Lords Sitting of 13 January 1916

Preamble
The CHAIRMAN OF COMMITTEES The CHAIRMAN OF COMMITTEES—Sat Speaker.

RETURNS, REPORTS, &c.
Navy (Supplementary Estimate, 1915–1916)—An Estimate of the Additional Number of Officers and Men required to be voted for the Navy for the year ending 31st March 1916: Presented. (by command) and ordered to lie on the Table.
Bank of England—Annual Accounts of Exchequer Bills and other Government Securities purchased, for the year ended 5th January 1916:
Destructive Insects and Pests Acts, 1877 and 1907—Orders declaring areas described in the schedules thereto to be infected areas for the purposes of the Wart Disease of Potatoes (Infected Areas) Order of 1914—D.I.P. 346–318, dated 30th December 1915:
Naval and Marine Pay and Pensions Act, 1865—Three Orders in Council, dated the 12th January 1916, approving Memorials of the Lords Commissioners of the Admiralty made under the Act:
Laid before the House (pursuant to Act) and ordered to lie on the Table.

MUNITIONS OF WAR (AMENDMENT) BILL.
Order of the Day for the House to be put into Committee, read.
Moved, That the House do now resolve itself into Committee.—(Lord Newton:)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF DONOUGHMORE in the Chair.]
Clause 1:
Power to declare Government factories, &c., controlled establishments.
1. The Minister of Munitions may by order declare any establishment or establishments belonging to or under the control of His Majesty or any Government Department in which munitions work is carried on to be a controlled establishment or controlled establishments as the case may be, and thereupon the provisions of the Munitions of War Act, 1915 (herein-after referred to as "the principal Act"), and this Act relating to controlled establishments shall apply to such an establishment or establishments subject to such modifications and exceptions necessary to adapt those provisions to such an
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establishment or establishments as may be specified in such order.
THE EARL OF KINTORE: I move to add, at the end of Clause 1, the new subsection standing in my name on the Paper. As I had to make so large a draft upon your Lordships' patience on the Second Reading of this Bill, when I explained my reasons for putting down this Amendment and said something as to the need for such a provision, I do not wish to repeat myself now. But let me say that this Amendment seems to me in no way to depart from the expressed intention of the Government when the principal Act was in Committee in the House of Commons. On reference to the proceedings reported in Hansard I find that these words were used by Sir John Simon—
"The Bill which the House has allowed us to introduce is not a Bill for the taxation of war profits, but a Bill to facilitate the production of munitions of war."
And again Sir John Simon said—
"The scheme is a scheme by which you are not going to permit the proprietors of a controlled factory to keep profits…. But I think there is force in the point that unless you make some adjustment in applying that principle you really are not encouraging output as you should."
It was in order to meet any possibility of an injurious effect on the output of controlled factories, especially factories making little or no profit before the war, that Mr. Lloyd George added Section 5, subsection (4), of the principal Act as it now stands. Yet the wording of that section, and still more the very restrictive wording of Clause 9 of the Rules made by the Minister under that section, can easily be interpreted in a much narrower sense, if it is desired to limit its scope. If, however, my noble friend in charge of the Bill is in a position to state that the assurances given in order to facilitate the passage of the Act will be adhered to in spirit as well as in letter and will not be limited, as I told your Lordships two evenings ago that they were limited, by the officials of the Ministry of Munitions with regard to provision of capital out of profits for the expansion of young industries of national importance, and if he will tell me also that if the Minister has a discretion that discretion is a solid one both during the period of the war and afterwards, either in himself or in the Minister to whom the Munitions Depart-

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ment may be transferred, I shall be satisfied. I beg to move.
Amendment moved—
Page 1, after line 15 insert as a new subsection:
"(2) Where the fixing of a standard of profits in accordance with the provisions of the principal Act would, in the opinion of the, Minister of Munitions, have the effect of checking the expansion of an industry of national importance, the Minister may, at the request of the parties interested and subject to such conditions as he thinks fit to impose, fix a higher standard at his discretion."—(The Earl of Kintore.)
LORD SYDENHAM: In spite of the rather chilly reception which the noble Lord who represents His Majesty's Government gave to this Amendment on Tuesday last, he did not actually bolt and bar the door against it. Therefore I hope that second thoughts may induce the Government to regard it in a somewhat more favourable light. The noble Lord said, in his remarks on the Second Reading, that under the powers given by the principal Act the Minister had already sufficient discretion to deal with the matters intended to be dealt with by this Amendment. If that is so, the Amendment is surely perfectly harmless, because it would then only make a little clearer what may, perhaps, now be somewhat ambiguous. But as I read the principal Act I do not think that such discretionary powers are given by it, certainly not such discretionary powers as would meet the case which the noble Earl and I have in view. It is certain that this Bill, like most other well-intentioned pieces of legislation, must give rise to some harmful effects. That has already happened. But the crippling after the war of some industry which it was of national importance to develop would surely be the most unfortunate result which this Bill could have. The powers given by the principal Act and by this Bill are immense, and the only object of this Amendment is to save the Minister from being forced to do something of which he must totally disapprove. I should have thought that this was a very attractive proposal, because no one likes to be forced to do something which would be wrong and injurious from the national point of view. So that the sweet reasonableness of this Amendment seems to me to be apparent, and I hope that the Government may now be able to regard it in a more favourable light than they did on Second Reading.
THE PAYMASTER-GENERAL (LORD NEWTON): regret very much to disappoint my two noble friends who have spoken, but I can assure them that the Minister of Munitions does not look upon this power in the same light as they do. I indicated two days ago that I should be reluctantly obliged to oppose the Amendment, and I do so for various reasons. The first is a Parliamentary reason. I should like to ascertain from my noble friend opposite why this Amendment was not moved in the House of Commons. It is an Amendment of a highly important character, and there was ample opportunity to have moved it before the Bill left the other House. This Bill, as your Lordships are well aware, represents a bargain between the Government and the leaders of organised labour in this country. The bargain amounts to this, that the trade union leaders agreed to waive certain rights in consideration of the fact that the Government appropriated the greater portion of the profits made by the employers. Therefore it seems to me that by passing an Amendment of this kind we are incurring considerable danger. It might cause great friction in another place, and it is just possible that it might imperil the passage of the Bill altogether. But I do not wish to rely only upon that objection.
Were this Amendment carried it would make a considerable difference in the working of the Bill. My noble friend opposite (Lord Kintore), in his speech on the Second Reading, drew special attention to the case of spelter. Spelter firms, I am given to understand, have done very well since the war. I have heard of a case in which the profits of one spelter firm have risen from an average of £10,000 a year, to something like £90,000 a year, and that is precisely a case of large profits which the Government are desirous of appropriating, with, I think, the general sense of the nation. My noble friend represented that spelter was a case eminently deserving of special consideration. There are over 2,000 controlled establishments, and it stands to reason, if an exception were made in the case of spelter, that numerous other industries would be able to put forward equally strong claims, and in that case the Government would be deprived of a large source of revenue.
The other reason which I have against this Amendment is the one which I stated

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on Tuesday—namely, that the Munitions Department consider that the case is already adequately dealt with. Under Section 5 of the principal Act it is possible to make any allowance which ought to be made; subsection (2) of that section allows the Minister to vary the standard of profits; and subsection (4) indicates some of the considerations which must be taken into account for this purpose—including, for instance, increase of output, the provision of new machinery or plant, alteration of capital, or other matters which require special consideration in relation to the particular establishment. I may also point out that the Rules in connection with this subsection have a considerable bearing upon the question. Under Rule 9 the following, amongst other items, are matters to be taken into account in determining the net profits—namely, capital expenditure specially incurred for the purpose of munitions work; the probable value to the controlled owner at the end of the period of control of any plant, buildings, or machinery erected or installed, or other expenditure incurred for munitions work, since August 4, 1914; special provisions or terms of any contracts entered into between the Government and the controlled owner; any exceptional services rendered by the controlled owner in connection with the controlled establishment; and, generally, any other matter which may appear to the Minister, or to the Referee, as the case may be, material to be taken into account. This opens a wide field, and I think ought to satisfy my noble friend to a great extent.
When the noble Earl asks me to give him a pledge as to what might take place after the war is over, I am afraid that I am not in a position to do that. In the first place, I believe that the definition of the phrase "termination of the war" has not yet been decided upon, and it will require careful consideration by the Government. But this Bill, as I have already said, deals only with the state of things during the war. As regards the period after the war, if it is desirable that special assistance should be given to any particular industry that will have to be done as part of the general trade policy of the country, whether by tariffs, or subsidies, or otherwise. Whether noble Lords opposite are right or wrong in their view, I think that at all events we might to give
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the Minister, whoever he may be, credit for a certain amount of common sense; and I cannot help thinking that at the present moment when so many shibboleths are in process of being exploded it is highly improbable that any Minister, whatever may be the opinions that he holds, will take any steps likely to damage one of the important and essential industries of the country.
VISCOUNT MILNER: I could not help thinking while listening to the speech of my noble friend Lord Newton what mincemeat he would have made of his own arguments if he still belonged to the noble army of free lances, which he has now, to our regret, deserted. I am sorry that I cannot present the case against the official view which he has just put forward with anything like the same telling eloquence or mordant humour with which he would undoubtedly have presented it himself were he still on these benches. But I may, perhaps, be allowed in my feebler way to protest against the whole series of arguments by which he has met the proposals of the noble Earl. The most astonishing of all, to my mind, was what he called the "Parliamentary argument" —namely, that because this Amendment had not been brought forward in the House of Commons it should not be brought forward here. Has he altogether given up belief in the utility of a Second Chamber? And if there really is any utility in a Second Chamber, does that Chamber not exist simply in order to make up for the mistakes or omissions of the First Chamber? And if that be necessary at any time, is it not especially necessary now when the other Chamber, through no fault of its own, is necessarily legislating under extraordinary pressure and passing any number of measures of first-rate importance in a hurry? I am not saying that as a criticism of the other Chamber. Not at all. They cannot help themselves. This is just the time, therefore, when the revising and supplementing powers of the Second Chamber are most required.
Then the noble Lord went on to point out that if an Amendment of this kind were adopted it might cause difficulties in the understanding which has been effected by the Minister of Munitions with certain representatives of the labour world. That is the last thing that any of us here would wish to do. He also said that the

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addition of a subsection of the kind proposed might deprive the country of a considerable revenue which, under the Finance Act, would be derived from the surplus profits of the spelter industry and other industries to which this Amendment might be applied. That certainly would be the case Were the Amendment not carefully guarded by the provision that action should be taken only where the fixing of a standard of profits in accordance with the provision of the principal Act would "in the opinion of the Minister of Munitions" have the effect of checking he expansion of an industry of national importance. That is to say, this Amendment does nothing more than empower the Minister of Munitions to exercise a certain latitude in dealing with this matter if he is satisfied that that is the right thing to do. It is not to be supposed for a moment that the Minister of Munitions is not as anxious as any man to derive the maximum benefit for the Exchequer from the provision which compels the Chancellor of the Exchequer to take certain excess profits. Therefore it does seem to me that there is not the slightest danger either of a conflict with the labour world or of an undesirable loss of revenue arising because this power is given to the Minister of Munitions.
The final argument of my noble friend in charge of the Bill was that it is not likely that when the war is over the Government of the day will deal harshly with industries of national importance, and that if they need help they will receive it in some way or other. I am willing to accept that. But the point is this. These industries of national importance, these basic industries if I may so call them, some of which have been taken away from this country by the ingenuity and enterprise of other nations, especially the nation with which we are in conflict, are not so easy to re-establish if they have once been suppressed; and the merit of the noble Earl's proposal in this Amendment is that it seizes an existing opportunity to help them. Surely it is better to seize an opportunity already presented of assisting one of these industries than to have to go about later to devise new and perhaps disputable methods of assisting them. I take the question of spelter as being illustrative of the point I am trying to make. Nobody can deny the immense importance to this country, not only from
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the commercial point of view but from the point of view of defence, of security, of being able to work the raw material which is supplied to us by our own Empire into those valuable articles for which we have become dependent on Germany. I am sure the noble Lord sympathises with that object. We all recognise the importance of the establishment of this industry in this country on a firm footing. It is true that certain established businesses are doing very well, but we have not anything like sufficient plant to turn out all the zinc that we require in this country, and we are dependent for most of our spelter on foreign supplies. We are all agreed that something pretty drastic will have to be done to remedy the weakness under which this country labours in this respect. But why go out of your way to create new factories or to adopt new methods, perhaps, as I say, disputable methods which may arouse a great deal of controversy, in order to aid this industry, when there is such an obvious way of enabling the extra plant which you want to he created—such an obvious way as that of allowing existing businesses to utilise part of their profits in extending their plant? What conceivable objection is there, except the purely red-tape objection to any proposal which comes from a non-official quarter, to this proposal to allow the Minister of Munitions, subject to such conditions as he thinks fit to impose, to permit an existing industry which is producing an article of which we have an inadequate supply in this country and of which we want to increase the supply to apply part of its excess profits to the development of its plant—to do the very thing which, if not done in this way, will have to be done by Government assistance in other ways? Why have a bounty or subsidy later when you have here businesses making the money which they are anxious to use for their further development?
You may say that this excess profit which is allowed to be put into new plant will be lost to the State. Yes; but the country gains much more from the expansion of production, and I maintain that if we are agreed that it is necessary to extend these industries in this country there is no simpler, no more obvious or cheaper, way of doing it than to allow them to use for this purpose, under any regulations which the Government may

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choose to impose, some portion of their excess profits which would otherwise go to the Exchequer, instead of taking away all that money from them now and then at the end of the war having to devise some other means to create this very extension of plant which there is such a clear way of allowing to be created on the lines suggested by the noble Earl.
I suppose we cannot press the Government on this matter. I feel that it would not be a right thing to do to carry an Amendment in this House which might cause difficulties to the Bill in the other. But I should like to have some assurance from the Government that they grasp the point, and that as far as is possible they will do whatever they can with their existing powers to allow a part of what would otherwise be taken by the Exchequer as excess profits to be devoted to increasing plant in those industries in connection with which they themselves admit that such increase by some means or other is necessary.
THE EARL OF CAMPERDOWN: When I came to the House this afternoon I was quite prepared to be convinced by the arguments of the Government against this Amendment, but the arguments which were adduced by the noble Lord the Paymaster-General in opposition to the Amendment will not stand examination. What were they? His first was the Parliamentary argument that this Amendment ought not to be accepted because it had not been introduced in the other House. Why, my Lords, what have the Government been doing for the last six months? They have been altering Bills and introducing Amendments here times without number in order to put right defects and omissions in the other House. As Lord Milner said, the House of Commons has been legislating in a tremendous hurry, and naturally the Bills come up here open to a great deal of revision and amendment, and this House is supposed to be in existence in order to produce those Amendments and make those revisions.
The noble Lord then said that the acceptance of this Amendment would break a bargain made with the trade unions. In what way could the Amendment possibly affect any bargain made with the trade unions? I believe the Minister of Munitions and the trade
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unions did make a bargain, but it was with reference to wages and matters of that sort. Does anybody suppose that the trade unions would take objection to the provision in the Amendment being acted upon if the Minister of Munitions was of opinion that unless it were acted upon he would be checking the expansion of some industry of national importance? Another argument of the noble Lord in charge of the Bill was that the Amendment, if inserted, would lead to great loss of revenue. It would not lead to any loss of revenue unless the Minister was of opinion that the arrangement was one which he ought to make. Everything is left solely to his discretion. And when the noble Lord tells us further that the Minister already has the power, I may say that I have read Section 5 of the principal Act and it is by no means clear. But if the noble Lord thinks that the Minister already has this power, what conceivable objection is there to making it clear in the Bill? In that case it really is not an innovation; it is not giving him any power except that which the noble Lord says he already possesses. Observe, too, that no compulsion of any kind is put on the Minister. Everything is left to him. If he thinks it is not necessary to assist an industry of national importance he need not do it. Really up to the present no reason has been brought forward against this Amendment which could convince any of your Lordships.
We have been passing many of these Bills. The Government know as well as anybody in this House that they are exercising very great powers, and they know perfectly well that we are unwilling to interfere with them to any extent that can possibly be avoided. Surely in those circumstances they ought to consider Amendments that are reasonable and sensible. If they are of opinion that an Amendment of this sort is merely placing in the hands of the Minister a power which he already possesses, and if noble Lords think he has not already that power, what objection can there be to giving way to this small extent and inserting an Amendment against which they can say nothing except that it is surplusage? I appeal to the Government to recognise that there is considerable ground for this Amendment; and there is no conceivable reason, so far as I can see, for supposing that the House

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of Commons will object to it. If they do object, then they can throw it out, and I am sure your Lordships would not insist upon replacing it. But you would have given the House of Commons the opportunity of considering whether in not inserting this Amendment they had not made an omission in the Bill. I hope that the Government will take these arguments into consideration. I may say that I do not know anything about the Amendment further than what I have heard, but all that I have heard leads me to think that it is a very moderate, reasonable, and sensible Amendment.
LORD BALFOUR OF BURLEIGH: I am sure every one has sympathy with the objects of those who have advocated this Amendment, but it seems to me that they have failed in one respect—namely, to show that the Amendment is really necessary. The question for the House seems to me to be twofold—first, whether this is a necessary Amendment having regard to the principal Act; and, secondly, whether it is a wise Amendment to make. As I have said, every one will have sympathy with the object which underlies the idea of the Amendment—namely, to make sure that what are known as new or infant industries are not strangled, but that every opportunity is given for their development under the special and difficult circumstances in which we are placed. I think if any one carefully studies Section 5 of the principal Act together with the Rules which have been made under it and the policy which evidently has prompted those Rules it will be seen that there is ample opportunity for any discretion on the part of the Minister of Munitions or his successors within the limits mentioned in the principal Act.
Under Section 5 of the principal Act where the owner of a controlled establishment considers that the average of his two pre-war years' trading affords an unfair standard the Minister can fix a higher standard and if the owner is dissatisfied with the standard which the Minister fixes he already has an appeal under the Act to independent Referees. In addition to this right to a higher standard, under the Rules made by the Minister under the Act the owner can obtain, if the case warrants it, additional allowances in respect of any amount by which his output during the period of
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control under the Act exceeds the average output of his business in the two years before the war; and, further, he can be given allowances for exceptional wear and tear of plant, capital expenditure incurred for munitions work, any exceptional services rendered by the controlled owner, and generally any other matter which may appear to the Minister or to the Referees material to be taken into account. Therefore it seems to me that full justice can be done to those who have been mentioned and with whom we all have sympathy, the spelter manufacturers, who are, I believe, for the moment doing very well.
But care must be taken in making an Amendment of this kind that you do not go further than you really intend, and that you do not open a much wider door of difficulty than appears on the surface. I suggest to the House that the effect of introducing such a provision as is suggested in the Amendment to facilitate at the expense of the Exchequer the expanse of an industry might open a very wide difficulty to the Ministry of Munitions in this respect—that under the Amendment, if it were to be incorporated in the Bill, I do not suppose there is a single owner of any one of the thousands of controlled establishments who would not make an effort to get the benefit of the Amendment. It is intended to be confined to new industries, but it is not specifically so confined; and it would, as I have said, open the door to a great number of applications. I note the delicacy of the Parliamentary argument, and I shall not put too much stress upon it. I would never be one of those consenting to have the rights of this House curtailed by what may or may not have been done in another place.
I would, however, remind the House of what was the main object of the provisions of the principal Act so far as limitation of profits is concerned. It was to deal with very large increases of profit owing to the war and to require owners of controlled establishments to hand over such war profits to the Exchequer. I suggest to the House that the Amendment, for certain industries, would go far to negative the main object of the principal Act in this respect, and it does seem to me rather difficult to justify the principle of certain industries selected in effect by the Minister of Munitions being allowed to retain profits

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which are to-day payable to the Exchequer for the purpose of doing an improved trade after the war. It is perfectly certain under the Rules that so far as these industries spend money in extending their buildings and plant for war purposes there is already provision—I refer to Rule 9—under which they will be allowed to retain out of their profits so much of this expenditure as they can show will be of no value to them when the period of control ceases. There is something in the idea that it would be a bad piece of tactics on the part of this House to seem to be holding the balance in favour of owners of controlled establishments, and seeming to depart from—it amounts really to an alteration of—the bargain which was come to many months ago between those mainly interested. On those grounds I think it would be inexpedient for the House to agree to this Amendment exactly as it stands, and I sincerely hope that your Lordships will not accept it.
THE MARQUESS OF LANSDOWNE: My noble friend who has just sat down has stated the case against this Amendment so fully and so clearly that I shall not attempt to reproduce the arguments which he used with so much effect. My noble friend who moved the Amendment suggested to the House that it was not contrary to the spirit and intention of the measure, and that it would have the effect of leaving room for adjustments, I think he said, which might be convenient to the parties concerned; and my noble friend on the Cross Benches (Lord Sydenham) added the commentary that if the Amendment was superfluous, as it seems to be to some of us, at any rate it was harmless. I am afraid I do not look exactly as he does upon superfluous Amendments. I venture to think that every excrescence upon an Act of Parliament which cannot be shown to be really actually required is a mischievous addition, and should, if possible, be avoided. In this case I am afraid I can come to no other conclusion than that the addition of these words would be a most imprudent addition. The Department, to begin with, is satisfied—I think with reason—that the main Act and the Rules which have been issued under it leave room for the kind of adjustment which my noble friend has in view to an extent which should be sufficient for all reasonable requirements. We are now asked to force upon the Department a further extension, and I venture
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to think that that extension could not be made without the risk of very serious inconvenience. There are over 2,000 of these controlled establishments, and I think, with my noble friend Lord Balfour of Burleigh, that if this provision were to be added to the Bill it would follow as surely as we sit here that constant pressure would be put upon the Minister to be allowed the benefit of this additional subsection. And how would the addition of these words strike the persons who have been parties to the introduction and passage of this Bill? I think, with my noble friend, that it would seem to them to open a very dangerous door. My noble friend Lord Camperdown took the noble Lord who represents the War Office to task because he suggested that some kind of a bargain had been made in another place, and that we ought not to disturb it in this House. I do not think that my noble friend suggested for a moment that there was any reason why your Lordships should not reconsider the Bill or amend it if You thought necessary; but he did suggest, and I think quite wisely, that this Bill was the result of very long discussions and negotiations, and that if the measure which was the result of those discussions and negotiations were to be amended as it would be if this Amendment were to be adopted your Lordships' House would certainly be regarded as having introduced into it a provision intended to afford a means whereby the owners of controlled works might extricate themselves from the obligation to hand over their profits, after those profits had reached a certain percentage, to the State. In these days we live, perhaps not unnaturally, in an atmosphere of suspicion, and I feel perfectly certain that this Amendment would be regarded with suspicion. The noble Earl who moved it appealed to us to renew a pledge which was given by the Minister in the House of Commons at the time when the passage of the Bill was agreed to. I am afraid I have not by me the terms of that pledge, but this I will say with the utmost confidence—that we are ready to assure my noble friend that any pledge which was given by the Minister of Munitions shall be observed in the spirit as well as in the letter.
THE EARL OF KINTORE: I am grateful to the noble Marquess for the remarks he has made. In securing that assurance I have attained one of my principal objects in putting down this Amendment. It was

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only after several efforts that we obtained a ruling from the Ministry of Munitions on December 21 last to the effect that there was no discretionary power vested in the Minister. I now understand that this is not the case, and with your Lordships' permission I withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clauses 2 to 4 agreed to.
Clause 5:
Amendments moved—
Page 2, line 31, at beginning insert:
("Section seven of the principal Act shall have effect as if for subsections (1) and (2) of that section the following two subsections were substituted.")
Page 3, line 20, after ("earning") insert. ("wages.")
Page 3, line 25, leave out from ("employer") to the end of line 27.
Page 3, lines 31 and 32, leave out ("of the Minister of Munitions") and insert ("made thereunder").
Page 4, line 1, leave out ("discontinuance") and insert ("discontinuous")
Page 4, lines 37 and 38, leave out ("the effect that a person is") and insert ("persons").—(Lord Newton.)
On Question, Amendments agreed to.
Clause 5, as amended, agreed to.
LORD SYDENHAM LORD SYDENHAM moved the insertion, after Clause 5, of the following new clause—"The Minister of Munitions shall have power by order to give directions as to the hours of labour in any controlled establishment on munition work if it appears to him to be necessary to safeguard the health of the workers."
The noble Lord said: This Bill has undergone so many alterations in Committee—I believe it was re-committed in the House of Commons three times—that the drafting of some of the clauses is now deplorably confused. The principal Act gave no power to the Ministry of Munitions to regulate hours of labour in any way, which I venture to think was a mistake. The original draft of the Bill also made the same omission, but power to regulate the hours of labour of women was inserted by an Amendment by a private Member in another place, and it appears in Clause 6, subsection (1). On the other hand power to regulate the rate of wages of semi-skilled and unskilled men was pressed upon the Minister of Munitions by the Amalgamated Society of Engineers,
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and was then incorporated in Clause 7, and control of their hours seems to have been added as an afterthought without, I believe, any discussion. As the Bill now stands, therefore, there is power to regulate the hours of labour of women and of semi-skilled and unskilled men, classes which may be very difficult to define in these days, but there is no power to regulate the hours of labour of skilled men. This is not only an anomalous position but quite illogical, and might easily lead to considerable inconvenience.
There can be no doubt that the regulation of the hours of labour in munition factories is urgently needed. The Special Committee appointed to consider the health of munition workers made some strong remarks in their Report on the hours of Sunday labour. They said—
"In the course of their investigations the Committee have found that both employers and workers were specially concerned at the present time with the problem of Sunday labour. The Committee have been so impressed with the urgency and importance of this question that they have thought it right to submit an Interim Report."
Then they went on to say—
"Intervals of rest are needed to overcome mental as well as physical fatigue."
Further on they say—
"…statements are made by many employers that seven days' labour only produces six days' output,"
as we can all easily believe. Then on page 5 of the Report appears this sentence—
"The evidence before the Committee has led them strongly to hold that if the maximum output is to be secured and maintained for any length of time, a weekly period of rest must be allowed."
I think those remarks show that the question of regulating hours of labour is urgent, and that this regulation must be applied if serious injury to the health of the workers, which would be a very important matter at the present moment, is to be avoided.
It may be said that if you restrict the hours of labour of women and semi-skilled and unskilled men in a factory you ipso facto can control those of the skilled also. But clearly if you have no legal power to regulate the hours of skilled men they might raise objections, and would probably do so if the curtailing of the hours led in any

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way to a reduction of their wages. I submit that this is an unsatisfactory state of things, and that the Bill as it stands is in this respect defective and confused. The question of safeguarding the health of our munition workers seems to me to be one of the greatest national importance at the present time, and I feel certain that this Amendment would not be rejected in another place. Therefore I trust that the Government will accept it.
Amendment moved—
Insert as a new clause:
"The Minister of Munitions shall have power by order to give directions as to the hours of labour in any controlled establishment on munition work if it appears to him to be necessary to safeguard the health of the workers."—(Lord Sydenham.)
LORD NEWTON: I am in complete agreement with the noble Lord as to the complicated wording of this Bill, and I have found the utmost difficulty in understanding parts of it myself. But I hope he will not take it amiss if I point out that the Amendment which he proposes widens the protection afforded to men who do not require it and narrows the protection afforded to women who really do require it. I observe that the Amendment is confined to controlled establishments. I do not think my noble friend quite realises that this is an Amendment of an exceedingly important and far-reaching character, and it appears to me that it would alter the Bill almost as much as the Amendment which we discussed in an earlier portion of the proceedings. My noble friend is really asking for much more than the munition workers have asked for themselves. One might be inclined to infer from what fell from my noble friend that the munition worker belonging to a trade union was a helpless sort of individual incapable of protecting himself and looking after his own interests, but I do not think that would be the generally accepted view. My point is that all these questions were very carefully discussed at enormous length both in Parliament and in private, and this is a thing which the men have never asked for themselves. That being so, I confess it does not seem to me to be incumbent upon us to introduce this rather startling Amendment and to give effect to a proposal which was not made by the persons who will be affected by it. I hope, therefore, that my noble friend will not persevere with it.
LORD SYDENHAM: The noble Lord has not met the point that an awkward position would arise if the hours of labour of women and of semi-skilled and unskilled men were restricted and you found you could not apply those powers to skilled men working in the same factory.
LORD NEWTON: These powers are applicable to women and to unskilled men who very likely do not belong to trade unions at all. That was the result of the deputation to the Prime Minister on behalf of the Amalgamated Society of Engineers.
LORD SYDENHAM: But if you knocked off the women and unskilled men, the labour of the skilled class would automatically stop; and, as I say, they might have a grievance.
LORD NEWTON: I can only repeat that they did not ask for this themselves, and therefore I do not think it is necessary to have this Amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7:
Amendment moved—
Page 5, line 38, leave out ("munition") and insert ("munitions").—(Lord Newton.)
On Question, Amendment agreed to.
Clause 7, as amended, agreed to.
Clause 8:
LORD NEWTON: This is also a drafting Amendment.
Amendment moved—
Page 6, line 17, leave out ("section one of") and insert ("the First Schedule to").—(Lord Newton.)
On Question, Amendment agreed to.
Clause 8, as amended, agreed to.
Clause 9:
Extension of definition of munitions work.
9.—(1) The expression "munitions work" for the purposes of the principal Act and this Act means—

(a) the manufacture or repair of arms, ammunition, ships, vessels, vehicles, and aircraft, and any other articles or parts of articles (whether of a similar nature to the aforesaid or not) intended or adapted for use in war, and of any other ships or vessels, or classes of ships or vessels, which may

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be certified by the Board of Trade to be necessary for the successful prosecution of the war, and of any metals, machines, or tools required for any such manufacture or repair, and of the materials, of any class specified in an order made for the purpose by the Minister of Munitions, required for, or for use in, any such manufacture or repair as aforesaid; and

(b) the construction, alteration or repair of works of construction and buildings for naval or military purposes, and of buildings in which munitions work is or is intended to be carried on, and the erection of machinery and plant therein, and the erection of houses for the accommodation of persons engaged or about to be engaged on munitions work; and

(c) the construction, alteration, repair, or maintenance of docks and harbours and work in estuaries in eases where such work is certified by the Admiralty to be necessary for the successful prosecution of the war; and

(d) the supply of light, water, or power or the supply of tramways facilities in cases where the Minister of Munitions certifies that such supply is of importance for the purpose of carrying on munitions work, and the erection of buildings, machinery, and plant required for such supply.

(2) In section three of the principal Act there shall be added after the words "affecting employment on," in both places where those words occur, the words "or in connection with," and in the same section the words "the manufacture or repair of arms, ammunition, ships, vehicles, aircraft, or any other articles required for use in war, or of the metals, machines, or tools required for that manufacture or repair in t his Act referred to as "shall be repealed.
(3) This section shall not come into operation until the time fixed by rules made under section four of this Act as the date for the commencement of that section.
LORD NEWTON: The object of the first Amendment to this clause is to make it clear in paragraph (a) that engines for ships built in a different place from their hulls can be certified as munitions work by the Board of Trade.
Amendment moved—
Page 6, line 31, after ("vessels") insert ("or parts of ships or vessels").—(Lord Newton.)
On Question, Amendment agreed to.
LORD NEWTON: The next is a drafting Amendment.
Amendment moved—
Page 7, line 7, after ("such") insert ("construction, alteration, repair, maintenance or").—(Lord Newton.)
On Question, Amendment agreed to.
LORD NEWTON: Representations have been made that the supply of heat should be added to the supply of light, power, and water, and it is considered that this is a reasonable request. I move to add "heat" after the word "light" in the first line of paragraph (d).
Amendment moved—
Page 7, line 10, after ("light") insert ("heat").—(Lord Newton.)
On Question, Amendment agreed to.
VISCOUNT PEEL VISCOUNT PEEL moved an Amendment in paragraph (d), after the word "facilities," to insert "or the maintenance of sewerage systems of local authorities." The noble Viscount said: The effect of this Amendment is that the definition of "munitions work" is enlarged to include persons working in the maintenance of sewerage systems. The further effect of this is that it gives the municipalities certain powers of control over their employees in sewerage systems. I am moving this Amendment on behalf of the London County Council although it, is drawn in rather wider terms, because I think it is only fair that other municipalities should be included if necessary. But I should be perfectly content if the noble Lord would accept the Amendment limited to London. It will be observed that the Clause goes on to say that exceptions shall be made or the definition enlarged where the Minister of Munitions certifies that such supply is of importance. The noble Lord may possibly say that this Amendment brings in a class of case rather widely departing from munitions work, but he cannot effectively argue that because he has admitted already the supply and maintenance of heat and power and of tramway facilities.
I will submit the reasons why I think these men and this particular business ought to be included from the point, of view of London in particular. The main drainage system of London is the largest and probably the best conducted in the world, and it is obvious to noble Lords that if anything went wrong with that gigantic system the health of London would be endangered. At present the London County Council has not got perfect control for these purposes over its employees. It attempted a few months ago to refuse clearing certificates to the workmen in the main drainage system, but that right was challenged and

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it has been decided before the Munitions Tribunal that it could not be sustained. Of course, the men are attacked from various quarters. They are sought for the Army and the Navy, and as the London County Council administers its affairs far more economically than the Ministry of Munitions it is obvious that these men who are skilled fitters and skilled engineers are wider very great temptation to go to munition factories.
Let me give one instance to show that this applies most closely to the Ministry of Munitions itself and to the work in Woolwich. The great drainage system on the South side of the Thames terminating at Crossness is much more difficult to manage than that on the North side, because the levels are very low and when you get storm water the water and sewage have to be pumped up to a higher level in order to be discharged. If you have not sufficient men both to work the pumps and to repair them when they go wrong you have Woolwich flooded, and you have Plumstead flooded, and you have woolwich Arsenal flooded. That has happened already last December, and I put it to the noble Lord that a danger of this kind is a very serious matter and closely connected also with the Ministry of Munitions. Let me give a small example. A very large new pump was recently installed for the purpose of dealing with this special problem at Woolwich, but owing to the fact that some of the men had gone away it was absolutely impossible to use this particular pump. Although the engineers and the County Council Committees concerned are doing their best to cope with the matter, the difficulty is a very serious one, and I think it can only be met by enlarging the definition and placing these men under some sort of control. I recognise that the Government have certain difficulties in this ease, but I would point out that this is absolutely essential and necessary work which cannot be supplied by any other form of labour. We have heard a great deal about the dilution of labour, but this is work which cannot be done by women or by unskilled men. If you cannot retain the men who thoroughly understand this work, the work cannot be done. The temptation to these men is very great under the special circumstances, and there is considerable difficulty in retaining them. I therefore urgently press this Amendment on the noble Lord, and trust that he will accept it.
Amendment moved—
Page 7, line after ("facilities") insert ("or the maintenance of sewerage systems of local authorities").—(Viscount Peel.)
LORD NEWTON: I am afraid that I am unable to accept the compromise offered me by my noble friend with regard to making an exception in the case of London. The object of this Amendment is a perfectly natural one. The noble Viscount, on behalf of the body which he represents, wants to keep his own workmen and to prevent their being attracted away by the Munitions Department or anybody else. That is presumably the position of every local authority, and I suppose of every business in the country. They would all like, were it possible, to be able to retain their men and to come within the definition of "munitions work." But it is the view of the Department that it is very difficult to represent sewerage workers as having any connection with the carrying on Of the war. If you included sewerage workers it would be difficult to exclude any. You might, for instance, find bakers saying that they supplied munition workers with bread and therefore ought to come within the definition, and the range might be indefinitely extended. The Department are naturally anxious to restrict the definition as much as possible. At present it is confined to what appears in paragraph (d) of the clause, and they are reluctant to make any further admissions. Although I concede that my noble friend has a case, I am afraid I am not entitled to accept his Amendment or to hold out any hope that the Department are prepared to reconsider the matter.
VISCOUNT PEEL: I cannot, of course press the Amendment against that decision. I have only to make this statement on behalf of the London County Council, that we have represented this matter to the Government and they in their discretion, which I do not wish to criticise, have refused our request. If difficulties should arise—and I hope they will not— the County Council cannot hold themselves responsible for the safety of the system and if any damage happens to Woolwich and the factories at Woolwich the Government must take the entire responsibility. The London County Council have discharged their duty in pressing for what in their opinion is the very necessary inclusion of these workers tinder the Munitions Act. I beg to withdraw the Amendment.
Amendment, by leave, withdrawn.
VISCOUNT PEEL VISCOUNT PEEL moved, after paragraph (d), to insert the following new paragraph—
(e) the repair of fire engines and any other tire brigade appliances in cases where the Minister of Munitions certifies that such repair is necessary in the national interest.
The noble Viscount said: I hope I shall persuade the noble Lord that this Amendment ought to be accepted. Here again the Government have admitted—and, of course, it must be obvious to any one—the immense importance of keeping the Fire Brigade men in London. Dr. Addison, the Parliamentary Secretary for the Ministry of Munitions, in his letter of July last, while pointing out that it would be very difficult to treat the work done in the workshop or brigade as war work, added—
"At the same time you may be sure that the Minister of Munitions fully recognises the importance of keeping the London Fire Brigade at the highest standard of efficiency, and I think you may assure your workers that although they are not engaged in war work they are doing work which is regarded by the Government as vitally necessary in the interest of the community."
Unfortunately these verbal statements or letters do not impress the men as much as they ought, and I am therefore going to ask the noble Lord to include this big service among munitions works. I should like to say that there is at present a considerable shortage in the Fire Brigade, that the men are working overtime already, that nobody can be spared, and that every week some fresh appliances are required to bring the Fire Brigade up to the highest state of efficiency; and it is not less but more efficient men of this kind who are required now that the old horse system has been abolished and a more technical system instituted. It is not necessary for me to point out to your Lordships the danger in the case of Zeppelin and other raids should there be a great outburst of fire. I therefore think, though the noble Lord would not accept my Amendment about the main drainage workers, he is almost bound to accept this Amendment as regards the Fire Brigade. These men are highly technical men and are tempted away by good offers from munition factories and so on, but they are essential to the safety of London; and if the noble Lord refuses this Amendment I shall have to make the same statement that I made on the previous Amendment, that it is impossible for the London County Council to hold itself responsible if great damage does occur. I hope it will not occur,
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but if it does the Government must take the full responsibility; because this is the only way, by placing these men under this Act, in which we can have control over them. If the Government do not give us that control, then they must take the responsibility for any damage that may occur. I should like to point out this further, that we are rather handicapped in getting new appliances because we cannot get them from the factories which in ordinary cases supply them because they are now doing munition work for the Government. Consequently we are thrown back on looking after, superintending, and mending our old existing appliances. That throws more work than would otherwise be placed upon the fitters, and so on. Therefore, as I say, we want more skilled men than before the war rather than less. But these men are I slipping away, and I can assure the noble Lord that the London County Council are placed in a position of great difficulty as regards the Fire Brigade administration by this fact.
Amendment moved—
Page 7, after line 13, insert the following new paragraph:
"(e) the repair of fire engines and any other fire brigade appliances in cases where the Minister of Munitions certifies that such repair is necessary in the national interest."—(Viscount Peel.)
LORD NEWTON: If I may he permitted to express an opinion, I think the case which the noble Viscount has made out on behalf of the Fire Brigade is much stronger than the previous one; and I will take it upon myself to accept the Amendment.
On Question, Amendment agreed to.
Amendment moved—
Page 7, line 25, leave out ("four") and insert ("five").—(Lord Newton.)
On Question. Amendment agreed to.
Clause 9, as amended, agreed. to.
LORD NEWTON: This new clause which I now move is put down by agreement with the Admiralty, and is inserted in order to clear up any ambiguity as to whether the Ministry of Munitions or the Admiralty would have to make the actual Order in Section 7 as amended by Clause 5, with regard to docks.
Amendment moved—
Insert as a new clause:
"Amendment of Section nine of principal Act.
".At the end of section nine of the principal Act the following proviso shall be inserted:
"Provided that the power of making an order applying section seven of this Act to any dock shall rest with the Minister of Munitions and not with the Admiralty."—(Lord Newton.)
On Question, Amendment agreed to.
Clauses 10 to 13 agreed to.
Clause 14:
LORD NEWTON: These are merely drafting Amendments.
Amendments moved—
Page 8, line 24, after ("where") insert ("nonunion labour is introduced during the war into any class of work")
Page 8, line 26, leave out ("non-union labour is introduced during the war").—(Lord Newton.)
On Question, Amendments agreed to.
Clause 14, as amended, agreed to.
Clause 15:
Extension of section eleven of principal Act.
15. In subsection (1) of section eleven of the principal Act, which specifies the matters in respect of which owners of establishments in which persons are employed are, if required by the Minister of Munitions, to give information, the following paragraph shall be inserted after paragraph (c):—
(cc) the cost of production of the articles produced or dealt with in the establishment, and the cost of the materials used for such production, and the names and addresses of the persons by whom such materials were supplied or who are under contract to supply them.
LORD NEWTON: This addition at the end of Clause 15 was put down as the result of a promise made in the House of Commons to a Member representing the employers, who stated that there was some uneasiness among business men as to the use which might be made of the information required by the clause in view of the fact that among the officials of the Ministry of Munitions were a number of men who might be trade competitors. This Amendment merely safeguards that point.
Amendment moved—
Page 9, line 4, insert at the end of the clause ("If any person, except as authorised by the Minister of Munitions, discloses or makes use of any information given under section eleven of the principal Act, as amended by this or any subsequent enactment, he shall be guilty of a misdemeanour and on conviction be liable to
916
imprisonment, with or without hard labour, for a term not exceeding two years, or to a fine, or to both imprisonment and a fine").—(Lord Newton.)
On Question, Amendment agreed to.
Clause 15, as amended, agreed to.
Clause 16 agreed to.
Clause 17:
Provisions as to offences.
17.—(1) All offences which are by or under this Act made offences under the principal Act, other than those for which the maximum fine exceeds five pounds, shall be deemed to be offences with which munitions tribunals of the second class have jurisdiction to deal.
(2) Rules under section fifteen of the principal Act shall provide—

(a) that in proceedings before a munitions tribunal the chairman shall, before giving his decision, consult with the assessors, and in all cases where the assessors are agreed he shall, except as respects questions which appear to the chairman to be questions of law, give effect to their opinion in his decision;

(b) that where the person or persons by or on behalf of whom or against whom the complaint is made in any proceedings before a munitions tribunal is or are a female worker, or two or more female workers, the assessor or one of the assessors chosen from the panel of persons representing workmen shall be a woman.

(3) Decisions of munitions tribunals shall be subject to appeal to a judge of the High Court appointed by the Lord Chancellor for the purpose on any ground which involves a question of law or a question of mixed law and fact in such cases, and subject to such conditions and in such manner as may be specified in rules made by the Lord Chancellor, and whether by means of the statement of a special case for the opinion of the judge or otherwise; and those rules may provide for such appeals in any classes of cases specified therein being heard and determined in a summary manner and for the remission or reduction of any fees, and as to the manner in which effect is to be given to the decision of the judge, and the decision of the judge on any such appeal shall be final and binding on all munitions tribunals.
In the application of this provision to Scotland "High Court" shall mean Court of Session, "Lord Chancellor" shall mean Lord President of the Court of Session, "rules made by the Lord Chancellor" shall mean Act of Sederunt.
In the application of this provision to Ireland "Lord Chancellor" shall mean the Lord Chancellor of Ireland.
(4) In the case of a company being guilty of an offence under the principal Act, every director, manager, secretary, or other officer of the company, who is knowingly a party to the contravention or non-compliance constituting the offence shall also be guilty of the offence and liable to the like fine as the company.
(5) In subsection (3) of section fifteen of the principal Act after the words "so far as relates to offences" there shall be inserted "and the enforcement of orders."
LORD NEWTON LORD NEWTON moved to amend subsection (3), after the word "fact," by inserting "or on any other ground that may be prescribed in rules made by the Lord Chancellor." The noble Lord said: This Amendment is proposed as a measure of precaution. It is thought that the clause as it stands, which provides an appeal only on a question of law or a question of mixed law and fact, may be too restricted; and it is desired, therefore, to have power to give an appeal in other cases if it should be found necessary or expedient. It is not, however, intended that an appeal should be given in all cases.
Amendment moved—
Page 10, line 10, after ("fact") insert ("or on any other ground that may be prescribed in rules made by the Lord Chancellor").—(Lard Newton.)
On Question, Amendment agreed to.
Amendment moved—
Page 10, line, 11, omit ("rules made by the Lord Chancellor") and insert ("such rules").—(Lord Newton.)
On Question, Amendment agreed to.
Clause 17, as amended, agreed to.
Clause 18:
Minor amendments of principal Act.
18. In section three of the principal Act there shall be added after the words "affecting employment on," in both places where those words occur, the words "or in connection with," and in subsection (3) of section live of the principal Act, after the words "if he thinks tit, allow," there shall be inserted the words "or require"; and, in paragraph nine of the Second Schedule to the principal Act, for the word "fourth," there shall be substituted the word "third."
LORD NEWTON: The first Amendment to this clause is a drafting Amendment. These words occur in Clause 9 (2), and are therefore unnecessary here.
Amendment moved—
Page 10, line 35, leave out from the beginning of the clause to ("in") in line 38.—(Lord Newton.)
On Question, Amendment agreed to.
LORD NEWTON: The next Amendment is intended to make it clear that the Minister can fix a standard in the ease of a new business in which technically there are no profits of the establishment for the two financial years before the outbreak of War, and consequently no standard period.
Amendment moved—
Page 10, line 38, after ("Act") insert ("after the words 'affords no standard of comparison' there shall be inserted the words' or that no such average exists, and'")—(Lord Newton.)
On Question, Amendment agreed to.
LORD NEWTON: The next Amendment is drafting.
Amendment moved—
Page 10, line 39, leave out ("fit") and insert. ("just").—(Lord Fenton..)
On Question, Amendment agreed to.
Clause 18, as amended, agreed to.
Clauses 19 to 22 agreed to.
Clause 23:
Effect of revocation of orders.
23. Where the Minister of Munitions makes an order revoking any order previously made by him under section four of the principal Act, the order so revoked shall, it the revoking order so directs, be treated for all or any of the purposes thereof as if it had never had effect.
LORD NEWTON: The object of the Amendment to this clause is to make it clear that such revocation of Orders is only to clear an Order which has been made by mistake and which has been enforced for a short time.
Amendment moved—
Page 11, line 35, after ("if") where that word first occurs, insert ("that order has not been in operation for more than three months and was made tinder a misapprehension and").—(Lord Newton.)
On Question, Amendment agreed to.
Clause 23, as amended, agreed to.
Clause 21 agreed to.
LORD NEWTON: The object of this new clause is to make it clear that the Munitions Tribunals are to continue for a period of twelve months after the war.
Amendment moved—
Insert as a new clause:
"Duration of principal Act.
".In subsection (2) of section twenty of the principal Act, which relates to the duration thereof, the words ('Part I of') shall be repealed." —(Lord Newton.)
On Question, Amendment agreed to.
Clause 25:
Short title.
25. This Act may be cited as the Munitions of War (Amendment) Act, 1915, and shall be construed as one with the principal Act, and the principal Act and this Act may be cited together as the Munitions of War Acts, 1915.
Amendments moved—
Page 12, line 4, leave out ("1915") and insert ("1916")
Page 12, line 6, leave out ("1915") and insert ("1915 and 1916").—(Lord Newton.)
On Question. Amendments agreed to.
Clause 25, as amended, agreed to.
The Report of Amendments to be received on Tuesday next, and Standing Order No. XXXIX to be considered in order to its being dispensed with: Bill to be printed as amended. (No. 197.)

COCOA EXPORTS.
LORD SYDENHAM rose to ask His Majesty's Government whether attention has been directed to the great excess of exports of cocoa from the United Kingdom during the war, and whether steps are being taken to regulate these exports.
The noble Lord said: My Lords, the statistics which have been given as regards the exports of cocoa during the war from the United Kingdom are very remarkable and somewhat disturbing. The principal figures were made public some time ago by Dr. Waller, who is one of our eminent physiologists, and he has supplied me with a graph which I wish could be distributed amongst the members of your Lordships' House, because you would then see far better than from any figures which I can give just what has happened in this connection. The great rise began in September, 1914, and the maximum of exports from this country was reached in November last.
Speaking broadly, the total exports of cocoa from the United Kingdom to all countries from August, 1913, to July, 1914, were only 6,638 tons, as compared with 32,086 tons in the corresponding war period. Or if you deal with the matter in another way, during the first sixteen months of the war our total exports were 33,357 tons, whereas they had only been 8,883 tons in the corresponding period of sixteen months before the war. That gives, roughly, an average export of 2,000
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tons monthly during the war and of only 500 tons before the war. I cannot get at the actual distribution of this large amount among the various importing countries; but Holland, Denmark, Norway and Sweden took between them only 1,161 tons in 1913 against 7,589 tons in 1914 and 15,316 tons up to December 21, 1915. The Board of Trade figures show that our export to Holland was 984 tons in 1913, and that ran up to 5,448 tons in 1914, after less than half a year of war. What the export to Holland was in 1915 I have not been able to ascertain. These figures are very significant, for it is quite impossible that all these neutral countries could have increased their home consumption by these enormous amounts. Holland prohibited the export of raw cocoa and cocoa butter some months ago; but I imagine that manufactured cocoa is not prohibited. It has been stated in your Lordships' House that under the secret arrangements come to with the Danish Chambers the export of cocoa is allowed from Denmark. What happens in Sweden I have no idea, but the imports into Sweden are very large.
The two points on which I wish to lay most stress are these—first, that we have apparently permitted cocoa to be increasingly exported to neutrals who could not require it for their own use; and, secondly, that this export of cocoa from the United Kingdom reached its maximum of 4,032 tons in November last. The noble Lord who presides over the Licensing Committee of the War Trade Department (Lord Emmott) said the other day that he was often met with "constant complaints, sometimes in the form of appeals ad misericordiam, sometimes in the form of abuse." I think the exporters of cocoa from this country could hardly plead ad misericordiam, and they certainly had no right to resort to any form of abuse. On December 23 the Under-Secretary of State for Foreign Affairs stated in another place that no export of linseed oil from this country had taken place "for many months past." That statement does not by any means dispose of the whole question of vegetable oils, but it did seem to mark an advance in a question the dealing with which had been exceedingly unsatisfactory in previous times. The noble Marquess the Leader of this House on December 20 spoke of the great importance of oils and fats, which he said was a matter that had

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given the Government "the greatest anxiety for a long time past." But cocoa contains very nearly half its weight in fat, and is twice as nourishing in the form of human energy as bread. That is why the figures I quote seem to me to be so disturbing.
What I would like to ask is this. Have these great exports from this country been permitted in order to prop up our entrepôt system, or to break down the German exchange, or out of tenderness for neutrals, who have in this war enjoyed a measure of prosperity they have never enjoyed in any previous war of which I have any knowledge? in a recent issue of the New York Journal of Commerce, one of the most important papers in New York dealing with commercial questions, it is stated that the United States exports increased by £200,000,000 during the first nine months of the war—in that period it is clear that very few munitions could have come into that large sum—and that the exports to Holland had increased by 50 per cent. in that period. It went on to remark that "most of this is trade that filters through to Germany and Austria-Hungary in spite of the British blockade."
My Question deals only with the export of cocoa from the United Kingdom, but it is certain that very large quantities of cocoa are going through to Germany from other sources. The only other figures I have been able to get are these for Denmark and Sweden, and they are very startling. In the eleven months before the war Denmark imported 2,211 tons, and Sweden 1,550 tons; but in eleven months during the war Denmark imported 18,071 tons, and Sweden 11,120. These figures tell their own tale; and they do not include the enormous imports of Holland, which are probably bigger than either of them. I suppose this external trade in cocoa could only be effectually controlled by making cocoa contraband, and I really cannot see why it was not made contraband long ago. A recent Order in Council has prohibited the export of bladders, casings, and sausage skins to all destinations except British possessions. I have no doubt these things are valuable commodities, and I can fancy that the restriction of the export of sausage skins would be annoying to Germany. But I do suggest that cocoa is of infinitely greater importance. Cocoa, as I have found from my own experience, is pecu-
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liarly valuable as a portable military food for use on a campaign. My Lords, it was always certain that economic pressure must play a great part—perhaps the greatest part—in bringing this war to an end; and if we had acted as the Northern States did in the Civil War I am perfectly certain we should have had peace before this. Every week that passes takes its heavy toll of gallant lives anti steadily increases the burdens we and our Allies will have to bear in the future. Yet all the time we know that the enemy is still being supplied on a very large scale and under the eyes of our Navy with the very commodities known to be most necessary to enable him to prolong the war. I beg to ask the Question standing in my name.
THE MARQUESS OF LANSDOWNE: My Lords, I regret that the noble Marquess who leads the House is not able to be in his place this evening. He presides over a Committee which deals largely with these questions, and would have been able to answer my noble friend with more knowledge of the facts than I can pretend to have. My noble friend asks two Questions —whether our attention has been directed to the great excess of exports of cocoa from the United Kingdom during the war, and whether steps are being taken to regulate these exports? If I were to be content with a laconic answer I should state that the reply to both of these Questions is in the affirmative; but I dare say my noble friend will expect me to say a little more than that.
First let me venture to express my entire agreement with him in what he has said as to the importance of cocoa as a source of military supply. I believe I am right in saying that cocoa contains all the ingredients of a complete food and in particular a large proportion of those fatty substances the absence of which is being so severely felt in Germany and Austria at the present time. Therefore there can be no two opinions as to the desirability of preventing cocoa from finding its way to the enemy. The noble Lord gave us figures with which some of us are probably already familiar, and which go to show that since the war began some of these neutral countries which are contiguous to Germany have been receiving an amount of cocoa so entirely out of proportion to their normal supplies that no other conclusion is possible except the conclusion that a great part of that cocoa

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has been finding its way through those neutral countries to the enemy.
I will not trouble the House with figures. I believe there are some points at which the figures are open to question. For example, I am told that the monthly figures are open to some suspicion for this reason, that they are compiled from the Customs returns, which have reference, not to the actual transactions that took place within the month, but to the transactions recorded within the month, which is not quite the same thing. That, of course, is material when you come to deal with the amount of cocoa that has been exported to these countries from the United Kingdom during the months which followed upon the prohibition of the export of cocoa. But there is one circumstance which does very materially affect the figures, and as to which I should like to say one word. Since the war there has been a very great alteration in the course of the trade in cocoa. Before the war Hamburg was the great entrepôt for cocoa, and immense quantities passed through Hamburg to those neutral countries which we are discussing this evening. A great deal of cocoa went from our own West African Colonies to Hamburg and from Hamburg found its way to Scandinavian countries and other places. When the war broke out Hamburg ceased to be an entrepôt, and a great part of the business previously done at Hamburg came to be done in this country, with the result, of course, of a great inflation in the amount of cocoa passing through Great Britain. That, by itself, would be a circumstance for congratulation, for it tends to show that we are capturing a business which was formerly in the hands of Germany. But there is a good deal more in it than this perfectly legitimate diversion of trade. I said I would not give figures. I will give only one. It is this, that whereas the imports of cocoa into this country during the year 1913 amounted to 78,000,000 lbs., they amounted in the year 1915 to 187,000,000 lbs.—an enormous increase. I ought, perhaps, to add that of this amount 99,000,000 lbs. were entered for home consumption. That is a very large increase, as the figure for 1913 for home consumption was only 56,000,000 lbs. But even allowing for what came to this country for the purposes of home consumption, it is quite clear, as pointed out by my noble friend (Lord Sydenham), that there is
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an enormous balance of cocoa unaccounted for, some of which it is reasonable to presume found its way to the enemy countries.
Now a word as to the steps which have been taken in order to endeavour to intercept that supply. It was not till last January that cocoa was added to the list of restricted goods, but it appears that the decision then arrived at was held to affect only cocoa powder, and it was so limited in the Proclamations issued during the spring and summer. It was only on July 30 that an amended Proclamation was issued adding to the restricted list raw cocoa of all kinds and all preparations of cocoa, including cocoa husks, cocoa shells, and chocolate. From that date—that is, July 30—the restriction was applied to all cocoa, so that it is only to the period subsequent to that date that you must look if you wish to find the true results accomplished by this policy of restriction. I venture to claim for that policy that it has been attended upon the whole by a very fair measure of success; and if it does not weary your Lordships I should like to tell you exactly what the result has been in its application to the imports of the Scandinavian countries and the Netherlands.
I take first Norway. During the year 1915 Norway took about 820 tons from the United Kingdom, and of that about 200 tons only had been shipped under licence since the prohibition was imposed. Cocoa is allowed to be shipped only to manufacturers, and in no case in excess of their normal requirements. The maximum allowed for any one month has been fixed at 50 tons. The normal requirements of Norway prior to the war were about 100 tons a month from all sources. To Sweden there were over 6,000 tons exported during 1915. Less than 200 tons of that have been exported since the prohibition was imposed, a very marked falling off, and even that figure includes a certain amount of cocoa which was released from the Prize Court. In regard to Denmark the same policy has been pursued. The total export to Denmark for the year was 4,570 tons; of that only 500 tons have been shipped under licence, these also including some consignments released from the Prize Court. In all these cases licences are issued to the manufacturers, limiting them to shipments not in excess of their normal requirements; and in all

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these cases guarantees are required that the cocoa will be consumed in the country concerned and not re-exported.
The case of the Netherlands is somewhat different. There are there at least two very large businesses, one that of Messrs. Turner and the other that of the well-known firm of Van Houten. I understand that these firms take large quantities of raw cocoa from this country and return it to us in a manufactured state. I believe that about 90 per cent. of the raw material which they take comes back in a manufactured state for consumption in this country. In addition to the transactions with these two large businesses, from 300 to 400 tons a month, or between 30 and 40 per cent. only of the normal requirements of the Netherlands, have been licensed, in every case to manufacturers who are believed to be trustworthy; in all cases it is arranged that the cocoa should be consigned to the Netherlands Oversea Trust, and the noble Lord knows quite well what the nature of our Agreement with that Trust is. In these cases we have been able to make what I understand are regarded as satisfactory arrangements with the British exporters, and I would like to insist upon the necessity of doing what we can to arrive at reasonable arrangements with them; and for this reason. If we are too stringent in our requirements and if our requirements appear to be vexatious there will be a very considerable risk that we shall drive them to cease exporting from this country and to get their goods through by other channels. The result which might follow is obvious. If they were to do that we should lose the opportunity of which we now avail ourselves for issuing licences to them and in other ways making convenient arrangements for the control of the export. Apart from that the further result would be that the same amount of cocoa, instead of reaching the neutral countries through British channels, would reach them overseas, and we should have to fall back upon the much more precarious and difficult methods of intercepting goods with which we have to be content when we are dealing with overseas traffic.
I mention overseas traffic, and would like to say a word upon that subject. I have no doubt that the noble Lord, who has studied this question, is aware that the amount of cocoa which goes to these neutral countries through British channels
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is a very small one compared with the amount which reaches them overseas, and it is when we come to deal with that part of it that our real difficulties begin. I take the case of Sweden as an illustration. In the first eleven months of 1915 the amount which reached Sweden overseas was 11,120 tons as against a normal 1,595 tons, and of the larger figure no less than 7,218 tons reached Sweden from the United States of America. I will not dwell further upon the difficulties which we have to encounter in dealing with the contraband which passes through neutral countries to the enemy overseas. We have, as the House is well aware, to depend upon our power to satisfy the Prize Court that the goods are really destined to the enemy, and everybody knows that this is not always a very simple or easy task.
In our view, as I tried to explain to the House not long ago, the best way of securing ourselves against a miscarriage of justice is that we should have recourse to the kind of Agreements into which we have entered with the Netherlands Oversea Trust, with the two great Danish trading associations, and with other trailers and combinations of traders. The foundation of those Agreements is to be found in what is conventionally known as the "rationing" of the neutral countries concerned. It is not very difficult to ascertain approximately what the reasonable and normal requirements of the neutral country are. If an Agreement can be arrived at as to that you have, when you take the goods before a Prize Court, the means of establishing inferentially a strong presumption that the goods, if they are in excess of the normal amount, are of enemy destination, and that at any rate helps to some extent in securing their condemnation by the Prize Court. I endeavoured to show just now, in the case of the countries mostly concerned in this trade, that since we had added cocoa to the list of prohibited articles there had been a very considerable improvement in the figures, that the amount licensed was very small compared with the amounts which used to pass before prohibition was resorted to.
LORD GRIMTHORPE: Do the figures refer only to the exports of cocoa from England?
THE MARQUESS OF LANSDOWNE: That is so.
LORD GRIMTHORPE: Not to exports of cocoa overseas?
THE MARQUESS OF LANSDOWNE: No. But I am very far from suggesting that nothing more can be done. I do not think that there can be any reasonable doubt that considerable amounts, in spite of all our precautions, continue to reach the enemy through these channels. I am able to say that this matter is engaging—I do not say will engage, but is engaging—the most careful consideration of the War Trade Department and of His Majesty's Government. I believe that we are justified in looking in certain directions for the possibility of a gradual tightening up of the precautions which we are taking at the present time. I mean that it is possible for us to obtain fuller and more accurate information than we now receive as to the factories in the different countries and their legitimate requirements. I believe it to be possible to do more in the way of restricting licences to cocoa consigned to the firms to which I refer, and I believe it is also possible to do something in the way of arriving at agreements with the shippers under which they would undertake not to consign except to the firms thus selected. I have also no doubt it would be possible to obtain more effectual guarantees against re-export from neutral countries, and in cases where the imports, tested in the manner which I described a moment ago, can be shown to be excessive, there of course we are able to refuse licences and to resort to the ultimate remedy, which is to take the goods before a Prize Court and there establish, if we can, their enemy destination. I have said enough, I hope, to show my noble friend that the question which he has raised is regarded by us as a serious one, and that we are addressing ourselves as best we can to meeting the views which he has expressed.
LORD SYDENHAM: I have to thank the noble Marquess for the full answer he has so kindly given to my Question. There will be general satisfaction in knowing that the net is being tightened and that there is a prospect that it will be drawn tighter still. As far as I can see the best thing would be to treat cocoa as contraband in the first instance, and to take the basis of rationing as the test of destination.
LORD HARRIS: My Lords, I hope I may take advantage of the elastic rules under which we debate in this House and ask a supplementary Question, because I
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am not quite clear what the noble Marquess wished us to understand. As far as Sweden is concerned. I understand that the largely increased imports were from overseas. But there are other countries—Holland particularly—which have been importing very largely increased quantities during the war. Are we to understand that those increases were also overseas, or may they have come through British hands? The noble Marquess, in the course of his reply, referred to our Colonies on the West Coast of Africa, where the cocoa bean, I believe, flourishes. I gathered from what he said that large quantities of cocoa had passed through the hands of British firms to importers in Holland, and the noble Marquess said that it was impossible to doubt that large quantities of these increased imports had gone into enemy hands. It was difficult to avoid the inference that those quantities of cocoa that had gone into enemy hands might have come from the West Coast of Africa Islands through. British firms to importers on the Continent. In that case, is there no way of preventing this? If these increased exports are going through the hands of British firms is it not possible to bring some influence to bear upon these firms and stop the exportation by that means?
THE MARQUESS OF LANSDOWNE: I am not sure whether I quite apprehend the question which my noble friend desires to ask. I distinguished between cocoa passing through neutral countries to the enemy on the one hand from this country and on the other overseas, and I tried to explain that, so far as the cocoa which passes through neutral countries to the enemy from the United Kingdom is concerned, we had now in full operation a system under which we issued licences.
LORD HARRIS: That is only since last November, is it not?
THE MARQUESS OF LANSDOWNE: No; since last July. I thought I stated that quite clearly. Since July we have had in full operation a system under which cocoa cannot pass through neutral countries to the enemy—cannot pass to neutral countries at all without a licence from us. But overseas trade is, of course, in a quite different position. That we can only deal with by intercepting it at sea, taking it before a Prize Court, and, if we can do so, establishing the fact that it is destined for the enemy.
LORD EMMOTT: My Lords, may I add a word which I think will be more or less reassuring to your Lordships about the licensing done in the War Trade Department? The figures which I have had the advantage of seeing showing month by month the exports from this country quite clearly include exports made in months previous to that for which they are entered. For instance, in regard to Sweden the figures show an export from
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this country in the four months August— November last—that is, since the embargo was put on—of between 2,000 and 3,000 tons. The amount licensed in that time was less than 80 tons; and therefore those figures quite clearly do not apply to the amount that was sent out of this country under licence.
House adjourned at half-past Six o'clock, to Tuesday next, half-past Ten o'clock.