§ Order of the Day for the Second Reading, read.
§ *THE EARL OF DENBIGH,
in moving the Second Reading of this Bill, said, it referred to the important Merchandise Marks Act with which their Lordships were familiar, passed by both Parties during the Government of the noble Marquess. The present Lord Derby, then President of the Board of Trade, in introducing that Bill in their Lordships' House, said it was for the purpose of preventing the fraudulent use of trade marks, and that all sections and classes desired to remove that foul blot upon our trade and to enourage honest trading. The Bill was accepted by the then Opposition, and the noble and learned Lord on the Woolsack said their object was to 765check immorality, which had such a mischievous effect on trade, and that in his opinion it was better to suffer some inconvenience from the severity of the law than not to deal effectively with the evil.That quotation would remind the House that the object of both Parties was to stop a system of commercial fraud which was doing immense harm to the manufacturers of this country and to the men in their employ. A Committee of the House of Commons was appointed in 1890 to inquire into the working of the Act of 1887, and much evidence was given showing the great good it had done to the manufacturing interests of the country. But certain blots were pointed out and the Committee made recommendations with the view of removing them. Accordingly, the amending Act of 1891 was passed, which had the effect or removing the defects then discovered. But considerable evidence was given about another and more serious blot. While the Act had been most beneficial in stopping fraudulent marking, practically no power existed to deal with goods brought into this country unmarked, then marked here as British goods, and so sold to British customers or exported to our foreign customers as being articles of British manufacture. This Bill was divided into two portions, the first dealing with that fraudulent practice, and the second with the importation of prison-made goods. Upon the first point he acknowledged at once that the Committee of 1890 was hostile to the proposals then made for insisting on marks of origin being borne by all imported goods. It was thought that to do so would restrict trade, and would damage warehousemen, small traders, and the various interests to be considered. Although that Committee did not see their way to adopt the suggestions made by many competent witnesses, the situation had now grown much more serious; and just as between 1887 and 1890 the testimony of Custom House officials showed that the quantity of unmarked goods imported into this country had largely increased, so it had become notorious that from 1890 to the present time, since traders had discovered more and more how they could defeat the object of the Merchandise Marks Act, the importation of goods into this country for the purpose of being fraudulently marked here had enormously increased. 766 As a result the feeling of dissatisfaction was becoming very great among all classes of the community. The noble and learned Lord on the Woolsack, in accepting the Bill introduced by the late Government, said that one admittedly prevalent kind of fraud was very disastrous—the combination of marks for the purpose of leading people to believe that goods were made by others than those by whom they were manufactured. That particular fraud was exactly what was being practised now—that was really the object of placing British marks on goods of foreign origin. And so long as the law remained in its present state that fraud would continue to increase. This Bill embodied no new proposals, though introduced for the first time in their Lordships' House. Bills had been introduced in another place five or six times in recent years dealing with this subject, but, unfortunately, until the other day, a Second Beading had not been obtained. A Bill similar to this had come up for Second Beading, and though opposed by the late President of the Board of Trade, had received considerable support in the other House, more especially from the Trade Unionists, to the great astonishment, no doubt, of Mr. Mundella. That gentleman had also opposed the proposal when an important deputation waited on him in May, last year. The objections so put forward would no doubt be strongly urged by the noble Lord who represented the Board of Trade on this occasion, and he would therefore venture to anticipate them. In the first place, Mr. Mundella declared that the present law was amply sufficient for the purpose of dealing with fraud of this description, and that the Board of Trade were willing and anxious to prosecute, and had in fact prosecuted in some cases with success, more especially in one or two where scissors had been imported from Germany unmarked, and then placed on cards marked "Best Sheffield Cutlery," or something of that sort. In such cases no doubt prosecutions might take place under the present law; but one was rather reminded of the old recipe for "cooking a hare," and it was absolutely necessary to catch the delinquent before he could be prosecuted. It had been found practically impossible to detect these frauds after the goods had once passed the Customs unless a system 767 of espionage were adopted in factories and workshops very distasteful to the manufacturing community. Next, Mr. Mundella urged that certain articles could not he marked. No doubt that was the case, and many jocular remarks had been made on that subject. Diamonds, it was said, could not be marked. But these islands could not be said to compete with foreign countries in the production of those gems, although unsuspecting travellers in the East had sometimes reason to know that mines for their production existed in Birmingham as well as, say, Burmah. The noble Marquess the other day asked whether he would be called upon to mark his dog when he returned from the Continent. It would be easy in Committee to insert provisions exempting travellers' personal baggage, or goods not intended for sale—that would obviate any difficulty in connection with the noble Marquess's faithful companion. It was also urged that Lord Onslow's Committee on the subject was still sitting, and was taking evidence with regard to agricultural produce, meat, shell-fish, and fruit; and that Committee were apparently contending as to the best way of marking foreign shrimps. Again, it was asked whether each gooseberry and every apple on old women's stalls in the streets should be marked. Of course, many articles were incapable of being marked separately; but such cases were provided for in the Bill, and it was left to the Regulations, to be framed by the Board of Customs to say what goods were to be marked in piece and what in bulk on the packages or cases in which they were sold. No doubt it would be urged that goods marked in bulk would be distributed unmarked throughout the country; but on the principle "that half a loaf was better than no bread" it would be well to stop frauds in connection with larger articles, even if the smaller ones should evade the law. It might be better to limit the operation of the Bill to manufactured articles, and he would consent to such an Amendment if a separate Bill dealing with meat and agricultural produce were introduced afterwards on lines to be laid down by Lord Onslow's Committee. Then Mr. Mundella insisted that these provisions would provoke foreign Governments to retaliate by demanding the marking of English-made goods. 768 But if that were to happen it could hardly be a disadvantage, in view of the fact that English-made goods were run after all over the world. Mr. Mundella further contended that the Bill would harass and restrict trade. It would certainly restrict dishonest trade, but that it would restrict trade in general was much to be doubted. The shipping industry cried out very loudly when the Merchandise Marks Act was passed; but the Committee of 1890, after taking exhaustive evidence, came to the conclusion that there had been no serious diminution owing to that Act in the amount of goods from delay in transit. Possibly there would be a great outcry against the Bill: but it would come from those who profited by fraudulent practices and false marking. Coming next to the portion of the Bill which dealt with foreign prison-made goods, a great amount of feeling had been recently aroused by the discovery of the extent to which German prison-made goods were imported into and sold in this country. A special commissioner sent by The Hardware Journal had visited the prisons at Grossweiler, Cologne, Berlin, and elsewhere, and had given a description of the employment of cheap prison labour by concessionaires, from whom no account of the prisoners' hours of labour was exacted by the authorities. Those prisoners copied from English models in various classes of goods. If such practices were allowed to continue, the steps which had already been taken to restrain the competition of British prison labour with free labour in this country must be rendered futile. The Bill did not raise the question of Protection, but its object was the protection of honest trading. It was supported by thousands of Free Traders all over the country; and, at the last Trade Union Congress a strong resolution was passed condemning the practice of introducing unmarked goods into this country, and subsequently marking them. There was the choice of two evils—either to submit to the vexation and inconvenience of seeing to the marking of foreign goods, or to witness the spectacle of more starving men about the country. Year after year the tendency had been to improve the condition of the working classes in this country, and that tendency had the entire sympathy of their Lordships. Among the circumstances which must 769 necessarily tend to raise the cost of production to some extent, were the insistence by great Municipal Corporations like the London County Council of the adoption of Trade Union wages, the condemnation by the late Government of sweating in connection with Army contracts, and the action of the present Government in limiting the hours of labour in the Government factories. If this unfair competition of foreign goods manufactured by means of cheap labour and by men who worked very long hours was encouraged, many working men would be thrown out of employment in this country. All that was asked was that the people should be told what kind of goods they were buying; and therefore he asked their Lordships to read the Bill a second time, first of all in the interests of commercial morality; secondly, in the interests of the honest manufacturers of the country; thirdly, in the interests of the consumers of the country; and, fourthly, as important a consideration as any, in the interests of the working men of the country.
§ Moved, "That the Bill be now read 2a"—(The Earl of Denbigh.)
*THE EARL OF ONSLOW
said, it was important to know what was the present state of the law, as some misapprehension existed on the subject in the minds alike of people in this country and manufacturers abroad. The law on the subject was that if any mark be put on the goods it should be an honest and not a misleading one. A strong feeling existed among producers of goods in this country that they were subjected to unfair competition with those who imported foreign goods. British producers had no objection to fair competition, but they thought that the middleman derived an undue share of profit through buying in a cheap market and selling in a dear market, while the article which he bought in the cheap market was sold as something else. The feeling therefore prevailed that something should be done to protect the consumer from having goods fraudulently passed off upon him. He trusted that the Bill would be read a second time, because there were a large number of interests in the country which were anxiously looking forward for some remedy in the nature of the present Bill. 770 At the same time, as a word of warning) it would be well for their Lordships to carefully consider what would be the effect of the Bill on the producers of this country. His belief was that there were a large number of good and cheap articles produced abroad, and if it was announced by the terms of this Bill that such articles were made abroad it was possible their Lordships would find English consumers determining only to take the articles made abroad and rejecting the more expensive goods made in this country. He gave an instance within his own knowledge. Farmers in many parts of the country had been endeavouring to make hay contracts with the forage merchants for this season's crop. The answer that the farmers had received was to the effect that as the farmers had no hay to sell last year the contractors had to go abroad for a supply, and they had been so well treated abroad, and had found the hay so satisfactory, that they had made up their minds to deal with the foreign growers again for hay. He hoped that whatever action might be taken in this matter that consideration would not be lost sight of, or it might turn out that a law of that kind would cause a demand to spring up on the part of the working people of England very far from the wishes of the noble Earl; and it might be found that the working men of this country who produced English goods would call out for protection for the work of their own hands.
§ *LORD PLAYFAIR
said, this Bill must obviously be made part of the Act of 1887, or it could be of no effect. For example it contained no penalty, and no definition of the goods to be marked with the name of the country of origin. Therefore, it was only by construing this Bill as a part of the Act of 1887 that it could have any effect whatever. The purpose of the Bill, however, was altogether different from the Act of 1887. The Act of 1887 was only directed against fraud and wilful misrepresentation, but the noble Lord tried to penalise honest trading here in order to get it within the Act of 1887, as fraud and misrepresentation. In the Preamble of the Bill the noble Lord said—Whereas much fraud and misrepresentation takes place by reason of the importation of foreign goods771 —by whom?—not by the importers; the noble Lord did not allege that, but—which goods are subsequently sold in the United Kingdom.The noble Lord alleged that the fraud and misrepresentation took place when the goods were subsequently sold in the United Kingdom. But if the fraud and misrepresentation took place in the United Kingdom the Act of 1887 provided that any false representation made, any fraudulent trade marks, false representation of selling as English goods what were foreign goods, could be dealt with and punished; and therefore no new Bill was needed. In order to bring this Bill under the Act of 1887, honest trading would be made a fraud and wilful misrepresentation, which of course it was not. Traders might now import a cargo of iron, or of copper wire for electric lighting purposes, and the mark of the place or origin was not needed; but if the articles were represented to be English make, then the representation was fraudulent and punishable under the Act of 1887. Without that Act, which was directed against the forgery of trade marks, this bald Bill would be of no use at all; and it was not right, therefore, to try and make trading from foreign countries with this country a fraud and misrepresentation as the noble Lord was endeavouring to do by his Preamble. What was the real object of the Bill? The noble Lord must candidly admit that he had introduced it in the interests of Protection. It was to handicap foreign produce as against English produce. What was the definition of "goods" that was intended to apply in the present Bill? Under the definition of "goods" in the Merchandise Marks Act of 1887, every kind of article of commerce, agricultural produce, raw material, and manufactures was included. By this Bill it was intended that every kind of "goods" should be marked with the name of the country of their origin. There was no exception made of agricultural produce or fruit, or indeed any article of commerce, from the operation of this Bill, and if the Act passed without such a reservation being added to the clause as it then Stood very great hardship would be done to the smaller retailers of fruit, such as costermongers and others, who might through want of knowledge of the effects 772 of this Act upon that of 1887, subject themselves to a fine of £50, or to a sentence of two years' imprisonment. The Bill might have one excellent result to the minds of educationalists—that of teaching geography to the boys and costermongers, by the marking of packages with the country of origin, but it would not in the least aid in the selling of the apples, oranges, bananas, or other articles. Every small package of almonds or raisins was to be marked in quarter-inch letters—not by this Bill, but by another of a like kind proposed in another place. The Bill also would be very hard upon our fruit-growing colonies. How was the Bill to be worked? In the case of a cargo of deals from Norway, was every board and every portion of the board which might be used in a carpenter's shop for a small repair to be marked? Then, as to prison-made goods, the Bill would apply not only when the whole of the article manufactured was made in prison, but when any part of it was made there. How would that work in the case of matches, the wood for which was split in prison, but which were afterwards dipped in sulphur and phosphorus by matchmakers working outside? The importer would have in many cases, therefore, no means of ascertaining the true place of origin. How was that want of knowledge to affect the case of the legitimate buyer? But there were larger questions involved. This question had been considered over and over again, and a Committee appointed by the late Government in 1890 reported that an alteration of the law in the direction now advocated would inflict a serious injury upon trade and almost destroy certain classes of business. That Committee was presided over by Baron de Worms, and though the arch-Protectionist, Mr. Howard Vincent, voted against, nine members were in favour of the following recommendation:—Your Committee have heard evidence of several witnesses, who were in favour of compulsory marking of all goods with an indication of their origin. They are unable to recommend such an alteration in the existing law, as they are of opinion it would seriously restrict trade, and might destroy the business of warehousemen, commission agents, and small masters.Such an enactment would of necessity involve the insertion of a clause in any International Convention, imposing similar obligations, in respect of goods made 773 in this country, and sold abroad. If this Bill was adopted, a policy of retaliation against England would be sure to be taken up by other countries, and it was a question of the greatest importance to this country that our goods should have no restrictions placed upon their introduction into those countries with whom we did the greater portion of our commerce. He hoped, therefore, that the House would not permit the Bill to pass the Second Reading. It was not a complete measure, and could not be worked unless it was read in conjunction with the Bill of 1887, and if that were done honest trade would be branded as fraudulent.
§ THE MARQUESS OF SALISBURY
My Lords, two questions are raised by a Bill of this kind. The first is whether your Lordships approve of the object and sympathise with the aim of the Bill; and, secondly, whether you think its provisions do or do not require amendment? I shall not argue in favour of any of the details of the Bill, because I freely admit that a Bill of this character must require very careful examination in Committee. The noble Lord, however, did not go into the details of the measure at all, and his speech was one of a most extraordinary kind. I am afraid that the noble Lord has been lately too much in the society of that distinguished statesman the Chancellor of the Exchequer, whose practice seems to be, whenever he finds he has no arguments to advance against a measure he wishes to oppose, to shout some popular watchword and to allow that to replace the necessity for argument. In the same way the noble Lord, finding he had no real or even plausible arguments to urge against the Bill, fell back upon the right hon. Gentleman's example and shouted that this was a Bill of Protection. How can it possibly be a Bill of Protection? How can this be treated as a matter of Protection when all the Bill desires is to require that those who import goods into this country should state the truth respecting them? Yet absolutely nothing more is asked for by this Bill than that they should state the place of origin of those goods that they are selling to the public. The noble Lord, finding himself unable to attack the Bill, went off into a diatribe against some Bills which had obviously no connection whatever with the one we 774 are now considering, and, as it turns out, he was really arguing against Bills which are still in the House of Commons and not involved in this Bill at all. Then the noble Lord told us of the terrible penalties which might be inflicted upon the costermonger who wanted to sell apples and oranges and bananas under the Merchandise Marks Act of 1887 as affected by this Bill. But this Bill is not the Merchandise Marks Act of 1887, and the effect of this measure would really be to lighten the penalties and save the costermongers from those ills which the noble Lord sees hanging over their heads. If every case containing foreign goods were marked with the place of origin there would be no danger that tradesmen would be tempted—as they are now often tempted, either through ignorance or any less presentable reason—to hide the real place of origin of his goods. The great hardship under the Merchandise Marks Bill is that it exposes men who are ignorant or careless of its provisions to exceedingly heavy penalties for their want of knowledge or their want of care. Now, if the cases of the goods they were selling were fairly marked on the face of them with the name of the place of origin of the goods they contained, surely that danger would be entirely averted. This is a Bill which, according to the statements of the noble Earl who moved the Second Reading, would, in fact, tend to make the Merchandise Marks Act a far more tolerable and easier measure than before. The important question is, whether the imported goods can be marked? Of course, we are all familiar with the old arguments about the matches, the needle, and the egg. It is impossible to stamp that class of articles with the name of the place of origin; but the cases containing them can be stamped, and a declaration can be exacted from the importer in which the place of origin would have to be entered. That would do something, at any rate, to make that kind of fraud less possible and less likely than it is now, and the British trader and British producer would be saved from that which everyone must admit is illegitimate competition—namely, the selling of foreign-made goods as English produce. That is the only protection against fraud. How far it is possible, 775 and as to how many classes of goods it may be suitable, might be determined by inquiry; but in view of the important considerations which are involved, and of the very serious evils suffered from this illegitimate competition, it would, I think, be a very strong measure to reject this Bill on Second Beading. I should have preferred to invite your Lordships to consider whether it was not possible under this Bill to give the tradesman sufficient protection against fraud, and if it were found that that were possible we should be passing a measure of most salutary legislation. What the difficulties may be, and how you are to cope with them, you cannot tell until you go into the matter in detail; but I think it would be an unwise step if we said we do not sympathise with the tradesman, and that we do not accept the principle of this measure.
THE LORD CHANCELLOR (Lord HEKSCHELL)
My Lords, I am not going to say a word in relation to this Bill from the point of view of Protection. My objection to the Bill is that' it is absolutely impracticable. It suggests an idea, but provides no means of carrying it out, and it would be impossible to mould the Bill by the ordinary process of Committee into a practicable measure. I do not deny that the object of the Bill might be perfectly legitimate, that the place of origin of goods should be in-indicated provided it could be carried into effect; but it must be borne in mind that the person who imports goods from foreign countries is never deceived as to the place of origin. He knows perfectly well that they come from abroad, and the wholesale purchaser is equally familiar with that fact when he buys foreign goods. Therefore, so far as those persons are concerned, to insist on the place of origin being marked on the goods would simply be to tell them what they already know. Unless you provide for giving that information to those who eventually, in the process of distribution, purchase the goods by retail, you will do absolutely nothing by the Bill. That is what you are aiming at, but that would never be accomplished by this measure at all. It might be possible to mark a bale of cloth with the place of origin, but it would be impossible to mark every yard or every 10 yards of the cloth without destroying the purpose for which it is bought, and it is the same 776 with many other kinds of goods. The man who is going to sell the cloth again divides it into smaller quantities, and would be asked nothing about the place of origin. You will, therefore, afford no protection unless you can provide that when the goods are distributed the place of origin shall be indicated. That is not practicable, and the Bill would not work. The noble Marquess says—"Why not take it into Committee and try to make it work?" If this were the suggestion of a new system there might be something to be said for that suggestion, but a Committee of your Lordships' House is already sitting on the question of marking meat and other foreign produce imported into this country. That Committee has reported that as to certain goods it is impracticable to mark their place of origin; while a Committee of the other House, having inquired into the subject, has come to the conclusion that it is impossible to carry out this system of marking. That is not a Committee composed of persons who are mad about Free Trade, but is composed of Members from different political Parties, and, with one exception, the Committee is unanimous that the proposal would interfere with commerce and be prejudicial to the interests of this country. Your Lordships are asked to accept this Bill, which contains no scheme for carrying its provisions into effect, simply in order that English produce shall be sold as much as possible; but even with that object in view it would, in my opinion, be unwise to read the Bill a second time, unless you can see your way to provide some practical means of giving it effect. By reading the Bill a second time I fear you would be holding out expectations which you will be unable to satisfy; and you would seem to be giving something when, in reality, you are giving nothing. But by checking commercial intercourse, by placing difficulties in the way of those who are importing foreign goods, you would be running the danger of checking exports to this country. All those are considerations which should be borne in mind. It would, in my opinion, be dangerous to read the Bill a second time unless we not only saw our way to some scheme by which its proposals could be advantageously carried into effect, but are satisfied that that may be done with- 777 out imperilling interests which cannot be touched unwisely without the greatest possible risk.
§ LORD HALSBURY
My Lords, I cannot help thinking there is a great deal of rhetoric in my noble and learned Friend's statement that no good can be done. The Bill before your Lordships differs from anything previously suggested. I have knowledge myself of one or two Bills enacting that everything imported into this country should be stamped with its place of origin in some indelible manner. The novelty in this Bill, and that which renders it desirable there should be inquiry, is that for the first time some machinery is suggested by which such goods as are capable of being marked should be marked; and it would be for a Committee to determine the articles which could be properly marked. I do not understand the meaning of the very violent language used with regard to the country of origin being stamped on goods which are susceptible of being marked, and on the cases for smaller articles. It may be, when you have done all you can by these means through the machinery of the Customs, you will not entirely exclude fraud, nor insure that the distribution may not be fraudulent; but does it necessarily follow that you may not do something in this direction to prevent misstatements as to origin in the course of the distribution of imported goods in this country? A false description is an offence under the Merchandise Marks Act, but the difficulty arises if goods are imported without any marks upon them they may be distributed as being what they are not in reality. All that is desired is to provide against foreign goods being distributed fraudulently; and I think no better machinery for carrying that into effect could be found than the Customs. If a declaration were insisted upon by persons introducing such goods some impediment would be placed in their way, and that could be done if a Bill of this sort were passed. The object of the Bill is to prevent fraud, and your Lordships ought certainly to allow it to be read a second time. The object being good, and the proposition a novel one in respect of the machinery to be employed, it is not desirable that the Bill should be thrown out upon the possibly exaggerated statements which have been 778 made by its opponents, of future injury to the trade of this country.
THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (The Earl of KIMBEELEY)
I do not wish to go into the general argument at all, but I desire to point out a matter of some importance as to how the restrictions which would be involved on the importation of goods from abroad might affect our foreign treaties. I should doubt considerably, though I would not venture to lay down any doctrine positively on the matter, whether the passing of this Bill might not lead to remonstrances by foreign Powers in regard to those restrictions. The provision that goods made in prisons should when imported into this country be so marked cannot, I think, as anybody reflecting upon it will see, be of any use, inasmuch as such marking must necessarily depend on the action of the foreign Governments concerned. Is it expected that we should enter into negotiations with those Governments with the object of ensuring the marking of prison-made goods? If restrictions are to be imposed, why should we not have restrictions upon English goods, and why should not sellers here be compelled to give a guarantee that the goods sold by them are of English origin. Where should we be landed then? Supposing you were to require it, how could you possibly tell whether goods were of English origin or not when they came to be sold in retail? I have often heard that articles known to be made in this country are deliberately sold here on a large scale as if they are foreign goods.
THE EARL OF KIMBERLEY
No, that is exactly what I wish to point out. The Merchandise Marks Act does not prevent the sale of those goods by retail in the least, and they are constantly sold as "made abroad." Of course, if there are marks a penalty can be inflicted. Though I would not say that this is a Bill absolutely favouring Protection, I assert that it constitutes an endeavour to place foreign goods at a disadvantage in regard to English goods. That, I maintain, is the object of the Bill.
§ THE DUKE OF RUTLAND
thought that the object was precisely the reverse of that which had been stated by the 779 noble Earth. The desire of its promoters was to prevent foreign goods from receiving undue advantage in regard to English goods.
§ On Question? their Lordships divided:—Contents 49; Not-Contents 26.
§ Resolved in the affirmative.
§ Bill read 2a accordingly, and committed to a Committee of the Whole House.