Lords Sitting of 27 March 1911

Preamble
Several Lords—Took the Oath.
MARRIAGES PROVISIONAL ORDER BILL.
Brought from the Commons; read 1a; to be printed; and referred to the Examiners. (No. 40.)
SOUTHAMPTON HARBOUR BILL.
Brought from the Commons; read 1a; and referred to the Examiners.
LONDON ELECTRIC RAILWAY BILL.
Brought from the Commons; read 1a; and referred to the Examiners.

METROPOLITAN DISTRICT RAILWAY BILL.
Brought from the Commons; read 1a, and referred to the Examiners.
The LORD CHANCELLOR The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificates from the Examiners that the further Standing Orders applicable to the following Bills have been complied with:—
Kingston-upon-Thames Bridge.
Felixstowe and Walton Water.
The same were ordered to lie on the Table.

BARRY RAILWAY BILL. [H.L.]
Report from the Committee of Selection, That the Earl Graham (D. Montrose) be proposed to the House as a Member of the Select Committee on the said Bill in the place of the Lord Weardale; read, and agreed to.

CHESTER WATER BILL. [H.L.]
Report from the Committee of Selection, That the Earl of Eldon and the Lord Langford be proposed to the House as Members of the Select Committee on the said Bill in the place of the Earl of Hardwicke and the Earl of Verulam; read, and agreed to.
Report of the Board of Trade on the Chester Water Bill: Ordered to be laid before the House (The Lord Hamilton of Dalzell).

BRIGHTON DISTRICT TRAMWAYS BILL. [H.L.]
Read 2a (according to order), and committed: The Committee to be proposed by the Committee of Selection.
SOUTHAMPTON CORPORATION TRAMWAYS BILL.
Read 2a, and committed for To-morrow.
DOVER CORPORATION BILL.
Read 2a, and committed.

METROPOLITAN WATER BOARD (NEW WORKS) BILL. [H.L.]
THE CHAIRMAN OF COMMITTEES (LORD BALFOUR OF BURLEIGH): My Lords, there is a notice in my name on the Paper with reference to the Metropolitan Water Board (New Works) Bill. I have to move that the time for depositing petitions praying to be heard against the Bill be extended to Wednesday next. I explained the reasons for this the other day, and I think they were generally understood by the House. I beg now to make the Motion.
Moved, That the time for depositing petitions praying to be heard against the said Bill be extended to Wednesday next.—(The Chairman of Committees.)
On Question, Motion agreed to.

WHALEY BRIDGE GAS BILL. [H.L.]
The CHAIRMAN OF COMMITTEES The CHAIRMAN OF COMMITTEES informed the House that the Promoters do not intend to proceed further with the Bill: The Order made on the 23rd of February last, discharged: Ordered that the Bill be not further proceeded with.
THAMES CONSERVANCY BILL.
Message from the Commons that they have committed the Thames Conservancy Bill to the Joint Committee on the Metropolitan Water Board (New Works) Bill [H.L.].
METROPOLITAN WATER BOARD (NEW WORKS) BILL. [H.L.]
Message from the Commons to acquaint this House that they have appointed a Committee of Four Members to join with the Committee appointed by this House as mentioned in their Lordships' Message of the 22nd instant to consider the Metropolitan Water Board (New Works) Bill [H.L.].
HARBOUR BILLS (1911).
Report of the Board of Trade on the Chester Water Bill [H.L.]: Laid before the House (pursuant to Order of this Day), and to be printed. (No. 41.)

BRITISH INTERESTS IN JAPAN AND KOREA.
EARL STANHOPE*EARL STANHOPE rose to ask His Majesty's Government—

1. Whether the decision of the Hague Tribunal with regard to perpetual leases to foreign residents in Japan has been fully put into effect; and

2. Whether, in view of the change in the status of Korea, His Majesty's Government propose to take measures to protect British interests in that country; and to move for Papers.

The noble Earl said: My Lords, I rise to ask His Majesty's Government the Questions standing:in my name. The question of perpetual leases as they are called is exercising the minds of British residents in Japan to no inconsiderable extent. As your Lordships are no doubt aware, by the old law of Japan foreigners were forbidden to hold land in that country, and in order to overcome the difficulty the Japanese Government forty or fifty years ago instituted a system of what is called perpetual leases—granting, that is to say, areas of land in each of the three chief ports of Japan—Yokohama, Kobe, and Nagasaki—for the purpose of forming foreign settlements in those cities. These leases were granted to private individuals and carried with them immunity from the Land Taxes, an arrangement which was confirmed by agreements made with the Governments of foreign Powers. Recently the Japanese Government held that the
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new House Tax was not included in the exemption. The question was discussed at considerable length in Japan, and after considerable delay the matter was referred to the Arbitration Court at the Hague, and this Court finally gave a verdict against, the Japanese Government.
This verdict was given four or five years ago, and the Japanese Government have recently instituted laws complying with the ruling of the Hague Court, but I understand that subsidiary questions which hang upon this judgment are still outstanding, and this is a matter which is naturally depreciating the value of the leases held by British subjects. These leases were confirmed, as I have said, by Treaties with the foreign Governments, and there is a considerable feeling of uneasiness among British residents in the Far East that His Majesty's Government intend to give up the leases in return for concessions in the new Japanese Tariff. These leases were granted to private individuals and were bought by them at a price largely in excess of the current value of adjacent lands in virtue of the immunity from taxation. While, therefore, additional security is given to these leases, they are not totally dependent upon the maintenance of the Treaties between the Powers—a point which is confirmed by a Memorandum from Sir Ernest Satow, then British Minister in Tokyo, to Viscount Aoki, soon after these Treaties came into force; in which he stated—
"If no stipulation on the subject had been made in the Treaty of 1804, justice and good faith would call for the observance of the contractual obligations thus created between the Japanese Government and the foreign renters."
It is clear, therefore, that while His Majesty's Government may properly be called upon to protect the rights granted to British subjects, they have no right to give up or modify those rights without the consent of the private owners concerned. I venture to hope that in the reply which will be given to-day on their behalf His Majesty's Government will be able to allay the misgivings of British residents in Japan by satisfactory assurances on these points.
In my second Question I ask whether in view of the change in the status of Korea, His Majesty's Government propose to take measures to protect British interests in that country. The Preamble of the

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Anglo-Japanese Agreement of January 30, 1902, runs as follows—
"The Governments of Great Britain and Japan, actuated solely by a desire to maintain the status quo and general peace in the Extreme East, being moreover specially interested in maintaining the independence and territorial integrity of the Empire of China and the Empire of Korea, and in securing equal opportunities in those countries for the commerce and industry of all nations, agree as follows:"
Then came the Russo-Japanese War, and in the Agreement which was concluded at the termination of that war naturally the Empire of Korea was no longer referred to as such, but the policy of the open door was perpetuated in the new Agreement; for Article III of the Anglo-Japanese Agreement of August 12, 1905, is as follows:—
"Japan possessing paramount political, military, and economic interests in Korea, Great Britain recognises the right of Japan to take such measures of guidance, control, and protection in Korea as she may deem proper and necessary to safeguard and advance those interests, provided always that such measures are not contrary to the principle of equal opportunities for the commerce and industry of all nations."
This was followed by the Convention of November 17, 1905, some months after peace was signed, in which Japan assumed the entire control of the foreign affairs of Korea, and undertook the duty of watching over the execution of the Treaties actually existing between Korea and the Powers; and five days later a circular Note was addressed to the Powers in which the Imperial Government of Japan declared that—
"in assuming charge of the foreign relations of Korea and undertaking the duty of watching over the existing Treaties of that country they will see that those Treaties are maintained and respected, and they also engage not to prejudice in any way the legitimate commercial and industrial interests of these Powers in Korea."
Finally on August 29 of last year the annexation of Korea by Japan was announced, and by a Declaration issued on the same day it was stated that the Treaties with foreign Powers ceased to be operative in consequence of annexation, and that Japan's existing Treaties would as far as practicable be applied to Korea. Extraterritorial rights were abolished and the tariff and coastal trade for foreign ships was to be permitted as before for a period of ten years. Several precedents have been advanced for the claim that the act of
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annexation of itself cancelled all Treaties formally existing between the Empire of Korea and foreign Powers. In the case of Madagascar, which presents the closest analogy, it was only after vigorous protestations by the late Lord Salisbury that England accepted the attitude adopted by France, and she has never relinquished the principle that succession to rights involves succession to responsibilities. But in all three cases—that of Hawaii, of Texas, and of Madagascar—the country annexing territory had in no case made itself previously responsible for the foreign policy of the country it annexed or solemnly pledged itself to watch over existing Treaties, as did Japan in the case of Korea. I venture to think that your Lordships will agree that this fact very materially affects the question.
And now as to how far the claim to cancel Treaties formerly in existence is likely to affect British interests in Korea. It would seem reasonable to suppose that if extraterritorial rights are unnecessary in Japan, they can hardly be considered necessary in a country under the same Government just across the Straits of Tsushima. But the circumstances in the two countries are so entirely different that no comparison can be made between the two. Japan is faced with untold difficulties. Imagine a country situated somewhat in the geographical position of the Channel Islands inhabited by what is considered an inferior race of a childlike and hopeless simplicity. It is obvious that the dregs of humanity in our great cities would be anxious to emigrate thither to exploit those people for their own advantage, and this is exactly what has happened in Korea. An undesirable class of emigrant gives rise to situations with which the authorities with the best will in the world must be unable to cope.
Nor is this all. Korea is at present not under similar laws to Japan, but under military jurisdiction. Again, there is not in Japan freedom of the Press as we understand it; but there is no semblance whatever of freedom of the Press in Korea. Four out of the seven newspapers which existed. there six months ago have been abolished, and recently the remaining three papers were notified that all communications to the Press and to the public would be made by the Governor-General of Korea and by

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no other authority. If all Japanese officials and colonists were of the high character of the late Prince Ito, of the present Governor-General, General Terauchi, or of Mr. Nabeshima, there would, of course, be nothing to urge against this abolition of extra-territorial rights, but it is impossible that they should he able to secure British residents from circumstances which they would wish to avoid if possible. There is this further point with regard to extraterritorial rights. Not only are the emigrants of a character who might give evidence in Courts which would not be substantiated, but naturally some of the officials are of a similar character; and communications in Korea being still extremely backward many minor points of law have been handed over to the gendarmerie for adjudication instead of to the Courts. By an Order in Council of January 23 last this country has recognised the abolition of extra-territorial rights in Korea, but I think your Lordships would wish to know whether any qualification was made as to the standing of the Court before which British subjects should be tried.
I turn to the question of trade and commerce. The imports of Great Britain into Korea are about eighteen or nineteen per cent. of the whole, and three years ago were estimated at £700,000. The inter-coastal trade is also very considerable. By the Proclamation issued on annexation Japan limits the policy of the open door to a period of ten years, at which time she may apparently impose any tariff she pleases, and forbid, as she has done in Japan, any inter-coastal trade by British ships—a policy which will bring to an end all British trade in that region. British subjects in Korea are anxious about yet another point—the ownership of land. They fear that they may be forbidden to own land in Korea as they have so long been forbidden to own land in Japan, and they object to the Regulation recently promulgated that in the event of any dispute the question must be referred to a Land Inspection Committee and not to a Court of Law. It is obvious that foreigners may have their interests handed over to a committee without any possibility of appeal to a higher Court, and that injustice in that way may be done. Mining rights, also, are in a somewhat uncertain condition. There are great possibilities in connection with mining in Korea, and already several
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foreign countries have started there and I believe are being extremely successful. But there, again, the companies are in doubt as to what their future will be, and whether these mining rights will continue to be conceded to them. The question is complicated by the Korean Company Act of December 29 last year, by which no company may be formed in Korea until the approval of the Governor-General has been obtained. This law, though extremely autocratic in operation, will, no doubt, tend to the prevention of bogus companies and the exploitation of the unfortunate Korean, but it should receive attention in so far as it affects the legitimate rights of British subjects.
Next I turn to the withdrawal of the British Consul from Antung. Antung is on the Yalu River, and is now the chief boundary town between what is virtually Japan and China. By an Agreement, very loosely worded as they constantly are, between China and Russia the former Government granted a rebate of three-tenths of the Customs Duty on her imports over the Manchurian border as a set-off against the necessarily heavy freight charges of the railway. Japan has obtained most-favoured-nation terms for the trade between Manchuria and Korea by an Agreement with China dated December 22, 1905. At present Japanese goods are shipped direct to Antung, and no rebate has been demanded. It is possible, however, that a line twenty-nine miles long from the mouth of the Yalu River will shortly be built and the bridge across the Yalu will shortly be completed. It is possible that rebate may then be charged, although the freight charges on the railway will, of course, be infinitesimal. It is felt, therefore, that a British representative should be re-appointed to Antung to watch developments, and that representations should be made before proposals so injurious to British trade are put forward. It is impossible to forecast with accuracy the future of the Far East. But if the feeling is allowed to gain ground that His Majesty's Government cares not, and it will speedily be translated into dares not, to uphold British interests such as those I have put forward, it will go far towards undermining and destroying British influence throughout the Far East and the Orient.
There is one further point. Sir Edward

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Grey, in a speech which he recently delivered in another place, made a statement with which I think every member of this House is in cordial agreement. I refer to his desire that this country should draw closer to the United States of America. By the Anglo-Japanese Alliance Great Britain is bound to make war in common with Japan for the preservation of Japan's territorial rights in the Far East. When that Alliance was signed Korea was not even a Protectorate of Japan. Manchuria at the present day is not a part of the Japanese Empire. Japan at that time had guaranteed equal opportunities for the trade and commerce of all nations in Korea, and she has made similar protestations with regard to Manchuria. It is possible—in fact, those who know the Far East best consider it probable—that some day Japan may be inclined to take similar action with regard to South Manchuria. We all know that the United States have considerable interests in that region, and they place so much importance upon them that Mr. Knox recently went so far as to suggest the neutralisation of all railways in that region to conserve as far as possible the question of the open door. My Lords, Korea may form a dangerous precedent. a precedent difficult to withstand when applied to Manchuria; and this country may either have to make explanations and withdrawals which once again will earn for us the name of la perfide Albion, or make war on a nation bound to us by every tie of common language and of common origin—a nation whose interests are identical with our own in the Far East. I apologise for having detained your Lordships so long, and I beg to move the Motion standing in my name.
Moved, That an humble Address be presented to His Majesty for Papers relating to the decision of the Hague Tribunal with regard to perpetual leases to foreign residents in Japan; and also as to the protection of British interests in view of the change in the status of Korea.—(Earl Stanhope.)
LORD HERSCHELL: My Lords, before replying to the Questions which stand on the Paper in the name of the noble Earl, I hope I may be permitted, without its being thought impertinent on the part of a very junior Member of your Lordships' House, to say how extremely glad I am sure
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every member of this House feels at seeing the noble Marquess the Leader of the Opposition once more in his place.
The first Question on the Paper is whether the decision of the Hague Tribunal with regard to perpetual leases to foreign residents in Japan has been fully put into effect. The Award of the Hague Tribunal, given on May 22, 1905, laid down that the Treaties concluded between this country, France, and Germany on the one hand and Japan on the other hand exempted from all taxes or payments of any kind except those contemplated in the Treaties all land held by British, French, or German subjects on perpetual lease; and not only all land, but also all buildings upon such land, whether they were already constructed or to be constructed in the future. The Award referred to taxes imposed on the properties in question, but did not expressly refer to taxes imposed in respect of the properties in question. The Japanese Government accordingly proceeded to levy State and Municipal Income Tax assessed on properties held under perpetual lease, on the ground that Income Tax was a personal tax; but as the action of the Japanese Government indicated that they placed a different interpretation upon the Award from that placed upon it by the three Powers, the Powers felt that it was eminently desirable to have a clear and definite statement of the taxes and charges from which the land renters could, in view of the Award, claim exemption. In the meanwhile the levying of the taxes above referred to has been suspended, and an informal exchange of views is actually taking place with the Japanese Government in the hope of arriving at a satisfactory settlement of the question. I feel sure that in these circumstances the noble Earl will readily understand that it is impossible for the moment to make a more detailed statement on this point.
I now turn to the second Question, which is whether, in view of the change in the status of Korea, His Majesty's Government propose to take measures to protect British interests in that Country. First of all let me say that the Secretary of State is fully alive to the question of British interests in Korea, and he is doing, and will do, everything which may be possible or practicable to promote those interests. I should like to state very briefly what is the position, broadly speaking, at present.

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The Japanese Government, in explaining the motives which led them to undertake the complete annexation of Korea, gave certain assurances. Firstly, they gave the assurance that as the Treaties between Korea and other Powers ceased to be operative, Japan's existing Treaties would, as far as possible, be applied to Korea. Foreign residents in Korea would, so far as conditions permitted, enjoy the same rights and immunities as in Japan proper, and they would also enjoy the protection of their legally-acquired rights subject in all cases to the jurisdiction of Japan. Secondly, they undertook to continue the existing Tariff arrangements for a period of ten years. Thirdly, for a similar period, vessels under the flags of Powers having Treaties with Japan would be permitted to engage in the coastal trade between the open ports of Korea and any open ports of Japan. And, lastly, the existing open ports of Korea, with the exception of Masampo and with the addition of Shinwiju, would continue to be open ports. As to foreign settlements, jurisdiction over British subjects, prisons, and other kindred questions, His Majesty's Government informed the Japanese Government on December 16 last, in consultation with His Majesty's Embassy at Tokyo, that they were willing to leave these matters to the sense of justice and good faith of the Japanese officials on the spot. Satisfactory assurances have already been received from the Japanese Government on the question of land tenure, and also on the question of ownership and the working of mines. With regard to the present Tariff, as I have already said it was to be continued for a period of ten years, and it is clearly impossible to ask the Japanese Government to definitely commit themselves in advance to a continuation of the present arrangement after the term specified.
With regard to the withdrawal of the British Vice-Consul from Antung, this took place for purely Service reasons. In December, 1909, His Majesty's Minister at Peking reported that the British political and commercial interests at Antung were, in his opinion, insufficient to warrant the permanent residence of a Consular officer in that place, and it was considered that these interests could be sufficiently protected by periodical visits from Mukden. However, quite recently—at the end of last month—His Majesty's Minister in
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Peking has been asked whether he has had any reason to modify this opinion during the past year, and I need hardly say that when his answer arrives it will receive full consideration. I think that is all I am able to say on the present occasion. With regard to the Motion for Papers, I am desired to say that the Secretary of State does not see his way for the present to lay Papers on the Table of your Lordships' House, but that as soon as these various matters have been definitely settled he will consider the question of laying whatever Papers he may be able to.
LORD CURZON OF KEDLESTON:My Lords, as one who has taken great interest for many years in Korea and who is still more interested in the Treaty rights of British subjects and notably of British traders in those parts of the world, I should like to add a few words. In the first place, I am sure we shall all agree in thanking the noble Earl for having raised this question. He did so, if I may be permitted to say it, with a wide knowledge of the facts, with perfect fairness, and with a correct appreciation of the issues he was placing before the House. The noble Lord who has replied has given us the information which he was no doubt instructed to lay, but he will pardon me for saying that it does not cover the whole of the ground and does not remove the apprehensions which my noble friend behind me expressed. In fact, a good deal of the information given us by the noble Lord, if not beside the point—and I will not say that—was irrelevant to the particular fears entertained by my noble friend.
I need not say anything about the first Question. I would not desire to push the noble Lord further than the point to which he went in replying to the Question concerning lands that have been leased in perpetuity in Japan. A point of great importance, however, is raised by our Treaty rights in Korea as affected by the recent action of Japan. What has been going on in the past few years in Korea? During the last seven years there has been a steady progression in the hold which Japan has acquired over that unhappy country. In 1904 a Treaty was concluded by which Korea promised to follow the advice of Japan as regards administrative improvements, and in which Japan undertook to maintain the integrity and independence of the Korean Empire. Then in 1905, after the

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war between Russia and Japan, there was another Treaty in which Japan assumed control of the foreign relations of Korea and pledged herself, in language differing somewhat from the former Treaty, to maintain the dignity and the welfare of the Korean Throne. The next step was in 1907, when Korea placed herself under Japanese suzerainty, and administrative authority was transferred from her to the dominion Power. And the last step—in July, 1910—was when Korea was finally annexed by Japan.
Thus there has been during the last seven years a progressive tightening of the hold on Korea by Japan. I am not for one moment complaining of that. Korea has been one of the most unhappy of all nations in the world. She has been a sort of football kicked about by the Powers of the East, and that at last she should be steered through the goal-posts of Japan is in all probability in the long run the best thing that could happen to her. Neither do I desire to say anything about the manner in which Japan has executed her self-imposed task. What I am concerned with, and exclusively concerned with, are the rights of British subjects in Korea, guaranteed by Treaties and calling for defence on the part of His Majesty's Government. The noble Earl referred to the Second Treaty concluded between Japan and ourselves in the year 1905, and he quoted these words, which the House will perhaps permit me to repeat—
"Japan possessing paramount political, military, and economic interests in Korea, Great Britain recognises the right of Japan to take such measures of guidance, control, and protection in Korea as she may deem proper and necessary to safeguard and advance those interests, provided always that such measures are not contrary to the principle of equal opportunities for the commerce and industry of all nations."
It is the last words to which I call attention. The noble Earl alluded also to the circular Letter to the Powers that. was issued at the same time as the Treaty of 1905 was concluded. This was the Letter in which the Japanese Government, in assuming control of the foreign affairs of Korea, declared that they would see that in assuming charge of those relations the Treaties existing between Korea and the Treaty Powers should be maintained and respected, and they also engaged not to prejudice in any way the legitimate commercial and industrial interests of those Powers in Korea. That was the state of
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affairs as regards public international pledges up to 1905.
Then we come to annexation in 1910, and at this stage Japan claimed that annexation should carry with it an abrogation of all existing Treaties. Here we raise on the one hand a question of international law, and on the other hand a question of practical importance for our own people. On the question of international law, no one has argued with greater force in times past than the present Foreign Secretary himself, Sir Edward Grey, that, whatever territorial changes might be effected, the economic status quo, the principle of the open door and of equal opportunities to the commerce of all nations, ought to be respected. The noble Earl behind me alluded to the negotiations that followed the annexation of Madagascar by France in 1899, and, while pointing out the analogy between those circumstances and the present, he rightly told us that the analogy was not. a perfect one. But I remember nothing better, having been Lord Salisbury's Under-Secretary at the time, than this, that when France annexed Madagascar Sir Edward Grey went round the country saying that we as a Government had no right to allow the Treaty rights we enjoyed with Madagascar to be abrogated by that act of annexation by France unless we obtained a substantial quid pro quo. In a speech at Liverpool on January 20, 1899, these were Sir Edward Grey's words—
"Lie did not believe that trade followed the flag, but what was no doubt true was that where the flag of other nations went British trade might be excluded. An instance of that was to be found in Madagascar. All they desired in regard to the matter was to request France to respect our Treaty rights, or, if our Treaty rights were to be extinguished, to see that they were only extinguished in return for compensation elsewhere. What had happened in Madagascar might happen on a much larger scale in China. They would continue to do their best, and would stand up and ask that the influence of this country should be used in favour of the policy of the open door."
That was what Sir Edward Grey said in 1899. Yet if I correctly apprehend the position, when Japan annexed Korea in 1910 His Majesty's Government do not appear to have made any fight for a quid pro quo. As far as I can understand, they have surrendered the whole position; they have—nothing has been said to the contrary—acquiesced in the annexation; they have surrendered our extra-territorial rights, and, if I am right, disabled themselves from any further action in the matter.

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What is the present position? It has been explained to us by the noble Earl in his speech just now. You have—I am not complaining of Japan in the matter—Law Courts and Police Courts set up to which British subjects have to take their cases, which are far below the standards of those that exist in any civilised countries, or even in Japan itself. You have a position as regards land holding, mining concessions, and so on, which is, at any rate, somewhat precarious; and you have an engagement as regards the tariff, that the present tariff shall only remain in operation for ten years. The noble Lord who replied for the Government very properly said that it is not for him to prophesy what will happen ten years hence. That is perfectly true. But what I want to know is, What has His Majesty's Government been doing all this time? When it was known that annexation had taken place, did negotiations take place between the two Governments? Was any attempt made to stand up for the Treaty rights of Great Britain, or have we given away the whole thing? I should be the last upon incorrect information to blame His Majesty's Government, but we know nothing of what has happened. We merely have the bald facts that annexation has taken place, that extraterritoriality has been abolished, that our Treaty rights have been impaired, and that His Majesty's Government have apparently acquiesced in this arrangement. If this be the state of affairs, then I must confess that I think there has been some departure from the enunciation of high principle by Sir Edward Grey ten years and more ago. I might quote other passages from Sir Edward Grey's speeches, because I have many of them, in which he has over and over again insisted on the same point. I cannot pursue the matter now, because he is not here to answer me. But I do submit that the case is one that calls for a reply, that we owe a debt of gratitude to the noble Earl for having brought it before the House to-day, and that until further information is placed at our disposal we are justified in entertaining the opinion that there has been some sacrifice of British interests in this matter.
LORD AVEBURY: My Lords, the noble Earl beside me (Earl Stanhope) has brought forward a matter of great importance in a speech of considerable ability, and while I recognise that there are some points on which in existing circum
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stances we cannot press His Majesty's Government for any further information, two points have been raised by the noble Earl on which I should like to say a few words. The first is as regards the coasting trade. I cannot help thinking that that is a matter which seriously deserves the attention of His Majesty's Government, not only as regards Japan, but also as regards some other countries. We know that we are excluded from the coasting trade both of France and of the United States. That is a very serious matter, and I am rather disposed to think that it does more injury to France and to the United States than it does to us. But there can be no question that it does sonic injury to us also.
In Germany the law is much fairer. In Germany they also have a law that the coasting trade is reserved to German vessels, but there is a proviso that where any country allows German vessels to share the coasting trade of that country, then the German Government gives the same privileges to vessels of that country in connection with their own coasting trade; and as we allow German vessels to carry goods between ports in this country, I believe I am correct in saying that Germany allows us the same privilege in regard to'German ports. I cannot help thinking that it would be very desirable if His Majesty's Government would raise this question wherever we are deprived of coasting rights; and we may fairly point out to a foreign Government that it is unfair that we should allow them to trade from one British port to another and that they should prevent us from trading from one of their ports to another; and the example of Germany might be brought forward as a fair way of dealing with this question.
With reference to the duties in Korea in the future, the Council of the London Chamber of Commerce have passed a unanimous resolution calling the attention of His Majesty's Government to the injury which might be inflicted on our commerce with Korea under the annexation. Of course it may be said, and said quite truly, that the case of Madagascar is not exactly upon all fours with this of Korea, but still it is one of a very similar character, and we know that our trade in Madagascar suffered very much when that country was

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annexed by France. It is, of course, quite open to France, or to Germany, or to any foreign country, to make any changes in her own duties which she may think to her advantage, and as a Free Trader I am bound to believe that in doing so she inflicts more injury upon herself than she does upon us. But it is a different thing when a country like France annexes Madagascar, or a country like Japan annexes Korea. There the duties did not stand at all upon the same footing, and surely it is somewhat unfair that French goods should be admitted to Egypt on the same terms as ours and vet our goods should be excluded from Madagascar unless they pay high duties to France.
Now we have very nearly the same question raised with regard to Korea, and, as I say, in the City of London we are a good deal exercised in our minds as to the injury which may be inflicted upon our commerce by these arrangements. It is, no doubt, some advantage that there should be the undertaking that the duties will not be raised for ten years, but, after all, in the history of nations ten years is but a very short time, and when you get towards the end of the period the uncertainty of what may happen will have a very serious effect. My noble friend who replied on behalf of His Majesty's Government said he did not think we could ask for anything more. But, after all, we had something to give. We had to consent to the annexation of Korea, and it seems to me, as it did to the noble Lord below me (Lord Curzon) and to the noble Earl who brought forward this subject, that we ought not to have agreed to any arrangements of that kind without serious protest and without doing everything to protect our commercial interests. Japan, of course, is quite entitled to raise her own duties as much as she pleases; but it is a different thing when we have to consider the question of Japan raising the duties in Korea, and we are afraid in the City of London that the arrangement which has been made will be very detrimental to our trade in Korea. I do not know how far the matter may have gone, but if it is possible to make any strong remonstrance on the subject I venture to hope that His Majesty's Government will do so.
EARL STANHOPE: My Lords, I do not wish to press the Motion, as I understand
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that His Majesty's Government will produce Papers on as early an opportunity as possible. There is, however, one point on which I should like to say a word—namely, with regard to the Consul at Antung. It has happened on more than one occasion that we have allowed things to slide until the scheme has been definitely formulated and it is impossible for us to get as great privileges as might otherwise have been the case. It is obvious that if we wait until the harbour at the mouth of the Yalu is finished and the railway constructed, it will he difficult for us to object to a rebate being given to the Japanese. But if we put forward our plea now that the rebate is only given for very high freightage over a long distance of railway and that therefore it is not an analogy which can be compared with a railway line 29 miles long, I venture to think His Majesty's Government will be able to take up a much firmer attitude than if they wait until the whole matter is settled.
LORD HERSCHELL: I think the noble Earl slightly misunderstood what I said. The promise I gave was that, as soon as all these matters were definitely settled, the Secretary of State for Foreign Affairs would consider the question of submitting Papers to Parliament. I cannot definitely promise Papers.
LORD CURZON OF KEDLESTON: I cannot help remarking that that does not put us in a very satisfactory position. The settlement may take years to effect, and I fully understand that neither the noble Lord nor in all probability the Leader of the House can pledge himself with regard to laying Papers in the absence of the Foreign Secretary. This instance emphasises the complaint which I made last week that we ought to have a representative of the Foreign Office in this House. In the present case the noble Lord who replied for the Government has given the official answer to the noble Earl's Questions, but he is stumped when we put a simple question like this with regard to the laying of Papers. All we can do, therefore, is to ask the noble Lord and the noble Viscount the Leader of the House to be kind enough to convey our humble request to the Foreign Secretary to listen to what we have said this afternoon, perhaps to read our speeches, and to give us Papers if he can do so. I suppose it is no good pressing the Motion for Papers further; but I think my noble

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friend will be justified in asking at no distant date whether Papers on the subject can be laid, and, if the answer is unsatisfactory, there will be nothing left for us but ourselves to raise the question again.
THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT MORLEY OF BLACKBURN): My Lords, there are difficulties in the way of presenting the Papers asked for, as other people have to be consulted. I will, however, convey to my right hon. friend the Secretary of State for. Foreign Affairs the desire of the House, and I will endeavour to convey the impression of humility with which the request is preferred.
Motion, by leave, withdrawn.

UNCERTIFICATED OFFICERS ON MERCHANT SHIPS.
LORD MUSKERRY LORD MUSKERRY rose to call attention to the necessity of further legislation, within reasonable limits, ensuring that British merchant ships shall be commanded and officered by men who can produce adequate proof of their fitness for doing so in the shape of Board of Trade certificates as master or mate respectively; to allude to certain recommendations on this matter which were adopted by the Manning Committee; and to move for a Return of those official Board of Trade inquiries in this country, of Naval Courts, and of marine inquiries in our Colonies and Dependencies, or a synopsis of them, which have been issued since the Manning Committee concluded its deliberations, and which contain any material comments or statements relative to the dangerous and common practice of merchant ships being in charge of uncertificated and irresponsible masters and mates.
The noble Lord said: My Lords, the question which stands in my name is one of grave importance, for it concerns the safety of life and property at sea. In nearly every occupation where men are entrusted with duties where default or neglect on their part may endanger life, it is taken for granted that they should be qualified to discharge these responsibilities and that they should hold a certificate of qualification and fitness, or a document of some similar kind, which will serve to ensure their responsibility and impress them with the nature of it. But the
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British mercantile marine is a glaring exception. There is a deficiency of the law in this respect, and the magnitude of the evil is but seldom realised.
In the first place. I may say that so long as a British ship is outside the three-mile limit of these shores, there is nothing incumbent upon her in law that she shall carry either a certificated master or a single certificated officer. I make an exception in the case of certain of our Colonies, such as Australia, where they will not countenance such a thing, and where they will not permit our ships to sail from their ports unless there are a sufficient number of certificated officers on board. Take, for instance, such a ship as the"Mauretania."It is permissible for her to proceed to sea with a full complement of crew and passengers, and carrying His Majesty's mails, with a certificated master and one certificated officer only. It is fortunate for the safety of our seamen and the seagoing public that companies such as that which owns the"Mauretania"fully realise how inadequate the law is in this respect and who, far beyond their legal responsibilities, ensure that their ships shall be commanded and officered by an adequate supply of certificated and responsible men. I will go even further. If the"Mauretania"were making a coasting voyage and did not happen to be carrying passengers, there is no obligation that she should carry a single certificated man, whether he be master or officer. As an actual matter of fact there are many large merchant vessels, both steam and sail, constantly trading round our coasts without a single certificated man on board. As showing how extraordinary the law is, we find that in the case of the fishing trawler, a small vessel, she is compelled to carry a certificated skipper and secondhand. A second-hand is equivalent in a fishing vessel to a mate in another ship.
So far back as the year 1896 the Committee appointed by the Board of Trade to inquire into the mantling of British merchant ships commented as follows:—
"It is truly an anomalous state of things under which a fishing vessel with a certificated skipper and second-hand may incur the risk of being run down by a large steamer in the home trade, which has not a single certificated person on board, or one the efficiency of whose eyesight has been officially tested and certified."
The Manning Committee, on the conclusion of their deliberations, stated that they

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were strongly of opinion that no vessel of large size or power should be permitted to go to sea unless provision had been made that the deck should always be in charge of some person who had given proof of his qualifications for such a position. They regarded the question as one closely allied to manning, and one urgently demanding legislation.
Your Lordships will appreciate what urgency has been attached to the matter by the Board of Trade when we find things in exactly the same position now as they were in 1896. Ten years later the Government passed the Merchant Shipping Act of 1906. While that measure was passing through your Lordships' House I proposed an Amendment which would have given effect to the recommendations of the Manning Committee. But the Board of Trade through their representative in your Lordships' House, though sympathising with the Amendment, said that they could not agree to it, on the lame excuse that its scope was too large for inclusion in the Bill. Time has gone on, and case after case has arisen where the scandal of allowing merchant vessels to be commanded and officered by uncertificated men has been exposed over and over again.
I will not task your forbearance by quoting these various cases, but I will briefly allude to two or three of the latest. One of these is where the cargo steamer"Paragon,"in charge of an uncertificated man, sank the pilot steamer"Excelsior,"loss of life ensuing. The Court which investigated the circumstances attending the accident expressed the opinion that—
"A man in sole charge of a steamship at night in a busy waterway, possessing no certificate of competency, is charged with a responsibility which should never be imposed on an officer without full professional qualifications:'
It is not long ago that the steamer"India,"the master and mate of which were both uncertificated, sank the sailing ship"Kate Thomas,"when nineteen lives were lost. In the course of the decision of the Board of Trade Inquiry into this catastrophe the Court expressed the decided opinion that for safe navigation those in charge of steam vessels such as the"India"should be certificated—an opinion, I may remark, that very few would endeavour to dispute.
The latest case is that where the fishing boat"Alice"was sunk by the steamer
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"Melissa,"which was in charge of an uncertificated man at the time. The Court found that the cause and the consequent loss of life was the absence from the deck of the"Melissa"of a responsible officer, and the neglect of that vessel to observe the Regulations for preventing collisions at sea. As it so happened, the master of the"Melissa"held a certificate, but was below at the time of the collision. The Court suspended his certificate for twelve months, and ordered that he should pay £50 towards the costs of the Inquiry. The following extract from the judgment of the Court is very significant—
"The Court is aware that in suspending the certificate of the master it is inflicting a more or less nominal penalty, inasmuch as masters and mates of home trade ships not carrying passengers are not required to possess certificates of competency; and the Court is strongly of opinion that, in the interests of safe navigation, the time has come when all masters and mates in the home trade should be certificated."
This matter is one upon which, very properly, I consider, the Imperial Merchant Service Guild, which represents over 15,000 certificated captains and officers, has agitated for many years past. They have appealed to me once more to refer to it in your Lordships' House, and I cannot but feel that they have absolute justice on their side. All these gentlemen have certificates at stake, and the suspension of a certificate is a very serious matter and may mean the ruin of a man's professional career. When they navigate our home waters they are exposed to undue and unfair risk when meeting vessels in charge of uncertificated and irresponsible men. I hear that, owing to constant pressure having been brought to bear upon them, the Board of Trade are now considering the framing of a measure which will deal with the situation. This I think we will all hail with considerable satisfaction and I sincerely trust that my noble friend representing the Board of Trade in this House will be good enough to give us some definite information upon the point. A measure of the kind must inevitably be introduced sooner or later, especially as, from what I am given to understand, the leading representatives of all the principal sections of shipping are in accord as to the necessity for it.
Perhaps my noble friend will also give us information as to what views on this matter have been communicated to the Board of Trade by the Merchant Shipping

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Advisory Committee. Personally I am of opinion that so soon as a measure of the kind is introduced Parliament should be provided with the fullest information, which will enable us not only to realise the evidence in favour of the Bill, assuming, as I believe I am right in doing, that it will be under the sponsorship of His Majesty's Government, but information of the kind would disarm opposition and facilitate its passing through its various stages with the smallest trouble and in the least possible time. I have moved for a Return from the year 1896, as it was then that the Manning Committee declared that the matter urgently demanded legislation. If we had a Return reporting these cases of accidents at sea where the evils of uncertificated masters and officers have been referred to it would be enlightening to the members of both Houses of Parliament who may have to consider the measure, and, further, would be of the greatest use to His Majesty's Government as a complete justification for dealing with it.
Moved, That a Return be laid before the House of those official Board of Trade inquiries in this country, of Naval Courts, and of marine inquiries in our Colonies and Dependencies, or a synopsis of them, which have been issued since the Manning Committee concluded its deliberations, and which contain any material comments or statements relative to the dangerous and common practice of merchant ships being in charge of uncertificated and irresponsible masters and mates.—(Lord Muskerry.)
LORD HAMILTON OF DALZELL: My Lords, this is one of the questions which the noble Lord has frequently raised, but never, I think, since I have had the honour of answering for the Department. I may congratulate him on having put it down at this time because otherwise he might have been too late and the legislation to which he refers might have been already before your Lordships' House or the other House of Parliament. I am afraid that the noble Lord has not always derived much satisfaction from the official replies, but I am happy to think that on the present occasion we are prepared to grant all, or nearly all, he asks.
I am afraid I cannot quite agree with what the noble Lord said as to the regulations with regard to officers' certificates, and even at the expense of keeping your
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Lordships for a few minutes I should like to run over what they are. For the purpose of determining what certificates are required British ships are divided into, three classes. There are, first, foreign-going ships sailing from the United Kingdom, and in this class are included home trade passenger ships. I ought to explain that the home trade includes all ships trading, between ports in the United Kingdom and also with certain Continental ports situated between the River Elbe and the Port of Brest. In the second class we have the home trade cargo ships, and in the third class British ships trading wholly abroad. The provisions with regard to the officers who must be carried apply only to the first of these classes. Those regulations are broadly these—that every British foreign-going ship and every other passenger ship must carry a duly certificated master and must also carry at least one other officer holding a mate's certificate, except in the case of certain small sailing ships. But there is a further provision. which extends that rule considerably, and that is that where, as a matter of fact, two mates are carried, one of those must have a first mate's certificate and the other must have a second mate's certificate at least. There are further regulations to which the noble Lord has not alluded which apply to engineers. Every foreign going steamship of 100 horse-power and. upwards must carry two engineers, one with a first-class and the other with at least a second-class certificate, and if of less than 100 horsepower it need only carry one engineer with a second-class certificate. Those are the regulations, and what I have to say with regard to them is that, in the opinion of the Board of Trade, regarded as a minimum—and your Lordships must remember that these are minimum regulations—they are sufficient, and it is thought at the Board of Trade that, considering the enormous amount of shipping which goes in and' out of our ports, the wreck returns and, other information available do not show that our ships are insufficiently officered.
The second class are the home trade cargo ships. With regard to this class I agree with the noble Lord that at present there are no requirements as to certificates of officers, but, as I have already stated, my right bon. friend does propose—he hopes this session—to introduce legislation dealing with that subject. And I may say

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that it is largely done for one of the reasons given by the noble Lord—that at present there are no means of dealing with these officers, because they have no certificates which can be forfeited in cases of misconduct and carelessness. I would also like to say of the men who carry on that trade that they are a fine body of men, and I do not wish to say anything in any way disparaging about them, because their trade, which is carried on in narrow waters very full of ships, has been carried on with extraordinarily few accidents. I would also observe that the men who are at present carrying on this trade will not suffer in any way, because we propose that they shall be given certificates of service to which they will be entitled by reason of the time that they have carried on the trade.
LORD MUSKERRY: I take it that if a man's certificate of service is suspended through any fault of his own, it will be understood that he will not be allowed to command during the period of suspension.
LORD HAMILTON OF DALZELL: The noble Lord will not expect me at this stage to give details of the legislation which it is proposed to introduce. The third class consists of British ships which trade wholly abroad. There are, of course, difficulties in making regulations for them, because it is extremely difficult to enforce any regulations you may make, but I may say that my right hon. friend is considering that question as well, though I do not definitely promise any legislation regarding it.
The second part of the noble Lord's Question deals with the recommendations of the Manning Committee. There are two principal recommendations, as far as I can make out, which are applicable—No. 31, which suggests certain detailed requirements with regard to the certificates of officers engaged in the foreign trade; and No. 32, which suggests legislation with regard to the home trade. As to the first of those recommendations, I have already said that in the opinion of the Board of Trade those requirements are not necessary, and with regard to the second, it is, as I have said, proposed to carry that out. As to the Return for which the noble Lord asks, we are quite willing to give it to him, and the only suggestion I would make is that he should consult with me as to its exact form with the object of limiting its size.
THE MARQUESS OF SALISBURY: My Lords, the noble Lord who has just sat down has made a very kind reply in answer to the Motion of my noble friend behind me. But I am not sure that the noble Lord realises what a service my noble friend has rendered to the country and to the merchant service by pressing this matter upon your Lordships' House and upon the country for so many years, and, may I add, for so many years in vain. My noble friend began to agitate in this matter some eight or nine years ago, and it is only now that His Majesty's Government are able to say that they hope—the noble Lord opposite was characteristically cautious—that they hope to introduce legislation on this subject in the present session. I confess I do not understand why there should be any doubt. Where does the difficulty lie? Does the noble Lord think he will be opposed in your Lordships' House if he tries to legislate in a matter of this kind? Does he anticipate in another place there may be opportunities for delay of which advantage will be taken when the interests of those engaged in the merchant service are at stake I can assure the noble Lord that he is quite mistaken if he thinks that there will be any difficulty in passing legislation of this kind if it is really called for.
LORD HAMILTON OF DALZELL: May I interrupt the noble Marquess? I do not anticipate any delay. I believe that the legislation will be introduced this session, but the noble Marquess himself must understand that there has been difficulty in the past. The Manning Committee reported in 1896, but no President of the Board of Trade, not excluding the noble Marquess himself, has seen his way to introduce legislation up to this date.
THE MARQUESS OF SALISBURY: I think my noble friend has indulged in what we used to call in my early days a tu quoque, but I cannot charge my memory with its having been brought to my notice when I was at the Board of Trade. The broad fact remains that this matter is at present under the notice of the Board of Trade, and my noble friend behind me is justified in his complaint. Therefore I should have expected an absolutely confident promise that legislation would be introduced, rather than the cautious hope that it would be introduced this session. However, that may be a form of words

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equivalent to the same thing. If legislation is not introduced I hope that my noble friend behind me wilt return to the charge.
LORD HAMILTON OF DALZELL: The Bill is drafted.
THE MARQUESS OF SALISBURY: I apologise for having criticised the noble Lord's phraseology. The Bill is drafted, and no doubt will be introduced forthwith. Just let me say one word upon the remarks of the noble Lord opposite. He declined to go into the details of the Bill. Of course, he is perfectly right. If the Bill is yet to be introduced it would be out of place to discuss the details. But I am rather concerned with the interruption my noble friend made in the noble Lord's speech—that if certificates of service are to be granted to those at present engaged in commanding ships, they should be liable to the same accidents which at present fall to the certificates of certificated officers—namely, that they can be suspended or removed altogether in case of misconduct. That seems to follow as a matter of course, and without that the certificates cannot be of much use. I noticed that the noble Lord made a marked distinction between cargo ships engaged in the home trade and ships engaged entirely in the foreign trade, and that whereas he confidently hoped that this Bill, which is already drafted, would be introduced with regard to the home trade, he was unable to give any promise with regard to ships engaged in the foreign trade.
LORD HAMILTON OF DALZELL: Those are ships which trade wholly abroad, and never conic home.
THE MARQUESS OF SALISBURY: My noble friend was referring to the trade represented by a very large number of ships which never come home but which carry on trade between foreign ports. He said he was not sure that he could introduce legislation with regard to them because of the difficulty in enforcing it. That is a matter I should hardly like to go into now; but I should have thought that there was full opportunity of exercising such an authority over these ships as would be sufficiently effective to force them to carry out such regulations as to carrying certificated officers as Parliament and the Board of Trade might see fit to impose.
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I know that these ships navigate the seas under a very strict code of regulations made by this Parliament, and therefore I do not see why in this matter they should not be subject to the same rules as those ships which are engaged in the home cargo trade. However, I do not want to press the noble Lord upon the point at this moment. He is fully entitled to reserve to himself the right to go into the details at a later stage. I will content myself on that head with merely asking the noble Lord and the right hon. gentleman the President of the Board of Trade to consider whether they cannot extend the same provisions as to enforcing certificates to ships trading between foreign ports as they propose to enforce with regard to the home trade. I do not think it is desirable to trouble your Lordships further. I wish to thank the noble Lord opposite for his promise, and to congratulate most heartily my noble friend Lord Muskerry on the success of his efforts.
LORD MUSKERRY: May I suggest that the Bill might be introduced into this House? It would expedite it very much.
Motion, by leave, withdrawn.

PROFESSIONAL ACCOUNTANTS BILL. [H.L.]
[SECOND READING.]
Order of the Day for the Second Reading read.
THE EARL OF CHICHESTER: Your Lordships will no doubt remember that a Bill to set up a register for England and Wales was introduced into this House two Parliaments ago. That Bill met with considerable opposition from Scottish and Irish Peers, who feared that the Scottish and Irish accountants might meet with some disabilities under it. I need not further refer to that opposition, because it has been met by the setting up of three different registers and by Clause 22. But other objections were raised. The noble Marquess, Lord Salisbury, raised certain objections, and as those objections apply as much to this Bill as to the last I will address myself to answering them. The noble Marquess said, in effect, that when introducing a Bill of this sort one ought to prove, first, that there was an evil, and then that

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the Bill went some way to remedying that evil. I am afraid he added that I had not done so. I hope the noble Marquess will blame me, and not my cause. But before I proceed to answer him, I think I should remind your Lordships of the present state of the profession of accountants, and what they are expected to do.
There are in Scotland three great societies of considerable age, and I think I am right in saying that they include almost every practising accountant in Scotland. The society in Glasgow received its Charter in 1855, the one in Edinburgh in 1854, and that in Aberdeen in 867. With regard to Ireland, there is one society, the Institute of Chartered Accountants of Ireland. This society was given its Charter in the year 1888, and I think I may say that practically all practising accountants in Ireland belong to it. In England, the position is somewhat different. There are two great societies. There is the Institute of Chartered Accountants, which was incorporated by Royal Charter in 1880. And then there is the Society of Incorporated Accountants and Auditors, which was incorporated in 1885 under Section 23 of the Companies Act, 1867. They were then allowed by the Board of Trade to dispense with the use of the word"Limited."These two great societies exercise, as do the Scottish and Irish Societies, considerable control over their members, and ensure, as far as they can, that their members should be efficient and practical, first by examination and then by a long course of apprenticeship. They also ensure a high standard of integrity through their disciplinary committees.
There are also in England certain unattached accountants who belong to no societies, and who, not having undergone the terrors of an examination, give no guarantee of efficiency. Their ranks have been and may at any time be added to by accountants who, for some unprofessional conduct, have had to leave the society to which they belonged. Besides these unattached accountants certain limited liability companies have recently sprung up. I have no doubt most of your Lordships have had communications from one or other of them. I shall have something more to say about them afterwards, but I may say here that the view that the profession take of them is that in a great many cases the members of these societies
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are in no way accountants at all, and would not so define themselves. They are bookkeepers, most estimable people, but they have not the knowledge to practise, and I do not know that they even want to.
What are the duties that accountants are called upon to perform? I think the most important duties are these: (1) auditors of public companies; (2) trustees in bankruptcy; and (3) liquidators of insolvent companies. Those are the three businesses that public accountants are called upon and ought to be ready to perform. With regard to the accounts of public companies, these men have to deal with incomes that amount to millions and to consider the interests of shareholders in the case of hundreds of thousands. Their labours have not been lightened by recent legislation. On the contrary their duties are more responsible now than they ever were before. I believe a recent judgment has laid down that it is not enough for an auditor to prove that the balance sheet of a company is rightly and truly drawn according to the books of the company—he has to go beyond that and to himself make sure that the books themselves are likely to give the right position of that company. And it has been laid down that unless he does so his audit is a farce. Then with regard to trustees in bankruptcy. This is au important point with regard to this Bill, because it is, I think, more as trustees in bankruptcy that inefficient men—and I am hound to say in some cases men who have betrayed their trust—have been appointed. And when you consider that trustees in bankruptcy have annually to deal with sums amounting to £5,000,000, you will see that this is a very serious thing in the public interest. I shall have later on to quote some cases from Parliamentary Papers and from the official reports which the Examiner in Bankruptcy has made, and in which he says that these cases are becoming much too numerous.
When the previous Bill was introduced the attitude of the Board of Trade was described by one noble Lord as"cool but correct."The other day I read my noble friend's speech again, and I need hardly say it was perfectly correct, but I cannot describe it as cool. However, I think I am entitled from what he said then to draw these conclusions—he will correct me if I

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am wrong—that the Board of Trade do approve of the principle of this Bill, that they do not see anything in the way that it is drafted to disapprove of, but that they hold to themselves the right to propose Amendments in Committee. I hope I am not going too far, but that is what I read into my noble friend's words. I must say that I shall be very much surprised if the Board of Trade did not look benevolently on this Bill. Because what is their position? Auditors of public accounts, trustees in bankruptcy, and liquidators of insolvent companies all have to file their accounts with different officials of the Board of Trade, and it is rather anomalous for these accounts to be so filed when there is no definition of what a public accountant is, and no guarantee that the man who has certified these accounts is efficient, or even honest.
Let me support my case not from ex parte statements but from official Reports which are also Parliamentary Papers. First, the Home Office Report of 1896 dealing with criminal statistics found it necessary to explain away the high percentage of crime amongst so-called accountants by the statement that betting agents and similar persons are in the habit of so describing themselves when they come within the meshes of the law. The Reports of the Inspector-General in Bankruptcy may also he cited as evidence of the difficulties experienced at present in dealing with unqualified and dishonourable accountants. On page 14 of Report No. 17 for the year 1899 the Inspector-General says—
"The extent to which deeds of arrangement are executed and carried through without any reference to the wishes of creditors is becoming serious. This system is much facilitated by the methods of certain accountants, not belonging to any of the recognised professional bodies, who carry on an advertising and touting business under the cloak of seine high-sounding name of an association for the guardianship or protection of trade."
Then on page 12 he states—
"There are numerous instances in which trustees after realising assets have absconded…Persons entirely without means and of indifferent character frequently obtain trusteeships. Bankruptcy does not disqualify a trustee from acting under a deed, and instances occur in which the person appointed is either an undischarged bankrupt or becomes bankrupt or executes an assignment while continuing to act as trustee. The Department is put to great trouble and expense in obtaining accounts from such impecunious trustees, and when an order is obtained against them they are unable to pay the costs."
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Further, on page 13 the Inspector-General says—
"In July last a creditor under a deed complained that he could get no dividend, although the trustee had sold the estate and received the proceeds in February…ticular accountant has had thirteen cases since December, 1897, only one of which has been wound up. In three of them complaints have been received as to his dealings with the estate or as to non-payment of dividend, and in several the trustee is in default as to his accounts."
On page 24 of Report No. 20 for 1902 particulars are given of the case of a bankrupt whose real and only business, although he styled himself an accountant, consisted of acquiring options for the purpose of gold mines and other properties. Then there is the case of a man who, though he was excluded from membership of the Society of Incorporated Accountants in 1903 for failure to distribute trust monies left in his hands, subsequently continued to practise as an accountant and was elected trustee of a bankrupt's estate in 1905. The Board of Trade refused to certify the trusteeship on information supplied by the society.
May I trouble your Lordships with just one other quotation' It is from Report No. 22 for the year 1904—
"Prosecution and conviction of a fraudulent trustee.—This trustee had been an undischarged bankrupt since July, 1000, but had, notwithstanding, succeeded in securing trusteeships under twenty-two deeds of arrangement by using the names of other persons …n one case no accounts have yet been obtained. The imprisonment of this practitioner has for the time being checked his activities, but there is apparently nothing to prevent him from acquiring trustee ships under deeds as previously when he is released"—
that is, unless your Lordships pass this Bill.
I will ask your Lordships to look at the Bill for one moment and allow me to explain three or four of the clauses. Only a very few of the clauses need any explanation. Clauses 7, 8 and 9 give in triplicate the list of persons who can claim as a right to be registered. Those who can claim registration are all present and future members of the Institutes and Societies mentioned in the Bill, and the members of certain Colonial institutes or societies who give notice of their intention to practise in any part of the United Kingdom, and all persons who, though not members of any of the said institutes or societies, were in practice in any part of

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the United Kingdom at the passing of the Bill. Persons not being entitled as aforesaid but who were articled before the passing of the Bill and who pass the prescribed examinations will also be entitled to be registered. Clause 12 allows appeal by either of the three Committees to the Privy Council in cases where it is thought that the standard of proficiency, required at the examination of any of the great societies falls below the proper standard. Clauses 13 and 15 give power to refuse registration in certain cases, and power to remove a name from a register; but a right of appeal against such decision is permitted under Clause 17—to the High Court in England or Ireland, or to the Court of Session in Scotland, as the case may be.
Clause 22 is, perhaps, the most important in the Bill. It prohibits, under a penalty, the use by an unregistered person of the title of professional accountant, etc. The clause further permits an accountant on the register of one of the three countries to go on his client's business—to conduct audits and so on—in the other two countries without registration there, provided he has no place of business in those countries. I might mention that similar Bills to this have been passed in the Transvaal, in New Zealand, and quite lately in Natal, and that the societies which have come ipso facto on to the registers in those Colonies are also parties to this Bill.
Now, I come to the opposition—I hope of a very limited character—that this Bill will have to meet. That opposition comes from certain self-constituted societies which think they have a right to be on the register ipso facto, and en bloc. I think it is easier for me to put our case in the words of the President of one of, perhaps, the most active of these societies which desire to be on the register. I will not mention names. Two sentences from his speech describe better than I can myself the feelings that we have on the matter. He said—
"The membership of our Association is now 1,102; that is, at November 30 last. May I just show you how we have gradually grown. At the end of our first year—1905—we had 314 members; the next year we had 653; it has gradually gone up—without burdening you with figures—till in 1909 we had 746, and now we have 1,102, an increase of 350 members in one year…I am pleased to say that during the past year we have had 23 candidates sitting for examination, 12 in the month of June and 11 just the other day."
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Later on, in dealing with the accounts, the President said—
"You will note the item,' Special issue of Journal and Objects, £276 18 s. 4d.,' but on the other side yon will find that the entrance fees were £439, so that you see we spent. £276 to get £440, and I think that shows that the money has been well spent, the result being that our membership has jumped up from about 746 to 1,102."
That so clearly sets out the objects and aims of one of these societies who desire to be registered that I do not think I need give the reasons why we trust they will not be so included. I do not know whether that was a post-prandial oration, but your Lordships will probably say in vino veritas. I do not think I need further comment on that. But we do feel that some of these bodies may have a case, and that individuals may possibly have a case to put before the Committee to which your Lordships send this Bill. We are extremely anxious that no injustice should be done, and, therefore, if you grant this Bill a Second Reading, I shall move that it he sent to a Joint Committee of both Houses, in order that these associations or individuals may state their case, and that their arguments may be weighed and considered.
I do not wish in any way to minimise the importance of what we seek. We are asking for statutory powers in order that the discipline and control exercised by these great societies may be made effective, and, bearing in mind that recent legislation has given new responsibilities to the profession of accountants, I do not think it is too much to ask that these accountants should be enabled to raise their profession, to set their house in order, and thus give a guarantee of high efficiency and integrity throughout the whole profession. I beg to move.
Moved, That the Bill be now read a—(The Earl of Chichester.)
LORD ASHBOURNE: After the very important statement made by the noble Earl, I assume that your Lordships will be disposed to give a Second Reading to this Bill. I listened with particular attention to his statement, because I remember what occurred when the Bill was introduced two years ago. I myself criticised certain of its provisions, and pointed out that the position of Ireland had been entirely ignored. I am glad to see that that omission has now been rectified. Other objections were

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raised to the Bill, sonic of which have been removed and some of which still remain. Upon them I offer no opinion now, but I can readily see that when the Bill goes into Committee Clause 22, which was objected to before, will be again criticised and closely examined. I am glad to know that it is intended to keep an open mind in reference to such arguments as may be addressed on Amendments in the Committee stage. Just before the sitting of the House, I was handed a statement of four pages dealing in detail with the Bill, and discussing it apparently with considerable knowledge. I shall myself keep an open mind on that memorandum. If have only had time to read it hastily, but from what I can gather there are a good many people who would like to see the Bill considered from an amending point of view. Therefore I am satisfied that it will be necessary when the Committee stage of this Bill is reached to be prepared to listen to some arguments that will be addressed in reference to the matter.
LORD ALVERSTONE: My Lords, I hope your Lordships and the Government will give a favourable consideration to this Bill, because it has frequently come before me in the last eight or nine years that there is a necessity for preventing the use of the word"accountant"in many cases. I have known eases where people have used the term"accountant"to cover all sorts of objectionable businesses, and I sincerely hope that steps will be taken to strengthen the Bill with a view to preventing that. I see that the Bill contemplates permitting persons who are now accountants to be registered. That has been done already with regard to surveyors and engineers, and you can only introduce examinations by steps. I am glad to know that there is an idea of stiffening the examinations, and I hope that the dame which enables the authorities to reject people who are not worthy to be members will be carefully and strictly worked. The present law wants strengthening, because at present the term"accountant"is used to attract people, whereas those using it have no qualifications for it, and are not really carrying on the business of accountants at all. I will not describe some of the businesses now using that title, but they are certainly not callings which your Lordships would wish to encourage under that name. All I desire to see in reference
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to Clause 22 is that chartered accountants and professional accountants are described by a name which is not to be taken by other people in future. I am satisfied that this Bill will require amendment in Committee, but I think it is a most desirable Bill, and I hope the Government will favourably consider it.
LORD SALTOUN: My Lords, as I was one of those who criticised the Bill on this subject some two years ago, I may say I did so because I thought that Scottish accountants should have equal facilities with English accountants, and in my opinion they did not get them under that Bill. It was then my opinion that the Bill could not be altered in Committee to meet these objections, and I congratulate the noble Earl opposite on the result of what has taken place since. This Bill is a far better Bill, as I am sure your Lordships will agree. I shall be very glad to withdraw the whole of ray objections to the Bill, although certain Amendments can be made, and to very heartily support the Second Reading.
LORD DESBOROUGH: My Lords, I would like to say one word on behalf of the London Chamber of Commerce, who are very anxious that your Lordships should give this Bill a Second Reading on this occasion. It is supported by two bodies which are closely associated with the Chamber, and which now comprise 7,784 members, every one of whom is in favour of the principle of this Bill. The business men who are represented in the Chamber of Commerce are very anxious that there should be a definite register of accountants by Statute in the interests, not only of the accountants themselves, but also of the general public.
LORD HAMILTON OF DALZELL: My Lords, I do not think anybody will be surprised, after the very undecided answer my noble friend received when he introduced his Bill the year before last, that he has come forward with another Bill on the same subject. On that occasion, out of the twenty-eight noble Lords who remained in the House fourteen voted for the Second Reading and fourteen voted against it. The noble Lords who comprised that small band will perhaps remember—my noble friend behind me has referred to it this evening—that the attitude of the Government towards the Bill was described by a noble Lord as being"cool but correct."

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That was a very accurate description at the time, and rather appropriate in view of the international character which the dispute had assumed. But now when my noble friend is, I believe, able to come here and tell us that not only has he removed the opposition of the Scottish and Irish accountants but has actually enlisted their support, I think I may say that the attitude of the Government, while still, I hope, correct, is appreciably warmer and more cordial than it was on that occasion. What the Government hope you will do—and it is the same advice that we gave before—is this, that you will accord the Bill a Second Reading and then agree to the further Motion to refer the Bill to a Joint Committee of both Houses, in order that those who, rightly or wrongly, consider that they have a grievance under the Bill as it stands may have ample opportunity of being heard.
THE MARQUESS OF SALISBURY: As your Lordships have been informed, there is no desire on this side of the House to oppose the Second Reading of this Bill. The noble Earl who introduced it referred to me personally, and perhaps I may be permitted to say that the reason why I ventured not to agree with him on the last occasion was that it appeared to me that in the case of the introduction of restrictive legislation an ample case ought to be made out. There are a great number of bodies of persons engaged in different pursuits, and sometimes it is proper to have their professions or trades made into a close profession or trade; but sometimes it is not proper. It depends on the circumstances of the case. Prima facie every subject of His Majesty has a right to call himself anything he pleases, and to trade in any way he pleases, so long as what he does is legal. If you call upon him to refrain from describing himself in a particular way, you have to show some reason for that restriction. The noble Earl gave himself a great deal of trouble, which I cordially appreciate, in his speech this
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afternoon to show why he thought in this particular instance of accountants such restrictive legislation was necessary in the interests of the public, in order that the public should not be deceived when they see the term "accountant" or "public accountant" inscribed over the door of a particular professional man. I think prima facie the noble Earl has made out his case this evening, and I am pleased to be able to reckon myself as one of the supporters of the Second Reading of the Bill. As to the actual details, it is necessary that they should be carefully scrutinised lest the particular standard which is set up should not be appropriate and should be not fairly drawn, and also to secure that those who administer it should not exclude such rules as would enlist the confidence of the profession and of the public. But that is a matter for Committee, and I am delighted to hear that this subject is to be carefully scrutinised by a Joint Committee of both Houses. I do not think the noble Earl could have taken a better course, and I think he is entitled to the thanks of your Lordships' House for the way in which he has submitted this particular measure.
On Question, Bill read 2a.
Then it was moved, That it is desirable that the Bill be referred to a Joint Committee of both Houses of Parliament—(The Earl of Chichester); agreed to: Ordered that a Message be sent to the Commons to communicate this Resolution and to desire their concurrence.

PROFESSIONAL ACCOUNTANTS BILL. [H.L.]
Petition against; of the Central Association of Accountants, Limited; read, and ordered to lie on the Table.
House adjourned at half-past Six o'clock till To-morrow, half-past Ten o'clock.