Lords Sitting of 21 December 1915

LONDON COUNTY COUNCIL (CELLULOID ETC.) BILL.
  GLASGOW CORPORATION (CELLULOID) BILL.
  Read 3a, with the Amendments, and passed, and returned to the Commons.
  WAR LOAX (SUPPLEMENTAL PROVISIONS) BILL.
  Brought from the Commons; read la; to be printed; and to be read 2a Tomorrow (The Lord Hylton). (No. 191.)
  JUDICIAL COMMETTEE BILL. [H.L.]
  Returned from the Commons, agreed to.

  RETURNS, REPORTS, ETC.
  Trade Reports (Annual Series)—

  No. 5538. France (Saigon, 1914);

  No. 5539. Persia (Seistan and Kain, 1913–1914):

  Presented (by command) and ordered to lie on the Table.
  Shops Act, 1912—Order made by the Council of the Borough of St. Helens and confirmed by the Secretary of State for the Home Department, affecting certain classes of shops within the Borough: Laid before the House (pursuant to Act) and ordered to lie on the Table.

  BUSINESS OF THE HOUSE.
  THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF CREWE): My Lords, I move that Standing Order No. XXXIX be considered in order to its being suspended for the remainder of the week. In making this Motion I desire to mention one fact connected with the business of the House, and concerned, indeed, with the suspension of the Standing Order. It is with regard to the Munitions of War (Amendment) Bill, which, as I understand, cannot reach your Lordships' House until Thursday. My noble friend the Paymaster-General will state what in the opinion of the Minister of Munitions is the extreme urgency of this Bill, and he will ask, as I understand, that it may be passed before we adjourn so as to avoid
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  the delay which would be caused by its being postponed until after our short recess. I hope that when you have heard what my noble friend has to say the House will agree to that course being taken. So far as the remaining business of the House until the adjourn ent is concerned, I think your Lordships have already been sufficiently informed as to the course which we propose to take.
  Moved, That Standing Order No. XXXIX be suspended for the remainder of the week.—(The Marquess of Crewe.)
  THE PAYMASTER-GENERAL (LORD NEWTON): My Lords, with reference to what has fallen from my noble friend the Leader of the House, perhaps I may be permitted to say, as I have been deputed to take charge of the Munitions of War (Amendment) Bill, that I saw Mr. Lloyd George this afternoon and he expressed a strong hope that your Lordships would consent to pass the Bill through all its stages on Thursday next. I quite realise that this is making a somewhat unprecedented demand upon your Lordships' House, but I venture to do so upon the ground that I am assured by the Minister of Munitions that it is all-important that this Bill should come into force at the earliest possible moment. In fact, he authorised me to state that any delay in the passage of the Bill might result in delay in the production of what is urgently needed—namely, machine guns, heavy guns, heavy projectiles, and many other munitions of the same description. Therefore I venture to support what has been said by my noble friend in the hope that the course proposed may be acceded to.
  THE MARQUESS OF CREWE: Perhaps I might add that supposing it should meet the convenience of the House to assemble at an earlier hour than usual on Thursday in order to be able to examine this measure more fully, we should be quite prepared to fall in with some such suggestion.
  EARL ST. ALDWYN: I do not rise to offer any objection to what has been suggested, but I think His Majesty's Government, as usual, are rather hard on your Lordships' House. There has been very great delay in the passage of this Bill through another place; and the result of that delay, which was not your Lordships' fault, is that we are asked to pass a very important Bill through all its stages in a

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  single day. I must say I do not think it is fair, but I should be very sorry to raise any objection to the course proposed having regard to what the noble Marquess has said.
  LORD NEWTON: With the permission of the House, perhaps I may be allowed to inform the noble Earl that it was explained to me by the Minister of Munitions that the delay which has arisen in the House of Commons was due to the difficulty experienced in coming to terms both with employers and employed. Nobody regrets the delay more than does my right hon. friend, but that is the reason why the Bill comes up to your Lordships' House at so late a stage.
  On Question, Motion agreed to.

  FINANCE (No. 3) BILL.
  Order of the Day for the Second Reading read.
  THE MARQUESS OF CREWE: My Lords, as your Lordships are well aware, it has never been the custom in this House for the member of the Government who is in charge of the main Finance Bill of the year to make anything in the nature of a regular Budget statement, and that custom seems to be even more reasonable than usual in its observance on this occasion, since, owing to the circumstances of the war, it is not possible to make the financial provision for any particular year by a single measure, as has been the custom of all Parties in ordinary times. The term during which a Finance Bill can be expected to remain operative is naturally somewhat indeterminate, and there is, therefore, the less reason for attempting to start a regular debate on a large scale in your Lordships' House in order to review the whole finance of the year. I will therefore confine what I have to say on the subject of this Bill within the shortest possible compass.
  Probably those of your Lordships who have glanced at the newspapers in this connection will have remarked that on one side this Bill introduces increased duties on many articles of consumption and articles of common use. It endeavours to obtain a substantial contribution to the revenue of the country from indirect taxation. The articles of consumption on which duty is payable at ordinary times have been subjected to substantial in-
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  creases to those duties, and, in addition to these well-known imposts, you find in the Bill a number of new duties to be levied on articles imported from abroad. I have no intention of discussing at length the details of those new duties. It will be noted, however, by anybody who reads the Bill that they are not imposed upon any fixed or recognisable fiscal principle. All that can be said about them is that they are designed in order that the duty to be raised in respect of each commodity may be a substantial or even a considerable sum, and that their collection should not be so intricate or inconvenient as to make it scarcely worth while to raise the duties at all, as would happen in the case of many articles which on a superficial view might seem to be proper subjects for taxation of this kind; and, in the third place, the selection of the particular articles is an index of the desire of the Government to limit, so far as they are able, useless and luxurious expenditure at the present time. These duties, as I have said, are not designed upon the lines of any special fiscal principle, as will be obvious to anybody who runs through the list of articles to be taxed. Their selection has no bearing whatever upon the old fiscal controversy with which we are all so familiar, a controversy which, as we all know, cuts quite as cleanly across the ranks of His Majesty's Government as it does those of any other body of public men who could be selected, without, as I am happy to think, disturbing in any way our harmony in discussing the best method of carrying the war to a successful conclusion.
  In addition to these indirect taxes, the Bill shows that formidable additions are also made to direct taxation. The Income Tax and the Super-Tax are both substantially increased. So far as the Income Tax is concerned various changes are made, some by establishing a system of quarterly or of half-yearly collection. There is another change which is of substantial interest to your Lordships' House, where the landed interest is so strongly represented, in the alteration which is made in the shape of the farmers' Income Tax by the trebling in one sense of the amount payable under Schedule B, charging it in proportion to the whole rent instead of only one-third, but leaving it, of course, possible for the farmer, if he so chooses, to be taxed under Schedule D as though he were an ordinary trader.

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  The third part of the Bill—which concludes this cursory examination of its terms—deals with the question of excess profits and proposes a charge to the extent of 50 per cent. upon profits which can be regarded as due to the war. It was not found possible, as I understand, to discriminate in particular cases between profits made by individuals which could be held to be due to the war or excused from liability on the ground that they were not due to the war. That would have involved inquisitorial examination of a very difficult and dubious character into the financial affairs of a vast number of people. It was therefore thought wiser to exempt certain classes of profits altogether from the operation of this clause. Those exemptions included the profits of farmers, because those had already been to some extent dealt with under the clause which I have just mentioned altering the scale of collection under Schedule B. The exemptions also included all holders of offices—that is to say, such recipients of income as, for instance, the whole Civil Service. A promotion with a consequent rise in salary would not become liable to this tax. The exemptions further included all professional profits, because in those cases it was not possible, it was thought, to ascribe these to the direct action of the war. With those exceptions, excess profits will be charged.
  It is evident from the reception which this particular provision gained in the country that there is a general sense that, if it can be fairly levied, this tax is a thoroughly reasonable one. I do not think it is possibLe to levy a tax of this kind with absolute fairness in the case of every individual, but the same may be said of a great number of the taxes which by common consent are fair when taken all round; and I am inclined to think that the method which the Chancellor of the Exchequer has adopted in this Bill comes as near a general system of fairness as any that we could hope to obtain. It is interesting to note that in some of the countries of Europe there has also been an attempt to embark on the taxation of war profits. I mentioned the other day that in Germany, after a long abstention from alluding to the subject, the Finance Minister had announced that such an attempt was to be made there. Whether it will be made on such reasonable and general lines as our proposal in this Bill,
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  one may, I think, take leave to doubt. It is not unreasonable to suppose that certain classes, highly powerful in the conduct of government, may somehow succeed in obtaining a larger share of exemption than we should consider absolutely just. But however that may be, we shall certainly observe with interest the attempts that are made in Germany and also in other countries, including those of our Allies, to deal with this novel and undoubtedly difficult problem. I think I need not trouble the House with any further observations upon this Bill. I have purposely avoided going into any detail or mentioning particular figures; and, of course, I must leave it to your Lordships to decide what amount of discussion you may desire to give to this measure, which we believe to be a fair attempt to meet to some small extent—and we sadly recognise that it is impossible to do so to anything like a full extent—the gigantic charges of this war out of the income of our citizens.
  Moved, That the Bill be now read 2a.—(The Marquess of Crewe.)
  LORD COURTNEY OF PENWITH: My Lords, I recognise that any one who asks your Lordships' attention respecting this Bill accepts a great responsibility. The noble Marquess who has proposed the Second Reading has given a clear account of its contents, but he did not, I think, invite discussion; and the general impression left by his speech is that discussion would be inappropriate and useless. I confess to a belief that this is the idea generally entertained by your Lordships, and in ordinary circumstances it is one that must prevail on the conduct of members of this House. We have no power to change this Bill in the slightest particular, or to reject it. Our words, therefore, may be said to be merely beating the air; they are of no immediate effect, and they can have no immediate result. But this Bill is a very small attempt, an inadequate attempt, to meet the necessities of the time, and it is upon that issue that I think some words might be addressed to your Lordships, not with reference to any possible change in the Bill, which, as I have said, is impossible, but with the recognition that this war has not reached an end—its end is not in sight—and that within a very short time graver calls may be made on the country to supply more adequate means of sustaining the cost of the war. Therefore I think it would not

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  be altogether useless if a discussion could be raised in this House, not on the details of this Bill, but on the great object which we should all have in view and the principles which should regulate our conduct in compassing that object of meeting as far as we can the cost of the war.
  I will first clear away two possible apprehensions which your Lordships may entertain. I am not going to enter into any of the questions which have been debated in discussions on former Finance Bills by distinguished members of this House. I am not going to raise any discussion on economies which are possible and which might be realised in the conduct of the war. I have no doubt that there is much waste. The general scale of expenditure is inordinately large, and it might easily be reduced; but it would be useless to enter into that question here; nor, indeed, do I feel any very great interest, in it. After all that is said by the most vigilant critics of the expenditure of His Majesty's Government, the amount of possible reduction which they suggest is relatively very slight, and does not practically affect the burden which is laid upon us or the necessity of discussing how that burden should be discharged. I am therefore not going to follow the example which has been set on former occasions of discussing the economies that are possible in the conduct of the war or in the general expenditure of His Majesty's Government. Again, I shall trouble your Lordships with next to no figures. I want to get at the facts which underlie the figures.
  In discussing our financial situation, our financial conduct, our financial proposals, we are too often led away by the phenomena of money into disregarding the facts which underlie those phenomena; and I want, if possible, though I may have to deal with quite elementary and obvious truths, to insist upon some which, elementary and obvious as they may be, are in my judgment too often disregarded both by financial critics and by members who undertake financial discussion in this House and elsewhere. The two things which I wish to impress upon your Lordships are these. First, that we have not adequately considered what are the limits of the military and naval action which is possible for us. We speak often as if we have only to desire things to be done and they can be done, as if the wish was sufficient to insure
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  its fulfilment. Secondly, I desire to discuss the adequacy of the application of the principles which should be followed in meeting the necessities which the war has imposed upon us. In trying to get an apprehension of the situation we should, as I have said, as far as possible release ourselves from the consideration of money and look at things. It is in reference to this that I would call your attention to the cardinal proposition which underlies everything that I shall have to submit to your Lordships.
  Speaking roughly, but still with perfect accuracy, everything that we consume in the course of the year in the conduct of the war—all our support of the Army and of the Navy, whether it be in food and clothing, whether it be in the provision of transport, ships, munitions, guns, or in any other particular—all these things have to be produced and are produced within the year; that is to say, whatever is consumed in the course of the year must be and is produced within the year. The notion that we can start with a great reserve in stock or that by calling up the use of credit we can command unlimited supplies is illusive and delusive. There is no such reserve of stock under our command as deserves attention. Nor can we by any use of credit multiply or extend the quantity of things that we can produce in the year. The limit of that quantity is fixed entirely apart from our suggestions, or the moneys at our command, or the credits which we enjoy. If you turn the matter over for a little while you will see that in point of fact this is true what I have insisted upon, that all that we consume we must produce. Even if we have a larger stock than we had at the commencement, we necessarily have to keep abreast of our consumption and must leave at the end of the year something like that with which we began. Therefore the limits of our consumption are fixed by the limits of our production.
  We might, perhaps, proceed a step further and consider what is the industrial and financial position of a country like our own in times of peace. There are produced within the twelve months, either directly or by exchange—there are brought to our use—a certain quantity of goods and a certain quantity of service. That is valued at a total of something like £2,400,000,000 a year, and the greater part of the things so produced—I am now talking of peace

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  time—are consumed in the course of easy living for the most part by the citizens of the country and their dependants. A margin is available for saving, and that margin, according to the estimate of the best statisticians, is valued at £500,000,000 a Year. Just over one-fifth of what is produced may be saved. But observe—and this is what I wish to impress upon your Lordships—that this £500,000,000 a year is not saved in money; it is not saved in stocks of goods; it is not saved in that reserve which we wish to call upon in times of emergency like war. The savings that are effected, the overplus of the incomes which are saved, and the overplus of things and of services, are built up in engaging men to create new things in which these savings are embodied. You apply the overplus in making railways, in building houses, in extending docks, in creating municipal improvements, in improving lands, in building ships, and, in fact, in amassing that great quantity of wealth which exists within a country in which the overplus of industry gets locked up but is not available in an emergency and does not assist the progress of the war. In order to meet that you have to create things anew, quite apart front the accumulation you have in the houses, the railways, the docks, the municipal buildings, the waterworks, and gasworks, and other things in which your savings have been placed. That is the simple case in time of peace.
  Then when war comes there is an immense divergence in the form of consumption. A new and unparalleled consumption is called into being. We have never had such a consumption as in the course of this war, a consumption of which I am very slow to give any estimate; but it is obvious, if what I have said before obtains the assent of your Lordships, that this consumption must be provided out of what we produce. The first fact is that the savings in ordinary circumstances, the overplus of service and things which we apply in creating and investing what we call capital, are consumed by the consumption due to the war. The other fact is that a large part of that which in ordinary circumstances you apply to the easy living of your citizens, to the meeting of their wants and the supplying of their pleasures from day to day, must be diverted to the support of the war; the war calls upon you for the sacrifice of all your savings, and for a great inroad upon your ordinary expenditure. You are incapable of pro-
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  ducing more things, although you may produce different things. You are incapable of producing more, because another result of the war is that a great number of your agents in production are taken away from the making of things and become instruments in the destruction of things. That being the situation, it becomes at once apparent to your Lordships that the amount which we can possibly apply to the war is limited by the production which is possible, which is practically incapable of increase, minus what is absolutely required to keep the population going.
  Now if in time of peace £2,400,000,000 was the estimated value of the things produced, and £500,000,000 the estimated value of the things saved, then £1,900,000,000 went to the support of the ordinary life of the people, realising what I have ventured to describe as the easy process of life as a whole for the mass of the citizens. The war comes and the savings go, and the easy life is transformed into a hard life. Out of the £1,900,000,000 representing services which are devoted to making life easy, a great proportion must be diverted to what is necessary for carrying on the war, and the life of the citizen must in consequence become hard. There is a limit, a very clear limit, not capable of being foretold beforehand but soon reached in the course of practice, to the extent to which you can maintain an Army. I do not know what may have been said elsewhere to-day. I have understood that whereas we have been maintaining an Army of something like 3,000,000 men, another 1,000,000 is about to be asked for. Of course, what has been already said in another place to-day may entirely dispel the anxiety which I feel, but I have not seen any statistics showing that there may not be a difficulty in maintaining these 4,000,000 men, with all the accessories for realising their efficiency as instruments of war. There may be a difficulty in maintaining 4,000,000 men withdrawn in large measure from productive employment and made into agents of destruction. It is necessary to be borne in mind that there is a limit, but I do not know that I have seen any evidence that the existence of that limit has been realised.
  Next is the question of how what is withdrawn from ordinary consumption and what is ordinarily saved shall be got to meet the expenditure of the war. If what I have said is accurate, the whole cost of

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  the war is necessarily defrayed by production of the things consumed within the year, and there must, therefore, be such a divergence as I have suggested to sustain that equilibrium. Taxation, largely applied, may do much, but we know that in addition to taxation there has been a considerable amount of borrowing—that is to say, those who have had anything overplus have been invited to lend and have lent to the Government what has been necessary for the purpose of carrying on the burden of the war. But the amount of borrowing is limited also by the over-plus beforehand and the amount that was so saved. Seeing that what is borrowed is made within the year and is consumed within the year, seeing that the whole of the capital has gone as it has been created, the question naturally gets forced upon many people, Why need we borrow at all? Since it is handed over for war purposes and not used by members of the conummity, the whole of it might be handed over for war purposes as taxation instead of being borrowed.
  In the Napoleonic War Mr. Pitt, in the first half of the war, borrowed largely, but he arrested his fatal course before it was too late, and for the last half of the war the country paid its way as it went. Therefore there is strong support from history for the suggestion which I put before your Lordships in what may be called theory, since what was done in the Napoleonic War was an actual meeting of the war expenditure by taxation year by year without recourse to loans. Since the whole substance of things consumed is produced within the year, the question arises whether it is not possible always and whether it should not be the aim of the Legislature and of the advisers of the Crown to secure if possible that taxation and not loans should meet the cost of the war? What will be the result otherwise at the end of the war when it comes? There is the same destruction of capital, the same using up of things in whatever form they are put forward. But the community as a whole in the one case resumes its career unassisted by accumulations of capital which peace time would ordinarily afford but without the burden of debt oppressing its industry and crippling its enterprise. Under the other form you leave the people in peace burdened with the debt which is the cost of the war.
  At the commencement of the Crimean War Mr. Gladstone essayed to brace up
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  the energies of the then Parliament to the duty of meeting the cost of that war out of taxation without recourse to loans. He showed by reference to Mr. Pitt's example that the thing could be done. He gave strong arguments, which I have endeavoured feebly to reproduce, why if possible it should be done, and since it had been done in the past he essayed to persuade the Legislature and the people to do it once more under that experience. And let me remind your Lordships of the extreme difficulties under which Mr. Pitt and his successors managed to raise taxation equal to what they wanted. Adam Smith's "Maxims on Taxation" had been published some time and Mr. Pitt was his great disciple, but the maxims on taxation of that great economist were but feebly embodied in our practice at that time. One of his maxims your Lordships will remember is that as little as possible should be taken from the taxpayer in addition to what reached the Exchequer, and that nothing should be taken without a corresponding addition reaching the Exchequer. Yet the system of taxation of that day was overlaid with protective duties, making the taxpayer pay much more highly for what he wanted and taking a great deal from his means which never came to the Exchequer at all. The maxim of equality or proportionality of contribution, which was Adam Smith's fourth maxim—we all know it was rather imperfectly apprehended and expressed by himself—obtained very little effect on the taxation of that time, and the idea of equality of sacrifice as we now understand it was but feebly understood and still more feebly attempted to be put into practice. Yet the people of that time did manage to make both ends meet, and did realise the necessity of making the consumption of the war not exceed what the country could produce; they did, in fact, equate the one with the other.
  Now is it impossible for us to attempt something of that kind to-day? Are the circumstances of to-day such as would justify any departure from that principle? No doubt it is a very difficult idea which I am endeavouring to submit to your Lordships. Mr. Gladstone, with all his power and eloquence, was not able to carry his proposals very far. He did not, indeed, have the conduct of the finances after the first year of the war, but he confessed to Sir George Cornewall Lewis, who took up

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  the task and fulfilled the duties of Finance Minister during the later part of the war, that he (Sir George) had to do what he himself would have had to do and would have contemplated doing; and therefore he was not able to realise the high scheme of action which he had submitted to the country. It may be that it is impossible to do it now. But it is possible to do more than has been done or is proposed to be done in this Bill now before your Lordships. Indeed, the impression left upon the bulk of his hearers by the Chancellor of the Exchequer at the end of his speech, if I am correctly informed, when he submitted whit is embodied in this Bill, was that he had not gone as far as was expected, perhaps not as far as some of them had hoped, and certainly not so far as many feared. The only motive for speaking here to-day is a desire, if possible, to infuse a little more boldness into the conception of the Chancellor of the Exchequer when he again may have to take up, as he very soon must, the duty of providing for the cost of the war—a little more boldness in his conception of how it should be carried through.
  Is the situation altered by the fact that, whereas the country under the Napoleonic War might be called a self-sufficing and self-sustaining one, we have to-day a possibility of obtaining help in the form of supplies, not perhaps altogether met by payment in kind, from another country, perhaps from more than one others country? I would venture to press upon your Lordships that the situation is not really changed. If it is desirable that a debt should not be run up so that at the end of the war the industrial energies of the country should not be left crippled with the necessity of a tribute to those who lent their savings during this war, those lenders being our own fellow-citizens, it is surely equally if not more desirable that the end of the war should not leave us in the position as a nation of being tributary to another country. That is the alternative which apparently in some measure lies before us, and which the Chancellor of the Exchequer is quite ready to face. He wants to borrow. He proposes to go on borrowing from the United States. There is no reason why the argument against borrowing from our citizens should not prevail against borrowing from the United States. On the contrary, I have suggested to you that the argument is stronger in
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  favour of our self-sufficiency in the one case than in the other.
  But even in respect to the United States I must repeat the caution which I have expressed before, that there is a limit, a pretty clear limit, to the amount that you Wray borrow from them. They have a large surplus of things made over things consumed, meaning by "things consumed" what is necessary for the maintenance of their population; but they apply that generally in the development of enterprise at home and hitherto they have had little or none to spare for other countries. They have been a borrowing, not a lending people; and the facts of the situation in the United States have not been changed materially in that respect by this war. They are still more apt to be a borrowing than a lending people. They have such an abundance of means for the occupation and employment of capital and their surplus income at home that there is very little left to lend abroad. The Chancellor of the Exchequer has, in fact, been really disappointed in the attempt he made. He offered most liberal terms, but he did not obtain anything like so much as he expected. And the Loan which he did eventually secure is a Loan that is not flourishing in the United States so far as it has reached the public hands. A great part lies in the hands of those who undertook as a syndicate to take it over. The part in the public hands is quoted at a discount. So there is a limit to your powers of borrowing there. But the argument against borrowing in the United States is as powerful as or more powerful than the argument against borrowing from people at home.
  Another reason why we should realise that this limitation exists may be found in the fact that in a very clear if not a direct way we have been already employing very largely the resources of help which can come from the United States. The Chancellor of the Exchequer proposes, if possible, to raise Loans in the United States by the medium of collecting together most of the securities of the United States Corporations which are held in this country. Upon the security of getting together the bonds, the shares, the funded debt of railways, industrial enterprises, municipalities, and what not in the United States, he hopes to get a pretty continuous supply from the United States of help to his finances. As I have said, there is a limit

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  to that, and we have been already dipping deep in the resources which are available in that direction. For months past public companies and private citizens in this country who are holders of the securities of the different corporations, railway and other, in the United States have been selling, tempted by the good prices which prevail on the other side of the water and also impelled by the feeling that it was their duty to assist the Government at home by meeting as far as they could the demand for loans put forward by the Chancellor of the Exchequer. So that the holders of American securities here have, in advance of all these conceptions of the Chancellor of the Exchequer, been realising in the United States the securities they held. The produce has come over here. It need not have come had it been employed by the Government in paying for the commodities they have received from the United States. The process has been going on pretty rapidly, and we are getting to the bottom of it. The bottom is within sight; as the bottom also is, in the eyes of many persons, within sight of borrowing at home. So that not only by policy but by necessity the Chancellor of the Exchequer must direct his mind to the idea of getting by taxation at home the greater part of what he wants for the supply of the war.
  How much that is the Secretary to the Treasury indicated some months ago when he declared that one-half of the incomes of the citizens of the country might be called for to be given or lent to the Government; that out of the £2,400,000,000 of income £1,200,000,000 should be advanced either by loan or by gift by the citizens to the Government, leaving some £1,200,000,000 for the support of the people at home who are engaged in keeping up the life of the country and providing what is wanted for the Army abroad. One-half! But even then you would not, according to the lavish extent to which you are carrying the enlistment of your forces in this war, be able to meet the drain upon you. How is one-half of the national income to be raised by taxation? Only by a very strong and very drastic application of the system of direct taxation. If one-half is to be raised from income, it is perfectly obvious that it could not be one-half all up and down the social scale. You could not get half the income of the poorest; you could not get half the income of the well-paid
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  labourer, though I hope you will get a good deal from him. I entirely sympathise with the desire to intercept some of the earnings of the well-paid labourer as much as the man with capital. But you cannot get half there. Nay, you could not get half from the moderately well-paid man of the lower middle class, or even of those above that level—what is called the upper middle class. You could not expect half the income to be realised by taxation of a man who has £1,000 a year; you could scarcely expect half from the man who has £5,000 a year. But since you must have half in order to meet the demand all round, you must have much more than half from the upper range of incomes which greatly exceed the limits I have suggested. If you are to raise in any adequate proportion by direct taxation the amount that is wanted to carry on the war, even reduced in its range as it must be, you must accustom your mind at least to the possibility of 10s. in the £ being levied on some limits of income.
  The amount to be raised by direct taxation, following the principle of equal sacrifice, results in getting a larger sum from the very rich than from the middle rich and a larger sum from the middle rich than from the moderately rich, and so down by gradation; and if you are to get half throughout you must get much more than half from the upper classes, and in matter of policy and justice it is difficult to deny that it should be so. If we concede, as I think it must be conceded, that the cost of the war as a whole may be met as far as we conceivably can out of the earnings of the country and that this involves half the income being raised, you must have the courage to carry on your argument. This I would say to the Chancellor of the Exchequer and to the members of the Government in respect to next year's transaction, at all events—you must have the courage to carry on your argument and recognise the necessity of making much stronger proposals than have been suggested hitherto.
  I do not think it would be judicious in me to indicate how much might be asked for and demanded. It is very easy for all of us to prescribe for others the limits of the sacrifice they should endure, and I dare say my idea of the sacrifice of the extremely rich would be thought almost

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  robbery on the part of those to whom it might be suggested. But this necessity must be fairly faced. Some nay say, "If you take 20 per cent. out of an income of £1,000, it is pretty drastic." But if you left—not took but left—20 per cent. out of £100,00, a man might rub along on £20,000, although it would be a very hard condition for him if he were accustomed to spend £100,000, a very hard condition, but not unparalleled even in the history of some persons in this country with whom some members of this House may have had intimate association. Those who know by tradition what was the experience of Irish landlords when the potato famine occurred, when rents disappeared but charges did not disappear, when great noblemen had to shrink their lives into part of their mansions and sustain existence almost as they could from the produce of the home domain, will admit that the most extreme scheme of direct taxation which might now be imposed would not touch the amount of sacrifice which was then demanded by the failure of the potato crop from the class of persons to whom I have referred. I do not suppose that any such scheme as I have suggested will be proposed or can be realised, but I suggest the necessity of fixing your minds upon and habituating yourselves to the contemplation of a very considerable increase in direct taxation so that the necessity of making both ends meet, which cannot after all be avoided in this great trial of ours, may be faced and solved.
  I apologise for the length and also for the character of the speech I have made. Try as I will, it will take the form of a lecture rather than an argument such as I should have wished to address to you. But the question is, Is the reasoning sound? Is it in any degree practicable? Does it suggest a scheme of action which it would be good policy and good conduct on the part of the administrators of the finances of the country to follow? I think it does. Proposals to deal with the war finances of the country are entirely independent of what feelings or what opinions we may have with respect to the war itself, and my proposal is such as in fact does embody what has been recommended by some of the strongest supporters of the war as it might be recommended by some of those who deplore its existence and would fain see it terminated. Still as it may be thought
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  that what I have said is coloured by my own view of the present situation, I do not wish in the least degree to disguise my feeling of the war itself. I may even be pardoned if in a sentence I admit that in my judgment it is a most hideous and apparently interminable blunder—a blunder precipitated by the governing personages of all Europe, our own not excluded. We have misunderstood and been misunderstood. But all this is apart from the question of the financial povisions for the war. Be our judgment of the war whatever it is, we are in it; we must go on with it; we must provide for it until we see our way to some measure for bringing it to an end. What I submit to your Lordships for your consideration and for the consideration of any others whom my words will influence is that if you really wish to meet your enemies and to overcome them there would be no demonstration so powerful as that of showing that you are ready to undertake any sacrifice however great, to entertain any suggestion however extravagant it might at first appear, in the way of taxation in order to win the war.
  EARL ST. ALDWYN: My Lords, I must say that in discussing a Bill of this kind in your Lordships' House I feel a sense of the greatest unreality, since your Lordships have been deprived of any power over such a measure. But I do not think, in spite of the ability and argumentative power of the noble Lord who has just sat down, that this sense of unreality was ever greater than when I listened to his speech. The noble Lord desires, as I desire, that a greater part of the cost of the war than is at present proposed should be raised by taxation. But the noble Lord is not content with that; he would raise, as I understand, £1,200,000,000 by taxation in the course of the year, and he would raise it all by direct taxation.
  LORD COURTNEY OF PENWITH: No, no.
  EARL ST. ALDWYN: Well, the greater part of it; because he passed over with censure the protective duties which were levied in the Napoleonic Wars. I venture to say that such a proposal as that is absolutely impossible, and I do not think if it were made in the House which has the right to deal with these matters the

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  noble Lord would find a single supporter. At the same time I feel that this Bill which is now before us does not contain adequate proposals for raising in the course of the year by taxation the money required for the prosecution of the war. I should say, Free Trader as I am, that in these times a much larger amount should be levied by indirect taxation than is proposed by this Bill, and that indirect taxation is the main source from which the extra taxation should be levied. Even by the argument of the noble Lord I think it is conclusively shown that you cannot raise the sort of proportions that he desired to raise from direct taxation. You are met with the fact that the poorer classes cannot spare more than a small proportion of their income, and going up by degrees to those who are better off I think the noble Lord got to the point of £5,000 a year before even he was able to suggest that half the income should go in taxation to the country. If the noble Lord thought for a moment how very few persons there are in this country possessing incomes of more than £5,000 a year he would see the impracticability of his own proposal.
  What does this Bill propose? It does propose to raise indirect taxation on four new articles—motor-cars, musical instruments, clocks and watches, and films. I do not deny that so far those proposals are good, and that a certain proportion of taxation may be raised by them. But that is a trifle compared with what is really required. Many more articles I venture to say should be included in our system of indirect taxation when we are engaged in such a war as we are at present engaged in, and not a few articles could be found which could not be considered by anybody as necessaries of life, although no doubt their increased cost might be inconvenient to many of those who use them. With regard to taxes upon articles that have always been subject to taxation, like sugar, tea, coffee, cocoa, tobacco, this Bill does largely increase the taxation on those articles. But I was very much struck with a report of an interview which the Prime Minister, the Chancellor of the Exchequer, and the President of the Board of Trade had with certain representatives of the trade unions a short time ago. What did the Chancellor of the Exchequer tell those representatives? He told them, with regard to one important
  764
  article—sugar—that the price of sugar, partly owing to increased taxation, was about double now what it was in peace time; that in 1911 the price was not so high as to-day, yet the consumption was largely reduced, but it was not at all reduced now; and, further, that the trades that manufacture articles largely consumed by the working classes were exceptionally prosperous and the demand for pianos was becoming enormous. That is where the money goes. In the first place, in increased wages to the working classes, and in the purchase of articles which to them are luxuries and which they do not really require.
  Then with regard to necessaries of life, what did the President of the Board of Trade say? He said that between 1872 and 1879 wages were abnormally high in some trades, but that at the present time we consumed 6 bushels of wheat per head of population against 5½ then; that we ate from 11 to 12 per cent. less meat per head of the population then than now; and that we then drank only half the amount of tea, smoked half the amount of tobacco and drank only one-fifth of the present consumption of cocoa. Yet these are articles which will be accounted by many as necessaries of life. The classes which are most able at the present moment to bear increased taxation are these working classes who are earning such large wages and wasting them to a great extent in what to them are luxuries. I would venture, therefore, to say that the Chancellor of the Exchequer's Budget, so far as the indirect taxation part of it is concerned, is quite inadequate to the occasion.
  But more than that. I have ventured before now on more than one occasion to complain in this House and out of it of the delays in imposing fresh taxation for this war by His Majesty's Government. The war began early in August, 1914. No fresh taxation was imposed until November, and then a totally inadequate amount having regard to the enormous cost of the war, which long before then ought to have been visible if the Government of the day had any foresight at all. Then time went on, and instead of bringing in a new Budget in April or May according to the ordinary custom, as the Government of the day ought to have done, what happened? Why, an absurd proposal, not

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  a financial proposal at all, but a proposal apparently aiming at stopping the consumption of aiming at stopping the consumption of alcoholic liquor was made and discussed at length in the House of Commons and finally abandoned; and the important Budget of this year is only now under consideration. Millions have been wasted in this delay in imposing taxation. The Government are always too late in everything they undertake, and this is a sample of what they have done. I had great hopes that the influence of my noble friends, two of whom I see sitting on the Front Bench opposite, when they joined the Government would be exerted in favour of the views which they themselves entertain. I see no trace whatever of the exercise of those views in the Budget now before your Lordships. I find that there is no real attempt to increase the number of articles which are subject to indirect taxation.
  There is one point with regard to direct taxation to which I should like to make a passing allusion. It has always been hitherto the habit, which I think has hardly ever been departed from before, to fix the rate of Income Tax in the early part of the year, in April or May as the case might be, when the Budget was brought in. Now we are fixing a new rate in November. We fixed a new rate last year in November. The inconvenience of that to everybody concerned is almost worse than the increased taxation. The trouble that was given last year in the calculation of the Income Tax on dividends to those persons whose duty it is to make deductions on that account was enormous, and it was impossible for anybody in receipt of dividends to know what was the proper rate at which he would expect the Income Tax to be deducted. The same thing happens again this year. I hope that next year when the new Budget is brought in it will be introduced at the ordinary time of the year—namely, April or May; and that whatever rate it may be necessary to place the Income Tax at for that year will be imposed, so that people can know beforehand what is the rate they will have to pay when their dividends and other receipts fall due in the course of the year.
  On Question, Bill read 2a.
  Committee negatived: Then (Standing Order No. XXXIX having been suspended) Bill read 3a, and passed.

  COMPANIES OF ENEMY CHARACTER BILL [H.L.]
  Amendments reported (according to Order).
  Clause 1:
  Procedure for obtaining royal declaration that a company is an enemy company.
  1.—(1) Where it shall appear to the Attorney-General that any company incorporated under and subject to the laws of some part of His Majesty's dominions is, owing to the character of its directors or of its members, or to any other cause, of a predominantly enemy character, he shall present a petition to His Majesty in Council praying that such company may be declared by His Majesty in Council to be an enemy company.
  (2) Any officer or member of time company, not being an enemy of His Majesty, may enter a caveat, addressed to the Registrar of the Council at the Conned Office, against such declaration.
  (3) If His Majesty shall refer any such petition to the Judicial Committee of the Privy Council, the said Committee shall proceed to consider the same, and any officer or member of the company who has entered a caveat shall be entitled to be heard by himself or counsel on the petition.
  (4) The Judicial Committee, after considering all the circumstances of the case, shall report to His Majesty in Council.
  (5) If the Judicial Committee report that the company is of a predominantly enemy character, it shall be lawful for His Majesty in Council to declare such company to be an enemy company and any ship belonging to such company shall forthwith become the property of His Majesty the King.
  (6) It shall be lawful for His Majesty in Council to make rules of procedure and practice for regulating proceedings on such petitions and, subject thereto, such proceedings shall be regulated according to the existing procedure and practice of the Judicial Committee.
  (7) The costs of all parties of and incident to such proceedings shall be in the discretion of the Judicial Committee.
  THE EARL OF HALSBURY: I move to omit from subsection (2) the word "Registrar" and to insert "clerk."
  Amendment moved—
  Clause 1, page 1, line 14, leave out ("Registrar") and insert ("clerk").—(The Earl of Halsbury.)
  On Question, Amendment agreed to.
  Then (Standing Order No. XXXIX having been suspended) Bill read 3a and passed, and sent to the Commons.

  INDICTMENTS BILL. [H.L.]
  Commons Amendments considered (according to Order).

  COMMONS AMENDMENTS.
  Clause 2, page 1, line 11, after ("England") insert ("for the time being, and of")
  Clause 2, Page 1, line 24, after ("Majesty") insert ("by that House").
  Clause 3, page 2, line 6, at the beginning of the clause insert:
  "(1) Every indietment shall contain, and shall be sufficient if it contains, a statement of the specific offence or offences with which the accused person is charged, together with such particulars as may be necessary for giving reasonable information as to the nature of the charge."
  Clause 6, page 3, line 29, leave out ("for") and insert ("as to")
  Clause 6, page 3, line 32, after ("being") insert ("materially").
  Clause 9, page 4, line 24, leave out ("March") and insert ("April")
  Schedules, page 5, line 18, leave out ("upon oath"), and after ("jury") insert ("And the foreman of the grand jury shall write his initials against the name of each witness so examined")
  Schedules, page 5, line 20, leave out ("paragraphs (2) and (3) of")
  Schedules, page 6, line 27, leave out ("in figures")
  Schedules, page 8, line 7, after ("drunkard") insert ("as the case may be") after line 8 insert—
  "12. Nothing in these rules or in any rules made under section two of this Act shall affect provisions of subsection (4) of section thirty-two of the Children Act, 1908."
  Schedules, page 8, line 23, after ("1915") insert ("and these rules, together with any rules made under section two of this Act, may be cited together by such collective titles as may be prescribed by the last-mentioned rules")
  Schedules, page 9, line 15, before ("killed") insert ("unlawfully")
  Schedules, page 10, line 13, leave out ("on") and insert ("between the day of and")
  Schedules, page 16, line 3, leave out the third ("and") and insert ("or")
  Schedules, page 16, lines 18 and 19, leave out ("5 (1) (a) of the Bankruptcy Act, 1913") and insert ("155 (a) of the Bankruptcy Act, 1914")
  Schedules, page 18, line 35, after ("indictment") insert ("and the foreman of such grand jury shall write his initials against the name of each witness so sworn and examined touching such bill of indictment")
  Schedules, page 19, line 29, leave out ("and") and insert ("or").
  THE LORD CHANCELLOR (LORD BUCKMASTER): My Lords, I move that your Lordships agree to the Commons Amendments to this Bill. Your Lordships may remember that when the Bill was introduced I pointed out that it resulted from the labours of the Joint Committee of both Houses appointed to consider the consolidation of the Criminal Law. This House passed the Bill and it was sent down to another place, where certain Amendments have been proposed. I have been carefully through these Amendments,
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  and with only one exception they are either trivial or else Amendments of drafting. The one exception is an Amendment proposed to Clause 3, and that is an Amendment which I think strengthens the provisions of the Bill in favour of the person accused by the Crown. As the Bill passed your Lordships' House Clause 3 was in these terms—
  Notwithstanding any rule of law or practice, an indictment shall, subject to the provisions of this Act, not be Open to objection in respect of its form or contents if it is framed in accordance with the rules under this Act.
  Your Lordships will see that the Commons Amendment defines the character of the indictment, and states what it must contain in order to comply with the provisions of the Statute; and then follows the clause as it originally stood. I hope your Lordships will agree to the Commons Amendments.
  Moved, That this House do agree with the Commons in the said Amendments.—(The Lord Chancellor.)
  On Question, Motion agreed to.

  EVIDENCE (AMENDMENT) BILL.
  Order of the day for the Third Reading read.
  Moved, That the Bill be now read 3a.—(The Lord Chancellor.)
  On Question, Bill read 3a.
  THE LORD CHANCELLOR: My Lords, I move, after Clause 2, to insert a new clause. The history of this Amendment may be present to your Lordships' minds. When the Bill was passing through the Committee stage the noble and learned Earl, Lord Loreburn, moved an Amendment which provided that the same results as follow upon this Amendment should ensue if, when any deposition was used at the trial, it was not substantiated in a material part by independent evidence. I pointed out then, for reasons which I explained to your Lordships, that we were unable to accept that Amendment, but I promised the noble and learned Earl that I would go as far as possible towards meeting his view, and this Amendment has accordingly been framed for that purpose. I know that it does not go as far as the noble and learned Earl desired. I know also, as your Lordships can readily

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  see, that it is open to the objection of being an illogical Amendment. It seems strange that if a man is convicted of an offence which is punishable by death he should be, by the peculiar character of the evidence given at his trial, subject only to imprisonment; but I realise that the noble and learned Earl's objection was due to his great anxiety lest sentence of death should be passed upon a man on account of evidence which might turn out to be unsubstantiated. I may say that I share that anxiety, and I have therefore been anxious to meet the noble and learned Earl's view by the introduction of this Amendment.
  Amendment moved—
  After Clause 2 insert the following new clause:
  ". Where any person has been convicted of an offence punishable by death upon evidence solely contained in depositions which have been read in evidence at the trial under the powers conferred by this Act, the punishment of death shall not be inflicted, but the Court may pass such sentence of imprisonment or penal servitude as it may think just."—(The Lord Chancellor.)
  On Question, Amendment agreed to.
  Bill passed, and returned to the Commons, and to be printed as amended. (No. 192.)

INCREASE OF RENT AND MORTGAGE INTEREST (WAR RESTRICTIONS) BILL.
[SECOND READING.]
Order of the Day for the Second Reading read.
THE MARQUESS OF LANSDOWNE: My Lords, during the last few months your Lordships have agreed to a great mass of legislation intended to meet the exceptional conditions, industrial, economical, and financial, which have arisen and are bound to arise during the progress of a great war. This exceptional legislation and the Proclamations and Orders in Council which have been issued in connection with it are collected in volumes which appear from time to time, and I think there are no less than four such volumes which your Lordships have probably seen. These Statutes abound in provisions of the most unorthodox description, provisions which would shock us profoundly if we were living in ordinary times, but which we accept because we
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regard them as inevitable and also because they are temporary in their application.
This Bill adds another to the long series of measures of this kind. It is intended to meet a situation of considerable difficulty and one which I have no hesitation in saying might easily become acute if it were neglected. I can describe that situation in a very few sentences. Complaints have reached His Majesty's Government from time to time that the occupiers of small dwelling-houses inhabited by the working classes were being subjected to pressure for an increase of rent, and that the consequences of this demand might, if it proceeded much further, become serious. This was the case mostly in districts which we commonly describe as munition areas. Our inquiries went to show that this demand for an increase of rent was by no means universal, and I should be sorry indeed to suggest that the owners of house property of this kind are generally either avaricious or wanting in patriotism; but the fact remains that in some neighbourhoods there have been, owing to exceptional movements of the population, a great influx of workers, a great shortage of house accommodation, and consequently a wholly abnormal competition for houses. The temptation to the owners has been very great, and their appetite has not unnaturally been whetted by the knowledge that very high wages were being received by a number of the people who occupied their premises. Your Lordships will not have forgotten that even before the war there was a very perceptible shortage of house accommodation of this kind, and I need not add that while the war has been in progress the normal addition to house accommodation of this sort has been interrupted partly owing to the high price of materials and partly owing to the dearness of money.
The general result of our investigations was to satisfy us that there was a real grievance. We also ascertained that this process of rent raising to which I refer was not taking place only in the case of districts where there had been a great increase in the rate of wages, and to that I think one might add that any unrest occasioned by circumstances of this sort was bound to be aggravated by the somewhat unusual atmospheric conditions which prevail at the present time, the general feeling of excitement and nerve tension

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which is inseparable from the events through which we are passing. In these circumstances we came to the conclusion that it was necessary to do something to relieve the occupiers of house property of this kind in regard to their liability for rent. But it became obvious that it was not possible for us to deal with the liability of the occupiers alone, and that if we touched the liability of the occupiers it was also necessary to do something in regard to the liability of the Owners of the houses in question. These houses have very often been built or bought with borrowed money, and I think it is obvious that it would be inadequate and insufficient to afford protection to the working man who lived in a dwelling of this sort and to give no protection to the person who had built the house and who was liable for interest on the loan out of which the house had been built. We therefore determined that if we were to protect the tenant against the owner of the house it was also necessary to protect the owner of the house against the mortgagee.
On this basis and with this object we propose under this Bill to fix for the occupier what is described as a standard rent, that rent being the rent which was paid before August 3, 1914, and to fix for the owner a standard rate of interest, that being the rate of interest which he was charged before the same date. We enact under this Bill that if the rent charged exceeds the standard rent the excess rent shall not be recoverable in a Court of Law, and in the same way we enact, in the case of interest on a mortgage, that any rate of interest above the standard rate shall not be recoverable and that the mortgagee may not foreclose his mortgage upon the premises—that is, so long as the standard rate of interest is paid. This is no doubt a somewhat rough-and-ready way of dealing with the difficulty, but it seemed to us that it was upon the whole the most convenient mode, and that it was simpler and more likely to achieve the desired result than any attempt to set up investigation in individual cases by means of courts authorised to determine in each case what was a suitable rent for the premises or what was an appropriate rate of interest for the mortgage. That is the real substance of the Bill; you will find it described in nine or ten lines in the first clause. The remaining provisions of the Bill are really ancillary to that main
772
provision and deal mostly with matters of detail.
There is one criticism which may possibly be directed at this measure as to which I might, perhaps, say a word in passing. We may be asked, if we are going to prevent the owner of a house from charging more than a certain rent for that house, and if we are going to prevent a mortgagee from charging more than a certain rate of interest for his mortgage, why we should leave the occupant, the working man who inhabits the premises, alone and leave him free to charge what he pleases for his own labour? It might be put in this way, "If you are going to have a standard rent and a standard rate of interest why should you not have also a standard rate of wages?" I think it must be perfectly obvious to anybody who will give the matter a moment's thought that to interfere in the way in which we interfere with rents and rates of interest is a very different thing from attempting to interfere with wages. The question of wages is infinitely more complex. You find yourself face to face with problems as to the value of the labour which the man renders in respect of his wages; you find yourself called upon to look into the purchasing power of the money which the man receives. All these create difficult problems. But apart from that there is also this fundamental difference between the two cases. As long as you are dealing with rents and with rates of interest you have a perfectly simple remedy ready to your hand. You enact that the excessive rent or the excessive rate of interest is not to be recoverable in a Court of Law. But when you come to wages it is impossible for you to fix a rate and then say to the man "You must work at that rate of wages." Nor, again, if yon could make him work could you exercise any control over the output of labour which he produced. But this question of the position of the wageearner has certainly not been lost sight of by us. We fully realise that nothing could be more disastrous at the present time than a general demand on the part of the working men of this country for an all-round increase of wages. It would be not only disastrous, but it would be futile. The demand would be justified on the ground that prices had risen. If you granted an increase of wages, the effect would immediately be that prices would rise again. Thereupon would follow another

773
demand for a further increase of wages, followed of course by a further rise of prices, and so you would go on working in a vicious and interminable circle.
We have endeavoured to touch at any rate the fringe of this important problem at two points. Your Lordships will not have forgotten the provisions contained in the Munitions Act, and I think in other Acts of the same kind, for dealing with labour differences between masters and men in controlled industries. Those provisions concern increases in rates of wages and alterations in the hours of work and in the conditions of labour; and they certainly have a very important bearing upon this question of the liberty of the working man to demand improved terms. But apart from that we have kept in view the necessity for doing all in our power to remove the causes which have acted, and are likely to act, as incentives to further demands for improved wages. This Bill by itself, by dealing with the question of house rents, takes away one of those incentives, and the legislation to which reference has been made already this evening in regard to what we speak of as "war profits" is another step of the same sort. Probably there is nothing which has contributed more to render the working men of this country dissatisfied and discontented than their suspicion that enormous profits were being made by their employers and that they themselves did not get a reasonable share of those profits. I do not think it is too much to hope that the working men of this country, saved by this Bill from excessive demands on account of rent and reassured by other legislation in regard to this question of war profits, will hesitate before they take any steps to restrict the output of their labour or plunge this country into the disasters of an industrial war.
There are other points in the Bill which are of interest but which are mainly matters of detail, and of which I need not say much. With regard to the scope of the measure, when it was originally introduced we proposed that it should be applied by Order in Council to certain limited areas which could properly be described as populous areas and in which there was a dearth of houses distinctly traceable to the war. We found, however, that the complaints about rent raising were general, and that it was impossible to describe what
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I suppose I might call a scientific. frontier around the areas where special protection was really indispensable. The Bill, therefore, applies to the whole country, but it is limited in its application to houses of which the rent or rateable value is in London under £35, in Scotland under £30, and elsewhere under £26. There are subsections dealing with various cases in which exceptions have to be made in regard to the application of the Bill, notably, for example, in regard to cases where the owner of the premises has during the war spent money upon their structural improvement. In such cases we propose that the owner should be allowed to charge rent over and above the standard rent but not exceeding 6 per cent. upon his outlay. There is a similar exception in a subsection under which, in the case of premises where the owner is liable for the rates, he is allowed to add to the standard rent such a proportion of the rates as is properly chargeable to the premises in question. I do not think I need say more as to the provisions of the Bill. I will only add this observation, that it was debated at great length on four separate occasions in the House of Commons, that the discussion was a perfectly good-humoured one, and that not a single Division was taken upon any of the clauses of the Bill. We are extremely anxious that it should become law as soon as possible, and if your Lordships will give your permission to take the Committee stage to-morrow and to pass the Bill through its remaining stages on that day we shall be extremely grateful.
Moved, That the Bill be now read 2a.—(The Marquess of Lansdowne.)
EARL ST. ALDWYN: My Lords, my noble friend correctly described this measure as unorthodox and only justified by the circumstances in which we are at present placed. I hope it will not be taken in any way as a precedent for future legislation when the war is happily over, because it is one of the strongest interferences with private contract that it is possible to conceive. For the present I agree that some such measure as this is necessary with regard to the small dwelling-houses inhabited by the working classes, but there is one point in the Bill to which my noble friend very briefly alluded but to which I should ask the careful attention of His Majesty's Government.

775
The noble Marquess told us that this Bill applied to houses in London of £35 value, in Scotland £30, and elsewhere £26. I suppose that a house of £35 value in London would not be above the limit of value which might be occupied by members of what we call the working-classes—those, in fact, who are in receipt of weekly wages. But when you come to the rural parts of the country there is no such person certainly occupying a house at anything like £26 in value. Persons who occupy houses of that value in rural districts are persons of fairly high social position. There are many farm houses occupied by large farmers which are not assessed above that rate. It is not really beyond the scope of the Bill that it should be made applicable to houses of that kind, and the fact that it is made applicable might have an effect which I am sure is not contemplated by those who framed the Bill. If my noble friend will look at subsection (4) of Clause 2 he will see—this is in the case of mortgages—that the Bill would not apply "to any mortgage comprising one or more dwelling-houses to which this Act applies and other land if the rateable value of such dwelling-houses is less than one-tenth of the rateable value of the whole of the land comprised in the mortgage." That is obviously intended to exempt from the Bill mortgages on what are ordinarily known as landed estates. But if you place the value of the house so high as £26, I think you will find that a good many country estates will come under the scope of the Bill although there is no reason whatever for bringing them under it.
My main point is this, that a house of £26 value in a rural district ought not to come within the scope of the Bill at all. You ought to adopt something like the plan of the old Composition for Rates Act, and have a much lower value than £26 applicable to rural districts. I would suggest £12 for rural districts. I do not believe you will find a single person in receipt of weekly wages in an agricultural district in the country occupying a house above that value. I hope this will be carefully considered by His Majesty's Government, because I need not say that the whole scope of the Bill shows that it is intended to apply only to the working classes, and that was the gist of the speech of my noble friend. Why you should bring in persons of a much higher social status I do not understand, unless you
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make it general and applicable to all. I will place an Amendment on the Paper, and perhaps my noble friend will consider the point before to-morrow.
THE MARQUESS OF LANSDOWNE: I will have the matter looked into. In the meanwhile I will endeavour to ascertain how the figure of £26 was arrived at.
EARL ST. ALDWYN: I think it was arrived at, as sometimes happens in Parliament I am sorry to say nowadays, without the slightest consideration for the rural districts. Those who framed this Bill—although I am bound to say I am surprised at it in regard to my right hon. friend Mr. Walter Long—did not take the rural districts into consideration at all, only the towns.
THE MARQUESS OF LANSDOWNE: I imagine that what this Bill is intended to relieve is the kind of thing you find occurring, not in rural districts, but in urban districts.
EARL ST. ALDWYN: Yes, I should think so.
On Question, Bill read 2a, and committed to a Committee of the Whole House to-morrow.

M.P.'S AND WAR OFFICE APPOINTMENTS.
LORD HAVERSHAM: My Lords, I understand that my noble friend Lord Hylton will answer this question as representing the Treasury. Therefore I beg to ask him the first Question standing in my name—namely, whet her the allowances given to twelve Members of Parliament from War Office funds are in addition to or in lieu of their Parliamentary salaries; if the former is the case, whether he is aware that six of the Members are drawing from £900 to £1,000 a year, and all are receiving more than £500, although it is impossible for them to perform both duties at once. If a Member accepts an administrative office his £400 per annum as a Member of Parliament automatically ceases in consideration of the new salary he receives, and I wish to know whether this is not to apply to Members in receipt of War Office pay. Last night there was a very good case in point. The Prime Minister stated that Mr. A. H. Lee, the Member for Fareham, had been made Military Secretary

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to the Ministry of Munitions, and that he was not accepting, the salary voted to him by Parliament. I wish to ask my noble friend whether, either by their own consent or somehow, this arrangement could not be extended to these other gentlemen.
LORD HYLTON: My Lords, for some reason which I cannot altogether explain this is considered a Treasury question more than a War Office one, and that is the reason why I rise to answer my noble friend. The facts are these. There are twelve members of the House of Commons who are at the present moment in receipt of pay and allowances from the War Office. But of these only two are drawing their salaries as Members of Parliament, the other ten having voluntarily relinquished their salaries in respect of their seats in the House of Commons. The names of those Members of Parliament have, I think, already been given in another place, but I will give them to my noble friend if he wishes.
LORD HAVERSHAM: I thank my noble friend for his reply, which I think is very satisfactory.

PAY OF MOTOR LORRY DRIVERS.
LORD HAVERSHAM: My Lords, I move for a Return of all motor lorry drivers engaged with the Army in France, specifying how many are receiving the higher rate of 6s. per day and how many the lower rate of 1s 2d.; and I should like to ask whether, since there is now no lack of drivers, the higher rate of pay men could not be replaced by men at the lower rate who have been adequately trained. My noble friend Lord Newton told me, in answer to a Question the other day, that a great number of men had enlisted and were being trained for this work at the ls. 2d. a day rate. That would mean presumably that these men are now fit to take the places of the men earning 6s. a day. The replacement of these men would get rid of the great anomaly that men like motor lorry drivers who do not go into the firing line and who perform a duty not requiring great skill should receive 6s. a day. That was only a temporary measure, and I hope that the necessity for it has passed by and that this winter the Quartermaster-General's Department will take the question in hand and replace these men with men at the proper rate of pay, 1s. 2d.
LORD NEWTON: My Lords, the men who are receiving the higher rate of pay cannot be replaced by men receiving the lower rate because time does not admit of the lower paid men obtaining sufficient experience to take entire charge of motor vehicles. As my noble friend reminded me, I told him when he put a Question upon this point not many days ago that large numbers of men were being recruited at the lower rate at the present moment, but as a matter of fact I am informed that the number of these men now being trained is barely sufficient to meet the increased needs of the Army, and in view of this the Army Council are unable to comply with the request for the Return for which my noble friend asks.
LORD HAVERSHAM: I understand that no more men will be taken on at 6s. a day, and that all the men recruited now will receive the lower rate of pay?
LORD NEWTON: That is so. I thought I made that clear on the last occasion; at any rate, I endeavoured to do so.

THE CROWN PRINCE OF PRUSSIA.
LORD HAVERSHAM: My Lords, I beg to ask His Majesty's Government why the name of the Crown Prince of Prussia remained in the official Army List of January, 1915, as Colonel-in-Chief of the 11th Hussars, alter the two enemy Emperors had been removed from the King's Dragoon Guards and the Royal Dragoons respectively. The official Army List is published only once a year, but if anybody looks at Hart's Army List for January he will see the name of the Crown Prince of Prussia as Colonel of the 11th Hussars.
LORD NEWTON: My Lords, I should be inclined to predict that one of the results of the warwill be that the eminently German practice of appointing Royal personages of both sexes to high military commands is one that may possibly be considerably modified. I imagine that every belligerent Monarch possesses in his wardrobe a large collection of uniforms belonging to hostile nations; and there is nothing to show that this practice of interchanging high military rank has conduced in any way to peace.

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As regards the Question on the Paper, I cannot help thinking that my noble friend is under some misapprehension. The name of the Royal Prince in question was removed from the Army List at the same time as the names of the German Emperor and the Emperor of Austria, in October, 1914. I believe that a statement has appeared in the "Almanach de Gotha" for 1916 to the effect that the Crown Prince of Prussia is still Colonel-in-Chief of the 11th Hussars. But His Majesty's Government have no control over that particular publication, and my noble friend may take it from me that he is under a misapprehension.
LORD HAVERSHAM: I am under no misapprehension at all as regards Hart's Army List. Anybody can refer to it in the Library, and he will see that in that List for January, 1915, the Crown Prince of Prussia is stated to be Colonel-in-Chief of the 11th Hussars.
LORD NEWTON: Then I am afraid Hart's Army List is no more a reliable publication than the "Almanach de Gotha."
House adjourned at twenty minutes before Seven o'clock, till Tomorrow, a quarter past Four o'clock.