Commons Sitting of 10 May 1944

PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS

  UNITED STATES FORCES, GREAT BRITAIN (DEATH SENTENCES)
  Mr. Hugh Lawsonasked the Secretary of State for Foreign Affairs if he is aware that two coloured American soldiers have been sentenced to death for rape by a court-martial held in this country recently; and if he will inform the American Government that the carrying out of such a sentence would be interpreted by many people in this country as racial persecution and therefore likely to cause bad feeling between the two countries.
  The Secretary of State for Foreign Affairs (Mr. Eden): The answer to the first part of the Question is in the affirmative. The second part of the Question raises an issue upon which His Majesty's Government have no basis for representations to the United States Government.
  Mr. Rhys Davies: Is it not an anomaly that a person can be sentenced to death on British soil, for an offence to which the same punishment would not apply under our own law?
  Mr. Eden: The jurisdiction of the United States authorities over their Armed Forces in this country rests upon the Visiting Forces Act passed by this House in 1941. Therefore, I have no locus standi in the matter.
  Mr. Davies: Is it not a fact that Parliament never anticipated that this would happen?
  Mr. Eden: On the contrary, if the hon. Gentleman will be good enough to read the Debate he will find that it was clearly stated by the Minister that, in some respects, American military law was more severe than our own.
  Mr. Davies: It is a disgrace.
  Mr. Hugh Lawson: Can the Foreign 1944 Secretary say whether the same sort of sentence has been passed for a similar offence, on white American soldiers in this country?
  Mr. Eden: This action has been taken under an Act which the House has passed. It is in accordance with the law of another country, and it is being administered in accordance with a decision of this House. I really cannot say more than that.

  UNITED NATIONS (INTERNATIONAL FORCE)
  Mr. Manderasked the Secretary of State for Foreign Affairs whether consideration is being given to the best means of continuing in the post-war period the present closely-knit organisation of international force among the Allies for the preservation of the peace of the world through a United Nations police force.
  Mr. Eden: The question of the preservation of world peace is being considered in accordance with Article 4 of the Moscow Declaration of October, 1943. I am not however at present able to state what methods will be employed to carry out the intention of the signatories.
  Mr. Mander: May I ask whether it has been considered, not only by the Big Three, but by the United Nations as a whole?
  Mr. Eden: The Moscow Declaration expressed what we proposed to do. We thought we had better start that way.
  Mr. Petherick: Is it not best to maintain the "present closely-knit organisation of international force among the Allies" without wasting time on any nonsense about an international police force?
  Mr. Eden: I do not think they are incompatible.

  EGYPT, MIXED COURTS (JURISDICTION)
  Sir John Mellorasked the Secretary of State for Foreign Affairs whether he has obtained assurances that the exclusive jurisdiction of the mixed courts to try British subjects in Egypt for all offences

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  punishable by law in accordance with the Treaty of Montreux will be re-established as soon as hostilities cease.
  Mr. Eden: The Egyptian Government were not asked to give any assurances of this kind. On the outbreak of war, for reasons of security and in fulfilment of their obligations under Article 7 of the Treaty of Alliance, they established martial law and, by various proclamations, gave military courts exclusive jurisdiction over certain offences. I have no reason to doubt that, when the emergency which was the reason for the creation of this military jurisdiction ceases to exist, the Egyptian Government will automatically repeal all these provisions. The exclusive criminal jurisdiction of the Mixed Courts over British subjects until 1949, as provided for by the Montreux Convention, will thus be restored.
  Sir J. Mellor: Is it distinctly understood between the British and Egyptian Governments, that the incursion of the Egyptian military tribunals into the jurisdiction of the Mixed Courts is purely a war-time expedient?
  Mr. Eden: Yes, Sir. I think that that emerges from the answer I have just given.

  POLISH FORCES, GREAT BRITAIN (COURTS-MARTIAL)
  Mr. Dribergasked the Secretary of State for Foreign Affairs if he will seek assurances from the Polish Government that Polish courts-martial held in this country under the authority of the Allied Forces Act, 1940, will in future, in accordance with normal British practice, be open and not secret.
  Mr. Eden: No, Sir. The authority conferred upon the Polish Government under the Allied Forces Act enables them to exercise within the United Kingdom, in matters concerning the discipline and internal administration of the Polish forces, all such powers as are conferred upon them by Polish law, and in present circumstances I am satisfied that there would be no justification for asking the Polish Government to give the assurances suggested by the hon. Member.
  Mr. Driberg: Is there not some distinction that can be drawn between questions of law, discipline, sentences and so
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  forth, and mere questions of procedure, such as the holding of a trial in open or in secret?
  Mr. Eden: I am advised that that is not so.
  Mr. Silverman: Is it not the case that when the Act was passed by this House, which gave the Polish Government powers which they are now exercising, assurances were given by the Minister in charge of the Bill that in exercising those powers they would not act in conflict with the general spirit of our own law?
  Mr. Eden: I have not re-read the Debate, but my recollection is that a clear statement on the position was made to the House at the time.
  Mr. Driberg: In the case of the recent courts-martial, did not the Polish authorities state that the only reason for excluding the British Press was that the proceedings were all in Polish and would not be understood? And is the right hon. Gentleman aware that one man now awaiting court-martial is an English-speaking Pole, who has lived in this country for many years and speaks no Polish? So what will happen about him?
  Mr. Eden: I am dealing here with the rights which the House has given to the Polish Government in the matter, and I do not think that some of the hon. Gentleman's insinuations are warranted.

  FOREIGN SERVICE
  Miss Wardasked the Secretary of State for Foreign Affairs whether he is considering establishing an adequate pension scheme for the unestablished staff of the foreign service.
  Mr. Eden: One of the unsatisfactory features of the present staffing arrangements for the subordinate ranks of the foreign service is the large number of posts which are unestablished and therefore unpensionable. As a result of the reform of the foreign service it is hoped to include a number of these posts among those which are established and pensionable. It will, however, always be necessary to rely to a considerable extent on unestablished and locally recruited staff and I am therefore considering, with my right hon. Friend the Chancellor of the Exchequer, what finan-

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  cial arrangements it will be possible to make to enable such staff to receive suitable financial treatment at the end of their service to the Government.
  Viscountess Astor: Are the reforms in the Foreign Office to be wide and democratic enough to allow women in?
  Miss Wardasked the Secretary of State for Foreign Affairs what new financial proposals are under consideration for the foreign service.
  Mr. Eden: The financial proposals now under consideration for the foreign service are those which arise from the scheme of reform set out in Command Paper 6420 and approved by this House on 18th March last year. These proposals depend for their realisation upon the reorganisation of the foreign service which cannot be fully completed until after the war.
  Miss Ward: Will my right hon. Friend give an assurance that he will get generous treatment for the foreign service from the Treasury?
  Mr. Eden: That seems a question that should hardly be addressed to me. I can only say that I will do my best, and I know that my right hon. Friend will help me.

  BRITISH TRAWLER (ARREST, ICELAND)
  Mr. Muffasked the Secretary of State for Foreign Affairs whether he is aware that the Icelandic gunboat "Aegir," attacked and damaged by gunfire the S.T. "War Grey" on the high seas without lawful pursuit from territorial waters on 28th March, 1943; and what steps have been taken to obtain redress from the Icelandic Government and to ensure protection for British trawlers in the future.
  Mr. Eden: The case referred to by my hon. Friend is a complicated one. The final pursuit and arrest of the "War Grey" took place after she had been stopped and ordered to sail to Reykjavik on a charge of fishing within Icelandic territorial waters. At the time of the arrest the "War Grey" was attempting to sail to this country having on board an Icelandic officer who had been placed there in connexion with the fishing charge
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  and whom she had unsuccessfully tried to put ashore earlier in the day. In these circumstances I am advised that there is strong ground for the contention that the action taken by the "Aegir", drastic though it was, was not illegal.
  While I am fully prepared to take energetic action to protect the interests of British trawlers when these have been unlawfully infringed, having given most careful consideration to this case, I have come to the conclusion that there is no good cause of action against the Icelandic Government and that no useful purpose would be served by taking the matter up through the diplomatic channel.
  Mr. Muff: In view of the fact that the skipper was imprisoned for 23 days, was under open arrest for over 40 days, was fined a heavy sum and had his gear confiscated, will my right hon. Friend use his good offices with the Icelandic Government, on grounds of clemency, to see that a certain amount of the fine is remitted?
  Mr. Eden: Clemency is another matter and I will gladly consider that, but we must be careful, for our own reputation, to make sure of our grounds before we press these matters too far.

  GREEK POLITICAL UNITY (CONFERENCE)
  Captain Gammansasked the Secretary of State for Foreign Affairs if he is yet in a position to make any statement regarding the relations of the Greek Government towards the underground movement in Greece.
  Mr. Eden: The Greek Prime Minister is about to hold a conference with delegates from the political parties and resistance organisations in Greece with a view to forming a national Government which will be fully representative of all patriotic opinion in the country. This conference may well be decisive for the future welfare of Greece and His Majesty's Government much hope that M. Papandreou will be successful in his efforts to establish political unity on a firm and lasting basis.

  ROYAL AIR FORCE

    Personnel, Malta and Iceland
    Mr. Viantasked the Secretary of State for Air whether members of the R.A.F. who were in Malta during the

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    bombing period are being returned to a home station provided they have been two years in that station.
    The Secretary of State for Air (Sir Archibald Sinclair): Yes, Sir. The hon. Member will, however, understand that the posting home of personnel who have completed their tour must be subject to the availability of shipping and the exigencies of the Service.
    Sir J. Mellorasked the Secretary of State for Air why ground personnel posted to Iceland before 1st May, 1943, are not allowed more than 14 days' disembarkation leave on return to England, seeing that they did not obtain 14 days' embarkation leave under the new rule before leaving England.
    Sir A. Sinclair: R.A.F. personnel on return to the United Kingdom after a tour of duty in Iceland, which is normally of 12 months' duration, are usually granted 14 days' disembarkation leave. It is not the practice to increase this period where, owing to the needs of the Service, embarkation leave was not taken, and to do so in the case of the personnel referred to by my hon. Friend would involve preferential treatment for this category of airmen.
    Sir J. Mellor: Do not these people lose both ways? Will my right hon. Friend say why local leave is banned in Iceland?
    Sir A. Sinclair: That is another question, and perhaps my hon. Friend would put it on the Paper. I do not think they lose both ways. They have a shorter tour than most people who go overseas, and their tour of duty in Iceland, although it is only 12 months, is treated as a full tour of duty.

    Parliamentary Franchise (Service Register)
    Sir J. Mellorasked the Secretary of State for Air when forms and explanatory memoranda in pursuance of the Parliament (Elections and Meetings) Act, 1943, were issued to units in England; and what progress has been made with registration.
    Mr. Loverseedasked the Secretary of State for Air whether he will appoint a certain week and take steps to ensure that, so far as possible, throughout the R.A.F., when each man receives his pay in respect of that week he shall also re-
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    ceive the form necessary in order to be placed on the absent voters' list or to have his vote recorded by proxy, together with an explanation on how to fill it up.
    Wing-Commander Hulbertasked the Secretary of State for Air whether he is now satisfied that all personnel in Balloon Command entitled to vote under the Parliament (Elections and Meetings) Act, 1943, have been made aware of their rights; if an officer at the command concerned has been specially detailed for this duty; and, if so, what is his rank.
    Sir A. Sinclair: Full instructions regarding the Service Register as well as an explanatory pamphlet were issued on 25th April. Under these instructions commanding officers are required to afford every facility for declarations and proxy appointments. No information as to the progress of registration, which is of course voluntary, is available. I am grateful to the hon. Member for Eddisbury (Mr. Loverseed) for his suggestion, and in order to facilitate the progress of registration, arrangements are being made, where practicable, for a copy of the registration form to be handed to every airman and airwoman at a future pay parade. Officers will be detailed to explain procedure at these parades and will be available to assist personnel in the completion of the forms. Copies of the explanatory pamphlet will also be available. The date of the parade and the detailed arrangements generally, in Balloon as in other Commands of the R.A.F., must depend on the circumstances and location of the unit but it is hoped to cover all units by 1st August.
    Sir J. Mellor: Why is the Air Force nearly a month behind the Army in this matter, seeing that the War Office did all this on 1st April?
    Sir A. Sinclair: All I can say is that we hope to get it done by 1st August, and I think that will be satisfactory.
    Mr. Bellenger: Is it not a fact that these explanatory pamphlets are not issued to every officer, or every other rank, but that one copy is kept in the orderly room? Will the right hon. Gentleman consider issuing at least one pamphlet to each officer?
    Sir A. Sinclair: I will certainly look into the point which my hon. Friend has brought to my notice, but there will be

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    officers available to give detailed explanations to the men at the pay parades. Whether we are making available a sufficient supply of these explanatory pamphlets is a point into which I will certainly look.

    A.T.C. Officers (Appointments)
    Mr. Liddallasked the Secretary of State for Air how many officers of the A.T.C. have been appointed during the present war to paid or whole-time positions in the R.A.F. for duty with the A.T.C.; and whether, in view of the disquiet now felt by those officers of the corps who have given years of voluntary unpaid service and who see other officers appointed to paid positions in the corps in which they have had no experience, he will review the whole position and make no such appointments in the future without considering the claims of those officers voluntarily serving in the A.T.C.
    Sir A. Sinclair: Since September, 1939, eight A.T.C. officers who were serving in the Training Branch of the Royal Air Force Volunteer Reserve in an unpaid capacity have been appointed to paid or whole-time posts with the Air Training Corps. Posts of this nature generally call for a wide degree of Service knowledge and experience which cannot normally be expected to be possessed by Training Branch officers. The claims of these officers will, however, continue to be considered when any further appointments are necessary.

    Aircrew (Rank and Flying Badge)
    Mr. Arthur Duckworthasked the Secretary of State for Air under what circumstances ex-operational and ex-instructional personnel of the R.A.F. are reduced in rank and lose the right to wear wings when posted to ground duties for reasons of medical unfitness.
    Sir A. Sinclair: Aircrew of the categories referred to by my hon. Friend retain both rank and flying badge on being withdrawn from aircrew duty on account of wounds or sickness.

    Overseas Service (Married Men)
    Mr. Bellengerasked the Secretary of State for Air whether married men with three years' overseas service are eligible for return to Great Britain; and whether the bulk of these men travel home by sea.
    Sir A. Sinclair: As regards the first part of the Question, I would refer the hon. Member to the reply to a similar question given to my hon. and gallant Friend the Member for Stockport (Sir A. Gridley) on 22nd March. The answer to the second part is "Yes."
    Mr. Bellenger: Am I right in saying that the answer to the first part of the Question is that men with three years' service overseas are eligible for return to this country?
    Sir A. Sinclair: Yes, Sir, married men.
    Mr. Dugdale: Will the right hon. Gentleman consider sharing any accommodation that the R.A.F. possess in ships, with soldiers, so that they may have an equal chance of coming home after three years?
    Sir A. Sinclair: No, Sir. I have an obligation to these men to see that everything I can do is done to get them home at the end of their normal tour. If the Army can come down to our tour, I shall be delighted, but I must do my best to carry out my obligations to the men for whom I am responsible.

    Colonial Personnel (Family Allowances)
    Mr. Sorensenasked the Secretary of State for Air if he is aware of the discontent arising from the fact that Jamaican airmen receive a substantially smaller allowance for their families than British airmen; and whether, in view of the increased cost of living in Jamaica and the prospective increase in the pay of British airmen, he will have the question of a corresponding increase for Jamaican and other colonial airmen sympathetically considered.
    Sir A. Sinclair: I have not received evidence of any discontent, but rates of family allowances payable in Jamaica and other Colonies are now under consideration. I will, in due course, be glad to inform the hon. Member of the result of this examination.
    Mr. Sorensen: Will it be related to the cost of living, so that any increase which has taken place in the last few years will be made up by corresponding increases in pay?
    Sir A. Sinclair: I think I had better wait until I see the results of this examination before I answer that question.

    AIRCRAFT FACTORIES (TRANSPORT FACILITIES)
    Mr. Edgar Granvilleasked the Minister of Aircraft Production if he is satisfied with the provisions that have been made for transport to maintain the supply of essential materials to aircraft factories during the period of heavy road traffic in the near future.
    The Minister of Aircraft Production (Sir Stafford Cripps): This matter has received the most careful attention from my Department, and arrangements have been made which should reduce to a minimum any interference with the traffics in question.
    Mr. Granville: Will the right hon. and learned Gentleman bear in mind that any arrangements to supply by parachute would require the co-operation of the civilian population? Has that point been taken into consideration?
    Sir S. Cripps: I will certainly bear that matter in mind.

    TANGANYIKA (LEPROSY)
    Mr. Creech Jonesasked the Secretary of State for the Colonies what steps have been taken in Tanganyika as a result of the investigations of Dr. Muir into leprosy five years ago; why the Chazi settlement has been closed and the Church Missionary Society's co-operation in the case of lepers in the Turiari district refused; and why the services of Dr. Wallace, a special in leprosy, could not be extended, as proposed by the Church Missionary Society, and thereby prevent lepers wandering about and infecting more villages.
    The Secretary of State for the Colonies (Colonel Oliver Stanley): As the answer is necessarily rather long, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Mr. Creech Jones: I take it that some action has been taken in this matter?
    Colonel Stanley: The hon. Gentleman will find quite a long list of them.
    Following is the answer:
    Dr. Muir, C.I.E., M.D., Medical Secretary to the British Empire Leprosy Relief Association, visited Tanganyika in 1938.
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    After his visit, it was agreed between the East African territories that a leprosy specialist for East Africa should be appointed, but no appointment has as yet been made, owing to war difficulties. A recent conference of Directors of Medical Services has raised the question again, and the Government of Tanganyika has expressed its willingness in the Legislative Council to appoint a whole-time specialist for Tanganyika, if a suitable man can be obtained.
    The Government of Tanganyika also decided, as a result of Dr. Muir's visit, to establish two main leper settlements under Government operation. One of these has already been established in the Southern Highlands Province, for 1,100 patients, and it is intended to establish another settlement in the region of the central railway line. The Church Missionary Society's station at Makatupora was considered as a possible site, but offers inadequate opportunities for expansion, owing largely to the limited amount of fertile agricultural land in the immediate neighbourhood. The search for a suitable site is being continued.
    The settlement at Chazi was established in 1941 by lay workers, paid by the British Empire Leprosy Relief Association, with the assistance of the native authorities. The site was discovered to be very malarious and too remote for effective medical supervision. It was therefore regarded as unsuitable for development as a Government station, and a decision was taken to close it. In view of the delay in finding a suitable site for a permanent Government station, however, the settlement at Chazi is being continued as a temporary measure. There are at present 14 leper settlements or camps in the country, maintained by Government or native authorities, and 15 by missions. Compulsory segregation is not in force; the Governor reports that it would, in any case, be impracticable, and modern practice is generally not in favour of wholesale segregation, especially where considerable numbers of non-infectious cases may be involved.
    As regards the last part of the Question, it was suggested by the Church Missionary Society that Dr. Wallace, in addition to conducting the Society's settlement at Morogoro near Manyoni, should supervise both the settlement at Chazi and another settlement at Mkalama in North Singida.

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    These places are respectively 230 and 115 miles from Morogoro, and the arrangement was not considered practicable. The Station at Mkalama has been handed over to the American Augustana Lutheran Mission, who are now supervising it in conjunction with the local native authority. Chazi remains, for the present, in charge of a lay worker. The station at Makatupara, which is assisted by Government funds and by free issues of food where necessary, remains in the charge of Dr. Wallace.

    PALESTINE (HEALTH MEASURES)
    Mr. Creech Jonesasked the Secretary of State for the Colonies whether the Palestinian Government has considered again its policy in regard to financial participation in the maintenance of the health institutions organised by the sick fund, Kupat Holin, of the General Federation of Jewish Labour; and why the Palestinian Government refuses to receive a delegation from this body to discuss the working of the health arrangements and some amendment of the Government's existing policy in respect of social insurance and mutual aid institutions.
    Colonel Stanley: I assume that my hon. Friend is referring to correspondence which the Director of the Sick Fund (Kupat Cholim) had with the Chief Secretary, Palestine, last year about the responsibility of Government towards the health of workers. In his reply of 5th August, the Chief Secretary drew attention to an address by the Palestine Reconstruction Commissioner which acknowledged that it was the duty of the State to provide at least some measure of social security for its citizens, but explained that the matter required detailed study. The Director of the Sick Fund was invited to get in touch with the Reconstruction Commissioner for this purpose, but the organisation have so far not availed themselves of the opportunity to do so.
    Mr. Creech Jones: Is the Minister aware that representations have been made for a full discussion with the authorities in Palestine on the whole of this problem but, so far, the organisations concerned have not been able to get agreement with the Government that such a deputation shall be received?
    Colonel Stanley: Here is an invitation as long ago as last August for this party to visit the Reconstruction Commissioner, who is the man chiefly concerned, but so far they have not availed themselves of the opportunity.

    MAURITIUS (SIR COSMO PARKINSON'S VISIT)
    Mr. Creech Jonesasked the Secretry of State for the Colonies whether the report of Sir Cosmo Parkinson can be available on the following points: Mauritius Constitution, trade union, conciliation and industrial law, greater financial provision for Government poor house, condition of Jewish refugees, disturbances last year at the Bellevue sugar estate and implementation of the Orde Brown Labour Report.
    Colonel Stanley: No, Sir. Sir Cosmo Parkinson has visited certain Colonies in the course of the last two years, including Mauritius, on behalf of my predecessor and myself; those visits have been undertaken mainly with the object of making personal contacts and discussing matters of concern to the Colonies with the Governors, and they do not lend themselves to the preparation of written reports. If, however, there is any particular point regarding Mauritius on which the hon. Member wishes for information and will be good enough to communicate with me, I will gladly give him such information as I can.

    NORTHERN RHODESIA (MINEWORKERS)
    Mr. Edmund Harveyasked the Secretary of State for the Colonies whether the promised consultations between the Government of Northern Rhodesia, the Mineworkers' Union and two mining companies have taken place; whether an amicable agreement has now been reached; and whether he can give any information as to how the African miners will be affected by the cut in copper production.
    Colonel Stanley: As the answer is necessarily rather long, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    The general copper situation for 1944 has now been reviewed by the Combined

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    Raw Materials Board in Washington and it has been decided that, in order to safeguard the Allied Nations' copper position, production from all sources should be maintained as far as practicable. Any production from the sources hitherto allocated to the United Kingdom in excess of their requirements will be made available in 1944 to the U.S.A., or the U.S.S.R., as may be arranged in agreement with the appropriate authorities of the countries concerned.
    In Northern Rhodesia, production will be at the level which can be maintained with the existing labour force and without involving His Majesty's Government in abnormal capital expenditure on replacement of plant. As the result of the operation of these factors, production for 1944 will be on a lower level than that of 1943, but, as regards the effect on labour, although there has been some voluntary release, there has been no retrenchment on grounds of production policy, nor will there be any so long as the position remains as it is at present. In these circumstances, it has not so far been necessary to hold the consultations referred to in the first part of the Question.

  WEST INDIES

    Labour Advisers
    Mr. John Wilmotasked the Secretary of State for the Colonies whether, in view of the high value of the work being carried out by the British trade unionists appointed as labour advisers to the Government of British Guiana and Trinidad, he will cause similar appointments to be made in Jamaica, Barbados, Bahamas and Bermuda.
    Colonel Stanley: I am anxious to see the experiment of appointing British trade unionists as labour officers extended. I qui consulting the Governments of the territories named by the hon. Member, with a view to ascertaining whether they now desire the appointment of trade unionists as labour officers.
    Dr. Morgan: Will the right hon. and gallant Gentleman consider the advisability also of appointing one federal labour adviser, and then having subsidiaries, if that is desirable?
    Colonel Stanley: That is quite a different question, but there is, of course, a labour expert attached to the staff of the Stock-dale Commission.

    Franchise Commissions, British Guiana and Trinidad
    Mr. John Dugdaleasked the Secretary of State for the Colonies whether he has yet received the report of the Franchise Commissions in British Guiana and Trinidad; and, if so, what action he proposes to take on it.
    Colonel Stanley: I have received the report of the Trinidad Franchise Committee and hope shortly to discuss it with the Governor, who is now in this country. I have also received the main report of the British Guiana Franchise Commission, but I understand that some members propose to make reservations about certain sections of the report and these have not yet ben received. I am therefore not yet in a position to make a statement.
    Mr. Dugdale: Cannot any of these re-pods be placed in the Library?
    Colonel Stanley: I will see what can be done.
    Mr. John Wilmot: In view of the very considerable delay which has taken place in the case of British Guiana, will my right hon. and gallant Friend see to it that waiting on these reservations does not unduly hold up action on the whole matter?
    Colonel Stanley: Of course, when a large number of people, especially representing one community, have these reservations to make, it would be inappropriate to act before we have got them.
    Mr. Wilmot: Will the right hon. and gallant Gentleman bear in mind that the delay in forwarding these reservations may be a device to hold up any action of any kind?

    Jamaica (Employment Conditions)
    Mr. Fraserasked the Secretary of State for the Colonies what is the estimated number of people in Jamaica in need of employment for whom no work can be found; and what provision is made for their welfare.
    Mr. Rileyasked the Secretary of State for the Colonies the present position of unemployment in Jamaica; how many

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    men have been sent this year from Jamaica to the U.S.A. for farm work in the States; and the approximate number of Jamaican labourers now working in the U.S.A. under agreements between the Governments of Jamaica and the U.S.A.
    Colonel Stanley: I am asking the Governor for the latest unemployment figures and will communicate with the hon. Member when I receive his reply. A number of works of public utility are being carried out in Jamaica, some of them with assistance provided under the Colonial Development and Welfare Act, and a sum of £185,000 was made available from revenue in 1943–4 for relief works.
    Some 9,000 labourers were recruited during 1943 from Jamaica to alleviate the shortage of farm labour in the United States of America, and of these approximately 2,300 remained over in the U.S.A. during the current year. It is proposed to recruit at least on a similar scale this year, and recruiting has already begun. But I have not yet been furnished with any details.
    Mr. Riley: Has the right hon. and gallant Gentleman considered the possibility of utilising any portion of this unemployed labour in Jamaica on the preparation of sites for future land settlement?
    Colonel Stanley: Yes, Sir, all these proposals are being put into action where possible, but the hon. Member must realise that one of the chief difficulties in Jamaica at the moment is shortage of imported material. I hope that that will be alleviated through the very helpful action of the American Commissioner on the Anglo-United States Caribbean Mission.
    Colonel Arthur Evans: In view of the grave shortage of labour in Trinidad, is it possible for my right hon. and gallant Friend to arrange for the transfer of overflow labour in Jamaica to Trinidad?
    Colonel Stanley: The great difficulty is getting them from Jamaica to Trinidad, which are something like 1,200 miles apart.
    Mr. Fraser: Is there any provision made for these workers who are left unemployed?
    Colonel Stanley: We are finding them work.
    Mr. Fraser: Is any provision made when they do not get work?
    Colonel Stanley: Perhaps the hon. Member will put that Question down.
    Mr. Fraserasked the Secretary of State for the Colonies whether the Fair Labour Code, recently produced by the Industrial Relations Committee in Jamaica, has been accepted by the employers and trade unions; and what are the main provisions.
    Colonel Stanley: I have not yet seen the Fair Labour Code, but I am informed by the Governor that the certificate of agreement was signed by representatives of the leading Employers' Associations and the representatives of the Bustamante Industrial Trade Union and the Trade Union Council of Jamaica. Copies of the Code have already been despatched from Jamaica and I will arrange for a copy to be placed in the Library of the House as soon as they are received.
    Mr. Fraserasked the Secretary of State for the Colonies how many workers are employed as relief workers in Jamaica in order to relieve unemployment; what are the rates of pay; were the trade unions consulted in fixing these rates; and whether they are comparable with the rates ordinarily paid for similar employment.
    Colonel Stanley: I am asking the Governor for the desired information and I will communicate it to the hon. Member on its receipt.

    Local Government, Jamaica (Reorganisation)
    Mr. Rileyasked the Secretary of State for the Colonies whether the Report of Mr. Hill, on the reorganisation of local government in Jamaica, has yet been published; whether Mr. Hill's recommendations are now being put into operation; and what the chief recommendations are.
    Colonel Stanley: The Report has been published in Jamaica; and I understand that its proposals are to be debated shortly in the Legislative Council. Until that is done they cannot, of course, be put into operation. I am placing a copy of the Report in the Library of the House.
    Dr. Morgan: If there are no shipping facilities for the transference or migration of labourers between islands in the West Indies, how is it possible to get the shipping to transfer them from Jamaica to the United States?
    Colonel Stanley: That is quite a different matter. It arose, I think, on a previous Question.

    KENYA (AFRICAN REPRESENTATION)
    Mr. John Dugdaleasked the Secretary of State for the Colonies whether he has now received a Report from the Government of Kenya on the question of the direct representation of Africans on the Kenya Legislative Council; and, if so, what action he proposes to take on it.
    Colonel Stanley: I have just received a further despatch from the Governor on this subject, but I am not yet in a position to make a statement.
    Mr. Dugdale: Can the right hon. and gallant Gentleman say when he expects to be in a position to do so, because there has been very great delay?
    Colonel Stanley: It is also a very important matter. The Government have certain further inquiries to make locally, but I hope to be in a position to make a statement in the near future.

    COLONIAL DEVELOPMENT GRANTS
    Mr. Rileyasked the Secretary of State for the Colonies the total financial commitments for the approved schemes under the Colonial Development Act to date; the amount of the actual issues; and the respective amounts for the West Indies and the rest of the Colonies separately.
    Colonel Stanley: Commitments under schemes approved to date are West Indies £4,600,067, the rest of the Empire £3,827,482, making a total of £8,427,549. Issues from the Vote to 31st March last were West Indies £1,246,419; rest of the Empire £923,574, making a total of 2,169,993.

    TAXI-CABS, MANCHESTER
    Mr. Harry Thorneycroftasked the Parliamentary Secretary to the Ministry of War Transport whether he is aware that the railway companies only permit a limited number of drivers of taxi-cabs to ply for hire on the station approaches in Manchester and in those cases only in return for an annual rent of £7 16s. for each
    1894
    taxi-cab; that, as a result of this, as from Monday, 8th May, very few taxi-cabs have been delivering passengers to, or collecting passengers from, the station approaches in Manchester; and what action he proposes to take.
    Mr. Emeryasked the Parliamentary Secretary to the Ministry of War Transport if he is aware that railway companies only allow a limited number of taxicabs to ply for hire on station approaches in Manchester and charge £7 16s. per annum for the privilege from each taxicab; and if, in view of the threat of taxi-cab owners to withdraw their services, with consequent inconvenience to the travelling public, he will allow all licensed taxi-cabs free access to the station approaches.
    The Parliamentary Secretary to the Ministry of War Transport (Mr. Noel-Baker): The railway companies make a charge of three shillings a week for every taxi-cab which they authorise to ply for hire on the station premises at Manchester. I understand that they have offered to allow all taxi-cabs to use the station stands, up to the specified capacity of the stands, provided they receive the same total payment as they now receive by way of acknowledgment rental from the authorised taxi-cabs. I am asking the Manchester and Salford Owner Drivers' Association if they are prepared to accept this proposal.
    Mr. Thorneycroft: Is my hon. Friend aware that as a result of a similar dispute between railway companies and cab-owners in London more than 20 years ago, the railway companies permitted cab owners free access to the stations; and in view of the serious inconvenience that is suffered by the travelling public in that part of Lancashire, will he give reconsideration to this question? Manchester is only asking to come into line with London.
    Mr. Noel-Baker: Yes, Sir, but I think the conditions in London and Manchester differ rather widely. The railway companies maintain that in peace time the existing arrangement secures a better service for the public, and there is certainly a strong argument in favour of that view. I think that their present proposal would solve the present difficulty if it were accepted, but I thought it right to ask the Association if they would agree.
    Mr. Rhys Davies: Will my hon. Friend take care in any negotiations he has with railway companies on this point to see that Manchester is not put in a worse position than London? I live in Manchester. Manchester is as important as London.
    Mr. Thorneycroft: Owing to the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Motion for the Adjournment.

  MINISTRY OF INFORMATION

    British Information Service, United States
    Captain Gammansasked the Minister of Information if he is satisfied that the staff of the British Information Service in the U.S.A. is adequate for the work which it has to perform; and if, in view of the vital importance of explaining adequately to the American people the war effort of Great Britain, he will consider an increase of staff.
    The Minister of Information (Mr. Brendan Bracken): There is a steady increase in the number of requests for information and assistance received by our staff in America from the American Press, radio and film industry. I have no doubt that there is work enough to employ a much larger staff were it not for the overriding need to conserve British manpower.
    Mr. Driberg: Is it not the case that the bureau in Chicago in particular, which is doing admirable work but has to cover a vast area, is still very seriously understaffed?
    Mr. Bracken: I think we are very seriously understaffed in New York, Washington and Chicago, but we are held up by lack of man-power and lack of dollars.
    Mr. John Dugdale: Will the right hon. Gentleman consider the claims of those men who have lectured in America in peace-time with very great success, and have a very big following in that country?
    Mr. Bracken: No, Sir. I will not consider the claims of lecturers. I have had a pretty rough experience of some lecturers in the United States, and I have no intention of using them.
    Viscountess Astor: Have not some of them done us a great deal of harm by preaching peace on any terms?
    Mr. John Wilmotasked the Minister of Information if he will place in the Library copies of the booklets and other matter issued by British Information Services, New York.
    Mr. Bracken: The British Information Services in New York issue a great deal of material, most of which has a topical interest only. It would be a burden to the Library and to Transatlantic transport to bring over the bulk of it, but I will gladly supply the hon. Member with the material issued on any particular subject that he may have in mind.
    Mr. Wilmot: While thanking the right hon. Gentleman for that answer, might I ask whether, in view of the high value and general interest of some of these excellent publications, samples of them can be placed in the Library for the information of hon. Members?
    Mr. Bracken: Yes, Sir, I will get a few samples; but I can promise only a very few. May I say that all the statements made here to-day, paying such high tribute to my officials in the United States, are the best encouragement to them in their hard work?

    British Commonwealth (U.K. War Effort)
    Mr. Vernon Bartlettasked the Minister of Information how many officials have been appointed by his Ministry in each of the Dominions in order to explain the United Kingdom war effort.
    Mr. Bracken: None, Sir. As my hon. Friend the Parliamentary Under-Secretary for the Dominions explained in his answer yesterday, the Ministry of Information has no staff of its own in the Dominions.
    Mr. Bartlett: Would my right hon. Friend suggest to his colleague in the Dominions Office that it is not really enough to have one official in Australia, for example, and one in the Union of South Africa, to carry on such a very large task?
    Mr. Bracken: It would be better if my hon. Friend would communicate direct with the Secretary of State for the Dominions.
    Mr. Bartlett: Has not my right hon. Friend got more influence than I have with the Secretary of State?
    Mr. Bracken: No, Sir.
    Mr. Vernon Bartlettasked the Minister of Information how many officials in the Ministry are charged specifically with the duty of sending material about the United Kingdom war effort to Australia, Canada, New Zealand, the Union of South Africa and Eire, respectively.
    Mr. Bracken: The total number, exclusive of clerical and typing staff, is fifteen. There are four for Canada, three for Australia and New Zealand, two for the Union of South Africa, and one for Eire. The work of the remaining five concerns all these territories.
    Mr. Bartlett: Will the right hon. Gentleman keep in mind the fact that despite the very good work done by these officials, and despite a great curiosity in the Dominions, there is still a lot of ignorance of the British war effort?
    Mr. Bracken: I quite agree with my hon. Friend, but I never thought that I should live to see the day when the House of Commons would be encouraging me to take on a lot more staff at the Ministry of Information.
    Viscountess Astor: Is the right hon. Gentleman making full use of Mr. Brockington, one of our best broadcasters, who has now returned to Canada?
    Mr. Bracken: My noble Friend must remember that Mr. Brockington has a full-time occupation in Canada.

    POST OFFICE (JUVENILE WORKERS)
    Mr. Viantasked the Postmaster-General whether any arrangements are made for the provision of free meals to juvenile workers in the Post Office.
    The Assistant Postmaster-General (Mr. Robert Grimston): Under a scheme recently introduced in the Civil Service, arrangements have been made for boys and girls under 16 years of age employed in the Post Office to obtain, free of charge, from a staff canteen, British Restaurant, or other suitable catering establishment, a midday meal of the value of one shilling. I am glad to say that 6,300, out of a total eligible staff of about 7,200, are receiving these meals. The
    1898
    majority of those not receiving them live near their work, and prefer to take their midday meal at home.
    Mrs. Gazalet Keirasked the Postmaster-General if he will give an assurance that in the future his Department will cease to recruit boys from secondary schools at 14 plus, thus encouraging parents to break their contracts with educational authorities to keep their children at school until 16 years of age.
    Mr. Robert Grimston: It is the policy of the Post Office not to encourage secondary school pupils to leave school prematurely against the wishes of local education authorities; and head postmasters throughout the country were instructed in March, 1943, not to recruit secondary school pupils, unless local education authorities were willing to release such pupils unconditionally from further attendance at school. If my hon. Friend will, give me particulars of any instance in which these instructions appear to have been disregarded, I shall be happy to have inquiry made.

    DOMINION PRIME MINISTERS (MEETINGS)
    Mr. Edgar Granvilleasked the Prime Minister who is representing Newfoundland at the present Empire Conference.
    The Prime Minister (Mr. Churchill): My Noble Friend the Secretary of State for Dominion Affairs is attending the meetings of Prime Ministers and will watch the interests of Newfoundland should any matter affecting Newfoundland come up for discussion.
    Mr. Granville: In view of the fact that Newfoundland will be a tremendous asset as a world air terminus for the future of civil aviation, will my right hon. Friend see that the rights and interests of the islanders, as well as the interests of the whole Empire, are safeguarded?
    The Prime Minister: That seems to be a proposition to which I could certainly give support.
    Mr. Tinker: As there is a difference of opinion over the pronunciation of Newfoundland, will the Prime Minister make it clear what is the correct pronounciation?
    The Prime Minister: I was always brought up to call it New found land, but I am not absolutely sure that New-found-land is not more correct.
    Mr. Treeasked the Prime Minister whether arrangements are being discussed at the meeting of Prime Ministers for the promotion of better mutual knowledge amongst the peoples of the Empire and for the setting up of adequate machinery after the war to ensure that the world shall be kept informed about the Commonwealth and the Empire as a whole.
    The Prime Minister: In view of the wide range of subjects already under discussion, and the limited time available, I doubt whether it will be practicable for this question to be discussed specifically at the current meeting. I may add that this knowledge about the Empire is growing at a pretty quick rate.
    Mr. Gallacher: Will the Prime Minister see that the part that Labour and Socialism are playing in the Dominions is made clear?

    WAR METALS AND ALLOYS (RELEASE FOR CIVILIAN USE)
    Mr. Bensonasked the Minister of Production whether he is aware that quantities of new war metals and alloys for the experimental manufacture of civilian goods are being released in the U.S.A.; and whether he is prepared to make a similar release in this country.
    The Minister of Production (Mr. Lyttelton): I am aware that small quantities of materials are being released for experimental work in the U.S.A., but only where this does not interfere with supplies needed for war production. In this country, in view of our limited labour and capacity, it is not possible at this stage of the war to make any general release of materials for this purpose. I should, however, be prepared to consider any case in which special reasons could be given for exceptional treatment.
    Mr. Benson: Does that include general releases, which are just as vital to our post-war trade and the turnover to peace as exceptional cases?
    Mr. Edgar Granville: Is the right hon. Gentleman aware that important post-war projects are being held up because there
    1900
    are not sufficient light alloys available? Does he not think that the time has come to reconsider the whole question?
    Mr. Lyttelton: I cannot give any general assurance. I am prepared to consider the whole question, but the needs of war production must come first.
    Mr. A. Edwards: Does the right hon. Gentleman realise that the release of these materials in America instead of in this country will give America a flying start in the world market?
    Mr. Lyttelton: I would draw the attention of my hon. Friend to a statement in the Press, last March, by the War Production Board, that no priorities for raw materials for post-war work can be permitted in the United States if it diverts any man-power, technical skill, or facilities from war production.

    WAR PRODUCTION FACTORIES (VISITS BY EMPIRE TROOPS)
    Flight-Lieutenant Teeingasked the Minister of Production if he will make it possible for Dominion and Colonial troops in this country to visit factories or other places connected with their pre-war trades or professions or with trades or professions they wish to take after the war, near their stations during their 24 hours' leave, and elsewhere during their longer leaves, so that they may learn about what can be done in Great Britain; and, in the case of factories doing secret work, make concessions concerning visiting regulations in their favour.
    Mr. Lyttelton: I am considering my hon. and gallant Friend's suggestion, and will communicate with him later.

  MINISTRY OF SUPPLY

    Government Factories (Workmen's Compensation)
    Sir Charles Edwardsasked the Minister of Supply whether he is aware that a system of compensation obtains at certain Government factories, of which he has been informed, in place of the Workmen's Compensation Act, that the workpeople have been asked to declare which system they prefer, but the condition is laid down that those who vote for the Workmen's Compensation Act should

    1901
    give their reasons in writing; and will he see that this ballot be taken without any such conditions being imposed.
    The Minister of Supply (Sir Andrew Duncan): Each employee in the Royal Ordnance Factories is free to exercise an individual choice in this matter, without giving reasons. Perhaps my hon. Friend will let me have details of any case in which reasons have been asked for.
    Mr. Rhys Davies: Will the right hon. Gentleman bear in mind that it is almost impossible for new employees at the factories to understand the form which is presented to them, and that, consequently, they sign under a misapprehension?
    Sir A. Duncan: No, indeed; I have looked at the form, and it is really very simple.

    Factory Inspection
    Miss Wardasked the Minister of Supply whether, in accordance with the Report of the National Expenditure Committee, the flax factories have been inspected by the factory inspectors; and whether they made any recommendations for the improvement of conditions of work.
    Sir A. Duncan: Yes, Sir; and all practicable steps are being taken to improve the dust-extraction plants in these factories.
    Miss Ward: Are the factory inspectorate satisfied that everything possible is done?
    Sir A. Duncan: Yes, Sir, they are cooperating fully with us.
    Dr. Morgan: Does the right hon. Gentleman mean the medical, as well as the lay, inspectorate?
    Sir A. Duncan: Yes, Sir.

    Containers (Prosecutions)
    Mr. Rhys Daviesasked the Minister of Supply how many prosecutions were instituted for the violation of the several Regulations covering the control of tins, cans, kegs, drums and packaging pails; how many were successful; and why it was necessary to repeat the same words seven times in the same Order.
    Sir A. Duncan: So far as I am aware, no prosecutions have been instituted under these Orders. I assume that in the last part of the Question my hon. Friend is
    1902
    referring to the No. 10 Order, of 19th August, 1943. For purposes of legal clarity, it is considered proper, when referring in one Order to a number of others, to cite them by name.
    Mr. Rhys Davies: In view of the fact that there were no prosecutions under these Orders, does the right hon. Gentleman think it was worth while issuing them at all?

  FOOD SUPPLIES

    Meat Ration
    Mr. Edgar Granvilleasked the Minister of Food if, in view of the announcement from the food mission to Australia and New Zealand that the Dominions are likely to increase the supply of meat to this country, he will consider an increase in the meat ration to those workers engaged in heavy work in the war industries, including agriculture, where canteen facilities are not available.
    The Parliamentary Secretary to the Ministry of Food (Mr. Mabane): Notwithstanding any increased supply of meat that may be received from Australia and New Zealand, the overall supply will not permit of any increase in the existing ration.
    Mr. Granville: Does not my right hon. Friend think that a case has been made out for the agricultural worker, who has no industrial canteen and whose wife is not able to go to a British Restaurant? Will he take into consideration, too, the fact that the agricultural worker will be working beside voluntary harvest workers, who will have an additional ration during harvest time?
    Mr. Mabane: Certainly there is a case to be met, but not by a system of differential rationing.
    Mrs. Hardieasked the Minister of Food why there are such short supplies of beef and mutton and so much pork is provided for rations.
    Mr. Mabane: A considerable priority in beef supplies is necessary for the feeding of the Armed Forces of the United Nations, not only in this country, but in America and also in the Southern Pacific. A large proportion of the supplies of mutton, lamb and beef which normally come to this country from Australia and

    1903
    New Zealand are not at present available for civilian consumption here. In substitution for these imports, we are at present receiving meat, mainly pork, from the United States.
    Mrs. Hardie: Is the Minister aware that pork is very gross feeding and very unsuitable for hot weather; and can he say why we are importing so much pork?
    Mr. Mabane: The question, as my hon. Friend will recognise, is substantially a question of what we can get, and I think most people are agreed that pork is a great deal better than nothing.
    Mr. Evelyn Walkden: Is the Minister's Department not aware that, from May to August, pork is a very unpopular item in the dietary with the housewives of this country?
    Viscountess Astor: They would rather have it than nothing.

    British Restaurant, Skipton
    Mr. Hugh Lawsonasked the Minister of Food if he- is aware that although the Skipton Urban District Council has been considering the matter since 1940, no British Restaurant has yet been established in Skipton; and if he will either require the local authority to establish a British Restaurant, or institute a public inquiry into the delay in this case.
    Mr. Mabane: I am informed that the Skipton Urban District Council has now undertaken to establish a British Restaurant, and is at present considering the tenders which it invited last month for erection of the necessary building.
    Mr. Lawson: Can I have an assurance that the Department will press this local authority to get on with the job, because they have been discussing it for four years?
    Mr. Mabane: That is a matter, as my hon. Friend knows, for the local authority.
    Mr. George Griffiths: Did not the electors of Skipton send the hon. Member here to press it upon the right hon. Gentleman?
    Mr. Mabane: He has done so.
    Mr. Gallacher: Is it a fact that there is no hall available in Skipton for the British Restaurant?
    Mr. Mabane: So the Skipton local authority decided.

    Ex-Servicemen (Retail Licences)
    Mr. Keelingasked the Minister of Food if he can now say to what extent it is the practice to refuse supplies of oranges, lemons and tomatoes to men pensioned from the Army on the ground that they were not in business in 1940; and whether he proposes to redress this injustice to ex-Service men.
    Mr. Mabane: New retailers of the kind to which my hon. Friend refers are treated precisely the same as other retailers to whom new licences are granted. The last part of my hon. Friend's Question does not therefore arise.
    Mr. Keeling: Does the Minister not appreciate that it is not the soldier's fault that he was not in business in 1940, because he was in the Army? Is it really considered just that, when soldiers have been told that they are going to be given facilities to trade, they should be treated like this?
    Mr. Mabane: The hon. Member has gone wrong in one important particular. The relevant date is not 1940 but 1939, and that makes all the difference.
    Mr. Keeling: That does not really make any difference to the principle, and, owing to the unsatisfactory nature of the reply, I beg to give notice that I will raise this matter again.
    Sir Waldron Smithersasked the Minister of Food whether the licensing policy to allow ex-service men to resume trading after the war includes milk retailers, their roundsmen and staff.
    Mr. Mabane: No, Sir. The arrangements which my right hon. Friend recently announced for granting licences to ex-traders who have been discharged from the Forces to enable them to reopen their former businesses do not at present apply to milk retailers.
    Sir W. Smithers: May I ask if the Minister will further consider this matter? Why are milk retailers not included, and why is it necessary to issue licences at all? Why cannot ex-Servicemen come back and resume their old occupations without this trouble?
    Mr. Mabane: I am glad to be able to assure my hon. Friend that this matter is

    1905
    being very carefully considered. The reason for any difference in the treatment of milk retailers is that the methods of distribution of milk do not allow precisely the same arrangements to be made, but my right hon. Friend is considering the matter with the very greatest sympathy.
    Mr. Keeling: Will my right hon. Friend consider oranges for ex-Servicemen at the same time?

    Eggs (Sales, Maidstone)
    Mr. Bossomasked the Minister of Food whether he is aware that large numbers of eggs are being sold in the market under his Department's control at Maidstone for hatching purposes and are being re-sold at a considerable profit in nearby markets for human consumption; and whether he is taking any steps to stop this illegal traffic.
    Mr. Mabane: The answer to both parts of the Question is "Yes, Sir."
    Mr. Bossom: Could the Minister say when some action is going to be visible in this matter?
    Mr. Mabane: I think it is recognised that it is foolish to tell malefactors what you are doing to try to catch them.
    Mr. Bossom: But are not these malefactors still continuing their activities, and should they not be stopped?
    Mr. Mabane: They had better wait and see.

    Beer Shipments, Eire (Cereals)
    Dr. Littleasked the Minister of Food how many barrels of beer, of 36 gallons each, are shipped annually to Eire from Great Britain and how many barrels of stout of the same capacity are shipped per annum from Eire to Great Britain; and if in both cases the required cereals are provided from grain grown in the United Kingdom.
    Mr. Mabane: In regard to the first part of the Question, it is not in the national interest to disclose figures of exports and imports during war time. The answer to the second part of the question is "Yes, Sir."
    Dr. Little: Does the Minister not consider it advisable to let the country know what is already well-known in certain circles?
    Mr. Mabane: I am not sure what is known in certain circles.
    Mr. Mathers: Is it considered in the national interest that the Minister of Food should be dealing with imports and exports of: such materials?

    Condemned Fish (Manchester)
    Mr. Harry Thorneycroftasked the Minister of Food whether he has yet received a Report as to the reason why such a large quantity of fish, 50 to 55 tons, was found, on arrival at the Manchester market on the 1st, 2nd and 3rd May, to be so bad that it was condemned or voluntarily surrendered and has been made into manure; and whether he will take steps to secure that whatever causes may have been responsible for the delay which must have occurred before this fish arrived at Manchester, shall be removed.
    Mr. Mabane: Thirty-four tons of fish were condemned at Manchester on 1st, 2nd and 3rd May. The greater part of this fish had been delayed at sea and at the port of landing. I am informed that, when it was despatched by rail, it was apparently in good condition. Such measures as are practicable to relieve congestion at the port have already been taken.
    Mr. Thorneycroft: Is the Minister aware that, on those days, also, large quantities of fish got out to the consumers, and that housewives, after having waited for hours in fish queues, had to cast the fish into the fire on returning home?
    Mr. Mabane: That is rather a different point, which is not raised here.
    Dr. Morgan: Will any compensation be paid?
    Sir Douglas Thomson: What port was it?
    Mr. Mabane: The landing port was Aberdeen, and I would remind the hon. Member that Manchester pressed very hard to be given a second port of supply and was given this very port.

  HOUSING

    Building Material (Chalk Cob)
    Mr. Wakefieldasked the Parliamentary Secretary to the Ministry of Works if he is aware of the cheapness of build-

    1907
    ing cottages in what is technically known as Chalk Cob; and what steps he is taking to use this method and material in all chalk areas for building agricultural cottages.
    The Parliamentary Secretary to the Ministry of Works (Mr. Hicks): Facilities are being given for an experiment in the use of this material, which will be carefully watched from the point of view of costs and general utility as a contribution to the problem of post-war housing.
    Mr. Wakefield: Is the Parliamentary Secretary aware that this material has been used very successfully in the trade in the past, and what is the point of carrying out further experiments when evidence is already available of the value of this form of construction?
    Mr. Hicks: I am aware of what has been done previously and we are now attempting to check up costs in order that it may become of more general use.

    Prefabrication
    Mr. Hugh Lawsonasked the Parliamentary Secretary to the Ministry of Works if he will erect a small number of prefabricated steel houses in various parts of the country for immediate occupation so that the opinions of the occupants may be sampled before mass production starts.
    Mr. Hicks: The prototype had to be constructed by hand, and it will therefore not be possible to arrange for the erection of a number in various parts of the country for occupation before production starts.
    Mr. Lawson: Can the Parliamentary Secretary make arrangements for at least one or two more of these houses to be built, so that they may be lived in by ordinary people before the job goes into mass production?
    Mr. Hicks: The Ministry of Health is now responsible for distributing the tickets to view, and this has been designed to ensure that representatives from all areas should have an opportunity of viewing the house. I am afraid that, at the present time, I am unable to entertain the suggestion that more should be built for the purpose of enabling people to live in them before it is decided to go into production.
    Captain Gammonsasked the Parliamentary Secretary to the Ministry of
    1908
    Works if he will publish detailed costs of the prefabricated house erected near the Tate Gallery.
    Mr. Hicks: As my hon. and gallant Friend will understand, it is impossible to ascertain accurate costs until the prototype has been erected and the information as to labour, capacity and materials has been made available. This was fully explained by my Noble Friend in another place last week, when he stated that he was aiming at a figure of £550 per house.
    Captain Gammans: Could the Minister say how the estimate of £550 is made up?
    Mr. Hicks: Labour, materials and fittings.
    Sir Joseph Lamb: Will the Minister give an assurance that the criticisms of hon. Members of this House will be fully considered before any large orders are given for construction?
    Mr. Hicks: The suggestions which hon. Members have made after viewing the house are being reviewed by my Department and will be taken into consideration before final production is agreed upon.

    Emergency Houses (Rent)
    Mr. Shephardasked the Minister of Health if he is able to state the rent to be charged for the factory-made emergency houses, the prototype of which is now on view.
    The Parliamentary Secretary to the Ministry of Health (Miss Horsbrugh): No, Sir. Further details on such points as the rent cannot be announced until the prototype house has been approved.
    Mr. Stokes: May I ask the Minister whether the rent does not depend upon the cost of the land on which the house is going to stand?

    Building By-Laws
    Mr. Bossomasked the Minister of Health whether his Department has had scientific observations or time-studies made of the various building processes necessitated by compliance with model by-laws, with the object of revising the laws to eliminate unnecessary practices and to simplify the task of building trade operatives.
    Miss Horsbrugh: No, Sir, but my right hon. Friend will consult my Noble Friend the Minister of Works on the matter.
    Mr. Bossom: Is my hon. Friend aware that the Minister of Supply has adopted this principle with great benefit as to cost and ease for the workers, and will the Minister not do the same with regard to these Regulations?
    Miss Horsbrugh: As I have already said, my right hon. Friend will consult his Noble Friend the Minister of Works on this subject.
    Mr. Bossom: When he has done so, will he then alter these Regulations, if the Minister of Supply so advises?
    Miss Horsbrugh: We shall certainly take into account any advice received from my Noble Friend.

    EROS STATUE, PICCADILLY CIRCUS
    Mr. Vernon Bartlettasked the Parliamentary Secretary to the Ministry of Works whether he will either remove the superstructure hiding the fountain basin of the Eros monument in Piccadilly Circus, or have a tablet fixed to it to explain to our many visitors from the United Nations the reason for this temporary superstructure.
    Mr. Hicks: The Eros statue is in the charge of the London County Council and I can only suggest that the hon. Member should approach that authority.

    ALLIED DESTROYERS (OUTPUT)
    Sir Leonard Lyleasked the First Lord of the Admiralty whether he can make any statement on the output of Allied destroyers to replace losses.
    The Financial Secretary to the Admiralty (Mr. J. P. L. Thomas): While it is, of course, impossible, for security reasons, to give exact figures, I can assure my hon. Friend that new building of destroyers by the Allies has far exceeded their losses.

  BRITISH ARMY

    Preston Hall, Maidstone (Rations)
    Sir Smedley Crookeasked the Secretary of State for War if he is aware of the hardship felt by soldiers who are being treated for tuberculosis at the British
    1910
    Legion Sanatorium at Preston Hall, Maidstone, who are put by the authorities on civilian rations, but still, being soldiers, have none of the concessions granted to Service men in canteens, neither can they visit shops to supplement their food allowance; and will he take steps to remove this grievance.
    The Financial Secretary to the War Office (Mr. A. Henderson): The soldiers concerned are transferred to this hospital in order to receive specialised treatment with as little delay as possible, pending their discharge from the Army. I understand that they receive sweet and cigarette rations as soldiers. As this is a civil hospital, and the patients are fed under civilian arrangements, I regret that it would not be appropriate to establish a Service canteen there.

    Serving Personnel, Overseas (Films)
    Flight-Lieutenant Teelingasked the Secretary of State for War what arrangements he is making to have made and shown the admirable films depicting men sending personal messages to their relatives at home from overseas, which have already been shown to Brighton relatives; whether he will arrange to show them publicly in all local cinemas in the towns concerned; and whether he will make sure that at such showings the muddle which almost proved disastrous in Brighton will not be allowed to recur.
    Mr. A. Henderson: These films are intended primarily for showing to relatives of the men depicted on the films, and I doubt whether they would have any general appeal. But if the proprietors of cinemas wish to show them arrangements can be made for them to do so. I regret the hitch which occurred at Brighton. The arrangements for showing these films to relatives are made locally and on previous occasions they have worked well.
    Flight-Lieutenant Teeing: In view of the fact that where they have been shown they have proved a huge success, will my hon. and learned Friend make sure that every opportunity is given for these films to be shown?
    Mr. Henderson: I have already said that, if proprietors of cinemas wish to show them, they will be given facilities to do so.

    BRITISH PRISONERS OF WAR, GERMANY (WORK IN COALMINES)
    Mr. Lipsonasked the Secretary of State for War to what extent British prisoners of war in Germany have been compelled to work in coalmines.
    Mr. A. Henderson: About 20,000 British prisoners of war—many of then miners by profession—are working in German coalmines. The conditions under which they work are by no means uniformly satisfactory, and several protests have been made through the Protecting Power.
    Mr. Lipson: May I ask whether the Germans are acting within their legal rights under international law, in employing prisoners of war at all?
    Mr. Henderson: I am advised that there is nothing in the Geneva Convention which prevents them doing this.
    Mr. Lipson: Will the Minister say whether the British Government are proposing to do the same as the German Government?
    Mr. Henderson: Perhaps the hon. Member will put that Question down.

  TRADE AND COMMERCE

    United States Radio Sets
    Sir Leonard Lyleasked the President of the Board of Trade whether he can make a statement on the importation of radio sets from the U.S.A.; how many such sets are expected; how many have arrived and how these have been distributed; whether more are to be sent; and when radio users who are unable to obtain spare parts in this country will be in a position to order them from British manufacturers.
    The Parliamentary Secretary to the Board of Trade (Captain Waterhouse): About 36,000 radio sets have now been imported, and a further 7,000 are expected shortly. It is unlikely that additional supplies will be got from the U.S.A. About 12,000 have already been distributed and arrangements have been made to distribute a further 12,000. The remainder are being tested, and repaired where necessary, and will be released to the trade within a few weeks. Spare parts other than valves for these sets should be obtainable from British manufacturers.
    1912
    Most of the types of valves required are imported from America, and should be obtainable through the normal trade channels. The supply of spares for a few types is still uncertain and is being investigated.
    Sir L. Lyle: Is it not a fact that people cannot get spares for any of their wireless sets and that the new sets do not meet the demand?
    Captain Waterhouse: I am afraid it is a fact that the repair position is extremely difficult and that the supply of new sets will not fully meet the demand.
    Mr. Mathers: What principle is followed in distributing the new sets; is it fair to every part of the country?
    Captain Waterhouse: Every attempt is made to give fair distribution throughout the whole country.

    Second-Hand Furniture (Price Control)
    Sir Harold Webbeasked the President of the Board of Trade whether he can now make any statement about the price control of second-hand furniture.
    Mrs. Adamsonasked the President of the Board of Trade if he is now in a position to announce the steps he proposes to take to tighten up control of the prices of second-hand furniture.
    Captain Waterhouse: After consultation with the Central Price Regulation Committee, my right hon. Friend has decided to fix maximum prices in cash for articles of furniture of the types most commonly in use. For this purpose the articles will be divided into categories according to size, class of wood and other factors which make for differences in value. With the help of experts detailed schedules have been drawn up, and these are now being discussed with the trade organisations, whose co-operation I greatly appreciate. The maximum prices will apply not only to sales by dealers but also to sales by auction and to sales on commission.
    Sir H. Webbe: Is my right hon. and gallant Friend aware that a great deal of the rise in price of second-hand furniture is due to the activities of speculators who "gate-crash" the industry and, by posing as private individuals, have evaded all the control regulations; and will he do everything in his power to eliminate these very undesirable speculators?
    Captain Waterhouse: Yes, Sir, I am well aware of this most unfortunate innovation in the trade and of the difficulty it is causing to the honest trader. We have it fully in mind and we are going to do our best to deal with it.
    Sir Richard Acland: Is this not an example of private enterprise which is supported by the party opposite?
    Mrs. Adamson: Is the Parliamentary Secretary aware that his answer will give general satisfaction to the public, and may I thank the Board of Trade that at long last it is trying to do something?
    Captain Waterhouse: I am grateful to my hon. Friend.

    OIL AND COAL DERIVATIVES
    Mr. Saltasked the Minister of Fuel and Power whether he is yet in a position to state what is to be the membership of the committee which will inquire into inter-relationship of raw materials derived from oil and coal, respectively; and what will be the exact terms of reference.
    The Joint Parliamentary Secretary to the Ministry of Fuel and Power (Mr. Tom Smith): No, Sir.

  NATIONAL FINANCE

    Widows' Pensions (Taxation)
    Sir Smedley Crookeasked the Chancellor of the Exchequer if he is aware of the injustice felt by war widows who have to pay tax on their widows' pension while wives of serving men are not taxed on their allowances; and will he take steps to put war widows on the same footing with regard to Income Tax as wives of men in the services.
    The Financial Secretary to the Treasury (Mr. Assheton): My right hon. Friend cannot see his way to depart from the decision conveyed on this matter by his predecessor in his replies of 24th June, 1942, to the hon. Gentleman, and 15th April, 1943, to the hon. Member for Rugby (Mr. W. J. Brown).

    Manufacturers (Post-War Credits)
    Major Millsasked the Chancellor of the Exchequer whether it is proposed that manufacturers, particularly in the engineering industry, should be permitted to use their post-war credit, given under
    1914
    Section 28 of the Finance Act, 1941, for the purchase of new plant from machine-tool makers and/or for the purchase of Government plant which is already on loan to them in order to facilitate the change-over from war-time to peace-time production.
    Mr. Assheton: Yes, Sir. As stated by my right hon. Friend in his Budget speech, trading concerns can look forward with absolute certainty to having their post-war Excess Profits Tax credits available for the financing of all such post-war expenditure.

    MEMBERS' SPEECHES, HANSARD (REPRINTS)
    Mr. Bowles: I wish to ask the Financial Secretary to the Treasury, by private notice, a Question of which I gave him public notice yesterday, namely, whether he has any statement to make upon the inability of hon. Members to obtain adequate OFFICIAL REPORT reprints of their and other hon. Members' speeches.
    Mr. Assheton: As you, Sir, explained to the House yesterday, there has been for many years an arrangement by which hon. Members could obtain reprints of their speeches from the type used by the Stationery Office to produce the OFFICIAL REPORT. In pre-war years there were some 50 or 60 demands a year, generally for a few hundred copies, very seldom exceeding 500, and it was possible to meet those demands from the standing type (which is afterwards used for the production of the bound volumes) with some economy to hon. Members and without any dislocation in the production of Parliamentary work.
    As you, Sir, stated yesterday, the number of hon. Members asking for these reprints has increased: there were 112 demands in 1943; and last week orders came in for reprints amounting to 55,000, which, as you, Sir, said, showed that a new issue had arisen. Moreover, this demand has come at a time when the demand for HANSARD itself is increasing, and the sales to the public have in fact doubled within the last 12 months.
    I was informed by the Stationery Office that it would not be possible to go on meeting demands on this scale without dislocating the normal production of the daily HANSARD and the timely publication of the bound volumes, and so I felt re-

    1915
    luctantly obliged to give instructions to the Stationery Office that for the time being reprints should be limited to a thousand copies of any particular speech. Moreover, it was brought to my notice that, as you, Sir, stated in the House yesterday, the charge for these reprints does not now cover the cost. It seems desirable that in any event that position should be remedied, and I have given instructions to the Stationery Office to examine afresh the scale of charges.
    Hon. Members can, as they always could, get copies produced by a private printer, but doubtless it is the labour and paper difficulties in private industry which has encouraged them to put this additional strain on official printing, for of course when quantities such as 30,000 are involved the advantage of the use of standing type becomes relatively of little importance.
    If and when the labour, materials and plant available for printing HANSARD become less restricted, I shall be very willing to consider the matter again in the light of the general feeling of the House at the time, but I am assured that the course now taken is the only alternative to a breakdown in the general arrangements, and I hope the House will agree that printing for public business, particularly the public business of the House itself, must always have precedence over the convenience of individual Members, and that in these very difficult times I have taken the best course in maintaining this long standing convenience within a limit which has obviously met the normal needs of most Members, at the expense of a restriction designed to meet a new situation newly arisen through the demands of the few who ask for very large quantities.
    With regard to the future, while the Stationery Office will be ready and willing to carry out the wishes of the House, whatever they may be, I think it is not unimportant for the House to consider what might be the possible effect on the character of its Debates of a wide extension of the practice of reprinting on a large scale verbatim, individual speeches, as apart from reports of the Debate itself. This, however, is entirely a matter for the House when the time comes.
    An hon. Member yesterday raised the question of the right of Members to obtain
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    reprints of other hon. Members' speeches. It has not been the custom in the past for this convenience to be available to hon. Members, though on one or two occasions, by inadvertence, orders for copies by other hon. Members have been accepted. Moreover, there are certain legal difficulties in connection with the laws of libel which should not be overlooked in this connection.
    Mr. Bowles: May I put it to my right hon. Friend that I have a constituency of 112,000 electors, and that 1,000 copies are completely useless to give any idea at all as to what takes place, so far as Opposition speeches are concerned, in a Debate, the Government speeches in which are very fully reported in the public Press? A very important Debate took place last Friday week, and I asked for 10,000 copies of the speech of my hon. Friend the Member for Ebbw Vale (Mr. A. Bevan). I was associated with him, not in taking part in the Debate, but in the division. My constituents have a perfect right to know, as I see it, the case against the Regulation. Therefore, Mr. Speaker, I cannot feel at all satisfied that the answer is anything like fair to the minority opinion in this House of Commons.
    Commander Sir Archibald Southby: May I ask for your guidance, Mr. Speaker, on an important point which has arisen out of the question asked by the hon. Member for Nuneaton (Mr. Bowles)? He is reported in HANSARD as saying yesterday that he had on numerous occasions given orders for speeches of hon. Members other than his own. I have always understood that the copyright of the speeches of the hon. Members of this House is vested in the Stationery Office, so that hon. Members who are able to obtain permission from the Stationery Office may reprint their own speeches, if they wish, and if the public want to read them. Is it in Order that any hon. Member should have the right to ask for a reprint of another hon. Member's speech?
    Mr. Speaker: That is a question not for me but for the Stationery Office, but I believe that it is a question in which the law of libel may be involved.
    Mr. Bowles: The right hon. Gentleman himself said that there would be no objection to buying copies of HANSARD as a

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    whole to give an idea of the Debate. I raised a question on the Adjournment, and I bought a copy of my speech and the Minister's reply. I do not see that the law of libel is involved, because we are, in any case, privileged.
    Commander Locker-Lampson: Ought we not to protect the constituents of the hon. Member, Mr. Speaker, and stop him flooding them with speeches they may not want?
    Mr. Wakefield: I would like to ask your guidance, Sir. Does the expense of circulating matters of this kind to that extent become liable to be entered as election expenses?
    Mr. Speaker: That is a point which might be put to my Conference in due course.
    Mr. Stokes: Could I put this question to the Financial Secretary to the Treasury, Sir, in view of the statement he has just made? Will he bear in mind that, since the Press has become virtually Government-controlled or, to a very large extent, controlled by people who support the Government, the minority view is not put? Some of us for a very long time have been having reprints of our speeches in order that our own constituents may know the truth of what we say instead of the misrepresentations put in the Press. Will he bear in mind that an issue of 1,000 reprints is quite inadequate? If he will consider the possibility of an increase, will he compare the demand over the next three months with what the demand has been on the average over the last six months?
    Sir William Davison rose—
    Mr. Stokes: May I have an answer, please?
    Mr. Speaker: I think the Financial Secretary has risen to reply.
    Mr. Assheton: With regard to the question put by the hon. Member for Nuneaton (Mr. Bowles), I quite understand that he has 100,000 constituents, but so have I. If the hon. Member is to exercise his privilege, we shall obviously get into a very great difficulty. It was because we were running into difficulties that it was necessary to make this move. With regard to the question put by the hon. Member for Ipswich (Mr. Stokes), while
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    not accepting what he said, I do not think it is my business to deal with the question.
    Viscountess Astor: Is it quite fair, Mr. Speaker—
    Mr. Bowles: On a point of Order, Mr. Speaker.
    Sir W. Davison: May I put my Question now, Sir?
    Mr. Bowles: In view of the unsatisfactory nature of the reply, and also in view of the fact that the recent release of 11½ per cent. newsprint to the Press has not been taken up by all the national Press, I beg to give notice that I shall put down a reduction of the salary of the Financial Secretary to the Treasury on the appropriate Vote, with the permission of my colleagues.
    Sir W. Davison: May I put my Question, Sir?

    RUSSIA (BRITISH EMPIRE SUPPLIES)
    The following Question stood upon the Order Paper in the name of Colonel LYONS:
    45. To ask the Prime Minister whether, in view of the information which has been published as to the supplies of material and munitions of war from the U.S.A. to Russia, he will now publish detailed particulars of the assistance rendered by Great Britain and the Empire countries in this direction.
    At the end of Questions—
    The Prime Minister: I am circulating to-day, in the OFFICIAL REPORT, a full statement on the materials and munitions of war supplied to Russia by Great Britain and the Empire countries. The House may, however, like to know that between 1st October, 1941, and 31st March, 1944, we have supplied to the Soviet Union 5,031 tanks, of which 1,223 were from Canada. We have supplied 6,778 aircraft, including 2,672 aircraft sent from the United States of America. These latter were sent on United States Lend-Lease to the Soviet Union as part of the British commitment in exchange for the supply of British aircraft to United States Forces in the European theatre. We have also sent over £80,000,000 worth of raw materials, foodstuffs, machinery, industrial plant, medical supplies anti comforts.

    1919
    I need hardly remind the House that a considerable proportion of these supplies has been fought through to Russia along the Arctic route. These operations have been under the general direction of successive Commanders-in-Chief, Home Fleet, and almost all losses of warships have fallen upon the Royal Navy. In merchant ships, on the other hand, the Allied Nations, and particularly the merchant ships of the United States of America, have borne the heavier loss. Many brave men have fallen into icy waters, but our Russian Allies have had some of the help and comfort they needed and deserved.
    I should also add that in making this statement I am merely responding to a wish that the facts should be published, as they ought to be. I am not in the slightest degree boasting invidiously about our efforts as compared with those of our Ally, the United States, nor making out any counter-claims against the heroism and glorious military exploits of the Soviet Armies.
    Mr. Mothers: Mr. Speaker, do we understand that the Prime Minister is telling us what has been sent purely on Government account, and that the subscriptions raised in this country for sending material to Russia are excluded from that statement?
    The Prime Minister: I am not quite sure of the form of the statement, but it is known that a very large sum has been subscribed by vast numbers of people in this country for medical comforts and supplies. I could give that figure separately if I were asked to do so on a future occasion.
    Lieut.-Colonel Dower: Do the figures given by the Prime Minister relate to what has been handed over safely to the Russian Government, or what has been sent from this country?
    The Prime Minister: I think that is a very pertinent question. The hon. and gallant Gentleman is to be congratulated on having, for the time being, found a chink in my armour.
    Mr. Petherick: Could I ask this question, Sir? I understood the right hon. Gentleman's reply to refer only to Empire countries and to Russia. Would it be possible, even at the risk of a little delay, to make the statement comprehensive and to give to the House a list of munitions
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    and other supplies sent not only to Empire countries and to Russia, but to all our Allies, if that could be done without any breach of security?
    The Prime Minister: I would like to look into that, Sir.
    Commander Locker-Lampson: Does the right hon. Gentleman think that the Russians will get to Berlin before the Archbishop of Canterbury?
    Mr. Granville: Can the Prime Minister say whether the statement will give the figures of the supplies sent to this country apart from those reaching this country or whether it would be possible to put them into the White Paper?
    The Prime Minister: I will look into that point. In the longer paper which is circulated to the House to-day, the phrase used is supplies "despatched" The figure probably excludes what was lost.
    Mr. McGovern: Can the right hon. Gentleman state whether Russia has given in exchange any materials to this country?
    The Prime Minister: The ports from which it was possible to export have of course been very much congested by the movement of military traffic and there has not been the opportunity to send all the quantities of lumber, which is the natural export from Russia to this country, from those ports which the Russians were very ready to send, but I am sure they have done their best to fill the returning ships.
    Following is the statement:
    I am glad of this opportunity to make known details of the very substantial contribution made by the U.K. in aid of our Soviet Allies. Not only has this aid been considerable, but it has only been possible to furnish it at heavy cost in lives of our seamen and ships which have been lost on North Russian convoys.
    The great bulk of these supplies have been furnished directly by or manufactured in the United Kingdom. Some of these items contain a proportion, small but unascertainable, of raw materials or component parts which we ourselves have received on Lend-Lease terms from the United States, and without which it would not have been possible to make these supplies available to Soviet Union.
    The figures also include some supplies made available to the United Kingdom under Canadian Mutual Aid and some

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    procured from Canada by the U.K., partly with the help of the Canadian Billion Dollar Gift. For the help thus given I should like to take this opportunity of expressing His Majesty's Government's appreciation. Since 1st July, 1943, supplies from Canada have also been going forward by direct arrangement between Canada and the U.S.S.R. and are not included in the present statement.
    A list is appended below, setting out the main items despatched to U.S.S.R. from 1st October, 1941, to 31st March, 1944. Owing to the wide variety of their nature, specific reference has not been made to all categories of supplies, but this list shows the scale on which aid to U.S.S.R. has been going forward over the last two and half years.
    SUPPLIES TO U.S.S.R. DESPATCHED BETWEEN I ST OCTOBER, 1941, TO 31ST MARCH, 1944.
    1. MILITARY SUPPLIES.
    (a) Armaments and Military Stores.

    Tanks: Since October, 1941, 5,031 tanks have been supplied, of which 1,223 were Canadian built.

    Vehicles (includes lorries and ambulances): 4,020.

    Machinery lorries: 216.

    Bren Carriers and Starters and Chargers: 2,463 (including 1,348 from Canada).
    Motor Cycles: 1,706.
    Weapons:

    800 P.I.A.T., with ammunition.

    103 Thompson sub-machine guns.

    636 2-pdr. anti-tank guns.

    96 6-pdr. anti-tank guns.

    3,200 Boys anti-tank rifles.

    2,487 Bren guns.

    581 7.92 m. m. Besa guns.

    Ammunition:

    85,000 rounds P.I.A.T.

    19,346,000 rounds 45-in, machine gun.

    2,591,000 rounds 2-pdr. anti-tank gun.

    409,000 rounds 6-pdr. anti-tank gun.

    1,761,000 rounds 55 in. Boys anti-tank rifle.

    75,134,000 rounds 303-in. rifle.

    51,211,000 rounds 7.92 mm. tank gun, Besa.

    G.L. Equipment:

    (a) Mark II: 302 sets.

    (b) Mark III: 15 sets British; 29 sets Canadian.

    Cable: 30,227 miles telephone cable.
    (b) Naval Supplies:

    9 Mine-sweeping trawlers.

    3 Motor mine-sweepers.

    102 Asdics.

    3,006 Mines.

    50 Vickers 130 mm. guns.

    603 Anti-aircraft machine guns.

    40 Submarine Batteries

    (c) Aircraft (Fighters).—Total despatched 6,77.8 aircraft, including 2,672 aircraft sent from U.S.A. These were sent on United States Lend/Lease to U.S.S.R., as part of the British commitment, in exchange for a supply of British aircraft to U.S. forces in the European theatre.
    2. RAW MATERIALS, FOODSTUFFS, MACHINERY AND INDUSTRIAL PLANT.
    (a) Raw Materials.—The greater part of these supplies have been bought from Empire sources. Over the last 2½ years we have sent:

    30,000 tons of aluminium from Canada [£3,038,000].

    2,000 tons of aluminium from United Kingdom [£720,000].

    27,000 tons of copper from Canada [£I.431,000].

    10,000 tons of copper from United Kingdom [£620,000].

    $4,672,000 worth of Industrial Diamonds, mainly from African production [£1,168,000].

    80,924 tong of jute from India [£3,687,000].

    81,423 tons of rubber from the Far East and Ceylon [£9,911,000].

    8,550 tons of sisal from British East Africa [£I94,000].

    3,300 tons of graphite from Ceylon [£1 60, 000].

    28,050 tons of tin from Malaya and United Kingdom [£7,774,000).

    29,610 tons of wool from Australia and New Zealand [£5,521,000].

    TOTAL VALUE of these and other raw materials: £39, 115,000.
    (b) Foodstuffs.—These include: Tea from Ceylon and India; Cocoa beans, palm oil and palm kernels from West Africa; groundnuts from India; cocoanut oil from Ceylon; pepper and spices from India, Ceylon and British West Indies.
    TOTAL VALUE of all foodstuffs supplied: £7,223, 000.
    (c) Machine Tools, Industrial Plant and Machinery.—These form the principal direct contribution from United Kingdom production to civil supplies for the U.S.S.R. Since the entry of Russia into the war, the following have been provided:

    Machine Tools— £,218,000.

    Power Plant— £4,250,000.

    Electrical Equipment— £3,314,000. Miscellaneous Industrial Equipment— £1,980,000.

    Various types of Machinery— £3,019,000 (e.g. Telephone equipment, food processing plant, textile machinery, port and salvage equipment).

    TOTAL VALUE OF (c): £20,781,000.
    GRAND TOTAL OF CIVIL STORES MADE AVAILABLE TO U.S.S.R. BY THE UNITED KINGDOM FROM ALL SOURCES: £77,185,000.
    3. MEDICAL SUPPLIES AND COMFORTS.—The public have contributed some of the funds for these supplies. Since October, 1941, £3,047,725 has been spent through charitable organisations on surgical and medical items

    1923
    and clothing. In addition, His Majesty's Government have made a grant of £2,500,000 for clothing, nearly all of which has been spent.

    STANDING ORDERS
    Resolution reported from the Select Committee:
    That, in the case of the Agriculture (Miscellaneous Provisions) Bill, the Standing Orders ought to be dispensed with: That the Bill be permitted to proceed.
    Resolution agreed to.

MESSAGE FROM THE LORDS
That they have agreed to,—

National Loans Bill,

City of London (Various Powers) Bill, without Amendment.

MONETARY POLICY
Lieut.-Colonel Elliot: I beg to move,
"That this House considers that the Statement of Principles contained in Cmd. 6519 provides a suitable foundation for further international consultation with a view to improved monetary co-operation after the war."
Mr. Loftus: On a point of Order. May I ask you, Mr. Speaker, whether it is your intention to call the Amendment standing in my name and those of other hon. Members:
"In line 3, at end, add: 'Provided that under any final scheme or proposals, His Majesty's Government retain adequate powers to enable them to maintain the policy of cheap money and control of the internal price level.'"
Mr. Speaker: Certainly not at the present moment. If hon. Members wished for a Division it might be called at the end.
Lieut.-Colonel Elliot: The Motion which I and certain other hon. Members have placed on the Order Paper is intended to raise in a form which I hope will enable the widest Debate to take place the subject of monetary policy, and, in particular, the joint statement from the experts in Command Paper 6519. We are, obviously, at the opening of very important discussions which will affect and influence our affairs in the years ahead, and it is vital that the House of Commons should have the earliest possible opportunity of taking part in those discussions. Indeed, the House has consistently pressed the Government to allot a day for this purpose, and Members have shown by the range and variety of the Motions they have tabled on this subject how very keen is their interest in the matter. I think it will also be agreed that it is a good thing that the discussions should take place in the first instance on a private Member's Motion, though we take it that the Chancellor of the Exchequer will also take part in to-day's Debate—at least we very much hope so.
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The signatories to the Motion cover a fairly wide range of opinion in this House.
It has been said by one hon. Member that the Motion limits the Debate to some extent, but I think not, except for the purpose of concentrating arguments on one single aspect of affairs, and I would like to emphasise that fact. The discussion on this aspect does not mean and cannot mean that we exclude the others. We are, in fact, discussing the mechanism for foreign trade, but I would say most strongly that in my view commercial policy is not involved in that discussion of mechanism, nor is the House at all bound by the conclusions it comes to on the mechanism of foreign trade as to the way in which foreign trade and commercial policy should subsequently be handled. We are discussing, if I may use a metaphor, the unifying of the gauges of the international railway lines. The question of the control of the trains, the management of signal boxes and shunting yards, and still more the direction of the traffic flow, will come at its appropriate place, and therefore I hope we shall not be regarded as attempting to commit the House to anything in any way modifying the very clear and explicit declarations which have been made by the Prime Minister, and pressed upon the Prime Minister by the House, as to the continuation of many special trade arrangements which this country has entered into with other Empire countries and, indeed, with countries outside the Empire altogether.
Taking it as a discussion upon mechanism, I should like to draw attention to the fact that the United States Department of Commerce, in its recent statement, which I commend to hon. Members, summed up the matter very clearly after a fairly long and interesting discussion of these matters in the following words:
"By way of final conclusion, based on the experiences of the entire inter-war period and strongly reinforced by events towards the end of the period, it is clear that whatever may be the other requirements stability in international economic relations generally and in foreign exchange rates in particular cannot be achieved solely or chiefly through technical financial arrangements but must be firmly based on vigorous and regularly functioning domestic economy."
That is a point I should like to consider again, in view of the contention put forward in some quarters that we are attempting to commit the House upon general trade policy, a matter which is

1937
certainly far from my mind, and, I am sure, far from the minds of the hon. Members who are associated with me in this Motion. If we are to discuss monetary policy I contend, in the first place, that we are greatly indebted to the experts who have examined this subject over a period of many months and who have brought before us this joint statement, the White Paper. I think it is for the House of Commons now to give a directive. Otherwise, our servants will not know our minds, and in such cases they may easily do things of which we should greatly disapprove.
Therefore, I say that we have put down a Motion which brings the matter before the House in a form in which the House may come to a conclusion, and it is the only reason for which I would deprecate the forms of some of the other Motions—namely, that the House welcomes the publication of this Paper. We go further than that. We say that the House of Commons should not act as a reviewing agency for the White Papers put out by the Government, but that it is for the House of Commons to pronounce upon them. I think the House should say, "Do we consider this a basis for further discussion or not?" There is only one thing we can say about a Paper of this kind and that is, Does it provide a basis for discussion or does it not? We all know that in negotiations of any kind, whether national negotiations or trade union negotiations or negotiations in private business, to say that a Paper does not provide a basis of discussion is a very serious step. It means that the whole of the work has to be torn up and is rejected. I ask the House to consider very seriously before saying that a Paper of this kind does not provide a basis for further discussion. Our Motion states that the Paper provides a suitable basis for discussion, and on that I think we should certainly ask, and I hope can receive, the assent of the House of Commons as a whole.
What is the White Paper? What are the proposals which are laid before us? It is a very intricate Paper and it discusses both technical and general questions. I hope that I may be excused from entering too deeply into the finer technical aspects of the proposals, because, frankly, there are many other Members who speak with far greater authority on that than I
1938
can myself, and, furthermore, I think at this moment we should not go too deeply into those finer technical aspects but draw general conclusions from the information laid before us in this Paper which the House is being asked to consider. I would say, in the first place, that this Paper consists _of two sets of proposals, short-term and long-term proposals. I want to stress that, because I think that it has been slightly overlooked in the general criticism which has fixed itself entirely upon the long-term plans which do not come into operation over a period of several years and indeed may well have to be modified before they come finally into operation.
If I may crystallise the matter in a sentence, inevitably weakening the accuracy of my description as I do so, I should say that the short-term proposals are to peg and restrict and the long-term proposals are to peg and derestrict. That is the essence of the two sets of proposals which the experts are submitting for the next step, namely, approval. The short-term proposals are contained in Clause X. They are headed "Transitional arrangements." I prefer the words "short-term," because I do not know of anything in the world that is not transitional, and I have no reason to suppose that the whole plan will not prove to be as transitional as the short-term plan. In the first place let me point out that the short-term plan involves only one thing —that the countries concerned state to each other in clear terms what they reckon the value of their currency to be and undertake to inform them if they change that value by 10 per cent. and to seek their consent if they change it by more than 10 per cent.; but during the whole of this shoat-term period all the restrictions which are in force just now, and these restrictions modified and adapted to suit changing circumstances, run on without any suggestion that anything contrary to either the letter or the spirit of the monetary agreement is being suggested. I think that is a point to which we should give very close attention.
The matters which have to be settled before we pass on to the long-term proposals are formidable indeed. At the top of page 10 the House will see that the Fund is not intended to provide facilities for relief or reconstruction or to deal with international indebtedness arising out of the war, and that it shall not become fully operative until it is

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"satisfied as to the arrangements at its disposal to facilitate the settlement of the balance of payments differences during the early postwar transition period by means which will not unduly encumber its facilities with the fund."
That is expanded in the foreword by the United Kingdom experts who further say that the drafting of this Clause, as experts on both sides understand it, allows during the transition period the maintenance and adaptation by the members of the sterling area of the arrangements now in force between them, and goes on to say:
"nor is the scheme intended, when the obligation of free convertibility has been accepted, to interfere with the traditional ties and other arrangements between the members of the sterling area and London."
It is worth while bringing those words to the notice of the House and asking for their comment upon them when we are considering the attitude which we are to take to the proposals to-day, especially the definite undertaking that a member need not assume full obligations of membership until satisfactory arrangements are at its disposal to facilitate the settlement of its balance of payments arising out of the war. Any of us who have been contemplating the difficulties of this country, realise that if to-day we could say that we have made satisfactory arrangements to settle payment difficulties after the war, that would be a very considerable landmark in our financial and economic history. When we have to add to that, that we also have to be satisfied that we have made new arrangements for relief and reconstruction, it will be seen that the word "transitional" means looking at the thing, as one might say, from a sub specie aeternitatis point of view. It is true that the long-term proposals involve a certain goal towards which we are supposed to be moving in Great Britain, and Britain being Britain and our commercial history being what it is, when we undertake an obligation, we undertake it with the object of moving in good faith towards that end and not using the unavoidable difficulties merely as ways by which we can evade the moral obligation altogether. Therefore, I think, although we might thoroughly recommend the Motion to the House on the short-term proposals, in view of the fact that we shall not arrive at the long-term proposals for a long time, I do not think that would be fair particularly in view of comments such as have been made by Mr. Balogh in his
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letter in "The Times" of this morning. He indicates that in his view the House of Commons would be committing itself in some way to non-discriminatory treatment of its overseas trade if it passed this Motion. Therefore, I say, that both longterm and short-term proposals are of very great interest and importance, and require very careful consideration.
We are speaking here of the foundation of further discussions. I think it might well be asked in further discussion whether three years, which is the term suggested for inquiries as to the termination of all restrictions, would commit this country to the suggestion that at the end of three years it was reasonable to bring these restrictions to an end everywhere. I should certainly ask that our experts in their renewed discussions should consider whether three years was not altogether too short a term to be inserted into a Paper of this kind, and whether some longer term should be considered. The main proposal is however for the establishment of an International Monetary Fund. Since these things are so extremely bedevilled with technicalities as to be scarcely intelligible to the ordinary man, I want to use a metaphor in dealing with them. The metaphor I choose is that the nations propose to open a currency shop, and stock its shelves with their currencies. They will have their goods, their currencies labelled in clear figures and they will undertake not to change the figures at all on those labels without letting other people know and not to change them extremely without asking the consent of the other people in the shop.. If they do not succeed in getting the agreement of the other members of the shop to an alteration of the figures, they can then walk out of the shop, taking their currencies with them.
Mr. Shinwell: Will my right hon. and gallant Friend clarify the point that there is one particular country which has not got all its currency in the shop?
Lieut.-Colonel Elliot: No country need put all its currency into the shop. I merely say that they will open the shop and stock it with their currencies up to a certain amount. All metaphors, to some extent, are misleading and all analogies are inaccurate, but I am trying to put it in terms which appear to me to be intelligible to the ordinary man. I admit there are inaccuracies, but I very much hope that we shall get away from the pure

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financial jargon of this business, which it is very difficult for the ordinary man to understand, and carries with it so many extremely theological implications. The word "gold," in the minds of many men creates either the vision of a personal deity, or of a personal devil. I think it would be as well to avoid both of these theological conceptions when we are asking whether the labels should or should not be marked in clear figures, or in cabalistic signs unintelligible to most. When we have to ask a shop assistant the price of goods and the shop assistant interprets that price for us, we have an uneasy feeling that, if we could have read the price it would have been something different from what the shop assistant said it was. The same object of clarity is desirable in currency. Currency should not be subject to repeated and unpredictable changes. If these objects can be secured without other still greater disadvantages then, obviously, they are objects of great advantage to this country. It is true that for a great nation like Britain, it may be said that the safeguards are illusory.
Mr. Hammersley: Before the right hon. and gallant Gentleman leaves his interesting metaphor about the shop may I ask whether the important thing in this shop is that there should be available for sale those various currencies at those marked prices, which are needed? Would he say whether the currency which is chiefly required—dollars—will be in adequate supply?
Lieut.-Colonel Elliot: That, I think, is one of the great objects of this Paper. There is a very strong clause, Clause VI, which is intended, at any rate, to deal with that particular point. If certain currencies are not available—it may be taken, very largely, to refer to the currency of the United States—then the most drastic terms come into play. They are so drastic that it might be our suggestion to our experts that they could not be put into force in any circumstances. They amount to a blockade of a country which is unwilling to allow its currency to be available either through lending or taking goods in exchange. But I do not wish to pursue that point too far. I can only say the currency should be available in the shop, and that if it is not available, then steps of one kind or another must be taken either to provide that currency or to terminate the whole system as Clause VI suggests. No
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doubt the existence of such a provision may lead to the country in question taking steps before that situation arises and realising that something has to be done about it. I am sticking at the moment to the wide general aspect of the very far-rending proposals brought before us. Obviously, to a great trading nation such as ours the existence of a clear and well-defined ratio, not merely between us and the United States, but between us and all the countries of Europe is highly desirable. There are many countries whose currencies have been smashed to pieces owing to the war, and which will have to be established again. We shall have to re-establish the many trade relations which we had before the war, and I stress the point that if stable arrangements could be come to, they would be of advantage to this country.
We must examine the advantage as well as the disadvantage. I think the man in the street would say one thing: "Does this tie us up to gold?" I think that is the first fear that would strike him. He has an uneasy feeling that he was tied up to gold years ago and that it was not very satisfactory and had to be liquidated at very short notice. Those who advance that view say "Yes. The pound has been given a fixed ratio to the dollar, and the dollar has a fixed ratio to gold. Things equal to the same thing are equal to one another." That, I think, would be rather a short-sighted view. First of all, we can unilaterally devalue up to 10 per cent. at any time, and thereafter, we can devaluate to any extent by consent. We have to give two days' notice for an extra 10 per cent., but the application for devaluation might be granted for a figure far above that after approval by the fund. [An HON. MEMBER: "It might even be recommended."] Yes, that is so, but I am taking it at its worst. How in fact are we tied up to gold by this? I say that a great deal depends on who are the managers of the Fund and on what basis they are elected. It is also true to say that the White Paper does not deal with that point. I certainly think it is one of the reasons why we should continue further examination of the proposals and insist on fair representation. The fund is to be governed by a board on which each member shall be represented and by an Executive Committee—whose voting power shall be closely related to their quotas or shares. The membership and

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the voting power of this Committee would obviously be of the very highest importance to this country and it should be laid down that the Empire should have parity in voting power with other great commercial countries such as the United States.
Mr. Shinwell: This is a point of great importance. In Clause VII, relating to management, with which my right hon. and gallant Friend is now dealing, the point is made, as far as it can be made, quite clear:
"The distribution of voting power on the Board of Directors and the Executive Committee shall be closely related to the quotas."
Lieut.-Colonel Elliot: I should say on that, that in the first place the voting power of the British Commonwealth should be equal to the voting power of the United States whatever the quota. I also have looked at that very carefully. I took it for granted that those words "closely related" were put in for a specific object. The voting power should not be in an arithmetical relationship to the quota.
Mr. Woodburn: Would my right hon. and gallant Friend agree, in regard to the subject he is discussing now—the question of gold—that there is a different voting provision in the next paragraph and in Clause IV, paragraph 5?
Lieut.-Colonel Elliot: I beg the House to realise that I am anxious not to follow up so closely on the smaller points. I am really, at the moment, dealing with the bigger questions, as far as I can see them. This question of how far we tie ourselves to gold, is one of the bigger questions. The question of the management, the directorship, of this Fund is another big question. In short, I do not think we are tied to gold by this if the management is properly run. There are two ways in which to ensure that the management is properly run—we must have adequate voting power and we must trust to a reasonable selection to men of good will on the Committee.
But this is a question of international co-operation. That is one of the catch phrases of the present time, but if we cannot get it on a subject such as this, it is not merely a question of the Gold Standard, or international trade on which
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we shall collapse; it is a question of a general collapse that will creep, like paralysis, all over the world. Either we can co-operate internationally or we go down. If we can co-operate, then this is an avenue along which we can go and in which men of good will and reasonableness can work these complicated proposals. The linking of gold and the management of the Fund certainly do not exhaust the questions which I should like to ask, and which I should like our experts to continue to inquire into, when they are negotiating. There is the question of whether the Fund is large enough. The sums suggested, in comparison with the huge volumes of international trade, or even the huge tides that run in international trade are relatively small. There may be an outflow by us under it of £80,000,000 in one year, but our Exchange Equalisation Fund is many times that. It may well be that the Fund is not large enough. That is an argument which could be advanced and thrashed out in the discussions which our experts have to have. Personally, I think the sums are substantial and ought to give a substantial easement to many of the smaller countries during the post-war period.
There is also the point—I hope I am not worrying the House—of whether the scheme is strong enough to ride out a tornado, to withstand what used to be called an economic blizzard. I had some experience of that. I happened to be sitting in the room of the Financial Secretary to the Treasury, as Financial Secretary, when the great economic blizzard of 1931 struck this country. I still remember that last week before we went off the Gold Standard. Before that, we had raised, first, £50,000,000 and then £80,000,000. The first £50,000,000 was swept away in a fortnight, and the next £80,000,000 soon went out with the tide that was running stronger and stronger against us. We thought that we could hold the rate of exchange which had been given, but during the last week, on the Wednesday, the run was £5,000,000; on the Thursday it was £5,000,000; on the Friday it was £18,000,000 and on the Saturday, which was a half-day, the run, up to the close of business, was £10,000,000. I remember sitting watching those figures in the Treasury room. We were down to our last few hundreds of thousands of pounds when I heard the

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clock strike on the Saturday for the closure of business and knew that we had the week-end in which to make the arrangements which finally took us off the Gold Standard. I had the task of piloting through the House of Commons, on the Monday, the Bill which took us off the Gold Standard. All that will be fresh in the minds of my right hon. and hon. Friends here, who, will remember that there was considerable confusion of opinion in. the House at that time, and that, even at the end, 112 Members were found to vote for remaining on the Gold Standard, although we had no gold.
Mr. Austin Hopkinson: The right hon. and gallant Gentleman is using expressions which he ought to define more clearly. He has spoken of an "economic blizzard" and the process of going off the Gold Standard. May I submit to him that what is called an "economic blizzard," is simply the definite and eventual result of living beyond one's income, and that going off the Gold Standard is acknowledging that one is a bankrupt?
Lieut.-Colonel Elliot: I think there is a Jewish proverb which says that the Talmud contains everything in the world but took 600 years to write. I do not wish to extend my remarks to anything like that extent of time. One of the reasons for putting down this Motion was to focus discussion. I am trying to deal with the argument of whether it is a good thing to unify the gauges of international railways, and to examine problems which I came across in a practical way, as one engaged in that work during a testing time. As to what the cause of an economic blizzard is, I will leave that to those skilled in weather prophecy, a subject which sometimes causes a fall in one's reputation. As I was saying, there was a storm: it blew with fearful violence and swept away the great resources which we had raised. It involved us in a great loss of prestige—let us recognise that frankly. We may not have noticed it in this country, but there were many small Powers and people abroad, who had lodged money with this country. I remember suffering a little in my conscience when I learned that the Sandwich Isles had deposited money with us. They trusted Britain and London, and did not withdraw their money. Then we had to tell them that their deposit was worth only two-thirds of what it had been worth when they lodged the money.
Sir George Schuster: I cannot sit quiet and hear the right hon. and gallant Gentleman tell the world that our going off the Gold Standard resulted in a loss of prestige of sterling. I was in India at the time and my experience was that it resulted in a gaining of prestige by sterling, and that every depositor of sterling credit found that he could buy just as much goods as before. He might not have got as much gold but he did not want gold.
Lieut.-Colonel Elliot: I do not want to enter into a controversy with the hon. Member, but I did not say that it had led to a loss of prestige of sterling. I said that it led to a loss of the prestige of this country. The fact is that sort of thing is something which we want to avoid doing again. I, also, well remember the experience in India. I was sitting in the Treasury rooms watching the run from this country to Bombay. The Parsees were running on us like tigers, tearing the gold from us. The moment there was the change, they swung round like an indicator, saying, "Here is money for jam." They all began to rush back again, buying pounds sterling as fast as they had been selling them. They must have cleaned up millions. I do not want to run the finances of this country for the purpose of putting vast fortunes into the pockets of Parsee speculators.
However, I was asking the Chancellor whether he was sure that the proposed arrangements can stand a sudden and violent assault of that kind. It is true that gradual devaluation would avoid this, and that arrangements could be made which would avoid a sudden storm. These arrangements of mankind are supposed to be conducted with reason, but very frequently they are conducted with no reason. My experience of devaluation is that it is not a thing which is undertaken quietly, peacefully, and after a great deal of thought. A sudden storm comes upon the country. It may he the result of past happenings, but that does not alter the fact. The storm comes, and the country finds itself knocked off its standards. Such a country might desire to retain membership of the group which has been suggested; it is a pity it should be allowed no latitude, except that of being able to withdraw altogether from the scheme. An arrangement might be come to whereby a country might well remain associated

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although it could not have the facilities of the scheme until it came back into full membership. It might be regarded as having suffered from force majeure and exonerated under the provision that a Government cannot get rid of the responsibility of the rulers to see that their public comes to no harm. If the proposals, which I have mentioned as briefly as I can, do not tie us to gold, or ask us to undertake tasks beyond our strength, and give us power to supervise them in a way in which we can have confidence, then I think we may say that they will do as a basis for further discussion. If we can receive an assurance from the Chancellor on these points, and from right hon. and hon. Members generally, then I think the House may be satisfied.
There is a further point. I spoke at the beginning of my remarks, about the fear that this was, in some way, fettering our discretion on commercial policy and it is to this point finally that I want to address myself. The Amendment which has been put down to the Motion shows the uneasiness of the House upon that point, and I think we should again wish to be assured by Members generally and by the Chancellor, in particular, that such a suspicion is a misreading of the proposals which are here laid before us. I should have thought that nothing could interfere with the very explicit assurance given by the Prime Minister as to Empire Preference, that the right of choice which this country has exercised, is in on way fettered by any of the discussions now taking place and that it is intended to maintain that stoutly as one of the points of British Commonwealth policy.
Mr. Graham White: Right of decision?
Lieut.-Colonel Elliot: I think the right of choice is inherent in any scheme, say, for bulk purchase or in an Investment Board, which is a very frequent proposal. I would say that this right of choice is not interfered with and, to use again the metaphor of the railways, we are laying down a firm permanent way but we do not say that signal-boxes or shunting guards yards are to be left out of the arrangement.
Mr. Shinwell: There is going to be a collision.
Lieut.-Colonel Elliot: The surest way to produce a collision is to say that any train can run freely in any direction at any time over any permanent way, and make no arrangements for signal boxes and shunting yards whereby the traffic can be properly directed. I am sure the producers of this document do not intend that, if they are sensible men. If they are not sensible men, then is the time for the ordinary man in the street, the man in the House, the man on the benches, to say "That is my reading of it." We are discussing the yardstick, the just balance. We desire the right of choice to be exercised, but not by the yardstick. We do not intend that unmarked weights of different gravities should be placed in the pan of the scales as a way for regulating our trade. If we want to regulate our trade, we must regulate it frankly and fairly so that everyone can see how it is done.
I have had much to do with the administration of commercial agreements and agricultural agreements and have many times had to interpret the extremely complicated formula, home farming first, Dominion farming second, world farming third. If it was suggested here that I was advocating some scheme by means of which all that would be swept away into limbo, I should not support that at all. But, as one who had had to negotiate these things, I say to the House that it is essential to remember that there comes a period at which negotiation has to be concluded, agreements have to be made, trade has got to go on. It is useless to say we have nothing to do with Argentine beef or Australian mutton. There comes a time when these things have to be allowed for in trade, but the time for discussing these things is not now. What we are discussing now is the yardstick, the arrangements by which, let us hope, when we come to an agreement about trade, these goods and services can flow freely along well understood and properly recognised channels. if the promoters of such a scheme regarded it as a step back towards the 19th century, the Gold-standard-Freetrade-world, I should not recommend it and the House would not support it. No House that could be elected would support it. If it is a step forward towards the 20th century, I think these are steps that we ought to take, and can take. In-

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ternational co-operation is an ideal which everyone supports in theory but very few people will do anything for in practice.
Mr. Stokes: Will the right hon. and gallant Gentleman explain what he means by the 19th and 20th centuries?
Lieut.-Colonel Elliot: I thought I had given a clear definition of it. I have said that I regard the 19th century as a Free Trade-Gold Standard century, and I regard this as a step away from that conception of things. This is neither Free Trade nor unfree trade. This is the mechanism of monetary exchange. The question of Free Trade and the right of choice must be discussed at a later date. I am very anxious that we should not, even by implication, find ourselves led away into commitments upon that. I am emphasing the fact that we are not, at the moment, discussing these matters, so that we shall not afterwards be taken to be committed to them. I am sure that is a sound and logical way of approaching the matter.
Mr. MacLaren: If we are not to discuss whether there is to be a free economy or a controlled economy, the right hon. and gallant Gentleman should not be so insistent on reminding us that the Prime Minister has forestalled us from discussing any alternative.
Lieut.-Colonel Elliot: I was merely giving that as one example of reservation. That is a point reserved. We are accustomed to negotiations to say that a point is reserved. I regard that point as reserved. I should not go further. I am sure the hon. Member for Wolverhampton East (Mr. Mander) would not have gone along that line if he thought the point had been settled. It is not settled, but I am claiming that it is reserved. I hope very much that we shall be able to allow the monetary discussions to go forward. I can imagine nothing more curmudgeonly or more likely to injure the interests of the country, than that we should tear up the White Paper and say it does not afford a basis for discussion. In the future we shall have many great negotiations to carry on. It would be a poor start if we said that this first technical examination is not worth carrying any further. I ask the House to declare that it is now a moment at which we can usefully carry forward the discus-
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sion, and in that sense I move my Motion.
Sir John Wardlaw-Milne: My right hon. and gallant Friend in an extremely interesting and able speech has made it quite clear that the object of the Motion is to declare that the House is prepared to consider this White Paper as a suitable foundation for further discussion. I cannot think that anyone can suggest that is not a Motion couched in wide terms. There is no doubt that, just as after the war, there will have to be an international organisation of some kind to ensure peace, so there will require to be an international organisation for the purpose of promoting and encouraging trade between the nations. We have a considerable advantage in the position we are in now because some of the economic myths of the nineteenth century are now rather discredited.
Mr. MacLaren: I wish this nineteenth century business could be stopped. If we are going to refer to dates, the eighteenth century was much more Protectionist.
Sir J. Wardlaw-Milne: The hon. Member suffers from one disadvantage, that he cannot bear to wait till the end of a sentence. I was not referring to Protection at all. I was going to explain that the point that I was referring to, the myth, was the exploded idea that we benefited by what was called, in pre-war days, afavourable balance of trade; that you benefited if you traded at the expense of other nations. We realise to-day that we can only prosper if other nations are prosperous and, therefore, the more imports we can have, with due regard to our home production, the better will be our standard of life, and that our exports are merely useful for the purposes of securing imports. The contrary view is the myth to which I referred. We have the great advantage that we, and other nations, start consideration of our economic future by having dropped that. It seems clear to me that a financial and currency system promoting the greatest possible exchange of goods is necessary, and it is from that point of view that I, at any rate, and I am sure others also, will have examined the proposals of the White Paper. I am afraid it is necessary, and, I think for the very reasons my right hon. and gallant Friend gave it is desirable, that the House should be quite definite in criticism of the

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proposals where we feel that criticism is necessary. It would not be of the slightest use to say this is a very good foundation for further discussion without, to some extent, dealing with the points where we believe our experts will have to pursue matters further with their opposite numbers among other nations. At the same time, while I may be definitely critical of some of these proposals, I recognise that it is a definite step forward that we have been able to get agreement to this extent, and I am all in favour of the House making it plain that we want these discussions to go on until a satisfactory system can be achieved.
Any system proposed must involve international credits, but the flow of trade after the war is bound to be extremely uneven in view of the differing economic and geographical position of the different nations. The main point from which I have examined the scheme is, Does it ensure that countries that fall out of equilibrium can restore their position? I think that is the first important point to discuss because, if the scheme will not work in that regard, it is bound to fail. The Fund starts with a total fund of eight billion dollars. It occurs to me, as it occurred to my right hon. and gallant Friend, that it is not a very large sum, or even the ten billion dollars subsequently envisaged, with which to facilitate the international trade of the world. I think it will require to he a larger figure very shortly after its inauguration. There is another point that I am not clear about and I should like to know what the view of the Chancellor of the Exchequer is about it. He may have read it quite differently from the way I did. I am not quite clear whether these different currencies are to be deposited in currency in the central Fund or to be held in the central banks of the different nations. Some people have told me it is clear to them but it is not so plain to me. I hope the point may be cleared up because, even if the Fund is to operate in existing currencies held by it, the total amount required will entirely depend on the extent of 'bilateral equilibrium between any two nations, and without that equilibrium, of course, the scheme will fail. It is suggested that the United States will provide 25 per cent. of their quota in gold and 75 per cent. in dollars. I noticed in a Press report that Mr. Morgenthau
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suggested that the United States will supply 2,250,000,000 dollars, and he suggests that this country should provide 1,250,000,000 dollars.
Let me come to a point which was raised in an interruption of my right hon. and gallant Friend's speech. There is a reference on page 6 of the White Paper, para. II, Sub-section 3, from which it appears that the contribution of any country is not limited to 25 per cent. in gold. I am a little worried whether, for example, the United States could not deposit the whole of their 100 per cent. in, that metal. I see nothing in the White Paper to prevent their doing so. That is a point which has to be cleared up. It seems to me that they have the right to deposit the whole 100 per cent. in that way if they choose. On the face of the White Paper gold is to play a very restricted part because while that metal may be used to redeem a member's currency, no nation is bound so to redeem it. Again, under the terms of the White Paper a member nation is not bound to subscribe more than 10 per cent. of its quota in gold. I do not know that that 10 per cent. of our gold holding will worry us very much for we have no gold to spare. I am very uncertain, however, about the suggestion of any country replacing its deposits of national currency, especially if, under the Clause which I have referred to, the United States can provide gold instead of currencies to any extent she may desire and when her quota is exceeded she pays 50 per cent. further in gold. In the White Paper it is stated that any country whose quota is exceeded can redeem its currency to the extent of 5o per cent. in gold. That, to my mind, brings us very nearly to the position of being tied up to gold. I am bound to say that I think this provision will have to be considered more carefully.
The position as I see it is this. After the war the currencies of several countries are bound to be over-abundant in the Fund. Only one, the United States currency, is likely to be scarce. I do not think it is any use our going on with this scheme without recognising that fundamental point, that the one scarce currency will be that of the United States. In all likelihood, so far as we can see events after the war, every other currency in the Fund will be over-abundant. Therefore, what is likely to happen? At a very early date the currency rate for

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the United States will be changed by 10 per cent. Events will force that. Then will come events which will force a further 10 per cent. by permission, and only if other nations can sell freely to the United States can disequilibrium be corrected. That brings us to an important point and we must look at it very carefully. No one can say what will happen after the war, but at the same time we see pretty clearly that there is bound to be a scarcity in any Fund of this kind of United States currency, and it is difficult to see how it can be corrected except in one of these two ways.
Mr. Spearman. It is very likely that there will be a shortage of United States currency, but it is by no means certain. Their costs may rise very much more than ours, and there are more than several thousand million dollars in America of foreign money which may be taken out. I do not think we are right to assume it will necessarily be so.
Sir J. Wardlaw-Milne: My hon. Friend will realise that I agree that nobody can tell what may happen. God forbid that I should attempt to lay down the law or prophesy the future, but so far as we can visualise trade after the war and the conditions of the different countries, we are bound to look at the probability that United States currency in any fund of this kind is likely to be short and the currency of other countries over-abundant. The real difficulty is that the only way in which the United States can restore harmony in the Fund is either by providing dollars or by providing gold if my interpretation of Paragraph II (3) is correct. There is no other way of doing it. Even if she wishes to help in every way there is a difficulty. Paragraph III (7, b), quoting it roughly, states that if a member's holding exceeds its quota, the Fund, in selling exchange to that country, shall require one-half of the net sales of such exchanges to be paid for in gold. It says, "shall require"; it is mandatory. That seems to me to be one of the difficulties which will prevent the United States, even if she wishes, restoring harmony under this plan in the currencies of the Fund. Much, of course, will depend on the action of the people of the United States in considering these matters politically and as a whole. I want to emphasise that, so far as I can see it, the
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whole success of this scheme depends upon the Fund holding the scarce currencies. It is no use the Fund always having ample supplies of currencies which are bound to be over-abundant. It is the holding of scarce currencies which will enable the Fund to work. Therefore, with ail respect to my hon. Friend's view, we must look at what will be the situation in the United States.
That brings me to this fundamental point in connection with the whole scheme. Does the scheme enable one nation to discharge its debt to another by means of a claim upon its own money or on its own exports if we like that description better? Does the Fund enable that to be done? If it does, it is the one thing we all want. If it does not, how can it be corrected and in what way can the scheme be altered to enable it to do so? There are certain other matters which I think are worthy of notice. It is clearly stated that the Fund is not to be used to meet large exports of capital but is to provide facilities for the normal flow of trade. That is a very important provision for this country and for all countries which have suffered impoverishment by enemy action or by special war efforts. It is very difficult to see how this can be carried out unless the United States will permit much freer imports than in prewar days, or alternatively is allowed to invest in industrial holdings here, which is the very thing the plan wants to avoid. If it did result, as it well might do, in forcing the United States to invest in capital enterprises here, it might lead to a dangerous political situation and disagreement between ourselves and the United States, which is the last thing we want to bring about. It would be a very different result from that for which the United Nations are fighting.
The difficulties of these proposals are immense, but I do not want to appear to emphasise too far criticism of them, because I welcome the fact that a valuable effort has been made to obtain agreement. It should be the basis of further effort. The only alternative to an agreed multilateral system would be for this country, or any other, to import goods only from the countries that would take its exports. That would deny expansion, destroy enterprise and bring about distress and unemployment at once. Nobody is in favour of a system of that kind. Another

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point that I want to put to the House why this scheme should be welcomed as a basis for further discussion is this. To end the war without an instrument which will prevent the disruption of foreign exchanges might well mean monetary collapse and would court world disaster.
I cannot too strongly emphasise the danger of ending the war without some scheme by which an agreed arrangement for the exchange of trade between the nations is brought about. If those nations also which are now under the heel of Germany have it made clear to them that at the end of the war they will not be in danger of a collapse of their currencies such as happened after 1918 it might strengthen them in their resistance to Germany and help bring about the surrender of the enemy. If we eventually secure an agreed scheme as a result of further discussions it must I think only be the forerunner of something else to follow. There would have to be a scheme for stability of prices, for the removal of all unnecessary trade barriers and for the rebuilding of the devastated areas and their return to prosperity.
In the Budget Debates I ventured to say that our greatest contribution would be to put our own house in order. Nothing in this scheme or in the proposals which may come forward are intended to prevent, and certainly must not in any way prevent, our full control of our internal monetary policy. We must have a long-term period after the war of low interest rates and a consistent policy of consumption expansion and the promotion of individual enterprise and initiative. The securing of full employment in prosperous industry is alone the basis for our future economic position and for our ability to help others. In the past we have been a great maritime Power. In the future we must be a great Power based on sea and air. We are in Europe but we are not of Europe. We want to cooperate with the Continent, help it, trade with it, rebuild it and restore it, but the foundation of our future strength, economically as well as politically, lies in unity within our own Empire and in close collaboration with the United States. I believe that with that close collaboration and by promoting an economic and financial policy internally so that we ourselves shall be prosperous, while we do
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our best to promote and extend trade between nations to bring prosperity to them, we can lead the world back to prosperity and do much to ensure it.
Colonel Sir A. Lambert Ward: The House has listened with great interest to two most informative speeches, the one from the right hon. and gallant Gentleman the Member for Kelvingrove (Lieut.-Colonel Elliot), and the other from the hon. Gentleman the Member for Kidderminster (Sir J. Wardlaw-Milne). I am inclined to think that, on the whole, the mild approval of the scheme which they have voiced will be re-echoed both in the House and in the country. My attitude is somewhat the same—very mild approval of the proposals in the White Paper. The first thing we have to do among ourselves is to decide whether we think that some form of international fund or clearing union will help us in the future. If we decide in the affirmative, the next thing we have to decide is whether the scheme adumbrated in the White Paper is the best in the circumstances. As the scheme is the result of the deliberations of no fewer than 31 nations, a great deal of give and take on all sides is necessary before an agreement can be come to. What is agitating my mind to some extent is the question whether we are giving a good deal more than we are taking in this scheme. Perhaps when we consider the decisions come to and the agreements arrived at as a result of the deliberations of 31 nations, it is rather astonishing that the proposals are as little disadvantageous to this country as, on the face of it, they appear to be, but it seems to me definitely that the Fund is, to a very great extent, anchored to gold. That being so, the currencies of the nations which comprise this scheme must also, to a very great extent, be anchored to gold.
The question at once arises in my mind, Is the scheme sufficiently elastic to offset deflationary, and also inflationary, tendencies, in the face of the world demand for commodities? If not, I am rather doubtful whether it is not condemned from the outset. At the same time one has to remember that one thing is quite certain. If we want America to play her part in furthering a scheme of international finance and co-operation, a certain amount of attachment to gold is

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almost inevitable. Without America, unless America is prepared to play her part, any scheme of this kind will be just as futile as was the League of Nations when America refused to take a hand in the game. If we want America to play her just part, we cannot avoid some attachment to gold. America having laboriously acquired practically the whole of the gold in the world, it is scarcely reasonable, unless she wishes to see this gold stock, so laboriously acquired, reduced to the value of scrap, for her not to co-operate. Unless America plays her part, the scheme is doomed to failure from its very inception.
We are inclined to look at this scheme as an end in itself, whereas it is nothing of the kind. It is only a means to an end, to enable world trade to be carried on in the difficult circumstances of the future. Reading American papers, one is forced to the conclusion that, although America appears to be very largely committed to this scheme, public opinion is far from unanimous with regard to it. On the other hand, if America wishes to export or to do any trade at all, that country must make either dollars or gold available to would-be purchasers. As far as I can see, there are only three ways by which that can be done. She can give the gold or the dollars to the purchasers who require them. Secondly, she can lend them. As my hon. Friend the Member for Kidderminster said just now, American loans or American money coming largely into the industries of this country might easily lead to a very serious situation. On the other hand, money can be lent on Government security without interfering in industrial concerns to any large extent. It is possible that gold or dollars can be lent by America to other countries in the world and thereby provide the necessary purchasing power for those countries.
The third way, which is by far the best of them all, is for America to consent to take payment for her exports either in goods manufactured in this or other countries, or in services. That is by far the most satisfactory method that can possibly be devised for providing purchasing power for American goods in other countries of the world. Candidly, unless America is prepared to do that, and if the disequilibrium in the balance of trade goes on, no clearing union or international fund
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would stand the strain for more than two or three years. In 1939 America was more or less in the position we were in all through the 19th century and the first decade of the 20th century. England was then the great creditor nation. By means of our exports of coal, cotton, iron, steel, etc., to say nothing of the invisible exports which we obtained through our shipping and banking facilities, gold was pouring into this country all through that time. By far the greater part of it did not come to this country in the form of gold. It came here in the form of food and raw materials. All the same, after that had been paid for, there was still a considerable favourable balance in this country which could be, and was, invested abroad.
There is a great difference between our policy then and American policy recently. We were prepared to lend that money to other countries, to enable them to develop themselves internally. Excepting for three or four years between 1921 and 1927, America was unwilling to do so. It is true that the greater part of the, money which we lent abroad all through the 19th century was lost. It has been estimated that something like £4,000,000,000 lent by this country to foreign countries was definitely lost. We lent money to South America, Brazil, Guatemala, Mexico and to the Confederate States of America. The whole of that was thrown away. A great deal of the money which we lent to the United States and other countries for the building of railways did not show very much return until a good many years afterwards. A great many people are of the opinion that because that money was lost it was a great mistake to have invested it abroad, and that it would have been much better to have invested it in this country I do not hold that opinion. I believe that had our financiers not been prepared to send the money abroad at the risk of losing it, the trade of the world would have come to an end in the middle of last century, England having collected the whole of the gold in the world and nobody having any money left with which to buy goods of English manufacture.
Mr. Mathers: No doubt the hon. and gallant Member means British.
Sir A. Lambert Ward: Yes, British manufacture, of course. It seems to me that the one good effect of the discussions which have been going on up to the

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present has been to show to people generally that it is not entirely the duty of a debtor nation to establish equilibrium in the balance of payments. After all, the creditor nation does owe something towards the establishment and maintenance of world trade. You cannot blame a debtor country altogether, but at the same time it requires a Fund something like that which has been adumbrated in this White Paper to smooth out inequalities which may take place from year to year. As I said before, a constant disequilibrium of the balance of trade cannot be dealt with by any Fund It will have to be dealt with by itnernal adjustments within the countries concerned.
One of the principal points in this White Paper is in sub-paragraph 2 of Paragraph 1, where it says that one of the objects of the Fund is
"to facilitate the expansion and balanced growth of international trade and to contribute in this way to the maintenance of a high level of employment and real income, which must be a primary objective of economic policy."
I think we will all agree on that point. It is emphasised in the paragraph of the Atlantic Charter which advocates the removal of all trade barriers which are inconsistent with existing obligations. To carry that out something bold, some bold scheme, must be inaugurated here and now. The constructive suggestion which I have to put forward is that, for the first 12 months after the cessation of hostilities, a moratorium on all tariffs should be declared. It is possible that "moratorium" is not the exact word to use, but I have used it because possibly it will raise the least objection in the minds of my Protectionist friends. This suggestion is only for 12 months, during the time when we shall be suffering from the great disorganisation of world trade. Something must be done to facilitate the rehabilitation of international and world trade.
I know that objections will be raised. People will say that this proposal would lead to the flooding of certain markets with goods from abroad, but I do not believe there will be sufficient goods in any country for 12 months after the war to flood the market of any other country. The difficulty will be to find the goods, and to trade with them. It is only by removing tariff barriers that anything of the kind can possibly be carried out. An-
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other objection is that it might create a vested interest in Free Trade, but if it is understood that this policy is only to apply for 12 months and that, after that, a complete reconsideration of the situation will be undertaken, I do not think it is possible that any such vested interest can possibly be acquired. In my opinion it is only by a freer exchange of commodities that the object of this international Fund can possibly be implemented. The removal of tariff barriers would go a long way in the direction of promoting postwar reconstruction and rehabilitation.
Mr. Stokes: The speech to which we have just listened and which I was very glad to hear, is surely a sign of the times. It seems yet another conversion to the policy of Free Trade, or, at least, freer trade.
Sir A. Lambert Ward: Temporarily.
Mr. Stokes: My own fear is that the conversion may be a temporary one. Anyhow, my hon. and gallant Friend having tried it temporarily, may find it of permanent value and may support it in the future. I agree with the two interesting speeches with which the Debate was opened, and I agree particularly with those who spoke on the danger of returning to the Gold Standard. I do not pose, and never have posed, as a financial pundit. I view this problem simply from the commonsense point of view of the man in the street. I am bound to tell the House, if hon. Members do not know it already, that the man in the street is extremely puzzled by what is going on and is extremely suspicious. I might summarise it by saying that it strikes the ordinary person that this scheme is a cunning way of re-introducing into the European monetary system the hoards of gold at present locked up in America, and the ordinary man in the street does not like the idea at all.
If I know anything about him he is going to oppose it absolutely to the hilt, more especially when he realises that this gold does not belong to the American Government but to financiers who are entirely irresponsible so far as any Government control is concerned. As the hon. Member for Kidderminster (Sir J. Wardlaw-Milne) pointed out, the scheme is virtually a return to the Gold Standard, and while that may not be so clear, it means in my view and the view of others,

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a more rigid adherence to the Gold Standard than ever before, though it may not be so easy to perceive. If that proves to be so what does it mean? If we accept it we shall be in for a long period of deflation and unemployment, as happened last time. It will mean the end of cheap money. As I understand it it means a rising Bank Rate, and the depreciation of the value of the savings of the ordinary man-in-the-street. That is what will happen as a result of the scheme if it is adopted. I do not like it at all.
What interests me is the kind of reception it has had in the Press. So far as I have observed, the Press of the country by and large have considered on the whole that it is not a bad plan. I cannot myself agree with that view at all. Amongst what I term the monetary reformers of my acquaintance, with whom I discuss these things and try to understand what they tell me, though I confess that sometimes it is difficult, I find the scheme almost wholly rejected. As far as the Government are concerned I find it is all shrouded in mystery. I have been endeavouring to probe the Chancellor for about the last year to know what is going on. He either says that he does not know or that nothing is happening. I will not call it worse than a terminological inexactitude, but neither of these points of view of the Chancellor was strictly accurate. Quite obviously the production of this White Paper means that a large number of experts must have been employed with the knowledge of the Treasury since last year, but try as we may at Question Time and on other occasions, we cannot elicit any information from the Chancellor. I had a question down to-day as to who were the experts employed by the British Government in the formation of this plan. I am not allowed to know who they are. That makes me more suspicious. I am not interested in the somewhat idiotic answer, as it seemed to me, that their names cannot be given because they are employed by the Government. That seems to me in an important matter of this kind a reason why I should know who they are.
What I suspect is that the Treasury have decided that there must be a currency plan of some sort, and that a bad currency plan is better than no plan at all. If that is the case I am wondering who decided that. Is it the Chancellor,
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is it Lord Keynes, or the Minister of State who, so far as I have noted his observations in the Press, seems to bow the head on every possible occasion, and the knee on many occasions, to the desires and wishes of America? I think it is high time we made it quite clear to our American friends where we stand on this, as indeed on other issues. As a result of all this people are very suspicious of what is going on.
I would like to ask the Chancellor or whoever winds up the Debate one or two questions. As the hon. Member for Kidderminster said, it is not made plain in the White Paper who will manage the Fund. Quite obviously to anyone who has studied the White Paper America will have a predominant voice. What is not made plain—and I shall be told that it needs a certain proportion of votes to carry any policy through—is that all the small nations will hang on to America because they will need her help. In the event America will carry the day. I do net like that. It is said, "You can always withdraw from the Fund if you wish." I think Clause 8 provides for that. In practice will that be so? May be possibly for some of the smaller nations, but it will not be a very easy policy for any of the larger nations, whatever difficulty they may find themselves in. It seems to me that the scheme is designed, in fact, to prevent the devaluation of sterling, however much we may want to devalue it at any given time. When that matter arises on this irresponsible body who is to decide whether devalution is necessary or not? It will be a matter of opinion, and the experts will line themselves up. Those who do not want devaluation will satisfy themselves, and probably the majority, that even a 3o per cent. necessary devaluation is not needed at any one time. I am deeply suspicious of the whole thing.
I would sum up by saying that we shall be handing over the sovereign rights of our own people to the irresponsible control of a lot of unnamed international financiers. I do not want that. I want to know what the Prime Minister thinks about this. I wish he was here. I do not very often agree with him on many things, but I pay tribute to his recognition of the trap into which he himself was led in 1925. He returned to the Gold Standard then. He was man enough and wise enough to admit what a ghastly

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failure it had been, and how wrong all the experts were. In case the House forgets what he said, may I read what he said in this House on 21st April, 1932? There were his words:
"When I was moved by many arguments and forces in 1925 to return to the Gold Standard I was assured by the highest experts, and our experts are men of great ability and of indisputable integrity and sincerity…that we were anchoring ourselves to reality and stability; and I accepted their advice. I take for myself and my colleagues of other days whatever degree of blame and burden there may be for having accepted their advice. But what has happened? We have had no reality, no stability. The price of gold has risen since then by more than 70 per cent. That is as if a 12-inch foot rule had suddenly been stretched to 19 or 20 inches… Look at what this has meant to everybody who has been compelled to execute their contracts upon this irrationally enhanced scale. Look at the gross unfairness of such a distortion to all producers of new wealth, and to all that labour and science and enterprise can give us. Look at the enormously increased volume of commodities which have to be created in order to pay off the same mortgage debt or loan… Are we really going to accept the position that the whole future development of science, our organisation, our increasing co-operation, and the fruitful era of peace and good will among men and nations; are all these developments to be arbitrarily barred by the price of gold? [OFFICIAL REPORT, 21st April, 5932; col. 1662, Vol. 264.]
I appeal to the right hon. Gentleman that he should be like all wise men, and should not commit the same mistake twice. If we accept this scheme involving, as it does, I think, a return to gold, then we shall be exactly where we were on the last occasion, and he and his Government will be held responsible for the evils which follow. I am somewhat puzzled that at this stage in the war there should be what I term this ugly rush back to discuss money. There has not been much discussion of money during the war except for ways and means and tricks for getting it out of the people's pockets. Since we went to war and before the problem has been how to link the skill, ability and labour we have in this country with the raw materials waiting to be fashioned into the things we need. We hear all too little of that at the present time as regards the post-war era, and now we are concentrating on what I call this ugly money business. I would have preferred to see a little more vision. I look forward to a far different scheme from what, it seems to me, amounts to a return to the old mechanical accountancy system. I
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ask, Are people going to put up with the old system? Must the production of our wealth be limited by the monetary rights of those who happen to be in possession of monetary tokens or credits at the present time? To take what used to be known as the favourable balance of trade, that is a contradiction that has to be explained to be exploded. I have never understood how any Government or any responsible industrialist or banker had the nerve to say that there was a favourable balance of trade when we sent more goods out of the country than we brought into it. It seems to me absolutely wrong. But that is what was aimed at.
As I have criticised this scheme I want to put forward an alternative suggestion. It seems to me, as the hon. Member for Kidderminster said, that the important thing about the exports of any country should be that those exports should be in exchange for imports, whether of goods or services. Then I would urge that in the post-war period we absolutely refuse all private dealing in foreign currencies, that currencies are not to be regarded as a commodity for buying and selling by the gamblers, quite irrespective of the trade done. Then, would it not be possible, in order to ensure that goods and services are taken in exchange for exports, so to arrange matters, as again I think the hon. Member for Kidderminster suggested, that an exporting country should not be paid in the currency of the exporting country but the currency of the importing country? If as a result there pile up tokens or rights to the goods and services of the importing country, and the exporter does not choose to exercise those rights, who is worse off? Nobody. The bankers and financiers would not have acquired the right to buy up the capital assets of the other nation, and that is all to the good. That is one thing, as the hon. Member for Kidderminster said, that we want to prevent. In fact, a policy of the kind I have suggested I would describe as a form of Lend-Lease continued in the peace-time era. I cannot see why, if we manage to arrive at a method of applying the necessary materials and efforts for war on a Lend-Lease basis, when we are busy destroying, we should not shed ourselves of the shackles of this international finance, as it is called, and make the same quantities of goods and services available for the benefit of all the world in peace.

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I suggest that we have now come almost to the cross-roads in this matter. We either abandon the Gold Standard for good and say that we are doing so, that we shall not have anything to do with it at all again, and so release production capacity to the full in peace-time as in war, or the alternative, as I see it, implied but very cleverly concealed in this plan, is to chain ourselves to gold and surrender to an irresponsible body, the sovereign right of the people. Therefore; I do not stand for it. May I repeat to the House a doggerel which I do not think inappropriate? I used it on one other occasion:
"Sing a song of plenty, a planet full of fools,
Everybody starving by sound financial rules, The banker's in the counting house counting out his money,
The laud is overflowing with bread and milk and honey,
The shops are full of good things, the factories likewise,
But the banker slams his books and says 'We must economise.'"
I think that sums up our pre-war financial system. I am reminded also of the jest in a Priestley play of to-day. The characters all go down into a vast new city, and the manager of one of the banks is among their number. He is seen by one of his friends surrounded by people who occupy this new city. They are standing roaring with laughter, and when the banker comes back out of the city through the open gate, someone says, "I did not know you were a raconteur. I saw those fellows roaring with laughter at what you were saying. What were you telling them?" He replies, "I was explaining our financial system."
So it was before; so it must not be again. I conclude with this remark. What is wanted is a recognition that the land and the natural resources of the earth are to be used as God's gift to the whole human race, and the distribution and use of them must not ever again be restricted by an artificial monetary system based on gold.
Mr. Graham White: I cannot compete with my hon. Friend the Member for Ipswich (Mr. Stokes) by reciting a verse to the House, but I was somewhat surprised and a little entertained by his condemning the Motion moved by my right hon. and gallant Friend the Member for Kelvingrove (Lieut.-Colonel Elliot), for two of the
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reasons which led me to support it. My hon. Friend complained, not for the first time, that he did not know, and had been unable to find out, what had been going on.
Mr. Stakes: I did not say anything of the sort. I was condemning the plan, not the Motion.
Mr. White: I will deal with that later; but my hon. Friend complained that he did not know what was going on. He said that he had put questions to the Chancellor of the Exchequer, and that generally there was an air of mystery about the matter. There has been criticism of the way in which this matter has been handled; it was expressed in our previous Debate. It was said that it was wrong to have two schemes, one by British experts and another by American experts. We had the answer to-day, in a scheme which is agreed on principle—not a final scheme. It is agreed, we understand, not only by the experts responsible for the direction of these matters in the United States and in our own country, but by the experts of all the countries which have been asked to consider this matter. That is a remarkable fact.
I rise to support the Motion which has been proposed by my right hon. and gallant Friend the Member for Kelvin-grove. Like my fellow-Members I find myself, for various reasons, in considerable difficulty in discussing this matter at all. The three previous speakers have made bold to say what they think are the views of the man in the street on these matters. That is one of the difficulties of Parliament. A very heavy and unusual responsibility lies upon us. These are matters for experts. They come into a specialised field. I very much doubt whether go per cent. of the people give any thought to these matters directly or have any views on them, although they may suffer directly in times to come from any mistakes that we may make. I have no doubt that, looking at this Motion in its simplest terms, the man in the street will be 100 per cent. for it. My right hon. and gallant Wend the Member for Kelvingrove rightly pointed out that we are not discussing a matter of policy, we are discussing a piece of mechanism which will make easier or more difficult the carrying out of policy, and which would be quite futile if considered in

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isolation. It should be considered only in relation to matters of much greater moment, our efforts to increase the use which we can make of goods and services to the benefit of man throughout the world. The people of this country are asked whether they wish this country to co-operate with other countries in trying to devise some mechanism which will enable a free flow of goods from one country to another, and there can be only one answer to that question. If they are asked whether His Majesty's Government, having taken steps to set these inquiries on foot, should be told by the House of Commons to withdraw from this matter, the answer would, surely, be in the negative, too.
Perhaps the one thing we can say in regard to these principles is that there is no question as to whether we should invite the Government to continue in the negotiations, and to give further consideration to them on the basis of this statement. It would have been a capital blunder if we had refused to enter into negotiations with other countries. It would be a disaster if we were to withdraw now. It would be equally a disaster if we were compelled by circumstances to withdraw from the scheme after it had been instituted. But, if it is worth while considering at all, we need not be so pessimistic as to contemplate being driven out of the scheme afterwards.
I could not help thinking of another White Paper which has been discussed in this House. This matter should be considered as part of a much wider and bolder programme for a world economy after the war. It might have been a good idea if this White Paper had been prefaced by the Government—following the example of Sir William Beveridge and his colleagues —setting out some two, three, or four assumptions on which this scheme might have been intelligently considered and reasonably expected to work. The first assumption is one which is not mentioned in the principles set out in the White Paper, namely, that we shall have, as a result of the conflict in which we are now engaged, secured freedom from the fear of war. Nothing that we can do after the war to rehabilitate international trade would make much headway in the face of the appalling obstacles to monetary development and control
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caused by fear of war. Those who have any recollection of the financial history of the last 20 years will recall that that fear was one of the most potent factors in promoting disorder and was a contributory cause of the conflict in which we are now engaged. A second assumption which is necessary, as a foundation for the working of the mechanism now proposed, is that all the nations which are members of any proposed scheme shall be willing to co-operate together, in the same spirit in which they worked and cooperated in the Lend-Lease Agreement.
My hon. Friend the Member for Ipswich said that he was disturbed at the ugly consideration of money. I myself, in these grim, harsh days, have derived considerable comfort and encouragement from the fact that we have been giving, in spite of this war, a tremendous amount of consideration, affecting all fields except one, to the question of what we can do when the war is over. We have considered matters relating to national health, social security, and the rehabilitation of other countries. To all these we have given a great deal of thought, and that is no bad thing. I am glad to see us turning to the question of international trade, because we could do none of those things if we could not set the wheels of trade with other countries going. It is not an ugly subject at all; it is a matter of first importance.
I will deal now with the one matter to which, during this war, we have given a great deal less thought than we did in the last war. That is the question of the formation of some kind of international society and a world organisation. Before the end of the last war we had a very cut-and-dried idea of what we were going to make of the world through the League of Nations. The Prime Minister reminded us a few days ago that the scheme has not been tried, but we had a cut-and-dried scheme. On this occasion, we have not given much thought to such a scheme. I think it is just as well that we have not—
Mr. A. Hopkinson: Surely, after our experience of the League of Nations, it would have been futile to do so.
Mr. White: My hon. Friend has been very good, and has mentioned the point that I was developing. I was going to say that, possibly, we are on wiser ground to confine our thought and atten-

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tion to the material conditions which are the essential foundations of any superstructure of world society which we may in time erect upon them. It is a fundamental condition of any policy that we may finally adopt for the restoration of international trade that the countries which may join in this scheme should be prepared to abandon isolation and to cooperate on the basis of raising the wellbeing of all people. It is just as well to remind ourselves that we are, in fact—

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

1. National Loans Act, 1944

2. City of London (Various Powers) Act, 1944.

MONETARY POLICY
Question again proposed,
"That this House considers that the Statement of Principles contained in Cmd. 6519 provides a suitable foundation for further international consultation with a view to improved monetary co-operation after the war."
Mr. Graham White: I was about to observe that whether we are wasting our time to-day in discussing these principles put before us as a basis for consideration, and whether we have, in fact, been wasting the great amount of time we have given to the consideration of post-war plans, really depends solely on whether or not the democracies working together in this war are capable of carrying forward into the peace, making a sustained effort over a considerable period of time, that co-operation which has governed our transactions for the prosecution of the war. The democracies will have failed utterly, and will have lost the war, if they cannot carry forward such a spirit. It is unthinkable that, having established such a remarkable standard of conduct in our international financial relations, we should go back to the miserable and "beggar-my-neighbour" policy of the twenties and thirties. I was much heartened by the speech made during the last few days by the Director of Lend-Lease in America in which he said that, what
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ever might happen to Lend-Lease itself, the one thing essential was that the spirit of it should go forward into the peace. We are wasting our time if we think we can do anything by discussing these arrangements unless that spirit can come into play.
I am afraid that my observations have rather dealt with matters outside the scheme than with the details of the scheme itself. I think that, on the whole, the details are relatively unimportant at this stage, but that this is the time when Parliament should indicate those matters upon which it has misgivings or doubts and any matters to which it is definitely opposed. I well remember saying in a previous discussion that the scheme which would have the best, or the only, chance of dealing with success with the problem would be the scheme which makes the least demand on the domestic concerns of a member country. These particular principles which we are now considering are infinitely better in that respect than either of the original proposals which we considered some six months ago. There is much greater latitude. We may differ on whether or not they are sufficient in the matter of the arrangement to be made for adjustments of exchange. In the previous arrangements which we have to consider, there was no latitude of that kind.
It has been suggested, in the course of the Debate, that, if we accept principles of this kind and order, we shall be tying ourselves more securely up to gold than we were under the older regime, that it is better to be on the Gold Standard, as we were in 1930, because, at least, we could come off it without any preliminaries at all. I cannot compete with those who take this view. It is useful to consider these schemes, not with a pessimistic outlook, but by concentrating on the methods to be employed. These are matters which we have got to take into account. Naturally, they are matters which we shall want to be assured of with regard to the management of the Fund and with regard to its effect upon those arrangements which have stood the test of time in relation to the sterling area. We may like to think that the scheme will be sufficiently elastic to include some arrangement such as that completed between the Belgian and Dutch Governments, which is not incompatible with the arrangements on the organisation of a fund of this

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character. Therefore, I commend this Motion, and I have little doubt that it will be adopted. Some of the doubts and fears are expressed in the Amendment before the House. If I understand it rightly, I have little sympathy with the Amendment of the hon. Member for Lowestoft (Mr. Loftus), who seems to think that it is possible, by unilateral or one-sided action, to shelter oneself from adversity arising from action abroad covered by the imposition of duties and tariffs and the like. I should have thought that anybody who studied the history of the last 20 years at least gained this lesson, that prosperity is indivisible; and that no country, by its own arrangements, can contract out of the world disasters which have passed over us.
I am known to be an enemy of slogans, first, because they are a substitute for thought, and, secondly, because the best slogans—the ones which make the greatest appeal to the emotions—make the least contribution to the solution of any practical problem which happens to be in hand. I am bound to confess, however, that there is one slogan that I would like to see the people of this country adopt, "No more Foreign Affairs." There should be no more foreign affairs in the sense that, in future, all our affairs, both political and economic, must, in some sense, be foreign affairs. There are very few transactions, both in the political and economic field, which do not take into account the result on the economy at the world at large. That would be a useful slogan. It would help to inculcate that attitude of mind, which I think is right, that the purpose of this country, and the increasing purpose of the United States of America, is to realise that the days of isolation have gone and that we must co-operate, not merely for our own needs, but for the prosperity of the world. It is because I believe in these principles, whereby the wishes and the wider policies of the countries of the world may be brought into effect, and work more smoothly, that I support the Motion now before the House.
Mr. Hely-Hutchinson: To speak with condensation on this very wide subject is something which almost passes the wit of man. I feel like quoting something which was said by that much-abused individual, who until recently was Governor of the Bank of England, Mr. Montagu
1972
Norman, at a public dinner some years ago, when trade balances, barriers to international trade, were under discussion, including tariffs, quotas, subsidies, shipping and navigation laws and the like. Mr. Norman got up and said to his audience:
"All this is too much for me. I only know that if there is confidence, and, therefore, credit, trade will flow over or under, round or through any barriers that were ever created."
Whereupon, when this was cabled over to America, the New York Stock Exchange fell ten points, for the brokers and their clients argued if all this was too much for Montagu Norman, it must be too much for them, and so they sold all their stocks.
I do not regard this plan as a deep laid plot of the Americans to keep up the value of their gold or to unload it on the world. I am a little doubtful in my own mind—and here I am very much surprised to find myself somewhat in agreement with something which the hon. Member for Ipswich (Mr. Stokes) said—of the extent to which discussion on post-war international monetary machinery is necessary at this time. Or, rather, I would put it in a different way. If there is to be a discussion of this problem now, the emphasis should not be so much on the machinery as upon the life and facts of foreign trade. It is more important to decide whether, than how to do things. Once one has made up one's mind to do things, there is little difficulty about machinery. The great difficulty after the war, will be to decide whether and, if so, to whom, money shall be lent—or perhaps even given. That is much more important than deciding how the transaction shall be carried out.
Anybody who considers the problems of international trade, immediately or very soon finds himself wishing that there might be such a thing as an international currency. This problem is brought very forcibly to mind—in miniature, but very forcibly and with great intensity—if one happens to travel about the world in an aeroplane. It has recently been my lot to travel, in a short space of time, 20,000 miles in an aeroplane, and in the course of that time to visit 12 different countries, each owing allegiance to a different sovereignty, with the result that I returned from my journey having in my pockets the "chicken-feed" of no less than 12 different currencies. To keep

1973
one's head and one's sense of values in those circumstances, even when engaged in such simple problems as paying for one's board and lodging, needs the mind of a Keynes and the patience of a Job. Therefore it is natural that the first efforts of the experts seemed to be directed towards trying to evolve what is really a philosopher's stone—an international currency and their first productions, with their "bancors" and "unitas," reflected these attempts. Yet on any conceivable definition of national sovereignty, and of currency, an international currency is in itself an impossibility. For a currency can only run as far as the King's Writ runs and therefore an international currency, as long as there are nations, is never going to be any more effective than a League of Nations can be.
The earlier editions of this plan tended to move in the direction of international currency, and I am glad to see that the present plan, at least abandons that. But the new plan has raised something very different. While it does not, absolutely rigidly, link the currencies of the member currencies to gold, it certainly would not be overstating the case to say that the new plan recognises the existence of gold to a much greater extent than either of the original plans. It is to that aspect, and that aspect alone of the new plan, that I would like to direct attention. It might be said that the new plan has regurgitated the Gold Standard; and ever since Lord Keynes was good enough to put the subject of economics within the reach of the public mind, the Gold Standard has been a subject on which all, even the most simple of us, have views. That thoughtful periodical "The Times," in a recent leading article, was chewing the cud on this problem and stated—as I think with some force—that to most minds the Gold Standard was either a bogy or a fetish; and added that there was really no reason why it should be either.
We might direct for a moment a little attention to what lies behind this. It is worth notice that every time yet another country says "Off with its head" to the Gold Standard, up goes the price of gold another notch. That may not be a reason for accepting the Gold Standard but it suggests that however clever and logical we may be about the inherent uselessness of gold—for we cannot eat it nor wear it nor live in it—however clever or logical
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we may be about it, there, nevertheless, remain numerous people in the world, very simple no doubt, who do like that attractive yellow stuff and are determined to get some of it if they can. That is a political fact which we must recognise; and that is what makes it the easiest medium for settling international balances. While it is true that no currency can cross the border of another country for the settlement of a debt, nevertheless, gold requires no passport in crossing frontiers. It is so popular. It writes its own credentials as it goes, and for various other reasons which are very well known to the House, it is from many points of view the most convenient ultimate method of settling international balances.
But there are two main causes of the gold hunger which are worth looking at. One is something which appeals with far greater force to the subtle minds of the east than it does to our more logical western minds. Under conditions of democracy and equal suffrage, there can be only one direction in which a fiduciary currency can move in the long run, and that is downwards. For equal suffrage always causes taxation to approach its effective limits, and politicians in a democracy must always keep in the background that subtle form of taxation which nobody quite realises is going on, which is a depreciating currency. Gold has been described as a policeman for politicians, and speaking for a moment not as a business man but as a politician, I must say that I object to being brought up short by the constable, just when I am beginning to outrun him.
Another cause of the gold hunger is the practice of central banks—and this practice is really a corollary of Gresham's Law that bad currency drives out good and sends it underground—of hoarding gold and keeping it out of circulation. The whole theory and practice of deposit banking is summed up in the story of the old lady in the financial panic of 1907 in New York who had 100,000 dollars in a bank on which there was a run. She went down to Wall Street and asked to see the president of the bank and when she saw him she said; "Mr. President, I have 100,000 dollars in your bank. If you have the money, you can keep it. But if you haven't got it, I want it right here and now." That is all there is to deposit banking.

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What is it that has caused Turkey to use her new-found prosperity of the last few years to accumulate over 150 tons of gold? While the two most powerful nations in international trade—England and America—fix the official price for gold at 168s. in London and what is more or less equivalent, at 34 or 35 dollars in New York, how is it that for a considerable period of time gold has been selling freely on the Bombay market at the equivalent of 328s. an ounce? And it is not merely a black market. We, ourselves, are supplying the gold for that purpose. We are doing it consciously with a view to trying to relieve the pressure of inflation. And so I would like to ask a question with reference to this plan. I see that under Clause IX, paragraph 1, it is laid down that one of the obligations of member countries will be not to buy gold at a price which exceeds the agreed parity of its currency by more than the prescribed margin and not to sell gold at a price which falls below the agreed parity by more than a prescribed margin. Does that mean that we have to give up the delectable practice of buying gold in South Africa at 168s. an ounce and selling a small part of it on the Bombay market at 328s. an ounce? Surely that is one of the plums we might hope to keep for ourselves.
In considering the Gold Standard, we might look back to what was the main influence on the facility of international trade in the golden Victorian age. There was no international currency then but sterling was freely convertible into gold and nobody anywhere in the world doubted the ability or the intention of the Bank of England to implement its promise to give gold instead of sterling. Therefore sterling behaved like a sort of international currency and went across the borders of countries with almost the same freedom as gold enjoys. But to those who regard the Gold Standard as a bogy, I would say there is no fear that we shall ever go back to the Gold Standard, and to those is who regard it as a fetish, I would say that they had better forget about it, because there is no chance that we shall ever go back to it. As it seems to me, about the only country which could go back to the Gold Standard, because it is strong enough both within and without to resist pressure, might be Russia; and we have to be rather careful that we do
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not suddenly find Russia back on the Gold Standard and trade transactions between Hong Kong and Valparaiso being settled by drafts on Moscow.
But there is one other shortcoming of the plan to which I would like to draw attention and, in connection therewith, to make an unorthodox suggestion. I do not know what will happen to me in the City when I show my face there tomorrow, after making an unorthodox suggestion in public. This plan makes no mention of any substance other than gold. Whether a central bank is, technically, privately-owned, or whether it is owned by the Government of the country which it serves, there is no doubt that the reserve of a central bank does, in fact, constitute a national reserve. And it is a national reserve not only for banking purposes but also against war. That is one of the reasons why countries like to store up a certain amount of that acceptable metal gold, because it is useful in case of emergency. In America at the present moment, there is something of the order of 500,000,000 ounces of gold, worth at the official price something like £4,000,000,000. One per cent. of those 500,000,000 ounces, that is to say 5,000,000 ounces, has about the same value as 700,000 tons of copper. Suppose America was suddenly confronted with war. Would she rather have 5,000,000 ounces of gold or 700,000 tons of copper? Thinking in those terms, the mind goes on to aluminium, magnesium, tin—
Mr. Maggay: Wolfram?
Mr. Hely-Hutchinson: Certainly, in small quantities. I would not even sneeze at pepper except that I might offend the susceptibilities of some of my Armenian friends in the City. One might also conceive the thought of other commodities of a more perishable nature which could be turned over in the same way as the laundry, which, when it comes back each week is put at the back of the shelf, so as to rotate the stock.
The question I would like to pose, when this problem goes back to the experts for consideration, is, What would be the effect if, say, gradually we built up to per cent. or 20 per cent. of the reserves of the central banks of the member countries or alternatively, 10 per cent. or 20 per cent. of the reserve of the new central fund, to consist of commodities other than gold? I hope these words may possibly trickle

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across the Atlantic and there receive some expert consideration, because America and perhaps Russia are about the only two countries which are really in a position to do anything about this. I would like to state my conviction that we shall make a great step forward, almost a leap forward, in the theory and practice of central banking, if we can get away from the purely monetary conception of reserves and think about those reserves more in terms of the great staple and basic commodities. I am quite aware that what I am adumbrating is really another form of Pharaoh's dream of the seven fat kine and the seven lean kine, which was so obligingly interpreted by Joseph. I hope the same fate may not befall me as befell Joseph, for if my memory serves me right, Pharaoh put Joseph in the saddle and made him carry out in practice his interpretation of the dream. One might be inclined to say with Mr. Norman, if one were offered a job which practically involved being Chancellor of the Exchequer, President of the Board of Trade, and Minister of Economics at the same time, that "all this is too much for me."
I would like to support the very noncommittal Motion before the House because I think it desirable that these matters should be thought upon still more by the experts. The Motion commits us to nothing, and the Amendment standing in the name of the hon. Member for Lowestoft (Mr. Loftus), which I hope also will be considered, seeks to make sure that we shall not even be committed to that nothing. In these terms, I beg to support the Motion before the House.
Mr. Shinwell: My hon. Friend the Member for Hastings (Mr. Hely-Hutchinson) will forgive me if I fail to follow his witty and interesting disquisition on the gold position. It is a commodity with which I have a very slight acquaintance. When he referred to the subject of copper, that seemed to me to be rather more familiar, but I was particularly interested in his final observation which was, as I understood it, that whatever advantages could be derived from this proposal we should not commit ourselves to them but speak with the utmost reserve.
Having listened to the best part of this Debate, I have reached this conclusion; it is quite impossible for my right hon. Friend the Chancellor of the Exchequer to say, when this Debate is concluded,
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that the House is behind the experts' agreement. I think we are bound to reach such a conclusion. I could understand the Government making a proposal that we might refer the subject to a Select Committee, when it might be possible to consult and examine—if not crossexamine—the experts on all sides; when, after a protracted period of deliberation, analysis and examination, such a Committee might find it possible to reach some definite conclusion. When, however, as we have seen and heard, the sponsors of the Motion in their able and interesting speeches, ask us to accept the agreement without any evidence of enthusiasm on their part, with a remarkably lukewarm attitude and considerable reservation, then it seems to me that my right hon. Friend is not empowered to say to the opposite numbers concerned, "The House of Commons desires this Government to proceed towards further consultation"—much less acceptance of the principles embodied in the agreement.
It has been suggested that this is more or less a Debate on currency, on the international exchange rate, on balance of payments and, in fact, on the financial mechanism which is essential in order to facilitate trade. I hope hon. Members will forgive me if I enter a caveat at once. To me it is impossible to consider currency mechanism associated with international trade in vacuo, and when my right hon. and gallant Friend who moved the Motion says that the House is in no way committed, either on the subject of trade discrimination, Imperial Preference, or bulk purchase, it seems to me—and I speak with diffidence on such an intricate subject—that once we accept the principle embodied in this proposal—which to my mind is the principle of non-discrimination—it is going to be exceedingly difficult, when we come to consider trading and commercial arrangements to depart from that principle of non-discrimination.
I suggest to hon. Members that we are putting the cart before the horse. If it had been possible, in the course of this Debate, to hear a considered statement from the Chancellor of the Exchequer, or from the President of the Board of Trade on a proposed trading agreement of an international character, and, in particular—I hope hon. Members will not mind my saying this—how far the American

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market was likely to be made available for manufactured goods from this country and elsewhere, and how far America in spite of her vast resources, financial and industrial, to say nothing of potential, was prepared to adopt an internal and international policy which provided for full employment in that country, thus absorbing the greater bulk of her production and adopting an import surplus policy instead of an export surplus policy —if I say we had preceded the discussion on monetary matters by considerations of that kind, clarifying the fundamental issues which underlie currency arrangements, then we might have been prepared to commit ourselves even to this so-called innocuous proposal. We have done nothing of the sort.
May I direct the attention of hon. Members to what I regard as the two fundamental considerations? The first is the one I have just mentioned—American resources. The second is the bargaining capacity of the great British market. We will take the British market first. As see it, what we are proposing to do, is to throw away the obvious benefits in international trade by the bargaining advantage of the British market, for the dubious benefit of using resources of the pool, in the event of the need for currency, up to a maximum of about £80,000,000 annually. I understand that £80,000,000 is the approximate figure. It is negligible alongside the drain on our resources, bi-laterally with the United States of America. We shall have to import to a much greater degree than ever before, not because we want to import for the sake of importing, but because, in the endeavour to rehabilitate our trade and to pursue a policy of expansion, of production and of full employment—those are our objectives—we must import raw materials. Many of those raw materials are in the United States of America. If we are to draw on the resources of the United States of America through imports, the obverse side of the picture is that we must export to pay for them.
The question is: How are we to pay? Out of our financial resources? Our financial resources are not in the same category as those of the United States of America. We shall not be a creditor country after the war. America will be the great creditor country, and we have to
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consider our position, not so much in relation to other countries, but vis-a-vis the United States of America. What is the position of the United States? Something has been said about currencies becoming scarce through the operation of this Fund and it has been suggested that if currencies become scarce, certain proposals can be adopted by the member States associated with this Fund to correct the disequilibrium. But, in fact, that is not the way it is going to work in practice.
I venture to make a suggestion as to how it will work. It can work out in one or two ways or, perhaps, both. The United States of America need not increase the supply of dollars in the Fund. The United States has power—there is nothing in the scheme to prevent it—either to lend and make this country more of a debtor country and thus adding to our burdens in the future, making it more necessary for us to export, or attempt to export to markets which are not available as, for example, the United States of America markets, or alternatively, and this is the danger point as I see it, the United States may, if dollars are scarce and not available to us for our purposes, advise us to dispose of the remainder of our overseas and Empire investments in order to obtain the necessary dollars. What is in this scheme to prevent that? There is no obligation on the United States, in relation to this agreement, to increase the supply of dollars in the pool. I repeat that she can adopt either of the two other devices and both of them are dangerous to the future trade and financial position of this country.
I want to ask the Chancellor of the Exchequer this question to begin with. Is there the remotest prospect of the United States reducing her tariff barriers to allow British goods to enter her market? It is a fair questioin. We have to export our goods somewhere. I venture to give the answer myself. There is not the remotest prospect—there may be some lowering or raising of barriers according to the circumstances—and therefore we have to find markets elsewhere for our goods. Where are we to find those markets? Is there anything in this scheme to facilitate trade with other countries? Already it has been suggested that the Argentine propose to remain outside the scope of this agreement, and,

1981
indeed, they do not need to come in because of their foreign reserves. They can avail themselves of those reserves. So, in order to find markets for our exports, we have to adopt other devices. What other devices? They are precisely the devices referred to my by right hon. and gallant Friend the Member for Kelvingrove (Lieut.-Colonel Elliot) in the interesting speech he made on the Budget Debate, and, to some extent, in his speech to-day, and that makes it all the more amazing to me that he should have sponsored this Motion. I direct the attention of the House to some of my right hon. and gallant Friend's observations. He said, speaking of the need for an export of goods from this country, and at a very high rate:
"I do not believe that that points to a helter skelter scramble of Free Trade. It points to a system of high organisation of bulk purchases, trade agreements, what you will."
Then he goes on to say:
"In such circumstances, it is impossible for us really to expect that we can agree with those who wish to sweep away the barriers, and to produce again the international scramble which, heaven knows, had no very beautiful results in the past."
Then he said:
"People say that the greatest thing that the United States can do is to produce an export surplus. I say that, in the long run, the greatest thing that the United States can do is to become so prosperous that it wishes to buy goods from all the rest of the world."—[OFFFICIL REPORT, 27th April, 1944; col. 1033, Vol.399.]
Very wise words. There is nothing in this agreement which is likely to facilitate proceedings of that kind. My right hon. and gallant Friend said this provided a "permanent way." But a permanent way is of no value at all unless you decide to travel. To provide a "permanent way" without deciding on the terms and nature of foreign trade in this modern world, particularly the kind of world we envisage when this war is over and the transition period comes to an end, seems to me a most absurd proceeding.
I want to apply the test by asking my right hon. and gallant Friend one or two questions. I presume, as I have already indicated, that our principal objective is to promote a policy of trade expansion and to promote full employment. Do not trade expansion and full employment depend on planning? Is it possible to expect any expansion of British trade without deciding on a plan and, if we are
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to plan, what do we mean? I shall tell hon. Members what I think a plan does mean. It means that this country, because of its needs and because of its huge market, and, again, because it desires full employment, should be able at any time, irrespective of any international consideration, financial or otherwise, to enter into reciprocal agreements with any country. That is a plan, and, indeed, there is no plan outside it. Of course, I know if the whole of the countries of the world could come together, and decide about the use of international resources in the true spirit of international co-operation, and decide on full employment, if they decided that this country was to produce this commodity and that country that commodity, and that certain countries were to produce primary goods and other countries manufactured goods—if that were all determined in advance, that kind of plan would be excellent. But does anybody believe that it is practical or likely to emerge for a long time? Of course not. And, in the absence of an international plan, which is the basis of international co-operation, we must be free to enter into our own arrangements.
My hon. Friend the Member for East Birkenhead (Mr. Graham White) said he did not indulge in slogans and then proceeded to say "We must demand international co-operation." What is that but a slogan? What does it mean? You can talk about the need for international co-operation until you are black in the face, but you have to get down to practical things, such as how are you going to trade and what is your objective and purpose in trade? International co-operation has got to be worked out, and, at the moment, it has not been worked out. It is an ideal, and a very desirable ideal and we should cling to it with all the power and strength at our command, and never abandon it. In the meantime, we have to look around and see where we can sell our goods and where we can buy our goods. That is the sine qua non of a decent standard of living for our people.
It has been suggested that there is nothing in this principle to prevent us proceeding with our reciprocal arrangements or bulk purchase or preference. We shall see. But, before I proceed, let me say this to Members of the Conservative Party. I can understand the Liberal Party supporting this, because it is a

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return to the Manchester school of economics. It is going back 70 years, and I can understand that. It is laissez faire. The party behind me no longer believe in laissez faire. [Interruption.] The hon. Member for West Islington (Mr. Montague) can speak for himself. He has already abandoned hope and I can do nothing for him. But certainly this party, by and large, no longer believe in a higgledy piggledy Free Trade which was never Free Trade in fact. They believe in planned trade, orderly trade, bulk purchase. What about the Conservatives? Are they going to abandon Imperial Preference? Are they going to say to New Zealand: "We could have made an arrangement with you, a trade agreement with you. We could buy your butter and ask you to accept all that we can produce in the way of electric light bulbs. We could make such an agreement but that is preference, that is discrimination, and other countries might object." Do we intend to allow that to happen? Hon. Members may say it is not implicit in this Agreement, but I say it is.
Lieut.-Colonel Elliot: How does the hon. Member explain the specific reference in the White Paper, that the document is understood by experts to mean that it does not, either now or in the future, interfere with the old-established ties and arrangements which the sterling areas have made with each other?
Mr. Shinwell: The right hon. and gallant Gentleman gave the answer himself. He divided the scheme into two parts—the short-term and the long-term aspect.
Lieut.-Colonel Elliot: I was anxious that the hon. Member should address himself to the fact that the proviso applied not merely to the short-term but to the long-term aspect.
Mr. Shinwell: My answer is that if one reads the scheme carefully, one detects serious contradictions. Indeed, hon. Members have referred to some of those contradictions. But I shall not take my stand on that at all. If you accept the principle of non-discrimination in relation to international exchange, it is bound to affect the position when you come to make reciprocal trading agreements which are, essentially and fundamentally, based on discrimination. You cannot have non-
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discrimination in relation to the balance of payments and discrimination in relation to trade. If somebody can prove that you can, I shall be glad to hear about it.
Lieut.-Colonel Elliot: That is what the White Paper says and what experts say the White Paper means, and I would rather take my stand on what the experts say it means, than on what the hon. Member says he thinks the experts ought to mean.
Mr. Shinwell: There have been various interpretations as to what the experts mean and there has been a great deal of discussion in the Press recently as to what the experts mean, and, also, in the House to-day, yet we have not had a clear answer. I think a great deal of further examination is required on this point. At any rate, I am entitled, in the interests of the future of British trade, to pose this question, a most important question: Is there anything in this scheme, either in its short-term or long-term aspects, that will prevent this country for purposes of development, expansion and full employment from promoting reciprocal trading agreements with other countries? I think we ought to have a very clear and definite answer to that before we can accept the principles involved in this White Paper.
Now I come to an equally important question—the effect on the sterling area. It has been suggested that this does not affect the sterling area position, and I preface what I am about to say by this observation: In a period of crisis and depression the sterling area position was of great advantage to this country. There is no doubt about that. The sterling area position was not telescoped by the countries associated with the Empire. Other countries were included, the Western European nations. Incidentally—although this is of great importance this is not the time to discuss it—we must not ignore the position of these Western European countries in the future in association with ourselves in terms of trade. I want to ask whether this plan proposes to withhold from the sterling balances, accumulated during the war in this country, the right to transfer or conversion? At present we have in this country very large sterling balances probably amounting to £2,000,000,000. A point comes in here, which much affects this agreement and it is: Have those sterling balances to be, in

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some way, utilised if we find ourselves short of a particular currency in the Fund? I am not sure, but the United States of America may say, "You are not entitled to utilise the Fund for the purposes of dollars, until you have disposed of the sterling balances in your country." They may do that, I cannot say, but at any rate it seems to me that the creation of this Fund would prevent us, or a member country, from using sterling balances for the purposes of capital export, namely, for expansion purposes.
Take the case of Australia. Suppose Australia has £100,000,000 sterling balance in this country and decides, out of that amount, to invest in one of the Colonies. We have been interested in this project of the Dominion countries concerning themselves in Colonial expansion. Suppose they do that. Are the precluded from engaging in an expansionist policy? If they are, or if the credit balances are in any way interfered with, then the obvious course the Chancellor and the Treasury have to take is to block those balances at once, to fund them and to pay the interest on them. That may create a serious situation as between ourselves and Dominion countries.
I come to my final point. One of the purposes of this scheme is to sweeten relations between ourselves and other countries, particularly the United States of America. That is the purpose of international co-operation at any level, in any sphere. It may well be—and I ask the Chancellor to pay particular attention to this—that when the time comes to implement this Agreement, we shall find that because it is to our disadvantage we must withdraw. It is no use ruling that out, because it is in the Agreement. Indeed, it is one of the escape clauses. There are several escape ladders. Why so many in a scheme of this kind? Those who promoted the scheme were not, it seems, very sure of themselves. You want escape ladders only in the case of fire or panic. They must have had that in contemplation. It may be necessary, for some reason or other, to withdraw from the scheme and leave the United States in the lurch. Nothing would be more calculated to embitter relations than that. Let us not forget what happened some years ago when Lord Baldwin, then Mr. Baldwin, went to the United States and concluded a debt settlement which was never implemented. That created deep displeasure in the
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United States; indeed, the legacy remained during this war. Let us be extremely careful that we take no step that is calculated to incur even greater displeasure in the future.
I understand that the conception underlying this Motion is that, whether this Agreement be good or bad, it requires further analysis and examination; that we must indicate our reservations on this, that and the other; that we must be careful to safeguard our trade and financial position in the future and, as has been pointed out, that the transitional period will be so prolonged that it will be many years before the scheme is actually implemented. If that is the underlying conception behind this motion, then this House has no right to accept the principles that are involved. But what the House can do is to say to the Chancellor, because we are not sure about it, because there are doubts, because there are strong reservations which are based on facts and not merely on suspicion, "Go on with your discussions, but please understand that not only the House of Commons but the whole country—for its trading future and standard of life of our people are at stake—wants to be assured that, before you finally commit this House you will come back to us and give us a further opportunity for examination."
If I had my way I would, frankly, reject these proposals. I have never voted against the Government on a Motion of Confidence, but if they had made this a Motion of Confidence then, with the greatest delight, I would have voted against them. I do not want to see this country commit suicide; if it proposes to do that, it will do it without any encouragement from me. I want it to be placed on record for the future that I, at least, did my best to oppose it. But if the Government are determined to proceed, I beg them to be exceedingly careful. It is not a question of playing into the hands of the United States because the United States has also got her problems and will have them in the future. But I am not sure that this is the way out for the United States. Her way out is the way out for us—promote a policy of full employment, in reciprocal agreements wherever you can, and then, on that basis promote international co-operation. Let the Government go ahead, but let them be careful, because if, as a result of this Agreement, we are let down, it will not

1987
be this House of Commons that will suffer so much, or even the people of this country; it will be the whole civilised world.
Sir George Schuster: In some ways I feel rather sorry to be following my hon. Friend the Member for Seaham (Mr. Shinwell) since he covered a great deal of the ground I intended to cover and approached this subject very much in the way which I myself had intended. I find myself in agreement with him in his point of view that we cannot usefully commit ourselves to any Motion or scheme which really means anything, until we have gone very much further in settling the underlying arrangements affecting trade and general policy. I want to say something about this, raising, perhaps, rather different aspects from those raised by my hon. Friend. I would not, however, go quite so far as he has gone in his pessimistic appreciation of the attitude of the House. I feel, like him, in a great difficulty about being asked to vote on a Motion in connection with this White Paper, but I think I can honestly express approval for the continuation of discussions which aim at the purposes which are set out in Paragraph 1 of the White Paper. I think he will find that all those purposes are purposes which he himself would support. Where I feel doubt is whether what follows in subsequent paragraphs represents arrangements suitable to achieve those purposes. Therefore, if I express my approval of the Paper it will be on that distinct understanding.
The hon. Gentleman said he had reached a conclusion. I too had been trying to form one and had been asking myself what sort of message the Chancellor would understand he had received from the House of Commons on the matter. It has been rather a blurred message. In some ways that is natural. We are a lay assembly. We cannot discuss the technical details of the scheme as experts. But we can and should express our views on broad issues, as the hon. Gentleman has just done. Therefore, although it may be elementary, I think it worth while to sum up what appear to be the main broad principles which I believe the House and the people of the country support.
First and foremost there is the strong feeling, which has already been referred
1988
to by several speakers, that the people of this country are not going to tie themselves, willingly, to any rigid external standard, whether gold or anything else, which is going to make it impossible for them to carry out the domestic policy which they think right—full employment, a rising standard of living and stable purchasing power for our own currency. At the same time, I think one can say that the people of this country are in favour of some form of international co-operation. But if international co-operation is to be anything more than what I think the Home Secretary once described as a nice after-dinner phrase, it must mean that we must accept certain rules and be bound by them. I ask myself, Are those two attitudes inconsistent? Are we honest about it? I think we are, and the answer is that we are ready to be committed to rules, but only if, first, we are satisfied as to the game that is going to be played and, secondly, satisfied that the other parties to the arrangements are also going to abide by the rules. That is a statement that we ought to make quite clearly to the United States.
That brings me to the matters of uncertainty to which the hon. Gentleman referred. My right hon. and gallant Friend the Member for Kelvingrove (Lieut.-Colonel Elliot) talked in analogies. Let me follow his example, although, as he said, they are always a bit misleading. I have talked of a game, and this scheme really does no more than provide for the counters for the "game." I ask myself, What is this game of international trade that we are going to play? Is it going to be a game of poker? Or a game of beggar-my-neighbour? Or perhaps a game of "happy families"? We do not know. For myself, I know that I want it to be a game in which the parties are not all seeking to get the better of each other and a game in which all the cards are on the table. But, of course, it is much more serious than a game. Nor is it only a matter of international trade. There must be harmonious international co-operation over a wide field of internal policies as well. I think we ought to be very careful when we are talking of this matter not to get our vision too narrow.
Here I should like to interject one idea, and it has a bearing on what the hon. Gentleman said about possible agreements with groups of other nations. If we are

1989
thinking of regional agreements in terms of trading agreements, which are intended to create self-sufficient; autarchic economic regions, then we are embarking on a very dangerous course which is only one degree less evil than Hitler's idea of an autarchic German economy. But if we are thinking of regional grouping in the sense of economic and social policy arrangements between groups of countries which stand at comparable stages of social advance, and whose economic interests can fit in together—if we are thinking in terms that there should be groups of such countries which agree to follow parallel lines for raising standards of living and other matters of domestic policy and which enter into trading agreements together, but who regard themselves as completely free and ready to deal with other countries outside the group as well, then I think that is a very fruitful and virtuous idea and one to which we ought to give our earnest attention.
But, whether we have regional agreements or world agreements, let us be clear about one thing, that we cannot ourselves be useful members of any group unless we put our own house in order and unless we create domestic stability. And here I want to say very definitely to the Government that it is not fair to ask us to discuss world plans like this until they have given us a much clearer idea of the shape of things to come as regards their own economic policy. Many of us have been asking for chances to discuss quite small things about planning at home—planning our towns, for example. When we ask for that, we are told it is premature. And I feel in this position. I am told it is premature to plan Walsall, yet I am asked to express my views to-day on a plan for the whole world. That is a contrast which shows up the illogicality of the position. I feel we must ask questions and that we have a right to answers. What are the Government's plans going to be for full employment? How can we discuss a currency agreement of this kind unless we know what sort of freedom it will be necessary to preserve in our monetary policy in order to make good our plans for full employment? Again, how do the Government visualise our overseas trade position? Is it true, as is now often being said, that in order to maintain the volume of our pre-war imports we shall have to increase our exports by 50 per cent.? Do the Govern-
1990
ment regard that as a practicable objective—something which it is at all likely we can attain? If they do not so regard it, what are the consequences? May we not be forced to adopt a policy of selective control of imports? Can you work a selective control of imports without some control of exchange? If for the sake of our own international solvency we are forced into courses of this kind, will they be consistent with the terms of this Convention? These are questions which we must ask, realities which we must keep before our minds. We may have to face them.
On all these grounds I feel that, with possibilities of that kind hanging over us, it is difficult to give approval to any kind of definite international monetary scheme. We must know more about the foundations of our own situation. That is our job. We have to know what our position is going to be. We cannot talk honestly to the United States unless we know it. But we are also entitled to ask something about their plans. They have their difficulties, as we have ours. Their difficulties are those of a surplus country, whereas ours are the difficulties of a so-called deficit country. What is going to be their position? Their resources of productivity are such that they can maintain a very high standard of living for all their people with a very large proportion of their industrial population unemployed. Some put it at 20,000,000. They like us will want full employment, and that will mean a vast surplus capacity.
How are they going to utilise that surplus capacity? Will they use it to build up their own standard of living, to increase their leisure, shorten their working hours and so on? Or are they going to pour out a vast flow of industrial products on to the rest of the world, countries whose products they will not take in return: These are questions which we must ask? I do not look at the United States position quite in the same way as the hon. Member for Seaham does. I do not believe that even if they knock all their tariff walls down they will find it very easy to import greatly increased quantities of British goods. It is not a mere question of good will. The economic positions of the two countries do not fit in together in that way. You cannot get away from realities of that kind. And there is one more thing to say on this general position. These policies are poli-

1991
cies which affect not only our two countries, but the whole world. Therefore these are not matters which should be settled merely by conversations between this country and the United States.
I turn from these general observations to the details of the plan. I have no time to say much about those, but, frankly, it has filled me with many misgivings. I find it difficult to understand many of its phrases. There are several important lacunae. The whole question of management, for example, is left out. And there are many ambiguities. Let me take one of them as an illustration. There has been some discussion about the extent to which these arrangements may limit our power to carry on our Empire economic policy. In the introduction explaining Clause X (2) it is stated that during the transition period the
"maintenance by members of the sterling area of the arrangements now in force between them"
is allowed. Then the passage goes on to say that, in the final period, that is to say when free convertibility has been accepted, the scheme is not intended to
"interfere with the traditional ties and other arrangements between members of the sterling area and London."
I ask myself what is the difference in significance between the
"arrangements now in force between members of the sterling area"
which are to apply in the transition period and the
"traditional ties and other arrangements be-between members of the sterling area and London"
which are to apply in the final stage. Apparently they are intended to mean something different, but I cannot see where the difference comes in. And there are many ambiguities of this kind in the document and phrases which I find almost impossible to construe. That makes me unwilling to give general approval to the plan because I feel that there are things lying behind the words which we, as ordinary members of the lay public, really do not understand.
Let me turn to another point. This whole plan rests on it being possible to make distinctions between capital and current transactions. I submit that, in practice, if you attempt to control exchange transactions it is extremely diffi-
1992
cult, in fact almost impossible, to draw the line between capital and current transactions. Then I feel that that is an element of unreality in the scheme. Anyone is free to go out over night. That is quoted as one of the advantages. But surely the standard is reduced pretty low if we have to command a scheme by pointing out how many ways there are of getting out of it. I dislike this position. We, in this country, would feel ourselves morally bound. We respect our moral obligation. But will the other parties do the same?
I should like to proceed, having been rather critical, to a positive statement summing up the sort of things which I feel we ought to put as Members of the House before the Chancellor of the Exchequer. Firstly, then, I should like to make it clear that we must enter into no scheme which hampers our liberty to pursue our domestic plans for full employment, for stable prices and for an expansionist policy. Second, that we do want international collaboration with countries who undertake parallel policies and with whom we can get a balanced position. We are prepared to accept obligations if others will too. Third, that any scheme must take full account of the realities; it must take account of our own strengths and weaknesses and of America's difficulties and strengths. Let us be frank on these matters, and have all the cards on the table. I should like to have no sort of misunderstanding as to our attitude towards our friends on the other side of the Atlantic. Fourth, that, when an agreement is made, it should, as far as possible, lay down a code of conduct rather than precise regulations, and it must be so planned that the whole tendency is expansive rather than restrictive. There are ways in which that can be accomplished. Fifth, we cannot settle everything at once. There is great value—and this is an element on which I support the plan—in setting up machinery for permanent, continuous consultation between the various countries which will collaborate in the plan.
Then, I come to a sixth point that seems to me of vital importance. In all that is said on behalf of His Majesty's Government in the United Kingdom I want to know that we have first taken counsel with His Majesty's Governments in the various Dominions and in India. I should like to say to the Chancellor, let

1993
us not advance a step further in the discussion of this plan or any other plan until we know that there have been full discussions with the Dominions and India.
Sir Irving Albery: When this Debate was announced, I asked the Chancellor whether the House would be in possession of the opinions of the Dominions before the Debate took place. The hon. Member has raised an important point, and I hope that we shall have some information on the subject.
Sir G. Schuster: I am glad to have my hon. Friend's support. Of course, I know that there have been some discussions, but this is one of the points on which I feel that we as Members of the House have been kept in the dark. Take the way in which the scheme was announced to the Press. One heard on the wireless that experts of 33 countries had agreed. I put it to my right hon. Friend that that was a misleading statement. According to all I have been able to discover, about what has happened, it is not fair to say that other Governments have dealt with this matter in the same way as our Government, and the United States Government have. I want to underline the point as strongly as I can and to ask whether we are to have the sort of currency policy discussions that we had with the Dominions and India at Ottawa, and in the World Economic Conference of the following year. I was myself a delegate at both these conferences, and I know the value of our discussions. I want to get the honest and plain opinion of the representatives of the Dominions and especially of India on these matters.
Lastly, I would like to go one step further. The hon. Member for Seaham has spoken about the Western European democracies. I feel that their interests are much the same as ours in this matter. I want to feel that we are in close association with them. I do not want to see any group built up hostile to the United States. Far from it. But I do want to see the Commonwealth as a group working together with these peoples, whose ideals and social standards are so closely akin to ours, and whose economic position fits in with our own in so many ways. This is a point of great significance. I would ask the House to reflect on the fact that those events in the history
1994
of this country that have redounded to our credit and enabled us to play a great part in the world, have always been the occasions when we have served as a rallying point for the weaker countries. We are now looking forward to a period when there will be one country—the United States—of dominating economic strength. I respect their ideals and I believe that they mean to use that strength in a way that will help the world. But the fact that it will be a dominating force cannot be ignored. I want to feel that we in this country will be the rallying point of the small countries and that we will help to preserve their individuality, their liberty and all the rich diversity of their civilisations. Therefore, I hope that there will be close discussion on this plan, not only with the Dominions, but with the Western European democracies, before we go a step further.
My final word is this. If we know what our own position is, if we know what the Government's economic policy is, if we know that we really have with us, heart and soul, the Dominions and those other countries who are so closely akin to us in their needs and ideals, then we can enter into a discussion of international economic and monetary plans of a far more realistic and definite nature than anything that stands in this White Paper That is the sort of plan I want to see. To such a plan I could give my unreserved approval.
Mr. Hammersley: On a point of Order. The matters under discussion are of great importance. The Government have already moved to increase the time available for the Debate by one hour. There is a Motion on the Order Paper in the name of my hon. Friends and myself which, apparently, will not be considered because the time is too short. I want to ask whether, if the Government are agreeable, it will be possible to increase the time available by a further hour.
Mr. Deputy-Speaker (Major Milner): I am afraid that it is not competent for the House, which has already come to a decision on the matter after due notice, to extend the sitting for a further hour.
Mr. Benson: Some doubts have been expressed as to how far this Motion is likely to carry us. I would remind hon. Members of the closing words of "Major Barbara," in which the heroine says to the hero,

1995
"Never mind, go on talking." That is all that this Motion says to the experts. It does not commit the House to anything. I am perfectly willing to bind myself to that kind of advice. I listened with great interest to the speech of the hon. Gentleman the Member for Walsall (Sir G. Schuster). I think that he rather minimised the importance of this discussion when he said that we could not fruitfully discuss currency until we had discussed a large number of other things. That may be true, but we cannot fruitfully discuss a large number of other things until we have discussed currency.
Sir G. Schuster: May I clear up a misunderstanding? I think that the discussions up to this point have been important and that valuable work has been done. My point is that we have reached the stage from which we can go no further until we know more about other questions.
Mr. Benson: I agree, and I hope that the Government will draw from the hon. Gentleman's speech the moral that we want a lot more discussion and that we have to discuss international matters, currency, trade and other things far more frequently in future than we have in the past. The hon. Gentleman the Member for Seaham (Mr. Shinwell) condemned the scheme root and branch, for the simple reason that it did not solve every one of our problems. Of course it does not. The scheme does not aim at solving every one of our problems. It is a narrow, limited scheme dealing only with currency machinery. The House is not asked to approve even the proposals in the White Paper. It merely asks for further discussion, so that we may once again express our opinion on the extent to which the experts have developed their ideas.
Mr. Craven-Ellis: Perhaps I might remind the hon. Member that it goes a bit further than that. Let us get this point quite clear. It says that the statement of principles provides a suitable foundation.
Mr. Benson: For further conversations.
Mr. Craven-Ellis: Yes, but the principles there must be accepted if we accept the foundation.
Mr. Benson: The most fruitful thing for this House to do is not so much to discuss the details of the scheme but to indicate to the Government what we feel is necessary in the post-war world so that, with their experts, they may devise some scheme which will suit the attitude of the House and fulfil what the House feels is requisite.
Listening to the Debate, I have felt a great deal more comfortable about the attitude of the House than I did 12 months ago, when I was a solitary voice crying in the wilderness against the dangers of fixed exchanges. There is a very different feeling now on that point and on other points as well, and that is why I think that the discussion in this House and in the country, arising out of this White Paper, is likely to be of immense value. When the White Paper was published, and I read it, I did what probably every other Member did. I asked myself how its proposals were likely to affect my pet hopes and my pet fears. That is how we shall really judge these currency schemes and other schemes; how they are likely to affect what we expect, for good or for ill, to happen in the future. We all have our hopes and our fears in these matters. What are our hopes, and how far are currency schemes likely to affect them? What are the dangers? How far are these proposals likely to safeguard us against them?
If the House will allow me, I want to get away from the rather general, theoretical discussion and bring the discussion down to realities and to actual facts. Viewing the future, and that period when the scheme, or any other currency scheme, is likely to be working in its entirety, over and beyond the period of change and restriction, we must realise that the major danger to world security lies with the United States. The productive capacity of the United States is colossal. Not only that, but the whole industrial system and the whole outlook of the country, are based on rampant individualism. Speaking broadly, they are ideologically where we were somewhere about the 1890's. In addition to this explosive situation, America has developed during the war a very high wages structures. High wages may carry on through the period of lend-lease and the period when the world is short of everything, but, taking everything that

1997
we can now see into consideration in relation to the United States, sooner or later there is a very great danger of an immense, world-wide industrial crisis starting in that country. That is one of the dangers that we certainly must anticipate, and if possible safeguard ourselves against it.
I would remind the House of what happened in 1929. The impact of the slump, which started in the United States, upon the outside world was shattering. In 1929 the United States had made available something like 6,500,000,000 dollars to the outside world. In 1932 they made available only 1,500,000,000 dollars, a decline of 5,000,000,000 dollars of purchasing power for the outside world. A good deal of that decline arose from the cessation of the policy of foreign loans. Loans from the United States to the rest of the world amounted in 1928 to 1,600,000,000 dollars. By 1932 that figure had shrunk to 100,000,000 dollars, and on balance the United States actually an importer of long-term capital owing to amortisation and repayment. The breakdown of this loan system was even more disastrous for the world than the contraction of current trade.
If we have to face a world slump arising in the United States after this war, there is no question, unless we take steps to mitigate the effects, but that 1929–31 will re-enact itself. And unfortunately one sees the pattern already growing up, ready to repeat itself. There is the enormous increase in the productive capacity of the United States. There is the inevitable need for high exports, for the whole structure of American industry is developing, and will continue to develop, along lines which will necessitate very large loans from the United States to the rest of the world.
It is implicit in the present policy of Lend-Lease that Lend-Lease will have to be carried into the immediate post-war world. There is the establishment of the Import-export Bank by the United States Government, the purpose of which is to facilitate capital exports. There is still another factor, the very large dollar reserves which are held in the United States, arising from the vast import of gold and currency into the United States in the thirties, due to the flight from Europe, on account of political developments. Some thousands of millions of dollars were de-
1998
posited at short notice there, and they will no doubt be repatriated. The whole set-up for post-war American industry will be dependent upon very high capital exports, and foreign loans. In 1929–31 the world was entirely unprepared for a world slump and for the sudden cessation of American loans, as well as for the catastrophic decrease in American purchases. American imports have always been a very steady fraction of their national income; that national income fell by more than 50 per cent. in those years, and with it their imports.
The hon. Member for East Birkenhead (Mr. G. White) said that it was impossible for this country to contract out of world disaster. It may be impossible but there is no reason why we should not try. I suggest that one contribution we can make to world stability after the war will be the development and the co-ordination of a sterling area with a policy of price stability. I think that is the greatest safeguard that can be offered to the world against world slumps in the future, and I think it is possible to do it within the scope of an international currency scheme, even a scheme more or less like the one outlined in the White Paper. That is perhaps the greatest contribution we can make to the future of world trade. The sterling area is, I think, particularly suitable as an experiment for a larger area than one nation, for the development and maintenance of stability, first of all because as compared with the United States there is not one single country in the sterling area that is likely to go to such extremes, none of them have the same productive capacity, none of them are quite so individualistic. Secondly, and perhaps more important still, we have in the countries of the sterling area—and by that I am including the larger sterling area, the Scandinavian and other countries—countries with a far greater power of combating slumps than anything the United States or the extra-sterling area countries possess.
Everybody here is agreed, I think, that any anti-slump activities must arise from Government action. There must be expansion of Government purchases if slump comes in this country. Most certainly it will be Government action that will be clamoured for. We must not forget that it was in Sweden that the theory of Government activity to counteract slumps

1999
was first adumbrated. In the United States an entirely different policy and entirely different outlook subsists. No one tried more valiantly than did Mr. Roosevelt by pump priming, but what happened? American big business was so hostile to State action, so hostile to the New Deal, that probably for every man that President Roosevelt put into employment by Government action big business knocked two out. Yet in this country and many sterling area countries, Government action seems to be the only possible antidote to slump conditions and deflation. Both in this country and in the Scandinavian countries there is no question but that a Government lead will be not merely welcomed by industry but demanded. The reaction of industry in the sterling area or in the major countries of the sterling area, will be fundamentally different from what it was in the United States. The result is we are in a fortunate position to counteract slumps.
I think we have to develop a new technique depending on co-operation in a large number of countries in price stability and trade expansion, particularly for the purpose of countering any contraction or slump that comes from elsewhere. That will be a much more difficult problem than merely maintaining price stability in one country only. I have no doubt that by expansion and Government action we can maintain price stability in face of any slump in this one country, but to maintain it over a very large area of the world's surface, the sterling area, will be, as I say, more difficult. It will require the development of a new technique. If we can succeed in developing that technique it will be one of the biggest contributions to world stability and full employment there is. We can do that because we have a similar social outlook. We have also a similar social policy, a social policy which finds its most complete form in the Beveridge Report. Throughout the sterling area social security has been developed to a far greater extent than in the United States, and social security can be a great element in the maintenance of trade stability and of price stability.
Now I think we must recognise that an essential factor in the maintenance of a sterling area stability in face of a world slump, one essential factor at any rate,
2000
is the power to depreciate sterling. I do not suggest that there should be wild depreciation but sufficient to maintain stable prices and purchasing power parity. Here I think it is essential we should make it perfectly clear to the United States and the world that our first concern will be price stability. It must be made clear, because invariably there is a curious reaction in countries to the depreciation of the currency of another country. A fall in prices in another country is not regarded as being so heinous as the depreciation of its currency.
There is a phrase in the White Paper referring to "fundamental disequilibrium." That sounds a very excellent safeguard but it is evidently dependent on who decides what is fundamental disequilibrium. Everything depends on whether the country that wishes to depreciate can persuade the managers of the Fund that they are entitled to depreciate. I suggest we make it perfectly clear that so far as this country and the sterling area is concerned fundamental disequilibrium means when our prices start to fall. The idea must be made clear, because we shall have to depreciate if we are to throw our weight and the weight of the sterling area against world deflation. We shall have to depreciate just at that time when the United States is feeling the pinch, when its markets are contracting, and when it and other countries which are experiencing contracting markets will fight bitterly against any depreciation of sterling. It is no use going into any international currency agreement unless we make our position perfectly clear beforehand, because once trouble starts it will be far too late for us to announce a policy of depreciation.
There will always be a dispute as to whether the conditions have been fulfilled. What we have to make clear, before we can enter into any agreement, is that for this country, and I hope for the sterling area as a whole, the fundamental stability is not the stability of exchange rates, but the stability of prices. Then, I hope that, powerful as the United States is industrially, immensely important as is its share in the world economic organisation, if we can succeed in developing a technique of stability inside the sterling area, we shall have something not hostile to, or aimed against, the United States, but something which will act as a counter-

2001
balance to the instability which is a characteristic of the United States, and which will help the United States in helping the world.
Mr. Loftus: Mr. Speaker decided not to call my Amendment, and I would say, with all respect, that I welcome that decision, as the Amendment would undoubtedly have narrowed the discussion. Before dealing with the White Paper, I would like to speak about something on which I think all Members are unanimous. We are agreed that the proposals in the White Paper are a very great improvement upon the original White-Morgenthau proposals. But that is not very high commendation, because those White-Morgenthau proposals would have chastised us with scorpions where the old Gold Standard chastised us with whips. My hon. Friend the Member for Chesterfield (Mr. Benson) said that the great thing which we must have was stability of prices. He placed that first, before stability of exchange rates. In the rest of my speech I propose to deal entirely with the contents of the White Paper. It emphasises, on page 5, that the desirable aim to be generally accepted by all Members is the free convertibility of its currency. That means that all the currencies must be freely convertible at a fixed exchange rate, subject to certain safeguards, with which I will deal later. Let hon. Members consider what that means. I will quote the statement of the professor of economics at Sydney University:
"The maintenance of a fixed exchange rate on London (or New York) involves actions similar to that which the Central Banks must adopt to protect the Gold Standard."
That is by Professor Mills, of Sydney University. Let us cast our minds back to those terrible years 1929–31, when we had millions of people out of employment here, when prices were going down and down, and firms were going into bankruptcy. The cause was our endeavour to keep on parity with the United States dollar. We deflated and deflated, and deflated, in our attempt to do so. That attempt to keep on parity involved, as it always must do, first, that the Government lost control of the internal price level and of interest rates, and industry was forced to reduce costs, and, then, that employers had the terrible alternative of cutting down wages and discharging men or of going into bankruptcy. That
2002
was due entirely to trying to keep on parity of fixed exchanges with the United States dollar. Are we going through that experience again? We had a slight touch of deflation in this country in 1937, because in 1936 we made a Tripartite Agreement between the franc, the dollar and the pound; and when America unwisely deflated for six months in 1936–37 we had also to deflate here.
I may be told that we have got safeguards. The first safeguard is that we can devalue by 10 per cent., after consulting the Fund but without the consent of the Fund. Let us see what that is worth. Look back to what happened in 1931. Let hon. Members assume that this scheme was in working order in 1931. In that desperate crisis one could have devalued under this scheme only by in per cent. without the consent of the Fund. Would that have been enough? We did actually devalue by 25 to 30 per cent. on our own responsibility, without asking the consent of anyone; and with what result? Immediately employment rose; immediately home trade rose; immediately export trade rose. But under this scheme, if it had been in operation, we could not have done so. My hon. Friend the Member for East Birkenhead (Mr. G. White), with reference to my Amendment, used the phrase, "prosperity is one and indivisible," having previously remarked that he was not going to use slogans. In 1930 depression, depression and misery and unemployment were one and indivisible, and it was only when we divided the sterling group from the dollar area that we broke the encircling strangulation and depression in this country. Surely that means that the White Paper scheme is really a more rigid form of the Gold Standard than we had in 1925, because in 1931, under the so-called Gold Standard of 1925, we devalued by 25 to 30 per cent. without seeking the consent of anyone.
Lieut.-Colonel Elliot: Surely we then departed from the 1925 scheme entirely. It is not fair to say that we devalued under the Gold Standard Act, 1925. It was not done on the Gold Standard; it was done by getting off the Gold Standard.
Mr. Loftus: I entirely agree. Apparently, I did not make myself clear. Take the second safeguard. Under Clause IV,

2003
Sub-section (3), we can devalue by more than 10 per cent. if we get the consent of the Fund and if, in the words of the White Paper,
"It is essential to correct a fundamental dis-equilibrium."
Can any hon. Gentleman explain what that vague phrase means? Surely it could have been better worded. I suggest it should read "If it is essential to correct a continuing adverse balance of trade"—I think that would be an uncertain safeguard. Then the third safeguard is that we can leave the Fund without notice. Does anyone believe that that is a real safeguard?
Mr. Stokes: No.
Mr. Loftus: Albania could; Guatemala could. Could we possibly do so without the most grave political repercussions?
"Facilis des census Averno est;
Sed revocare gradum, superasque evadere ad auras,
Hoc opus, hic labor est."
That is from Virgil's "Æneid," Book Six. It may be roughly translated:
"It is easy enough to go down the road to hell, but to retrace one's steps—there is the supreme difficulty."
I want to turn to the question of exchange control, because I believe that, without rigid exchange control, we cannot control the outflow of capital, and, if we cannot control that, we cannot control the internal price level or the external trade of this country. An international standard, with uncontrolled exchange, is not compatible with full national self-government, either in industrial or social policy. One newspaper has criticised my Amendment as being economic nationalism. I would defend myself against that charge in the words of a very prominent economist as follows: "Let finance be primarily national." The author of those words—the name on the cover of the book—is Maynard Keynes. Let me also quote this from the "Economist" in 1938:
"The supreme object of economic policy must be to maintain its"—
that is the home market's—
"purchasing power."
I think that is a defence of the attitude I take up on this matter. To continue on the subject of exchange restrictions, Clause 5 (1) provides that a member
2004
"may not use the Fund's resources to meet a large or sustained outflow of capital … but this provision is not intended to prevent the use of the Fund's resources for capital transactions of a reasonable amount required for the expansion of exports or in the ordinary course of trade, banking or other business."
I would like to know what the words "other business" mean. Does it allow the speculation by British subjects in the New York Stock Exchange? If we do not get cast-iron exchange restriction, capital will find its way abroad from this country. In 1939, at the beginning of the war, we tried only restricting capital movement overseas, and we lost any amount of badly needed dollars. It was not until 1940, when we had restrictions over commercial transactions as a whole, that we stopped the outflow of capital from this country. If there is this outflow of capital for speculation on Wall Street, what would happen? There must be in this country, a tendency towards rising interest rates. There must be pressure on the sterling exchange. Then I think we come to the point of having to request the further devaluation of sterling. If we are not allowed to do this, we shall have to indulge in deflationary measures to protect sterling.
Viscount Hinchingbrooke: Surely, before we came to that, we should have reimposed an embargo on speculation in Wall Street?
Mr. Loftus: I will come to that in one moment. First, I would like to ask the Chancellor certain questions about Clause V, which I think would clearly be of interest to the public generally if they could be answered. Would a member State have the right to exercise control over the transfer of capital funds abroad for any of the three following purposes? (1) Exchange speculation. Are we going to allow that? [HON. MEMBERS: "No."] (2) Obtaining higher interest rates in foreign markets than could be got in the home market. If you allow that, you must force up interest rates at home. (3) Exporting private wealth for political means. This was done in many countries in the past. There was the flight of the franc, and there was the flight of the pound to New York before this war. But there is another question which I must ask the Chancellor and which I think is yet more important. Would a member State have the right to exercise control over foreign investments within its own borders? Let us consider what happens

2005
under Clause 6, when the dollar is declared a scarce currency and advice is given as to the course to be followed. We assume that the managers of the Fund are all wise impartial people—a large assumption. If a currency is scarce, there has to be rationing; as the right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot) said, there would be almost an economic blockade of America. But America is not going to submit to that. Obviously, the answer of America will be, "I must provide my customers with purchasing power." It will not have free admittance of goods so that we can obtain dollars thereby, but, of a country like this, a good customer, it will say, I must somehow provide them with purchasing power—with dollars." It can do so by lending and investing here. As my hon. Friend the Member for Seaham (Mr. Shinwell) said, by investing in our British fixed assets, our industrial securities and so on, it may purchase a large proportion of our assets. Indeed, this country may, in the course of time, suffer as Ireland did from all the economic evils consequent upon absentee landlords.
Lieut.-Colonel Elliot: A very interesting point, but what happens if the absentee landlord refuses to withdraw any of his rent?
Mr. Loftus: I did not gather the right hon. and gallant Member's point.
Lieut.-Colonel Elliot: The hon. Member says the arrangement is to pour money in here and never to take any of it out. Surely, here is the danger of the absentee landlord. This is suggesting a new type of landlord who never admits any money into the country to equal the interest which he has taken out. I would like to study very closely whether that is going to be a disadvantage.
Mr. Loftus: The technique of the large scale creditor nation in the 19th century is well known. He refuses to take interest in goods, or only takes part of the interest in goods, and he forces the unfortunate debtor to get more and more into debt. Mr. Emil Davies, who is a well known authority, has said—I think I can quote the exact phrase:
"By and large the debtor nations pay interest on their loans in so far as creditors keep on lending them the money to do so.'
Lieut.-Colonel Elliot: That is the very reason why my hon. Friend and myself
2006
considered that certain aspects of foreign countries are not so advantageous to the lending of money as are supposed to be. If I lend free of interest I do not consider that I am lending money to people but that I am giving money to people. Whether that is good or bad is a thing that I would like to consider.
Mr. Loftus: My right hon. and gallant Friend said "not as advantageous to the lending country." Fifteen years ago in newspapers and in my published books, I was advocating that to the best of my ability.
Lieut.-Colonel Elliot: Exactly, and I say we are in agreement up to that point, and I do not understand why my hon. Friend has gone back.
Mr. Loftus: After that interruption I resume my examination of the White Paper and will turn to Clause IX (2). The member country
"is not to allow exchange transactions in its markets in currencies of other members outside the prescribed range based on agreed parities."
I would like to ask my right hon. Friend the Chancellor of the Exchequer what that means. Does it not mean that if sterling depreciates on the foreign exchange market in New York under this Clause, there is an obligation on the American authorities to support it by buying sterling and thereby American authorities will accumulate considerable sterling balances? In Clause III (5) we come across a sentence of extraordinary obscurity:
"So long as a member country is entitled to buy another member's currency from the Fund in exchange for its own currency, it shall be prepared to buy its own currency from that member with that member's currency."
I cannot believe that the author of that charmingly lucid book "The Economic Consequences of the Peace Treaty" wrote that sentence. What, again, does that mean? I take it to mean that if sterling depreciates in New York the United States authorities acquire sterling balances. If for instance it tends to depreciate through British speculation on the Stock Exchange in New York the American authorities support it and accumulate sterling balances. I take it under this Clause that the British authorities are under an obligation to redeem these sterling balances with gold or with dollars from the Fund. We have to provide dollars at official exchange rates not only for genuine commercial transactions but for the outflow of capital due

2007
to British speculation on the Stock Exchange in New York. That is as I read it.
I know that many other hon. Members are desirous of speaking and I will draw my remarks to an end. My view as to the monetary policy which we should adopt was expressed some ten years ago in the Parliament of the Commonwealth of Australia by the then Commonwealth Treasurer in introducing the Budget of 1933 in these words: I would only alter one phrase, and where he uses the words "the United Kingdom" I would use the words "New York."
"Whatever the United Kingdom may decide to do in this respect, it is important that we should retain our own right to fix our monetary unit at a point which is consistent with our own price level at the appropriate time."
I agree with the remarks made by various hon. Members about the necessity for collaboration after the war with the United States of America. I believe that in that collaboration lies a large part of the hopes of mankind. I would sacrifice much, I would sacrifice almost anything, to secure that arrangement. The one thing I would not sacrifice is control by the British Government of the volume of purchasing power in the hands of our people. The one thing I would not sacrifice is our freedom in external trade, especially with our own Dominions. The world is weary of the old financial system. The primary producers of the world to-day are nervous of going back again to the terrible times of deflation when the value of their produce was cut down by one-half in a couple of years. The industrial producers are nervous again of deflation, of the ruination of their customers overseas and of unemployment. The whole world to-day is waiting for a lead from this country for a saner and healthier economic and monetary system than we have had hithertofore—a system which will be based on the fact that the exporting country is paid in the currency of the importer and must either directly or multi-laterally take the goods of the importing country in exchange for its exports. The world does not want to go back to the 19th century or between-the-wars systems when external trade, instead of being a healthy, mutually advantageous interchange of goods became a fierce struggle for power, a struggle for large favourable balances, for getting
2008
debtor nations deeper and deeper into debt. That is what we do not want.
The world looks to us for a lead and let us make no mistake. If these plans are adopted, if there are fatal essential defects in the plans which involve going back to the old methods of slump and boom, and of periodic deflation to maintain fixed exchanges, then indeed we may abandon all hopes we now hold of building up a better social life in this country and of establishing peace among all mankind.
Mr. G. Strauss: All of us will have been moved by the speech of the hon. Member for Lowestoft (Mr. Loftus) and I personally agree very much with what he said. I think that he would say, as have all other Members who have spoken, that it is desirable that the negotiations among the experts should continue in the hope that something better will emerge than the White Paper which we have before us to-day. Certainly we can all be free to vote with a clear conscience for this Motion, particularly since we have been told it commits us to nothing at all. I wish to state my view of the White Paper. I believe that if it is carried out without serious and important Amendments and qualifications, it will be disastrous to world trade, to the prosperity of this country and to Anglo-American relationship. It is highly desirable that we should have the utmost co-operation in economic affairs with the United States. That is one thing. It is quite a different thing to bind ourselves to the United States with chains that are likely to become burdensome and possibly intolerable. If we do that, and our shackles become too heavy to be borne by one party or the other, the net result is likely to be not an increase of goodwill between the two countries but an increase of ill-will. Therefore, we have to be very careful indeed about any agreement which binds our affairs with those of the United States for the sake of Anglo-American relationships.
My objections to the proposals in the White Paper concern themselves not so much with the machinery but with the three objectives set out on Page 6, which I think will be highly undesirable in the world that will emerge after the war and for a very long time after, not just during a short transitional period. Those objectives are: to promote exchange stability; to bring about the establish-

2009
ment of multilateral payment arrangements; and the elimination of foreign exchange restrictions. I want to say a word or two about all three, but first I would like to draw attention to this fact, that all three of those objectives which we are told now are so desirable were, in fact, in existence in 1929 and did not prevent the major slump of that year; in fact, many of them facilitated the slump and made it very much worse.
A word, first, about exchange stability. In the slump of 1929 imports into the United States fell by about 30 per cent. Later, during the course of the slump, they fell by 70 per cent. and, because the rest of the world was tied to America by exchange stability, the imports into the rest of the world fell by 57 per cent., nearly as much as in the United States. That situation became quite intolerable. Various countries went off the Gold Standard, there was much greater freedom of foreign exchange, and consequently, when the second slump developed in the United States in 1937, and the imports into that country fell by 36.4 per cent., we found that the rest of the world was very little affected. Indeed the import of goods into the rest of the world only fell by 10 per cent. It is possible, therefore, if we do not have exchange stability, to cushion ourselves very considerably from depressions which happen elsewhere in the world.
I do not agree at all with the statement of the hon. Member for East Birkenhead (Mr. G. White) that prosperity is indivisible. We find that is not true at all. Russia, for example, was completely cushioned off from the rest of the world and one found that industrial developments in one part of the world in the way of booms and slumps did not affect Russia at all. It is quite possible for us in this country to cushion ourselves very considerably from industrial slumps and depressions in other parts of the world, and particularly in the United States, if we are not shackled by exchange rates. I know perfectly well that the White Paper suggests that not only have we this 10 per cent. latitude but, under certain circumstances, we have escape clauses. I do not want to repeat arguments used by other hon. Members because I have not much time; I only want to say that I agree completely with the reading given by them that those escape clauses are, in fact, quite
2010
useless, and that once we subscribe our name to this agreement we are bound within a 10 per cent. limit to the exchange rates originally laid down. That would he all right if we could be confident that slumps and chaotic economic conditions which have occurred in the United States in the past will not occur again, but we have no reason to believe that. On the contrary, we have every reason to fear that they will happen again.
At the moment, in the United States all ideas of national control are taboo. The New Deal is exceedingly unpopular. Free enterprise is the cry. Free enterprise has been accepted by all parties in the United States, and if free enterprise means anything, as experience has shown us, it means freedom to slide freely into slumps and financial crises, restrictions and economic chaos. If one looks at this question dispassionately it would appear there is every probability that during the next 10 or 15 years there will be these financial dislocations in the United States. I cannot see the sense of this country shackling itself to those disturbances. It is all very well to say that it would be a good thing for all the world to walk in step in economic matters. Of course it would; but is it such fun if we have to walk in step up the peaks of the booms and down the valleys of the slumps? It would be much better, if it were possible—and it is possible—for this and other countries to walk on level ground and not be shackled to countries where depressions are likely to occur.
The second objective which I think would have very serious effects on postwar international reconstruction is the establishment of multilateral payment facilities, and the implication which I think every hon. Member has read into it is that this means that, in point of fact, we are debarred from entering into reciprocal agreements as a nation with other nations. Comments have been made about the effect of such restrictions on Empire agreements, the sterling area, and so on. I want to add one point. It may be very desirable, if we want to see the rehabilitation of Europe, for this and maybe other countries to make reciprocal agreements with certain European countries—
Mr. Boothby: Is the hon. Member talking about currency agreements or trade

2011
agreements? There is a difference between the two and he refers to reciprocal agreements.
Mr. Strauss: I am referring to paragraph 5 which says:
"To assist the establishment of multilateral payments facilities on current transactions among member countries …"
Mr. Boothby: That is currency.
Mr. Strauss: Yes. I read that in the same way as other hon. Members who have spoken. I take it to mean that it will debar us from entering into bilateral financial agreements with other countries. It will be impossible for this country as a nation to enter into a bilateral agreement with another nation in Europe designed to aid the rehabilitation of that country.
The last point is the elimination of foreign exchange restrictions. I do not see how it is possible for us in this country to plan our affairs to restore prosperity here unless we have exchange restriction. This White Paper says very clearly and definitely that it is to be the object of all the nations who agree to it to get rid of their foreign exchange restrictions as quickly as possible. How can we plan our economy, how can we plan prosperity in this country, unless we have effective control of our own resources in this country and of foreign trade—internal and external trade? It seems to me quite impossible. If there are to be no exchange restrictions, as suggested in the White Paper, then any individual in this country will be free to buy goods abroad—maybe luxury goods—and import them into this country; or use the available currency of this country for the purchase of goods from abroad, when it should be used in the national interest for some national purpose under national control.
The Chancellor of the Exchequer (Sir John Anderson): Is not the hon. Member omitting some words:
"exchange restrictions which hamper the growth of world trade."
Mr. Strauss: That is perfectly true, but if the Chancellor will look at the White Paper, I think it is on page 10, he will see that it is to be the objective of the countries which subscribe to this Agreement to eliminate their present exchange controls I maintain that the exchange
2012
controls which we have had in operation during the war in this country, and which have been essential for the purposes of war, will be equally essential for the purposes of peace. If we are to relax those exchange controls it will be quite impossible for us to plan our resources and develop our trade.
Sir Alfred Beit: Surely the controls will be much less necessary when we are able to export again. They are imposed now on account of our lack of exports. Is not that so?
Mr. Strauss: I think control is equally desirable under those circumstances. I believe that effective exchange control, under the management of the Government, operated for the purposes of the national benefit, will be essential. In countries with completely free enterprise economic conditions minimum exchange restrictions throughout the world may be desirable; but in this country, if we are to control our affairs at all, we must have efficient and watertight exchange control in the hands of the Government.
To sum up, I believe that the objectives of this White Paper would considerably hamper the re-establishment of international trade after the war, would put this country into very serious difficulties indeed if a trade depression developed in the United States at any time—as I fear it is likely to do—and would hamper us in controlling our own economic destiny by carefully devised plans under the aegis of the Government. Without such control of our own resources and affairs I do not believe it is possible to get prosperity for our people and, therefore, I think the House should say to the Chancellor that while we want him to carry on negotiations in the hope of getting something very much better, there are fundamental defects in this White Paper, serious disadvantages, which make it, as it stands, wholly unacceptable to this country.
Mr. Spearman: I would like to refer to the speech made by the hon. Member for Seaham (Mr. Shinwell). I never miss one of his speeches, if I can help it; I always admire them, but I generally disagree with them and to-day was no exception. The hon. Member said he thought we were putting the cart before the horse, but I entirely disagree. I would, however, admit that it is rather a small horse and that we may have to

2013
bring other horses along to help before we can get the cart very far. But this is the first step towards creating the framework in which we can develop world trade. This plan boils down to an attempt to show how we shall be able to buy in one market and sell in another. Our requirements come from all over the world, and unless we are to lower our standard of living a lot, I believe that we must sell wherever we can, in order to be able to get those requirements. The hon. Member for Seaham also said, I think, that we had a very valuable weapon in our home market. I suggest that after the war, when we are no longer a creditor nation, when we have lost a large amount of our foreign and Dominion investments, when we have nothing with which to pay except our own manufactured goods, it may be a good deal more difficult for us to buy than to sell. Therefore, if we are to get the imports which are essential to us, we have to sell wherever we can and apply the earnings we get, to pay for what we buy wherever we buy.
If it were possible for us to supply ourselves entirely within the British Empire, then our course would be easier, but that is not so. We have to face the fact that the Empire is not self-contained. The year before the war, our exports to the British Empire were just under £250,000,000; our exports to foreign countries were just under £300,000,000. If the British Empire took nothing at all from any foreign country and took nothing at all from any other member of the British Empire except ourselves, it still, on its pre-war position, could not take enough from this country to take all the exports we have to sell.
Viscount Hinchingbrooke: My hon. Friend said that the British Empire was not self-contained and then went on to give figures of trade before the war. Does he mean that there is not a whole range of raw materials, geologically, within the Empire?
Mr. Spearman: I will not pursue that point now, because I have not the time, but we cannot expect the Empire to refuse all foreign goods. For instance, before the war Canada sold more goods to America than she did to this country. We have, roughly, three possible alternatives. The first is reversion to gold or some rigid standard, but I hope and believe that we are all so convinced that that would be a disaster than one need
2014
not waste time in discussing it further. The second is a plan something on the lines of the plan we are now discussing and the third is bilateral agreements.
I would like to say something about the plan now under discussion. It seems to me that what it really does is to afford a breathing space; it does not aim at completely stable prices, but provides the means of an orderly adjustment for those countries whose costs of production have got out of line with each other. It provides a sort of cushion. We are not irrevocably committed to anything. It is rather like a rule of the road. If one offends against that rule, he is not summoned but, it is made clear, that if everybody adheres to it, we shall all get on much better. The second point I should like to make concerns the pressure that it brings to bear on the creditor country. A creditor country which hoards, as has so often happened in the past, is just as much to blame for international dislocation as an improvident debtor. This scheme provides mechanism by which a nation enters it knowing well in advance that if she does not spend in imports all the proceeds of her exports, or invest her surplus outside her country, there will be discrimination against her and it will be entirely her responsibility that a barrier will be put up against her. That seems to me to be a very great advantage.
As far as I can see it, Clause X is a complete safeguard to us during the transition period. Our position is going to be a very weak one; our export trade has of necessity to come down to a very low level. When Lease-Lend ends, and we have not yet built up our export trade, we shall be in a very difficult position indeed and shall depend very much on the help and co-operation of the United States. I feel that when one remembers that the reason why we are weak is because as the Chancellor said in his Budget speech "We are in this war with all we have got," we can rely upon great consideration and help from other countries, but I think we can only rely upon that, provided we act in good faith.
I hope the Chancellor will give us two assurances. The first is that, if this plan is adopted, full use is made of Clause X and we do not precipitate ourselves into these arrangements too early, but, equally, that they are an objective for

2015
which we strive all we can and from which we do not deviate at all. Failing a plan of this sort, we must fall back upon bi-lateral agreements, so much beloved by our Central European economic experts, who have been such skilful propagandists for them. Their misplaced ingenuity rather reminds me of a Heath Robinson drawing. There are many objections to bi-lateral agreements but I want to refer only to two. First, it seems to me that to set up a system of regional arrangements which will cause antagonism and conflict is madness after our experience in the past. Surely it must be our job to try to make the cake of world trade as large as we possibly can, rather than try to snatch temporary security by seizing a piece of it. The second objection to bi-lateral agreements is that they put an immense responsibility upon the Government, which, I think, is quite unsuitable in a democratic country. I do not believe that even our Governments have shown themselves so infallible in their judgment and so absolutely impervious to pressure from those who shout loudest, that they are capable of undertaking those responsibilities. If we adopted them we should take a long step towards totalitarianism.
There has been a good deal of criticism of this White Paper. It is easy enough to see the difficulties in a complicated plan like this, but what are the alternatives? I should like to make two suggestions to the critics. First, may it not be that, if we do not take this, we shall suffer for it very much indeed? Secondly, what is the price that we are going to pay? I suggest that if we adopt this plan and it fails, as indeed it may do, we shall not be much worse off than if we had never tried it. To me it is rather like, "Heads we win and tails we do not lose." I warmly support the plan. I believe it provides an instrument of international government in economic affairs, which may save us, in the future from all that appalling waste and dissipation of wealth from which we suffered and on which the Nazi regime throve in the interwar period.
Mr. Boothby: The speech to which we have just listened is the first which has given a whole-hearted welcome to the proposals now before us. I think
2016
my hon. Friend is the authentic voice of the City; but I suggest that he is also an echo from the past. I do not think we are likely to solve the problems of the twentieth century by applying the economic doctrines of the nineteenth, to which he seems so anxious to return. Apart from his speech, the scheme has been pretty roughly handled in this Debate. I think it unfortunate that the whole problem of post-war international trade and economic organisation should have been dealt with primarily, and in the first instance, from the standpoint of currency.
I have always held the view that other things were much more important, and that it is because we have started off on the wrong foot that we find ourselves in something of a mess to-day. I should have thought the 1933 World Economic Conference would have been a warning to us. We tried to tackle the international economic problem from the standpoint of currency then, and a great fiasco it was. However, the professional economists were bent on this currency discussion. They would have it; and, now that they see the road that they are being invited to tread, some of them are getting rather queasy about where we are going to get to next. Even professional economists have some unhappy memories; of 1925, for example, when they put us back on an international Gold Standard at the pre-war parity of exchange. With one notable exception—Lord Keynes—they were all in it; and the Treasury and the Bank of England were in it up to the neck. The results of that experiment were simple, but hardly encouraging—the worst industrial upheaval we have ever had, the worst unemployment we have ever had, a ruined agriculture, a crippled export trade, and the real burden of our National Debt doubled in the course of five years—not a bad effort for one executive act. I can imagine the most ardent professional economist being somewhat apprehensive about committing us to the same sort of thing again.
Then came the New York stock market crash of 1929. It is worth while running over these things, because the warnings of the past should be a guide to the future. Tied to Wall Street, we were towed under by Wall Street. It was American foreign lending upon which the whole flimsy structure of post-war laissez faire capitalism, so dear to the heart of my hon. Friend, was erected.
Mr. Spearman: The most effective opponent of going back to the Gold Standard is not completely dissociated from these proposals. Is the hon. Member suggesting that he has changed his mind?
Mr. Boothby: I may say a few words about Lord Keynes later if my hon. Friend will allow me now to develop my argument. It was, as I say, American foreign lending on which the whole structure of our economic system was founded after the last war. It was a flimsy structure; and when American lending stopped, it collapsed. Between 1929 and 1931 the supply of dollars for international use fell by 5,000,000,000, or 68 per cent. Imagine the effect of this on the world economy as a whole. We were all dragged to the depths of an economic depression without parallel in history. One of the results of that was Hitler, who climbed to power on the backs of 6,000,000 German unemployed. What we have to remember today, in considering this scheme, is that that was an American generated disaster, not a British disaster; and that we had deliberately deprived ourselves in 1925 of the power to protect ourselves from its dire consequences. I think the House is almost unanimous that, whatever else is allowed to happen, that must never be allowed to happen again.
There is really a fundamental issue involved in the discussion to-day. It is the issue between those who think of wealth in terms of goods and services, and those who think of it in terms of money. That was brought home to me strongly by the speech of my hon. Friend the Member for Scarborough (Mr. Spearman), who, when talking about the Empire not being self-contained, dealt with the question entirely in terms of the money-trade of the Empire before the war. He never thought of how much copper or lead or wheat there was in the Empire; and what we should do about it. He was thinking solely in terms of millions of pounds of exports and imports. That represents a fundamental divergence of view. I am in the former category; I am a goods man. I do not believe that money has, or should have, a separate and independent value of its own. I do not believe that money should be the pivot around which the whole economy, national and international, should revolve. It is no more, and no
2018
less, than a convenient medium for exchanging goods and services, and measuring their value. I further believe that there should be enough of it to facilitate the flow of production, exchange and consumption of goods, at a level sufficient to absorb the available factors of production throughout the world. Money is not petrol; it is oil; but without oil the machine is apt to seize up. I am on record in this matter, because in a Debate on 9th May, 1932, I said:
"The machinery has seized owing to the lack of lubricating oil; and the first thing the Government ought to do, by hook or by crook, is to oil the machine; and that can only be done by expanding credit. I would inflate until I had restored domestic prices to the level of 1928. Can the Chancellor deny that this is feasible? Then I would regulate credit to keep the value of sterling stable in terms not of foreign exchanges but of commodities."—[OFFICIAL REPORT, 9th May, 1932; col. 1638, Vol. 265.]
In my view, international currency stabilisation can be achieved only on the basis of a durable peace, an expansionist policy deliberately pursued by the participating countries, a sound commercial policy, and a productive international investment policy. We are not at the moment in sight of any one of these things. I therefore think that these currency discussions are premature, and that in embarking on them we have put the cart, not before one horse, but before at least four extremely important horses. What I think we should have been talking about in Washington during all these months are, first, a Red Cross policy for assistance to the suffering peoples off Europe when the war is over; and, second, the recommendations of the Hot Springs Conference. In other words, coming back to my fundamental argument about goods versus money, we should have been talking about the essentials of human existence—food, clothing and shelter—and not about money, even when it is gold. What we should be talking about in London to-day is inter-Imperial trade, and the reconstitution of the sterling area.
That being said, it would, obviously, be an enormous advantage if competitive exchange depreciation as between nations could be avoided after the war; and if some arrangement could be made whereby the money earned by selling goods to one country could be spent in purchasing the products of another. We cannot have the chaos of fluctuating exchanges, accom-

2019
panied by world-wide speculation in currencies, when the war is over. And we certainly do not want a revival of what I would call "Schachtism," involving currency manipulation of every sort or kind. If this is to be avoided exchange rates will have to be fixed in any event, and maintained by Government-operated controls. It was done after 1931, and it will in any case have to be done again.
What we must preserve at all costs—and this, I think, has been brought out clearly in the Debate—is, first, our right to pursue a policy of internal expansion designed to achieve full employment; second, our right to conclude any trade agreements, including bilateral agreements and bulk purchase, that we wish. Upon that point, more than any other, the House requires some assurance from the Chancellor of the Exchequer. And thirdly, we must retain control over our domestic rate of interest. My hon. Friend the Member for Seaham (Mr. Shinwell), in his interesting speech, which, I think, met the approval of a large number of Members who had the pleasure of listening to it, referred to some of the ideals of the Socialist Party. If the Tory Party is to play the part after the war which I think it should, it will have to base its policy on three things—full employment, a prosperous agriculture, and Imperial development. These are the three fundamental planks on which, in the long run, the Tory Party will stand or fall. If it falls down on any one of those planks, it will be done. We have therefore to watch these proposals very carefully, and see that nothing is done that might prevent us carrying out a policy designed to achieve these three objectives.
I do not think that the pound can ever be rigidly linked with the dollar. If once again we fix the external value of the pound beyond our own control at a level which bears no relation to our wage and social policies, we can say "Goodbye" for ever, or until there is another smashup, to any prospect of full employment, of social security, of a prosperous agriculture, or of Imperial development. This policy also involves the control of imports, and of the export of capital. If we barter away the principle of Imperial Preference in pursuit of what I regard as the obsolete doctrines of Free Tade and laissez faire, we shall cease to be a world Power, and in the long run we shall cease to be even a
2020
great Power. Moreover, if we were to do that, I think we should endanger peace, for I do not think the world would long tolerate the overwhelming concentrations of industrial wealth, and therefore of military power, which uncontrolled, multilateral trade would inevitably bring about. To believe that we can revert to uncontrolled multilateral trade is a dangerous illusion. Modern productive capacity imposes its own limitations, and unless it is wisely directed it can produce chaos.
On the last point, the control of interest rates in this country, and the necessity of cheap money, upon which a policy of social reconstruction largely depends, I will content myself with quoting a sentence from a speech by Lord Keynes:
"Unless the aggregate of the new investments which individuals are free to make over-seas is kept within the amount which our favourable trade balance is capable of looking after, we lose control over the domestic rate of interest."
That means quite simply that we must maintain control over the export of capital from this country.
How does this scheme emerge from these tests? I think it right to be fair, and to say not as badly as might have been feared. Do not let us over-estimate the proposals that are now before us. They are not so very far-reaching. They merely provide a liquid fund for the conduct of international trade; but they carry certain very dangerous implications, against which we ought to be on our guard.
They admit—and it is a substantial admission to get from the United States—the need for flexible exchange rates, and they positively encourage control over the export of capital. They do not explicitly prohibit regional, or even bilateral or bulk-purchase trade agreements, although the bias is naturally in favour of multilateral trade. I would ask the Financial Secretary to the Treasury to bring to the notice of the Chancellor of the Exchequer a point here which I believe is of vital importance. What exactly is the implication of these proposals upon our trade policy in the future? To what extent will they limit us in coming to direct bilateral trade agreements with other countries, particularly in the British Empire, and in the sterling area? To what extent will they prevent us from discriminating, so far as trade is concerned? Because we

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must discrminate, if we are to survive. This scheme further accepts the principle that discrimination should be applied against surplus as well as against deficit countries where disequilibrium exists. I would only say that it is important to have got the United States to come along as far as that. It also takes account of domestic, social or political policies.
There are a large number of escape clauses. Personally, I do not find this fact so tremendously encouraging, because you escape from something you do not like. If you do not get into it in the first instance, the necessity for escape need not arise. It seems to me that there must have been a lot of apprehension lurking at the back of the minds of these great experts in Washington when they decided on these innumerable escape clauses. They tell us how we may get out of these engagements altogether if the thin; really goes cock-eyed. Presumably it is to reassure people that they are not being finally trapped, and that they can escape from this structure that is being erected. That gives me rather an uneasy feeling.
The scheme says that the growth of international trade contributes to a high level of employment. I do not think that is at all true. Trade is simply the mutually advantageous exchange of goods, and it has nothing to do with employment, one way or the other. [HON. MEMBERS: "Oh!"] No, not particularly; and not so far as toe world is concerned. Trade does not necessarily lead to an all-over increase of employment; and although an export surplus may transfer unemployment from one country to another it does not necessarily increase the total volume of world employment. Development of backward countries is a different matter, but a mere increase in the exchange of goods between countries, although it may improve the standard of living and facilitate the international division of labour, does not necessarily involve an increase in all-over employment in the countries concerned.
Mr. Colegate: How can the standard of living be increased by the methods suggested by the hon. Member, as he admits, without increasing the general level of employment throughout the area?
Mr. Boothby: It varies in respect of different countries. Assume that there are
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two countries, A and B, which are on full employment. I say that an exchange of goods between those countries does nothing more than raise the standard of living in them. Suppose they are only half employed. Exchange of goods may increase the standard of living slightly by enabling them to purchase certain goods more cheaply; but it will not necessarily increase the volume of employment in these countries. If an export surplus is built up in one country against another it increases the volume of employment in the exporting country; but at the expense of the importing country.
Mr. Vernon Bartlett: Is it not a fact that, in the competition to export at all costs, you may increase unemployment at home as we did with our own agricultural industry?
Mr. Boothby: In some cases that is certainly so. I do not think that international trade is a panacea for unemployment—but I do not want to press the point unduly.
The scheme then contemplates a transitional period of only three years from the establishment of the Fund. When I read that I rubbed my eyes, and I asked myself what kind of a world those expert economists thought they were living in. To suggest that the transitional period, before the necessary adjustments have been made, will last only three years, is to my mind, to live at least in a fool's paradise. We shall be very lucky if we get through the major dislocations caused by this world war in 15 years, let alone three years. The suggestion is a preposterous one. The two methods by which it is proposed to maintain equilibrium under the scheme are the devaluation of weak, and the rationing of strong, currencies. For technical reasons I doubt the efficacy of all-round devaluation of the currencies of deficit countries, in slump conditions after the war. The conditions of 1931 were exceptional. With regard to the rationing of scarce currencies, it must be borne in mind that this applies only to the supplies available in the Fund. There will be quite a lot of dollar-surplus countries which will have no need to cut their imports.
The aim apparently is to force the United States to lend money when they have built up a surplus. But it really is an illusion to suppose that in international

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lending is to be found the ultimate solution for serious disequilibrium on current trading account. I do not think the answer to that problem is international lending, which is foxing the issue. The real answer is a balance of exports against imports. This suggestion is an attempt to escape that issue. Short or medium-term credits for the execution of particular projects or contracts are, in themselves, highly desirable; but I do not think it is desirable that, in the modern world, private interests in any one country should either seek, or obtain, a permanent controlling interest in the fixed assets of any other country. That is what long-term lending by private interests, if encouraged to too great an extent, will involve. I do not want to see the United States owning half the equities of this country.
Sir A. Beit: Does the hon. Member think that this country is to be criticised in this respect for what it did in the 19th century?
Mr. Boothby: Yes, and I think perfectly rightly and justifiably. The owners of Mexican and Brazilian tramways and all the rest of it are suffering at the present moment because of what we did then. When I think of the amount of money we lost in South America alone—[An HON. MEMBER: "Gained"]—they may have gained, but not us—I repeat that it is undesirable from every point of view that the fixed assets of one country should be owned by private persons in any other country; and I do not change my opinion.
Mr. Astor: In the Empire, too?
Mr. Boothby: Yes. I have never heard it maintained, and I do not think that the hon. Member would contemplate it with equanimity, that there should be a long-term lending policy on the part of the United States which would enable them to buy a very large part of the fixed assets, and equities of this country. I do not think it would be desirable, in the long run, for the United States; and, from our point of view, it might lead to very great international trouble in the long run. The development of backward deficit countries is an entirely different matter. In that case, loans will have to be made on long term to Governments. I regard an International Investment Board as an essential part of any international currency scheme
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that is to work. Long-term loans by an International Investment Board to the Governments of the countries concerned are quite a different matter.
I come finally to the question of gold. That has been referred to a great deal in the House to-day. I was reading the other day a speech by a right hon. Gentleman in this House on 21st April, 1932, in which he said:
"Is the progress of the human race in this age of almost terrifying expansion to be arbitrarily barred and regulated by fortuitous discoveries of gold mines here and there or by the extent to which we can persuade the existing cornerers and hoarders of gold to put their hoards again into the common stock? Are we to be told that human civilisation and society would have been impossible if gold had not happened to be an element in the composition of the globe? These are absurdities; but they are becoming dangerous and deadly absurdities. They have only to be asserted long enough, they have only to be left ungrapplied with long enough, to endanger the capitalist and credit system upon which the liberties and enjoyments and prosperity, in my belief, of the vast masses depend. I therefore point to this evil and to the search for the methods of remedying it as the first, the second and the third of all the problems which should command and rivet our thoughts." [OFFICIAL REPORT, 21st April, 1932; cols. 1662–1663, Vol. 264.]
Lieut.-Colonel Elliot: The hon Member will remember further that in that speech the right hon. Gentleman the present Prime Minister, whose eloquence we all admire, suggested as a remedy for all these very things co-operation between this country and America.
Mr. Boothby: I am not arguing about that. I am only quoting a speech made by the present Prime Minister with which I find myself in agreement. If a visitor from Mars visited this globe to-day he would think it a very peculiar place. First of all he would find a whole lot of us trying to blow each other up. But, as a subsidiary and very entertaining side-show, he would surely find it odd to see men in South Africa burrowing under the ground, bringing up gold, making it into little blocks, putting them on to trains, unloading them at the ports, putting them into ships, unloading them again, and burying them once more under ground in the vaults of Kentucky. Nobody seeing them, nobody using them—no use to anyone at all. The value of the gold mined in 1938 was equivalent to the total value of all the other metals which are of use to humanity in the whole

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world. [Interruption.] This plan does propose to go back to gold. It makes gold the basis of international credit.
I think it is too much to ask the United States to agree to the demonetisation of gold. If I owned £4,000,000,000 worth of gold I should be very reluctant to agree to its demonetisation. But if gold is to be he basis of international credit let there be enough of it to finance the production and trade of the world on an expanding basis. One of the main criticisms of this scheme is that, unlike the original Keynes scheme, it does not provide enough international money. I think that the price of gold should be fixed by the sterling countries high enough to ensure that the annual production is sufficient to take care of whatever export surplus the United States may wish to have. Then we can really get going, if they will take the gold at that price. If the price is raised high enough to look after their export surplus, that will have an expansionist effect on the trade of the world. The basic problem is not how to write up debt, but how to write it off with the least harm to humanity. I believe that the price of gold, if we are to make gold the basis of international credit, will be a matter of vital importance, and should be given very serious consideration. If the sterling countries have the power to fix the price of gold sufficiently high, we may be able to devise a scheme which will lead to an expansion of trade and commerce and the production of goods all over the world.
About the Fund itself we know very little. We have not been told what the quotas are to be. We do not know exactly about the voting power. We do not know what the price of gold is to be. There exists as yet no comprehensive scheme for the relief and rehabilitation of the countries which have been devastated by the war. There is no scheme for long-term international investment, which I believe to be essential to any international currency scheme. We have no assurance that the United States intend to pursue a policy of deliberate economic expansion. We do rot even know clearly what our own policy is to be. I honestly think that before we tell the United States how we think they ought to rebuild the world we should be able to tell Lord Astor how we think he ought to rebuild Plymouth. Suddenly to ask the House of Commons to approve some vast international scheme
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before we have evolved an internal economic policy for ourselves is asking us to bite off a bit more than we can chew.
Unless and until we know more about these vital questions it would be madness, in my view, to tie ourselves up in any hard and fast currency scheme. This Motion does nothing more than it says. There was a letter from Dr. Balogh in the "The Times" to-day which said that if the House passed this it would be committing itself to all kinds of things. I suggest that that is stuff and nonsense. What the House is doing is, subject to a lot of provisos, and many have been suggested, to say that the Government can go on talking. It would be the height of discourtesy to say to one of our Allies, to whom we owe so much, on the eve of great offensive operations, "No. We will stop talking altogether. We are not going to consider the question of international economic co-operation with you at all." If the United States will cooperate with us in pursuit of an internal policy of expansion, and an external policy of functional international organisation, the path to high general levels of income and world trade will be open; and we shall enjoy a prosperity that we have never known. If they will not do that, we shall have to make our own contribution to the solution of the world's economic problems; and we must retain the power to do so. That is what we ought to tell them explicitly.
The Chancellor will, I hope, make clear in his reply that we are committed to nothing more than further discussion; and that he will not come back with any cut-and-dried scheme and say "Take it or leave it. That has been accepted by us." I hope that any scheme that is worked out will be very different from the proposals in this White Paper; and that it will be submitted to this house for ratification before final approval. This Debate has made it perfectly plain that the House is not in a mood to accept these proposals out of hand; and that the Government cannot go ahead and fix things up on these terms. The solution of the modern world economic problem is to be found in the application of the same principle to the international as to the national field, namely, an increase of effective demand by making the means of payment generally available to purchase the abundance which modern science and machinery have placed at our disposal. Economic

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policy should be nothing more than the technical means of achieving political ends—the most important of which is full employment in a free society. The remedy for depression is expansion. That is what we must get home to the United States; because in that single sentence lies the key to future world prosperity.
Sir I. Albery: I want to ask the hon. Member if he remembers that he put his name to the Motion, part of which reads:
"… provides a suitable foundation for further international consultation. …'"
Could he say if he thought that any part of his speech would support that expression of opinion?
Mr. Pethiek-Lawrence: The House has listened to a most interesting Debate which has dealt pretty broadly with the most important subject under review, and each one of us can only contribute a certain viewpoint on this matter. I shall endeavour, in speaking at this stage, to put before the House certain general aspects to which I hope the Chancellor of the Exchequer will be able to direct his attention when he comes to reply. In view of the speech made by my hon. Friend the Member for East Aberdeen (Mr. Boothby) it might be worth while if I read the Motion to the House before I commence my speech:
"That this House considers that the Statement of Principles contained in Cmd. 6519 provides a suitable foundation for further international consultation with a view to improved monetary co-operation after the war."
The speeches that have been delivered have been, more or less according to the speaker, favourable to the actual scheme in the White Paper, but I think nearly everyone who has spoken—perhaps not my hon. Friend the Member for Seaham (Mr. Shinwell)—considers that this Motion should be carried, and I think the Chancellor of the Exchequer may take it that the Motion represents the general consensus of opinion of this House.
There are three considerations to which I think the House should devote itself in taking this matter under review. The first consists of the general principles by which the country should be guided in its approach to this problem. The second consideration is, What are the mechanical details of this scheme contained in the White Paper, which has been agreed, up
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to the expert level, between us and the United States primarily, and, to a certain extent, by a number of other nations? The third consideration is, How will the plan work out in practice if it is put into operation? So far as the general principles are concerned, I think the public are in a position to have views and to express them, and to have their views listened to. When I say "the public," I mean not only the public of this country, but, in fact, the public of the whole world, because they are intimately affected by any decision that may be reached. So far as the mechanical details of this scheme are concerned, I think the general public can hardly be expected to have formed any views at all, and Members of Parliament can reach conclusions themselves only if they have studied the White Paper very carefully and, possibly, if they are assisted by expert opinion. When we come to the third consideration, of how this scheme will work out if it is put into operation, I suggest that none of us here, with the possible exception of the Chancellor of the Exchequer—and I see that he shakes his head—and none of the experts, can feel at all sure how it is going to work out in practice. I think that hardly anyone except the historians of the future will be able to judge what it will be like.
I think we are all agreed about general principles. We want to see a healthy international trade promoted. We want, as my hon. Friend the Member for East Aberdeen said, an expansionist policy, and I think that the great majority of people recognise the need for co-operation. But this scheme is a banking and exchange question, and no scheme of banking can create international trade. It may help to foster it, but it cannot create it; and, in its broad sense, cannot even foster it. The business of a banking system is to provide channels through which a stabilised international trade can work. The promotion of the trade must rest with other people. The only thing that might happen is that the banking system might check and hinder its development. Not only does it not concern itself with international trade, but it does not even make the channel for the promotion of big capital development, because this scheme is concerned with what bankers call short-term credit, and not with long-term credit. The long-term credit for the promotion of capital de-

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velopment has to be provided by entirely different means. The means which are contemplated in this scheme are far too small: they will be far too quickly used up if they are diverted from their proper channels of providing short-term credit for carrying nations over temporary disequilibria into the realms of big-term lending, which are necessary for meeting the large disequilibria in payments between one country and another. No banking system can create expansion: the only thing that banking systems in the past have sometimes done is to check expansion. Therefore, we cannot look to this scheme for any positive proposals for creating an expansionist economy. We have to make quite sure that there are no proposals in the scheme which will have the disastrous effect of bringing expansion to an end, and substituting restriction.
When we come to the point about co-operation, we have to remember that co-operation necessarily involves certain risks. What those risks are in the case of this particular scheme I will mention presently. For the moment I want only to make this point: that, whatever may be the risks involved in co-operation, there are also very grave risks in non-co-operation; and if we are not to have co-operation, we may be driven to a form of non-co-operation which may be much more serious and which may land us in grave danger. The main risk of non-co-operation in this matter of international trade is that, instead of getting to multilateral trade we may go back to bilateral trade, and what really it would be, bilateral barter. I am against bilateral barter; and it would he a very dangerous thing if we were forced back into that position. Therefore, I come with a favourable mind to the question of cooperation, not in order that we may, as it were, give a bun to a bear of some other country with which we want to keep on good terms, but because I think we should get our quid pro quo in co-operation, and if we have to give something, we may get from our colleague nation something of value to us in return. In my opinion, those are considerations which will weigh with people in general terms.
When we come to the present scheme, we have to contrast it, in the first place, with the two schemes that were before us a year ago. There were then what were
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popularly known as the Keynes scheme and the White scheme. I have seen it stated in the Press—I am not sure that it has been said in this Debate—that this new scheme is, in some way, a compromise between the two. That is not my view. I regard this scheme as being essentially different from either of those two schemes. In some respects it does lie between them, but in some respects it lies outside both of them. In my view, it is a great advance on either, and I shall endeavour presently to show why.
The points that arise on the scheme itself are, first and foremost, the question of gold. I have been unorthodox, according to the view of the orthodox of years gone by, on the matter of gold. I took an adverse view about the return to gold—I think it was in 1925—when the present Prime Minister, as he afterwards admitted against his better judgment, brought us back on the gold system. I was against it then, and that has been my position, and I was rather intrigued when I went to a very distinguished dinner party somewhere, I think, in Park Lane, at which Sir Henry Strakosch, who will be known to many hon. Members as a very great financier, said:
"In gold we have trusted;
By gold we are busted."
I am bound to say that that colloquial phrase was not very far from the truth, and I was very much interested to hear from the hon. Member for Hastings (Mr. Hely-Hutchinson) that he was getting near to the view that, instead of having a Gold Standard, we should have what I call a "basket of goods standard" in its place, because that is a matter which many of us have thought about for a long time past. Therefore, the first question we have to ask ourselves with regard to this scheme—and it is a question which is asked by everyone, not only in this House, but all over the country and, I think, all over the world—is: Does this scheme bring us back, and bring the world back, on to a gold basis? I think it is rather difficult to answer "Yes" or "No" to that question. It certainly goes a long way to taking us back to a gold basis, but it does not go to anything like the extent of carrying us back to the old Gold Standard that used to reign in the days gone by. It does introduce gold into the picture, but the extent to which it reintroduces gold is one about which, I am bound to say, after reading the

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Paper three times, I do not feel too sure. Therefore, I say that it is one of the matters which has to be dealt with in any further conversation which, as suggested in this Motion, the Chancellor of the Exchequer may have in future.
It is not enough merely to consider whether we are going to be tied to gold. The question which is also exercising the minds of large numbers of people is: How far are we going to tie our economy to the economy of our great partner, the United States? It may well be that, in many ways, it would be a great advantage to have the two countries marching forward together. But, supposing that, in the United States, the history of the years that are to follow repeats the history of the years gone by, in the last half century? If we are, in any very specific sense, tied to the economy and the finance and monetary values of the United States, we may find ourselves forced into the same terrific fluctuations which they have had in the United States. There is actual fear that, in too rigidly binding ourselves to that country, we should involve ourselves in those fluctuations. What we have to consider is this. Supposing we do not enter into this Agreement, supposing we do not have any currency arrangements with the United States, shall we be able to escape the influence of these fluctuations? We have not been able to do so in the past, and the question arises whether these arrangements will make it more easy for us to isolate ourselves from the United States, or drag us more closely in. Another question is whether the Agreement will help to damp down these oscillations which are so dangerous to trade and commerce. I am inclined to think that some of the provisions of this scheme are so contrived as to damp down these oscillations. If that is so, the fact that we are united to the United States in some way, though it may make us a little more liable to their influence, may be an advantage to us in getting us a little more on a steady basis.
We have then to ask ourselves the further question: Are we becoming liable to an international dictatorship, as has been remarked by one speaker in the Debate? Not very much is said in the White Paper as to the nature of the management of this international Fund. We know that it is to be according to quotas, but there is no definite statement
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what the quotas will be. We do not know what proportion of votes will be held by the United States, by us, or by the different parts of the British Commonwealth and by other countries. We are, at the present moment, rather in the dark. We may imagine a management of the Fund which could become a very great dictator.
When I was at the Treasury, as Financial Secretary, Lord Snowden, as he afterwards became, was ill for part of the time and was absent from duty. At that time, the Bank for International Settlements was being formed, and I had, to sonic extent, to decide what view our representative should take when he was present at the inauguration of that Bank. I had always been very strongly in favour of an international organisation for banking, but, when I came close up to it, I realised that there was also a very grave danger involved. I may say that it was thought at that time that the Bank for International Settlements might be a very much greater world force than it afterwards became. I had thought, up to then, of the Bank of England as a separate thing, apart from this House and unrepresented in this House—a Bank of England as an entirely separate organisation, not responsible to Parliament, but able to influence British affairs to a more important extent than even the Government of the country. If we set up in Switzerland a Bank for International Settlements, in which our own Bank of England was to have only a small voice, and if we had practically no voice in the conduct of the Bank of England, I realised that this Bank for International Settlements might become a Frankenstein monster over which we should have no control and which might easily dominate the affairs of this country and of the whole world, without hon. Members of this House having any say in the matter. Therefore, when it conies to the question of setting up another great body like this Fund, I think we have to be very careful how the Fund is to be controlled, and what share we are to have in that control.
I am tempted to think of another illustration. Over the week-end I have been reading a book about the Dinosauris, and I find that these were very large animals roaming over the earth some scores of millions of years ago. The most important and overpowering of these animals was called the Tyrannosaurus Rex, and he seems to have been a very large and

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powerful animal because if he stood on a tennis court, his nose would poke through one side of the wiring of the court, while his tail would be poking through the wiring on the other side. He roamed the world and everything else had to give way to his desires. I can conceive the management of a great Fund that might become a regular Tyrannosaurus Rex to us for all the rest of our lives. We might find our whole activities limited by the intentions and rules of that Fund. There is the danger against which we have to watch.
We found that the sterling bloc which was established after we had gone off gold was very valuable, I would not like to say institution, but apparatus, which certainly served a very good purpose. It helped our recovery, and was helpful not only to the people of this country but to the people of other lands at the same time. We are all exceedingly anxious that the creation of this monetary mechanism should not mean the dispersal and destruction of this sterling area which has produced such good results. I understand it is claimed that under the White Paper that will not be the result, but that is a matter which is not very clear from the precise reading of the White Paper itself.
What are the advantages of this scheme we are discussing and what are its risks and dangers? The first advantage—and it is essential—is that it brings into being again, multilateral clearing as against hi-lateral clearing, which was the principle of a good part of the inter-war years. The second great point, which is very important, is that for the first time, as I see it, in the history of the world, there is an apparatus for bringing pressure to bear on a creditor. Hitherto any failure to balance payments has always been laid at the door of the debtor. Now for the first time it is going to be partly laid at the door of the creditor nations, and that is a step forward in the right direction, which I count as one of the very important parts of these proposals for the Fund.
We have to remember, particularly in these financial matters, that the shadow of possible coming events is cast before. The provision to which I am referring is the possible rationing of the currency of a great creditor nation when that currency is getting short in the Fund. With rationing of creditor nations' currency,
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other nations are able to make discriminating provisions; and the export of the country's goods is going to be a very unpleasant business for creditor nations. That being so, when there seems to be a prospect of that happening, people in a position to know and to conduct their country's affairs will try to avert that definite step of rationing their country's currency. I think that that is a very good and a desirable thing contained in this proposal, which I do not think has really existed in anything like that form before, though it was mentioned in the Keynes plan a year ago, and, to a much smaller extent, in what is known as the White plan.
Finally, and rather a more vague feature, this scheme means that there will be a concern in the minds of the other countries of the world, jointly and severally, in the misfortunes of any individual country. We have talked rather glibly in times gone by, saying that no country can suffer without other countries suffering at the same time. Here, for the first time, there will be a definite material recognition of that fact and that, I certainly regard as a very useful thing.
Weighing it all up, I think the House will probably come to the same conclusion as I have done. It is, first, that there is a grave risk in doing nothing, in avoiding co-operation and going back to bilateral trade, and secondly to a scramble, where the world is not particularly interested in the misfortune of any individual country. At the same time, there are grave risks in any scheme, and there are certain grave risks still unresolved in the present scheme. It depends very much, not only upon the final or larger details the Chancellor, if he carries out the spirit of this Motion, gets into the final draft, but upon the whole spirit which permeates the mechanism of the proposal when it comes to work. Therefore, it is of great importance that he should prosecute his inquiries and should make it quite clear that it would be disastrous if we got tied up to gold; that it would be disastrous if a board of management, either incompetent or unwise or one-sided, were to rule this Fund, and that he will have to use his judgment and his action in preventing these things from coming into being.

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I do not go as far as my hon. Friend the Member for Seaham in objecting to the scheme. I think he went too far in his criticism. We have to go forward, but with caution, because of the uncertainty. As I said at the beginning, I do not think that anybody, certainly not the general public and not Members of this House, and not even the experts, can be quite certain how the thing is going to work out, and because of that the escape Clauses are of very great importance. In so far as there is an escape Clause by which, after a further discussion with the managers of the Fund, we can move the rate of exchange even further than the to per cent.—though I think it is most undesirable to keep altering it—the fact that you have the power to make those alterations enables accommodation to be made. People say that if you do not make accommodation you drive them into the alternative, which is taking some drastic step. The fact that you have those possibilities while still a member of the Fund, and, in the background, the possibility of going out of the scheme altogether when you find it imperative to do so, is a very great advantage.
Finally, I want to ask the Chancellor this question. As I see it, our only obligation if the scheme is carried out and we enter it, is that we will try to make this scheme work, but, of course, if we were in any sense morally pledged to stay in the scheme and to sink with it, that would be a most disastrous thing. I think it is essential that the Chancellor of the Exchequer should make it perfectly clear to-day. Of course he cannot bind his successors, but he can state in this House at the present time the spirit in which he enters it: first of all, that he is not bound by the scheme as it is and that he is only using it as a basis for further consideration; secondly, if and when the scheme comes into operation, he will work it in the spirit of the Debate in this House and with the remarks I have made, that he will not under any circumstances regard our commitment to the scheme as so rigid, or as such a moral obligation upon his country, that future Chancellors of the Exchequer would hesitate to free themselves from its shackles if it were dragging this country or the world down into disaster.
The Chancellor of the Exchequer (Sir John Anderson): I believe most hon. Members will agree that we have had a very useful Debate on a most important topic. The Debate is one which had been persistently asked for by hon. Members. It has not been forced prematurely on the House of Commons by the Government, as my hon. Friend the Member for Walsall (Sir G. Schuster) seemed at one point rather to be suggesting.
Sir G. Schuster: No, no.
Sir J. Anderson: Well, I thought the hon. Member suggested that it was a little unfair, at this stage, to ask the House to express an opinion on something which was only past—as he undoubtedly was right in saying—of a complex of measures designed to promote our interests in the post-war world. I have myself, on more than one occasion, given the House an assurance that the Government would come to this Debate without any commitment. I hope no hon. Member anywhere in the House thinks that that assurance has not been most fully redeemed. Before coming to certain specific matters of detail in connection with the scheme, there are two general observations I should like to make. The first is that I think we all owe a very great debt of gratitude to those who have collaborated in the working out of this plan. An immense amount of time and thought and care and effort on the part, not only of our own people, but of the experts and representatives of other Governments, has gone to the framing of what I might call the third edition of our currency plans. As I have said, I think we owe them all a very great debt of gratitude, whatever may be the ultimate outcome of our deliberations.
The second observation of a general character I want to make is this. This is indeed, as many hon. Members have said in the course of the Debate, a matter demanding the most careful examination on the part of all of us, because the financial and economic future not only of the United Kingdom, but of the whole Commonwealth, may well depend upon how we direct ourselves in regard to these matters. Before I proceed to comment on some of the main aspects of the plan, there are a few points upon which information has been sought by speakers in the debate which perhaps I had better get out of the way first.

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A question was raised by my right hon. and gallant Friend the Member for Kelvingrove (Lieut.-Colonel Elliot) and also by the right hon. Gentleman who has just sat down in regard to the voting arrangements contemplated in the plan. They are not set out in the plan, and hon. Members are undoubtedly at a disadvantage in estimating the working of the plan in the absence of precise information on that point. I can tell the House this, that the general idea accepted by our friends in the United States and ourselves—when I say "ourselves" I mean the experts who worked on the plan—is that voting power should run parallel with quotas, and that the voting power of the United States and the voting power of the British Commonwealth should be, for practical purposes, equal. That is the idea running through this plan. It has been brought out quite clearly in discussions between our experts and the experts on the other side of the Atlantic, and I am glad to be able to make that point perfectly clear. The voting power of the United States and of the Commonwealth would probably work out in each case at something like 20 per cent. or 25 per cent. of the total, though it depends on the actual quotas and there is some disagreement as to the quotas of some of the smaller countries. That is my understanding of that point.
There is another matter on which the White Paper gives inadequate information and that is in regard to the arrangements for management of the Fund. This is a most vital matter, as my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) very justly pointed out. There is indeed need, in my opinion, for further and closer discussion in regard to the arrangements for management, if we go on with the plan, and not only with the arrangements for management but the location of the offices of the Fund and so on. Our experts on this side have the conception of a general council of men of very high standing, with alternates who could take their part at periodical meetings but, at the same time, an element of executive management with a certain security of tenure composed of people chosen for their known freedom from prejudice or bias, and for their expert knowledge.
Mr. Stokes: By whom?
Sir J. Anderson: They would be chosen, of course, by the representatives of the nations forming the general directorate of the Fund. That is the general idea but it needs to be very much more closely worked out.
Then the question was put by my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) as to where the currencies, in which the Fund is to deal, will be held. He rightly conjectured that they are to be held in the central banks of the various countries. In fact, the Fund will be banking with those central banks. My hon. Friend also asked whether the United States could, for example, under this plan, pay their quota fully in gold. As I understand the matter the answer is, "Yes." My hon. Friend also asked how Clause III (7, b) is to be interpreted. As hon. Members know, the Fund is to be made up in the main of national currencies, with a proportion of gold, and the intention of the Fund is to provide a means of strengthening those currencies. Therefore, in the circumstances it seemed reasonable that if a member State possesses gold in large quantities the management of the Fund should be entitled to require of that State that it should put a proportion of its gold at the disposal of the Fund for the strengthening of the currencies of the State. Another question my hon. Friend asked was whether the scheme enabled one nation to discharge its duty to another by giving that other nation a claim on its own money, or, in other words, a claim on its exports. The answer is undoubtedly, "Yes." The main purpose of this scheme is to secure that result.
Sir J. Wardlaw-Milne: How does that square with the right of any nation to provide 100 per cent. in gold?
Sir J. Anderson: I do not think there is any inconsistency. Gold is a valuable commodity and there is no doubt whatever that it would be readily disposable. [An HON. MEMBER: "You have not got it."] We have some. I would now like to say something about the right of members to withdraw, a right on which my right hon. Friend the Member for East Edinburgh dwelt at some length in his speech. Provision for that right, I understand, was introduced into the scheme primarily because it was held that no purpose could be served by attempting to hold people in the Fund against their will.

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It was felt that small nations would be more likely to come into this scheme if they felt that in the last resort they had the right to withdraw. It was also considered that having the right to withdraw in certain cases—indeed the discretion—would protect, to some extent, the members of the Fund against any tendency on the part of the management to be unreasonable.
Before I pass from this question I would like to say two other things. First, I can readily give my right hon. Friend opposite the assurance for which he asked, that it would not be, in the view of the Government, right to take up an attitude now which would deprive a member country of the advantage of this right to withdraw. We are not proposing to create a situation in which it would be possible to charge a country with having wrecked a great scheme by withdrawing, if the circumstances of withdrawal were such as are contemplated in this scheme. The second thing is in regard to the suggestion which my right hon. and gallant Friend the Member for Kelvingrove was disposed to throw out, namely, that it might be possible, perhaps, to find what I might call an intermediate sanction between accepting the dictates of the management of the Fund, however distasteful, and clearing out. I think it may well be that some modification of the plan could be devised which would enable a member State to remain in the Fund, although it had taken action which the management of the Fund, for the time being, were not prepared to approve.
I pass now to the question of scarce currencies. My right hon. Friend opposite was quite right in regarding as severe the provision in the scheme for enforcing the obligations which properly fall upon creditor States by providing various sanctions, where such a State fails to discharge those obligations. It was felt that the sanctions provided in the scheme were of a very severe character, that they were probably so severe that a State whose currency was becoming scarce would, in practice, take measures to relieve the situation which was developing before the question of enforcing the sanctions provided by the scheme had become of practical importance. That is the view which the framers of the scheme took, and my desire is for put the House in possession of any explanation I can in regard to provisions
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of the scheme upon which comments have been made. I would like to say something about a question which has engaged the minds of many Members—how far this scheme involves States that may enter the plan in a return to the Gold Standard. I believe there is no foundation for the view that this scheme in any way involves a return to the Gold Standard. Certainly, the attitude of His Majesty's present Government would be one of the most vehement opposition to any suggestion that we should go back to the Gold Standard.
Let me try to explain, as briefly and as simply as possible, why I think the view I have indicated is the right view. Hon. Members will perhaps forgive me if I begin by a rather elementary statement of what I understand by the term "Gold Standard." The classical view of the Gold Standard is, I believe, that of a currency which is self-regulating being fixed by law at a certain parity of gold, and being kept between what are called specie points by a free movement of gold in and out. That was the old, orthodox Gold Standard monetary system which we had in this country up to the outbreak of the last war. We have seen variants of that system. In particular, in our own case, between 1925 and 1931 we had a Gold Standard which was not self-regulating but which was so managed that it was kept between the specie points on a fixed parity with gold. What this plan contemplates is that, instead of a fixed parity, there should be a recognised machinery for the adjustment of the rates of exchange of the several countries in relation to other currencies, including the United States currency, which is based on gold and, therefore, the scheme provides for regulating the parity of national currencies in the last resort with gold, but it is not a question of clamping the national currency to gold. It is a question of keeping national currencies in relation to gold by what we might describe as an adjustable link. They are kept in relation, but the link which joins them is a variable one and the scheme is designed to facilitate the adjustment of exchange rates where fundamental disequilibrium of exchange has arisen.
I should like to explain what I understand—I may perhaps be wrong—by fundamental disequilibrium. I do not mean, as I think my hon. Friend the Member for Lowestoft (Mr. Loftus)

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indicated, merely a disequilibrium in the balance of payments. What I understand by a fundamental disequilibrium for this purpose is where the relationship of currencies one to another has got out of harmony with the respective values of those currencies in terms of goods and services. In those circumstances the management of the Fund is enjoined to facilitate adjustment of the par value. The right hon. Gentleman opposite was right in saying that one of the objects of the Fund, as set out in page 6 of the Statement of Principles, is to damp down temporary disturbances affecting exchange rates.
May I say a word about the position of what we know as the sterling area in this connection. I have said more than once that the Government would not be disposed to favour any plan which was likely to interfere in any way with the relationship between the different States which have been in association with one another under what we understand by the sterling area arrangement. We adhere quite firmly to that. We have made it absolutely clear, in the discussions on the other side of the Atlantic, that that is our position. I can say now that the technical representatives of the Dominion Governments who were engaged in discussions a few weeks ago in this country with our representatives were unanimously agreed that there was no reason to expect that the long-term objectives of these monetary proposals would be in any way detrimental to the maintenance and strengthening of the relations between the countries forming the sterling area. What I have said in that regard applies also to other countries which have looked to this country.
Another matter to which hon. Members obviously attach great importance is the bearing of this on the policy of full employment, to which the Government, with the support I am sure of Members in all quarters, stands pledged. Any danger to the policy of full employment from external influences would presumably arise either from our inability to sell a sufficient volume of exports to pay for the food and raw materials requisite for full employment or as the result of fluctuations in employment in the export industry as a consequence of violent fluctuations in external demand. The arrangements under discussion are designed to help the
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full employment policy in both those respects, because one of the main purposes of the plan is to prevent, or at least to mitigate, violent fluctuations in external demand and, in addition to the specific measures contemplated, the Fund will provide a platform where, in the event of difficulties, the best co-operative means of escape from those difficulties can be discussed by representatives of the countries concerned. In the section of the plan dealing with the purposes and the policies of the Fund it is expressly stated that the Fund will be guided in all its decisions by the purpose of shortening the periods and lessening the degree of disequilibrium in the international balance of payments of member countries. It is also expressly provided in the Statement of Principles that the Fund shall not be entitled to call in question, in dealing with any applications which may be made, the domestic policy followed by the country concerned.
I should like to deal now with some of the points made by those who have taken part in the Debate. I should like first to deal with the powerful speech of the hon. Member for Seaham (Mr. Shin-well). I thought that towards the end of his speech he adopted a rather minatory attitude towards me, but that was probably for rhetorical purposes. I am doing nothing but presenting to the House a plan drawn up by experts, which hon. Members have expressed a very keen desire to debate, and I am now engaged in explaining certain points arising in connection with that plan. The hon. Gentleman—this ran right through his speech—asked himself a series of questions. What is the prospect of America lowering her trade barriers? What is the use, he asked, taking a metaphor from my right hon. and gallant Friend the Member for Kelvingrove of a permanent way if there is no desire to travel? American imports will be necessary to us. How are we to pay for them? Incidentally, in that connection I thought he inadvertently raised an argument in favour of the multi-lateral approach of this scheme rather than the bi-lateral. May I remind hon. Members of the origin of these plans that are now being worked out, not only this one, but other plans that have been under discussion? It all goes back to Article 7 of the Mutual Aid Agreement. Perhaps hon. Members will allow me to quote a few passages from

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that Article, which was accepted by His Majesty's Government. It runs:
"In the final determination of the benefits to be provided to the United States of America by the Government of the United Kingdom in return for aid furnished … the terms and conditions thereof shall be such as not to burden commerce between the two countries, but to promote mutually advantageous economic relations between them and the betterment of world-wide economic relations. To that end, they shall include provision for agreed action by the United States of America and the United Kingdom, open to participation by all other countries of like mind, directed to the extension, by appropriate international and domestic measures"—
this is very relevant to the question of expansionist policy on which stress has been laid—
"of production, employment, and the exchange and consumption of goods, which are the material foundations of the liberty and welfare of all people; to the elimination of all forms of discriminatory treatment in international commerce, and to the reduction of tariffs and other trade barriers, and, in general, to the attainment of all the economic objectives set forth in the Joint Declaration"—
that is, the Atlantic Charter. Then it went on:
"At an early convenient date conversations shall be begun between the two Governments with a view to determining, in the light of governing economic conditions, the best means of attaining the above-stated objectives by their own agreed action and of seeking the agreed action of other like-minded Governments."
It is important that in any Debate on this or any other of the plans that have been under consideration, this document should be kept in view. As the Prime Minister made clear in the recent Commonwealth Debate in the House, before this Agreement was formally entered into between our two Governments, the understanding was clearly established between us that this contained no obligation on our part to get rid of Imperial Preference in consideration of the Lease-Lend facilities that have been put at our disposal. I have not the slightest doubt that those who have been engaged in discussions with representatives of the British Treasury on the other side of the Atlantic have been handling this matter with the most complete good faith and with the intention of securing, as far as possible, the objectives set out in the passage from which I have quoted. Of that I have no sort of doubt whatever. There is no reason to see in this plan any deep or
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dark design to get the better of this country in these matters.
My hon. Friend the Member for Walsall, to whose speech I have already made one or two references, stressed his view that it was bound to be extremely difficult to assess the value and importance of a plan of this kind unless there was at the same time available to Members all the other schemes and plans which, together with this, will form the basis of a comprehensive economic system for the postwar world. I quite recognise the difficulty, but I can assure my hon. Friend that we have to proceed in these matters by stages. This currency plan is a general plan which must form part of the foundation for any scheme concerned with our external relations, and it seemed to me not unreasonable that we should get ahead as rapidly as we could in working out the technical details of a plan of this kind while leaving any final commitment of principle to stand over until we have looked at the picture as a whole.
Mr. Shinwell: It is a vast picture.
Sir J. Anderson: My hon. Friend asked a question. He asked whether we think that an increase of 5o per cent. in our exports—whether in money value or in quantity—will, in fact, be practicable. The answer is that His Majesty's Government intend to work for that objective, and that they do not regard it as in any way unattainable, in their co-operative effort. In the earlier part of my speech I dealt with the question about management which my hon. Friend raised.
The hon. Member for North Lambeth (Mr. G. Strauss), who is, I think, not in his place, expressed his disagreement, rather to my surprise, with three of the items in the statement of objectives on page 6 of this Paper. I did not think that he did full justice to what is set out in the Paper. I intervened to point out that, when he referred to the elimination of foreign exchange restrictions, he omitted the very important words which follow "restrictions," and which are:
"which hamper the growth of world trade."
When he expressed his strong objection to exchange stability, I thought he was interpreting exchange stability as. if it meant exchange rigidity, which, of course, is not what the plan means, and is, in fact, what the plan is designed to avoid.
I come now to certain points with which I have not dealt, in the speech of my

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right hon. Friend the Member for East Edinburgh. I found myself, speaking personally, very largely in agreement with what he said. He clearly favours strongly the multilateral approach, as contrasted with the bilateral. That is my view, always provided that there is nothing in the plan which will prevent us from entering into reciprocal trade agreements with other countries or groups of countries, either in the monetary or in the economic field. I say quite categorically to the House that, in considering this plan, we considered it—we have made it clear to the representatives of the United States—subject to that stipulation. Only if that understanding can be given effect to, shall we be prepared to enter into it.
No one could attach more importance than I do to the maintenance of our traditional relations with countries which have stood by us in the past and which, I know, are eager to stand by us in the future. I did not quite agree with my right hon. Friend when he expressed the view that this matter takes us a long way —I think that is what he said—or goes a long way, towards gold.
Of course the scheme recognises gold as a valuable commodity and as the basis of important world currencies, notably of dollars. We cannot get away from that. We cannot suggest to the United States that they should abandon their gold basis. I say quite frankly to the House that it is very important, and it is going to be very important in our further examination of this plan, or any development of this plan, that every possible care should be taken to guard against any tendency in the working out of the plan to favour a currency just because it rests on gold rather than a currency like sterling, which rests on what most of us would regard, I am sure, as an equally stable foundation of good repute and standard of probity in those responsible for the management of sterling currency. There will be a gold measure but not a fixed gold measure. There must be. How can we engage in international trade unless we have a rate of Exchange? In any circumstances you must have a rate of exchange between sterling and dollars, and if dollars are on gold quite obviously there must be a parity between sterling and gold.
My right hon. Friend asked me how far is this going to tie us to the United States. We want to be in friendly collaboration
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with the United States, but we do not want to be in a position in which if unhappily some disaster befell the United States we should similarly have to go down and suffer in common with them; we do not want to be tied in that way. But we do believe that by having international relations in this monetary field we shall in practice greatly lessen the risk of disasters occurring, as we know they occurred for reasons with which many of us are familiar, during the inter-war period. There is no doubt at all that in these matters there are, and must always be, many factors of doubt and uncertainty. I ask, as my right hon. Friend opposite asked, if we have no scheme in this country, what is the alternative? Should we be better off? I think the answer to that is certainly, no. We ought to go on, I believe hon. Members in all quarters of the House take the view we ought to go on, with these discussions. I think myself that in various respects the scheme can be adjusted and improved. I am sure it is most important that we should enlarge the range of discussions in a way in which they have not yet been enlarged and bring in the representatives of other nations. I was not responsible for the statement about the number of nations' experts who have been consulted.
Mr. Boothby: Also the subjects.
Sir J. Andersen: Quite so. As to formal consultation, I think we should proceed. The Government are in no way committed with regard to this scheme. The Government do not propose to enter into any commitments at this stage. What they would propose to do if this Motion is carried, as I believe it will be, is to pursue discussions with the view, as stated in the Motion, of arriving at international monetary arrangements. I think we shall be fortified in the further stages through which this matter must pass by the Debate that has taken place to-day, and that we shall advance with the good will of the House towards what has been described as a free fertile economic policy for the post-war world.
Question put, and agreed to.
Resolved:
"That this House considers that the Statement of Principles contained in CMD. 6519 provides a suitable foundation for further international consultation with a view to improved monetary co-operation after the war."

REQUISITIONED PREMISES (BIRMINGHAM)
Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Boulton.]
Mr. Higgs: On 4th April I addressed a Question to the President of the Board of Trade, asking him
"why pressure was put, by his Department, on Messrs. H. Incledon and Company, Limited, of 67–73, Constitution Hill, Birmingham, to vacate their premises, in May, 1943, for the purpose of housing a firm whose buildings were unsafe, as the firm in question never occupied the premises."
The President of the Board of Trade replied:
"This request was made, in the interests of war production, to Messrs. Incledon, who sold the premises to the other firm mentioned by my hon. Friend. These premises are now being put to very good use in the war effort, though not for the purpose originally intended."
I then asked him:
"Is the Minister aware that, owing to the activities of his Department, a business of 40 years' standing has been closed down; and is he further aware that the premises are now in the possession of a competitor of the original owner?"
The President of the Board of Trade replied:
"No, Sir. My duty in these matters is to assist the Service Departments and the Supply Departments to obtain space for war production and storage. I was requested by one of ' the Supply Departments to obtain these premises. I did so, and the premises are now being used for effective war purposes. I do not wish to go into detail, on grounds of security."—[OFFICIAL REPORT, 4th April, 1944; cols. 1800–1, Vol. 398.]
I considered that it was rather a weak excuse for the President of the Board of Trade to say that he did not want to go into the matter in detail, on grounds of security. I think I can show that a case can be cited, and I have no doubt that you, Sir, will readily call me to Order if I transgress. In the first place, he said that the premises were sold. I should add that they were sold under pressure, and I have correspondence to prove that. The Minister said that it was his business to assist the Supply Departments. I would remind him that it is his duty also not to interfere unnecessarily with businesses. This firm established a branch in Birmingham in 1904. Their head office is in London, and their normal business is the distribution of plumbers' hardware. A
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profitable business was being carried on in war-time, to the benefit of the, community. The premises in question were erected in 1926, and in May, 1943, the Board of Trade informed Messrs. Incledon that it was necessary for the premises to be used by a Government Department. I would like to read extracts from three letters. The first is dated 14th May, 1943, and is addressed to Messrs. Incledon, from the Board of Trade:
"We were very pleased to hear from you in reference to your premises in Birmingham. As we explained to you, we have a very difficult task these day in trying to meet the many production and storage demands for space in this region, and, naturally, we are always anxious to see that all premises, whether factory or warehouse, are used to the best advantage in the war effort. In the case of your Birmingham branch, we consider the premises are ideally situated for production."
The word "production" I emphasise—
"At present we have a very difficult demand to meet in connection with a firm whose premises have been badly damaged by enemy action and whose production is suffering considerably as a result. It is essential that this company are rehoused at a very early date, and it may be that your Birmingham premises will be required for this purpose. We should be very glad if you could arrange to discuss this matter at a joint conference in these offices at a mutually convenient date."
I will read another letter, and an extract from a third. This letter is dated 15th May, and is from the Board of Trade, addressed to Messrs. Incledon:
"In reply to your letter dated 11th June, we have to confirm that the above premises owned by your company are required for a Ministry and for the use of their contractors, Messrs. X, at Birmingham. In the normal course, we should issue an authority to this Ministry to requisition, but we understand that the premises are required for conversion to war use and that you are negotiating with Messrs. X of Birmingham, with a view to the disposal of these premises."
That is signed by the Deputy Regional Controller. There is a third paragraph from a later letter, dated 3oth December, and I am reading this extract now, rather out of sequence, but in order to show the inconsistent manner in which this matter has been dealt with:
"In fact, I told you on the telephone we were not aware that you were proposing to sell the premises to Messrs. X, but we were under the impression that you preferred to negotiate a private treaty agreement with them than for your premises to be requisitioned by a Department. We are only too pleased to meet your wishes in this regard."
In the first letter, they suggested that the premises are being disposed of, and,

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in the second, sold. I would inform the Minister that the meaning of those two words is identical, and it he will refer to any dictionary he will find that the alternative meaning is given. Messrs. Incledon accepted the Board of Trade argument that these premises were necessary, and they did their best to find alternative accommodation, but, obviously, without success. They were reluctantly compelled to close down their Birmingham business. The Board of Trade informed Messrs. Incledon that Messrs. X were employed on the higest priority work, that Messrs. X's premises had been damaged by bombing, that Messrs. X's premises were condemned, that the premises were not safe, and that it was absolutely necessary that Messrs. X should have the premises at the earliest possible moment. I have read the correspondence which indicated that if Messrs. X could have the premises immediately the Board of Trade would not interfere. Messrs. X said it was necessary to instal heavy plant and machinery and make many other alterations and that it would, therefore, suit their convenience if they could retain the premises after the war.
Messrs. Incledon, realising that their business had been forcibly closed, sold their stock and fixtures, disposed of their staff in the best interests of all concerned and decided to sell the premises. They therefore sold the premises to Messrs. X, as they thought, in the national interest. They were given permission to instal plant and machinery in September, 1943, and given vacant possession in December, 1943. To Messrs. Incledon's great surprise no effort was made to instal the machinery and at the end of 1943 the premises were still vacant. Messrs. Incledon drew the attention of the Board of Trade to this fact and also referred to the unnecessary delay that had taken place. It soon transpired that Messrs. X were not going to move into the premises and by some means or other the original building had become safe. Messrs. Incledon again lodged a protest with the Board of Trade in January and the letters were certainly acknowledged, and it was stated that the official in charge was away and that the matter should have his attention on his return. But it came as a great surprise to Messrs. Incledon to hear that Messrs. X had sold the premises to another firm named Gittins, which was a competitor of Incledons. A business of 40 years'
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standing had been closed down for no purpose whatever. At that time there was no intention at all to use the premises.
In February of this year a further letter was addressed to the disposal officer and no reply was received. The office was telephoned on several occasions and the reply received was to the effect that they were always being put off and that the official was away, and so on. Since the last complaint on 18th February, stating that Messrs Incledon intended to claim compensation, the premises have been occupied for storage purposes, but they were originally requisitioned because they were considered suitable for production and manufacture. I have visited these premises, and what I have said is accurate. Business concerns are prepared to co-operate, and do co-operate, with the Government, and unless they do they know that we shall not win the war, and then there will be no premises at all. But there are too many cases of interference, and this is a glaring case in which the Board of Trade should not have acted as it did. Unfortunately, Government Departments will not admit their faults when they are in the wrong. The power of requisitioning has been used to enable a commercial firm to speculate in property on rising prices.
In conclusion, I should like to ask the Parliamentary Secretary what price Gittins paid Messrs. X for these premises. Will the Department consider compensating Messrs. Incledon, and will the Minister arrange for the premises to be returned to Messrs. Incledon at their original purchase price, if they want them?
The Parliamentary Secretary to the Board of Trade (Captain Waterhouse): My hon. Friend has made out a very temperate case and I shall endeavour to persuade the House that this is not one of those instances in which the Board of Trade have been at fault. The hon. Member said that Government Departments are 10th to admit their faults. It would be quite impossible for Government Departments to interfere as widely as they have to do during this war without making many mistakes. I believe that, by and large, Government Departments are not 10th to admit a mistake when one has been made. In this case I am not prepared to admit any such mistake at all. I do not object to the way my hon. Friend has put his case. I do not object

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to the way he has marshalled his facts, but I propose to marshal the facts in a rather different way, without controverting his facts, to show, as I believe I can, that the action taken was not unreasonable and was, in fact in all the circumstances, reasonable and necessary,
As my hon. Friend has said, in the spring of 1943 the Ministry of Aircraft Production approached the Factory and Storage Control of the Board of Trade and asked for their assistance to get some premises in which to house the firm of X, X being a firm making a most important small part for aircraft. X's premises were not large enough. Further, they had sustained bomb damage, and the Ministry of Aircraft Production wanted better and larger premises in order to get increased production from Messrs. X. It was suggested, therefore, that Messrs. X should approach Messrs. Incledon, whose premises were considered by the Board of Trade to be generally suitable for the purposes needed. I am quite sure that I need not stress the difficulty in a city like Birmingham to find premises at this period of the war. My hon. Friends who know Birmingham will know that it is extremely hard to find any premises anywhere in that city, as indeed it is becoming increasingly hard to find premises in any of the great industrial cities of this country. Messrs. Incledon's premises were selected and the matter was explained to the firm's secretary. After that it was left to negotiation between the two firms. Messrs. X, so I am informed, would have preferred to take the premises on a lease for the duration of the war and for six months afterwards, but that was not agreeable to Messrs. Incledon, who preferred, apparently, to sell. In fact they offered the premises for £10,000 and Messrs. X paid £9,500 for them. Therefore, Messrs. X were in possession of these premises in, I think, July, 1943.
At that time there were at Messrs. X's a father, a crippled son, and a younger son, all actively engaged in the business. The younger son 'had been under deferment ever since 1939. The deferment ceased and he was called up in August, 1943. Unhappily, within a few weeks of his being called up, the father died and the crippled son, on the advice of his doctor, felt himself completely unable to move the whole of his works into these
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new premises and to expand his production, as he had been asked to do. Furthermore, as my hon. Friend correctly said, it had been found that by a comparatively small expenditure it was possible to make Messrs. X's original premises secure. This was done, and they remained where they were. They decided to carry on in their present premises. I do not know why they decided to sell the other premises. It may well be, as happens in so many families, that they had considerable Death Duties to pay, and that a sum of ready cash was vitally necessary to them. But, at any rate, they were perfectly entitled to sell these premises, which had not been requisitioned. My hon. Friend was wrong in saying that there was any question of requisitioning. They were sold at a voluntary commercial sale. It is true that Messrs. Incledon's would have lost the premises in any case—
Mr. Higgs: I read the letter just now. It stated:
"In normal circumstances we should issue an authority of this Ministry to requisition."
Captain Waterhouse: That is precisely what I was about to say when my hon. Friend intervened. It is true that Messrs. Incledon would have lost their premises in any case, but had they lost them by requisitioning, or had they granted a lease, the premises would have been available to them at the end of the war. But they preferred to sell, and Messrs. X were perfectly within their rights in afterwards selling those premises on the open market, which they did for £12,000 to Messrs. Gittins & Sons, Limited, as my hon. Friend has said. I admit that that is an extremely galling circumstance for Messrs. Incledon, but I submit that there is no unfairness there at all. The first firm sold to the second at within £500 of the price that had been asked; the second firm sold, to the third firm, property which was theirs to sell. I want to make it perfectly clear that I realise the hardship in this case and in the thousands of other similar cases. These. cases of requisitioning are the hardest of all things that Government Departments have to do, but they are absolutely necessary for the conduct of the war. It was necessary that these premises should be taken over at that moment. A way for disposal was found which was thought to be the best and the most agreeable to both firms.

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I repeat, there was never any requisitioning in this case. There were clearly three possibilities—one, to lease; two, to sell and, three, to be requisitioned. Messrs. Incledon chose to sell their premises, and, having chosen to do so, the premises were resold. They are now angry, and justifiably so, because they have seen the Birmingham branch of their premises closed and, being human beings, they are aggrieved that somebody has made £2,500 profit in a short time. But that is neither the fault of the Ministry of Aircraft Production, nor of their agents, in this case the Board of Trade. Both Departments acted, at the time when they acted, reasonably and properly and I hope my hon. Friend will, agree with me that, hard as it seems on Messrs. Incledon, they should not now complain at what was then their own choice.
Sir John Mellor: Surely there was some misrepresentation, even if a perfectly innocent one, inducing the sale by Messrs. lncledon to Messrs. X of these premises. There was a misrepresentation, I think—I only know the facts from this Debate: I knew nothing about them beforehand—as to the necessity for Messrs. X taking these premises. I suggest that, first of all, in regard to the importance of this firm's production for war purposes. It is rather curious that of the three directors there was one who was presumably elderly, another was a cripple and a third was called up soon afterwards. Surely, if the firm was of sufficient importance in the war effort to justify threatening a requisition of premises, it is a most astonishing thing that the one young and fit director should be called up and taken away on military service.
There is another point which sounds to me as though there was misrepresentation. We were told by my right hon. and gallant Friend that it was necessary that Messrs. X. should find other premises because of bomb damage to their original premises. As soon as it became incon-
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venient to move, they decided not to move, and in fact continued to carry on after repairing the damage to their original premises. In view of these facts I think my right hon. and gallant Friend's explanation sounds very thin. I hope he can deal a little more fully with those two points.
Captain Waterhouse: My hon. Friend has put his finger on two points which I noticed myself and made special inquiries into. As to the calling up of the younger son, at this time there were three, the father and two sons, in the business. As the war has proceeded the comb out has become more and more severe. Not in one or two firms but in scores of thousands has one of several partners had to be removed as the war has proceeded. When this boy was called up there were two left, the father and one son, and they could undoubtedly have carried on perfectly well. But the father died just after the boy had been called up, and that completely altered the circumstances of the firm.
On the other point I have to admit, on behalf of the Minister of Aircraft Production, that the assessment of the damage to Messrs. X's premises was, at first, exaggerated. This was a very important production. They could not run any risks at all. The first examination made them think that the premises would be unsuitable for further use and it was only subsequently that they found they could be patched up. There may have been some error there, and I am assured by the Parliamentary Secretary that since this case even greater care has been taken over the survey.
It being half an hour after the conclusion of Business exempted from the provisions of the Standing Order (Sittings of the House), Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order, as modified for this Session by the Order of the House of 25th November.