boat is being built at Messrs. William Denny Brothers, Dumbarton, and it is expected that she will be ready about the end of May. She will have accommodation for 700 persons including crew, and the accommodation, both first-class and third-class, will be very much improved. The building of the new vessel for Stornoway will be started within the contract time,
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but the plans have not as yet been finally completed. She will be taster than the present vessel and will have sleeping accommodation, both first-class and third-class, and the accommodation generally will be much improved. The expenditure on these two vessels will probably be as much as £150,000.
Mr. Malcolm MacMillan: Can the right hon. Gentleman give us a rough indication of what the speed of the new Stornoway boat will be?
Mr. Burgin: As that is a matter of detail and as the plans are not yet finally determined, perhaps the hon. Member will allow me to make some inquiries. I should imagine it will be 14 knots or over, but I am imagining when I say that. The hon. Member will appreciate the fact that speed and planning must be combined and that speed and cost are very relevant factors. The driving of a vessel through the water at a knot or two above a given figure may multiply the cost, instead of merely adding to it. That is a general reflection which I seem to have carried over from my Board of Trade days, but I hope the hon. Member will not seek to pin me down to a definite statement of the actual number of knots of this new vessel. I hope, as the members of the travelling public do, that the new vessel will be an improvement on the old one. I have given the House the information in my possession and I will make inquiries about the specific point raised by the hon. Member.
I pass to Article 10. This is generally similar to the corresponding article of the old contract. Under it the vessels must be approved by the Minister, they may not linger or delay on the voyage, or deviate, except as the result of stress of weather—and as I myself have been marooned for more than 24 hours, I can speak feelingly of that. There are penalties in all cases in which a vessel fails to put to sea at the proper time, the consent of the Minister is required for the sale of a vessel and provision is made whereby the Minister may secure the withdrawal of vessels which are considered unfit. These are common form conditions in a mail contract and there is nothing special about them. They repeat the corresponding conditions in the earlier contract. Paragraph (2), however, is a new provision which I hope the House will appreciate. It says that the contractors shall not, during the continuance of the contract,

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buy a vessel abroad or buy from foreign owners, and I think that is in accordance with the spirit and feeling of Members in all parts of the House. Paragraph (5) provides that the masters, officers and at least three-quarters of the crew shall be British subjects. In point of fact, at this moment all the crews are British subjects, and this is merely a safety provision in case it may be necessary to have a cook or somebody of that type, of non-British nationality. I hope the House will not think that I am skipping anything if I say that there is nothing in the remainder of Article 10 to which attention need be called.
Article 11 applies to road services. Perhaps the House would be interested to know that this shipping company has a staff of 515, of whom 275 are afloat and 240 are ashore, and of the 240, 65 have to deal with motor vehicles. Article 11 deals with the obtaining of licences for the running of motor vehicles and makes similar provisions with regard to motor vehicles to those which I have just read dealing with shipping services.
Mr. Mathers: Will the Minister say whether there is any limit, or whether it is understood with the company that there is to be any limit upon the services in operation on the roads?
Mr. Burgin: The limit, as I have tried to explain, is the schedule setting out the services which the contractors are to carry out. They have to carry out those services, and whatever is proper and necessary for that purpose comes within Article 11. There is otherwise no limit. They have to obtain the Traffic Commissioners' licence in the same way as any other operator. They are under contract to carry out and maintain the services set out in the schedule some of which are road services.
Mr. Mathers: There is no limit?
Mr. Burgin: There is no limit other than that of proper compliance with the terms which they have undertaken to carry out. Articles 12 and 13 apply the Fair Wages Clause to the services run by the contractors and require them to keep proper records of wages and hours. Under the old contract the Fair Wages Clause applied only to the land services. The new article is in a more modern form and applies to both land and sea services. The article requires the contractors to
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exhibit a copy of the Fair Wages Clause for the information of their workpeople in connection with the road services. That does not apply to the sea services. It is not the practice to exhibit a copy of the Fair Wages Clause on ships, but it is the practice on shore. The conditions of service at sea are governed by agreements, and local superintendents of mercantile marine will be appointed by the Mercantile Marine Department to supervise the carrying out of the agreements. There has not been, as far as I know, any suggestion that the Fair Wages Clause is not fully and properly implemented by the company.
Mr. Gallacher: There have been a lot of complaints.
Mr. Burgin: Perhaps the hon. Member will allow me to make my statement. I say with deliberation, having made elaborate inquiries into the matter, that I know of no complaints ever being made that the company is not fully and properly implementing the Fair Wages Clause.
Mr. Kirkwood: That includes the engineers on board ship as well?
Mr. Burgin: Certainly. What I am saying is a negative statement, that no complaint has been made that the Fair Wages Clause has not been observed by Messrs. MacBrayne. Through the courtesy of some Members of the House I have been told recently that there is a request by the Railway Clerks' Association that that association should be recognised as the trade union having the interests of the clerks at stake. I am told that the Railway Clerks' Association say that the management of Messrs. MacBrayne have declined to recognise that association as the negotiating body for that class of their employés. I understand that out of the entire staff of Messrs. MacBrayne there are 104 who may be described as clerks, and it is alleged by some Members of the House that 76 of these are members of the Railway Clerks' Association and that they are desirous that their terms of employment should be negotiated and handled by that trade union on their behalf.
Mr. F. Anderson: Do the 104 include the administrative staffs?
Mr. Burgin: I have only recently been informed of this suggestion of the Railway Clerks' Association and I should rather imagine that it did. There is a

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guild to which Messrs. MacBrayne's clerks belong, which is a great feature of their employment, to which great importance is attached by the management.
Mr. Watkins: But not by the staff.
Mr. Burgin: I hope the hon. Member is not serious in that. I am trying to tell the House of a position which is new to me and which has recently been explained to me. It has been said, "You are offering £60,000 of Government money to this company; you surely desire that they they should be eminently proper employers and that the conditions should be above reproach." As a Member of the Government I entirely subscribe to the doctrine of voluntary collective discussion and negotiation. That is Government policy and a principle which I definitely favour. The Railway Clerks Association are apparently suggesting that clerks in the employ of Messrs. MacBrayne are performing work comparable to that which is performed by employés of railway companies. The railway capital in Messrs. MacBrayne is an investment which does not provide a right of management; the management remains with the shipping interests.
Mr. Walkden: It provides a substantial representation on the board of directors.
Mr. Burgin: I am speaking with knowledge and authority when I say that the management of that company is provided and controlled by the shipping interests, and that the railway capital is an investment.
Mr. Walkden: Surely the management is controlled by the directors?
Mr. Burgin: Two out of five is not a majority. I am not trying to make any false point. I am making the plain statement that the railway capital in Messrs. MacBrayne is an investment and that they are a shipping company run, directed and controlled by shipping interests. I have been impressed by the figures of 76 out of 104, and I want to assure the House that I have the undertaking of the President of the London Midland and Scottish Railway to raise at the next board meeting of Messrs. MacBrayne the question of the propriety of a discussion with the Railway Clerks Association on this matter. I desire to communicate to the House that undertaking which I am authorised to give.
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I pass to Article 14 which says that the shipping services are to be run in connection with the railway services. That is quite natural. The railway is a part of the transport communications. The shipping is an essential link with the railway, just as much as the railway is with the shipping, and it is essential that there should be some form of close collaboration. Hon. Members who may be induced to take part in the Debate know that there is a vessel that leaves the Kyle of Lochalsh to connect with the railway at Mallaig. That is one of the reasons it does not stop on the way.
I will now deal with Part III of the contract which is concerned with the conveyance of mails. Article 15 says that the contractors shall without additional remuneration carry all the mails tendered to them. This means that if the Post Office wish to send mails by certain of the company's services which do not at present carry mails the company are bound to take them free of charge. The subsidy is an all-in subsidy, and the obligation to carry mails is unlimited in its extent, and is not specific by way of service.
I come to the part of the contract which, no doubt, will interest hon. Members particularly, that is, the financial part. The contractors are to receive £60,000 a year. Under the old contract it was £50,000 and, in addition, the contractors received from the Post Office sums amounting to £1,690. Under the new contract that merges in the larger figure and the £60,000 is inclusive. The financial framework is substantially the same as under the old scheme. Of the £60,000 subsidy, something under one-half is payment for the conveyance of mails. I make that point because in any contract with a steamship company where a subsidy is mentioned that portion of the Government payment which relates to mails is in reality a payment for services rendered and is not subsidy properly so called. The figure of payment for mails is about £26,000 out of a total of £60,000. Under the old contract that portion of the capital of Messrs MacBrayne which was allowed to rank for dividend received 6 per cent. Under the new contract the rate of interest is 5 per cent.
Mr. Gallacher: How much increase in capital is there?
Mr. Burgin: The increase in the amount of capital is represented by an increase

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in the fleet and assets which are very valuable for the purpose of the services. Under the old contract the amount of capital which was allowed to rank was £250,000. Under the new contract the ranking capital may not exceed £425,000 without the approval of the Minister. That figure of £425,000 is approximately the amount to which the assets of the company may be allowed to grow during the period of the new contract. Under the old contract Messrs. MacBrayne did more than they were required by the contract in the way of providing new boats and modernising old ones, and the amount of capital which they in fact ventured in the enterprise was considerably greater than the amount which was authorised to rank. The Government have recognised that fact, and having put the contractors under an obligation to provide new facilities they thought it right that the amount of the ranking capital should be entitled to rise to a maximum of £425,000.
Mr. Kirkwood: Then their income will be exactly doubled. They had an income of 5 per cent. on £200,000 and now it is to be 5 per cent. on £400,000.
Mr. Burgin: No, it was 6 per cent. on £250,000 and it is now 5 per cent. on a maximum of £425,000, and more than that £425,000 is, in fact, represented by vessels, omnibuses and other assets which have been acquired by the new enterprise. The House is perhaps familiar with the old system of remuneration. Any sum, called "the surplus profit," after the interest has been paid on the ranking capital is assigned as to one half to Messrs. MacBrayne, and the other half is paid to a contingent liability fund, and at the end of the contract the amount standing to the credit of that fund becomes the property of the Minister.
I do not want to weary the House with details, but it is necessary that I should go through this with some particularity. In the early years of the new contract there is every probability of Messrs. MacBrayne having to have recourse to the Contingent Liability Fund for the purpose of paying the interest on the ranking capital. In the early years of the old contract Messrs. MacBrayne were very successful and earned considerable money, but expenses increased, and in the latter years of the contract there were very reduced earnings. On an average
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the interest earned over the whole period of the contract would be of the order of 6¾ per cent. on the limited amount of capital which was allowed to receive interest. In 1936, 1937 and 1938 the expenses increased enormously, but the net receipts dwindled to almost one-half. The Government, by the new terms, are endeavouring, by bringing down the rate of interest and by increasing the amount of capital, to make a more equitable provision for both sides. In order to assist the early years of the new contract the Minister agrees to pay back into the Contingent Liability Fund by way of loan a sum of £10,000. The House will appreciate that when the old contract came to an end, whatever there was in the Contingent Liability Fund became the property of the Minister. The withdrawal of that buffer clause out of which the interest could be paid would naturally leave the concern without adequate finance. In order, when we start the new 10 years' period, to give the whole adventure a prospect of developing under its own power the Minister agrees to pay back into the Contingent Liability Fund by way of loan a sum of £10,000, and proper book-keeping and accounting is to be done during the lifetime of the contract to ensure that credit is always given to the Minister for that £10,000.
Mr. Walkden: Is it £10,000 for 10 years free of interest?
Mr. Burgin: Will the hon. Member allow me to make an inquiry? It is a point to which I have not directed my attention. I have not heard anything about its being free of interest. The point will receive attention. Before I resume my speech I will endeavour to give the hon. Member the answer. I can now tell the hon. Member at once, from information which has reached me by divers methods, that it is not free of interest, but I will endeavour to obtain a little more specific information for him. When new vessels are built of course the old vessels are sold. You do not by ordering two new vessels bring up your fleet from a strength of 19 vessels to 21. As a rule there is some scrapping or selling when there is building, and one of the reasons why there are losses occasionally is that there is loss on the re-sale of an old vessel. I shall deal with that depreciation in a moment, but when on the sale of vessels there is a good deal of loss which has to be spread over a number of years and can be recouped only

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by a percentage in each year's accounts there may have to be some subsidising of the contingency fund. The new contract is substantially a continuation of the old one, and so it was considered reasonable to allow the money in the old contingency liability fund to be carried over. At the end of 1938 the amount in that fund was £47,000, which becomes the property of the Minister, subject to the agreement to lend this £10,000 to which I have referred.
I said a moment or two ago that in the latter years of the old contract there had been a considerable falling-off in income. In 1936 the net receipts were £32,000, in 1937 £25,000, and in 1938 they were of the order of £18,000. I say "of the order of £18,000" because the 1938 figures are not finally audited and I can give only the company's estimate. On the other hand, the increase in the cost of running vessels and road services in the last few years has been substantial. I will give the figures of the increase in 1937 over 1936 and of the increase in 1938 over 1937, in other words I will ask hon. Members to go up two steps with me. In 1937 crews' wages went up £2,000 over 1936, dock labour £2,000 over 1936, coal £3,000, repairs £2,000, and depreciation £2,000. Thus the expenses in 1937 were some £11,000 over the comparable items in the year before. During 1938 wages went up £2,000 over 1937, marine insurance £3,000, dock labour £3,000, coal and oil £2,000, repairs £1,000, depreciation £2,000, and the general expenses £2,000. In other words, in 1937 expenses rose £11,000 over 1936 and in 1938 expenses rose £15,000 over 1937.
Mr. Walkden: Do we understand that that occurred on decreasing traffic?
Mr. Burgin: It was a rise in working expenses on, broadly, the same gross receipts.
Mr. Walkden: Was the personnel increased?
Mr. Burgin: Perhaps the hon. Member will allow me to inquire about that. I should not have thought there was any substantial increase in personnel. What I have been giving are comparable figures, like being compared with like. If there has been any increase in personnel, of course my figures would be thrown out.
Mr. Duncan Graham: Is the Minister correct in saying there was an increase of £3,000 for coal in 1937 over 1936, and an additional increase of £3,000 in 1938 over 1937?
Mr. Burgin: The figure I quoted was for coal and oil together. I am assured that there was an increase of £3,000 in 1937 over 1936 and another £3,000 in 1938 over 1937. I was trying to ascertain the subdivision between coal and oil. I have the two bracketed together as fuel.
Mr. Graham: Is the coal supplied by Scottish coalowners? From what district is it sent?
Mr. Burgin: The hon. Member is setting me some teasers. I will see if I can ascertain from which pit the boiler was stoked. It is British coal, but I will try to find from which part of the United Kingdom it came. I will do my best. In 1939 my own confident prediction is that the expenses on these items will show an increase over 1938. The increase in the subsidy was agreed to after a very careful consideration of the whole of the figures. The hon. Member for Inverness (Sir M. Macdonald) will appreciate that the increased subsidy of £10,000, if we make allowance for the fact that £1,690 for the Post Office is included amounts to a net increase of £8,310 a year. In order to remunerate £250,000 of capital and to meet increased working expenses, a large sum of money is required. The ranking capital under the new contract is higher but the rate of interest is 1 per cent. less. Having regard to these facts, it is probable that, even with a subsidy of £60,000, there will be an obligation on the contractors to draw from the Contingent Liability Fund at all events in the first year of the new contract period.
I pass from that and come to the remaining Clauses of the Contract. Article 17 defines the "Subsidised Balance," which is, of course, the net revenue plus the subsidy, and the definition is the same as in the old contract but a little more precise. Article 18 deals with the way in which depreciation is calculated but, unless any one desires to go into it in detail, I think the Clause speaks for itself. There is a carefully calculated schedule of depreciation. Article 19 says that on this subsidised balance there is a first charge of interest at 5 per cent. on the ranking capital and the next charge is to fill up any deficiency of previous

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years. The balance is "surplus profits" and the "surplus profits," as stated in Clause 20, are distributed as to one half to the contractors and one half to the Contingent Liability Fund, the balance in the Contingent Liability Fund remaining with the Minister at the end of the contract. So that, broadly speaking, after these first charges the net equity is 50–50–50 to the contractor and 50 to the Minister. Earnings are, so to speak, put at the disposal of the contractors by being put into this Contingent Liability Fund.
Article 20 deals with the disposal of the surplus profits. Article 21 deals with the way in which the Contingent Liability Fund is dealt with, and then we come to Article 22, which deals with such things as the reconstruction of piers. I appreciate the interest that hon. Members have in that. During the old contract the contractors spent some £40,000 in the reconstruction of essential piers. Tobermory, Fort William and others have been rebuilt and Port Ellen will soon be completed. The main object of this Article is to enable the contractors, with my consent, to reconstruct piers which they have acquired. It sometimes happens that the only way to effect repairs is for the company to acquire the pier and carry out the work of reconstruction themselves. They have done this in many cases under the old contract, and it is thought desirable to make a similar provision in the present one.
Article 23 deals with fares and freights. I must detain the House for a moment on this very essential Article. It introduces a radical change in the control of freights and fares. Under the old contract the company made an immediate reduction in freight charges and fares of 10 per cent. Provision was made for the examination at two-yearly intervals of the Contingent Liability Fund and, if it amounted to £12,500 or more, reductions had to be made in freights and fares. Reductions were made after reviews in 1932 and 1934, but for various reasons it was not possible to make further reductions. The reductions were dependent upon agreement. The ranking capital was £250,000, but the actual capital involved was much more and, by agreement, the company were allowed to charge to revenue a number of extra costs. The new contract provides that there shall be no increase in fares and freights for a period of two years, and that notwithstanding the fact that I
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have shown to the House that expenses are on a rising scale. I claim that this Article is a protection to the consumer, that rates are not to be increased for two years.
On 1st October, 1937, railway fares were increased by 5 per cent, and, when that increase came about, this company was rather anxious to see whether similar considerations did not apply to Messrs. MacBrayne as had applied to the railway companies. That increase was not allowed and a condition of the new contract is that a couple of years must elapse before there can be any increase or reduction. The test is always, "Are the freight charges sufficient to bring in 5 per cent, on the ranking capital?", and the standard which any tribunal judging these fares is to have before it is, "What is the amount necessary at the end of the year to provide a minimum return on the agreed capital?" There is a tribunal, the same that I referred to earlier on—the President of the Railway Rates Tribunal, someone experienced in commercial matters and an expert on shipping and, if the Minister after any year thinks there are circumstances that justify a reduction, the matter can be dealt with by the same committee, the criterion always being, "What is the figure at which freight charges and fares ought to be stabilised in order to produce 5 per cent, on the agreed capital?" Clause 25 enables the Minister to determine the contract if there is a breach, and Article 26 enables him to charter a vessel himself should the company decline to carry out their obligations.
I apologise to the House for having taken rather a long time to explain a somewhat complicated matter, but I have endeavoured to give information to the best of my ability. I have not yet subdivided the coal and oil supplies, but I hope to obtain that in the course of a few minutes. With these opening observations I commend the contract to the House as a good commercial bargain freely negotiated between the Government and the shipping company. A shipping company is essential to the maintenance of these services, and I know of no other company which could carry out an effective service between the mainland and the Islands and Highlands, and it is necessary to have a sensible contract approved by both sides if it is to give satisfaction.

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This contract is one of which I can conscientiously approve and can commend to the House. I ask the House to adopt it. I have now been supplied by the magnificent information service of which we are all aware with the exact sub-division of coal and oil. In 1936 it was £17,600 for coal and £6,100 for oil. In 1937 it was £15,500 for coal and £11,200 for oil. The name of the colliery company will follow immediately.
9.37 p.m.
Mr. T. Johnston: The fundamental difference between the two sides of the House on this issue can be very briefly stated. We believe that the road to the Islands ought to be as much a public service as the roads are on any part of the mainland, and that the inhabitants of the Outer Islands ought not to be compelled to yield a profit to a private company or to a semi-private company any more than the inhabitants of the mainland should be compelled at this time of day to yield a profit to a private company operating the roads in the neighbourhood. A coastal, a sea, service to the inhabitants of those Outer Islands ought to be as much a communal service, rendered free and gratis to the local inhabitants, as are the road services on the mainland to the inhabitants of the mainland.
The right hon. Gentleman has been at great pains to-night, and for a considerable period, to examine the financial aspects of his bargain. He calls it a very favourable bargain for the State. We are not so much concerned with the precise details of that financial bargain that he has made with the company, but with the conditions of life of the people in the Outer Islands. Largely owing to transport those conditions are rapidly becoming impossible. A ton of groceries from, say, Glasgow, sold to the inhabitants of the Outer Islands involves a freight charge of 60s., or in some cases 58s. 6d. In other words their groceries cost them about £3 a ton more than has to be paid by consumers who can get their groceries on the mainland. A population about equal to that of Newfoundland inhabits the Western Highlands and Islands of Scotland and is being steadily reduced to appalling poverty, with no prospect whatever of ever being able to create an economic life of its own on which it can stand without subsidy, of one kind or
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another. In our view that is largely because of the heavy transport charge which they have to pay on their housing material, food supplies, and every commodity they consume in their daily lives. For our part we would welcome any kind of proposal for a sea transport service owned and run by the community.
I remember well a Friday about 10 years ago, when the Government of the day produced a contract with the old MacBrayne Company. That was the time when the subsidy was x00A3;36,000. From every part of the House where Scottish representatives sat furious protests arose against the continuance of the old MacBrayne contract system, and the Government were compelled to yield. At four o'clock on Friday afternoon they had to withdraw their proposal to implement that contract. They set up a Select Committee of inquiry. The party opposite was the majority. I see some hon. Members here who were on that Committee. At the end, that Committee put forward unanimous recommendations one of which was that there should be at least two Government representatives upon the board of the company. I go further than that. I believe that the present Minister is aware that the proposal for two representatives of the Government was not a wild Socialist proposal. It was put forward actually by Sir Josiah Stamp, as he then was, and Sir Alfred Read. I have nothing to say against those two public-spirited citizens for the action they took.
The old MacBrayne company had resigned from their contract and the thing was in chaos when the committee met. The company had resigned those particular services after a period of three months and we were faced with a complete collapse in the Highlands and Islands of Scotland. We asked the London Midland and Scottish Railway, the London and North Eastern Railway and Coast Lines, Limited, to see what they could do to help us. For reasons to which I need not refer to-night, the London and North Eastern Railway could not come in, but the London Midland and Scottish and Coast Lines did come in. They offered to provide half of the capital each— they made the offer— and suggested that there should be two Government representatives on the board. The committee hurriedly brought forward this proposal as a unanimous recommendation, all parties agreeing.

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Then the Government resigned from the arrangement as to two representatives and proposed only one. The numbers on the board were reduced. The original proposal was three London Midland and Scottish, three Coast Lines and two Government. The new proposal put forward by His Majesty's Government was two London Midland and Scottish, two Coast Lines and two Government. Subsequently to that, a local board was set up with three London Midland and Scottish, three Coast Lines and no Government representative. So that, by whatever test you like, the semi-public-utility corporation idea, which was the public-spirited proposal of Sir Josiah Stamp and Sir Alfred Read, was departed from, and here to-night, after 10 years of having only one representative on that board and no Government representative on the local board, the Government come forward for recognition of that contract with its departure from the proposal agreed to unanimously by the Select Committee upstairs.
This is not a mere academic discussion, but something which affects vitally the lives of a quarter of a million people. When we had to face the situation before we discovered that the cost of conveying stock pre-war from Lochboisdale to Oban was 2s. 6d., and in 1928 it was 13s. How could a crofter make ends meet with freightage increases like that? All the public expenditure by our Scottish Office, every attempt made to create smallholdings, was rendered nugatory and vain by the excessive freight charges that were imposed upon the inhabitants of these Islands. A cow sent from Lochboisdale to Oban pre-war cost 8s., and in 1928 20s. To send an empty herring barrel pre-war cost 1½ d. and in 1928 is. I am not sure these conditions are substantially improved now. Sir Alexander McEwan—I have been unable to check his figures—late Provost of Inverness, recently circulated a pamphlet, which I suppose most hon. Members of the House will have received, entitled "Act Now" It is a resumé of the Highlands and Islands Economic Committee Report, and he says here that it costs more to send goods to the Islands than it does to send them to Belfast, and that it is still the case that it costs more to send feeding stuffs to Mull and to Skye than it takes to send them to Stornoway.
At this time of day these things cannot be justified. If true, they are a strangu-
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lation of the economic life of our people in these Islands, and for a beginning we on this side would most earnestly appeal to the Government to fall in with the expressed wishes of Sir Josiah Stamp and Sir Alfred Read and let us have two Government representatives on the board of this company, and, as the second representative, some gentleman who will be able to devote time and knowledge towards assisting the proposals outlined in this Highlands and Islands Economic Committee Report. It is no good saying, "We are going to have a representative who will be a good financial man and who will see that the books are all right, and attend the quarterly meetings of the larger board." That is no use. Let us have no Newfoundland created on our coasts. While yet there is time—and the sands are running out—let us give the people in these Outer Islands a chance to live.
I will not go into the points that I know will be raised much more effectively by hon. Friends behind me about trade union conditions and trade union recognition, and although I welcomed for my own part the statement made by the Minister that Lord Stamp was going to raise this issue personally at the next meeting of the MacBrayne Board, I wish the right hon. Gentleman had also got Sir Alfred Read to act in support of him. If Sir Alfred Read and Lord Stamp together would raise this matter, it would be settled in five minutes, and I think it is again indicative of the attitude of the Government, of the solitary Government representative that we have on that board, that it is at this last moment of the eleventh hour that even this proposal has been put before the House. I do not see why the Government representative long ago should not have sought to apply what is known to be Government policy, the policy of all Governments now, that trade union recognition should be afforded to all the employes of all public works and services.
Again, there are other matters, relating to prices, cost of living, and so on, that I know my hon. Friends behind me will want to raise, and at this late hour one wants to avoid repetition. But I beg of the Minister not to spend all his time thinking of the fine bargain he has got here, of how he can cheesepare something down and do with a little less, or how he can avoid spending £1,000 here and £1,000 there—not on this matter. If you

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let our Outer Islands go, you will lose a hardy, seafaring population, a population which you may require to draw upon very effectively in the future as you have had to do in the past, a population which, as we all know, cannot get employment, cannot maintain themselves economically now, and yet a population which has to carry burdens upon its shoulders that no other section of the people of this country is being called upon to bear.
Let the right hon. Gentleman and the Secretary of State for Scotland even now look at the problem of the Outer Islands as the Highlands and Islands Committee have looked at it. That committee have been given a blessing in general, and the people have welcomed the outlook of the members of this committee. They thank them for their public spirit and for this non-partisan report. Will the Government not even now look at this problem, not from the point of view of how much they can save here, but how far they can help, how quickly they can help. I would particularly stress that, because of the experience we had when we were on the committee and of the public-spirited report that we got from the two capitalist representatives who took over the whole derelict MacBrayne concern. They are still with us, and I believe that if the right hon. Gentleman and the Government would go to these two men fairly and squarely to-morrow and say, "Let us have a new outlook, a new deal here," and if they and the Government and the MacBrayne Company (1928) Limited would give the public of the Western Highlands and Islands a new deal, I am sure they would receive the cordial thanks of Scots representatives in every part of this House.
9.54 p.m.
Mr. Macquisten: It is 10 years since we had that memorable Friday, when I think the last speaker and I brought about a result which, as far as it went, was a great improvement on the past. Still, we have nothing in the Highlands like what we had 50 years ago. We were infinitely better served 50 years ago than we are now. Of course, in those days there were no hours of labour. People just worked till the job was done, no matter how long it took. Their pay was poor, and there had been no Coal Mines Acts, and coal was cheap. We managed to have these extraordinarily cheap fares,
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about which the right hon. Member for West Stirling (Mr. Johnston) has talked. But after the War the fare from Oban to Tiree was raised from 8s. to 31s. for so-called cabin deck, though there was no cabin and nothing but the open ship exposed to wind, rain and spindrift. The steerage fare was raised from 6s. to 15s. We have not got anything like the reduction that we should have, and it is a pity that the subsidy was not adequate.
We need a much broader view than has hitherto been taken. We might well follow the Norwegian practice of running steamers at low rates, by heavily subsidising private enterprise under very careful supervision. They have much cheaper rates than we have to many places in Norway, where there would have been no steamer service whatever but for the Government subsidy. They have also some very enlightened methods that we do not practise. For instance, when a Norwegian is going to some fairly distant place, if he takes his wife with him, she can travel at half fare, and his children at a quarter fare. The result is that there are many more passengers than there otherwise would be. I have often wondered why similar methods of increasing the number of passengers are not adopted in this country.
The real difficulty, of course, is the smallness of the population of the Islands. These Islands used to be densely populated in the old days, before we had all the disabilities that were imposed by the English Government. I am sometimes reminded of the story of an old Irishwoman who took her furniture out by a passenger steamer to South Africa, and when she was presented with the bill for transporting it said. "I do not wonder that the Lord walked upon the water, because he could not possibly afford the fares." I do not say in the circumstances that this is an unfair contract. An addition is being made to the subsidy which, as the Minister of Transport has shown, has barely met the increased cost. We ought, as the right hon. Gentleman the Member for West Stirling (Mr. Johnston) has said, these services are the roads to the Isles, and should be helped by the Minister of Transport. If something is done for these people, it will be a real economy. We do not want the Islands to be evacuated of all these gallant people, who stick to their islands with the most intense local

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patriotism, and would continue to live there if they could get the barest subsistence. It would be far more economical to give them free travelling altogether. In this country, if the roads had been properly regulated, we should all have had free travelling. If we had taken up the land alongside the railways, we should all have been able to have free travelling. Provision ought to be made for practically nominal freights for people in these outlying parts. There should be some balanced system of assistance, as there is in Germany and America, whereby the distant farmer gets allowances in rates which bring him on to an equality with those who are near the markets. The little Island of Tiree exports to the amount of about £72 per head of the population—a very fine figure—and has to bear very high charges for freight.
There is another matter which ought to be dealt with by the Minister of Transport. It is sad to hear that the Mac-Brayne Company have had to spend £40,000 for piers which ought to have been provided by the Minister of Transport. The piers are part of the roads, and should not be charged to private individuals. Moreover, it is sometimes very awkward that they should be in private hands. There was an instance of this in my constituency, where I was told that a pier had been shut because the man who bought it raised the charge from 1d. per person to is., and the people could not pay this. I asked who was the monster who had perpetrated this shameful act, and I was told that he was a London accountant named Napier. I said, "Nae Pier! What else could have been expected of a man with a name like that?" I could see that they thought I was of very little use as a Member if I could not open the pier. I told them that in Ireland they would have dealt with him locally, but that they were a law-abiding people here. Then, being a very devout man myself, I said, "Leave it in the Lord's hands; he will soon deal with the situation." And he did, because within three weeks the nefarious man was dead and up for Judgment. It shows that
"The prayer of a righteous man availeth much."
In that Glen they believe that I have the power of life and death, and I am almost inclined to believe it myself. Finally,
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Lady George Campbell bought the pier from Napier's executors and restored the old charge of 1d. at once. In due course the Lord rewarded her, for the county council went in for an immense scheme of road improvement, and tens of thousands of tons of material were landed at the pier, so I do not think she lost on the transaction. At any rate, it was a very beneficent thing she did. All these piers ought to be acquired and kept up by the Minister of Transport. That would be an immense help to the masses of the people. The pier is the end of the road, the foundation for the immortal song which our great Scotsman sings.
The 10 per cent, reduction was not nearly enough; it should have been 50 per cent. The reduction of practically nearly 50 per cent, that I got for lobsters and shell-fish made a great difference to the lobster fishermen and the poor people who gathered what in this country are called winkles, and what in Scotland we call whelks. Many of them do that still, and there is nothing better than a good Scotch winkle. This House has a long way to go to undo all the wrongs that have been done to the Highlands in the last 200 years especially, since Culloden. The Chancellor of the Exchequer has destroyed our distilling industry. It was our main industry, producing hundreds of thousands of pounds in the Highlands and other places in the north of Scotland and millions of pounds in revenue to the English Exchequer. That has been largely ruined by foolish taxation, and surely, with the revenue thus obtained, something can be done in the way of transport for those parts of the country who produced it. That revenue from the whisky duty in the Highlands before the War paid the whole cost of the British Navy. It has been largely taken from us by taxation, because the product has now been made almost as dear as milk under the Milk Board.
Something will have to be done. This is a small step, but I hope that it is only a beginning, and that the Minister of Transport, the Secretary of State for Scotland and the House will realise that it is not going to relieve the situation. I may point out that some of the boats are not as swift as was provided in the original contract, which stipulated for a greater speed by two knots. That would make a great deal of difference to many of these small places. Moreover, some of

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these places, which have a relatively enormous production of cattle and sheep, only get one boat a week in the winter time. I speak specially of Lismore, a fertile island producing great numbers of sheep and cattle. Even the weekly steamer only allows 2½ hours in Oban which is useless for the sales.
There should be more liberal provision made for places like that. There needs to be more liberal provision all round. You need to improve the houses, and when you have improved the houses you want more inhabitants also. It was a great advance when the people got the telephones in. But not nearly enough has been done. It will take a generation and immense sums of money to undo the enormous wrongs of the last 200 years since the Act of Union and the Battle of Culloden. [Laughter.] It is no use laughing about that. It is a very recent wrong in the minds of our people. The wrongs are beyond all mention. We used to have very great populations there. The exodus has been caused by the wrongs committed, and a lot more will have to be done to restore us to our old prestige and our old happiness and people.
10.7 p.m.
Mr. Malcolm MacMillan: I should have liked to have been able to follow the hon. Member for Argyll (Mr. Macquisten), but I do not share his quality of being able to make a subject like the steamer services to the Western Isles a subject for humour at the same time as he makes it a subject of criticism. I am not going to let myself be led astray from my duty to my constituents by the happy assurances that the Minister gave us regarding the important things in the contract, and the more important things which may be added to the contract but of which we have no guarantee. When I looked at the Order Paper to-day I saw that it was a perfect example of the Government's habit of muddling abroad and tinkering at home. The gift to the Czechs is to compensate them for the Government's muddling abroad and this contract is an outstanding example of their, tinkering at home, with, of course, a characteristic subsidy to discredited private enterprise.
Like the Czecho-Slovak loan, this is retrospective. This House was not consulted in advance with regard to the proposals. I do not say that it is our constitutional right as Members to be con-
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sulted, but a little more consultation could have been held with the House and with the local authorities before these proposals were submitted to the House to be approved retrospectively. There; was no reason why the old contract should have been allowed to expire and a stop-gap contract inserted, about which, again, we have not been consulted. After the old contract had been in operation for 10 years, and had failed to a large extent, we were told that it had expired, and that a stop-gap contract had become necessary. Surely 10 years, during which repeated representations have been made to the Ministers in charge about the working of the contract, was ample time in which to make all the amendments and improvements that were urgently necessary, without having to ask for a further two months in order to produce almost exactly a replica of the old contract. The Minister hardly explained that to us. He said himself:
"I cannot answer in regard to the original contract, but a supplementary contract for two months has been entered into on the old terms to enable negotiations for a proper new contract to be concluded."—[OFFICIAL REPORT, 30th November, 1938; col. 421, Vol. 342.]
After that has been drafted and submitted to the House, we find ourselves in almost the position we were in before. It is practically a photograph of the 1928 contract, except that it has been touched up to make the profit a little more handsome. The Minister said that that procedure seemed an "essential, commercial, businesslike proposal." It is a long time to take to do business, and to do it badly— because I consider that this business has been done badly. The Minister himself has gone fairly fully, part by part and Clause by Clause, into the contract. It is not necessary for me, in criticising some of the Clauses, to go into them as fully as he did, and I am not going to do so. I shall only mention a number of representations that I have made myself to the Minister, to the Postmaster-General, to the Secretary of State for Scotland and to the other Ministers concerned. They promised to take into consideration the representations of the people of the Western Isles, who are, after all, the people most affected. As far as I can see, after having read the contract several times, they have not taken those representations into consideration, as they should have done.

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The Members for the other Highland constituencies, no doubt, will make their own representations to-night. I have no doubt that the hon. Member for Inverness (Sir M. MacDonald) will deal with the position of the Islands in his constituency, I have no doubt that the right hon. Member for Ross and Cromarty (Mr. Malcolm MacDonald) will assist me to-night in making representations for the Isle of Lewis and other islands in his constituency, and I have no doubt that the hon. and gallant Member for Orkney and Shetland (Major Neven-Spence) will be making representations for the Orkneys and Shetlands—and they are in a worse position in some regards than the Western Isles. I am not making any criticism of the masters or crews or the staffs of the company. The company and all concerned have been most fortunate in the men who have manned these ships, and in the people, ashore and afloat, who have been responsible for running them. Not enough tribute has been paid to these people who make the steamer service possible.
The question of nationalisation was raised by my right hon. Friend a few moments ago. It is a question on which we should be insistent. We realise that it would be voted out of the House tonight if it were before us; and on the Motion that we are now considering, because of the form it takes, we can only say yes or no. It is rather an unfair way to put before us a Measure of this importance. There are very good reasons why we should press the Minister to consider modification of the terms of the contract, or some further legislation or amendments which it is in his power, as he said himself, to introduce. We are in the position of subsidising this company, though not to the full extent of £60,000. It may be a question of paying the Post Office £36,000 and the rest going completely in subsidy, or it may not. The point is that the Government have recognised that it is the duty of the State, and have accepted it as the duty of the State, to provide a mail service for the Western Isles through the Post Office, which is a nationalised institution. Nobody can deny that the subsidy is a national subsidy. The Minister of Transport himself professes to be very deeply interested in the welfare of the Western Isles, and it is under the control of the State from the point of view of the Ministry of
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Transport, the Board of Trade, the Post Office and—financially—of the Treasury.
If we are to pay £60,000 a year for a service which does not completely serve its purpose or adequately serve the people it is intended to serve, an adequate case might be made out for the State to take over the service itself. Nobody could say that it would be a loss to the State if profit was being made, and there is no reason why the State should make a profit out of it at all. I am making certain serious criticisms of this Measure and the people responsible for it only because I feel the serious nature, and the great importance to the Islands and Highlands, and to the economic life especially of the Islands, of this great question of transport. It is chiefly a question of transport by sea. My hon. Friend the Member for Dumbarton (Mr. Kirkwood) interrupted the Minister and properly stressed air transport as well. This is a question which the Minister seems prepared to consider favourably. A number of people, including myself, who generally use the steamer service have, when it has failed, had to use the air service, and I hope that that service will make the progress which my hon. Friend also said he hoped it would make. Not only are passengers among the Islands and to and from the mainland affected, but the transport service affects the very economic life of the Western Isles of Scotland. Every fisherman is affected, and fishing is the staple industry of the Western Isles of Scotland. If they are to make an economic livelihood at all; even if we have to admit that to some extent it is the duty to subsidise transport, we must cheapen transport as much as we can.
Since the State recognises that it is necessary to subsidise these services, surely the State should do the job thoroughly and properly when it is at it. When we are giving 100 per cent, for so-called first-class roads in the Western Isles, surely the steamer service is to be recognised to be as important to the economic life of the Islands as the roads. All roads in the Islands converge on the harbours and ships come to and from the harbours taking people and goods to and from the Islands. When one comes to the ships one is at the mercy of MacBrayne and of the people who do not choose to control MacBrayne. My right hon. Friend has already quoted figures and I do not intend to do so. I have collected

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many figures which are at the disposal of the Minister if he requires them at any time. It is not the first time by any means that I have presented them.
The charges for the conveyance of some of the essential commodities are enormous and disgraceful. They eat up a large part of whatever small profit the fishermen make out of their very arduous calling. The costs of food coming into the Islands and the cost of agricultural needs are swollen by the "cut" which MacBrayne takes out of them. The local merchants are compelled to raise the prices to people who can very ill afford it, because of the large transport charges upon groceries and other commodities. A very good case has been made out by the people in the Islands for a reduction, not only in passenger fares but in freight charges, because those are the things that directly affect their livelihood.
The Minister will tell us that this cannot be done, unfortunately, because of the 5 per cent, on which the whole of the contract has been made. Everything is subject to the 5 per cent, demand. Unless the 5 per cent, is guaranteed, the charges go up. If we guarantee the 5 per cent., in two years some of the freights and passenger fares may be reduced—after two years. The business should not, however, be related to 5 per cent, but to the needs and welfare of the people. I take it to be the purpose of the Government subsidy to make it possible for people to continue to live in these Islands and to make a livelihood. It ought to be the policy of the Government not only that the people should stay there but that they should make a reasonable livelihood. Transport service is, as the Minister admitted, an essential part of the economy of the Western Islands, and the charges should be reasonable.
The Minister of Transport might consider the establishment of a flat rate for certain classes of goods; and certain commodities, at any rate on foods, and to meet the needs of the fishermen and the agricultural people, the crofters, at least within the subsidised area. The Post Office will also be interested in this proposal. There should be a flat rate for any distance within the subsidised area, in the same way that there is a flat rate for postal packets. A person sending fish from the more distant or smaller isles
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to the mainland should not be penalised. There should not be any discrimination within the subsidised area, but all the people within that area should enjoy the benefit of the flat rate on the specified commodities, which should be operated on the same principle as the postal arrangements. The question of extending that principle will, I hope, be supported by other hon. Members.
It may be said that some of these proposals cannot be afforded under the terms of the subsidy, and I partly agree. I would prefer to see a higher subsidy serving its purpose fully than a smaller subsidy serving the purpose less well. It is not unreasonable to suggest that a higher subsidy would bring greater benefit than the smaller subsidy. I would prefer that we had a larger subsidy with better conditions if we cannot have nationalisation. I look forward to the time when these essential services will be run not for the benefit of vested interests but run by the State for the general benefit of the people.
I am glad to learn that two new boats are to be built and that at last third-class sleeping accommodation is to be provided on the boats. That will be a blessing to many people who have to travel in them. Some of these boats are a good deal more than 10 years old at the present time, and 10 years hence they will, of course, be 10 years older than they are now. They will be very much more out of date by the time the contract is finished, even the "Loch Ness" which is the most modern is three years older than the Government, and while I am prepared to admit that its condition is butter than the dilapidated condition of the Govern-men, nevertheless, it is not the most modern of boats by any means, and the others are considerably older. I have travelled in these boats practically every month, and I know what it is to go into a boat which is sometimes not altogether seaworthy, and, what is equally important from the point of view of travel, is not altogether passenger worthy. Have we to wait for 10 years before the "Loch Earn," for example, is replaced by another boat? I am not suggesting that the boat does not serve the purpose as well as we could expect her to do, but we have a right to expect a better boat. We do expect the Minister to give consideration to the importance of good transport facilities in these parts. He mentioned being

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himself delayed in the Isles 22 hours. I have had to struggle for three days, from Monday morning to Wednesday night, between Oban and Castlebay, and it is not a pleasant experience. It is a depressing experience. In addition it all adds to the costs of a family who have to travel a longer time and pay for additional meals and other things. I think the company should bear the costs of people who are delayed in this way on these journeys. I am glad to have the assurance that the third class accommodation is going to be improved, and I hope the Minister means that it really will be improved. It is within the power of the Government to decide the specifications of new boats. I hope the Minister will do his best; and I accept the promise which he has given.
There is one matter to which I must refer, and that is the Stornoway steamer. The "Loch Ness" is put down as capable of 13 knots: it does 11 knots. We have been promised that the new boat will do 14 knots. I can assure the Minister that this will not at all satisfy the people in the Lewis district. They will not be satisfied with a boat which is going to do the journey in just a little less time than the present boat. They have asked for a 20 knot boat with steam, hoped for a 17 knot boat, and will be dismayed at getting a 14 knot boat. Fourteen knots is not a modern speed for such boats. I hope the Minister will insist on a boat of higher speed and that he will carefully consider the specifications. Seventeen knots is not too high a speed to ask for, and I hope the Minister will not think they are unreasonable in asking for this. The hon. and learned Member for Argyllshire (Mr. Macquisten) has referred to the service as it was 40 years ago. There was only one disadvantage and that is that the boats used to come from Oban and not from Oban, Kyle and Mallaig as they do now. This arrangement of the three ports is the better by far. I hope the Minister will give consideration to the claims of the people from Harris to Barra for a daily service. The least I hope and ask for is extension from May till the end of October of the summer services. They ask for the restoration of the service which they had 40 years ago.
Regarding piers the Minister mentioned that the pier at Tarbert was recently reconstructed, the pier at Lochboisdale in good condition and the Scalpay pier re-
890
cently improved. He did not mention the pier at Lochmoddy, the piers at Barra, Castlebay and Northbay which are utterly unworthy of being called piers, the pier of Tiree, which cannot be used by the average steamer going there if the sea is even choppy, and the pier at Leverburgh, which is falling to pieces, so that one cannot take a car on to it with any hope of getting the car off again. The piers are in a very bad state. The Minister knows all these things, because he knows the Islands very well, and I hope he will insist on the local authorities taking advantage of the recent Enabling Bill to remedy these matters. I hope the Secretary of State will also consider the giving of financial assistance at the same time.
There is another matter which is of great importance to the fisherwomen and fishermen who have to go to the Islands in the fishing season. Hundreds of them are often crowded on to the ordinary boats. We must get the MacBrayne company to put on an extra boat to take these people across to the Islands instead of crowding them on to the ordinary single service, where they have to sleep on the decks, with perhaps a mattress under them and a thin sheet over them as their only protection against the winds of the Atlantic. I am sure that if the Minister would approach the company and use his influence with a view to getting some shelter at Kyle especially provided and some sort of canteen from which the people could get refreshment, these things could be done. I am sure that these little comforts could be obtained if the Minister would use his influence with Lord Stamp— certainly not the most reactionary of men.
In the interests of the Islands, I hope the Minister's specifications will be, as he has promised, of the very best. I hope he will also insist on some of the older tubs being taken off and better steamers provided. We have great hopes of the tourist industry, in which I know the Minister is himself directly interested. I take his assurances to-night, perhaps a little more generously than he intended, to cover not only the points he has mentioned, but his interest also in further improvements in the steamers which are used on these lines. In the interests of the tourist industry, the local industries, which are absolutely essential to the economic life of the Islands, and the interests of the people who travel to and

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from the Islands, I ask the Minister to consider the suggestions I have made. It is only once in 10 years that we are able to discuss these matters, and although I apologise for having detained the House for a long time, I do not apologise for any of my suggestions, which I consider to be more moderate than those which the people in the Islands are making.
10.34 P.m.
Sir Murdoch MacDonald: When the Minister introduced the contract and asked the House to approve it, he examined it meticulously article by article, and with his usual extreme lucidity, he made every article plain. However, I must admit that I was astonished that he omitted to refer to a matter to which reference was made immediately afterwards by the right hon. Gentleman the Member for West Stirling (Mr. Johnston). Possibly he left it to his colleague, the Secretary of State for Scotland, to deal with it, but it did not seem to me that he examined the fundamental fact about this contract. Why is this contract being made? It is being made because life in the Western Isles and on the Western seaboard of Scotland would be impossible unless reasonable facilities for transport were available at reasonable rates. When the original contract was made it was found that not only had the Post Office to provide a subsidy of £21,500, but that the Scottish Office had to provide a further subsidy of £28,500, and that second subsidy was really for the purpose of enabling cheap transport to be made available for the service of the Western Isles.
Since that contract was made circumstances have changed considerably. There has been in the Western Isles a state of depression, if not of absolute poverty and a lowering of the standard of living. A vast number of people are out of employment—a far greater number than there was when the previous contract was made. I would have thought that those circumstances would have been taken into account in making this new contract. It is true, as the Minister pointed out, that a sub-committee of the Scottish Economic Committee called the Highlands and Islands Committee was set up with the sanction and approval of the previous Secretary of State for Scotland. They examined this question, and it so happens that their report was almost contemporaneous with the signing of the final
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contract. It was well known to the general public all the time that committee was sitting—for two years at least—that the rates in the Western Isles were at an impossibly high level. I will not weary the House with further examples because the right hon. Gentleman the Member for West Stirling (Mr. T. Johnston) gave sufficient to enable the House to judge whether those rates were reasonable or not.
It is evident that if these islands and the Western seaboard are to remain populated, a reduction of transport rates is one of the major things to be attended to in order to enable the people to obtain an economic living. They have not that at the moment but if transport charges were reduced to a reasonable level, they would be put in the same position as people on the mainland who are closer to the markets. I am sure it is the anxiety of everybody to see that the people are distributed as equitably as possible throughout the country. They should not be concentrated in great masses in the large centres as at present giving the people who supply those centres with agricultural produce an advantage over those who are separated from the large centres by long distances and particularly those, like the people of the Western Isles, who are separated by a great distance over the sea as well as over the land from these markets.
I then address myself to this problem. What are these reasonable rates to be? We have a reply to that question in the report of the Economic Committee. They say that if 25 per cent., on the average, were taken off the rates that might be considered reasonable. That might mean a 50 per cent, reduction in some rates and perhaps no reduction at all in others, such as luxuries, but on actual necessities there would be the possibility of reduction larger than the average of 25 per cent. I then asked myself what that would mean to the Government financially. Under this contract the subsidy is to be £60,000, which includes the contribution of the Post Office and the Secretary of State. The previous contributions were £8,300 less. The increase in that respect will undoubtedly be swallowed up in increased wages. As a consequence there will be no chance of any of the money that is now being allocated going in reduction of rates. The Minister rightly did not mention the possibility of a reduction.

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He mentioned that the rates would be stabilised for the next two years at the present figure. As this Highland Committee has reported that the transport rates should be reduced something like 25 per cent., I asked myself what this represents. It will represent a figure of something like £40,000.
Therfore, with this £60,000 we want a further £40,000, and I feel certain that if the Minister asked the House for £100,000 for this purpose and explained that transport rates were to be such in the Western Islands that there would be no continuation of the de-population that has been going on for the last two or three generations, every Member would gladly acquiesce. I was glad to hear the Minister say that all he was stating in his lucid exposition would not interfere with the consideration that was to be given to the Committee's report. I hope that earnest and quick consideration will be given to that report, because time is of the essence of the problem in this matter while people are drifting rapidly away from the Western Isles. I, therefore, hope that the Secretary of State will have something to say on this report, and will indicate that something is to be done in the way of further increasing the grant. I am certain that if he indicated that at a reasonable date in the future the amount would be increased to £100,000 so that transport rates could be lowered, everybody in the House would acquiesce.
10.43 p.m.
Mr. Kirkwood: I was delighted to hear the manner of approach to this question by the Minister of Transport because, like myself, he has roamed the Western Islands and is therefore in a position to face this question in a different way from most of the Transport Ministers in my time in the last sixteen years who have known nothing about the question. Therefore, I have great hopes that he will face this problem sympathetically, because anyone who has visited the Western Islands is bound to be alarmed at the terrible conditions under which the people there and in the Highlands of Scotland exist. I want to deal with the question of MacBrayne's ships. There has been a great revolution and a change for the better since the time when a Member for the Western Islands gave an invitation to the hon. Member for Camlachie (Mr. Stephen), the hon. Member for Bridgeton (Mr. Maxton) and me to
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see the terrible state of affairs under which the fisher girls had to exist, and the sort of transport they had when they had a vessel seventy years old. The only time the hon. Member for Bridgeton and myself had seen like conditions of transport was when we sailed from Marseilles to Algiers. In both cases the passengers were huddled together on deck, and the only difference was that there were warm zephyrs blowing in the Mediterranean night while in crossing the Minch the conditions were as wild and terrible as only those know who have made the journey.
Terrible conditions still exist, and although MacBrayne's service now is very much improved the House must remember that those improvements were forced upon the company by our agitation here. This is not a philanthropic institution. It is a delusion to walk away with the idea that MacBrayne and Company are nice, kind, philanthropic Christian gentlemen, although one of the chiefs is known as "Holy Willie" and passes with all the majesty of a fine Christian gentleman who is building Christian churches all over Scotland. We notice that the first essential here, laid down in no uncertain fashion, is 5 per cent. interest. On any money which we on these benches can put into cooperative societies we are getting only 2 per cent., and if my colleagues knew of any undertaking in which we could get the same guarantee of 5 per cent. we should not consider that we were being kind, generous and philanthropic in putting our money into it. We are not going to be "kidded" in that fashion.
Apart from that, the Highlands and Islands of my native land are becoming deserted. It is a tragic scene, and it is one of the disgraces of the British Empire. The Secretary of State for Scotland promised that he would himself see to it that the pier at Armadale was made all right. In the month of July last year he promised that the pier at Broadford would be made all right, and only 25 per cent. of that pier needs to be repaired in order to make it quite easy for ships to put in there.
The Secretary of State for Scotland (Mr. Colville): At Question Time to-day I answered a question about that pier, and was glad to say that the Treasury have promised assistance in the restoration of the pier subject to certain procedure.
Mr. Kirkwood: I am very glad to have got that concession. The matter is evidently making some headway. As I said to the Secretary of State on that occasion, there is no man in Scotland who will pay more tribute to him than I will, irrespective of party, if he does what he has the power to do; and should the Cabinet stand out against him, then if he will ask this House to ensure that the needs of the people in the Western Isles and the Highlands are seen to I am satisfied that the House will stand by him. If anyone looks into this matter he will feel broken-hearted, I am sure, to think that a hardy, intelligent race of men, whom the Romans themselves could never defeat, are being driven from their native land. Already to-day it has been said that this British Empire may have to call on these men again, as it did in the last War, and has done in every war in the last 130 years. No part of the British Empire has contributed more towards making the British Empire possible than the men from the Highlands and Islands of Scotland. If it happens again, the men will not be there. The Highlands and Islands are being depopulated at a rate beyond the wildest dreams, and one of the reasons is bad transport. Transport to-day is the very life blood of a country, and they have no means of transport. MacBrayne's ships pass within a mile of Armadale Pier. I have been appealed to time and time again in the past 15 years for them to call there, but they do not do it because it does not pay them. This is a matter that should be beyond payment. I would advocate anything to get us out of the trouble, even a subsidy for shipping. We are busy discussing that now with the Cabinet. We subsidise beet and wheat. Why should we not subsidise the Highlands and Islands to raise men and women? One of the finest reservoirs of human beings in the British Empire is being tapped dry and here is an opportunity for the Secretary of State for Scotland, in conjunction with the Transport Minister, who has roamed the Highlands and Islands. It is not enough to approach it in a sympathetic fashion. We want more than sympathy. We want action, and I am sure if the Secretary of State is prepared for action the House will support him.
10.53 p.m.
Mr. Watkins: I should not intervene in a Scottish Debate were it not that my
896
union, the Railway Clerks Association, feel that something ought to be said in the House of Commons regarding their position. There is a Fair Wages Clause in this contract. The complaint of our members who are employed by Messrs. MacBrayne and Co. is that that clause is being violated. It has not been observed in the past and, unless there is some change, it will not be observed in the future. The wages and salaries paid to our members are £30 or £40 a year less than those that the railway company pay for precisely the same work in the same districts. The hours that pursers are called upon to endure are excessive, there is little or no pay for overtime and Sunday duty and, generally speaking, the service conditions and rates of pay cannot be regarded as being in harmony with the Fair Wages Clause.
We have intimated these facts to the Ministry of Transport. We let them know about them before Christmas. so I was rather surprised when the Minister said that he had only just heard about those complaints. Our members complain that the yare not receiving the benefits of the Fair Wages Clause and are denied the right of trade union protection and negotiation. Our members are surprised about this, because Messrs MacBrayne, Limited, deal with the National Union of Seamen for the men on their ships, the Transport and General Workers' Union for their servants on the land, and with the Navigators' and Engineering Officers' Union for the men who are in that union; yet they refuse recognition to the appropriate trade union for their clerks, pursers and supervisors. In this case, as in many other cases, it seems as though the employers regard trade unionism as something appropriate for manual labourers but not appropriate for what are usually called black-coated workers. We say that black-coated workers have just as much right to the protection of a Fair-Wages Clause as have seamen, lorry drivers or any other group of workers.
I further submit to the Minister that the Railway Clerks' Association is the appropriate trade union for these members to join and to represent them in negotiations with their employers. The Railway Clerks' Association caters for railway clerical, supervisory and administrative workers and also for those classes of workers in allied undertakings. Messrs. MacBrayne, Limited, are un-

897
doubtedly an allied undertaking. They work in close combination with the railways. There are through bookings from London to the Western Isles, partly by rail and partly on MacBrayne's boats. The company have made a point of this close relationship with the railways. The chairman of the company, speaking on 30th August, 1937, used these words:
"For some little time now the company's services have been operated under the mutually beneficial influence of friendly arrangements with the principal railway companies, and unprofitable rates are being steadily removed."
About 50 per cent. of the capital is railway capital. There are two main directors and at least two other local directors on the board. It, therefore, can be rightly said to be an allied undertaking, and a proper one for its workers to want to come into the Railway Clerks' Association.
The Minister said that the work which MacBrayne's staff are doing is different from that which the railway clerks and supervisors are doing. I assure the Minister that the most expert examination has been undertaken by our Scottish officers, who understand this matter very thoroughly, and that they assure me that the work done by the men and women on the boat side of the London Midland and Scottish Railway and of the London and North Eastern Railway, is identical with that done by Messrs. MacBrayne's staff. The London Midland and Scottish Railway's staff at Gourock and the London and North Eastern Railway's staff at Craigendoran are doing the same work as Messrs. MacBrayne's staff at Glasgow and elsewhere, and you have this curious anomaly, that Lord Stamp, president of the London Midland and Scottish Railway, who recognises the Railway Clerks' Association and is a party to our agreements and faithfully and honourably applies them in the London Midland and Scottish Railway service, refuses to recognise the Railway Clerks' Association and to adopt the rates of pay and conditions of service in this allied undertaking. One of the directors is the chief marine superintendent for Scotland of the London Midland and Scottish Railway and is familiar with the work that is done by clerks, supervisors, and pursers in his department, and he must know that the work which is done by MacBrayne's staff is similar.
I would ask the Minister also to believe that this is no quarrel between two trade
898
unions. We have involved in our membership, as the Minister rightly said, 76 out of a staff of 104, about three-quarters of them, but the directors of Messrs. MacBrayne have circularised the staff to join in membership with the Coastlines, Limited, and Associated Companies Clerical Staffs Guild, which is not a trade union. Messrs. MacBrayne themselves subscribe to its funds, and the very essence of a trade union is that it must be an independent body. If it is not independent, it cannot negotiate with that freedom which our members on Messrs. MacBrayne's staff desire. The Railway Clerks' Association has striven to gain recognition by this board ever since September, 1937, and we desire that Messrs. MacBrayne should undertake to recognise us as the appropriate negotiating authority for our grades in their employment, in the same way as they already recognise other trade unions for the grades proper to those unions.
The Minister has very kindly looked into this matter and has had some communication with Lord Stamp. He tells us that he has secured a promise that Lord Stamp will raise this matter at the next board meeting—that is, the question of the propriety of discussion with the Railway Clerks' Association on salaries and other matters. I wish he had not used that word "propriety," as if there was any question on that point. The extraordinary thing about this is that this Matter has already been discussed by this board of directors and has already been rejected by them. Their general manager wrote to us on 30th July last as follows:
"The matter of recognition was laid before my board at their last meeting, and the board regret that they are unable to see their way to accept recognition of the Railway Clerks' Association.'
Where is the difficulty about it? Surely the National Government believe in trade unionism and are not going to incur the hostility of the trade union movement and the General Council of the Trade Union Congress by agreeing to large sums of public money going into an undertaking that does not carry out normal trade union obligations. The Minister tells us that he has had communications with the President of the London Midland and Scottish Railway. He tells us that there are five directors, two of whom are railway and one represents the Government. Is not that the majority that the

899
Minister requires? Cannot he undertake now to accord us recognition? It is no extravagant or improper request.
I am not by nature very sceptical, but we have had some experience with Messrs. MacBrayne. Does the Minister of Transport know, for instance, that the Chief Conciliation Officer of the Minister of Labour has been trying for days and days to get this undertaking to agree to meet us to discuss this question, and has failed? Therefore, unless the Minister himself will take very drastic action, we feel that we are going to be left high and dry. After all, this is not primarily a matter for the directors of the undertaking; it is a matter for this House and for the Minister of Transport. We say that fair wages must be observed. That phrase, surely, is not just a decoration in a document, a little bit of poetry inserted in the prose. It must mean something. And fair wages can only be determined when they are fairly and freely negotiated with the firm concerned. Lord Baldwin, a year or two ago, when he was Prime Minister of this country, used these words:
"A free trade unionism is a bulwark of public liberty."
That is what we ask—a free trade unionism. We feel that our members will not get justice and satisfaction by joining a house union which is subscribed to by the employers; they want independent representation; and I would ask the Minister—he could if he would—to use his influence to get the board of directors of the MacBrayne Company to accord us recognition and to carry out the Fair Wages Clause according to the letter and the spirit.
11.9 p.m.
Mr. Stephen: I do not wish to delay the House at this late hour, but I would not like the Debate to pass without, on behalf of my party, joining with my Scottish colleagues in pressing upon the Minister our view that a great deal more has to be done in order to help our people in the Highlands and Islands. As the hon. Member for Dumbarton (Mr. Kirkwood) said, the hon. Member for Bridgeton (Mr. Maxton) and I went to Stornoway and saw for ourselves the difficulties of the people in that part of Scotland, and we were convinced that it would mean a great deal to them if the Government were prepared to spend more money in helping the people in that part of the
900
country. I wish also to take this opportunity of congratulating the hon. Member for Central Hackney (Mr. Watkins) on putting forward the claims of the staff on behalf of his association. I am sure that Members in all parts of the House will not agree to tolerate the present nonrecognition of the union but will insist that this firm should come into line with every other intelligent firm in the country as regards the recognition of the trade union. I hope the Minister will take a very strong line with regard to this matter, because in these days it is of the utmost importance that the trade union rights of the people should be preserved.
11.11 p.m.
Mr. Colville: My right hon. Friend the Minister of Transport explained the contract in considerable detail and with his customary lucidity, and I do not think the House would wish me to go over it again. But there are some points raised in the Debate which require a reply. First, let me refer to the speech of the hon. Member for Hackney, Central (Mr. Watkins). As regards the observation of the Fair Wages Clause, he will agree that if it be broken there are ample powers within the contract to have the matter effectively dealt with—by Clause 25, by subsequent action which the Minister could take under Clause 26, and under Clause 5, the arbitration Clause. But the recognition of a particular trade union is not for the Minister to enforce; it is a matter of the policy of the management. My right hon. Friend, however, in his careful statement on this matter in his opening speech, indicated that he was impressed with the number—76 out of 104 —of the clerks who were members of the Railway Clerks' Association, and that he was authorised by Lord Stamp to say that he would raise the question at the next meeting of the directors of the company. I will not add to the statement except to refer to the interest my right hon. Friend has in the matter. Lord Stamp himself was not at an earlier meeting when the matter was discussed.
Mr. Watkins: Am I to understand that the Minister of Transport himself is, as it were, to keep hold of this matter and receive from the head of the London Midland and Scottish Railway Company a report of what transpires, so that he is fully informed of any development?
Mr. Colville: My right hon. Friend is a party to the contract and he will naturally be interested in what transpires, and will be fully informed.
Mr. Mathers: Are the Minister's desires, or any wish of the Minister's, to be communicated to the Government director on the board?
Mr. Colville: The Government director will, no doubt, be aware of the statement of my right hon. Friend to-night
The right hon. Gentleman the Member for West Stirling (Mr. Johnston) raised the question of public versus private enterprise, but I do not think he would expect me to debate that to-night. Our concern to-night is to get the House to agree with this contract as a wise one to adopt in present circumstances. The right hon. Gentleman based most of his doubts as to the wisdom of the present contract on the Highlands and Islands report, which indicates the need for certain large-scale action. I believe the right hon. Gentleman thinks that apart from this consideration the present contract is adequate in view of the terms set before him. He gave the report his whole-hearted blessing, but he seemed to be in some doubt earlier to-day as to the central provision of the report, which is the appointment of a Commissioner to the Highlands, and he referred to him as a commissar. Perhaps he and I in a close examination of the report might find many points for discussion before its provisions can be implimented.
Mr. Johnston: I am not sure from the recommendation of the Islands and Highlands Committee that there should be an immediate reduction of fares and freights.
Mr. Colville: The right hon. Gentleman, as one who has had experience of administrative work, will agree with me tht when you get the report of a committee you cannot take individual items. You have to look at the picture as a whole and consider how much of the report you can act upon. The House might fairly ask me to answer three questions on that point. These are the questions. Why does this contract not give effect to any decisions of the Government on the recommendation of the Highlands and Islands report? Does the contract preclude the giving effect to any decisions of the Government on the report? Could not the old contract have been extended,
902
say, for a year pending the decision on the report? The report is under careful consideration and examination, and I am in consultation with certain local authorities and other bodies on its provisions. The new MacBrayne contract had to be made for a period commencing in January of this year, so as to secure the maintenance of services in the Highlands and Islands after the expiry of the previous contract, The report was only received at the end of November, and it was clearly impossible to reach a decision either on the report as a whole or even on parts of it—parts to which the right hon. Gentleman referred—before the settlement of the terms of the new contract.
The new contract is, therefore, on the general lines of the old contract, but, as my right hon. Friend was careful to state, without prejudice to the consideration of the references to services and freight charges in the Highlands and Islands Report. If the result of the Government's consideration of the Highlands and Islands Report should be in favour of the adoption of any of its recommendations as to seaborne services, there is nothing in the contract to preclude effect being given to such a decision. Any modification in the services can be dealt with in Articles 6 and 7, subject to the possibility of additional payment to the company being necessary. Again any reduction in charges which might be approved could receive effect by means of an amending contract which might require an additional payment to be made to the company. I have calculated the amount of Exchequer money which might be required to implement the suggestion in the report of an all round reduction of 25 per cent. in freights at approximately £50,000. This is rather more than the amount stated by the hon. Member for Inverness (Sir M. MacDonald) who said that it would be £40,000. I mention that figure in order to show the House the sort of region into which the Government would be required to go if assistance was to be given.
The mere continuation of the old contract after 31st December would not in our opinion have been satisfactory. That is a point which I should answer, because the question was put to me, Why do we not carry on temporarily under the old contract? Temporary prolongation would not be satisfactory. The financial provisions of the

903
contract had become ineffective in the circumstances which have existed in recent years and it was agreed by both sides that the remedy should not be postponed.
A temporary prolongation merely as a stop-gap arrangement would have produced a state of stagnation, and in such circumstances we could not have hoped to get the Company to proceed with the improvements in the service, with the new ship for the Islands service and the new ship for the Stornoway service. The old contract was extended for two months, one of the reasons being to bring the contract into line with the year of the Company's accounts on which the arrangements are based.
The main point made by those who have spoken is that the Highlands and Islands should receive a greater measure of special treatment in order to assist them to face their difficulties. There is one aspect of the conditions in the Islands which I ought to mention. Several hon. Members have spoken of their rapid depopulation. They are misinformed. The population situation is changing. A very large decline in population in the Highlands and Islands took place in the century from 1831 to 1931, amounting to about 95,000. From 1911 to 1931 about 48,000 people left. It is noteworthy, however, that in recent years the decline in population appears to have been largely stopped, owing to the reduction of emigration. The recent report of the Highlands and Islands Committee referred to that fact. It showed that in 1931 the population was 293,212, and that in 1936 it was estimated by the Registrar-General to be 291,848. Therefore, fewer than 1,400, or less than 1 per cent., had left, or approximately one-tenth of the decline in the preceding years.
Mr. Kirkwood: Is not the right hon. Gentleman showing that the statement I made is absolutely correct? There is nobody there to come away.
Mr. Colville: The Registrar General's estimate is that 291,848 are still there. Therefore, the depopulation is not so rapid as some hon. Members suppose. There is, however, an alteration in the age groups, the age groups there consisting of a greater proportion of elderly people and not so many young people.
904
That, however, is not a feature of the Highlands alone, because other rural districts of the country are suffering from the same conditions. I should like to correct an impression in the minds of many people, and in the minds of hon. Members, judging from the speeches tonight, that the Islands are being rapidly depopulated. In the last 10 years, while the old contract was operating, the rate of depopulation was decreasing. None the less, we have the serious problem of the age groups.
Mr. Kirkwood: Is not the right hon. Gentleman aware that during the Napoleonic wars, which lasted 21 years, Skye alone sent to the British Army 10,000 men. To-day it could not send 2,000.
Mr. Colville: The hon. Member is wrong. The Highland Division of the Territorial Army, which includes the Islands, is at present over strength. From the point of view of recruiting for the Territorial Army, there is no region that does better than the Highlands and Islands. I ask the House to accept the Motion and to recollect that between 1928 and 1938 considerable improvements have been made in the services offered to the Highlands and Islands by this company and that the present contract ensures that this improvement will be maintained. New vessels have been and are being built, and if we pass this contract, we shall be continuing the policy of assisting the Highlands and Islands of Scotland in their transport services. There would be no degree of transport at all in these areas but for the special provision made by the Government. The Government recognise that they have to make special provisions and by approving of this contract we shall ensure that this provision shall be maintained.
11.26 p.m.
Mr. MacNeill Weir: I beg to move, in line 4, to leave out "approved," and to add instead thereof:
"disapproved with a view to Article 2 (which empowers the Minister to nominate a person to serve on the Board of Directors of the contractors) being altered so as to empower him to nominate two persons."
I understand, Mr. Speaker. that the form of words in the Amendment on the Order Paper in the name of the right hon. Member for Stirling (Mr. Johnston) is out of order, but that you are prepared to accept an Amendment in the form in

905
which I have moved it. In view of the fact that the principle of the Amendment has been fully discussed I will not take up any time of the House but will formally move it.
11.27 p.m.
Mr. Mothers: I beg to second the Amendment.
I propose to follow my hon. Friend and be equally brief. The principle of the Amendment has been argued already and has been accepted by the Government up to the present. We believe that if there were two Government directors on the board we should have some influence over shipping interests which appear to dominate on the board. We think the Government should have an opportunity of carrying out their policy in respect of trade union representation on this board, and that two directors would enable them more properly to carry out what we consider to be the right policy.
Mr. Speaker: The Amendment which appears on the Order Paper in the name of the right hon. Member for Stirling (Mr. Johnston) is technically out of order, but the words which the hon. Member has moved are in order.
11.29 p.m.
Mr. Burgin: This Amendment asks the House to reject the contract. There is no other course. The agreement has to be accepted or rejected. Under the Standing Orders a contract of this character, over a period of years, involving a public charge and dealing with mails, is only binding if it is supported by a Resolution of the House. The Amendment is therefore a wrecking Amendment, and is intended to reject the entire contract. I must ask the House to reject the Amendment. It is suggested that a second Government director would assist in some form of control over the board of the company. The Government directors would not have a majority: it is not suggested that they should have a majority.
Mr. Kirkwood: Two would be better than one.
Mr. Burgin: The Government director is intended to have access to documents and papers, in order to be able to satisfy the Government that nothing takes place within the company without their knowledge. If there was not a majority, that is the maximum that a Government director could do. In my submission,
906
whether there is one in five or whether there are two in six, the result is precisely the same. The Government are entirely satisfied with the right of access to documents, papers and information which a Government director on the board would assure them. I cannot allow the House to imagine that the rejection of this contract, with all the advantages which it secures for the Highlands and Islands, would assist the Government in any attempt at control over Messrs. MacBrayne. Quite the contrary would be the case. Therefore, I must advise the House—I can do no other—that this Amendment would have the effect of cancelling the whole of the recommendations that have been put in regard to this contract, would involve its ceasing, and would necessarily mean that the whole of the financial arrangements relating to the building of ships and to services would come to an end.
11.32 p.m.
Mr. Speaker: The right hon. Gentleman is really raising the point of Order on which I ruled out the original Amendment standing in the name of the right hon. Gentleman the Member for West Stirling (Mr. Johnston). The reason I ruled it out of order was that it was a wrecking Amendment: it would negative the Motion, but put nothing in its place. The Amendment as it is now worded does, of course, negative the Motion, but the suggestion is that the Government should bring in an altered contract as suggested in the new Amendment. This Amendment is perfectly in order.
11.33 p.m.
Mr. Johnston: I thank you for your Ruling, Mr. Speaker. It is a long time since I heard such a tactless closing speech as that which the Minister of Transport has just made. There has been no obstruction to his proposals, and all the speeches that have been made have been helpful and constructive. The right hon. Gentleman is well aware that the precise terms of the Amendment are the terms which were indicated to us by Mr. Speaker, and to designate our Amendment a wrecking Amendment is not, in my opinion, the way in which the right hon. Gentleman can facilitate the passage of his Measures through the House.
Mr. Burgin: May I point out that I had no intention whatever of suggesting to the House that there had been any

907
obstruction? When the terms of the Amendment in its revised form were suggested, I was not aware that it was within the power of the House to amend the contract at all. By the Rules of the House, the contract either stands in its entirety or falls in its entirety. What I was endeavouring to point out to the House—and if I used an unfortunate expression, I am the first to desire to withdraw it—was that the Amendment is not one of that character which can be accepted by the Government and which involves the passing of the contract subject to an alteration. It involves as a necessary consequence, the rejection of the contract as a whole.
Mr. Johnston: Or, as Mr. Speaker has said, delay—that is the withdrawal of this precise form of contract and the introduction of a new, and, as I endeavoured to prove when I spoke previously, an amended contract on the exact lines proposed by the representatives of Coast Lines and the London Midland and Scottish when they appeared before the Select Committee of this House. So far from that being a wrecking suggestion, it was a suggestion originally promoted by Lord Stamp and Sir Alfred Read. Let me remind the House, and particularly hon. Members opposite, what it means. The original proposal, agreed to by Conservative, Liberal and Labour Members—the unanimous recommendation of the Select Committee—was that there should be three representatives of the railway company, three representatives of Coast Lines and two representatives of the State. Subsequently, that proposal was departed from and the Government in 1928 produced an agreement in which the figures were, two representing Coast Lines, two representing the London Midland and Scottish and one representing the Government. That has been the position from 1928 until now, but in addition to the cutting down of the State representation, two further facts have emerged. One is that the State's contribution has increased by £10,000 per annum. The other is that there is a local directorate consisting of three representatives of Coast Lines, and three representatives of the railway company with no representative of the State. The position, therefore, which the Government have urged on the House to-night as a satisfactory one, is infinitely worse than the position which existed in 1928 as far as the
908
public interest is concerned, and the proposal is infinitely worse than the proposal made by Lord Stamp and Sir Alfred Read—
Sir R. W. Smith: I understood the right hon. Gentleman's statement was that the original proposal was for a board consisting of three, three and two, thus making eight in all with two Government representatives but the Government propose a board consisting of two, two and one, which is only five in all with one Government representative. Do I understand that the right hon. Gentleman desires that the numbers should be two, two and two?
Mr. Johnston: I am sure the hon. Member has not been giving that attention to my remarks which they deserve. I was trying to prove that, in addition to the original figure submitted by the Committee of which the hon. Gentleman himself was a Member and with which he agreed, there has been created a local directorate on which there are three London Midland and Scottish directors, three Coast Lines directors and no State director. Instead of having two out of eight, which was one in four, the position now is that of having one in five. In 1928 we got a raw deal—
Sir R. W. Smith: As I understand the proposal which is being put forward at the present time by the right hon. Gentleman's party, they want to carry out exactly the proposal of the Committee which was for three, three and two.
Mr. Johnston: That is not the proposal at all, and if the hon. Gentleman would listen to what we are saving, it would save the time of the House. We are deliberately asking that the Government shall have power to nominate two Government representatives instead of one. We are not asking even that this shall be immediately carried into effect. We are only asking that they shall take power to nominate two representatives. I hope I have made it clear that in no sense is this a wrecking Amendment, and that any wrecking that has been done, has been done by the Government. I do not blame Lord Stamp or Sir Alfred Read. I believe that they would have honourably fulfilled their bargain. We are endeavouring to insist that as far as possible the public interest shall be safeguarded. It is not being safeguarded by watering down the suggestion of a Select Committee of this House.
11.41 p.m.
Mr. Walkden: I rise to protest against the description which the Minister has given of the position of Government directors of a concern in which Government money is largely involved. I have always understood that the representative of the State on a public or semi-public concern should serve as a director, and not as a superior auditor to which the Minister has reduced him. He is there to see that the direction of the company is in accordance with public policy, which means in accordance with the declared wishes of the Government of the day. We have been involved in labour questions to-night and have had the assurance that an eminent member of the board will raise the question of the clerks employed by this company. We shall be glad to accept that assurance knowing whence it comes, but we have had so much unsatisfactory treatment from this company. It is quite as bad as the administration of the Imperial Airways. There is something wrong in this company like there is in Imperial Airways, and we should like to see the Government director a pukker director on the board. I support the view that we should have a second man who could see that this concern is carried on in accordance with the policy of the Government.
11.43 p.m.
Sir R. W. Smith: Reference has been made to the finding of the Committee, and I want to point out that their unanimous finding was that the directorate should consist of three from the London Midland and Scottish Railway, three Coast Line representatives and two Government directors. That is not what is proposed by the Amendment, and that is why I do not support the Amendment.
11.44 p.m.
Mr. Gallecher: I want to draw attention to the description given by the Minister
of the Government director. The shipping directors are concerned with the business of making a profit out of the business. The railway directors, too, are concerned with making a profit. The Government director should not be a superior auditor; he should be a director whose special interest is to see that the welfare of the people in the Highlands and Islands is cared for. That is the big problem, not the welfare of MacBrayne's or the railways. The problem is the welfare of the people who are being driven from their homes in the Highlands and Islands. There is, therefore, plenty of work for two Government directors apart from just looking through papers and accounts. They should look after the welfare of the people with whom we are supposed to be concerned in this contract.
11.45 p.m.
Mr. J. Morgan: There is one point which I should like to have made clear before I go into the Lobby. Is it a fact that this company would not exist at all were it not for the financial assistance of the State and its participation in the concern? If that is so, surely the case for strengthening the Government directorate is established. I cannot imagine that when the hon. Member for Central Aberdeen (Sir R. W. Smith), as a member of the committee, recommended that there should be two Government directors, he imagined they would be two auditors, but meant that their status would be equal to that of the London Midland and Scottish directors, or the directors of the steamship company. In view of the fact that this company exists partly upon assistance from the State prima facie there is a case for the State taking it over and managing it.
Question put, "That the word 'approved' stand part of the Question."
The House divided: Ayes, 130; Noes, 81.

Division No. 30.]

AYES.

[11.47 p.m

Acland-Troyte, Lt.-Col. G. J.

Burgin, Rt. Hon. E. L.

Cross, R. H.

Adams, S. V. T. (Leeds, W.)

Butcher, H. W.

Cruddas, Col. B.

Agnew, Lieut.-Comdr. P. G.

Carver, Major W. H.

De Chair, S. S.

Albery, Sir Irving

Cary, R. A.

Dixon, Capt. Rt. Hon. H.

Allen, Lt.-Col. Sir W. J. (Armagh)

Castlereagh, Viscount

Dodd, J. S.

Anstruther-Gray, W. J.

Chapman, A. (Rutherglen)

Dorman-Smith, Col. Rt. Hon. Sir R. H.

Aske, Sir. R. W.

Christie, J. A.

Drewe, C.

Astor, Hon. W. W. (Fulham, E.)

Clarke, Colonel R. S. (E. Grinstead)

Dugdale, Captain T. L.

Baldwin-Webb, Col. J.

Cobb, Captain E. C. (Preston)

Duncan, J. A. L.

Beechman, N. A.

Colville, Rt. Hon. John

Dunglass, Lord

Broadbridge, Sir G. T.

Conant, Captain R. J. E.

Eckersley P. T.

Brooke, H. (Lewisham, W.)

Cook, Sir T. R. A. M. (Norfolk N.)

Elliot, Rt. Hon. W. E.

Browne, A. C. (Belfast, W.)

Cooper, Rt. Hn. T. M. (E'nburgh, W.)

Ellis, sir G.

Bull, B. R.

Crooke, Sir J. Smedley

Erskine-Hill, A. G.

Fox, Sir G. W. G.

Macmillan, H. (Stockton-on-Tees)

Scott, Lord William

Fremantle, Sir F. E.

Magnay, T.

Shakespeare, G. H.

Furness, S. N.

Maitland, Sir Adam

Shaw, Captain W. T. (Forfar)

Gledhill. G.

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

Smiles, Lieut.-Colonel Sir W. D.

Gluckstein, L. H.

Markham, S. F.

Smith, Sir R. W. (Aberdeen)

Grant-Ferris, R.

Mayhew, Lt. Col. J.

Snadden, W. McN.

Grimston, R. V.

Medlicott, F.

Somervell, Rt. Hon. Sir Donald

Hambro, A. V.

Mills, Major J. D. (New Forest)

Southby, Commander Sir A. R. J.

Hannah, I. C.

Mitchell, H. (Brentford and Chiswick)

Stanley, Rt. Hon. Oliver (W'm'l'd)

Harbord, A.

Morgan, R. H. (Worcester, Stourbridge)

Strickland, Captain W. F.

Heilgers, Captain F. F. A.

Morrison, G. A. (Scottish Univ's.)

Sueter, Rear-Admiral Sir M. F.

Hely-Hutchinson, M. R.

Munro, P.

Thomson, Sir J. D. W.

Hepworth, J.

Neven-Spence, Major B. H. H.

Titchfield, Marquess of

Herbert, Major J. A. (Monmouth)

Nicolson, Hon. H. G.

Tufnell, Lieut.-Commander R. L.

Higgs, W. F.

O'Neill, Rt. Hon, Sir Hugh

Turton, R. H.

Hogg, Hon. Q. McG.

Orr-Ewing, I. L.

Wallace, Capt. Rt. Hon. Euan

Holdsworth, H.

Radford. E. A.

Ward, Lieut.Col. Sir A. L. (Hull)

Holmes, J. S.

Ramsden, Sir E.

Waterhouse, Captain C.

Hope, Captain Hon. A. O. J.

Rathbone, J. R. (Bodmin)

Whiteley, Major J. P. (Buckingham)

Horsbrugh, Florence

Rayner, Major R. H.

Wickham, Lt.-Col. E. T. R.

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

Reid, J. S. C. (Hillhead)

Williams, C. (Torquay)

Hunloke, H. P.

Ropner, Colonel L.

Willoughby de Eresby, Lord

Kerr, J. Graham (Scottish Univs.)

Rosbotham, Sir T.

Winterton, Rt. Hon. Earl

Lamb, Sir J. Q.

Ross, Major Sir R. D. (Londonderry)

Wise, A. R.

Leech, Sir J. W.

Ross Taylor, W. (Woodbridge)

Womersley, Sir W. J.

Lipson, D. L.

Royds, Admiral Sir P. M. R.

Young, A. S. L. (Partick)

Llewellin, Colonel J. J.

Ruggles-Brise, Colonel Sir E. A.

Mabane, W. (Huddersfield)

Russell, R. J. (Eddisbury)

TELLERS FOR THE AYES.—

MacAndrew, Colonel Sir C. G.

Salmon, Sir I.

Mr. James Stewart and Colonel Kerr.

MacDonald, Sir Murdoch (Inverness)

Salt, E. W.

McKie, J.H.

Schuster, Sir G. E.

NOES.

Adams, D. (Consett)

Harvey, T. E. (Eng. Univ's.)

Pearson, A.

Adams, D. M. (Poplar, S.)

Hayday, A.

Poole, C. C.

Adamson, Jennie L. (Dartford)

Henderson, A. (Kingswinford)

Price, M. P.

Adamson, W. M.

Henderson, T. (Tradeston)

Quibell, D. J. K.

Alexander, Rt. Hon. A. V. (H'lsbr.)

Hills, A. (Pontefract)

Robinson, W. A. (St. Helens)

Bellenger, F. J.

Jenkins, Sir W. (Neath)

Sexton. T. M.

Benn, Rt. Hon. W. W.

John, W.

Silverman, S. S.

Burke, W. A.

Johnston, Rt. Hon. T.

Simpson, F. B.

Cape, T.

Jones, A. C. (Shipley)

Smith, Ben (Rotherhithe)

Charleton, H. C.

Kennedy, Rt. Hon. T.

Smith, E. (Stoke)

Cocks, F. S.

Kirkwood, D.

Smith, T. (Normanton)

Daggar, G.

Lawson, J. J.

Sorensen, R. W.

Dalton, H.

Leach, W.

Stephen, C.

Davidson, J. J. (Maryhill)

Leonard, W.

Stewart, W. J. (H'ght'n-le-Sp'ng)

Davies, R. J. (Westhoughton)

Leslie, J. R.

Tinker, J. J.

Davies, S. O. (Merthyr)

Logan, D. G.

Tomlinson, G.

Dunn, E. (Rother Valley)

Macdonald, G. (Ince)

Walkden, A. G.

Edwards, Sir C. (Bedwellty)

McEntee, V. La T.

Watkins, F. C.

Evans, D. O. (Cardigan)

Maclean, N.

Watson, W. McL.

Fletcher, Lt.-Comdr. R. T. H.

MacMillan, M. (Western Isles)

Welsh, J. C.

Foot, D. M.

MacNeill Weir, L.

Westwood, J.

Gallacher, W.

Maxton, J.

Whiteley, W. (Blaydon)

Graham, D. M. (Hamilton)

Messer, F.

Williams, T. (Don Valley)

Greenwood, Rt. Hon. A.

Milner, Major J.

Woods, G. S. (Finsbury)

Grenfell, D. R.

Morgan, J. (York, W.R., Doncaster)

Young, Sir R. (Newton)

Griffiths, G. A. (Hemsworth)

Morrison, Rt. Hon. H. (Hackney, S.)

Griffiths, J. (Llanelly)

Noel-Baker, P. J.

TELLERS FOR THE NOES.—

Hall, G. H. (Aberdare)

Paling, W.

Mr. Mathers and Mr. Anderson.

Harris, Sir P. A.

Parker, J.

Main Question put, and agreed to.

Resolved,
"That the contract, dated the 13th day of December, 1938, between His Majesty's Government and David MacBrayne, Limited, for the maintenance of transport services in the Western Highlands and Islands of Scotland, and for the conveyance of mails in connection with the said services, be approved."
The remaining Orders were read, and postponed.
It being after Half-past Eleven of the Clock, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at Five Minutes before Twelve o'Cock.