Lords Sitting of 3 July 1907

PRIVATE BILL BUSINESS.
North Staffordshire Railway Bill.—Moved, That the order made on the 20th day of March last, "That no Private Bill brought from the House of Commons shall be road a second time after the 18th day of June next," be dispensed with, and that the Bill be now read 2a; agreed to: Bill read 2a accordingly, and committed: The Committee to be proposed by the Committee of Selection.
Dundee Corporation Order Confirmation Bill [H.L.].—Read 3a (according to order), and passed, and sent to the Commons.
Gas and Water Orders Confirmation (No. 2) Bill [H.L.]; Tramways Orders Confirmation Bill [H.L.].—House in Committee (according to order): The Amendments proposed by the Committee made: Standing Committee negatived: The Report of Amendments to be received To-morrow.
Local Government (Ireland) Provisional Orders (No. 2) Bill.—House in Committee (according to order): Bill reported without Amendment: Standing Committee negatived; and Bill to be read 3a To-morrow.
Local Government Provisional Orders (No. 13) Bill.—Read la; to be printed, and referred to the Examiners. (No. 92.)

RETURNS, REPORTS, ETC.
  EAST AFRICA PROTECTORATE.
  Correspondence relating to the flogging of natives by certain Europeans at Nairobi.

  TRADE REPORTS: ANNUAL SERIES.
  No. 3846, Spain (Bilbao); No. 3847, Germany (Frankfort).
  Presented (by Command), and ordered to lie on the Table.

  SEA FISHERIES REGULATION ACT, 1888.
  Order made by the Board of Agriculture and Fisheries under the provisions of the above Act, for the variation of an order for the creation of the Eastern Sea Fisheries District, together with Report by inspector on inquiry.

  SHOP HOURS ACT, 1904 (COUNTY OF SOMERSET).
  Order made by the council of the county of Somerset, and confirmed by the Secretary of State for the Home Department, fixing the hours of closing for certain classes of shops within the parish of Tiverton.
  Laid before the House (pursuant to Act), and ordered to lie on the Table.

  PROHIBITION OF MEDICAL PRACTICE BY COMPANIES BILL, [H.L.]
  Bill read 3a according to order.
  *THE LORD PRESIDENT OF THE COUNCIL (The Earl of CREWE): My Lords, I have one or two small Amendments to this Bill. The House may remember that the last time the measure was before your Lordships the noble Lord in charge of the Bill, Lord Hylton, had put down an Amendment to Clause 1, and I suggested then that if he would confer with the Department we might be able to frame some form of words which would be agreeable both to him and to us. The noble Lord was kind enough to carry out that suggestion, and I understand that he agrees to the Amendments which we propose. The point which arose was whether, in the case of a company contravening the provisions of the Bill, all the directors, officers, and others should be made personally liable, and it was suggested that in some cases that provision might operate rather hardly. Consequently, we have proposed that while the company itself should be liable, which, of course, is one of the principal objects of the Bill, the directors and officers of the company should only be liable if they knowingly and wilfully authorised or permitted such contravention. That seems to meet the case of anybody who for some reason or other is really not personally concerned and so ought not to be personally liable. I

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  beg, therefore, to move the first Amendment standing in my name.
  Amendment moved—
  "In Clause 1, page 1, line 8, to leave out from the second word ' company' to the word ' shall' in line 10."—(The Earl of Crewe.)
  On Question, Amendment agreed to.
  Amendment moved—
  "In Clause 1, page 1, line 12, after the word 'happens' to insert the words 'and every director, manager, or other officer of the company who knowingly and wilfully authorises or permits such contravention shall incur the like penalty.' "—(The Earl of Crewe.)
  On Question, Amendment agreed to.
  *THE EARL OF CREWE: There is also a small Amendment to Clause 2 of a drafting character. It is the opinion of the Department that the form of words which we propose to insert carries out the design more fully and completely than do the words in the Bill as it stands. I beg, therefore, to move that this Amendment be agreed to.
  Amendment moved—
  "In Clause 2, page 2, line 5, to leave out from the word "means" to the end of the clause, and to insert the words ' any body corporate wherever established which carries on business in the United Kingdom.'"—(The Earl of Crewe.)
  On Question, Amendment agreed to.
  Bill passed, and sent to the Commons.

  IMPORTED WATCH-CASES BILL.
  Read 1a, and to be printed. (No. 91.)

  SUGAR BEET GROWING IN ENGLAND.
  *THE EARL OF DENBIGH: My Lords, I rise to call attention to the fact that when the policy of His Majesty's Government with regard to the Brussels Convention was announced, provisional contracts had been signed for growing 2,000 acres of sugar beet in the neighbourhood of Sleaford, that financial arrangements were in process of completion for the erection of a local factory to employ 120 men in the winter months, and that it has now been found necessary to abandon the whole project owing
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  to the uncertainty created by the action of the Government.
  I do not feel that I need apologise for again bringing this subject before your notice at so early a date, because I know that any practical proposal for the purpose of improving the agriculture of this country meets with great attention from your Lordships. I wish I could say the same with regard to the attitude of His Majesty's present Government towards this particular question. It seems to me that they have got so tied up with the various pledges they gave previous to the general election with regard to the Sugar Convention that it, is very difficult to get them to consider anything on this question if it in any way tells against them.
  I would remind your Lordships, with regard to the Sugar Convention, that it was passed after a great deal of controversy for the purpose of stopping the sugar bounties and suppressing the foreign cartels; and it is very often forgotten that those cartels did just as much harm as the direct bounties themselves. The Convention was very roundly abused by the Party now in power, mainly, I believe, because it was passed by the late Government; and the then Opposition, on the hunt for battle cries, thought the Convention would serve them on many political platforms in this country, and they made it so by laying to the door of the Convention all the blame for the rise in the price of sugar which took place a year and a half after the Convention was passed. I think it is generally admitted by people who regard the matter impartially that this rise in the price of sugar was really caused by the great shortage of the European crop. But the rise afforded too great an opportunity to be lost, and the result was that many Members of His Majesty's Government and a great many of their supporters went about the country saying that it was wholly the result of the Convention.
  I was very glad to see the other day an admission from the noble Lord, Lord Denman, who has dealt with this question before, to the effect that he did now admit that this rise in price was to a large extent due to the short crop. I think it a great pity that the noble Lord

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  did not mention that fact until I rather forced it from him by recalling to his notice some facts which he could not very well controvert. The noble Lord then went on to say that he thought the rise in price was also caused indirectly by the Convention, through the fact of Russian and Argentine sugar not being allowed into this country. Previous to the Convention the amount of Russian sugar that came in was about 15,000 tons. The amount that came from the Argentine was very small indeed, and I believe the Argentine is at the present moment an importing and not an exporting country at all. Considering that the world's crop of sugar is 12,000,000 tons and that the amount consumed in this country is nearly 2,000,000 tons, I think that to contend that the coming or not coming in of 15,000 tons or so of Russian sugar was any factor in the rise in the price is a very bold statement; and if the noble Lord persists in that opinion I can only admire from a distance the hardihood and originality of his ideas.
  On various political platforms throughout the country previous to the general election a great deal of what I can only call most undiluted nonsense was talked on this subject by politicians of every rank, and the people of the country were given an entirely erroneous impression of the facts of the case. The members of the Government then found themselves committed to pledges against the Convention, and they gave no thought or heed as to how their action would affect the agricultural question in this country, and the result is the situation I want to bring before your Lordships to-day. The Government seem to me to have steadily ignored every attempt we have made to call their attention to the practical side of the beet sugar industry, and do not appear to have taken any trouble whatever to make themselves acquainted with the most elementary facts connected with the practical side.
  A year ago I ventured to draw the attention of the House to the question. I was answered by the noble Earl the President of the Board of Agriculture and Fisheries, who informed me that he thought there was only about £3 per acre profit in it to the farmers, and he seemed
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  after that to dismiss it from his mind altogether as not being worthy of consideration. Shortly after, the noble Earl received a deputation of gentlemen from the neighbourhood of Sleaford, in Lincolnshire, who informed him that a movement was on foot there to bring about the starting of the beet sugar industry. They pointed out to him the bearing upon the question which the Brussels Convention had, and asked him what hope there would be of getting some rebate in the matter of excise from His Majesty's Government with a view of starting the industry. The noble Earl turned them down very shortly indeed. He told them they could not hope for anything in the way of rebate, and he refused to discuss the question of the Convention; and these gentlemen went away with feelings of great disappointment at the reception they had received from His Majesty's Government.
  Then recently in this House—in May last—I asked if the Government were now prepared to do anything to encourage the starting of this industry in this country, and, although I think it deeply affects practical agricultural questions, the noble Earl the President of the Board of Agriculture did not see fit to say a word upon the subject. He left it entirely to Lord Denman, who dealt with it partly from the Treasury point of view and partly from the political point of view, and to the noble Lord the Undersecretary of State for Foreign Affairs, who dealt with it from the Foreign Office point of view. The noble Lord Lord Fitzmaurice told us that the Foreign Office had nothing to do with sugar. Well, that is exactly what we complain of. The Foreign Office has to deal with this very important question of the Convention, but they absolutely and totally ignore the bearing which it has on British agricultural interests at home, and that is typical of the whole attitude of the Government with regard to this question. The noble Lord commented in pleasant sarcasm on the remarks which I had made. He spoke of the "sugary" nature of the suggestions I had put forward and the "mysterious benefits" which he said my proposals were going to bring to the agricultural population. All I can say is that it is extremely disappointing to have a perfectly serious

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  business proposition of this sort treated with contempt and indifference, and to be told by Lord Denman that we were simply impracticable enthusiasts, which I can only take as being the polite Parliamentary way of saying we are agricultural cranks and not worthy of notice. The result is that, although we have done our best to call the attention of His Majesty's Government to the great necessity of maintaining the Convention in the interests of this very important question, the agricultural side of it has been^ absolutely ignored.
  The other day we were met with the announcement in the House of Commons that the penal clause was going to be denounced. The penal clause is the one which forbids bounty sugar or cartel sugar being brought into this country, and it is practically the only weapon which we have for compelling respect for the Convention. What is the result? At the time the announcement was made, this movement at Sleaford, to which the attention of the noble Earl the President of the Board of Agriculture had been previously drawn, had made very great progress. The landowners and farmers round Sleaford are of a go-ahead nature—I wish that landowners and farmers in all parts of the country were the same—and they convinced themselves that there was a great deal in this sugar question and they, determined to try a practical experiment on a commercial scale. An eminent German expert was engaged to come over and advise them, and provisional contracts for the cultivation of no less than 2,000 acres of beet sugar in the district were drawn up with the local agriculturists, many of them small occupiers and freeholders, who undertook to grow five, ten, fifteen, or twenty acres apiece. These contracts were completed, signed, and stamped, and very favourable railway rates had also been arranged. The factory site had been chosen, the water supply carefully gone into, and a great deal of financial support promised. The factory was to cost some £50,000 or £60,000, and altogether £90,000 was going to be raised for the enterprise. And to show your Lordships that it was a serious business proposition I would mention that an eminent firm of cattle food makers were prepared to find £30,000 of the
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  capital on condition that they had the handling of the slices for the purpose of cattle food. The factory was going to turn out 7,000 tons of sugar a year, and it would have provided employment for about 120 men in the winter months. That is the first example we have had of the agriculturists of the country really taking hold of this matter as a really serious business proposition.
  I was invited the week before last to meet the promoters of this scheme. I do not know whether they would be called agricultural cranks the same as myself, but at all events they were business men who knew what they were about; and I heard read a report by their committee saying that it was useless now to go further with the matter, because they could not recommend anybody to put up a sum like £90,000 for this enterprise if, through the action of His Majesty's Government, the Convention was going to be endangered with a chance of the whole sugar trade being once more placed under the dominion of the foreign cartels. The result is that the whole scheme has been dropped and the agriculturists, not only of Lincolnshire, but also of Yorkshire, where a similar scheme was in preparation, have been very greatly disappointed.
  I have no doubt that His Majesty's Government will taunt me with respect to the wisdom which they displayed in having steadfastly refused everything in the nature of a rebate of excise, seeing that these gentlemen have been willing to go on with their enterprise without anything in the nature of a rebate. The answer to that is, as I stated at the time I asked for a rebate, that it is purely a question of price. When I first asked for a rebate the price of sugar was somewhere about 8s. 6d. a cwt., which is considerably below the cost of production. The price is now nearer 10s. a cwt. Then, again, the land round Sleaford is exceptionally suited for this particular industry, and the farmers there believe, from practical experience, that they can grow some twenty tons to the acre, as against twelve tons to the acre, which is the Continental average. The consequence is that they are able to work on a better scale than would be the case on the average land throughout

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  the country. At the same time, I wish to repeat that I believe it will be very difficult to start this industry on average land if some consideration is not given to the factories in the early part of their existence.
  One of the chief arguments brought forward by Lord Denman, in his reply to my request for a rebate, was the loss of revenue that would ensue. The noble Lord was aghast at the prospect of losing a figure which he put at possibly £400,000. That was a purely arbitrary figure which I had mentioned. I said that if the sugar production of the country reached a certain total the rebate might amount to £400,000. Of course, the loss in revenue is naturally a serious question, and I can quite understand that for a Chancellor in extremis the prospect of losing any revenue at all is a very serious matter, particularly when that Chancellor is at his wits' ends and would not know where on earth to turn for a substitute for that revenue. But I would ask the noble Lord and the Treasury whether they have yet considered what the loss of revenue in this way would mean. The rebate which I suggested was £2 10s. a ton, the amount permitted by the Convention. At this rate £400,000 would mean a rebate on 160,000 tons of sugar. On the scale of the factory referred to in my Notice this would mean the output of twenty-three rural factories treating 1,500,000 tons of roots on a four-course system, thus improving the cultivation of some 300,000 acres of land in this country. But this loss of revenue would not occur until this was an accomplished fact and until the industry was practically established, and I respectfully submit to the House that the benefits to be gained by the establishment of this industry would be well worth paying something for, to say nothing of the fact that a considerable amount would come back in income-tax and in the general prosperity of the neighbourhood. But the mere fact of its necessitating a loss of revenue was sufficient for it to be turned down by the Government and not thought of any more.
  It is interesting, however, to note what the attitude of the Government is with regard to small holdings. The other day a Small Holdings Bill was introduced into the other House which no doubt has been
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  looked upon as likely to prove an efficient and useful snowball against your Lordships' House, and that Bill is to be assisted in its career with a grant of £100,000 in the first year, the Chancellor of the Exchequer giving that without turning a hair. Nobody can say whether that project is going to be successful. The Government themselves seem to have so much doubt upon the question that they do not even urge the purchase of land, but want to lease it, so that if it is unsuccessful the landowner and the taxpayer will have to stand the racket. You have only to consider this grant of a large sum for a purely untried scheme and put it against the other project, which would mean a loss of revenue only after an accomplished fact, and I think your Lordships will see how untenable the argument of the Government is.
  I would also draw attention to the fact that this industry ought peculiarly to appeal to all who are interested in the co-operative movement. The greater number of these factories on the Continent are run upon co-operative principles by the farmers and the landowners in the neighbourhood, and if they are successful there I cannot see why they should not be successful here. I suppose we shall be told that all this alarm with regard to the dropping of the penal clause is quite unnecessary and that the Government do not intend to do anything in the nature of reviving bounties. If the Government do not wish to see bounties revived why do they not have the courage of their convictions and leave the Convention alone? I have heard members of the Government say: "We do not approve of bounties ourselves, but if other people are foolish enough to give bounties why should not we profit by them?" This lofty principle is akin to that of the gentleman who said he strongly objected to burglaries on principle, but if other people were foolish enough to commit them he did not see why he should not profit by being the receiver of stolen goods, thereby getting them cheaper.
  The real difficulty we have to contend with in this question is the fact that the general public seems to know very little about the intricacies of it. It is an intricate question, but on the Continent,

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  where the sugar industry is a very important branch of agricultural and of commercial business, people take a much keener interest in and have a far greater knowledge of it than here. The result is that His Majesty's Government seem to be taking advantage of the ignorance which is displayed by the general public in this country to use this question of the Convention purely for political purposes. I sincerely hope that the public will now begin to realise that this question is not one which concerns merely the West Indies, but is applicable to the greater part of the Empire, and I trust that this concrete example from Sleaford of the effect of the action of His Majesty's Government will bring home to the agriculturists of the country that the Convention concerns them to a far greater extent than they have ever thought before.
  *THE UNDER-SECRETARY OF STATE For FOREIGN AFFAIRS (Lord FITZMAURICE): My Lords, I am sure that no Member of your Lordship's House will complain for a single instant of the noble Earl having again called attention to this question. I think we shall all agree that this is a most important question, but it would be well if noble Lords were to recognise that what separates us are really questions of principle and of belief. In any case I certainly can say for noble Lords on this side of the House that we fully recognise the complete sincerity of the noble Earl himself. The whole question of bounties and cartels is one upon which the majority of reasonable men may agree to differ, and upon which there probably always will be differences of opinion. All we ask is that the noble Earl should recognise that in regard to us. I regret, however, if I may say so without offence, that in his speeches and letters on this subject the noble Earl is too much given to introducing allusions about persons being animated by the desire to capture votes on political platforms, and to take advantage of a question like this Convention when a general election is coming on. Personally, I make no charge of that kind, for I recognise that at election times there is always a disposition shown by both Parties to indulge in a certain amount of good-humoured exaggeration. At the same time it will be readily acknowledged that,
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  notwithstanding this, the traditions of public life are high and honourable on the whole.
  When the noble Earl's notice first appeared on the Paper, we were in some doubt as to which Department was particularly aimed at. But in the end we came to the conclusion that we were all included, and the speech of the noble Earl has certainly justified that belief, for he indulged in a good deal of random firing at all the Government offices. First of all he had a shot at my noble friend the President of the Board of Agriculture, then at the Board of Trade-and the Treasury, and finally he delivered an attack upon the office which I have the honour to represent. In the course of that portion of his speech he complained of the Foreign Office because he alleged that we did not in the least care for the interests of agriculture. My Lords, I venture to meet that statement with a positive contradiction. It is true that I did say the other day that the Foreign Office had no direct responsiblity for agriculture. That is, I am afraid, almost a platitude. But it is wholly wrong to say that it either does not care for or underrates the importance of agriculture. The Foreign Office is called upon constantly to negotiate with foreign countries as to a great number of questions, the real care and decision of which rests more with other Departments of the Government than with the Foreign Office. I venture to assert that during the short time we have been in office we have actively shown what we are disposed to do for the agricultural interest. That is, perhaps, a matter which would be more properly developed by my noble friend the President of the Board of Agriculture, who, no doubt, if this debate continues, will be prepared to address your Lordships in regard to that part of the question.
  The present position of the Sugar Convention is fairly well known, because a few days ago a white Paper was laid before Parliament, in which the Secretary of State explained a little more fully than in replies to Questions in the House of Commons what the present attitude of the Government is. As there still appears to be some doubt in the minds of noble Lords, and especially

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  in the mind of the noble Earl who brought forward this question, I would ask your Lordships' permission to read two short extracts from the despatch of Sir Edward Grey to Sir A. Hardinge, His Majesty's Minister at Brussels. The Secretary of State wrote—
  "His Majesty's Government have come to the definite conclusion that the limitation of the sources from which sugar may enter the United Kingdom, whether by prohibition or by the imposition of countervailing duties, is inconsistent with their declared policy, and incompatible with the interests of British consumers and sugar-using manufacturers, and that consequently it will be impossible for them to continue to give effect to the provisions of the Convention requiring them to penalise sugars declared by the Permanent Commission to be bounty-fed."
  The Secretary of State then proceeded—
  "It is, however, possible that, in the special circumstances of the case, the other Contracting States might judge it to be preferable to accord to the United Kingdom, by a Supplementary Protocol, a special exemption from the obligation to enforce the penal provisions of the Convention. They might be the more disposed to take this course, inasmuch as such an exemption would be unlikely, at all events for a considerable period, to have any material effect of a prejudicial character upon the export trade in sugar from any of the Contracting States."
  As that despatch is dated June 1st last it must be quite evident that negotiations upon the particular points mentioned in the second paragraph are continuing at this moment, and until those communications are completed it is impossible for me to make a statement outside the four corners of this despatch. But there is one thing which I would desire at once to point out to the noble Earl—namely, that he is quite mistaken in supposing that, if the policy adumbrated in the second paragraph I have read were carried out, it would immediately, by the abolition of the penal clauses, introduce the mischiefs of cartel sugar in this country. The abolition of the penal clauses by themselves, no doubt, would have the effect of making it easier than it now is for the sugars of non-Convention countries—such as Russia—to come into this country. But that is a different matter from the far larger question of the introduction of cartel sugars, which formerly were introduced here from countries like Germany now within the Convention. These are questions, however, that could be discussed with greater advantage at a later period
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  of the session, when we may be able to make a fuller statement than is now possible as to the exact position in which this country will stand when we have received replies to the suggestions adumbrated by the Secretary of State.
  But as to the broad lines of the policy of the Government I wish to see no misunderstanding. We are not ashamed to acknowledge that we are above all things a free trade Government. We quite admit that many noble Lords opposite do not share those views. We respect their views, and we hope that the same toleration will be extended to our sincerity and consistency of conviction. The Government are convinced that, whatever small advantages might possibly accrue locally by the development of such industries as those for which the noble Lord has pleaded, they would be infinitesimal compared with the loss of those advantages which the absolute freedom of entry of sugar into this country would bring about. The noble Lord told us about 120 men who would have been employed if this factory had come into existence. I remember very well the late Mr. George Palmer, of Reading, telling me about the time the late Baron H. de Worms was engaged in negotiating a sugar convention that if that convention had been ratified the result would have been that he would have been compelled immediately to close a new branch of his works which he had just built in order to develop the making of cakes into which a great quantity of sugar entered; and several hundred men would probably have lost their employment. I put that case, of which I happened to hear by accident, against the noble Lord's.
  *THE EARL OF DENBIGH: My point was that the factories I had in view, being in the rural districts and villages, would be a means of bringing people back to the land, which is a quite different proposition from the case of factories in towns.
  *LORD FITZMAURICE: I quit sympathise with that view. I have represented in Parliament a constituency which was largely rural, and I have always felt that anything which would bring about the establishment of factories in our villages would be a very desirable

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  thing; but there is another side to the question. Looking at employment in the country as a whole, I believe the abolition of the system produced by the Convention and the free introduction of sugar into this country would bring about more employment than the plan proposed by the noble Lord.
  I do not think the noble Earl was quite accurate in regard to the quotation he made of the statement by my noble friend Lord Denman in regard to the rise in the price of sugar. The noble Earl stated that my noble friend had said that the rise in the price of sugar shortly after the Convention was mainly due to the shortage of the crop on the Continent. What my noble friend did say was that it was "in the first instance" so due. That is an important distinction. My noble friend Lord Denman was anxious to be accurate, and I do not think the statement he made in any way went beyond the facts.
  I do not desire in the least to overstate the case in regard to price. The manner in which these artificial arrangements, contrary to the spirit of free trade, work out is altogether unforeseen, and their consequences, and the reasons for them, never admit of exact proof, because in great trade movements the questions of price and value are not the result of one thing only. They depend upon a great number of different circumstances opera- ting at different times, and sometimes operating together. It may fairly be argued that the great rise in the price of sugar which took place very soon after the Convention was very largely due to the shortage of a portion of the crop. But that was not the only reason. It is quite acknowledged by those who have studied this question that the fact that we prohibit Russian, Argentine, and Danish sugar from entering the United Kingdom does not lessen the available supply of sugar in the world, and that sugar which would otherwise have been sent to this country finds its way elsewhere, and thus displaces sugar which, instead of being sent to those destinations, is sent to the United Kingdom. For example, Russian sugar finds its way to Persia, and in consequence a certain amount of Austrian sugar is sent to the United Kingdom instead of to the East.
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  The blank which has been made by the diversion of Russian sugar has very likely been filled up in our markets by a larger importation of French sugar. Although it may be quite truly said that since sugar from Convention countries has taken the place in our markets of sugar from the excluded and non-Convention countries there has been no actual diminution of supply, it may nevertheless be fairly argued that the Convention has brought about a bad result.
  If it were asked how, in view of the fact mentioned, the prohibition of Russian sugar in this country could affect the price we had to pay for our sugar or could really limit our supply, the answer would be that any interference with the natural flow of commodities along the routes which they follow when left to themselves must involve friction and must tend to make them more expensive. A case may easily arise, when sugar prices are unduly inflated by speculation, when it may be desirable for an importer to procure sugar from a special source which may for the moment be the most favourable one, for it is just at such periods of speculation that prices are not, as they are at more stable periods, uniform throughout the world. The penal clause, in shutting out certain sources, even though they are sources of minor importance, may in this case inflict a real injury on purchasers. Such interference with the natural course of trade, and such interference with the right of a purchaser to obtain goods in any market which may accidentally be especially favourable to him, will cease, so far as purchasers in this country are concerned, with the abandonment of the penal clause. It will give the intending purchaser the knowledge that all markets are open, and that fact tends to produce an equalising effect on the market.
  These are the main arguments which have induced the Government to believe that the Sugar Convention is, on the whole, a document which has not had any good effect upon British trade. At the same time, the Secretary of State has recognised that, as this country has set its hand and seal to a document which has brought about great changes in other countries, we must approach

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  those results from the point of view to a certain extent of the effects of our conduct upon foreign countries. That is the main reason why the Secretary of State has attempted to find out whether, without inflicting grievous disturbance upon foreign countries in regard to some of those arrangements which we have ourselves practically encouraged them to enter upon, we cannot relieve our own consumers of sugar by abolishing the penal clauses from the worst consequences of this, as we think, unhappy Convention.
  *THE MARQUESS OF LANSDOWNE: My Lords, this is, perhaps, hardly the occasion for a prolonged debate upon the important question which has been brought before the House to-night. I feel that the more because I gather from my noble friend who has just sat down that negotiations are still in progress, and that before the end of the session we may have a fuller opportunity of considering the position which His Majesty's Government intend to assume.
  But I wish, in the first place, to say that I think that those who believe in the possibility of introducing the cultivation of sugar-beet into these islands—and I am under the impression that the number of those people is increasing—owe a great debt of gratitude to my noble friend for the courage and perseverance which he has shown in bringing this question before the House. I think my noble friend has been well advised in making it clear that the issue he desired to bring forward was not the same that he had raised on previous occasions. On former occasions he pressed His Majesty's Government to encourage the cultivation of sugar-beet by the grant of a rebate. I say, frankly, that I was not very much surprised when I learned from noble Lords opposite that that was a suggestion which they did not see their way to adopt. My noble friend made, however, rather a shrewd point when he suggested to the House that a Government which had shown the splendid audacity displayed in the Land Bills now before Parliament need not have been too timorous when it came to his much more modest proposal.
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  But I do not desire to press that point this evening.
  What my noble friend tells us to-night is that the announcement recently made by His Majesty's Government in regard to what I can only call their withdrawal from the Brussels Convention has had the effect of strangling at its very birth a well thought out movement for the introduction of what might have proved a very important branch of industry in the rural districts of these islands. What is the attitude, then, of His Majesty's Government towards the Convention? I gather from the despatch of the Secretary of State which has been referred to that they do not desire formally to dissociate themselves from the other Powers who have signed the Convention. What they do desire is to intimate to all concerned that they refuse any longer to enforce the clause under which those Powers bound themselves to put certain penalties on bounty-fed sugar. I have a pretty distinct recollection of the negotiations which led to the Brussels Convention, and my recollection is certainly to the effect that the penal clause was the essential element in the whole matter. There had been, as some of your Lordships may be aware, attempts in former years to bring about an international arrangement of this character. Those attempts had always broken down. Why? Because it was always found impossible to obtain the consent of this country to a penal clause. The penal clause, as I have said, was that without which I believe the Brussels Convention could not have been obtained. I understand that so far as that clause is concerned His Majesty's Government have fully made up their minds to extricate themselves from their obligations at the earliest possible opportunity.
  It does not seem to me to be enough to say, as we are saying, that we have no intention of giving bounties ourselves to British sugar products. That is not the point. The point is whether we desire to close our markets to sugar produced under this artificial and, as I shall always believe, most mischievous system. If our markets are, as I suppose they will be, re-opened a few months hence

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  to bounty-fed sugar, it will be difficult to convince me that that will not mean the pulling out of what I would describe as the keystone of the arch of the Brussels Convention. What are the reasons given in the despatch of the Secretary of State? We are told that this penal clause is inconsistent with the declared policy of the Government and incompatible with the interests of British consumers and sugar-using manufacturers. What is the declared policy of His Majesty's Government? It was announced this evening in vigorous terms by my noble friend. He said—
  "We are a free trade Government."
  Well, my Lords, I say there never was a clearer violation of free trade, there never was a more frontal attack on the principles of free trade, than this arrangement of sugar bounties and sugar trusts operating under the shelter of those bounties.
  My noble friend suggested that His Majesty's Government were opposed to what he spoke of as interference with the natural movement of commodities. Could any movement of commodities be more unnatural than the movement of sugar which results from these trusts? As to the interests of the consumers and manufacturers of sugar, I have always been under the impression that what best suited them was that the price should be moderate and steady. It was because the system of bounties led to prices which were neither moderate nor steady that I for one was in favour of a determined attempt to put an end their existence.
  Then as to the interests of the consumer. Is it the case that the Convention had the effect of raising prices against consumers? What it did was to raise the price from the low level at which it once stood, owing to the manner in which the market was flooded with bounty-fed sugar—a level which I think once reached the figure of 5s. 9d. a hundredweight—to a figure corresponding much more closely to the actual cost of producing sugar. Under the system of bounties fluctuations of price took place of the most extraordinary description. In 1889 the price fluctuated between 11s.
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  and 28s. a hundredweight, and in the ten years between 1893 and 1903 it ranged between 6s. and 19s. Now I do not believe fluctuations of that kind are really compatible with steady, honest business, and I should like in that connection to quote a well-known sentence of Mr. Gladstone's upon this subject. Mr. Gladstone once said—
  "I do not think any gain founded on inequality or injustice can bring good to the consumer."
  That was our point of view when this Convention was negotiated. I think we may fairly claim for the Convention that it has had the effect of widening and increasing the sources of supply, and that, to my mind, is a matter of extreme importance. No one can say that since the Convention there has been any sign of a shrinkage of the supply of the world. I shall be corrected if I am wrong, but I believe the sugar crop of the world was larger in 1906 than any previously recorded sugar crop, and the figure for consumption the year before was larger than in any previous year.
  And surely in connection with this question we have a right to take some thought of the interests of our own sugar - producing Colonies. To my mind it is extremely satisfactory that, whereas the imports of sugar produced from other materials than beet were falling steadily between 1890 and 1903, they have shown in the last three years a very considerable rise. Therefore, my Lords, I hope we may claim for the Convention that it has widened the sources of supply, and that it has had, at any rate, some effect in bringing about a revival of the sugar industry in our own Colonies. Of this I am quite sure, that the announcement of His Majesty's Government of their withdrawal from the penal clause has created the profoundest dismay in those Colonies.
  We have heard a great deal about the apprehension with which the manufacturers of sugar products in this country regard the cessation of the occasional supply of cheap bounty-fed sugar. So far as I have been able to ascertain, no real injury whatever has been done to

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  those who are connected with those industries. What has frightened them is that some of them were under the impression—a wholly mistaken impression—that because sugar under the bounty system at one time was sold in this country at 5s. 9d. a cwt., they had a right to look forward to 5s. 9d. sugar in the future as something upon which they could regularly depend. Nothing could be more unlikely than that, under the bounty system, those low prices would continue to prevail. We know how the bounty system works. You have the low prices, you have competition knocked out, and, when a gigantic and carefully organised monopoly has been established, then up go the prices again in the manner in which they used to in former days. As far as the confectioners are concerned—and I wish to speak with the greatest respect of that industry—so far is it the case that they have not been ruined by the Brussels Convention that I see from the published returns that the exports of jam and other kinds of confectionery stand higher for the year 1905 than for the two previous years.
  I have only to say before sitting down that what makes me especially regret the decision at which his Majesty's Government have arrived is this, that it seems to me that our action leaves us open to the imputation that in regard to this important question we are deserting the Powers with whom we acted at the time that the Convention was concluded. It is to me painful to think of the kind of observations which are likely to be made by those Powers upon our conduct in withdrawing from the penal clause. If the Convention breaks down, the responsibility will certainly be laid—and I think rightly laid—at our door. As for the minor matter to which my noble friend behind me has referred, I regret that the particular enterprise in which he takes so much interest should have suffered as it has suffered by the announcement of His Majesty's Government. But the real question is one of infinitely greater magnitude, and in regard to the larger aspects of the case I must say that I greatly regret the decision which His Majesty's Government have intimated.
  THE LORD PRIVY SEAL (The Marquess of RIPON): My Lords, I do not think my noble friend is in the least justified in speaking of our withdrawal from that portion of the Convention from which we propose to withdraw as a case of deserting those countries with whom the Convention has been made, because, as my noble friend knows very well, the Convention contemplated that at a certain date, which is about to arrive, any of the Powers connected with the Convention should have a right to withdraw. That is, of course, a fair announcement to all the Powers concerned that if any one of those countries should at that time not find it to their advantage to continue in the Convention they have a perfect right to give notice of withdrawal. I cannot think that that deserves to be called a desertion of those with whom the Convention was made.
  My noble friend declared that the system of bounties is quite contrary to free trade, and I entirely agree with him. The system of bounties is most objectionable all round, but the system of bounties exists in foreign countries. We are not responsible for them. We think it a bad system, and I think that the evidence that was before the world at the time that the Convention was made showed that it was a bad system for those countries which gave the bounties. But it is not in the least inconsistent with the doctrines of free trade that we should carry out this policy on our side, although it may not be carried out by other countries. My noble friend began by saying that, as he understood that the matter referred to in the last paragraph of the despatch of the Secretary of State was still under consideration and negotiation, he would not enter further for the moment into that question. But he has gone pretty fully into the general considerations of the Convention itself, but I must decline, under the present circumstances, to follow my noble friend in that part of the matter, particularly after the admirable statement which has been made regarding it by my noble friend behind me.

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  With regard to the question of my noble friend opposite, what he has said is a very excellent illustration of one of the most objectionable features of a protectionist system. You cannot have protection in any shape or form without it being quite certain that industries that are founded and grow up under that system will stand in the way of any change; and the longer the protection exists, the greater the number of industrial undertakings that are protected by it, the stronger will be the argument that you ought to continue protection. The evil of taking a first step in that direction is that you are immediately exposed to that argument. If the experiment in which the noble Lord opposite is interested goes on under anything in the nature of a protective arrangement, other undertakings of the same kind will spring up. It is no advantage to a new industry that it should be called into existence by methods of that kind. If it can establish itself in the country that will be a good thing, but if it rests upon artificial arrangements fostering it under circumstances which are not natural to it you are not benefiting at all the people whom you are artificially supporting, but creating a great difficulty in the way of the removal of the protection in the time to come.
  As to the particular case with which we have been dealing to-night, I know that my noble friend opposite, who always takes such a charitable view of the opinions of his political opponents, thinks and believes that the objection which we have always made from the beginning to the Brussels Convention was made for a political purpose. My Lords, it was made in accordance with the principles on which we have always acted, the principles which we have always defended; and if any persons have created an industry under the belief that we made those statements for temporary political or electioneering purposes, and have then founded upon that belief the investment of their money in undertakings of this kind, they have made a very great error.
  House adjourned at Six o'clock till To-morrow, half-past Ten o'clock.