Lords Sitting of 28 February 1918

SHROPSHIRE, WORCESTERSHIRE AND STAFFORDSHIRE ELECTRIC POWER BILL [H.L.]
Standing Order No. 92 considered (according to Order) and dispensed with, with respect to a Petition of the Wednesbury Corporation.
Leave given to present the said Petition.

MESSAGE FROM THE KING.
Delivered by the Lord President (Earl Curzon of Kedleston) as follows:—
His Majesty having taken into consideration the eminent services rendered by the late Lieutenant-General Sir Frederick Stanley Maude, K.C.B., C.M.G., D.S.O., while commanding His Majesty's forces during the campaign in Mesopotamia, and being desirous, in recognition of such services, of conferring some signal mark of His favour upon his widow, recommends to the House of Lords that they should concur in granting Lady Maude the sum of £25,000.
The said Message to be considered on Tuesday next.

INCOME TAX BILL. [H.L.]
Order of the Day for the Second Reading road.
THE LORD CHANCELLOR (LORD FINLAY): My Lords, I rise to ask your Lordships to accord a Second Reading to this Bill. The object of the Bill is to give effect, to what I think is the very general feeling that the tune has come when the law relating to Income Tax ought to be put upon a more intelligible footing than that on which it at present stands.
The Income Tax is a great weapon for war as well as for peace. It won the Napoleonic War for us, and it will win the still greater struggle in which we are now engaged; and I think that all of us must recognise that, whatever aspirations have been entertained in the past with regard to the Income Tax being only of a temporary nature, it must now be regarded as a permanent part of our fiscal system. The tax was introduced as a war tax in 1799 by
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Mr. Pitt; and, at 2s. in the £, it yielded from 1799 to 1802 between £5,000,000 and £6,000, a year. It was repealed after the Treaty of Amiens in 1802; but when the war broke out again in the next year the Income Tax was revived, and continued in force until the year 1816. From 1806 to 1816 it stood at 2s. in the £; and in 1816, when it was repealed, it was yielding about £14,000,000 a year. When peace was made the tax came to an end in deference to the public demand for its abolition; and from 1816 to 1842 it was apparently dead
In 1842 it was revived by Sir Robert Peel, not as a war tax but as a means of putting our fiscal system on what was considered a sounder basis than that on which it had stood. In 1853 Mr. Gladstone, for the first time, extended the tax to Ireland, but he did this while announcing that the scheme was that the tax should fall in amount during the seven years ending 1860, and that, at the end of the seven years, it was contemplated that the Income Tax should cease altogether. So it might have ceased had it not been for one of those things which sometimes interfere with financial plans—I mean the Crimean War; and instead of the Income Tax going down until it should cease in 1860, it went up to 1s. 4d. in the £ instead of the 7d. in the £ which had been fixed by Mr. Gladstone for the earlier years. The year 1860 thus passed leaving the Income Tax still in existence.
In 1874 a General Election took place, and it was announced as part of the programme on which Mr. Gladstone went to the country that there should he a complete abolition of the Income Tax. Unfortunately that was not carried out because the Conservatives were returned to power; and Sir Stafford Northcote kept up the Income Tax, but at the very low figure of 2d. in the £. That was, I think, the lowest figure at which the tax has ever stood; and at that figure it yielded, for the years at which it stood at that amount, just under £4,000,000. Since the year 1874 no statesman, I think, has proposed its abolition. The Income Tax has flourished. It has reached figures that were never dreamt of by those who first introduced it, and it has begotten the Super-Tax. The Income Tax remained from 1874 until 1900 at under 1s. in the £. In the year 1900, at 1s. in the £, it yielded close upon £30,000,000. From 1900 to 1914 it yielded, at amounts varying from 1s. to 1s. 2d. in

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the £, £35,000,000 to £43,000,000 a year. Then came the war, and in the fiscal year of 1916–17 the amount yielded by the Income Tax was £186,,538,000; and, besides that, there was the Super-Tax which yielded a good deal more than £20,000,000.
We must in these circumstances regard the Income Tax as a permanent portion of our financial system; and I think that nobody can have any hope that the youngest member of the House of Lords will see its end. That being so, it becomes imperative to consider whether the form in which the Acts have been cast imposing this tax cannot be improved. There is a general agreement that these Acts are framed in a manner which rather adds to the feeling of hardship felt by those who have to pay the tax. The Statutes are drawn up in a way so confused that they are really not to be understanded of the taxpayer; and the first step to getting a reform of Income Tax Acts which may be contemplated at no very distant date is to get the law as it now exists into an intelligible shape so as to provide for alterations in the Income Tax law. The object of this Bill is simply to make the existing law intelligible.
I will quote only one thing that has been said from the Bench on this subject. It has often been a topic of remark in judgments in Income Tax cases. But there is one utterance by Lord Cozens-Hardy, sitting as Master of the Rolls, in the year 1914, which will dispense me, I think, from troubling your Lordships with more quotations. The Master of the Rolls said this—
"I venture to think the time has come when all the Income Tax Acts ought to be consolidated, so that it may be reasonably possible for the subject to ascertain the nature and extent of his liability."
I think all will agree that this is a very humble ambition that the law with regard to the Tax should be in such a shape that it may be reasonably possible for the taxpayer to understand what he has to pay.
The truth is that grumbling as to the confusion and incoherence of Income Tax legislation has become chronic, with occasional paroxysms. In these circumstances this Bill has been drawn, with very great, care, for the purpose of putting into coherent and intelligible shape the law as it at present exists, which is the first step
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towards any further reform. It is absolutely necessary, in order to enable people to see what the law is, that it should be arranged into one coherent enactment, instead of being scattered about, as it is at present, over all enormous number of volumes of the Statute law. In performing this task, the very language of the Statutes which are consolidated has been, as far as possible, preserved. Where the Statute has received judicial interpretation it is undesirable to alter the language, because it might be supposed that you intended to convey some meaning other than that attributed by the Judges to the language of the Act as it stood before. The result of what has been done by the labours of Mr. Bertram Cox and other officials at Somerset House has been to bring together the disjecta membra which at present constitute the body of the Income Tax law, and to gather into one chapter the law on a particular head which at present has to he hunted for in a vast variety of Statutes.
I will take only one instance, which will serve for twenty. Suppose a man wants to ascertain, what is of very great interest to many people now, the amount of deduction from his taxable income which he is entitled to in respect of the amount of insurance premiums, and the cases in which deduction on that account is admissible. He now has to turn up some dozen of volumes of Statutes. I will merely mention, to convey an idea of the state of the law, what they are. To begin with, there is Section 54 of the Income Tax Act of 1853, which defines the amount of deduction as being not to exceed one-sixth of the income. He goes on to the first section of the Income Tax (Insurance) Act of 1853; to the first section of the Income Tax Insurance Act of 1855, which relates to insurances with registered societies; and to Section 6 of the Income Tax Act of 1859. After that the Legislature seems to have taken a rest on the subject of deduction for life insurance premiums. It rested for some forty years, but the Legislation broke out again in 1903. The taxpayer inquiring into the subject will have to refer to Section 10 of the Revenue Act of 1903, Section 9 of the Finance Act of 1904, Section 11 of the Revenue Act of 1906, and Section 19 of the Finance Act of 1907. There was again an intermission of eight years, without further legislation on this point, but in 1915 the Legislature again took up its parable, and made provisions, which will have to be considered, by Section 17 of the

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Finance Act of 1915, Section 26 of the Finance Act (No. 2) of 1915, Sections 36 and 37 of the Finance Art of 1916, and Section 11 of the Finance Act of 1917. I should think, my Lords, that any taxpayer who proposed to inform himself on this subject would be in some danger in the course of his inquiries of running the risk of forfeiting his insurances by suicide. In this Bill, the whole of this subject—I take it merely as a specimen will be found collected in one clause, namely Clause 49 of the Bill, with the exception of some provisions of a purely temporary nature relating to the war.
This measure is not at all an ambitious one. It is a useful thing to have the law made intelligible as to what a man has to pay, and that is all that is aimed at in this measure. But it is not only useful in itself for the taxpayer; it is, as I have said, an almost indispensable step before the subject of an alteration in the law can be properly considered. If your Lordships see fit to give this measure a Second Reaching, I should propose in due and proper time to send it to the Joint Committee of both Houses by whom such matters are considered, and under whose auspices a great deal of most excellent and admirable work has been done. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a. (The Lord Chancellor.)
LORD HARRIS: My Lords, I have consulted some experts as to the intelligibility which the noble and learned Lord claims for the language now used in this Consolidated Bill, and they quite confirm what he says, and are extremely pleased to find that the language is English and not of the archaic character of the language which is to be found in the old Acts. There is some chance now of the layman being able to understand what are the impositions put upon him. I wish to take this opportunity, however, of expressing the hope that now that the Government have taken up the consolidation of the Income Tax Acts, they will follow it by taking the opportunity of remedying what is one of the most serious grievances under those Acts, and that relates to the taxation of that class of property which is very frequently described as a "wasting asset." The most notorious cases of that are mines. The present position is that, the Depart-
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ment hold that it is legitimate to tax a declared profit, although part of it is unquestionably a return of capital; and the auditors having declared a profit, and holding that the profit is a true profit, the Courts have supported the Department when the point has been fought. It is unquestionable that at the present moment it is impossible to avoid paying the tax, although part of it is on return of capital; and the suggestion which I have seen made that the difficulty might be got over by treating part of the profit as a return of capital is really so difficult that companies are unwilling to make the effort. It is a process of law which is very laborious; it is difficult of explanation, and it unquestionably requires the calling in of experts, such as surveyors and valuers, and in fact it is absolutely necessary to prove to the Court that the property is wasted by the extraction of the mineral, whatever it be. The consequence is that no company attempts to save itself by that process, and it goes on paying what it regards as a most unfair tax because its property is wasting every year and the profit on which it is paying Income. Tax is not a, trite profit. I hope the noble Lord, if he has the chance, will take the opportunity of urging the Government also to take up this question as well as the consolidation of the law.
VISCOUNT HALDANE: My Lords, I rise only for the purpose of joining with the noble Lord who has just sat down in congratulating the noble and learned Lord on the Woolsack upon having framed and introduced this Bill. Those of us whose duty it is to sit here from half-past ten until four o'clock hearing appeals know that the labour which we have to undergo in getting the various Statutes together, extracting their substance, and afterwards endeavouring to put them into an intelligent proposition in the judgment of this House, is very great indeed; and it must have involved a great deal of work to get this Bill into the shape it is.
It was truly said by the Lord Chancellor that this Bill, if it becomes an Act, will be a possession which will endure certainly through the lifetime of the youngest of us, and probably during the lifetime of several generations of your descendants, but I am not sure that this Bill will be found as clear as might appear. The subject is a very obscure one, and almost on every point—not merely in the case of insurance, which

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is comparatively simple, but in other cases—the difficulty of interpreting legislation which has changed in its application since the days of Sir Robert Peel and since earlier days than that till now is not easy and cannot be made easy. But this Bill is the first step. Of course, it cannot deal with such questions as those to which the noble Lord referred. One might add other examples, but this is not the moment to refer to them, because this Bill is simply a specimen of a very useful undertaking which Parliament has entered into by common assent every now and then to take the Statutes relating to a single subject, and, without altering a word of their substance, to alter the form and put that into what is called a Consolidation Act, which at least has the advantage that it is comprised in one volume and you can find where to refer to the various pages.
I think this House and the other House are under a great debt of gratitude to the Consolidation Committee that is going to sit on this, as it has sat on many other Bills of the same sort. It simplifies the law and prepares, as the noble Lord opposite has said, an opportunity for dealing with problems which otherwise would be almost unintelligible, but it does no more than that, and we must understand that we are not in the least aiming at making the interpretation of the income Tax law any more easy. This Bill is simply the usual kind of Consolidation Bill, and a very valuable Bill of that kind. It carries us no further than to make the law easily got at, and, so far as mechanical adjuncts can make it, intelligible. We all owe gratitude to the noble and learned Lord and to the staff of experts by whom he was assisted in preparing the Bill, for giving us something which is at least a step towards making a Statute law of this kind more comprehensible than it is at the present time.
LORD FARRER: My Lords, I wish also to thank the Lord Chancellor and to rein force what previous speakers have said as to the comfort of having the consolidation of these Acts. I am hound to say that the Bill only reached us forty-eight hours ago, and there are, I think, 258 pages on what previous speakers have said to be one of the most complicated subjects in the world. I have only just been able to look through it.
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Before the Second Reading is carried, I should like to make one or two remarks as to the curious position with regard to Income Tax in which a member of this House is placed by our recent legislative procedure. If there is one canon of the Constitution left to us it is that in any free country—and I believe this country is still the freest in the world—the basis of freedom is that taxation and representation must go together. I need not weary your Lordships with this truism, but wish to call the attention of the eminent lawyers who sit here to the following facts. The first canon of every economist of note, from Adam Smith downwards, is that taxation must fall on the person and cannot fall on things. The earliest Statutes printed in our admirable collection of Statute Law Revised—which I remember the late Lord Salisbury said was done for the benefit of the working man so that in his leisure hours he could read all the Statute Law of England in twelve volumes—was an attempt, I believe, to make clear the principles of our law, and the words in the recapitulation of Magna Charta on page 49 of the Statute (which I understand, as a layman, may still be pleaded in our Courts) are so remarkable as showing that human nature does not alter much in six hundred years that I should like to quote them. They state that—
"No freeman shall be taken or imprisioned, or be disseised of his freehold, or liberties, or free customs, or he outlawed, or exiled, or any otherwise destroyed; nor will we pass upon him nor condemn him but by lawful judgment of his peers, or by the law of the land. We will sell to no man, we will not deny or defer to any man either justice or right."
You may ask what has all this constitutional lore to do with Income Tax. I think it has much to do with it. You have all through these six centuries no doubt altered the machinery, but I hope we have not altered the principle.
But in quite recent years you have done two things. First, the Parliament Act is the law of the land. The Peers cannot alter taxation; that is imposed by the House of Commons. The first section of the Parliament Act of 1911 is perfectly clear on this point as regards this House, and I will not weary the House by reminding you of its terms, except to point out that Money Bills are thereby clearly differ-

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entiated from other Bills, and cannot be rejected by this House or even amended by an individual member of it. Therefore I, as a Peer, am to be taxed without any representation at all as regards Money Bills, which is my reason for taking this opportunity of raising the point. Secondly, you decided the other day to reject my Amendment that a Peer should have the right to vote for a member of the House of Commons.
It appears to me, therefore, logically that the result of these two Acts taken together is the highly joyful but totally unexpected one that no Peer need pay the King's taxes until the constitutional question is settled. I admit that rates are on a different footing, unless you are prepared to give up the idea that taxation and representation must go together, and in fact are willing to return to the High Tory policy of the Stuart régime. Considering that last year, as far as I can make out, the rates, taxes, and pensions in my case came to something like 13 s. in every 20 s. of income, it will at any rate he worth while trying a ease to see whether Magna Charta can still be pleaded in the Courts. This may be very agreeable for lawyers, and it would certainly offer a fine innings arguing another Ship Money case, but it is slightly humiliating for the politicians who ought to settle the question of this House, and I hope I may receive further assurances from my noble friend Lord Bryce, whom I do not see present., that his Committee do intend to bring up their Report and not force us to claim our constitutional rights by means of the Law Courts. In such a case I presume that, under our Standing Order, no legal member of this House could sit or vote because he is in receipt of money from the public purse. There are only two courses possible, either to force your money out of your pocket by presenting a pistol at you—it is a case of your money or your life—or amicably settling the matter. But that the matter must be settled is certain—"You take my life when you do take the means by which I live."
LORD WRENBURY: My Lords, it is a matter of profound satisfaction to myself that the noble and learned Lord on the Woolsack should have brought in this Bill. It has been my duty to take part in judicial decisions on the Income Tax Acts, and I confess that the puzzled frame of mind which the Lord Chancellor has
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depicted is not confined to the taxpayer. I defy anybody reading the Income Tax Acts, involved, complicated, and numerous as they are, to rise from his studies with anything but a headache. The Acts are full of long and complicated sentences, frequent repetitions and cross references, which leave you in a state of profound I bewilderment. I have felt it my duty, judicially, to express my opinion as to the enormous difficulties which exist in construing these Acts. In a recent case in your Lordships' House I made some observations on the subject which I hope were not too strong. The noble and learned Lord on the Woolsack has depicted the case of a taxpayer who wants to ascertain a particular thing. In the first place he has to trace half-a-dozen or a dozen different sections. He reads them, and, as he reads them, he becomes more involved and more and more puzzled. Probably he gives it up in despair. A Judge is not able to do that. He is hound to say that the Legislature meant something, and however impossible it may be to say what the Legislature meant, he is bound to say what it does mean. In these Acts of Parliament you will find the same word used in two totally different senses. You find the word "charge" used now to mean one thing, and now to mean another. You have to give it a meaning, somehow or other. The result of this Bill, I hope, will be to reduce this chaos to something like order and sense. It is an enormous task. The subject is a large one, the Bill is a heavy one. I hope the labours of the Consolidation Committee may result in reducing this ill-digested mass of unintelligible legislation into a form in which the skilled person can say what it means. Whether it will ever come into a form in which an unskilled person can say what it means I do not venture to say.
THE LORD CHANCELLOR: My Lords, I only wish to say one word on a matter which I have already indicated in moving the Second Reading of the Bill. It is that any credit for the preparation of this Bill is due to Mr. Bertram Cox and his coadjutors at Somerset House. The Bill will run the gauntlet of the Joint Consolidation Committee, and I trust that it will come back in a shape which will effect a substantial improvement in the law.
On Question, Bill read 2a.

THE SHORTAGE OF MEAT
Debate on the Motion of Viscount CHAPLIN, "That, having regard to the warnings repeatedly given to the Controller of Food by representatives of agriculture of great experience and repute in England, Scotland, and Ireland, that the policy announced in the summer, viz., the slaughter of thousands of immature cattle, on the scale of prices adopted by him, must have the effect, if carried out, of creating a meat famine in the New Year, this House is of opinion that the Controller must be regarded as largely responsible for the present shortage of meat, and that any powers vested in his Department by which the production of food can be affected should be transferred to the Board of Agriculture, and be subject to the control of that Board alone," resumed (according to Order).
LORD BERESFORD: My Lords, I wish to make a very few remarks, with your permission, with regard to the Motion of my noble friend Viscount Chaplin. No doubt meat is short in this country. It is short throughout the world, and the position will be very bad next May and June. It is owing to circumstances which we all know—first of all to the U-boat attack, and, secondly, to the shrinkage in production. I agree with the noble Lord, Lord Rhondda, when he spoke of the economic question of supply and demand. We have to alter a lot of laws when we are at war, and I think he was very wise in fixing prices. If he had not done so we should have had riots in this country. But where I think he made a mistake was that he fixed prices too low. If you fix prices too low the producer will not go out of his way to produce his commodity if he cannot do so except at a loss.
We must remember that wages in this country are much better, and that the people, perhaps for the first time in their lives, have been, as a whole, really well fed. The Army rations are a great deal more than they are accustomed to, and that has trespassed on the supply of meat. The health of the people is better at this moment than ever before in the history of our Empire. The object, I think, of the noble Lord has been to stop profiteering and reduce prices to the community. As far as I con see, that has been his only object; but I respectfully think that he went the wrong way to work to attain it.
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He thought only of preventing profiteering and reducing prices to the community, and the result has been that he has dried up the sources of supply. And how has he done that? He has interfered with the ordinary trade channels of the country. He has interfered with the shopkeepers, with the commercial men, with the brokers, the agents, and the retailers, and above all with the distributors. I remember saying to Lord Devonport two years ago, when he first took over the charge of this herculean work, that he would find the real bother and difficulty in the question of distribution.
Some years ago, when I was at work on the question of the food supply in reference to our trade routes, I found that in big ports like Bristol and Portsmouth, if a supply, generally sent to that locality, was upset there was no means of filling it up from places which had a food supply. What my noble friend has done is to put a, whole lot of new people, perfectly ignorant of the work, over the ordinary administrators of the trade. It would have been much better if we had had no Controller at all. If we had had a Ministry that would look after nothing but profiteering and prices, inflict very heavy fines for profiteering, but not interfering with the ordinary distributors of the country we should have been better off than we are now, and there would not have been this enormous confusion by people undertaking work of which they know nothing whatever. I should like to ask whether the gentleman in charge of cheese did not come from a museum. I believe it is correct. I want to know whether it is true that he gave ½d. per lb. more for cheese than the New Zealand manufacturers offered to accept. If he did, he cost this country many thousands of pounds of money. Then, again, linseed cake is a feeding-stuff that is absolutely necessary to this country. I am informed that the price of linseed cake is fixed at £19 per ton, but that the price of the ingredients are:—linseed, £48 per ton; rice meal, £16 per ton; and locust beans, £30 per ton. If the three ingredients which make linseed cake be at that price, how is it possible to fix the price at £19 a ton?
As to the Controller, France and Italy both tried a Controller, and in both instances it was a failure. When Germany tried it, it was in the first instance a tremendous failure, and they had to alter it. If I am

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correctly informed they had to go back to the ordinary tradespeople who understand their business. My noble friend the Food Controller knows well that many retail shops are closing all over this country owing to what I may perhaps call ignorant interference. People are going to the large Shops instead of to the small ones which used to retail the food, and food is being held up in many places owing to the want of proper machinery for distribution.
There is one more question that I should like to ask my noble friend. It is in regard to freezing plants. I believe that we have no freezing plants in this country. The French in this respect have achieved wonderful things in the distribution and conservation of food. They have established large freezing plants all over the country as well as cold storage. That is how we have been able to feed our Army and Navy so well. It has been owing to the freezing of the meat before it is put into cold store. This question of cold storage was mentioned by my noble friend Lord Lytton on December 4, when I called attention to a ship which had been sent out of a port with a full cargo of meat and had been torpedoed between the ports. My noble friend said that if there had been cold storage available at the port in question the ship and the whole of the cargo would have been saved. That is only an instance to show how much behindhand we have been in this matter of cold storage. In the Army and the Navy we have good facilities for cold storage, but I should like to know what is our position at the present moment with regard to cold storage for the community at large.
Coming to the shipping position, which is perhaps the cause of the whole of the shortage, I find that it is most serious. It is, indeed, becoming absolutely dangerous. Yesterday in the House of Commons Mr. Barnes said that it was most serious, and went on to explain that last month we turned out only 50 per cent. of the estimated amount of shipbuilding, and that this month it would be about the same. That really is a most serious position, and emphasises the point made by my noble friend Viscount Chaplin with respect to increasing production in this country. Mr. Clynes, another Minister, said that the position was very grave. I think that we ought to know from the Government how grave it is. Do not let the people suddenly discover these things. They are the easiest people in the world to handle if they only
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know the truth, no matter how bad it is. If you tell them the truth they will face it, but they are the worst people in the world to handle if they do not know the truth and it is suddenly revealed to them.
The matter of the 12½ per cent. bonus has a great deal to do with the shipping question. I am informed that since the 12½ per cent. was given, work in the shipyards has gone back 40 per cent. My noble friend shakes his head, but he can correct, me afterwards if I am wrong. That, at ally rate, is my information. Why is the shipping, according to one Minister, 50 per cent. less than the amount estimated? It seems to me that the Minister of Munitions, or whoever advises him, does not understand the difference between time and piece-work. The 12½ per cent. was granted to adjust time difference in wages, and now I hear that the Minister is going to add another 7½ per cent., and that that will leave things exactly as they were before and we shall have the old trouble over again. In other words, we are to spend a hundred lions in extra wages and are only to get half the number of ships estimated. That is the position, and the country ought to know it..
There is another danger. The men France hear that their wives have great difficulty about food. If the people knew the facts they would face them. The men who are wounded and come home into the hospitals here are going to be rationed, and they will not have as much food as the men have in France. The Army rations are to be reduced, and would be reduced further if the medical authorities had not stopped it. The real point is administration. We have seen that the administration has failed. I suggest this to my noble friend. Why not put those people over it who have proved themselves to be capable of doing the most wonderful work that has ever been accomplished in distribution? I mean the men in the Department of the Quartermaster-General, Sir John Cowan. Let these men set to work, having proved their capacity already, and undertake the distribution of the food supply of this country. I think that the position has been worse than it has been since the war, and that the Government are far too secret about it, as they have been about other things. I wish that they would tell the people the truth. I should like to know whether my estimate with regard to shipping is correct, because it is through lack of shipping that the whole of this shortage has occurred.
VISCOUNT DEVONPORT: My Lords, I certainly had no intention when I came to the House yesterday afternoon to take any part in this discussion. It was not only contrary to my intention, but it was contrary to my desire too. It is only in consequence of a statement that was made by my noble friend Lord Rhondda in the course, of his speech affecting the fixing of the prices in relation to cattle that I feel, in justification to myself and also to Mr. Prothero, with whom I was associated in that matter, that I should acquaint your Lordships with the short history of it as it came under our attention at the time when I was responsible. I understood Lord Rhondda to say—indeed, I have seen it in Hansard> this morning—that he could not be held responsible for the adoption of the principle of the descending scale of prices because that was fixed by others before his advent. "Before his advent" are not his words, but my own. My attention has been called to the fact that on two or three previous occasions my noble friend has entered the same disclaimer. He did it, I think, at the Aldwych Club and in his own country at Newport.
LORD RHONDDA: In this House also.
VISCOUNT DEVONPORT: I am informed by Mr. Prothero—and I am not quoting him without his permission—that he, on his own behalf, has entered a strong protest against the statement. I am bound to say that when I noticed the statement first I did not feel in a very protesting humour. I knew the difficulties of the situation with which my noble friend was confronted, and I thought that I would let the matter pass. But when it was repeated again yesterday with some considerable amount of emphasis, I thought that the moment had arrived to clear up the situation.
I will recite as briefly as I can the course of events that led up to these particular prices. As long ago as March of last year the Government, for very good reasons—I need not enter into the details as to what those reasons were—felt that it was desirable to utilise our home resources of cattle in order, I think, mainly to accumulate reserves of imported meat for Army services. I want to emphasise this point, that the question related at that moment to Army consumption and to nothing else. The Government set up a Committee, which I think I may call a Cabinet Committee, who were appointed to take the necessary
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steps to provide a supply of home-killed beef for Army consumption. The members of that Committee were Mr. Prothero, Minister of Agriculture, myself as Food Controller, a representative of the Quartermaster-General's Department, who, of course, was mainly concerned from an Army point of view—I think General Crofton Atkins was his representative—and Sir Thomas Robinson, the Agent-General for Queensland, who, as many of your Lordships know, has taken a most active and commanding part in all matters appertaining to the importation of meat from overseas, and has had a very considerable experience in the matter.
Well, this Committee met, and we deemed it was the most fitting way of dealing with the question to set up a thoroughly competent practical Committee consisting of men who had a wide experience in dealings with cattle, and also competent to advise on matters affecting the purchase of cattle, also their slaughter, their storage when killed, and distribution. We asked Sir Thomas Robinson to become Chairman of that Committee, and he so became. On it were specially selected representatives for each of the Boards of Agriculture of the Kingdom—for Mr. Prothero's Department, the English Department; for Mr. Duke's Department, the Irish Department; and for Mr. Munro's Department, the Scottish Department. We directed this Committee to address itself to the reference that we drew for it, and that embraced not only the question of buying of cattle, but of providing increased slaughtering accommodation, additional cold storage accommodation that would become requisite, and matters of that kind.
In due course, indeed, at the end of May, that Committee reported its recommendations, and submitted a scale of prices. I happen to have been fortunate enough last evening to come across the Report of this Committee. It was among my papers, and so I can quote from it without any fear of its authenticity being questioned. These were the prices that were recommended by this Committee—I quote from the Report:—
"That the maximum price to be paid for first-grade steers and maiden heifers for Army requirements be fixed as follows:—
August, 77 s. per cwt. live weight;
September, 74 s. per cwt. live weight;
October, 72 s. per cwt, live weight;
November, 72 s. per cwt. live weight;
December, 72 s. per cwt. live weight.
THE FOOD CONTROLLER (LORD RHONDDA): A descending scale.
VISCOUNT DEVONPORT: Obviously. It is not an ascending scale, it is a descending scale. I do not know whether my noble friend makes any point of that.
LORD RHONDDA: Certainly.
VISCOUNT DEVONPORT: He makes a point of it. Well, I rather suspected, when he used the word "principle" in his speeches, that he intended a good deal by that. But I submit that is not the point of controversy at all. The question is the question of price. It is the price that has caused all this excitement among the agricultural classes; it is not the question whether the principle of a declining scale has been adopted. It is a question as to whether the price that was recommended by this thoroughly competent Committee was a sound one, or whether the price as finally adopted by my noble friend was sound or not. However, I am glad to have elicited from him that he really does pay a great amount of attention and attaches a great deal of importance to the word "principle." I have had the opportunity of giving my opinion upon the divergence of views between people interested in the bare principle and the solid substantial matter of price.
As regards the descending scale, the Committee made it quite clear that they had not in mind any question of principle of a descending scale, but the descending scale that they recommended corresponded, I am advised, precisely with the normal decline of prices at those periods of the year that had been taking place year by year so far as records could be traced; that is to say, that in justification for the price in August being the highest price, the cattle that are taken off the grass in that month—the percentage of them that at that time have finished—cannot be so large as those that are taken off in the following month. That is perfectly obvious to anybody who knows anything about agricultural matters. The grass is not ready for the cattle under ordinary circumstances much before the first week in June, and consequently to fatten an animal by August it must have been in a fairly advanced condition before it is turned on the grass. But, of course, when another month has elapsed there is a large percentage of animals progressing and becoming fit for sale, and consequently
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it is a matter of supply and demand. And I was assured by tie Committee and have been assured since that their only object in fixing this declining price was to make their suggested price correspond to what had been the normal decline in prices year by year for these periods. And I may say, as regards the December price, that although a price for December was fixed, it was well understood that the buying for Army purposes would terminate at the end of November, at the latest in the first week in December. They wanted the Army demand to be swept away before the Christmas trade demand for civilian purposes came along, so although the price of December is mentioned, as a matter of fact it was not expected to come into practical action.
I think I ought to mention this in justification of my noble friend, and I do not want in any way to make a false point—that it was always intended, certainly by me, that prices would be applied and would be continued for cattle purchase for civilian consumption. It is quite obvious that that must be so. I saw that the very moment that the Government decided that we were to deal with our home supplies for Army consumption. It was a self-evident proposition that the necessary corollary would be to establish the same price for civilian purchases; otherwise we should have had this astounding position of affairs, which could not have endured for an hour, that you would have had two prices for the same commodity in the same market. That would have been impossible of course; therefore I desire to make it clear that. I always wanted prices to be applied and continued for cattle purchased for civilian consumption. I will remind your Lordships that, from the prices I have read out, 72 s. was the last price, and that, as far as I am concerned, would have been the basis of price for the purchase of home-reared cattle for civilian purposes.
On June 6 Mr. Prothero and myself and the other members of the Cabinet Committee (as we termed it) met to consider the Report from Sir Thomas Robinson's Executive Committee, and the submission as regards prices. We came to the unanimous conclusion that those prices should be adopted. I was in a rather difficult position at that moment. I had resigned my office at the end of May, but I was carrying on—I hardly like to say that it was in the capacity of a locum tenens—but

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I was carrying on while awaiting the arrival of some man of courage to succeed me. Day by day it was reported that A.B. had surrendered to the seductions of the Prime Minister; but day by day the particular person failed to materialise until my noble friend stepped into the position. I was pressed by Mr. Prothero to publish these prices, but my reason for not doing so was not merely that I was holding the office tentatively (as it were) but I deemed that it would be necessary, before doing so, that a corresponding or co-related scale of meat prices should be fixed, as these prices were to apply to civilian consumption, first of all, for the carcase, and, secondly, for the retail price of each and every joint sold by the butcher. My noble friend proceeded on those lines, and ultimately fixed the prices not merely for the live animal but for the carcase, and then finally for every part of the carcase before it came into the hands of the butcher for sale. So I would not consent to publish these prices because it would have been a very incomplete affair for civilian purposes. It did not matter much to the Army; it was sufficient to fix the price for the live animal in that case; but when it came to be a question of civilian consumption it was necessary to carry the thing through every stage.
That was the position when I left office. When my noble friend succeeded me, I understand that he had this matter brought immediately to his attention and that he decided to reject these prices altogether. He held the view that the proper method of procedure was to adopt one flat rate; and the rate, I believe, that he held to strongly for some time was that of 60 s., subject to compensation being paid in hard cases where men could show that owing to the high prices at which they had bought their cattle they would be subjected to loss at that figure. I do not think that I am stating what is incorrect when I mention that price of 60 s. Finally, according to my noble friend's own statement, he found the course that he favoured was impracticable; he was advised not only by his own Department but by the Board of Agriculture not to proceed on those lines, and ultimately he issued the prices with which we are all now familiar. I have endeavoured to explain that as well and as simply as I can; and I hope that I have succeeded in putting your Lordships in possession of the true state of affairs.
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I said at the beginning of my remarks that I had neither the intention nor the desire of speaking in this debate; but since I felt it incumbent upon me to make some observations I have paid a little more attention to the remarks of my noble friend. I would like, but not in a spirit of hostile criticism, to say a few words on another aspect of my noble friend's speech of last night. I refer to the question of prices. Lord Rhondda said yesterday that when he took office in June prices had been left to the free play of the law of supply and demand; that prices were soaring; and that his first object was to prevent the further soaring of prices. Then the noble Lord went on to claim that he had obtained success in preventing the further soaring of prices, and that he had brought down the cost of living by something like 8 per cent. That figure was not unfamiliar to me, because my noble friend Lord Milner, upon the occasion of a debate on Industrial Unrest, dealt, as he was expected to, quite properly with the large increase in the prices of food-stuffs covering the period of the war; and he mentioned that the progression at first had been slow, but that it had accelerated in the second year of the war, and that, in the first six months of last year, I think he used the words that it had "advanced terrifically," or something like that. Finally in July of last year, the noble Viscount told us, the increase over pre-war prices amounted to 104 per cent., and that prices still rose until September, when they had reached the high figure of 105 per cent. above those of pre-war days. Lord Milner then pointed out that, for the first time, a drop had taken place in this unbroken sequence of rises, and that prices had fallen from 105 per cent. to 97 per cent. That statement seemed to me rather curious at the time, and I thought it was one which would require qualifying; so I ventured to put to my noble friend a question right at the end of the debate. I do not think the question attracted very much attention, as the noble Marquess was on the point of withdrawing his Motion; but it is recorded in Hansard and, with your Lordships' permission, I will read the question. I said—
"May I ask a question arising out of the statement made by the noble Viscount, Lord Milner, in the course of his speech, dealing with the increased percentage of the cost of food over a period? I think he mentioned that the prices continued to rise until September of this year, when they approached somewhere about 105 per

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cent. in excess over those of 1913; then there came a diminution which brought them down to somewhere about 97 per cent. The question I want to ask is, Was that diminution affected by the artificial reduction in the price of the loaf?
And my noble friend quite frankly said, "Yes, it was." Now I desire to put a question to my noble friend. (Lord Rhondda). He mentioned last night that he had brought about a reduction of 8 per cent. I want to ask him whether his 8 per cent. has taken into computation the subsidised loaf? Can he tell me that now, because it has a very important bearing?
LORD RHONDDA: I prefer not to carry on the debate in this way. A reply will be given to the noble lord in due course, and I think it is rather too much to ask mite to answer a question in the middle of the debate.
VISCOUNT DEVONPORT: I am sorry if I have unduly trespassed in asking the question; but I will assume that the position remains as it was when the noble Viscount, Lord Milner, courteously and frankly replied to the question which I quoted a minute or so ago. My noble friend in one of his speeches claimed, with regard to the successful results of his endeavours, that out of twenty-three articles of food of primary consequence he had made reductions in the price of thirteen. It would be a matter of interest if in the course of the reply we may be told what are these articles. I do not ask simply out of idle curiosity, but I ask it in connection with this 8 per cent. diminution that my noble friend claims to have made. I ask it in view of the fact that many of the most important articles of food show no reduction whatever, but have continued to soar; and I put that against the statement of my noble friend that he has prevented the further soaring of prices, and has brought down the cost of living by something like 8 per cent.
Now let me enumerate some of these important food products that have not only shown no reduction, but have largely increased in cost during the last six or eight months. I take the period from June, 1917, when my noble friend look over the position of Food Controller, which I vacated. In June of last year butter was 185 s. per cwt., and the maximum retail price at which the bulk, at any rate, of the supplies which came to this country was sold was 1s. 10 d. per lb. To-day its control
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price, is 232 s. per cw., and its retail price 2s. 6d. per lb. Then take bacon. The price, taken by the side, was 108 s. wholesale; to-day the control price is 172 s. The retail price last June was 1s. 3d., while to-day it is 1s. 11 d. Lard, another prime article, was in June 113 s. per cwt. wholesale and now is 152 s. The retail price was 1s. 2d., and to-day it is 1s. 6½d. My object in quoting these augmentations is to make, it clear that the noble Lord, although I am sure he has exercised a great amount of endeavour and a considerable amount of skill, is not quite entitled to attribute the enhancement of price as having taken place prior to his accession to office, and to claim that since he has held his position he has prevented the further soaring of prices.
There is one other matter of a similar kind to which I would like to claim hits attention for a second. Among this list of articles that he claims to have reduced in price he included cheese, for which he has fixed a control price of 1s. 4d. per lb. I would remind him, and I think he will admit, it, that the contracts that brought about this control price were effected with the New Zealand Government and the Canadian Government daring the time when I was the Food Controller. I think it is fair that I should mention that fact.
One other item in which he claims to have brought about a large reduction in price is potatoes. He said they rose 144 per cent, above the zero line, and are now down to 36 per cent. I cannot make out how this 8 per cent. reduction which he claims has arisen. If in addition to that the subsidised loaf has been thrown into the computation, I think the statement requires readjustment, and if I am right in my contention I think my noble friend will have difficulty to show that he has made this reduction. I am not attempting in any way to suggest that I should be disappointed if he could show that reduction. On the contrary, no one would be more pleased than myself. But when he goes out of his way, as he did yesterday, to point out that until the time when he came into office prices were allowed to be at large, as it were, I think I am entitled to point out that at all events, to put it mildly, some of his claims require some little scrutiny. So much for the question of prices.
I want now to say a word in illustration of my views, or some of them, on food

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control. I do not suggest for a single moment that my noble friend has taken a wrong course. No doubt, in many of his actions, he has pursued not only the right course but the only course which it was open to him to pursue; but would like to give an illustration within my own experience of where control, it if had been attempted to be exercised, would have led, if not to disaster, at any rate to something very near akin to it. I am referring to breadstuffs. When I took the position of Food Controller, my attention was immediately drawn by the Wheat Commission to a very serious situation of affairs, proceeding from the fact that by order of the Government they had accumulated very large stocks of breadstuffs in Australia, and that in consequence of shipping difficulties it was becoming very palpable, day by day, that those supplies would not be available, that they were too far removed to present any prospect of their being utilised for our purposes, and that in the meantime the Government—not this Government—had stopped the Wheat Commission from operating in the nearer market, namely, the North American market, owing to difficulties connected with exchange. The problem presented to me was this, that if we were not allowed to have access to the American market, and if the difficulties could not he overcome (and apparently they could not) of drawing upon those supplies which we had purchased in Australia, a serious shortage must ensue, and there were very strong indications that sooner or later it would lead to famine.
I was thus made fully acquainted with the views of the Commission, and I placed myself in communication with the Chancellor of the Exchequer, who took a thoroughly sensible and quick view of the situation, and authorised me to operate forthwith in the American market, which hitherto had been closed to the Wheat Commission. He made no difficulty about finance, no difficulty about exchange. He recognised, as I did, that the supreme thing was to get supplies. When I was able to tell the Wheat Commission of that decision I said to them, "Now, once you are in this market you go on buying, buying, buying, and never cease until somebody stops you, and it will not be myself." They proceeded accordingly. What happened? They bought, and bought, and bought, and of course prices rose, and rose, and rose, and the loaf which was 10 d. when I became Food Controller rose to 1s. There was a
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great outery, of course; people were accused of profiteering and what not, but the result was that we got the supplies. Had we not proceeded on those lines, and had we not bought without any let or interference, there would have been a bread famine in this country long before the harvest of 1917 arrived. So successfully were these buying operations conducted and so clean a sweep did we make of all the supplies available in North America—notably in the United States—that immediately prior to the harvest in America the State of New York was compelled to import supplies from Canada. The only point I want to make good is this. You can have too much of control, and if you control injudiciously you really turn off the tap of the flow of supply. If in connection with the wheat supplies I had said to the Wheat Commission, "Not a cent. more than $2.50 will I countenance for wheat," you would have had a bread famine in this country before the harvest. Control is absolutely necessary in many ways. My noble friend could have done nothing else in many cases of control, but I do submit, with great deference and in no hostile spirit, that control wants tempering with good judgment; otherwise, diastrous effects may result.
VISCOUNT MILNER: My Lords, I am sorry to intervene between the House and the noble Earl, Lord Selborne, who I know wishes to address us, but I think a few words from me at this stage may possibly save time by preventing certain misunderstandings. I am also anxious, as far as possible, to bring a certain sense of proportion into this discussion, for it does seem to me that an enormous superstructure of criticism and. disapproval has been based upon a rather slight foundation of fact. The noble Lord who has just addressed us with so much force, and whose services while he was Food Controller I have often had occasion publicly and otherwise to appreciate, seems to me to have somewhat mistaken the point of the arguments of my noble friend the present Food Controller last night, when he was speaking about the reduction of prices, or the maintenance of prices at the high level which they had reached, and which, as I believe, would have been far surpassed now if it had not been for the action of the Government. I do not think my noble friend Lord Rhondda was trying to take any special credit to himself He was

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defending the policy of the Government in fixing prices.
I am prepared to maintain that it was an absolute necessity to intervene at the time we did in fixing prices, and that if that course had not been followed you would have had a perfectly terrible condition of affairs in this country to-day. Of course, it was only done by spending a great deal of public money. We members of the Government are not taking any special credit to ourselves for the fact that we have kept prices at a certain level by an enormous expenditure of public money. It was no stroke of genius. There was nothing wonderful about stepping in between the consumer and the foreign producer to whom you have to pay a certain price regulated by market conditions. There is nothing wonderful in stepping in, and, as I say, no stroke of genius in taking that burden upon the shoulders of the country. But I believe it was the right course to pursue, the only course which any Government in our position could have pursued; and all that my noble friend Lord Rhondda was pointing out last night was that it was justified, and he was giving the reasons which necessitated our course. It was not, as I understood it, any reflection on the action of his predecessor. In fact, I deprecate most strongly—I really do deprecate most strongly in a matter of this kind the attempt to throw blame on this or that particular person. Whoever is Food Controller under present conditions has to deal with a practically insoluble problem. Whoever is Food Controller to-day has a problem to deal with, and he works under conditions in which the wisest and most far-seeing man is bound to make a certain number of mistakes. In spite of that I think we have good cause to be grateful both to the noble Lord who has just spoken—who in certain particulars rendered very important and valuable service to his country—and the noble Lord who sits behind me and who is at the present moment so greatly attacked.
Let me say this, my Lords. Do not let us forget that whatever the difficulties with which we are confronted to-day, and however serious may be the shortage of certain articles of necessity, we are yet, after three and a-hall years of war, in a far better position than an other of the warring countries, except the United States, in the matter of supplies—and this notwithstanding that our position when we
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started the war was a peculiarly precarious one. No one I am sure will admit that more than the noble Viscount who introduced this Motion last night. All his life he has been pointing out, as some other noble Lords also have pointed out—I may say I myself was a humble follower of his in that respect—the extreme danger which this country ran in case of war owing to the fact that it produced less of the articles required for consumption in this country from its own soil and by its own materials than any other great European country. It was a position of extreme danger, but it was the policy of the country, steadily followed year after year and in the teeth of every warning, which produced that position. And the wonder is, starting as we did under that great disadvantage, that after three and a-half years of the greatest war in history we are not in greater straits to-day than we actually are.
Observe this, that not only did we start with the great disadvantage of a very limited home production, but that the great national advantage on which those had always relied who told us that our limited home production did not so much matter—of a free oversea cone communication has, during this particular war, been more affected than in any previous war in our history. If that condition had been foreseen. I doubt whether there would have been anybody in this country who would not have taken the view so vigorously, advocated by the noble Viscount, that it was essential for us to increase our home production in view of the possible danger of war. Do not let us ever forget the peculiarly disadvantageous position as regards food supplies with which we started, or how that original disadvantage has been aggravated by the course of the war, and by the attack which has been directed against our overseas communications, with an energy and a persistency which has perhaps never been exhibited in any of the past wars of this country. Now, my Lords, there are two points, as it seems, involved in this discussion. One is the general question of the wisdom, or un-wisdom, of the policy of fixing prices, and the other is the other is the amount of judgment which has been shown in the particular prices that have been actually fixed.
THE EARL OF SELBORNE: I beg pardon for interrupting the noble Viscount, but there is nothing about fixing prices in the Motion.
VISCOUNT MILNER: It is perfectly true that there is nothing about fixing prices in the Motion, but tie discussion in this House, as the noble Earl will admit, has ranged somewhat widely, and certainly a great deal has been said in the course of the debate about fixing prices. Nevertheless, I was just going to say that I did not propose to dwell any further on that point, because I think it is now generally admitted that fixation of prices was necessary. There has been a misunderstanding, I think, on the part of many noble Lords in the idea that we have limited our supplies from overseas by fixing prices, or rather by hesitation to pay the prices which were necessary in order to obtain those supplies. The noble Lord who spoke last has told your Lordships how he, with the full consent of the Chancellor of the Exchequer, obtained, at a very critical time, a large supply of American wheat without sticking at any rise in price. I do not know what may have been done before that time, but I can say positively that since that time the same policy has prevailed throughout. We have not lost any chance of obtaining supplies from overseas through any hesitation to pay whatever price was necessary in order to obtain them. Therefore, as far as that branch of the subject is concerned, there is no possibility of attributing any scarcity which exists—and I maintain that the actual degree of scarcity which exists has been rather exaggerated in the course of the debate—as far as overseas supplies are concerned, to any hesitation on the part of the Government to pay any price necessary in order to obtain those supplies, but solely to the difficulty of getting them here.
Let me say one other word, because I think it is important for the nation and the world generally. Our greatest difficulty is that of obtaining overseas supplies, but that is not wholly due, especially at the present time, to difficulties of shipping. No doubt we have great difficulties about shipping, but there are other causes which have impeded importation into this country, especially in the latest months even when shipping was available. Great difficulties have arisen in connection with transportation on the other side of the Atlantic, and there are a number of causes which happen to have contributed, concurrently, to the difficulty of obtaining supplies from overseas at this time. It is not merely a question of shipping; the difficulties in regard to shipping are somewhat exagger-
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ated, indeed very much exaggerated. The present shortage of certain articles in this country for which we are dependent upon foreign countries is attributed entirely to a shortage of shipping. That is one of the causes, but it is not the only cause, and it is not, at the present moment perhaps, the most potent cause. There are other causes connected with transportation on the other side of the Atlantic, and other matters which I do not wish to enter upon, which are contributing causes to the shortage of certain articles under which we are suffering. So far, I hope I have made it clear that the shortage—which is mainly due to the reduction of our importations from overseas—whatever it is due to is not due to any hesitation on the part of the Government to pay the price that may be necessary to obtain the articles which we need.
There remains the question of the home prices—whether the prices that have been fixed for articles produced at home have, or have not, been too low. Obviously, if you fix the price at too low a figure, which does not leave a reasonable profit to the producer, you run the risk of diminishing the supply. Now I am not the Food Controller. My good genius prevented me from being Food Controller, for I was offered the post and it was even very vigorously pressed upon me. It was a most fortunate day of my life when my good genius intervened and saved me from accepting it. But I am certain of this, that if an archangel was to occupy the position of Food Controller, if you had a whole series of archangels succeeding one another, they would nevertheless be discredited one after the other and exposed to the most fierce criticism and general disapprobation. I say that I am not the Food Controller. I thank my stars that I am not. Therefore it is perfectly impossible for me—and I shall not attempt it—to follow my noble friend who sits behind me through the labyrinth of Orders which he has necessarily had to issue, or to try and prove that in every case in which he has fixed a price he has fixed the right one. Knowing what I do of the imperfections of human nature, I should think it probable that in the numerous prices he has had to fix he has made some mistakes. He may not have done so, but if he has I think that he must be forgiven for his lack of omniscience. But I am very anxious to clear him and everybody else

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who may be concerned, of guilt in respect to one particular fixation of prices
We have heard a great deal—and I think it is the most serious of the charges I hat have been made against my noble friend—about the fixing of the price of cattle which took place in July last, and which is, according to the Motion, it seems to me, held responsible for all the troubles that we are suffering from to-day in the matter of meat. I should like to tell the House exactly what happened in that case. There seems to be a disposition on the part of various Departments to bandy the blame backwards and forwards from one to the other. I am prepared to save them the trouble by taking the blame upon myself. Me, me; adsum qui feci; in me convertite ferrum. What happened was this, that a scale of prices for cattle for every month intervening between July and the end of the year was proposed by the Department of Agriculture. A different scale was advocated by the Food Controller. The matter was the subject of a long and protracted controversy. As it happens, a great part of the work of the Cabinet in these days necessarily consists in adjudicating between different Departments, and the only way in which that can possibly be done and the work got through under present conditions, when the total labours of Government are about five or six times or even twenty times as great as they are in ordinary times, is by means of Committees, in which the warring Departments are brought together under the presidency of some member of the Cabinet who does his utmost to get them to agree, and, if they cannot agree, he finally on behalf of the Cabinet gives a decision. The decision may be right or wrong, but we are constantly criticised—I think often justly criticised—on the ground that we do not give decisions. People are always saying, "If we could only have a decision." Well, you would have very many fewer decisions if this system were not adopted. This system is adopted, and it is a very serious responsibility for the particular Cabinet Minister who often has to give a decision, and who has to give it necessarily on many subjects with which he is not himself familiar, and upon which he is not an expert. All he can do is to hear the arguments of both sides, inform himself as best he can of the circumstances, and then take his courage in. his hands and give the best judgment, which his intelligence enables him to give. That is all that can be done.
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That is what I did in this case. I fixed the prices. I heard the arguments of the Agricultural Department, and I heard the arguments of the Food Controller. In the prices Which I finally fixed, subject to the approval of the Cabinet, I thought that I had leant very midi more to the side of the Agricultural Department than I had to the other side, and as a matter of fact the prices for the month immediately following the time when the decision was given wore absolutely the ones proposed by the Department of Agriculture. It is perfectly true that for the later months of the year, November and December, I accepted a lower figure than that recommended by the Board of Agriculture and took the figure which was advocated by the Food Controller. I ought to add this in order to make the matter perfectly clear. When I gave that decision both parties expressed their dissatisfaction. They both thought that I was wrong, very wrong. I was rather comforted at the time by that fact, and thought that perhaps I had succeeded in striking a golden mean. Both parties disapproved, but they accepted the decision of the Government as represented by me. That is the whole story.
Now let me say a word about the result. I think it is very likely true that the fixing of lower prices for the end of the year—though they were high prices compared with those of previous years, indeed very high prices—has had the effect of bringing a larger number of cattle into the market in the months immediately preceding the end of the year and a smaller number in the months since. I believe that is undoubted.
VISCOUNT CHAPLIN: And a great wastage of meat. That is the great thing.
VISCOUNT MILNER: I am not so sure that there is a great wastage of meat.
VISCOUNT CHAPLIN: Ask Mr. Prothero.
VISCOUNT MILNER: Even supposing that there is a wastage of meat—I do not admit it—
VISCOUNT CHAPLIN: There is.
VISCOUNT MILNER: Never mind. We will not continue the discussion. I say that I do not admit it. I want to know what is the extent of it.
VISCOUNT CHAPLIN: I have stated it often.
VISCOUNT MILNER: I have been careful to inquire, and I am told on very high authority that the additional number of cattle slaughtered in the earlier months that under other circumstances might have been slaughtered in the later months was something like 130,000, which I believe is about two weeks' supply. I do not mean to say that if before Christmas 130,000 cattle were slaughtered that had better have been slaughtered after Christmas it is not a serious thing. It means, of course, that instead of spreading a certain scarcity over four months, there was an abundance during two months and a scarcity during another two months. I think that is very likely the case, and, if so, I think that a mistake was made, and I must take my responsibility for the mistake. I hope that the other parties concerned in the matter will regard themselves as absolved, and will not pursue the controversy as to who was more to blame because none of them was to blame at all.
I want to know whether really that error, if it was an error—I am willing to admit that it was—is sufficient to justify a Motion which certainly gives the impression that, if it were not for Lord Rhondda's action, all would be for the best in the best of all possible worlds as far as meat was concerned. What is it that the House is being asked to say? It is asked to express the opinion that the Controller must be regarded as largely responsible for the present shortage of meat, and that any powers vested in his Department by which the production of food can be affected should be transferred to the Board of Agriculture, and be subject to that Board alone. I maintain that the present shortage of meat has been only slightly affected—no doubt it may have been slightly affected—by the action to which I have referred. If it is true—and I say I have it on the highest authority, a high agricultural authority—that the whole amount of meat involved is two weeks' supply, then, though it might have been better to spread this additional two weeks' supply over four weeks instead of concentrating it on two, the effect of two weeks' supply, even if it had been absolutely lost, instead of being merely badly distributed, cannot by any human possibility be held to be largely responsible for the
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present shortage. And, as a matter of tact, it is not so.
The present shortage is due to many causes, and by far the greatest cause is the reduction of the amount of imported meat, which, for reasons which I have given, it is beyond the power of any Government to control. There is a reduction in the importations which is very, very serious indeed, though I am glad to say I do not think that it will continue on anything like the present scale. As your Lordships are aware, the most drastic steps have been taken to enable the country to carry on in the interval. Far and away the most important cause of the present difficulty is decreased importation. The second important cause is the shortage of feeding-stuffs. Noble Lords opposite are perfectly aware that nothing could have prevented a considerable reduction in our stock It was absolutely necessary and inevitable, in view of the fact that we were not in a position to import anything like the amount of feeding-stuffs which were requisite for maintaining the old quantity
And in this connection I should like to refer to one argument which was used, I think by the noble Viscount opposite, or by one of the speakers, who seemed to think that we might be in a position to import more meat or to import more feeding-stuffs if we had been more drastic in our reductions of other classes of importations. I should like noble Lords to realise that the question of priority as between different classes of articles competing for our limited amount of tonnage is, perhaps, of all the great questions at present besetting the Government, the one which receives the most constant, the most earnest, the most laborious consideration; and that undoubtedly—I cannot go into details about this, but you may take it from me—the two things which suffer least and for which almost everything else is sacrificed are the food supply and munitions of war.
Let me say, in passing, one word on that subject. If we had been prepared to sacrifice the war, if we had been prepared to allow our men in the field to go short of supplies and munitions, or if we had been ready to withdraw the long arm of England from the protection of her distant Empire, I dare say we might have avoided any shortage of food in this country. But we have not done that. However much the German submarine may have embarrassed

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us in the matter of food— and though it has embarrassed us, it certainly has not starved us—we have not allowed it to diminish the necessary supplies for our Armies in the or allowed it to force us to withdraw a single expedition, however distant, which we regarded as essential for the defence of our Empire and for the successful conduct of the war.
Well, that is really a digression which I hope your Lordships will forgive me, but I am not sure that, it is not material that the public should recognise this. Because I think if they knew for what purpose and with what objects they were subjected to certain hardships they would show even greater patience than they do. On the whole, I think they show great patience in enduring whatever hardships they are put to. Except for what is necessary for the conduct of the war, which we will not starve, everything else gives way to the food supply. As a matter of fact, the percentage of reduction in our importations of food is far less than the percentage of reduction in every other article except munitions. Somebody suggested that an excessive quantity of paper was still imported. What do your Lordships think the reductions of paper have been? The paper imported in 1917 showed a reduction of 80 per cent. on the pre-war importations—only one-fifth of the quantity was imported; and on pa per-making materials, again, there was a eduction of very nearly two-thirds. I give that merely as one instance in answer to the suggestions which have been made that the shortage of food might have been averted if we had been more drastic in our reduction of other importations.
I have detained your Lordships longer than I intended. I have now covered most of the points with which, as a non-expert in this matter, I am able to deal; but I want to ask your Lordships finally whether, in view of what I have said, it really is just to attribute so much as this Motion does attribute, in any of the difficulties from which we are at present suffering with regard to meat or anything else, to a particular action of the Food Controller? I think it is calculated to mislead the public. I am the last person in the world to want to pretend that the Government is infallible. I am always, perhaps, rather too ready to admit a mistake. But surely it would have a very bad effect upon the country, at this time, if it were to go forth as the judgment of the House of Lords that
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the hardships from which the people are suffering are due principally and mainly to errors committed in official quarters. It is totally untrue. Even if errors have been committed, they have nothing like the degree of importance which this Motion attributes to them; and I think it would have a disastrous and a regrettable effect if a. Motion of this kind were passed by your Lordships' House.
It is not in the least any regard for the Government or myself which leads me to make this appeal to your Lordships. I am not objecting in any way to the criticisms which have been advanced in this House; but I do object to the exaggerated terms of censure in which the Motion is couched, and I hope that your Lordships may see fit to allow it to be withdrawn after the discussion we have had, and after such speeches as those to which we may yet listen. It would not be possible for the Government, of course, to accept the Motion inasmuch as it throws blame upon a particular member of the Government who is not the person who ought to be censured, if anybody is to be censured, in the matter; also because, in view of the extraordinary difficulties which any policy of fixation of prices involves—and we are all agreed, I think, that fixation of prices has been necessary—it would not be consistent with wisdom, or with fairness, or with temperance to be too severe in censuring a particular mistake
THE EARL OF SELBORNE: My Lords, let me clear away at once a part of the ground before I to deal with the arguments of my noble friend. I do not agree with my noble friend Lord Lamington that there ought have been no fixing of prices. I am entirely in accord with what the noble Lord, Lord Rhondda, said, and with what Lord Milner has said, that in time of was you have to fix prices. But let it always be remembered that it was not the fault of the British farmer that prices rose; it was entirely the fault of the economic system in which this country had persisted for 50 years before, which made us dependent to such an enormous extent on overseas supplies. The result was that directly those supplies began to fall short home products began to rise in price. But the prices would have risen to wholly unjustifiable heights unless they had been fixed. Prices can be fixed so as to give a perfectly fair profit to the producer, even under war conditions, and yet be within

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the reach of the consumer; and Lord Rhondda has succeeded again and again in fixing such prices.
My criticism of the Food Controller and of the Government is that, perfectly gratuitously, they have ignored the advice of the Department of Agriculture, and fixed prices that could have only the result of reducing our food supply. That is my indictment. Take the case of meat, the history of which my noble friend has told US. There is nobody in your Lordships' House who is a greater admirer of the noble Viscount who has just spoken than I am. I think he very seldom makes a mistake. He has told us that he is responsible for fixing the prices of meat. I think he made a great mistake; and I do not admit that the consequences have been as comparatively small as he has stated. The consequences have been cumulative, Let me explain. The process of the manufacture of beef, like the manufacture of coats or ships, is one continuous chain. It is not all done by one man in one place; half a dozen, or a dozen, men supply a certain stage in the process of manufacture. What the Government did, by the cumulative effect which I am going to describe ater, was to cut out one big chunk from that chain of manufacture, so that a moment came when the process of manufacture came almost to a standstill. It was not only the fixing of prices, it was the killing of the store cattle.
VISCOUNT CHAPLIN: Lean cattle.
THE EARL OF SELBORNE: It was the want of confidence put into the heart of the farmer which prevented him from buying such store cattle as he could buy; and, in addition to those three things, there came, I think, a most unfortunate series of speeches from the noble Lord the Food Controller. I can only describe his attitude towards the farmer on more than one occasion as blustering—bullying. The fact is that he has had his eye on the large and prosperous farmer. That is not the man on whom you should have your eye. Because a farmer has plenty of capital and great experience and is doing well—making a large profit, perhaps—it does not follow that the small farmer is doing the same. The small farmers amount to 80 per cent. of the total number; and because a farmer with capital and experience, and who is manufacturing under the most favourable conditions, is doing well, or very well, it
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does not follow that; the small farmer is doing the same; and if you want to get the bulk of production von must regulate your attitude and fix your prices, not with a view to the farmer who is doing best, but with a view to the small farmer who is operating under much less favourable circumstances. That is where the most unfortunate effect of the noble Lord's speeches came in. He fairly frightened these men. Therefore, although it is quite true—
LORD RHONDDA: To which speech does the noble Earl refer?
THE EARL OF SELBORNE: I have not got them by me, but I think I am in the recollection of all your Lordships as to the tone that has been used on more than one occasion. Now it is quite true that the decrease in imports has had a great deal to do with it, but I am perfectly convinced that if it had not been for the cumulative effect of the mistakes that I have mentioned and of the attitude to which I have referred there would have been a much larger output of home-grown meat during the present time. The whole root of the evil is that the Food Controller has not listened to the Department of Agriculture. I want to show your Lordships how the danger has not yet passed by.
I have here correspondence between the Food Controller's Office and the Scottish Chamber of Agriculture. It is quite recent correspondence, and I will summarise it very shortly. The Food Controller makes an Order in respect of the slaughter of lambs in Scotland. The Scottish Chamber of Agriculture writes and says that this Order will have the result of greatly decreasing the output of meat and of increasing the consumption of foodstuffs. The Food Controller's Office writes back to say that the Order has been issued with the assent and approval of the Board of Agriculture in Scotland and cannot be changed. The correspondence goes over some weeks, and the final answer of the Food Controller is that he finds it quite a mistake, that the Board of Agriculture in Scotland never did agree to this Order, because the copy of the Order to which they had agreed did not contain the clause about lambs at all, and then he proceeds to say, quite properly, that the Order shall be modified. I only give that as an example.
Another example is the case of pigs. I do not know what the attitude of the

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Board of Agriculture has been about pigs, but I cannot believe that it approved of the price fixed. The producer gets 188. per score live weight, or the equivalent of about 23 s. 9d. dead weight. The retailer is allowed to charge 1s. 11 d. per lb., and as your Lordship, will see there is a great difference between the two scales of prices, because I believe 18 s. per score is equal to 1s. 2d. per lb. The pig is disappearing from our markets. I agree that this is not the only reason, but it is one of the reasons, and I suggest that the Controller could at any rate stimulate the production of fat pigs if he would bring the two prices nearer to each other.
But, my Lords, the agricultural world at the present moment is greatly alarmed by rumours of further schemes for dealing with the meat trade for grading, weighing, and valuing of cattle, and the allocating of store cattle to the different farmers in the country. There are also rumours of an organisation which is to be the sole organisation to which farmers will be allowed to sell what meat they produce. I have not seen any of these schemes, but am only repeating the rumours that are agitating, to a degree which the Government do not perhaps understand and appreciate, the whole of the agricultural world. That agitation would be much loss if it were not for the fact that farmers believe that the Board of Agriculture may be overridden by the Food Controller. Lord Milner has explained that when the price of meat was fixed last autumn it was not the Food Controller who overrode the President of the Board of Agriculture, but the War Cabinet. That, I think, will be a relief to them. I think they will feel that it is a fairer method of dealing with them.
The point I wish to make to the Government is this—really, although the Food Controller may not think it, I have great sympathy with him—that the position in lily humble judgment between the President of the Board of Agriculture and the Food Controller is a perfectly impossible position for those two men. I do not know which I am more sorry for. Nothing would have induced me to hold the position of President of the Board of Agriculture for twenty-four hours and be responsible for the production of food, if somebody else was to fix the price for the food which I produced. That is a perfectly impossible position into which to put the President of the Board of Agriculture.
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Then look at the position of the Food Controller He is held responsible by the whole of the public for the prices he fixes for food, and yet hero is another Department, which in his judgment is a great nuisance, always objecting to his proposals, delaying the execution of his Orders, and causing friction and worry. I do not know which of those two men is operating in the greater difficulty.
The Government, I think, made a great mistake in ever separating the two duties as regards home production. The same man should have been President of the Board of Agriculture and Food Controller for home-grown food, or for food part of which was grown at home. It would have been perfectly possible to put into the Board of Agriculture an assistant secretary to look after the interests of the consumer—some gentleman like Mr. Clynes. The point which I wish to make to the Government is that the final words of this Resolution really go to the root of the matter. I hope myself that after what Lord Milner has said my noble friend will not press the first part of his Motion. I think that the appeal coming from Lord Milner on behalf of the Government was a very forcible appeal; and as Lord Milner has told us, perfectly frankly, that he is himself responsible and not the Food Controller, I do not think your Lordships can express an opinion contrary to his statement. But then you come to the final words of the Resolution—
"that any powers vested in his [the Food Controller's] Department by which the production of food can be affected should be transferred to the Board of Agriculture, and be subject to the control of that Board alone."
THE EARL OF CRAWFORD: That is the price?
THE EARL OF SELBORNE: Yes. The meaning of that is that the President of the Board of Agriculture should be responsible for fixing the price of those articles of food which are grown at home.
THE EARL OF CRAWFORD: Then there would be two prices—home-grown and imported.
THE EARL OF SELBORNE: No He would deal with the whole price of any article which may be grown at home. He would deal with wheat, because wheat is grown at home, and also with meat, but he would not deal with sugar, or tea,

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or anything of that kind, So long as those two functions are separate, the one Department will be constantly thwarting the activities of the other. I am certain that the Food Controller's action has largely diminished the increased production which the Board of Agriculture has been striving after, because of the want of confidence and of timidity which his action has engendered in the farming class. I do not ask the Government to give us any reply on the subject now—I cannot expect them to accept the Resolution—but I do ask them to take most seriously into their consideration the question whether the present divided responsibility can possibly continue without danger to the public service and without serious interference to the food supplies of this country.
LORD CLIFFORD OF CHUDLEIGH: My Lords, I have been connected with two or three freezing and tinning works; and for three years I was a drover. Therefore, perhaps, I may be able to give a view that would obviate in future similar errors to those of the past. When I spoke on the matter six months ago I pointed out that it would be almost impossible to fix the price of fat stock in any way whatever, and that the only way to place any restriction upon it would be by trying to check any exorbitant charge as between the wholesale butcher and the retail butcher, and, as far as possible, by fixing the price of store stock, while the price between store stock and the butcher must be left to fix itself.
When we were tinning and freezing we found that the great difficulty was to prevent competition between rival companies causing an exorbitant rise in the price of store stock. To obviate that the only thing to do was to get our different clients to send us every three months lists of the probable amounts of stock they would have fattened three months later. If the Government would take some such step and secure every three months a return of the possible stock throughout the country that would be in the market three months later, and would try to fix the price of store stock as nearly as possible on an average over particular months of pre-war date, then there would be a chance not only of fixing the price of store stock but of knowing in what proportion fat stock would be available. Then no mistake would be made, such as has been made in the last six months, of rushing a lot of half-fat stock into the market and having
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it killed because of a rise of price at a time when it weighed only one-third of what it would have weighed if it had been properly fattened. This can only be done by doing as we used to do there. When I was stock droving I made all the clients for whom I bought state what stock they could fatten three and six months ahead, so that I and the other drovers knew how we could fix the price of store stock, and get it coming in regularly.
These are the questions to be studied if you are to keep the home consumption low for three or four years, and it will take three or four years certainly before any of the belligerent countries learn the important lesson that neither side can win this war, and that if either side did win the war it would mean the impossibility of a lasting peace. The only possibility of a lasting peace lies in a drawn game, and it is more important to have a lasting peace than anything else. At any rate, you will not be at the climax before 1922, and you have to provide for a good many winters before that. It is just as well to see how you can do it now, and not leave it till the last moment. These are the questions you will have to weigh most if you are to keep home consumption low, and if the responsibility is placed half with the Board of Agriculture and half with another Department the thing is impossible. Unless all matters connected with agricultural stock lie in one Department with one principal head, you are bound to have confusion. Therefore I should certainly support the second part of this Motion.
VISCOUNT CHAPLIN: My Lords, I have been greatly impressed by the extremely conciliatory spirit in which Lord Milner has dealt with this question. If the same conciliatory spirit had been shown by the Food Controller, both in his speeches here and in his dealings with the farmers in particular, we should never, I think, have been placed in the very critical, dangerous, and difficult position in which we are at this moment. The noble Viscount, Lord Milner, was not here yesterday. If he had been and had heard all that I said, I think he would not have thought it necessary to make some of the observations which he has made to-day. I am not now going to enter again into those points. When he speaks of the necessity for the fixation of prices—which he thinks is generally admitted—I am sure he will agree with me when I say on the other hand that no one has ever disputed the vital necessity of an

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enormous increase in the production of food in this country. If ever it comes to be a question of conflict between the fixation of prices and the actual presence and production of food, I am sure he will agree with this also—that food at whatever price, no matter how high, is better and far more essential than food which is not adequate for the population, or possibly no food at all.
These are the motives by which I have been influenced from beginning to end in considering this question and in framing the Motion I placed on the Paper. It is absolutely certain to me that the effect of the policy of the noble Lord, Lord Rhondda, has been beyond all doubt considerably to lessen the production of food in this country. Lord Selborne was perfectly right when he said that the farmers were frightened. Anybody who knows what farmers are knows that you cannot have an immense increase of home-produced food unless you have their whole-hearted and loyal support at your back; and Lord Selborne never said a truer word than this, that they have been frightened to death by the bullying attitude—as he called it—of the noble Lord, Lord Rhondda, though I dare say the noble Lord may not have intended it.
I think the noble Lord will gain some lessons from this debate. I was about. To propose, and I had written down and suggested to the noble Marquess at my side an arrangement that I would be willing to come to after hearing Lord Milner's speech. I would not mind saying to the Government that if they would agree that any one of the hundreds of different Orders which have been issued by Lord Rhondda—which only confuse and perplex the people and keep up the agitation and dismay caused among the farmers—should be cancelled if the President of the Board of Agriculture really considers it necessary, and that no further Orders should be issued by the Food Controller's Department without the express sanction of the Board of Agriculture, then I should be perfectly satisfied. I have had a very difficult position to consider, because believe I can honestly say that the farmers throughout
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the country rely very greatly on me. I may say that. I think, without vanity, and the noble Lord who was present at the Caxton Hall meeting will perhaps think there is some foundation for my belief after the reception I met with on that occasion—at a meeting supposed to be the largest and most important gathering of farmers, from every quarter of the country, that was over hold in London.
My position, therefore, is difficult. But, having considered it carefully, and after the generous and conciliatory spirit in which the noble Viscount (Lord Milner) has addressed us this evening, I will not press my Motion to a Division. I hope it will be understood that I do this in the belief that what I have said about the two Departments which are concerned will be taken seriously into consideration by His Majesty's Government—that is to say, by the Cabinet themselves. If they can make some arrangement of this kind you will be relieved from the difficulties in which you are placed at the present moment, and I will guarantee that you will give an impetus to the increased production of food in a degree which will greatly astonish you, but which I am certain you will never see in this country, vital as it is to us all, unless something in the nature of what I have suggested just now is borne in mind and given effect to. Unless it is, I shall reserve to myself the right of raising this question again at any time I think desirable in the future. That is all I have to say on the subject, except to express my thanks to your Lordships for the patience with which you heard me last night and which you have always extended to anything I have had to say.
Motion, by leave, withdrawn.
Moved, That the House do adjourn, except for Judicial business, until Tuesday next.—(Earl Curzon of Kedleston.)
On Question, Motion agreed to.
House adjourned at five minutes after seven o'clock.