Lords Sitting of 28 August 1914

MESSAGE FROM THE KING.
His MAJESTY'S Answer to the Address of yesterday delivered by the Lord Steward (E. Chesterfield), and read as follows, viz.:
"I thank you for your loyal and "dutiful Address. I will gladly "convey to the King of the Belgians the "sympathy and admiration with which, "in common with Myself and all my "People, you regard the heroic "resistance offered by His Army and People "to the wanton invasion of His "Territory, and an assurance of the "determination of this Country to support in "every way the efforts of Belgium to "vindicate her own independence and "the public law of Europe."

THE WAR.
THE SECRETARY OF STATE FOR WAR (EARL KITCHENER): My Lords, we learn to-day from Sir John French that in the fighting which took place between his Army and the enemy on Wednesday, and which it appears from the French official report was in the neighbourhood of Cambrai and Le Cateau, our troops were exposed to the attack of five German Army Corps, two Cavalry Divisions, and a reserve corps with the Guards Cavalry and the Second Cavalry Division. Our Second Army Corps and Fourth Division bore the brunt of the Cavalry attack, whilst our First Army Corps was attacked on the right and inflicted very heavy loss on the enemy. I regret to say that our casualties were heavy. Exact particulars are not yet known. The behaviour of the troops was in all respects admirable. General Joffre, in a message published this morning, has conveyed his congratulations and sincere thanks for the protection so effectively given by our Army to the French flank. In addition to the reinforcements that will shortly proceed from this country, the Government have decided that our Army in France shall be increased by two Divisions and a Cavalry Division, besides other troops, from India. The first Division of these troops is now on its way. I may add that all wastage in the Army in France is being immediately filled up, and that there are 12,000 men waiting for that purpose on the lines of communication.
THE MARQUESS OF LANSDOWNE: My Lords, the House will have heard with intense interest the statement just made by the Secretary of State for War. I need not comment upon it save to this extent, that we are rejoiced to hear once again from the lips of the noble and gallant Field-Marshal his testimony to the gallantry which our troops have exhibited under exceptionally trying circumstances during the last two or three days. With regard to the announcement that further reinforcements are to be sent to the seat of war, I need not say that, so far as it is in our power to give our support to His Majesty's Government in this matter, they may depend upon that support, and that whatever measures they may consider indispensable for the purpose of maintaining the credit of this country will have all the encouragement which we are able to give them.
THE LORD PRIVY SEAL AND SECRETARY OF STATE FOR INDIA (THE MARQUESS OF CREWE): My Lords, perhaps I may venture, speaking as Secretary of State for India, to say a word in continuation of what has been said by my noble and gallant friend behind me with regard to the despatch of two Indian Divisions and a Cavalry Division to the seat of war in Europe. It has been deeply impressed upon us, from what we have heard from India, that the wonderful wave of enthusiasm and loyalty which is now passing over that country is to a great extent based upon the desire of the Indian people that Indian soldiers should stand side by side with their comrades of the British Army in repelling the invasion of our friends' territory and the attack which has been made upon them. It is well known in India that the African troops of the French Army have been assisting the troops in France are of native origin, and I feel satisfied that it would have been a disappointment to our loyal Indian fellow-subjects, all the more on that account, if they had found themselves debarred for any reason from taking part in the campaign on the continent of Europe. We shall find our Army there reinforced by soldiers, high-souled men of first-rate training and representing an ancient civilisation; and we feel certain that if they are called upon they will give the best possible account of themselves side by side with our British troops in encountering the enemy.

551
I venture to think, my Lords, that this keen desire of our Indian fellow-subjects so to co-operate with us is not less gratifying than the same desire which has been shown by the various self-governing Dominions, some of whose soldiers in due course will also be found fighting side by side with British troops and with Indian troops in the war. Of course, we all know that India does not possess an inexhaustible reservoir of troops, and that the defence of India must in itself be a primary consideration not only to India itself but also to us. But I am able to state, so far as external aggression is concerned—of which I hope and believe there is no prospect—that in spite of these heavy drafts upon the Indian Army, our Indian frontiers will be held fully and adequately secured; and as regards any risk of internal trouble in India, against which in ordinary times, of course, our combined British and Indian forces have to secure us, I believe that at this moment the general enthusiasm which has been awakened by our resistance to the unprovoked attack which has been made upon our Allies is such as to render anything of that sort altogether impossible. That enthusiasm has pervaded all classes and races in India; it has found vent in many different ways—in some cases by gifts of great liberality for the service of the troops in the field. I was told only yesterday by the Viceroy that one of the principal Indian Princes had sent him a gift of 50 lakhs of rupees—between £300,000 and £400,000—for the use of the troops in the field, and there have been on varying scales a number of offers of the same kind. I feel confident, therefore, that the action we have taken will meet with the most enthusiastic response in India, and I believe that it will be approved by your Lordships and by public opinion here generally.

CURRENCY AND BANK NOTES (AMENDMENT) BILL.
Brought from the Commons.
Moved, That the Bill be now read 1ª.—(The Marquess of Crewe.)
On Question, Bill read 1ª, and to be printed.
THE MARQUESS OF CREWE: My Lords, it will be as well if I explain quite briefly what the object and purpose of this Bill is. The first power given by it is to enable the Treasury to call in, when
552
it desires, the currency notes which were distributed to the banks, as the House is aware, a short time ago. Those notes were somewhat hastily prepared, and those of us who have handled them will all agree that they are not securities of a very attractive kind so far as their outward appearance is concerned, and they possess, from the haste with which they were prepared, the grave defect of being easily liable to forgery. It is therefore desirable that, so soon as can be conveniently done and without causing any dislocation of the use of these £1 and 10s. notes, they should be called in and replaced by something not merely more sightly but also more generally serviceable. I ought, perhaps, to add that this action which is being taken is without any prejudice to the question which, like all currency questions, is one of great complexity and difficulty, as to whether £1 notes are to become in future part of our currency system, and, if so, whether they should be issued as Government currency notes such as these, or whether a system of £1 notes, if adopted at all, should become part of the Bank of England issue. Those are all questions for the future, with which it is quite impossible to deal at this moment. The operation of this particular Bill is limited to what I have stated.
But there is a further provision in the Bill which I ought to explain. When the notes were advanced to various banks on the previous occasion to an amount not exceeding ten per cent. of their total cash holding and their deposits, the actual notes were issued to them. That is a rather cumbrous arrangement, and an unnecessary one except so far as the notes are required for re-issue. It is proposed, therefore, to substitute for that system a system of certificates, which will be furnished to each bank on the same lines and in proportion to the securities which it is able to lodge, and will therefore relieve us from the necessity of handing the actual paper to them and them of the need of safeguarding it. These are the only two provisions of the Bill, and I hope that your Lordships will agree to pass it through all its stages to-day.
Moved, That the Bill be now read 2ª.—(The Marquess of Crewe.)
On Question (Standing Order No. XXXIX having been suspended), Bill read 2ª: Committee negatived: Bill read 3ª, and passed. (No. 275.)

LOCAL GOVERNMENT (ADJUSTMENTS) (SCOTLAND) BILL.
Brought from the Commons.
Moved, That the Bill be now read 1ª.—(Lord Emmott.)
On Question, Bill read 1ª, and to be printed.
THE FIRST COMMISSIONER OF WORKS (LORD EMMOTT): My Lords, I can explain in a very few words the object of this Bill. Your Lordships will remember that a few years ago a judgment was delivered, I think in this House, under which the system of financial adjustments which had obtained up to that time in reference to areas taken from counties and added to burghs was upset. A Joint Select Committee of this House and of the House of Commons was appointed, over which the Duke of Devonshire presided. For England a Bill to carry out the recommendations of the Joint Select Committee was passed last year. The Bill to which I am now asking your Lordships to give a Second Reading is of the same character mutatis mutandis as the English Act. After considerable negotiation, this Bill has been framed with the consent of the various local authorities in Scotland. It carries out the recommendations of the Joint Select Committee to which I have referred; it has the support, so far as I know, of all parties in the House; and in the interests of Scotland it is desirable that it should be added to the Statute Book before the close of the session.
Moved, That the Bill be now read 2ª.—(Lord Emmott.)
On Question (Standing Order No. XXXIX having been suspended), Bill read 2ª: Committee negatived: Bill read 3ª, and passed. (No. 276.)

PATENTS, DESIGNS, AND TRADE MARKS (TEMPORARY RULES) AMENDMENT BILL.
Brought from the Commons.
Moved, That the Bill be now read 1ª.—(Lord Wimborne.)
On Question, Bill read 1ª, and to be printed.
LORD WIMBORNE: My Lords, in the absence of Lord Granard I have been asked to take charge of this Bill to-day. Its object is to amend the Act which your Lordships passed only recently dealing with patents and designs. That Bill, which is now on the Statute Book, had for its purpose the voidance and suspension
554
of patents enjoyed by the enemy, both with regard to such patents as affected the importation of articles made in enemy countries and also with regard to the manufacture of such articles by enemy aliens in this country. It now appears that the Act does not quite go the lengths which are desirable in the situation. Therefore the present Bill amends and extends the Act. It extends the Act to patents where an alien enemy benefits either directly or indirectly from the existence of a patent in this country, and it also covers the point about designs, which was omitted. But there is a further point about this Bill which will commend itself to the House. The object of our action in this respect is to enable British manufacturers to step into the place which has been heretofore guarded by enemy patents. It is felt that unless power exists to grant an unrestricted licence with regard to manufactures of this kind, business men will hesitate before expending large capital sums in laying down plant with the risk that at the determination of the war the licence might be revoked, and therefore the Board of Trade seek to take powers to grant licences to such manufacturers, if they think fit, for an unlimited period.
Moved, That the Bill be now read 2ª.—(Lord Wimborne.)
On Question (Standing Order No. XXXIX having been suspended), Bill read 2ª: Committee negatived: Bill read 3ª, and passed. (No. 277.)

WAR LOAN BILL.
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the weaning of the Parliament Act, 1911.
Moved, That the Bill be now read 1ª.—(The Marquess of Crewe.)
On Question, Bill read 1ª, and to be printed.
THE MARQUESS OF CREWE: My Lords, I must briefly explain what this Bill is, because it differs from Bills which have been passed in former times in cases of urgency. This Bill provides that any money for raising the Supply granted to His Majesty for the service of the year ending March 31, 1915, may be raised in such a manner as the Treasury think fit, and it gives a general power to the Treasury of creating and issuing any kind of securities for the purpose. These powers sound, and are, exceedingly

555
wide. On former occasions when smaller amounts have been raised the actual method of raising them has generally been included in the legislation. When we engaged in the South African War the first demand which was made was not a large one—it was for £8,000,000 of Treasury Bills. Later on a sum of, I think, £60,000,000—first £30,000,000 and afterwards £60,000,000—was raised by the creation of Consols; and, of course, there is also the method, adopted afterwards in the South African War, of raising a special War Loan. In all those cases it was easy to state the particular method by which it was desirable to raise the money.
Now, as your Lordships are aware, a Vote of Credit has been obtained for a sum of not less than £100,000,000, but it is quite impossible to say in the present condition of the Money Market, which, of course, is entirely different from anything experienced in any previous war in which we have been engaged, what may be the most economical and the best method of raising a large sum of money when it is required, or, indeed, to state the time at which such creation, either of Bills or of Exchequer Bonds or of Consols or of a special War Loan, would be desirable. Those are, in fact, the only four methods which, so far as I know, could be employed for the purpose of raising this money, and therefore there is no possibility of hasty or arbitrary action on the part of the Treasury which could in any way damage or compromise the national credit. I was glad to notice, when this subject was discussed in another place, that so acute and well-informed, and, I may say, almost invariable critic of His Majesty's Government as Sir Frederick Banbury expressed hearty approval of the terms of the measure and of the latitude given to the Exchequer to raise money in any way which appears most suitable and most economical to them. I may also remind your Lordships that it has been stated that it is not likely that any long interval will elapse without the sitting of Parliament, and in those circumstances I hope this House will agree that in the present peculiar and very special circumstances the terms of the Bill are not unwarranted.
Moved, That the Bill be now read 2ª.—(The Marquess of Crewe.)
LORD DESBOROUGH: My Lords, it is not my intention to occupy much of your Lordships' time on this occasion,
556
but I should like to ask His Majesty's Government whether they have considered a recommendation made by a Commission which was set up in the year 1888 on the question of currency, and which unanimously reported in favour of the adoption of a certain method for increasing the gold reserves of this country. The Royal Commission reported, I think I may say unanimously, in favour of issuing small notes based on silver. We have in this country enormous sums of money in ten-shilling pieces, which are a most wasteful coin. The Commission reported in favour of issuing small notes based on silver as substitutes for half-sovereigns. I submit that that would be an easy, cheap, and harmless method of increasing our gold reserves. I am informed that there are something like 70,000,000 ten-shilling pieces in the country; that, of course, may be an exaggeration, but the number is very large. Speaking on this subject at Leeds, during a financial crisis in 1891, the late Lord Goschen, whose authority in this matter will not be disputed, said that he had fully considered this suggestion and saw no economic objections to its being carried out. The adoption of the recommendation of the Royal Commission would not inflate the currency. Therefore I venture humbly to throw out this suggestion, backed as it is by a Royal Commission which sat for two years and by the late Lord Goschen, who was admittedly a high authority on finance. When Germany went to war she issued legal tender up to £80,000,000 against the deposit d securities; I think Canada in the last ten days has taken the same step; and I believe that the United States of America, after their panic in 1907, sanctioned the issue of no less than £100,000,000 sterling against securities. There is no doubt in my mind that there has been a conspiracy on the part of Germany against the whole of our English securities. In order that the business of the country may be carried on there ought to be some means of employing in the ordinary purposes of commerce and trade this enormous mass of wealth which has been conspired against and which is now locked up owing to the war. I therefore ask the noble Marquess the Leader of the House whether the recommendation of the Royal Commission to which I have referred has been before the Government and whether they have also considered the possibility of issuing legal tender against the deposit of securities of acknowledged worth.
THE MARQUESS OF CREWE: My Lords, I am sure the House will not expect me to engage in anything like a full discussion on the question of currency at this moment, even with so accomplished a master of the subject as my noble friend opposite. But as regards the issue of 10 s. notes as against silver, with the consequence of the demonetisation of the half-sovereign as a current coin, I would remind him of this, that the value of such an augmentation of the gold reserve as would be caused by the addition of the stock of half sovereigns in the country, whatever it may be, and their conversion into sovereigns or into bar gold, must depend on the possibility of calling in the whole of those coins, which would be an elaborate process, and one not very easily carried out at this particular moment. The question, I think, cannot be regarded as urgent. I do not express any opinion at this moment on the abstract proposition as to whether it might be a useful thing in ordinary times to issue these small notes against silver, but it is not urgent in the sense that there is any shortage of currency in the country. We have been able to meet this crisis by the issue of the notes of which I have already spoken without the very serious national step of a suspension of cash payments. That has, as a matter of fact, been carried out, and I think that if my noble friend will consult his friends in the City they will all tell him that any step of the kind he mentions is not in itself urgently called for at this moment by anything that had happened in connection with the war. Therefore although I have no doubt that the possibility has been considered, as all possibilities have been considered, by those most competent to form and to give opinions on the subject, yet I should be surprised to find that those with whom we have been acting, representing the great financial interests of the country, would desire to take the particular step with regard to 10 s. pieces which my noble friend has mentioned.
As regards the other question—that is to say, issue as against securities—by securities I take it that the noble Lord means securities held by private individuals and not by banks, because, of course, in the case of banks this has already been done—the advance of these small notes to banks has been made against securities. The noble Lord means, I suppose, that in the case of private individuals owning securities cash advances should be made. That
558
is a very large proposition, and I confess that at first sight I do not see how it could be carried into effect without such elaborate safeguards as would make its practical usefulness very doubtful. I will not attempt to discuss the question further with my noble friend at this moment. He, I am sure, has means of bringing the proposition before the notice of those who form prominent and most valuable members of the Committee on which I have been myself acting, dealing with these matters. Therefore if he cares to pursue it. I have no doubt he will take that step.
On Question (Standing Order No. XXXIX having been suspended), Bill read 2ª: Committee negatived: Bill read 3ª, and passed. (No. 278.)

SLAUGHTER OF ANIMALS BILL. [H.L.]
To be printed as amended. (No. 279.)

ROYAL COMMISSION.
The following nineteen Bills received the Royal assent—

War Loan.

Special Constables.

Isle of Man (War Legislation).

Defence of the Realm (No. 2).

Customs (Exportation Prohibition).

Articles of Commerce (Returns, &c.).

Elementary School Teachers (War Service Superannuation).

Education (Scotland) (War Service Superannuation).

Education (Scotland) (Provision of Meals).

Police (Scotland) (Limit of Age).

Naval Billeting, &c.

Housing (No. 2) (Extension to Ireland).

Patents, Designs, and Trade Marks (Temporary Rules) Amendment.

Local Government (Adjustments) (Scotland ).

Currency and Bank Notes (Amendment).

Blyth Hall (Transfer) Order Confirmation.

Coatbridge Drainage and Burgh Extension Order Confirmation.

Dumbarton Burgh (Water, &c.) Order Confirmation.

North British Railway (Invergarry and Fort Augustus Railway Vesting) Order Confirmation.

House adjourned at twenty-five minutes past Three o'clock, to Monday next, a quarter past Four o'clock.