§ THE DUKE OF BUCCLEUCH had the following Question on the Paper—
§ To ask His Majesty's Government whether they can give any particulars of the scheme for purchasing the wool-clip, 1916.
§ The noble Duke said: My noble friend Lord Sandhurst was kind enough yesterday to say that if possible he would give further information on this subject to-day, and therefore I would like to ask the Question which stands in my name. Perhaps the noble Lord could also inform the House what powers the War Office had of fixing the price, and what appeal there is for those who are forced to sell if they are not satisfied with the price.434
THE EARL OF LICHFIELD
My Lords, before my noble friend answers, may I be allowed to say a few words with regard to something that was said by him in the course of the debate yesterday afternoon. He stated, I think, that it was proposed to pay the farmers 30 per cent. increase on the pre-war prices of 1914. I do not know whether the noble Lord said 1913 or 1914, but I believe that in the other House the year 1914 was given. The 30 per cent. increase which the noble Lord mentioned is the first official statement of the exact amount that it is proposed to give. When he made this statement yesterday I was not in a position to get up and point out that this would involve to the farmers a lower price than they had received last year, because it was necessary to look into facts and figures. I have since done so, and there is no doubt whatever that if such a price were adhered to, namely, 30 per cent. on 1914 prices—if it were 30 per cent. on 1913 prices it would be still worse, because prices went up in 1914—it would be very detrimental to farmers. I cannot understand on what principle such a figure was settled. Surely it is not the intention to give farmers less than the market price for the wool that is being commandeered. The farmers are quite ready, if the nation wants it, to hand over their wool to the Government; they are as loyal as any other section of the population; at the same time I think they have a right to expect that they will obtain something like market prices for the goods that are commandeered.
I am able to state that the figure named by my noble friend would not produce to the farmers the same prices as they obtained last year. A rise of between 40 and 50 per cent. on the 1914 prices would be necessary to bring up the figure to the same that they obtained last year. I know it may be argued, when I talk of the market price, that it is very difficult to say what the market price is until the wool sales of this year have established it; but those sales have been done away with, so that one may say there is no market price. I contend that the only fair basis of settling the price is to take the prices of last year. If the farmers obtained last year's prices, one would feel that they were being treated fairly and justly; but anything short of last year's prices seems to me to be unfair and unreasonable.
I should like, in connection with this case of wool, to say what a great loss it is to the 435 country and to agriculture that Lord Selborne has resigned the position of President of the Board of Agriculture. He has done an immense deal during the twelve months that he has been President of the Board, both for the nation and for agriculture. There never was such a difficult time for anybody who looked after the interests of agriculture. Lord Selborne has done his best to encourage farmers to grow as much food as possible on their holdings. As my noble friend the Leader of the House said last night, he (Lord Selborne) has dealt very efficiently with the difficult question of the labour on the farms and the requirements of the Army, and he has not failed frequently to go about the country and tell the farmers what he considered their duty was to the country—namely, that they were to do their very best in their respective holdings to grow as much as they possibly could; that they were, if possible, to carry on their milk cows so that the population might have plenty of milk. Generally, he has given them good advice; and where there has been a question of Regulations he has never failed to seek advice from all parties concerned, so that the conflicting needs of agriculture in the different districts might be reconciled. I hope I am not out of place in this connection in saying that it is a great misfortune that we have not got Lord Selborne now at the Board of Agriculture, because I am sure he would have done his best to see that in this case of the commandeering of wool the farmers were treated as fairly and as justly as possible.
My Lords, I have not with me a copy of the Defence of the Realm Act, and I must ask leave, therefore, to postpone a reply to the supplementary question which the noble Duke put to me. Your Lordships will remember that yesterday my noble friend Lord Camperdown addressed to me a specific question on one or two points which admitted of a categorical and precise answer. I came prepared with that answer and gave it. But, as often happens in this House, four or five speeches were made on the subject, to which, to my great regret, I was unable to reply. Where a variety of speeches are made on a specific question they lead to a little inconvenience; because unfortunately the official who replies is often unable to provide the additional information beyond that which is asked for in the Notice on the Paper. Therefore I am very glad to be able to-night 436 to make up for my shortcomings yesterday evening.
The noble Duke asked last night why the date of June 8 was fixed. I am told that the Order forbidding the sale of the wool-clip this year was issued before any of the English wool fairs had taken place. The question of the supply of wool had been one of anxiety for some time, but it was not until the beginning of June that it was clear that there was a serious danger of a shortage in the supplies available for the military necessities of ourselves and of our Allies. As soon as the decision was taken that it was urgently necessary to safeguard English supplies, all the interests were informed. In one case only did the information arrive too late to prevent preparations from being made for an auction sale, and it is extremely regretted that this circumstance caused some inconvenience to those farmers who had made arrangements to sell their wool on that date. Where the farmers had packed their wool the trouble will not be wasted, as it will be taken over in that state as soon as the necessary arrangements are completed. Since that date negotiations with a variety of leading wool merchants, wool brokers, and farmers have taken place in regard to the methods to be adopted by the Government for the purchase of the whole clip, and it is these methods that, in reply to the question on the Paper, I shall endeavour to explain.
I may say at the outset that the matter has been discussed with the Board of Agriculture. To begin with, merchants of good standing will be employed as agents for the purchase of wool from farmers with whom they are accustomed to deal. These merchants will act under directions from district officers appointed by the Department in each of the main wool-growing areas, and will be responsible to a central executive officer in London. There will be a central advisory committee at headquarters, and a local advisory committee for each district officer in the various areas. As to organisation, the services of Colonel Wyllie have been obtained for the purpose of directing the whole of the wool purchase. I might say that before the war this gentleman aided in the management of the well-known firm of Wyllie and Company, which I believe is, if not the largest, one of the largest firms of wool merchants in the country; and he has had considerable experience of the 437 wool trade in America as well as in this country. I may add, too, that he was employed in the Ordnance Department in Gallipoli and elsewhere; therefore in addition to his trade experience he has experience of handling and storing clothing, and so on.
The actual collection of the wool—this is of interest and importance—will be undertaken by the usual buyers who operate in an area, and they will be responsible for the purchase, transport, casing, packing, storage, and discharge under directions from the district officers. A central advisory committee of prominent wool merchants is being set up to advise the central executive officer at headquarters. Their assistance will be required in selecting suitable district officers, fixing a table of maximum prices, splitting or dividing up the United Kingdom into convenient areas, and advising generally in questions of policy as they arise. In the meantime five gentlemen have been asked to give preliminary advice pending the appointment of a formal committee. The Department is also in communication with the National Farmers' Union and representatives of auctioneers and manufacturing interests. Local advisory committees will be constituted in each district to advise the district officers in the selection of approved merchants. It will be arranged as far as possible that the farmer shall sell to the merchant to whom he is accustomed to sell, though no vested right of any buyer to deal with any particular farmer will be admitted; and in selecting merchants to act as buyers, only those will be considered who have warehouse accommodation and facilities for and experience in classing wool. The local advisory committee will advise on local administration generally, and will assist in disputes as to quality; and it may be desirable for this purpose to ask the Board of Agriculture to appoint farmers' representatives to these local committees.
It may be suggested that farmers have bought sheep in anticipation of the high price that they would get for their wool. I am advised in any case that at least nine-tenths of the selling value of the sheep consists in the mutton.
In the two years from May, 1914, to May, 1916, mutton had 438 risen about 59 pet cent. in price, though in that period the price of store sheep had risen only about 29 per cent. Between February and June of this year the price of mutton had risen about 28 per cent. There is an increase of nearly 60 per cent. on the average of the past eight pre-war years, and it is therefore submitted that the increased cost of production will be compensated for. Should the farmer not be making as high a profit as he had hoped, he is in the same position as other classes of producers, who have cheerfully acquiesced in the position, and no doubt this will be the same on the part of the agricultural classes. The proposed increase of 30 per cent. above 1914 prices was fixed after careful examination of wool prices for a long period and consultation with the Board of Agriculture, wool buyers, and other interests. It should be noted that wool prices in 1914 were considerably above the average of the previous ten years. The prices proposed to be paid are in fact 60 per cent. above the average of the period 1908 to 1914. The increase in the price of English wool owing to the war varies from class to class, and this increase has been caused by the various demands for wool clothing for the Allied Armies, by shortage of shipping and the sinking of wool ships by German submarines, by the enormous increase of freight on Colonial and South American wool, by purchase by German interests in neutral countries, and by a decreased world production of wool. In dealing with manufacturing and other trade interests who supply the needs of the Armies the War Office has consistently during the past few months refused to be guided by the market price. In districts upon which there is a heavy war demand the price is practically created by the demands of the Government, and it is not regarded as reasonable to require the Government to pay an inflated price merely because, owing to war conditions, there is a shortage of supply as compared with the great demand.
It is proposed to take a census of the 1916 clip as soon as possible, and the necessary returns will need to be filled up. The district officers will then draw up the list of approved staplers or merchants, and give instructions to purchase from the farmers allotted to them. After inspection of the clip either on the farm or at the merchant's warehouse and after weighing the wool, the farmer will be entitled to 439 receive 75 per cent. of the estimated value. After the wool has been cased or classed by the merchant according to the different qualities the district officers will inspect the wool, and if the estimate is confirmed the balance will be paid on the certificate of the district officer.
Then there is the question of storage, and as it is desirable to avoid congestion at Bradford and to keep up a reserve for military requirements for a longer period than usual, it will be necessary to arrange for storage in some districts. For this purpose the approved merchants will supply the accommodation required. It may be necessary for them to acquire extra premises as warehouses, and if the farmer is required to store longer than a certain period it is proposed to allow him interest from August 1 at the rate of 5 per cent. The question of distribution is not in such a mature condition that I can usefully say anything about it.
This is the main outline of the scheme of the Government. As I said yesterday, it is necessarily incomplete. It may be modified as to its details, and there are also various adjustments to be made, but I hope I may have said enough to show that the Government are availing themselves fully of expert opinion and knowledge. It is intended to publish the full scheme as soon as possible. The Department are fully alive to the need and to the advantage of simplifying the procedure so as to enable the farmer to secure prompt payment for his produce.
THE EARL OF CAMPERDOWN
My Lords, I desire to make a few remarks on the statement of the noble Lord, for which we are very much obliged to him. He commenced his speech, however, by making a statement on which I think he must have been misinformed by the Department. He said, regarding the issue of this Order by the Army Council on June 8, that it was only just before then that they had become aware that they would require the wool. He also said that it was generally known throughout the country that this action would be taken. I can assure him that that is an absolute misstatement. Of course, it is not the noble Lord's fault; it proceeds partly, I am afraid, from the ignorance of the Department. At all events I think every one will agree with me 440 that the Army Council know nothing about wool, and that this is the first occasion on which they have presumed to deal with this matter, on which it seems to me they have displayed nothing but the most absolute ignorance. Surely the noble Lord does not want us to believe that it was only on June 1 that the Army Council arrived at the decision that it was necessary to take this wool. If he does, all I can say is that it shows how utterly they were wanting in foresight. I presume that the greater part of this wool is wanted for the clothing of the Army. Indeed, one sees that this is so. But though they are going to take the whole wool clip, there is a portion of the clip which they admit is not suitable for their purpose. They say that this portion of the clip will be re-sold by public auction. This shows that it is a mistake to take the whole clip. Is it not generally known that up to within about a year or two ago the authorities would not touch black face wool for any purpose; would not buy it at all? So much with regard to the statement as to their purpose, which was announced on the morning of the day when the Order was put in force. This action disorganised not merely the one auction to which the noble Lord referred. It disorganised the wool trade all over the country.
Let me deal with the way in which it is proposed to purchase this wool. The noble Lord says that wool buyers are to be divided over the country, and that they are to purchase to a large extent from the farmers with whom they have been accustomed to deal. On what terms are they to be free to purchase? The wool buyers are restricted as to the terms they are to give. They are not to give more than 30 per cent. in excess of the prices of 1914. That is not telling the buyer to go and deal; it is saying to him, "You must take the wool, but at a price not above the price fixed." The noble Lord was unable to say what are the rights which the Government have in regard to wool. What I should like the noble Lord to answer me is this. Have the Government the right, under the Defence of the Realm Act, to take away the property of any set of persons in this country, paying such price as they see fit? Have the Government, under the Defence of the Realm Act, the right to take property without giving any compensation? Of course if they have, the whole question falls; because anything the Government choose to give you is simply ex gratia on 441 their part. But if that is not so, then clearly the Government have no right to fix a certain sum and say, "We will not give beyond that amount." What is the use of appointing wool buyers if you will not allow them to deal as if they were in the market? A wool buyer does not go into the market tied as to the price he is to offer; he goes in order to negotiate on the terms of the trade, whatever they may be. A wool buyer is no better than anybody else to go into the market if all that he is empowered to give is a maximum sum which has been fixed by the Government. He is not a wool buyer; he is simply a person who is carrying out the instructions of the Government.
Supposing these wool buyers carry out their transactions in the way we have been told, what does it amount to? The wool buyers will have no control whatever, and the Government have no control, over the wool that comes from abroad. If wool comes from the Cape, if it comes from Canada, even if it were to come from Germany, you have not the slightest control over the price it is to fetch; and by restricting the home producer while you are unable to touch the foreign producer you are simply fining your own producer for the benefit of the foreign producer.
The noble Lord made one or two other statements that I could not follow. They may be perfectly correct, but all I can say is that I, for one, do not understand them. We were speaking of the case of persons who had gone into sheep farming within the last twelve months. Those persons, certainly in the case of all the big sheep farms in Scotland and in England, have taken over the sheep at a valuation. And when the noble Lord tells me that the rise in store sheep has been only 29 per cent., pray on what ground does he found that? I have had personal experience which tells me that this is a most ridiculous understatement of the increase in the value of sheep. The further statement that nine-tenths of the selling value of sheep is in the increased price of mutton I believe to be entirely inaccurate. The noble Duke sitting beside me (the Duke of Buccleuch) knows about these things much more than I do; but to say that the price of the wool represents only one-tenth of the value seems to me to be an entirely incorrect statement, and I do not know on what it is founded. If it is founded on the inquiries of the Army Council, I can only say that if they do not 442 know more about the rise in the price of sheep than they did about their own requirements and the wisdom of issuing this ukase suddenly on that particular morning, I am afraid I cannot attach much value to their opinion.
I was glad to hear from the noble Lord that it is intended to appoint men to value the wool who will really know something about it. But my objection is that you are not going to give them any latitude; you are going to fix the value yourselves. The noble Lord tells us that it is quite sufficient to add to the price of 1914 by 30 per cent. I believe that to be contrary to the opinion of the trade. I feel confident that if you were to ask the opinion of the trade you would find that the increased price is far more than 30 per cent. I do not think that a transaction of this magnitude, which I have shown to your Lordships is so unfair to home producers as compared with foreign producers, can go through unless there is some further inquiry made and some further opportunity of going into the facts. The extraordinary manner in which this transaction has been initiated and is being carried out by the Army Council is an additional proof of what very bad business men a great many of the Government Departments are composed.
§ LORD ST. AUDRIES
My Lords, I think the argument of Lord Sandhurst is a curious one. As I understand, it is this—that because the farmer is able to sell mutton to the consumer at a high price, therefore the Government are entitled to commandeer his wool at much less than the market value. This seems to me to be rather curious commercial morality, and if you carry it to its logical conclusion the Government might have the wool for nothing. The pre-war price plus 30 per cent. is not a fair price to the farmer. The price in 1914—of course, different wool sales had different prices, but I am talking about the average price of good quality wool—was 11d. to 1s. a lb.; if you add 30 per cent. it comes to about 1s. 3d. a lb. Last year the price of wool was from 1s. 7d. to 1s. 8d. a lb.; therefore you are really depriving the farmer, for no reason of which I know, of from 4d. to 5d. a lb. of the value of his wool. I do not know whether the Government, in commandeering other materials for the war, have fixed their price at the same rate. When they 443 buy timber for the purposes of the Army or Navy or when they buy coal, do they fix the pre-war price plus 30 per cent.? If they do, they are getting the materials remarkably cheap. But if they do not, why should the farmer be treated differently from the coal-owner or timber-seller? It is most unjust to the farmer.
As to the advisory committees, our experience of the local forage committees does not inspire us with hope as to how the work will be carried out. There has been one long complaint, ever since the local forage committees were instituted, that proper prices were not forthcoming and that there was immense delay. With regard to the wool question, the farmers cannot stand delay. They depend upon the money they get for their wool to pay their rents at Midsummer. And you must recollect that sheep farmers were very hard hit indeed by the snow in March. On Exmoor there were twelve feet of snow, and hundreds of lambs were killed. The result was that farmers were not able to save as much mutton for the profitable time, April and May, as they generally do. Also their clip of wool was shorter because a number of ewes and other sheep had been lost. Therefore it is essential to them to have cash as soon as they possibly can. They have to pay their rent and their rates and taxes, and they have also to pay for their labour; and these are not days in which banks are at all willing to make advances to farmers.
The whole of the scheme which the noble Lord has unfolded to us this evening is one of delay. There are to be committees of wool staplers; there are to be directors, some military and some of them in the wool trade; there are to be advisory committees—the whole thing is simply, I will not say wilfully a scheme for delay, but a scheme which involves delay. But the interests of the farmers will not allow of delay. Therefore I impress on the Government that they must, in the interests of the country, carry this scheme through as quickly as possible; and they must have the 75 per cent. advance available so as to let the farmer have cash within the next few weeks. The sooner it is done the better. If the farmers are kept hanging about for their money there will be not only great dissatisfaction amongst them but dissatisfaction as well amongst the labourers because they will not be able to get their wages.
§ LORD STRACHIE
May I ask my noble friend one question—namely, whether the Department will consult the Central Chamber of Agriculture as well as the National Farmers' Union. I would point out that the Central Chamber of Agriculture is more representative of agriculture as a whole than the National Farmers' Union.
THE DUKE OF BUCCLEUCH
My Lords, I would like to thank my noble friend Lord Sandhurst for the great trouble he has taken in a short time to obtain the information which he has given us. I only wish I could congratulate those who have furnished him with the information as to the accuracy of it. At the Kettering Sales, where I happened to be at the time this Order was made known, nobody knew anything about it until they arrived at the market. Whether there was a sale or not, I do not know. This only shows how hopelessly ignorant the Department must be of the conditions. I believe I am right in saying that before the Order was issued the Department neither consulted the Board of Agriculture for England nor the Board of Agriculture for Scotland. I noticed that my noble friend said they were now consulting the Board of Agriculture, but I think that is only since the Order has been passed; and as far as one can see they took no steps to do anything until people began to make a fuss.
I beg the noble Duke's pardon. In regard to consultation with the Board of Agriculture, what I said, or intended to say, was that the proposed increase of price was fixed after careful examination of wool prices over a long period and after consultation with the Board of Agriculture, wool buyers, and other interests.
THE DUKE OF BUCCLEUCH
I beg the noble Lord's pardon. I thought that was about other questions. But let me take the question of store sheep. Take the hill farms. The hill farms in the South of Scotland and the North of England and elsewhere produce a great deal of wool, and it is said that there is no reason to give them a high price for their wool because store sheep have not risen in price 445 in the same proportion as fat sheep. The whole of the sheep they sell from these farms are store sheep. Therefore they have not only lost because of the price of store sheep not rising, but they are also to be defrauded of the price of their wool. I do not say that no lambs are sold for fatting off the hill farms, but the bulk are taken away to other parts of the country for store purposes. Therefore as far as those who are most bit by the Order are concerned there is no compensating advantage at all.
I could not follow the figures given by my noble friend. It looked to me rather as if the War Office had picked out certain figures which suited their purpose. But, after all, the real point comes to this. Is it fair and right that one class in this country should be paid a price considerably below what the article that is taken from them is worth? I do not think it is disputed that this proposed 30 per cent. over 1914 prices will be very much below the present day value of the wool. I think the very least that should be offered should be the prices of 1915. It is, as Lord Camperdown pointed out, very hard that the farmers in this country should be fined whilst the growers of wool abroad will be able to get any price they can. There is an impression, it would seem, on the Army Council that cloth is made only in the neighbourhood of Bradford, but I believe there are other places throughout the country where cloth is manufactured and where they will want wool stored.
Another point to which I want to draw attention in connection with these prices is that it is well known that, because of the supposed profits on farms, the farmer has to pay treble the Income Tax that he paid before the war. Previous to the war, under Schedule B, he paid on one-third of the value; now he pays on the full value. Of course it will be said, "But he can claim under Schedule D if he does not make that." Your Lordships know that at the present time farmers are very short of labour, and unfortunately many farmers are not very good at keeping accounts, and there is a good deal of difficulty in keeping accounts to satisfy the Treasury under Schedule D. Therefore practically you may take it that farmers will have to pay on the full value under Schedule B, or three times the Income Tax that they 446 paid previous to the war. If you take those matters into consideration and also the fact that the sheep sold off the great wool-producing farms are store sheep and not fat sheep, they show that the War Office have been acting under an entire misapprehension, and that it is time for them to review their attitude and give a reasonable price.
There is another grievance. Although certain societies and bodies have been mentioned as regards England, apparently no body in Scotland of any sort or kind has been consulted. Perhaps we are supposed to be rather touchy, but I think it must be admitted that Scottish farmers, both as regards stock and cultivation, know their business perhaps as well as anybody. I hope that His Majesty's Government will take this question into further consideration, because there is a great grievance. It really seems that the minimum price they can in justice offer is the price of 1915, although personally I think they ought to give from 10 to 15 per cent. over that.
§ LORD EMMOTT
My Lords, before this discussion closes I should like to be allowed to say one or two words on a rather broader aspect of the case which has been put before the House to-day. I do not propose to deal particularly with the case of wool, but I may perhaps express the opinion, from what I have heard this afternoon, that a case has been made out to show that the new Order was imposed without adequate inquiry having been made in regard to it. We must all agree that in present circumstances great interference with trade is inevitable. As one who has to deal every day with interference with trade, the case of this Wool Order is merely an example of very many cases that constantly come before me. When the Government interferes with the delicate machinery of trade, it almost inevitably interferes with a very heavy hand. I find myself at the War Trade Department very often in the position of having to refuse exports of commodities for which no sale appears to exist in this country. The merchants come to me and say, "What am I to do with this material? You will not let me export it. I cannot sell it here. What am I to do?" And where genuine cases of that kind exist, I must confess that I often feel great sympathy for the would-be sellers.
447 My purpose to-night—it is the only purpose for which I have risen—is to make an appeal to His Majesty's Government to institute as full inquiry as possible before these new Orders are imposed. I would even beg of them to interfere as little as they can with trade. Of course, I am not for a moment contending that we must not interfere with it very greatly. We must interfere with our export trade at the present time; that is patent to all of us. With regard to all articles like wool we have complete control of the export from this country, and I do not think anybody objects to that. Nobody can complain of it. And I should like to say, of the classes in this country who are interested in trade, that speaking broadly they have been excessively loyal and have been ready to carry out every requirement of His Majesty's Government when they have seen the necessity for it. In those circumstances I appeal to His Majesty's Government to see to it that when interference is necessary it shall be made as little hurtful as possible to all interested by making as full inquiry as possible from experts in the trade before these new Orders are made. I have found that men of experience are generally ready to meet one as fully as they can, and that when one explains to them what one requires 448 they are ready to advise as to how the new Order or Regulation may be made as little hurtful to the trade of the country as possible. That is all I have to say. I do beg His Majesty's Government to be most careful in these matters, and to consult experts, wherever consultation is possible, before new Orders are put into force.
I will, of course, represent in the proper quarter the various criticisms that have been made. But I endeavoured to make clear that the Department were availing themselves to the fullest extent of expert experience and knowledge in the various interests concerned.
Noble Lords may rely upon it that I will faithfully convey their views to the proper quarter.
§ House adjourned at a quarter past Six o'clock, till To-morrow, half-past Ten o'clock.