Lords Sitting of 11 December 1919

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
MANCHESTER CORPORATION BILL.
Read 3a, with the Amendments, and passed, and returned to the Commons.
MINISTRY OF HEALTH PROVISIONAL ORDERS (No. 1) BILL.
Read 2a (according to Order).

LAND SETTLEMENT (SCOTLAND) BILL.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (LORD BIRKENHEAD): My Lords, communications which have reached me from some of your Lordships show that it is necessary to make an explanation, however brief, of the provisions of this Bill. It is well known that this is the Scottish equivalent of the English Land Settlement (Facilities) Act, which became law last August, and in its main purpose and structure the Bill closely resembles the measure which has already received the assent of your Lordships. There are, as is inevitable from the nature of the case, points of difference, and I am informed that some members of the House who are highly qualified to offer advice in such a matter hold the view that in one or two respects the Act has been imperfectly adapted to Scottish purposes. Any such representations will naturally be carefully considered.
The main purpose of the Bill is to facilitate the settlement of suitable small holders upon land, with a preference in favour of men who have served in the war. The Bill consists in structure of five Parts. Part I, like that of the English Act, deals with the acquisition of land; Parts II and III, which correspond to Part II of the English Act, amend the existing law relating to small landholders; and Parts IV and V, which correspond to Parts III and IV of the English Act, contain financial and general provisions.
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The differences between the two measures are due to the difference in the pre-existing codes applicable in the two countries, mainly contained as regards England in the Small Holdings and Allotments Act, 1908, and as respects Scotland in the Small Landholders (Scotland) Act,1911, and the Allotments (Scotland) Act,1902. Of these differences two ought to be particularly described. In England the power and duty of providing small holdings lies primarily with local authorities; in Scotland it lies with the Scottish Board of Agriculture. The second principal difference is that in England the small landholder becomes the tenant of the local authority on land purchased or hired by them for that purpose; in Scotland he remains the tenant of a private landlord, at a rent judicially fixed and with security of tenure. He is not the tenant of a local authority nor of the Board of Agriculture.
Let me shortly state the effect of the clauses. Clause 1 proceeds, as does Section 5 of the English Act, to confer power on the Board by way of extending the Small Holding Colonies Acts, 1916 and 1918, emergency measures which contained agreement powers only, and the consent of the Treasury and Secretary for Scotland are necessary. Clause 2 I think I need not deal with. Clause 3 confers powers of entry resembling those in Section 2 of the English Act, and also by sub-clause (1) gives force to Schedule 1, which contains the compulsory acquisition procedure and resembles the English code as simplified by Section 1 of the recent Act. Clause 6 is the equivalent of Section 11 of the English Act, and gives directions to the Board in the selling or letting of land acquired. As in England, the tenant is given the right to buy his holding after six years' occupation at an agreed or arbitrated price, unless the Board obtain the consent of the Secretary for Scotland to a refusal to sell. Clause 7 and Clause 8 need not be specially referred to.
Part II is headed "Amendment of the Small Landholders (Scotland) Act, 1911." That Act is the leading Statute which at present regulates the tenure of small holders in Scotland, and hitherto provided the means for the settlement of new holders. It will continue to do so after the temporary powers of purchase conferred on the Board by Part I have expired, and even during those two years it will provide an alternative means for the settlement of ex-Service men. Both, therefore, from the

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emergency point of View and with a view to subsequent administration this Bill provides means for the simplification and amendment of the existing law in the light of experience, just as Part II of the English Act is devoted to the amendment of the Small Holdings and Allotments Act, 1908.
The small landholders tenure in Scotland has its root in the local conditions of the North and West, where when Parliament came to deal with the matter in 1886 there existed large numbers of small tenants residing on and cultivating their holdings or crofts and paying rents which were often low because the improvements on the crofts, whether by building or by operations on the land itself, were usually made by the crofter himself; but the rents were liable to be raised on account of these very improvements. The Crofters Holdings (Scotland) Act, 1886, applied only to the crofting counties and to crofters as defined in the Act, i.e., resident tenants from year to year of arable or pastoral holdings at a rent of £30 or less. These were given security of tenure subject to statutory conditions at a rent which might be varied either by agreement or by the Crofters Commission established by the Act; subdivision and assignation of the croft were prohibited and a power of bequest conferred which was limited to one member of the crofter's family. The Crofters Commission had power to enlarge the holdings, but none to establish new ones.
Then came the Act of 1911, which instituted the Board of Agriculture for Scotland and substituted the Scottish Land Court for the Crofters Commission, substituted also the statutory term "small landholder" for the "crofter" of 1886, though "crofter" survives in popular language. Existing crofters became "landholders," and so did many tenants not previously crofters, because tenants under lease were included as from the termination of their leases, and the rental limit was raised from £30 to £50. It ought to be added that the Act applies not only to the crofting counties properly so-called, but to the whole of Scotland; but that great extension of the area did not in itself largely multiply the small landholder, because for that status the Act required that the tenant himself, or his predecessors in the same family, should have effected the whole or the greater part of the permanent improvements on the holding, and this outside the crofting area has usually been done not by the tenant but by the landlord.
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The new Land Court had power not only to fix rents and to revise them every seven years, and to enlarge existing small holdings, but to form new ones, by compulsion if necessary. It is this compulsory constitution of new holdings which has in practice proved to be the least satisfactory provision of the 1911 Act, and it is the provision which in this Bill it is deemed most important to amend, in order that the settlement of new holders under this tenure may henceforth be facilitated. It has been necessary to give this somewhat tedious explanation of the situation in relation to crofters prior to the introduction of this Bill, in order that its proposals now shortly summarised may be understood.
Clause 9, which is the first clause of Part II, proceeds to deal with this change. It proceeds by Amendment of Section 7 of the Act of 1911, which contains the existing law on this matter. Under Section 7 of the 1911 Act the procedure is that the Board of Agriculture, where it deems new small holdings to be required and land to be available, shall first negotiate with the landlord and failing agreement prepare a scheme for the purpose, and if the landlord does not accept the scheme apply to the Land Court for a compulsory order confirming it. If that goes through the scheme becomes effective, the new holdings are formed and equipped, and suitable applicants registered as landholders, their rents being fixed by the Land Court. This is a lengthy and complicated procedure. It is amended and simplified under the terms of this Bill. Several subsections of Section 7 relating to negotiation and agreement are repealed, being unnecessary. Where compulsion is necessary the Land Court is now "cut out," except for the one purpose of assessing disputed compensation. Having prepared their scheme the Board intimate it to the landlord and any tenant or occupier concerned, and after hearing any objections may either drop it or themselves make an Order confirming it, subject to the consent of the Secretary for Scotland. If the scheme is confirmed the Board themselves fix the first rent for the new holders, although the Land Court may vary these at the end of seven years.
As to compensation, that is always a difficult matter so far as compensation to the landlord is concerned. It is particularly difficult in this case, because he does not lose his land but retains it, although the rents are no longer agreed rents. The

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1911 Act sets out provisions about compensation which have proved to be a hindrance to land settlement by this method, leading sometimes to the abandoning of promising schemes and sometimes to heavy charges on the public funds administered by the Board. Under this Bill, if your Lordships will look at Section 9, subsection (11) these are replaced by provisions which are felt to be both clearer and fairer. Compensation for loss in selling value—hitherto often a heavy claim—is ruled out except in so far as it arises from loss in letting value: and the value of porting rights is to be estimated as the value which such rights would possess if the land were at the same time put to agricultural or pastoral uses. Any enhanced value due to clearances will not be reckoned. The assessing tribunal is to be the Land Court, without the present alternative of a judicially appointed arbitrator, in all cases where claims exceed £300. The Land Court has now had several years experience, and it is hoped that on the whole the new provisions may be accepted as a fair solution of a problem of the difficulty of which the Government is sufficiently conscious.
I do not think I need give any special explanation of the other clauses, which are not particularly difficult. I have only to say that I thought it desirable to give this short explanation because the matter is a somewhat technical one. If the debate in its course elicits any other points on which information or explanations are desired, I will do my best to supply them at a later period. I hope that in the main these proposals will not prove to be unacceptable to your Lordships, and I move the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
THE DUKE OF BUCCLEUCH: My Lords, the noble and learned Lord has alluded to Clause 9 and to the compensation clause of the 1911 Act. The latter has been found fair and reasonable, and there is nothing to show that what has been done under it was in any way excessive. The difference between what is provided in Clause 9 and what has been in operation in the past is that that portion of the cost of forming these holdings which has hitherto been borne by the public funds is now thrown upon the individual land owner whose land is taken. I will, however, deal with that aspect of the case later,
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As regards the Bill there is in the main no hostility towards it. It is, as the noble and learned Lord said, divided into two Parts, one the Land Settlement and the other an Amendment of the Small Holdings Act, 1911. I do not think it can be said that it is by any means on all fours with the English Act, which dealt almost entirely with the settlement of soldiers and sailors, and it was really unnecessary for that purpose to have this amendment of the Small Holdings Act of 1911. As far as the taking of land for these holdings is concerned, it practically means that in each case the land owner whose land is to be compulsorily taken is to be treated very much worse under the present Bill than he has hitherto been treated.
There is one rather unfortunate circumstance in connection with this. The question was discussed in February, 1918, when the Secretary for Scotland asked a very large number of land owners in Scotland to meet him in Edinburgh. Considering the difficulties of the time and that so many were away at the war there was a very large attendance. The Government then had not been able to formulate any proposals, but after some discussion and after various suggestions had been made a Committee was formed of land owners representative of the whole of Scotland. We understood that the Secretary for Scotland was going to consult that Committee regarding this measure, but that Committee was never called together or consulted, and I think that is very unfortunate, because had it been called and consulted a good many difficulties of the present Bill might perhaps have disappeared. It would also probably have brought about a better feeling between land owners in Scotland and the Board of Agriculture who, up to the present, have not been on so good a footing as they ought to be. I think that the cause of this, partly, was the suspicion aroused when the Board of Agriculture was first created, but of course for that no member of the present Government was responsible. Still a certain amount of friction has been going on, though I do not think it is so bad now as it was, and if the land owners in Scotland had been more in touch with the Secretary many of these difficulties would have been removed, and it would have been easier to draft a Bill that would have been readily accepted, and certain portions of this Bill would not have contained, as they do, great injustices to the land owners in Scotland.

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Coming to the clauses, one important point is that the purchase of holdings for soldiers and sailors is limited to two years, and a certain sum of money is provided for it. It was said in another place that the time could be extended, but I understand that there were certain objections to that on the part of the Treasury, and I think that perhaps your Lordships would like to have some assurance that there is a prospect during these two years of this money being spent, and that there will be no delay in the purchase of land for the settlement of soldiers and sailors. It was also, I believe, stated that, although the two years applied to the purchase of land, the money would still be available for the equipment. If that is the case it does remove many of the objections which could be directed against limiting it to a period of two years. I hope that the noble and learned Lord will be able to give us some assurance that this money will be available for equipment when the two years are over.
Your Lordships will remember that whereas in England many authorities are engaged in settling these men on the land, in Scotland there is only one authority, and it is a very big job for that authority to purchase and arrange all these holdings, if there are to be a large number of applications, within two years of the passing of the Act. Some people have a suspicion, which I hope and believe is unfounded, that it is not proposed to use this money so much for the purchase, but to proceed more by the system that has been in operation in the past of settlement under the 1911 Act.
I will now deal with the most important clause in the Bill—Clause 9—which alters the whole procedure of taking land for small holdings. From the land owners' point of view the most objectionable part is subsection (11) (b) regarding the compensation payable. The noble and learned Lord said that this was going to be a fairer way of dealing with it than in the past, but I think that I have only to read to your Lordships the words themselves to enable you to see whether or not there is going to be proper compensation. At the bottom of page 6, line 32, there appear the words—
"The compensation payable under this subsection shall not include—
"(i) any allowance on account of the constitution of new holdings being compulsory."
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No one has any objection to that. But the second reads as follows—
"(ii) Any compensation for injury done to or depreciation in the selling value of the land comprised in the scheme, or of any estate whereof such land forms part, except in so far as the same arises from injury done to or depreciation in the letting value of the land or estate. …"
I think from the wording of that section that it will be quite evident to your Lordships that considerable damage will be done, and that that loss has to be borne by the land owner whose land is taken, instead of as in the past by the State, because obviously if there was no loss there would never be any compensation paid, and in certain cases under the 1911 Act that has been the case.
The Prime Minister said not long ago that the State, whether it was building or buying land or obtaining the labour it required, would pay a fair price for it. That is only what. is asked, and I hope that when we get to the Committee stage the Government will put an Amendment down to carry out that pledge. The Prime Minister cannot look into everything himself, and I cannot imagine that His Majesty's Government want to do anything which will break a pledge or the word given by the Prime Minister.
There are cases where losses have occurred. There is one that is perhaps the best known—the farm, of Ballencrieff in East Lothian. The rent was about £1400, the farm extends to 590 acres. Thirty new holdings were formed on that farm. It did not come to arbitration, and the compensation which was agreed upon between the seller and the Board of Agriculture was £8,000, which, I believe, included the value of the buildings. The farm was shortly afterwards sold and realised £12,500, making a total return to the owner of the land which had been taken of £20,500, including all compensations. Previous to the Board taking this farm the owner had had an offer from the sitting tenant of £25,000, or over nineteen years' purchase of the gross rent, and a neighbouring farm was sold at an even larger number of years' purchase. So there is a loss to the owner of £4,500, and probably if it had been sold in the open market the loss would have come to another £1,000. That loss was made even after the landowner had obtained the compensation which is now being done away with by this Bill. There was £1,800

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to £2,000 for compensation, and therefore under the present Bill, as it stands now, the loss in that particular case would have been between £6,000 and £7,000, or possibly more if the farm had been sold in the market.
It has been said that many of these cases will not affect very large owners so much because they would not have to sell their land. But your Lordships must think of the somewhat smaller owner. Unfortunately during the war the owner of land has been very heavily hit. He has had greatly increased expenditure and taxation, especially in Scotland, where there are stipends and other burdens on the property, and against that he has had no increase of rent. whatever. Unfortunately, also, a very large number of properties in Scotland are heavily mortgaged. Take the case in East Lothian which I have mentioned. The farms on that property sold at something like twenty to twenty-one years' purchase. After it was converted into small holdings the price realised when these small holdings were sold was twelve years' purchase. It is obvious that on a small estate which has mortgages there has been very great loss of security to the landlord. Very likely loans will have to be called up, and he will have to sell at a very heavy loss, and the whole of that loss will fall on the owner instead of on the estate.
It may be said that the case that I have quoted was an exceptional one, but I will take another from the Report of the Land Court. This is a farm called Kinninghall, and the Land Court was not supposed to be particularly favourable to the landholders. The Report states—
"It seeems indisputable that Kinninghall itself, if now put up for sale, would not attract the same competition as it would have done prior to 1913. The ordinary landowner will prefer a property where he has control of his tenants, their rents, and their leases. The outsider who wants a small holding for his own occupation knows that after he buys he must undertake the disagreeable task of turning out the present tenant, and must pay some yet-to-be-ascertained sum for his farm buildings. The tenants themselves, if they purchase, at once cease to be under the protection of the Land Acts, and may find themselves called upon by the Board for immediate repayment of the money lent them for erection of buildings. These three classes constitute the most likely buyers of land in ordinary circumstances, and from none of them could keen competition be expected. There remains the ordinary investor who wishes good security and a fair return for his money. There is no reason why he should not find both as the
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owner of small holdings, but as yet perhaps this is hardly realised, and he may prefer another outlet for his surplus capital. We have accordingly found that the value of the estate of Cavers has been depreciated in one of its parts, namely Kinninghall, by the constitution of the new holdings and that to the extent of three years' purchase''
I think this is a case which, in all justice, should go back to the basis of the Act of 1911. That was settled after considerable consultation, and I think Mr. Asquith, who was then Prime Minister, went into the question himself and came to the conclusion that it was the only fair and reasonable way, in fulfilment of the pledges previously given by Sir Henry Campbell-Bannerman. All that is asked now is that the Government should back up the statement made by the late Prime Minister.
There is another point which this clause deals with in the next paragraph, which, it is true, affects the Highlands much more than the South of Scotland. I should like to point out that there is in the public mind a misconception about sporting rights. I myself am not particularly fond of shooting, and therefore it does not affect me personally. But in Scotland it has been found that the letting of shootings to Englishmen and others who can afford to take them for their autumn holidays is of great value to the community. Although I have not worked it out on my own property the value of the shooting rights would not be more than—it would be under—one to ten as compared with the agricultural rate, and I believe it was something like that before the war. Therefore it is absurd when people talk of any one, at any rate in the South of Scotland, doing this against agriculture and in favour of game; because the return you get from game is as nothing compared with what you get from arable land.
But to show you how it affects the locality, I may say that some years ago one shooting was let for £250 and there was not much return after the keepers had been paid. I asked the tenant what he spent in the last year, and he said that he had spent over £600 during his holidays. That meant a great deal of employment, and also helped to keep the population in the country districts. Over and above that, if there is anything done to destroy these sporting values, instead of getting the money which is made in London and in other large towns, and instead of their

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spending money in our country districts and helping the population to live there, the people who take the sporting rights will go abroad and all that money would be lost to us. I am pointing that out only with regard to the South of Scotland where it is an immense advantage to the population. With regard to the Highlands, with which I will not deal, it is a larger question and one that is mixed up with rating.
Small holdings are not a new thing; the question is a very old one, and one in which landowners have been interested for a large number of years, yet for some reason or other at the present time it is not thought necessary or desirable to consult them or to ask their assistance. As long ago as towards the end of the eighteenth century au ancestor of mine, the third Duke of Buccleuch, created small holdings in five villages. This was done without any Government assistance; it was carried out by a joint effort between the landowner and the tenants. The principle on which the landowner acted was that he realised what is not altogether realised at the present time—namely, that in the particular district the land was not sufficiently good altogether to maintain the population, and that therefore the principal livelihood of these small holders was to be by village industries. These villages were prosperous for a time, and then some of them went down; but there are two which are flourishing even now, one because a neighbouring manufacturing town employs the people, and the other because many visitors go there. But there are many advantages in this because, apart from the economic side, it enables anyone who has lived on the land and saved a certain amount of money and who is not capable of full work to take one of those houses with a small holding and get sufficient occupation for his age and capabilities. I think it is a pity in some ways that there has not been any effort to try to induce landowners to create more small holdings. If they do create them there is always the fear that they will be taken out of their control and put under the control of a Board of Agriculture and so on.
There are two or three other points in this Bill. In the former Small Holdings Bill there was a sanctioning authority. I admit that there is a certain desirability in "short-circuiting" (as they call it) the system because there was a certain amount
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of delay in forming the holdings—although the delay was not as great as it was represented—by matters having to go through these various channels. But your Lordships, and also the taxpayers of the country, must remember that if this Bill passes in its present form the Board of Agriculture for Scotland will start the holdings, draw up the plans, and also be the sanctioning authority. There is practically no control to see that the money is properly spent or that the schemes devised are the best possible. I should like to give an instance of a case of my own in connection with the operations of the Land Court. Negotiations were going on with regard to a farm which I said was not as suitable as it might be. The case was taken to the Land Court, and the Land Court, although they sanctioned the scheme, upheld my view and said it was not by any means to be looked upon as an ideal settlement; they did not think that the ground was sufficiently good. However, I did not wish to stand in the way of the Board and we came to an agreement about the matter. There should be, however, some supervising authority. Again, those people whose land is to be taken should have some sort of appeal. Every one wants to prevent unnecessary delay or correspondence, but there are some cases where it is reasonable that the owner of the land which is to be taken should have some right of appeal. So far as I have seen, this Bill does not give any appeal at all. The Secretary of Scotland, it is true, has to sanction the scheme, but it is obvious that he would not have the time to look into everything, nor is there any form of appeal to him.
Another point is that under the former Bill—now swept away—any owner claiming more than £300 had the option of going to the Land Court, or, if he did not like to do that, there was a method arranged for arbitration. I do not know that I myself liked that very much, but I think it would be better if it were left. Parliament has lately passed the Acquisition of Land Act, but it is curious that this Act, which was essentially one for taking land for public purposes, should be absolutely ignored in this Bill. If instead of all this leasing they were going to use the Acquisition of Land Act the whole difficulty would disappear but for some extraordinary reason there seems to me a rooted objection to purchasing the land. I mean by that not necessarily that they should be compelled to purchase, but that if the owner is not

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willing to lease they should have the option of taking it under the Acquisition of Land Act. It does not seem to be much use for Parliament to pass such an important measure as the Acquisition of Land Act if the various Departments do not make use of it. It surely is not right that each Department should have its own particular way of dealing with any subject of that kind. The probability is that the arbitrator appointed under the Acquisition of Land Act might be a better arbitrator to decide upon the value of the land and the compensation to be paid than the Board of Agriculture in the present case.
There is a further small point on which I should like information—namely, the question of home farms, and so on. In both the English and the Irish Bills on Land Settlement home farms are excluded from the operation of the Bills. Although it may not be of vast importance, if two years only are to be allowed for purchasing and it is possible that the time may have to be extended, I think it is only reasonable that that should be put into the Scottish Bill, and so make it on all fours with the Bills—now I think the Acts—for England and Ireland.
I am afraid I have somewhat wearied your Lordships with a good deal of detail in these matters. The real point is that the land owners of Scotland are anxious to facilitate in every way the settlement of soldiers and sailors. We are prepared to do what we can, and we appointed a Committee to go into these matters. We desire most strongly that the pledges given by the Prime Minister and also by the Leader of the House of Commons, the Leader of the Unionist Party, should be kept in this matter. We consider that certain parts to which I have alluded in Clause 9 are breaches—at least, they are not keeping their words in the spirit or even, in my opinion, in the letter. It is quite impossible, as I have said, for the Prime Minister to know what is going on, but I do sincerely hope that something will be done to meet our views in this respect, because, although it might not be so hard for a land owner who has a large extent of land, and who gets compensation for his loss in letting value (though no compensation in respect of capital value), it is a most serious thing for a small owner. I think it is very wrong that a person not particularly well off, whose land is taken for public purposes, should at the same time
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very likely be ruined and have to pay a very large proportion of the expenses which ought, undoubtedly, to be borne by the country.
LORD LOVAT: My Lords, I should like, before the Second Reading of this Bill, to say a few words in criticism of certain lines of unfairness so clearly brought out by the Duke of Buccleuch. We all listened, I am sure, to the statement of the noble Lord on the Woolsack, that he would consider certain views that we might bring forward, in order to see how far effect could be given to them in the Committee stage.
First of all I should like to say, with regard to Part I, that I believe, from what transpired at a meeting which I attended of those interested in the land question in Scotland, that you will find every support to pass Part I as it stands. Undoubtedly, as the Duke of Buccleuch has pointed out, we in Scotland are putting up with certain hardships as regards the acquisition of land which the land owners of England have not been asked to accept. We have perhaps less cultivated and less cultivable land. There is also the question that the body which is to decide compensation is altered, and we hope in future that the deciding body will give fairer decisions than have perhaps been given in the past.
As to Part III, which deals with allotments, I am perfectly certain that that will receive nothing but support from this side of the House. High prices and shorter hours have undoubtedly added enormously to the possibilities of the allotment movement. Speaking for myself, I can only say that I wish this particular Part had gone further, and that a larger sum had been voted for the increase of allotments, especially for allotments in the neighbourhood of towns and villages. I am certain, from the fact that the soldiers who return from the war have had periods of strenuous—one might almost say killing—work alternating with rest in rest billets, that it is much more a question, not of work shyness on their return, but a wish to escape from the dull monotony of one particular job for the whole time. I believe, therefore, you will find, with the shorter hours and the greater advantage to be got from allotments, that allotments, especially by soldiers, will be made the greatest use of, and I wish the sum of £4,000 allotted had been considerably increased.

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Turning to Part II, on which the whole of my own criticism will be centred, I would like to ask the House first to consider whether it is necessary to have Part II at all. The 1911 Bill was a distinctly bad Bill. It was bad in itself; it was not too wisely administered as an Act; and it failed from the very start, because it did not accept the fact that in order to get settlement in land you want the co-operation of every single individual interested in land—that is to say, the land owner, the tenant, and the Board which has to administer. You are sailing on a very fine margin when you are dealing with small holdings in any part of Scotland. Unless you have the utmost co-operation between the three parties interested, I do not believe that they will succeed on the whole. I believe that if the noble and learned Lord on the Woolsack, had had the good fortune, or the bad fortune, to attend the meeting at which the Duke of Buccleuch presided and to which he has made a reference, he would have appreciated the wish that there is expressed by land owners in every part of Scotland to aid in the settlement of returned soldiers and to give every assistance.
By the 1911 Act it was only possible to get fair treatment by opposing a scheme which was put forward. The noble Lord made certain references to schemes being ruled out on account of expense, although the schemes themselves might have been good. Having had considerable experience of such schemes, let me assure him that a great many schemes were lost, simply because, in order to get your rights, you had to oppose the schemes under this most foolish Act of 1911. Whether it is necessary, as urged by the Government, for the special conditions of Scotland, to have a Bill based on the 1911 Act, I would only say, for my part, that we must be quite clear that justice covers not one bank but both banks of the Tweed. Furthermore, as far as Scotland is concerned, we must be sure that Part I of the Bill is not to be the camouflaged portion of it and Part II, which is merely a prolongation of partisan effort, the really effective portion.
I would commend to the noble Lord's notice that I think your Lordships will probably press to see that we have a quite clear definition as to how much action is going to be taken under Part I and under Part II. It is really extraordinary that a Government should produce one Part of
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a Bill which is mainly fair in its encouragement, and, in a second Part, an alternative scheme for the same subject which is grossly unfair in a great many respects. You must back one horse or the other. You must say either that you are going to deal fairly with land owners in land settlement, or that you are not going to deal fairly under Part II where you fail to pay the compensation which is due.
Before I deal further with Part II of the Bill I should like to touch on one point which I think is very important—namely, the actual amount of money which ought to be spent under Part I and under Part II. Under Part I you will get £2,500,000, which is the Scottish share of the land settlement money voted by Parliament. Under Part II you have to deal with money which comes under the Agriculture, Scotland Fund, which altogether is about £200,000. Therefore for the next two years you will have the £2,500,000, spent under the grant for soldiers, and £400,000 under the other head. Of this £400,000 you will have to spent £15,000 on housing, you will have all your ordinary upkeep expenses and salaried gentlemen to pay, and for the actual settlement of soldiers on the land I calculate you will have at the outside £150,000 to £200,000.
Therefore I submit is it worth while risking a chance of losing this Bill by insisting on certain provisions in the Bill in order to get 10 per cent., probably 5 per cent., of benefit which is going to come to soldiers under the Bill as a whole? It may be said that we are holding up land settlement if we oppose Part II of the Bill. I wish to make it abundantly clear that if we hold up Part II we only hold up at the outside 10 per cent., 5 per cent. would be much nearer, of the settlement of soldiers by the whole Bill as it stands.
It would be a pity if Part II was lost. It is going to quicken up the method by which settlement will be made. In the past there were references from the Board of Agriculture back to the Land Court, and the process was slow and cumbersome. Little was done. This is going to make the process much quicker; so quick that schemes may be passed which may be unfair. We have to take that risk, and it is a fair and legitimate risk. These men who fought for their country wish to settle on the land and it is important that as soon as legislation is passed action should follow. It would also facilitate settlement by consent,

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which I think is a most important consideration. The advantages which are going to be given to existing crofters have my entire sympathy.
There are other minor points in the Bill on which I do not think it is necessary for me to trouble your Lordships. It would be a pity if the Bill was lost simply on the two clauses dealing with compensation against which we can present the strongest arguments. I will not go into the question of the honour of the Prime Minister being absolutely pledged to see that a fair settlement is made and the proper and right interest in land regarded. I can point to the Glasgow speech of Mr. Bonar Law, the Leader of the Unionist Party, in which he made an equivalent statement. We have a right to hold that these election pledges, given at a time when a General Election was being held, should be made good. On the grounds of justice also there is no reason why land owners in Scotland should not be as fairly treated as land owners in England. In one-half of this Bill you treat them fairly; in the other half you treat them with grave injustice.
Another point, which is even more important, is the question of the absolute power it gives to the Board of Agriculture for Scotland practically to make bankrupt any unfortunate land owner in the Northern part of Scotland who derives most of his revenue from sporting estates. It places in the hands of this body the power to make or mar any individual in that area. It is not a question of what might happen; it is a question of what has happened. I can quote two cases. There is a certain property on which the Board of Agriculture insisted that £30 worth of grazing land should be taken by resident tenants. The value of that property was reduced from £1,200 a year to £750, and I am told that it has now been reduced to £450. The rateable value also came down from £1,100 to £450, and as the taxation in this area is going to be something like 10s. in the obviously£ the fall in rateable value will come on the local authority. The decrease in the value of sheep on this grazing land was between £500 and —600 and the amount produced from the area was much less than in the past. This is an example of how far folly can go if you give to a body absolute power to enter into any sporting area, deer forest or otherwise, and turn it inside out.
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The Duke of Buccleuch made a reference to the question of taxation and its relation to sport. As you Lordships are aware, in the South of Scotland the importance of sporting values is not very great; but in the Northern areas the sporting values are very often in certain parishes 60 per cent. of the total rateable value. That is to say, if you abolish the whole of your sporting value you would double the existing rates. I am sorry to trouble your Lordships with this question of rates, but it is a very important one. In the county of Inverness-shire our police rates have gone up from £9,000 to £19,000 by a stroke of the pen. We had to adopt practically the same regulations which govern the police of London, and the Outer Isles policeman who perhaps does one day's work a week has got to have the same rest day as those who guard the streets of London every day. We have had to have an Education Bill which insists upon travelling expenses being paid, and has increased the rates in certain parishes from 1s. 4d. to 7s. in the £. In the particular parish to which I have referred I think I am correct in saying that the parish rates, which were 2s. in the £, are now 7s. 1½d. We have experienced, of course, the usual advances that poor localities have had on roads and lunacy, which have more than doubled the rates which in many parishes in the Highlands are approaching 10 s. in the £. Now, if you halve your rateable value by the abolition of sporting values you necessarily double the rates, and you may, unless this Act is carefully worked, reduce our Highlands to the same condition as the Outer Isles.
I do not know whether many of your Lordships have travelled in the Outer Isles. I had the fortune or misfortune to recruit there for a good many years, and I am absolutely persuaded that the whole of the misfortunes of the Outer Isles turn to a very great extent upon the question of rateable value. Lord Balfour of Burleigh had dealt with the whole rating question of the Outer Isles and knows more about the subject than I do, but I am sure he will agree with me that if the whole of the Highlands were reduced to the same state as the Outer Isles we might say good-bye to prosperity. I do not wish for a moment that it should be thought that I do not believe that the deer forest question cannot be tackled with advantage. I am a whole-hearted believer in the abolition of a great

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many of the deer forests of Scotland. A great many of them should never had been put under deer at all. I have always thought that a good many could be used for sheep land, and others for forestry and grouse and sheep and the rates on those might be maintained. A smaller number, being in close connection with crofter ground, could be turned into small holdings or used for grazing extensions. It is necessary, however, to remember a few facts. In 1892 a Commission which held a survey only found 2,500 acres of arable land.
How many men are you going to settle on 2,500 acres? At the most you would be dealing with the settlement of 100 soldiers. Is it therefore worth while to risk the Bill by not paying adequate compensation, because the numbers of persons that you are going to settle on these lands will only be a very small percentage of the total number that it is hoped to settle in Scotland. I therefore would insist again that it is most dangerous to put it in the power of such a body of men, who from their very nature have no interest in the question of taxes and rates, to reduce the sporting value and therefore reduce the rateable value. You may say what is the connection between rateable values and compensation to landlords? It is the very closest connection. It is this, that if compensation is to be paid they will obviously in making schemes take those schemes which are something like economically possible. Without compensation there is no driving force to make them adopt those schemes which by their development, would give the maximum result to the small holders and cause a minimum of hurt to the people in the villages.
With regard to the remarks, which were made by the noble Duke—as to the drop in selling value—I believe that in the South, where small holdings are not so much understood as they are in the North, the drop in the selling value is considerable. In the Northern Highlands it is perhaps not so great, but whether it is great or small it is surely right that the loss should be undertaken by the Government equally in the case of those who dwell north as in the case of those who dwell south of the Tweed. I was particularly interested to hear the statement of the Lord Chancellor that he was prepared to listen to reasonable suggestions. I am sure that he will see that on this compensation question we have got every right to feel that we should be not less
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well treated than those who reside south of the Tweed. I believe there to be a considerable demand for small holdings. It is only right that the soldiers who fought overseas should be enabled if they wished to take the risk of small holdings, but I feel in justice that it is a liability which is a liability of the nation as a whole and not one which should be thrust upon any particular body of persons.
THE DUKE OF ATHOLL: My Lords, practically all the points against this Bill have been made by the two noble Lords who have spoken, but there are one or two on which I should like to say a few words. The Bill tinder discussion is intended to be a measure for settling soldiers on the land, and as such it must obviously receive our most hearty co-operation and support, so far as it fulfills that object and so far as the Government carry it out without injustice to any other section of the population. I do not know how far the demand for small holdings exists in Scotland amongst returned soldiers, for the very good reason that we find great difficulty in getting returns. In the crofting counties, about which Lord Lovat has just been speaking, no doubt there is a greater demand still for small holdings, and I quite understand the desire of the Secretary of Scotland to speed up the granting of these small holdings considering that we are to a certain extent three or four years in arrear on our programme on account of the war. In the Lowland counties I think there is really less demand for small holdings than there was before, and for very good reasons.
In what I say now I am not saying anything against the idea of small holdings, but I think there are certain facts that we ought to consider before we blindly pass a Bill which, as has already been shown, would inflict a certain amount of injustice on certain individuals. Wages are now very high in the country districts in the Lowlands, and men can make more money with shorter hours and with less labour than they could possibly ever make on any small holding, and they have no risks to their capital. A man simply has to go on the railway—it does not matter if he knows anything at all; no questions are asked—and he gets something like 50 s. a week, and he certainly will not make 50 s. a week when lie is seventeen or eighteen years of age on a small holding. Or he can go into the timber trade. Yon see boys of fifteen getting

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£3 a week for leading a horse up and down the road. Of course, that is a temporary wage, but generally speaking wages in Scotland, agricultural and otherwise, are so high now that it would probably pay a man better to be a labourer in some profession or another than to have a small holding, more especially when you remember that his family can possibly bring in £8 or £10 a week, whereas to a small holder helped by his family there would be nothing of that sort.
A Housing Act has been passed, and we have the promise, or hope at all events, that we shall get houses for workmen better than the houses that they have at the present moment, with reasonable security. I think these conditions are probably far better for the men who come out of the Army than are the small holdings which are proposed, for the small holdings are a perpetual grind from dawn to night, and there is a considerable element of risk about them. I do not think that this ought to be an experiment, but that the men who are put on to the land should know something about it. To put men on the land who know nothing about it means that they will starve. Future tenants, therefore, will require to have a certain amount of training. I think that we might well spend a certain sum in training them before entering into very large schemes. The men should have an opportunity of learning what the work is like, so that the preliminary training can act as a sieve. Those who cannot stand it will find out beforehand, and will not go on the land and become a burden upon it and to themselves.
Apart from the question of small holdings, your Lordships must remember that there is also the question of the general public. During the war we were living on a very narrow margin of food in this country. I am not talking of small holdings and deer forests in the Highlands, but of small holdings in the Lothians. If you are to cut up some of your best land in the Lothians into small holdings—and the small holder has to live on some of the best land—you will certainly diminish the food supply of this country, and also put up the price of food to individuals in the towns. The question of allotments is a very different matter. Allotments have my hearty sympathy, because I think the old soldier is far more suited to working on an allotment than he is on a small holding, and
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also it does not take up the whole of his time. He is able to take up some other work, and yet his allotment is sufficient to give him a great many not only of the necessaries of life but also to give him what I might call a stake in the country, and an interest in it, which he would not otherwise have. Certainly it would not tie him in the same way that a small holding does.
While supporting the Bill generally, I would like to go briefly into one or two of the chief defects, as I regard them. I am not going to make the charge that this Bill—an emergency Bill—is being used to alter the Small Landholders Act, which alteration could not be made had the Government tried to bring in Amendments to that Act in the ordinary way, though there is a suspicion of that. What is being done reminds me of what took place the other day in connection with a club that wished to get a cup for competition. They could not raise sufficient money in the club to purchase that cup until someone had the bright idea that they might call it a war memorial to the members who died during the war. The money was immediately forthcoming, and they got their cup, and members were able to compete for it. It is very much the same thing here. You are able to tack on the word "soldiers" to the first Part of the Bill, thinking that it will be rushed through in consequence, because everybody will dislike and resent doing anything that might not be to the advantage of soldiers, and you then add on the second Part of the Bill something which is an alteration to an Act, and which is hardly germane to the purpose in view. I do not think that that is a fair way of bringing in an Amendment to an Act. Nearly every one of the Amendments that are brought in are Amendments that were attempted to be introduced into the Small Landholders Act, and which were beaten in the House of Commons. The noble and learned Lord on the Woolsack will remember that we worked together and defeated those very Amendments, which are now brought into this Bill. And that was done in another place, which was certainly not at all friendly to the one and only landlord on the Committee.
The first thing we find is that the Board of Agriculture is constituted the sole judge of its own schemes. That was a point we fought before, and even that very

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strong Committee in another place had to admit the justice of our contention. It is surely not fair, if two people are in disagreement, that one of those two should be the sole arbiter. That is really what happens. It is quite true that there is an appeal to the Secretary for Scotland, but after all the Secretary for Scotland is the head of the very Department which is one of the parties to the action, and Chairman of the Board. Surely he should not be the man, in common equity and justice—though. I do not suspect his wish to be fair—to be the judge in the matter. But apart from that aspect of the matter, I think it is a very great mistake, and puts the Secretary for Scotland into a very invidious position. He is not always popular as it is. He has a great many things to do—a great many difficult things to do—and he cannot possibly have time to go into all these questions, and I think it is putting the chief Minister of State for Scotland into a most invidious position to put upon him the settlement of questions for the decision of which there are plenty of judges and courts, and plenty of other kinds of arbiters in Scotland.
Then there is the question of compensation. It is probably folly to own land, but so far it is not a crime, and if the Government want to acquire land, surely they ought to pay the full market value for it. That is in equity recognized everywhere, except perhaps in some parts of this country. If, for instance, the Government in the interests of the Army wishes to buy a large stock of clothing, and has to seize it, it pays the full value for it, and sometimes pays far too much. Why, then, because a commodity is land should the Government pay sometimes half the value of that land, and do everything it can to reduce its price for the Government's own purchase? I do not call that equity and fairness.
A short time ago the Government passed the Housing Bill to which one or two modifications were made in this House. We asked for one or two modifications in order to make it more suitable for Scotland. We were immediately met with the official reply that you could not possibly alter that Bill to make it suitable for Scotland because it was in the English Bill, and it was only right that a great. Bill concerning the two countries should have the same basis. On the other hand we now come here and ask for certain provisions in our
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Bill—all questions of principle which exist in the English Bill—and we are told that that is no argument. Perhaps the noble Lord on the Woolsack, when he replies, will inform us why we should not have the same basis of compensation in Scotland as we do in England. I am sure there is a very good reason for it, but so far we have not been able to ascertain it.
A good deal has been said with regard to the loss on selling land. Some noble Lords perhaps did not hear the very cogent way in which it was put by the noble Duke, the Duke of Buccleuch. In the English Bill compensation is allowed for the loss of capital and letting value. But in the Scottish Bill you are altering the whole system that we have had up to now, and we are only allowed the letting value and not the capital value for compensation. In the case given by the noble Duke an estate was cut up into thirty small holdings, and the rent dropped by about £1,000. That was all right; you got compensation for that. The sitting tenant had offered £25,000 for the estate. It was not accepted, and then the owner, not wishing any longer to hold an estate of thirty small holdings over which he had no control, and on which there was no sport left, sold his estate, and there was immediately a drop to £12,500. Thus by the direct action of putting small holdings upon the estate there was a loss of about £12,500. Why is the owner not to be compensated for that? Because it costs too much. If it costs too much that is not the proper place to put small holders, unless the Government are prepared to make up the loss. There are certain new features in this Bill. When there is betterment that is deducted from what is due to the landlord, but if there is "worsement" we do not get any compensation. The whole thing is—"Heads I win, tails you lose." The Land Court in these cases of compensation is made the sole judge of any single case. It is not only the judge—it is the jury, the assessor and the beneficiary. Surely that is not fair.
The Bill also cuts out a great deal of compensation from a sporting point of view. It does not nearly so much affect individuals like myself with large properties and deer forests which are perfectly unassailable for climatic and other reasons. But where there is a small deer forest you can understand that there may be some small portion of it that would keep a small holder. But that small piece

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of ground is probably the grazing area for the whole of the deer forest concerned, and therefore it is better business for the district and for the whole country that it should be under deer. It is possible you could put a small holding there, but to do that you would probably have to dispossess three or four people of their houses. Under this Bill you say that compensation is to be paid as if the rights of the landlord were put to the full possible use. If you put in the word "reasonable" use one might have understood it. It is perfectly possible for an odd sheep, or a few sheep, to stray into the forest, and that would be part of the "possible" use. We think this is far too sketchy a clause to be included, in view of the fact that it may mean the entire loss of compensation, because if you were to use it to its full use and allow three or four sheep right to the top of the hill it would mean that you would not merely have malicious chasing of sheep for the various purposes of the tenants but you would have great disturbance, with the result that there would be no deer there and no compensation for sporting value. That is perfectly possible.
I want to remind noble Lords also of the question of the rates. In my own parish a year or two ago I found the value of the "general subjects" and railways was something like £12,000, and the value of the "sporting subjects" £13,000. Therefore the sporting subjects paid considerably more than half the rates in the district. If you do away with valuable sporting subjects it means that you will raise the rates for every other individual in the parish, excepting the small holders who do not pay—for the grocer, the boot-maker, and every single individual who has a house. And the rates are so high now in Scotland that you will find it will be an extremely heavy burden on the people, and that rents will drop in a great many of these places. I take a place where sheep have been put into a deer forest during the war. The rental formerly was £450, and after sheep were put in by the Board of Agriculture the rental was £30. The result is that these rates have to be paid by the community in general. It is a question to consider whether, if there is a drop in the rates, that drop should not be made good by the Government, because this has become an intolerable burden in some of the Highland parishes.
The only other clause to which I want to allude is one on which I may possibly
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have more practical sympathy (if I may say so) from the noble and learned Lord on the Woolsack —I mean Clause 14, which I think is a mistake. That clause states that it be permissible to make small holdings within the borough boundary of any borough in the North of Scotland. It so happens that I took charge of an Amendment to the Small Landowners Bill in 1911 against this very point, and carried it, at the request of some of the boroughs in the North of Scotland. If you propose to put small holdings in the middle of these boroughs, you must remember that the boundaries of those boroughs are not very wide, that they contain small villas, and that the inhabitants are anxious to keep the amenities of their boroughs undisturbed because they depend almost entirely for their livelihood on summer visitors. Some people think that a small holding contains only vegetables, and beds of violets, and so on. Speaking from my own knowledge, the reverse is usually the case; you will have on them cattle, poultry, bees, and a midden. These are not pleasant things to have next to you. The inhabitants have no objection to, in fact they are in favour of, small holdings in the immediate vicinity of the boroughs.
When we come to the Committee stage I shall move the excision of this clause, and it is up to the Government to agree or not. I wanted to bring the point forward—it is perfectly altruistic—and I think we should have further information on the subject. I believe that this was put in at a time when the usual watch-dogs in Committee in the other place were absent. I trust that the questions I have raised will be taken into consideration when the Bill goes into Committee.
LORD BALFOUR OF BURLEIGH: My Lords, I start by giving your Lordships a definite assurance that I do not desire to prolong this discussion, but I am in this difficulty—that while I agree with almost everything that has been said from the Benches behind me, I shall be liable to misunderstanding if I allowed the discussion to close without saying that what has been said applies to all parts of Scotland and to give it such support as I can. Lord Lovat and the Duke of Atholl did not in the smallest degree over-state the difficulties which will be brought on those country districts if careful discrimination is not used in making schemes which interfere

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on a large scale with the deer forests and sporting interests there. That is one of the reasons why I object to the taking away of the right of appeal in the case of schemes which are promoted by the Board of Agriculture. At present there is a right of appeal; and I want to point out to the noble and learned Lord on the Woolsack, in case he has not had his attention directed to it, that the Board of Agriculture as a Board has no interest at all in the matter of rating. It does not matter to them how high the rates go up; therefore I am strongly of opinion that the Board of Agriculture ought to have the control over them of a Tribunal of Appeal in connection with their schemes. If they are reasonable I do not believe that the Court of Appeal would ever be brought into operation, but the mere fact of the existence of an appeal will tend to make them more reasonable than thee otherwise would be. I also strongly object to the, Land Court being supreme in judging matters of compensation. I am not in the least surprised that they want to get rid of the Court of Appeal, because I think in the majority of cases in which an appeal has been taken from their decision it has been defeated; therefore it is extremely natural that they would want to get rid of the Court of Appeal.
The only other point upon which I want to speak is the question of the compensation for settling small holders upon the land. I myself dislike the idea of their being put there as tenants. I think it is an altogether false relation, as between landlord and tenant, that the landlord (whatever his sins and errors may be) should have put upon him tenants in the selection of whom he has no voice. The certain result will be friction and difficulty. In ordinary circumstances the tenant has certain mutual obligations to his landlord, and in the majority of cases they work together. If you put down a number of people selected by an outside authority, who has no relation to the landlord at all, you are in my opinion certain to have a greater amount of friction than you would have in any other circumstances. If the finances of the country are such that you cannot produce money to purchase the land, why not give the land owner the annual rent on a fair arbitration, what it is worth one year with the other—what we call in Scotland a feu—for a long period of years? That wound be very much better than what is proposed in this Bill.
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Let me give your Lordships an illustration. Supposing there is a farm of 400 acres for which 25 s. an acre is paid, or a gross rent of £500. If the Tribunals in question enter upon that farm and take the whole 400 acres and put upon them ten small holders, if the gross rent of those ten small holders comes to the £500, there is no compensation, and no case for compensation. If the rent is in any way less than £500—say, for example, it is £450 for the ten small holdings —for that loss of annual value, even under this Bill, the landlord is to be compensated, and rightly so. But supposing you put the ten small holders on and they pay nominally £500 a year—the same as the present rent£you cannot deny that the capital value of that holding is depreciated. Take it how you like, you will find no one who will defend the position that the capital value is the same; because no one will give you the same number of years' purchase for a farm on which there are ten small holders that he will give you for a large and thriving holding occupied by a prosperous tenant who pays his rent in one lot of £500. What is the reason? Can the noble and learned Lord on the Woolsack defend the position that there is to be compensation in the one case and no compensation in the other? It seems to me absolutely absurd, and personally I hope that this provision will be put out of the Bill.
Then there is another point. I have had the argument put to me that it does not matter what the selling value of the thing is if the owner does not want to sell. There are cases where the owner does not want to sell but where he is obliged to mortgage. The mortgagee who goes into the market to find security for what he wants to lend, will not lend on an estate split up in the way I have described as much as he will lend on an estate consisting of large farms. Therefore, put it how you like, you are doing harm to the capital value of what you are taking; and I do not think it is fair that the individual should be prejudiced for what is a State service. I cannot for the life of me understand what the justification on the part of the Government is for treating the Scottish land owner worse than they are treating the English laud owner. I hope that this point will receive the careful attention of the noble and learned Lord on the Woolsack, and I shall listen with great attention to whatever ingenuity he can find to make a reply. I am not going to

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prolong the discussion; but, as I have said, unless I had said so much it might have been thought that I was sitting here and not approving, whereas on all the points taken by my Scottish friends I want to say that I am in hearty agreement.
LORD LAMINGTON: My Lords, with regard to the Lowlands, can the Government say whether any benefit—economic or productive, or social—has arisen from the small holdings created under the 1911 Act? The noble Duke, the Duke of Buccleuch, referred to the case of Ballencrieff. I have not visited the spot myself, but I know a good deal about it. The land that has been broken up there constituted one of the, best farms in the East Lothians, and its condition now compared with what it was before is such that it produces about one-half of what it produced as a large farm. I have had a farm broken up into two small holdings, the farm buildings cut in two, and fresh buildings put up, the walls of which began to crack within twelve months. To-day, that farm is not occupied by a greater number of people than would have been the case under a single tenant.
What has been the benefit to the country by breaking up a farm of that description? I pity the small holders, supposing there is any great fall in prices. They benefited from high prices during the war, but, in the normal conditions of agriculture which obtained before the war, I believe they would be ruined men. At the present time, one of the most favoured farms in East Lothian is going to be broken up—Thorntonloch—into forty small holdings, I believe. What is to be the cost of establishing these holdings on a farm which is in the centre of the best producing area perhaps in the United Kingdom, if not in the world? Where is the benefit? Can the Government say that the country has Prospered or benefited by the creation of these small holdings?
If there is any particular locality where it would be desirable to establish these people it would be competent for the Government, without the elaborate machinery under the existing Act and proposed under the present Bill, to go to the open market and buy any amount of land. They would be perfectly free to act as a landlord and under the condition which Lord Balfour of Burleigh described, that would be far better than forcing
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tenants on a landlord, when it is so essential in the whole conduct of agriculture that all parties should be concerned to get together the best results. Therefore, I hope it may be possible for any member of the Government who is going to reply to say what has been the result of the establishment of these small holdings under the 1911 Act.
THE DUKE OF SUTHERLAND: My Lords, it is my intention to-night only to deal with the general principle of this Bill. The details, I think, have already been dealt with by noble Lords who have spoken, and they will come up again in the Committee stage. This Bill is of very much greater importance than is generally realised. For a hundred years the Highlands have, from time to time, seen a series of land agitations. They have died down, only to rise again and to cause fresh unrest and trouble. Let us hope that this Bill, the fruit of a compromise with all parties, may be a way of laying that ghost of unrest which has haunted the Highland glens for so long. Is it an adequate Bill to fulfil the pledges that were made exactly a year ago by the Prime Minister and Mr. Bonar Law to the ex-service men, and to fulfil those pledges in fairness to all other parties and classes? On its face value, it seems to fulfil everything that is needed, but only by experience can it be found whether it will do so, or whether another measure will be required later to settle permanently the great land questions that have distracted Scotland for so long. At any rate, it is agreed, I think, that the present Bill should suffice at least to fulfil these pledges to the ex-service men.
Let us consider for a moment the position that will arise if radical changes are made in this Bill in your Lordships' House. The Bill will go to another place and very probably will be returned in the form in which it was sent to us. A serious constitutional crisis might then arise, and I remember that it is only a short time ago—a few years before the war—that in Scotland, at any rate in the Highlands of Scotland, the House of Lords was looked upon with anything but favour. In fact, my recollection is that it was considered to be the author of all tyrannical evil. The cranks and agitators very cleverly twisted the various acts of the House of Lords to represent everything as being against the people's interests. We do not wish for a similar state of affairs at this moment, when we should all be united

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against the many evils of Bolshevism and such like troubles that surround us. It is important that we should all pull together and act in fairness to all parties. I think, if I may say so, that Lord Lovat, in his excellent speech, made a very true remark—that the small landlords, who depend year by year on their rentals and sporting rentals, have every right to expect fair and honest compensation, equal to that which they would receive if no settlement scheme were to take place on their land.
What is the cry from the ex-Service men themselves in Scotland? At present they say that none of the pledges have been fulfilled; that they are still waiting for something more to be done; and that what has been done is comparatively trifling in its extent. That is quite true, and it is only by getting this Bill through, with reasonable speed and by allowing only reasonable amendments to take place, that this crying need will be met. Great discrimination is necessary to avoid mistakes that may be made. For instance, the wrong men may be selected and bad schemes may be adopted. Inefficient officials and ill-advised plans will cost the country much money and be a waste of time. The Board of Agriculture officials, who have such large powers under this Bill, should be chosen with the greatest care. They must be men of real practical knowledge. The Secretary for Scotland, who has a great responsibility under the Bill, must weigh well the consequences of everything he undertakes, and he must review in all its different phases every scheme that comes to him for consent. I think in the circumstances, and taking into consideration the conflicting interests, no better Bill could be evolved than the present one.
VISCOUNT CHAPLIN: My Lords, I have no direct connection with Scotland which would justify me in speaking on this question, but I have had a long experience of that country for many weeks every autumn for a number of years, and have learned a good deal about the sporting aspect of the case. I wish to express my entire agreement with the statement of the noble Duke, the Duke of Sutherland, when he feared that the administration of this Bill might not be in sufficiently practical hands. That is the one danger in these days we have to contend with in regard to all agricultural questions. There is a want of practical official knowledge in
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the Department of the Board of Agriculture for England, though I cannot say from my own knowledge what the position is with regard to the Board of Agriculture for Scotland.
I am entirely in sympathy with the views expressed by my noble friends in this debate. I believe them to be absolutely right. In no case are they more accurate than in what they have said about rates. I am perfectly certain that unless this Bill is administered with great care in this particular respect its passage will be the worst day for the rates and the ratepayers in Scotland that Scotland has experienced for a long time.
With regard to small holdings and allotments, if I do say a word on that subject I am sure the House will believe that I am perfectly genuine in my interest in small holdings. It fell to my lot in the House of Commons, many years ago, to be the author of the first compulsory Bill for allotments, and it was also my duty to introduce and carry the first Bill in the House of Commons providing for the addition of small holdings. Therefore, my views on that point may be already well known. But Scotland differs to a great degree, especially in the north where the deer forests exist, from the position in England in one respect which no one up to the present has mentioned. I will give any own experience.
For many years I had a forest in the middle of Sutherlandshire, in the very centre of that county, joined on one side by the deer forest of the Duke of Sutherland and on the other by the deer forest which now belongs to the Duke of Westminster. What did I learn from my sojourn there autumn after autumn for many years? I learned that it was very unwise to attempt to make a great outlay in that part of the world upon small holdings, and for this reason. You always have to contend with the weather and the seasons, and they are absolutely uncertain. In three years in succession the weather was so bad that the crops were never garnered at all, practically speaking they were wasted, and all the exertions and work given to them worthless. This is a consideration which does not appear to have entered the mind of the Board of Agriculture in Scotland, although they certainly ought to have known it.
Just another word on the question of deer forests. People who are not versed

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in the subject themselves do not seem to be aware how much food they produce for the people living in these sparse country districts. During the war the owners of deer forests killed many stags solely for the purpose of feeding the population who lived around them. I am sorry I have not the figures with me. I asked for some figures from Caithness which were given to me, but I have forgotten or lost them—it was three years ago. But the number of stags killed during the war was enormously great for the purpose of providing food for the people, and it is a matter which ought to be borne in mind in any legislation on the subject that the number of deer is now much smaller than it was at that time. I do not wish to delay the House but, having listened with the greatest interest to the debate and knowing a good deal of the subject, I thought it might be of interest to your Lordships to hear this side of the case from some one who has been thoroughly well versed in it for the last thirty or forty years.
THE EARL OF ANCASTER: My Lords, I am loth to continue the discussion on this Bill because it is a subject with which I am not very well acquainted, although, of course, I am interested in it. In listening to this debate—I do not know whether the Lord Chancellor is going to give us a reply—I could not recall to mind any other Bill which assesses compensation for land on the same principles. On almost every occasion in which land is taken for public purposes it is only human nature for the person whose land is being acquired to try and make out that the land is valuable and would let for a great amount of money. Under this Bill the position will be entirely altered, and any proprietor whose land is taken for small holdings must go and plead his case by saying that his land is most outrageously over-rated, try to make out that be has rack-rented his tenants and that he ought to have made a large reduction in the rent.
If I understand this Bill, the land owner is to receive compensation for any loss of rent but not for any loss of capital value. It amounts to this. If a proprietor is receiving £500 from a large farmer whose land it is intended to convert into small holdings he goes before the Land Court and says he has been dealing harshly with the farmer, that the £500 is a most absurd rent, and that as a matter of fact he ought to have asked the farmer £400 a year as
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the rent. If he is fortunate enough (as I understand the Bill) to convince the Land Court that this £500 is an excessive amount and that £400 is the proper rent, they will take his farm at £400 and compensate him for the £100 which he loses. If he says that £500 is really the true and fair rent the authority—the Land Court—will take the farm and not pay a single halfpenny as compensation. This is really the gist of the whole Bill. We know perfectly well that this farm land, for which a rent of £500, which was quite fair, was paid, will be cut up into small holdings, and we know also that at the end of seven years several small holders will not be making as big a success as they ought to be making, and that they will apply for a reduction of rent. We feel equally certain that the Land Court will say "Here is a disabled soldier, or an unfortunate small holder. It is true it is fair land, but still we are of opinion that he has not got the best bits of the farm which was cut up, and we will therefore reduce the rent by 25 or 30 per cent." The whole of the resulting loss of selling value will fall on the land owner. It seems to me that this Bill reverses the old order of things which has hitherto prevailed in arbitration cases, as regards the taking of land compulsorily, and that every man whose land is being taken will have to go into Court and try to prove that he is rack renting his tenants. I cannot believe that it will be a satisfactory solution of the question.
Part I of the Bill is, of course, a fair and proper way of dealing with the question, and Lord Lovat gave us some good figures to illustrate what very little difference it would make if Part II were left out altogether. In Part I everything is fair and above board, but it is not fair and just to put these small holders as tenants of the landlord and give no compensation at all, and then at the end of seven years for these small holders to be able to apply to the Land Courts and get their rents reduced. As we all know, if there is a change in agriculture and some of these small holders begin losing their money, the first thing will be a very large reduction in rent, and I personally consider that the loss should fall upon the State and the general tax-payer, and that certain landowners in Scotland should not be selected to have this experiment made on them by the State, and then be called upon to bear what loss may accrue from the

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creation of these small holdings. It appears to me, if you go into the question to the very bottom, that you had better put an annual levy upon all the land owners in Scotland in order to compensate those who may suffer under this Bill in future years, because undoubtedly certain land owners will have to pay the cost of creating these small holdings and other land owners who have not got small holders on their estates will escape. Equally the whole of the ratepayers and tax-payers will escape, which is a very different thing from what happens under the English Bill, where, as we know, if small holdings are not a success the loss falls upon the ratepayers of the county or else the State has to come in and provide compensation. As I have said, Part II of this Bill appears to me to be a complete reversal of the old order of things, and it hits certain people most unfairly in order to provide these small holdings.
THE EARL OF ELGIN: My Lords, I had no intention of taking part in this debate, but I think it has been proved that this is a subject of great importance, because it has occupied the attention of the House for a considerable time, and we have listened to the speeches of various noble Lords who are well acquainted with all the aspects of the question, including two ex-Cabinet Ministers. So far, although the debate has covered a period of over two hours, we have not had any reply from His Majesty's Government.
The subject, as I have said, is one of considerable importance, and is viewed as, such by His Majesty's Government—at least we presume so from the fact of the Bill having been presented—and all the noble Lords who have spoken this afternoon have expressed the desire, which I know is in the heart of every one of your Lordships, that we shall do everything we possibly can to help the settlement of soldiers upon the land of this country. I am quite certain that all of your Lordships who have served in any of His Majesty's Forces during the years of the war must have been impressed, in a way which is quite indelible, with the great value to the country of a love of the country to which we belong—that love which is so well-expressed in the peasantry of France. If we can by any possible means inculcate that same love of country in our own people, we shall be doing something to further the real betterment of this country in the future.
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To-night we have had before us this Bill for the settlement of the people on the land of Scotland, and we have tried to consider it from the point of view of those who welcome it, and while supporting it we have only endeavoured to criticise it in a way that is reasonable. So far, however, we have not received from His Majesty's Government any indication of how far they are prepared to meet those Criticisms which we consider reasonable. It is only in order to point out that omission that I have risen to-night, and I hope that before the debate closes we shall receive some indication of His Majesty's Government's wishes.
THE LORD CHANCELLOR: My Lords, I thought it would probably occur to the noble Lord who has just spoken that it was usual for a Minister who introduced a Bill to reserve his remarks in reply until all other speakers who wished to take part in the debate had spoken. That is the usual course, and it is one which seems to me also to be convenient.
This observation falls to be made at once, that I have listened most attentively to all the speeches that have been made, and not one, as was to he expected, challenged in any way, even remotely, the Second Reading of this Bill. I do not believe there is a single member of your Lordships' House who would desire to raise his voice against the proposal for the Second Reading. It follows that all the points that have been made are points which will no doubt be made the subject-matter of specific proposals on the Committee stage, and upon which detailed discussion will naturally take place when that stage arrives.
I do not in the least exclude myself from making a few general observations upon some of the points that have been taken, but of course I guard myself against any expectation that I should commit myself with any particularity to any one of the single points raised. The whole object of a Second Reading debate is that the Government may be afforded an opportunity of explaining the general effect, a they understand it, of their measure, and that they may receive the advantage of hearing what is the general opinion, the expression of which is appropriate to that stage, that is entertained by members of the House. Certainly I cannot complain that I have not been afforded in full measure the advantage of learning what impression

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certain provisions of this Bill have made upon your Lordships. Those who have spoken have represented, as they always do represent, clearly, admirably, and ably, the great land owners of Scotland. I know of no body of men who can give expression more forcibly and more plainly to the views which they hold, and certainly they have given such expression to them to-night. I would only say by way of caveat at this stage that when Amendments are put down they will be carefully considered, while the interval between this stage and the Committee stage will be used by myself for the purpose of discussing with the authorities the various points which have been raised.
While that is true, it should, I think, be also remembered that this Bill was discussed in another place by a Committee which consisted very largely of Scotsmen, belonging to most classes in the community, and that it was afterwards considered and discussed on the Report stage with considerable care in the House of Commons by the whole body of Members, and it must not therefore be supposed that Scottish opinion has not hitherto been brought to bear upon the terms of this Bill. That does not in any way preclude the necessity of giving most exact care to the points which have been urged in the debate to-night with the object of deciding whether on any one of those points the fairness of the present course has been successfully attacked, and whether a further course can be substituted. Your Lordships may rely upon it that that course will be pursued, and that when Amendments are put down I will see if it is possible to discover whether any further purpose can be served by discussion.
Some specific questions were asked. I may in the first place deal with the suggestion made by the noble Viscount, Lord Chaplin, who said that it was enormously important that the Commissioners should be men of experience. It is, of course, an elementary principle that the Commissioners to be appointed should not only be able and experienced, but that they should be experienced in dealing with these very localities. It is to be reasonably expected that only such men will be appointed. The Duke of Buccleuch, if I understood him, asked whether the whole of the £2,500,000 would be utilised within the two years contemplated by the Bill. The answer
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to that is, it is the case that the fund can be used after the lapse of two years for equipment in the case of schemes which have been approved within two years, but which have not in fact been completed within that period, and it is thought that that provision will safeguard every case which needs protection.
One noble Lord asked whether the £2,500,000 was available for both Part I and Part II, and the answer is that it is so available. Lord Lovat developed a much wider attack upon Part II, and one with which I do not propose to deal to-night, because it would take me far too long. He attacked it upon the ground that the methods adopted in Part I were much preferable to those contained in Part II, and that the whole fabric of the Bill could easily be so, adjusted as to render Part II unnecessary.
LORD LOVAT: I only asked the noble and learned Lord why we should have Part I founded on equity and Part II founded on injustice.
THE LORD CHANCELLOR: What the noble Lord intervened to say does not appear to me to make what I said inaccurate. I said that the noble Lord had put forward a position that he would like to see Part II excluded from the Bill. I do not pretend to recollect verbally what the noble Lord said, but I think that I have done complete justice in substance to what he said. I do not feel called upon to quote the whole of the noble Lord's speech so long as I do not do him an injustice. I understood him to put forward the argument that Part II ought to be left out of the Bill because a preferable method was employed in Part I. I will deal with what I understood him to say. As I stated, the whole argument would be extremely lengthy, but I recognise that it is one which will have to be faced, and which the noble Lord is fully entitled to put. I merely said to him that he could put down a simple Amendment in the terms of his criticism—
LORD LOVAT: I must decline to have words put into my mouth which I never said. I thought that I made myself perfectly clear, that I was anxious that Part II should form part of the Bill. I saw a very great advantage in having the method there set out. My exact words, as far as I can remember them, were that

929
I saw great advantage in having Part II included, especially having regard to the avoidance of taking a dispute from one Court to the other and so hanging up procedure, which has occurred under the 1911 system. I did say, however, in regard to compensation, that the proposal was not founded upon equity, and that I objected to it. I hope that the noble and learned Lord on the Woolsack agrees with that.
THE LORD CHANCELLOR: I am extremely sorry that I misunderstood the noble Lard. I understand now that there are some portions of Part II which in his judgement are not founded in equity. I can only assure the noble Lord that if he will indicate by Amendment precisely those points, and set out how they can be put right, any suggestions coming from him will receive my most careful attention and that of the Government. I misunderstood the full extent of the noble Lord's disagreement with that part of the Bill.
The Duke of Atholl equally made an attack upon the method of determining compensation which is adopted under this Bill, and that attack was afterwards repeated, with that great weight which he brings to bear on all Scottish questions, and indeed on all questions, by Lord Balfour of Burleigh. I know well, and those who framed this Bill realise, that the question of compensation is one of difficulty and of perplexity. They realise also that the method adopted is one which is open to attack, and was certain to be so attacked. I was asked why the method of compensation adopted in this Bill differs from the method which has been adopted in the English Bill. Whether the explanation is a complete one or not, it springs, of course, from the difference of system which in the past, not only in these Bills but any other Bills, has been adopted in taking land in the two countries. In England, where there is compulsory leasing, the land is leased by a local authority, and the rent is fixed by arbitration. That system, whether good or bad, has always been adopted. In Scotland, under the 1911 Act, tenants are compulsorily imposed on the land owner and rents are fixed by the Land Court. That that system is a good one I have never claimed. Indeed, I remember the occasion referred to by my noble friend, the Duke of Atholl, in which he and I were engaged elsewhere in attempting to resist
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many of the provisions of the Act of 1911. And many have taken the view that the methods adopted in the Act of 1911 are open to the gravest possible criticism.
The question whether it is possible in terms of this Bill to adopt a method which gives greater satisfaction to those who are affected, without at the same time inflicting an undue burden upon the community is another subject which will be, and ought to be, considered in Committee, and in respect to which the Government will certainly be prepared to give due weight to all considerations that may be urged. I need, I think, only add in reference to the criticism made by the Duke of Atholl upon Clause 14 of the Bill that this clause was most strongly pressed upon the Government in the House of Commons. I think it formed no part of the Bill as originally drafted, and the clause was inserted on the Report stage without a Division—and I think (though I speak only from memory) at the wish of Scottish members.
Lord Balfour of Burleigh also spoke on the subject of the appeal. I agree with him that prima facie in all these cases it is reassuring to know that there is an appeal. The Bill as at present drafted has adopted such safeguard as is afforded by the fact that the Secretary for Scotland must assent, if recourse is had to him. The Secretary for Scotland has, of course, every interest in questions of rating, and it is the view of those who presented this Bill that the right is preserved and that there is sufficient safeguard—but that, again, is not a point of absolute principle, and it may be discussed hereafter.
A question was asked by Lord Lamington as to whether the small holdings in a particular district in the Lowlands of Scotland had proved on the whole to be successful. I am not able without reference to documents to give him any exact figures, nor can I compare the actual productivity of the small holdings in the Lowlands with the productivity of the other lands which have not been split up. But I am informed by inquiries I have made since he spoke from those who represent the Department that in many cases in the Lowlands these small holdings have been extremely productive. Of course, the argument in their favour is not based exclusively upon relative productivity, although that is a very important consideration. It must also be based on

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the social conditions which have been urged in regard to the whole system of small holdings. But in regard to that point, as far as there are figures available, I will see that the noble Lord has them in the Committee stage. I have attempted to deal with such points as have been raised, and, whether we are able to accept Amendments which are proposed or not, your Lordships, at least, need not be apprehensive that they will not engage our careful and sympathetic attention.
Bill read 2a, and committed to a Committee of the Whole House.

BUSINESS OF THE HOUSE.
THE MARQUESS OF SALISBURY: My Lords, before your Lordships enter upon the consideration of the next Order I wish to put a Question to the noble Earl the Chancellor of the Duchy as to the position in which your Lordships find yourselves in respect to business. The next two Orders, both of which have Amendments on the Paper in respect of them, stand in front of the Government of India Bill. I think most of your Lordships have a feeling that the Government of India Bill has been treated with very scant respect in this House. When we reflect upon its enormous importance and the very important speech which, no doubt, the Under-Secretary for India is about to deliver, and the other speeches from other noble Lords on this subject, we must come to the conclusion that the time allowed us is very small.
I should like to ask the noble Earl what arrangement he proposes to make with respect to the subsequent course of the India Bill—whether he is going to take it at all to-night, in any case, whether he will take it as the first Order to-morrow, and whether the subsequent stages of the Bill will be treated with greater respect than the Second Reading stage. I refer to the Committee stage—a sinister rumour has reached me that it was proposed to take it after dinner in the middle of next week. I earnestly hope that is not true. I would remind the Government of the vast importance of this Bill, and I hope the Government will take that view of it also. I have no desire to suggest that the Under-Secretary should not deliver his speech tonight. I hope there will be proper time
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for it, but we shall have great difficulty anyhow in getting through the Second Reading debate in the position in which business has now been placed.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF CRAWFORD): My Lords, I can assure the noble Marquess that the last thing the Government desire is to show disrespect to the great Dependency of India, or to your Lordships either. It did not occur to me that it was disrespectful to the House or to India to begin the Second Reading of this Bill to-night. This Bill, substantially in the form in which it is before your Lordships, was in the hands of the public many months ago. It has since been to a Joint Committee of the two Houses, which has made certain Amendments in the Bill, and I think the amended Bill has been in the hands of the public for three or four weeks. Certainly it did not occur to me that it was disrespectful to anybody to proceed with the Second Reading at the earliest possible moment.
As regards the two Bills preceding the Government of India Bill on the Order Paper, I understand from Lord Muir Mackenzie that he has reserved his observations for a later stage, and my impression is that these two Bills would not occupy more than a very few minutes. In that case I suggest that Lord Sinha should present the Bill on Second Reading—he will make an important and a considered speech—and that the further stage of the Second Reading should be proceeded with tomorrow.
THE MARQUESS OF SALISBURY: As the first Order?
THE EARL OF CRAWFORD: Well, there is a Bill which was on the Paper last night, the Ferries (Acquisition by Local Authorities) Bill, in the name of Lord Galway. Subject to that, I think the India Bill will be the first Order. I gave notice yesterday to your Lordships that I was going to propose that the House should meet at three o'clock to-morrow in order to give as much time as possible for the later stages of the Second Reading of the India Bill. As regards its Committee stage, it is, perhaps, rather premature to deal with that before the Second Reading debate has been begun; but Lord Curzon's idea was

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that this should be taken on Tuesday next, if necessary after dinner.
I really must demur to the view that for the House of Lords to sit after dinner deserves the epithet of sinister, and in view of the fact that we have some important measures to come before us—notably that to which your Lordships devoted some attention a night or two ago, a Bill dealing with electricity, and also the Housing Bill—I hope that your Lordships will be prepared to sit after dinner next week, on three nights if necessary, in order to get through this business. Your Lordships can sit on Monday and Friday as well; but I must say that it seems to me that it is generally for the convenience of business that Bills should be taken after dinner as well as before dinner; otherwise I must say that the programme is rather larger than the House can be expected to encompass in the short period we have before dinner.
THE MARQUESS OF CREWE: My Lords, although there is indeed no question before the House, perhaps I may be allowed to say a word as it so happens that I think I am the only Peer in the House at this moment who has been for many years in charge of its business, and therefore I am quite able to sympathise with the difficulties in which His Majesty's Government may find themselves. It is quite true, and it has very often happened, that at these late periods of the session we are not always well treated by another place and a great congestion of business occurs here. But I cannot, while admitting all that, acquit His Majesty's Government of lacking, as I think, in proper respect to what is after all by far the most important measure that they could have to deal with during the whole period that they remain a Government, for however long that may last. From the Imperial point of view this measure is, as we all know, infinitely more important than any other with which His Majesty's Government can have to deal; and in those circumstances I cannot help thinking that it would have been possible to arrange that this most important measure should have been made the first Order on some day of the week.
The Bill which has just been considered is of great local importance, but I do not think that even my noble friends on those benches who are personally interested will be prepared to say that it compares
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for a moment with the Bill which is shortly going to be introduced. Nor can I feel that the reply which the noble Earl has given regarding the proceedings in Committee can be considered as adequate. Very likely it may be necessary for your Lordships to sit after dinner next week. No one will make any complaint of that. But we all know what the sort of attendance after dinner in all parts of the House is, and the extremely important details of this measure will not, as I fear, receive the consideration which they ought to receive in Committee if this particular subject is relegated to the hours approaching midnight. I may remind the noble Earl—who seemed to think that it was a mere matter of course that this measure should be taken at seven o'clock—that a large number of visitors to the House, Indians and those interested in India, have come down to hear the debate, and have been sitting here in expectation of its beginning. In those circumstances I cannot help joining the noble Marquess in saying that I think it is a great misfortune that this most important measure has been treated in this way.
THE EARL OF CRAWFORD: If Lord Crewe, as Leader of the Opposition, asks that this Bill shall be postponed until tomorrow I will, of course, acquiesce. My noble friend, however, is prepared to make his speech to-night.
Noble LORDS: Hear, hear.
THE MARQUESS OF CREWE: I can answer that question at once. I consider it to be entirely a matter for my noble friend the Under-Secretary of State for India. It is purely a question for him whether he would prefer to make his speech to-night. We are all looking forward with the keenest interest to that speech, and, if my noble friend is good enough to make it, I am sure that his doing so would please all your Lordships.
THE EARL OF CRAWFORD: Then I suggest that your Lordships continue with these two small Bills now, that Lord Sinha should then move the Second Reading of the Government of India Bill, and that the debate upon it should be taken after Lord Galway's Bill as second Order will be to-morrow.

TRADE MARKS BILL.
Amendments reported (according to Order).
Registration of trade marks in Part B.
2.—(1) Where any mark has for not less than two years been bona fide used in the United Kingdom upon or in connection with any goods (whether for sale in the United Kingdom or exportation abroad), for the purpose of indicating that they are the goods of the proprietor of the mark by virtue of manufacture, selection, certification, dealing with or offering for sale, the person claiming to be the proprietor of the mark may apply in writing to the registrar in the prescribed manner to have the mark entered as his registered trade mark in Part B. of the register in respect of such goods.
(2) The registrar shall consider every such application for registration of a trade mark in Part B. of the register, and if it appears to him after such search, if any, as the registrar may deem necessary that the application is inconsistent with the provisions of section eleven or section nineteen of the principal Act, or if he is not satisfied that the mark has been so used as aforesaid, or is incapable of distinguishing the goods of the applicant, he may refuse the application or may accept it, subject to conditions, amendments or modifications as to the goods or classes of goods in respect of which the mark is to be registered, or to such limitations, if any, as to mode or place of user or otherwise as he may think right to impose, and in any other case he shall accept the application.
LORD MOULTON LORD MOULTON moved, in Clause 2, subsection (2), after "or is," to omit the word "incapable" and to substitute the word "capable." The noble and learned Lord said: This Amendment is to correct a curious mistake which has arisen in the re-printing of the Bill as amended in Committee. The word "incapable" has been inserted instead of the word "capable." The Amendment which I had down originally remedied the defect by inserting four or five other words, but I think the object would be best attained by substituting the word "capable" for the word "incapable." I desire to move my Amendment accordingly.
Amendment moved—
Page 2, line 10, omit ("incapable") and insert ("capable").—(Lord Moulton.)
VISCOUNT PEEL: I think that will meet the difficulty.
On Question, Amendment agreed to.
LORD EMMOTT LORD EMMOTT moved to delete from the Second Schedule the following words: 'In subsection (11) of Section 64, after the
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word 'refused' the words 'lapsed, expired, withdrawn, abandoned, cancelled' shall be omitted."
The noble Lord said: When I moved this Amendment the other night in Committee the Government promised to consider the matter. Since that time I think they have had ample proof that the Manchester people desire the Amendment of which I have given notice. It was suggested to me that it was unnecessary because the lapsed, expired, and other marks now being used would in future be able to be registered under Part B of the Bill. That was not the case. They wanted the continuance of the search for Part A purposes. I can explain the matter further if the noble Viscount desires, but if he is able to meet me I shall be glad to save the time of the House.
Amendment moved—
Second Schedule, page 9, leave out lines 18 to 20.—(Lord Emmott.)
VISCOUNT PEEL: The attitude of the Government is that they are not really convinced of the necessity for the retention of these words; but, as I understand that the matter is pressed strongly by the Manchester Chamber of Commerce, the Government do not wish to offer any opposition if my noble friend presses the Amendment.
LORD EMMOTT: I do press it.
On Question, Amendment agreed to.

PATENTS AND DESIGNS BILL.
Amendments reported (according to Order).
VISCOUNT PEEL VISCOUNT PEEL moved in Clause 1, subsection (3) (b), to leave out "the Patent Office" and to insert "his address for service given on the register." The noble Viscount said: The necessity for this Amendment is that the Office cannot undertake to forward all these letters, and the suggestion is that as the patentee must register his address at the Office it would be quite sufficient for the purposes of service.
Amendment moved—
Clause 1, page 3, line 29, leave out ("the Patent Office") and insert ("his address for service given on the register").—(Viscount Peel.)
LORD MOULTON: I admit that this is an improvement.
On Question, Amendment agreed to.
VISCOUNT PEEL VISCOUNT PEEL moved, in Clause 1, subsection (9), to leave out "allowed by the Comptroller" and insert "prescribed." The noble Viscount said: This is mere drafting.
Amendment moved—
Clause 1, page 5, line 34, leave out ("allowed by the comptroller") and insert ("prescribed").—(Viscount Peel.)
On Question, Amendment agreed to.
VISCOUNT PEEL VISCOUNT PEEL moved, in Clause 2, subsection (1) (d), to leave out "the Patent Office" and insert "his address for service given on the register." The noble Viscount said: This is consequential on the first Amendment.
Amendment moved—
Clause 2, page 8, line 11, leave out ("the Patent Office") and insert ("his address for service given on the register").—(Viscount Peel.)
On Question, Amendment agreed to.
VISCOUNT PEEL VISCOUNT PEEL moved, in Clause 4 (bb), after "opposed," to insert "was deposited pursuant to an application for a patent which is or". The noble Viscount said: This is purely drafting.
Amendment moved—
Clause 4, page 9, line 40, after ("opposed") insert ("was deposited pursuant to an application for a patent which is or").—(Viscount Peel.)
On Question, Amendment agreed to.
LORD EMMOTT: My Lords, I have handed in an Amendment, which there was not time to have printed, dealing with the difficult question of the moratorium. As has been explained, there is a real case which ought to be met, if it can be met satisfactorily, with regard to those patentees who have really suffered injury owing to the war. That case is being met in other countries—in France, Belgium, and, I believe, in Germany. I do think some better effort ought to be made to meet it than is made in the Bill as it stands. The only relief these patentees have is under Clause 7 of the Bill as it now stands. The Government plan set out there would mean, in the case of an uncontested application, that it would cost the patentee £100 and, i
938
the case of a contested application, a minimum of from £750 to £1,000.
I have given private notice of my Amendment, which I think is a practical one—much more practical than that which was on the Paper before. I understand that the Government, although they feel disinclined to accept it, have another proposal that does not go all the way I desire to go, but I am told that it will quicken, cheapen, and greatly simplify the procedure and will, in particular, substitute as a reason for prolongation a much less exacting test than is now proposed. In these circumstances, if my noble friend can assure me that he will move the Amendment which has been shown to me privately instead of mine, I will not trouble the House with mine.
VISCOUNT PEEL: My Lords, I am ready to move this Amendment, which is to leave out subsection (2) of Clause 7, and to add a new subsection. I may say shortly that the effect of the new subsection is to proceed by originating summons instead of by petition and so enormously to decrease the expenses, especially for the patentee. The Court in considering its decision may have regard solely to the loss or damage so suffered by the patentee and not, as in the principal Act, to cases of exceptional merit only. This, I think, will give great relief to patentees who wish in this matter to extend their patent.
THE MARQUESS OF SALISBURY: For what length of time does this permit the extension to run?
VISCOUNT PEEL: That is at the discretion of the Court. It is governed by the principal Act.
Amendments moved—
Clause 7, page 11, line 22, leave out subsection (2).
Clause 7, page 11, line 32, at end insert as a new subsection:
"At the end of the same section the following subsection shall be added: Where by reason of hostilities between His Majesty and any foreign State the patentee as such has suffered loss or damage (including loss of opportunity of dealing in or developing his invention owing to his having been engaged in work of national importance connected with such hostilities), an application under this section may be made by originating summons instead of by petition and the Court in considering its decision may have regard solely to the loss or damage so suffered by the patentee. Provided that this subsection shall not apply if the patentee is a subject of such foreign State as aforesaid or is a company the business whereof is managed or

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controlled by such subjects or is carried on wholly or mainly for the benefit or on behalf of such subjects notwithstanding that the company may be registered within His Majesty's Dominions."—(Viscount Peel.)
On Question, Amendments agreed to.
VISCOUNT PEEL VISCOUNT PEEL moved to insert, after subsection (3) of Clause 8, the following new subsection—"(4) Nothing in this section shall affect the right of the Crown or of any person deriving title directly or indirectly from the Crown to sell or use any articles forfeited under the law relating to the customs or excise." The noble Viscount said: The object is to give the Crown the same right to sell all goods seized by the Customs and Excise Departments under the proper authority, even if such goods are the subject of patent right.
Amendment moved—
Clause 8, page 12, line 42, after subsection (3) insert the said new subsection.—(Viscount Peel.)
On Question, Amendment agreed to.
LORD MUIR MACKENZIE: My Lords, I had intended to call your Lordships' serious attention to Clauses 19 and 20 of this Bill and to Clause 12 of the Trade Marks Bill, but it is quite evident that everything ought to be done to get on with the business of this evening in relation to the Government of India Bill. Therefore I shall try to get an opportunity to make my remarks on the Third Reading.
LORD MOULTON LORD MOULTON moved, after Clause 15, to insert the following new clause—
". For section seventy-one of the principal Act the following section shall be substituted:—
"71.—(1) Where a person becomes entitled by assignment, transmission, or other operation of law to a patent or to the copyright in a registered design, he shall make application to the Comptroller to register his title, and the Comptroller shall, on receipt of such application, and on proof of title to his satisfaction, register him as the proprietor of such patent or design and shall cause an entry to be made in the prescribed manner on the register of the assignment, transmission, or other instrument affecting the title.
"(2) Where any person becomes entitled as mortgagee, licensee, or otherwise to any interest in a patent or design, he shall make application to the Comptroller to register his title, and the Comptroller shall, on receipt of such application, and on proof of title to his satisfaction, cause notice of the interest to be entered in the prescribed manner in the Register of Patents or Designs as the case may be with particulars of the instrument, if any, creating such interest.
"(3) The person registered as the proprietor of a patent or design shall, subject to the provisions of the Act and to any rights appearing from the
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register to be vested in any other person have power absolutely to assign, grant licences as to or otherwise deal with the patent or design, and to give effectual receipts for any consideration for any such assignment, licence or dealing.
"Provided that any equities in respect of the patent or design may be enforced in like manner as in respect of any other personal property.
"(4) Except in applications made under section seventy-two of this Act, a document or instrument in respect of which no entry has been made in the register in accordance with the provisions of subsections (1) and (2) aforesaid, shall not be admitted in evidence in any court in proof of the title to a patent or copyright in a design or to any interest therein unless the court otherwise directs."
The noble and learned Lord said: My Lords, I move this Amendment in pursuance of an arrangement which was made in the Committee stage of the Bill that a clause of this kind should be brought up on Report. In my opinion, it fully carries out that which we had in view.
Amendment moved—
After Clause 15, insert the said new clause.—(Lord Moulton.)
VISCOUNT PEEL: I agree to the Amendment.
On Question, Amendment agreed to.

GOVERNMENT OF INDIA BILL.
Order of the Day for the Second Reading read.
THE UNDER-SECRETARY OF STATE FOR INDIA (LORD SINHA): My Lords, the position I have held for the last few months in your Lordships' House is one of which I have been naturally and gratefully but I hope not unbecomingly proud, though I have felt oppressed with a deep sense of personal insufficiency. My Lords, these feelings reach their culminating point to-day when it involves the high privilege of asking your Lordships to give this Bill a Second Reading. If any arts of eloquence or persuasion, were necessary for the purpose of inducing your Lordships' House to accept the general principles underlying this Bill, I would despair of the task before me, but I feel convinced that the great experiment which this Bill will inaugurate is likely to prove successful and beneficial, not only to India, but to the Empire at large. It is because I am convinced that this Bill is wisely framed to place the feet of India on a level road leading to that goal to which she has long aspired, the

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goal of self-government within the Empire, and to a real partnership in that great Empire which is bound together by unswerving allegiance and enthusiastic homage to our august Sovereign, in whose person is embodied all that Empire means and connotes, I repeat that it is with feelings of humble and grateful pride that I rise to make this Motion.
This Bill is the immediate outcome of the memorable declaration of policy made by His Majesty's Government on August 20, 1917. The whole of that declaration is embodied in the Preamble of the Bill; it has been read to your Lordships several times already, and I will not weary your patience by reading it again. It is the first step forward that Parliament is asked to take in fulfilment of that pledge, and I confidently hope that your Lordships will agree that in taking this step you will be taking a generous and perhaps a bold step, and yet one which is neither rash nor hasty, nor unnecessary or ill-considered.
My Lords, let me invite your attention for a few moments to the immense amount of care and critical examination from every possible standpoint which have gone to the elaboration of this measure. The matter was first broached when Mr. Austen Chamberlain was still. Secretary of State for India, and Lord Hardinge, after full consultation with the heads of the various Local Governments, put forward certain proposals for post-war reforms. Soon after Lord Chelmsford assumed office, in 1916, the need for a public declaration of policy as to the future of India was recognised by the Secretary of State and His Majesty's Government. The Government of India invited Mr. Chamberlain to visit India and confer with them as to the practical steps to be taken in pursuance of this policy. The policy was declared in August, 1917, and Mr. Montagu, to whom on his acceptance of office the Government of India had transferred their invitation, went to India in the autumn of that year. Before he left he had already been furnished with the results of prolonged and thorough investigation by his advisers of the India Office as to the possible lines of advance.
The Secretary of State and the Viceroy spent the cold weather of 1917–18 in a detailed inquiry in India, in the course of which they visited all the larger centres in the provinces and had the benefit of the fullest consultation with the heads of
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Local Governments and the members of the Government of India and of non-official opinion of all shades. The result of this inquiry was the Montagu-Chelmsford Report, published in July, 1918, and this was further supplemented by the minute and careful investigations carried on throughout India by the two Committees presided over by the noble Lord, Lord Southborough. These investigations resulted in two further Reports—the Franchise Report and the Functions Report. And may I pause here for one moment to pay a humble tribute to Lord Southborough and the members of his Committee for the valuable work done by them, without which it would have been impossible to proceed with, and indeed to frame, this Bill.
These three Reports, the Montagu-Chelmsford Report, the Franchise Report, and the Functions Report, have been subjected to exhaustive examination by the Government of India, the results of which you have before you in three of their published despatches. You have also two other published despatches of the Government of India dealing with various special aspects of the problem. Yet another Committee, presided over by the noble Marquess, Lord Crewe, closely examined the question of the changes to be made in the system of home administration of Indian affairs, and you have the Report of that Committee before you. Finally the whole matter has been investigated and all the available material re-examined by a Select Committee of both Houses, who, after many weeks of hearing of all the evidence available in this country, both official and non-official, Indian and British, and after patient scrutiny of all the documentary evidence, have given you their mature conclusions in the shape of this amended Bill and of their Report upon it.
This last Report is, I venture to think, of almost equal importance as the Bill itself, and will be looked upon in India quite as much as the Bill as the charter of our progressive liberties. And here again I must ask your Lordships' leave to be allowed to voice the general appreciation of the uniform courtesy the patient industry, and the ripe experience which the noble Earl, Lord Selborne, as President of that Committee, brought to bear upon its investigations. Surely, my Lords, no one in view of all these facts can contend with any show of reason that the Bill which you are

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now asked to read a second time has been insufficiently explored. This Bill is the natural and inevitable sequel to the long chapter of previous legislation for the better government of India. And for that purpose I will confine myself briefly to the Statutes of 1861, 1892, and 1909.
From 1837 to 1861 the Governor-General in Council was the sole administrative as well as the legislative authority for British India. The Indian Councils Act of 1861 for the first time associated with the Governor-General's Executive Council and the Executive Councils of the two Presidency Governors a small number of additional members, half of them being non-officials, for the purpose of making laws. But these Legislative Councils were no more than advisory committees for that purpose only, and had none of the other attributes of legislatures. Similar provisions were subsequently made for the province of Bengal and the North-West Provinces. A further step was taken by the Act of 1892 which increased the numbers of the Legislative Council slightly, but what is more, enabled rules to be made regulating the course of nomination of non-official members in a manner which contained the first faint beginnings of the representative principle. Further it gave liberty to ask questions and to discuss, but only to discuss, and not to vote or to move resolutions upon the financial statement.
Then came Lord Morley's Act of 1909, which still further enlarged the Legislative Councils both of the Governor-General and of the provinces. But it did more. It introduced for the first time the principle of election, though not yet direct election, as the means of constituting a portion of the non-official members. Further it gave the Councils power to move resolutions upon matters of general public interest, and also upon the Budget and to ask supplementary questions. The resolutions, however, were to be only advisory in character, which the Executive might adopt or reject at its discretion. We see, therefore, that for a period of nearly sixty years there has been a steady increase in the number of members for the Legislative Councils, the introduction of the principle of representation by election, and a progressive increase of the functions assigned to these Legislatures, steadily tending to make these Councils more and more parliamentary in nature, character, and influence.
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The Bill before your Lordships' House intends to make these Councils even more parliamentary in character by a further increase in numbers with the object of making them as completely representative of the whole population as is possible and by increasing their functions to the largest possible extent that existing circumstances will allow. Since Lord Morley's reforms were inaugurated ten years have passed—ten fruitful years of experience and rapid development—within which fall the four crowded years of the great struggle in which India has, like other parts of the Empire whose existence was at stake, borne her share. Of the part played by India in the war I do not propose to speak to-day. Her record is known to your Lordships and I will venture only to say that no words of mine are needed to give lustre to that record. Moreover, I should be creating an absolutely false impression if any remarks of mine gave colour to the impression that India desires or demands this measure as a reward for her war services. In my view this Bill must stand upon its own merits—upon the question whether or not the great experiment which it seeks to initiate is an experiment on right and proper lines.
There is no doubt that as a result of the war there has been a great advance in the status of India. She has been privileged through her own representatives to take an equal part with the British Dominions Overseas in the Imperial War Conference, and also in the Peace Conference in Paris, and she has been admitted as an original member of the League of Nations. These experiences have further quickened her sense of national unity and development, a sense which has been steadily fostered for many years by common allegiance to the same beloved Sovereign, by being amenable to one code of laws, by being taxed by one authority, by being influenced for weal or woe by one system of administration, and by being urged by like impulse to secure like rights and to be relieved of like burdens. My Lords, it is no longer possible to doubt this rapidly growing sense of nationality, any more than it is possible for India to stand aside unchanged from the turmoil of development and growth and reconstruction which has been shaking the world for the last five years.
My Lords, you have been deluged with a mass of Blue-books and Reports on this subject, and I do not deny that in its details the subject is one of great complexity,

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but I would submit to your Lordships that the real issue is a simple one. It is this. Do you intend to keep India in leading strings, or do you believe the time has come when Indians themselves should be given some control of policy and should be in a position to make a start at least on the path of self-government?
The present system of Government in India is in essentials identical with that which obtained sixty years ago, and indeed earlier. It is a purely official government, centred in the India Office, able and entitled to impose its will in every detail on the people, the administration of whose affairs has been entrusted to it by Parliament. I am deeply conscious of the debt which we owe to the Government of India, to the Local Governments, and to the untiring and devoted efforts of the great services which they employ, and which have been directed with an energy and singleness of purpose, probably unequalled in history, to the welfare and advancement of the people committed to their charge, and with a success in securing that advancement which certainly no premature attempt at self-government could possibly have achieved.
But, my Lords, during these sixty years you have had Legislatures set up in the provinces, and, including the Central Government, now no fewer than ten in number, gradually increasing in size, gradually acquiring more power to criticise the action and policy of the Executive, and gradually becoming more and more representative of public opinion. But their functions are confined, broadly speaking, to criticism. I do not deny that the influence which they have exercised during the last ten years has been great, nor do I assert that official Governments have pursued systematically, or even frequently, a policy of flouting the wishes of the non-official members. They have done nothing of the kind. I believe that, so far as has been consistent with the discharge of their responsibilities to Parliament, the Government in India and the Secretary of State in this country have been studiously careful to pay increasing deference to the wishes of the representatives of the people in the Councils. But, my Lords, what these Councils do not possess, and what the representatives of the people ask for, is some guarantee that the Executive will conform to their wishes when they represent the real desire of the majority; in other
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words, they want to advance from the stage of influence to that of control, while steadfastly maintaining their loyalty to the King-Emperor as an integral portion of the British Empire.
In so far as these demands postulate complete self-government for India at once, or even a material weakening of the connection which ensures for India the responsibility of the British Parliament for the maintenance of peace and order and for its immunity from external aggression, I, for one, emphatically repudiate them; and I am convinced that in so doing I am voicing the sentiments of the vast majority of my countrymen. India is not yet fully equipped for complete self-government, and I will not be so rash as to attempt to predict when she will be. But of this I am certain, that so long as the present system continues she never will be fit for self-government. It is only with experience of actual responsibility that the fitness to exercise it grows. I am also certain that India is fit and ready today to embark, and to embark with every hope of success, on the experiment which this Bill proposes, and that this Bill is the only logical and necessary means for carrying out the pledge given by the announcement of August 20, 1917, as the Joint Committee has reported to your Lordships.
This Bill will not and is not intended to set up a final and permanent constitution for India. It provides for a period of transition. How long that period will last, as I have already said, I make no attempt to forecast, but while it lasts we have to provide a bridge whereby India may pass from an autocratic and bureaucratic form of Government, which guides her destinies ab extra, to a form of Government whereby she will control her own destinies. We have to give the people in India at once some measure of control over the policy which dictates their laws and imposes their taxes, and this we have to do by a system which will enable a sure judgment to be passed on the use or misuse to which that control is put, and an orderly and justifiable advance to be made.
Let me try and explain very briefly the means proposed in this Bill, with these objects in view. We start by dividing revenues and demarcating the spheres of government as between the Central Government and the provinces. We assign to the Central Government unquestioned authority

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over certain administrative heads, such as the defence of the country, its railways, tariffs, and other activities which cannot be localised; for these it legislates, for these it provides funds, for these it supplies and controls (either directly or through the intervention of provincial governments) its executive agency. Certain other administrative heads are handed over to the Provincial Governments, which assume within their own areas full and complete responsibility for financing and administering them. There are limitations of course—there must be limitations—on the authority of Provincial Governments in so far as they remain agents of Parliament, but I need not now confuse the broad outlines with these.
Of these matters which thus become, in the language of the Bill, "Provincial subjects," a further division is made, and while for one portion of them the official side of the Government retains responsibility, the other portion is handed over to the administration of the Governor acting with Ministers chosen from the elected members of the Legislature. Over the matter compressed within this latter portion of the field the Legislature will be given a very real control; legislation for them will be governed by the wishes of the elected majorities, and it will vote the supplies for them. For the administration of these subjects the Ministers will be directly responsible to the Legislature, and though they are liable to be overruled by the Governor if he considers that his endorsement of the policy proposed is inconsistent with the discharge of his responsibilities for the administration of the "reserved" subjects or for the peace and tranquility of his province, they can only remain in office if they are prepared to support and defend in the Legislature any action relative to the subjects in their charge, with the full knowledge that such support or defence, if the Legislature calls their acts in question, may lead to an adverse vote and possibly to resignation or dismissal.
So much for the immediate effects of the Bill as planned. But as I have said, the Bill attempts—and I submit successfully attempts—to provide for progress. It legislates for a transition from bureaucratic to self-government. And the progress is to be effected by the simple means of gradually enlarging the field made over to the administration of Ministers by the
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gradual transfer of more and more subjects to their administration until at length the time arrives when there are no subjects remaining "reserved." I have said more than once that I make no attempt to predict the date when that consummation will be reached. Obviously it cannot arrive until you have throughout India a widely diffused and trained electorate capable of formulating clear and wise conceptions of policy and of selecting representatives who will be capable of guiding and voicing the view of the population at large. But here, again, it is by actual experience and by no other method that such training can be given.
If it is necessary, in order to train administrators, to give the Legislatures real work to do and real responsibilities to shoulder, it is no less necessary, in order to train the electorates and to teach the value and the proper use of a vote, to give the representatives selected as the result of that vote the opportunity of controlling the course of the administration in a way which will be clear in its results, be they good or bad, to the electors. I say "be they good or bad" advisedly, for it is human experience that success is achieved by means of failures, and that mistakes, if I not irretrievable, are the best of lessons, and it would be idle to suppose that Indian administrators will spring into being full fledged and infallible. If this were to be expected there would be no justification for this half-way house with all its complications of structure. We expect mistakes, but we claim that we have provided in this Bill every reasonable safeguard and every device possible to minimise the chance of their occurrence or the seriousness of their results when they do occur. In the first place, we reserve in the charge of an agency still responsible to Parliament those services or heads of administration upon which the safety and peace of the country depend, and we provide means by which that agency, despite a large non-official majority in the Legislatures, shall be enabled unfailingly to secure the legislation and the supply which it regards as essential to the discharge of its responsibility. In the second place, we ensure, by the association of the new Ministers with an official element in the Executive, that the experience and knowledge acquired by long traditions and practice of a great and successful Service shall be at the disposal of the Ministers when they formulate their own policy. And, lastly, we ensure by the

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relations which are to subsist between Ministers on the one hand and the Executive Council on the other, that the latter will have in their deliberations the advantage of friendly counsel and a knowledge of the wishes and susceptibilities of the people.
This is the plan which has been given the somewhat terrifying name of dyarchy. For myself I should have preferred to call it a system of specific devolution. Your Lordships will not have failed to observe that the Joint Committee, after many weeks of patient examination of the matter from every point of view, has reported that the plan proposed by the Bill interprets with scrupulous accuracy the policy announced on August 20, 1917, and that it is the best means of carrying out that policy. By the scheme of the Bill they meant in that connection primarily its basic principle of division of functions and consequent demarcation of the source of authority which is to lie behind the provincial executives. But it would be foolish to attempt to disguise from myself or from your Lordships' House the fact that this principle is regarded with misgivings by many persons who are in full accord with the general policy which the Bill seeks to carry out. The objections to this principle are obvious. But is there really any practicable alternative?
Various alternative schemes have been put forward with greater or less authority. The first in point of time was the scheme of the Congress and the Moslem League which was published before the conception of the Montagu-Chelmsford Report. More than one alternative was suggested by the official reports of the various Local Governments on that Report; another scheme was formulated by five heads of provinces after the Local Governments had discussed the proposals officially; and, finally, the Joint Committee had yet another alternative scheme laid before them by representatives of the Indo-British Association. But apart from variations of detail, all these alternative schemes are in essence the same. They purport to provide an united or unified Executive, and to proceed on the basis (as one authority has put it) of giving some responsibility to the Legislatures for all matters of government rather than full responsibility for some They postulate a Council or executive body consisting in part of officials and in part of members of the Legislatures,
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and all holding office for a fixed period. They reject the device of dividing functions and subjects, and they propose that the members of this Government should preserve joint responsibility for all the actions and decisions of the Government in the ordinary and usual manner of Cabinet government. They postulate that the non-official members of the Government will be selected as representing the views of the majority of the Council, and will in practice "necessarily be influenced by the opinions of the Legislative Council" (those words I quote from the Memorandum of the five heads of provinces). This fact they urge will secure that the Government as a whole in its decisions on all matters will to some extent be responsible to the Legislatures, whose wishes will necessarily strongly influence if not shape those decisions. Lastly, progress towards fuller and more real responsible government is to be achieved on the one hand by gradually increasing the number of members of the executive taken from the elected members of the Councils, and by gradually therefore handing over to such members a larger and larger range of portfolios, and on the other hand by a gradual increase in the deference paid by the executive to the wishes of the Legislatures. I believe that is a fair description of the essential features of all the various alternative schemes which have been put forward.
The problem can be simply stated—it is to give a measure of control to representative Assemblies in India over the policy and actions of the Government, and to give it in such a way that the control can be gradually increased as and when those to whom it is entrusted exhibit their fitness for an increase, but in such a way that each increase comes by an ordered and controllable process, and not per saltum, so that throughout the process may be one of evolution, and neither in its first stage nor at any subsequent stage one of revolution.
That is the problem. Now, are you going to solve it by giving to Parliamentary institutions in India full control—or practically full control—over a certain defined field, or by giving at once some control over the whole field. I am confident that reflection will show that the latter alternative is not only not a good method of achieving the object in view, but that it is not a practicable alternative, and, if it were introduced, it could have only one of two

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results—either a complete failure to establish any real responsibility to Parliamentary institutions or Councils in India, or to a paralysis of Government which would lead, and lead rapidly and inevitably, to complete control by Legislatures in India and a complete ouster of the authority of this Parliament.
For what is the underlying hypothesis in all these schemes for a unified Government? It is nothing more nor less than a divided allegiance to Parliament on the one hand and the Provincial Legislature on the other, and a division of allegiance which affects or may affect every single issue which comes before the Government. The official members of the Government will be responsible to Parliament, under whose authority and in whose name they hold their office; the non-official members of the Government will, as members of a United Government, be similarly in theory responsible to Parliament. But they will, remember, be "necessarily influenced by the opinions of the Legislative Council" from whose ranks they are elected. If the official members of the Executive Government, in deference to orders received from Whitehall or Simla, or in fulfilment of what they conceive to be their responsibility to Whitehall and Simla for the good administration of the Province, adopt a policy of which the majority of the Legislative Council (whether rightly or wrongly) disapprove, what is to be the attitude of their non-official colleagues? Assuming that their view coincides with the majority of the Legislature, are they to sink their difference and support their official colleagues? If they do, what has become of the element of responsibility to the Legislature? Or are they to oppose their colleagues and withhold their support? If so, where is the unity of the Government? If on the other hand, the official members of the Government adopt a course which they honestly believe to be inconsistent with the discharge of their responsibility to Parliament in deference to their non-official colleagues and the majority of the Legislature, they would no doubt pro tando be establishing a system of Government by popular control and rendering the Executive amenable to the popular will, but would Parliament for a moment tolerate such government by abdication, and would it not rightly call to account a Secretary of State who by acquiescence in such a course might endanger the peace and good government of the country?
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Again, even were such a unified system workable at the outset, is the road to progress in the grant of responsibility which it opens a satisfactory road? As I have stated, its supporters urge that development lies in the line of increasing the number of non-official Councillors, with a consequent increase in the number and scope of the portfolios committed to them, of increasing acquiescence in the wishes of the Legislature and a rarer resort to the veto. With the two latter of these suggestions I have just dealt. As regards the two former processes, since a unified Executive must as such be answerable for its actions to Parliament and subject in the last resort in all matters of administration to Parliament's control, I fail to see how any increase in the number of non-official members of such an Executive or any enlargement of the sphere of their administrative activities can alter the character or lessen the reality of that control. This particular point has been dealt with much more clearly and more cogently than I have been able to do by the Government of India in their Dispatch of March 5 of this year, and I would only refer to Paragraphs 18 to 24 in that Dispatch, which is published as Command Paper 123. For these considerations I submit that your Lordships will accept without hesitation the opinion of the Joint Committee on this the fundamental point of the whole Bill.
Before coming to the provisions of the Bill itself, I venture to draw atttention to two particular points as regards the form of the Bill. In the first place, your Lordships will have seen that the main provisions for constitutional changes are set out in the body of the Bill itself, and by means of a Schedule—the Second Schedule to the Act—these changes are to find their proper place in the main Act (the Act of 1915–16), so that automatically consolidation will follow. That is the plan of the Bill, and it has commended itself to the Joint Committee, and I trust will commend itself to your Lordships also. The second point in connection with the frame of the Bill is this. The Bill itself outlines the main features of the constitutional changes. It leaves these changes to be worked out in detail in the form of rules. Some objection has been taken to this latter feature, but here again I would refer to the White Paper which gives in full the reasons for this form of legislation in this particular case.

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Firstly, it is in accordance with all previous precedents. The matter was debated on the last occasion when Lord Morley's Act came before your Lordships' House, and, as I read the debates, it was generally accepted that that was the proper way of framing the Bill, leaving the details of the constitutional changes to be worked out by the authorities in India, subject, however, to the control of Parliament. Secondly, it secures reasonable dimensions for the Bill, and makes elasticity possible. Thirdly, it is the only method possible for the introduction of new constitutional forms expressly devised for the conditions of a transitional stage. Fourthly, it enables different provisions to be made for different provinces; and, fifthly (and this is the feature to which I desire to draw special attention), the control of Parliament is fully secured for the exercise of the rule-making power by Clauses 33 and 44 of the Bill to which I crave your Lordships' particular attention.
Clause 33 deals with the Rules to be made by the Secretary of State himself for the purpose of relaxing his powers of superintendence, direction and control. That clause enacts that Rules with regard to subjects other than transferred subjects shall be laid in draft before both Houses of Parliament, and therefore shall not come into operation until they have been approved by both Houses of Parliament. All other Rules shall be subjected to the negative process of being laid on the Table of the House, Parliament of course to be at liberty to petition His Majesty to annul the Rules, on which the Rules may be annulled. Clause 44 deals with by far the large majority of Rules which are to be made under this Act, namely, Rules by the Governor-General in Council. These Rules again, are divided into two categories—first, Rules which are only to be subjected to the negative process of being laid before Parliament after they come into operation, but being liable to be set aside or annulled by petition to His Majesty in Council by Parliament. It is also provided that the Secretary of State may direct that any Rules to which the section applies shall be laid in draft, and that they shall not come into operation, before Parliament had approved them by positive resolution; and the Secretary of State in exercising that discretion will undoubtedly be advised by the Standing Committee of both Houses that
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the Joint Committee recommends, or by the Joint Committee itself if Parliament chooses to re-appoint it, for the purpose of going through these Rules. I submit, therefore, that the criticism that it is either dangerous or inexpedient to leave so much to be done by Rules is neither just nor fair.
Having dealt with the fundamental principle involved in the Bill, I will not detain your Lordships long with the other features as contained in the separate clauses, especially as the Report of the Joint Committee has dealt with them clause by clause and given the reasons not only for the clauses themselves but also for such changes as they have introduced. The Bill, following the general plan of the Montagu-Chelmsford Report, starts with Provincial Governments, since it is in that sphere chiefly that the scheme is to be developed. Clause 3 sets up in the eight major provinces of India a Governor in Council—a form of Government which has long been in force in the three Presidencies. But the new Local Governments are not merely to be Governors in Council—they will consist of the Governor in Council (whose functions and constitution will remain unchanged) and of the Governor acting with Ministers, appointed from the elected members of the Legislative Council and holding office during the Governor's pleasure. To the Governor in Council will be entrusted the responsibility for reserved subjects, and the Governor and Ministers will be responsible for the transferred subjects. All matters which in a Council Government would normally come before the Council—that is, everything which is not of purely departmental or minor importance—will as a general rule come for discussion before the Governor, his Councillors, and his Ministers sitting in conclave. But the decision on reserved subjects and the responsibility for that decision will rest with the Governor in Council, while the decision and the responsibility for the decision on all transferred matters will rest with Ministers, subject to the Governor's intervention and control if he feels it incumbent upon him to reject their advice. This is the Provincial Executive.
The Legislative Councils in all their eight Provinces are to be considerably increased in size and will acquire for the first time a substantial (70 per cent.) elected majority. The Governor will not be a member of the Legislature; each body

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will have a non-official President and Deputy President, to be elected by itself subject to the Governor's approval; but for the first four years the office of President is to be filled by a nominee of the Governor. Each Council will normally have a life of three years, though the Governor may at any time dissolve the Legislative Council. The powers of Provincial Legislatures will as regards legislation be much as they are at present, but in view of the fact that the scheme contemplates an almost complete abrogation of the existing executive orders which require every Bill (save those of purely formal or minor importance) to be submitted to the Government of India and the Secretary of State for previous approval before introduction—a system which has naturally not conduced to initiative and independence in provincial legislation—the necessity arises for somewhat expanding the scope of the existing statutory provisions which require the previous sanction of the Governor-General to certain classes of provincial Bills, so as to ensure that the Provincial Legislatures shall not infringe on the sphere which is reserved for the Central Government.
Outside matters of legislation, the powers of the Councils are to be enlarged—or perhaps it would be more correct to say that the Bill reverses the position which these bodies have hitherto held. Hitherto Legislative Councils in India have been presumed by the law to have no functions except those which the law has specifically allowed them. As I pointed out a short time ago, Legislative Councils in India were at the time of their creation strictly confined in their duties and powers to the business of discussing and passing legislative measures. Little by little the scope of their activities has been increased by the grant of further specified powers. Under this Bill they will be assumed to possess all the normal attributes and powers of a legislative body except those which are definitely withheld, or the use of which is restricted.
The most important change which results from this position is that for the first time the provincial budget will be voted by the Legislative Council—they will now actually vote and sanction the appropriations proposed by the Executive. All they can do at present is to vote about the budget; that is to say, they can move and vote upon resolutions recommending changes in the Government's financial proposals in the year; but the Government has usually
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been in a position with its nominated majority to defeat any such resolution if it wished to do so, and in any case was in no way bound to accept it if carried; and hitherto the annual appropriations of expenditure have required no other sanction than the fiat of the Executive Government. That will now be changed, and the Legislatures will have a real voice in the disposal of provincial finances. It would be impossible, of course, to give them at the present stage a final and decisive voice over the whole field. A portion of the Government will not be responsible to or removable by the Legislature, and that portion of the Government must be in a position to secure the legislation and supplies it needs for the discharge of its responsibilities. It has not the natural means of an assured majority in the House, and it must therefore be given an artificial means. Thus in "reserved" finance, the Governor is empowered to neglect an adverse vote on a budget head if he certifies that the proposed expenditure is essential to the discharge of his responsibility for the subject, while in times of crisis, when perhaps a recalcitrant Legislature may decline to vote any supplies, he is empowered to authorise such expenditure as is required for the maintenance of safety and tranquillity or to avoid administrative starvation.
There is a further safeguard against irresponsible action by the Legislature in the matter of supply—that certain heads of expenditure are not to require an annual vote—in much the same way as the Consolidated Fund in this country. For example, contributions payable by the Local Government to the Governor-General in Council; interest and sinking fund charges on loans; expenditure of which the amount is prescribed by or under any law; salaries and pensions of persons appointed by or with the approval of His Majesty or by the Secretary of State in Council; and salaries of Judges of the High Court of the Province, and of the Advocate-General.
In legislation the position of the official Government is safeguarded by the provisions of Clause 13 and Clause 11 (5) of the Bill, which give the Governor power to secure the passage or rejection of Bills in certain circumstances. I do not wish to weary your Lordships with detail, but I invite particular attention to these provisions and to the remarks in the Joint

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Committee's Report in explanation of them. They take the place of the original plan suggested in the Montagu-Chelmsford Report of Grand Committees of the Council, and I am confident that your Lordships will agree that the change made by the Joint Committee is a great improvement, and that nothing will be lost and much gained by their more straightforward plan.
The changes made by the Bill in the Government of India are much less extensive. The Indian Legislature is considerably enlarged and is now to consist of two Chambers—an Upper Chamber or Council of State of sixty members and an Assembly of 140 members, the latter with a substantial elected majority. The statutory limit on the number of the Governor-General's Executive Council is a minimum of five and a maximum of six (or six and seven if the Commander-in-Chief is included). The Bill does away with the Extraordinary Member, and assumes, as will doubtless be the case, that the Commander-in-Chief will always continue to be appointed a member of the Council. Each member of the Executive Council will be a nominated member of one or other Chamber of the Legislature, but not of both, though they will be entitled to speak in both Chambers. Like the Provincial Legislatures, the Indian Legislature is to have power for the first time to vote on certain portions of the Budget. That is to say, there will be the same provisions for a Consolidated Fund upon which they will not be able to vote; and, further, the Governor-General will always be entitled, if he thinks necessary, to reject every vote on every item of the Budget of the Legislature.
It may be urged that this change is inconsistent with the policy which has taken no step towards introducing at this stage the principle of responsible government in the Central Government in the sense of making the Central Executive legally dependent upon or subject to the control of the Legislature. I am confident your Lordships will agree that whatever technical inconsistency there may be, the change is sound and necessary. What is the position? In the first place, there can be no question of taking away any power which the Central Legislature at present enjoys. One of the powers which it has enjoyed for the last ten years is power to propose and vote resolutions suggesting
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changes in the Budget statement, and this power it must retain. Hitherto the Government has been able by means of its official majority to defeat any such resolution (though even if it had failed to defeat it, the resolution would have no binding effect). But in future the Government will not command a majority in the Legislature.
Now, my Lords, which is the sounder constitutional position—the position which augurs best for a sound judgment by the proposed Statutory Commission which is to inquire into progress ten years hence and for amicable relations meanwhile, that the Indian Legislature should be able year after year, with no sense of responsibility flowing from a knowledge of practical consequences of its vote, to vote by an overwhelming majority resolution after resolution recommending specific alterations in the Budget, which the Government is forced to ignore; or that the Legislature should be legally responsible for passing the Estimates and legally accountable for the results of any modifications they may vote? I admit that the practical difference between the two positions is not great, for if you will look at the clause—it is Clause 25—you will see that the Government is necessarily given the fullest powers to reject adverse votes, since its responsibility is not to the Indian Legislature but to this Parliament for the proper administration of its charge. The change is really one of form, but I do not seek to disguise its importance on that ground. It is an important change, but one which I am convinced is the logical and necessary result of constituting a representative Central Legislature.
I have been a member of the Governor-General's Legislative Council, it is true in an official capacity, but none the less closely associated with all the non-official members. I can assure your Lordships that the cleavage which has, unfortunately, shown itself so often of late between the non-official and the official members of that body is largely due to the non-officials' sense of aloofness from the real difficulties and decisions of the Government which the present position has engendered. They feel—they can hardly help feeling—that they are outside the machine and are not a real part of its working. I am confident that all that is required to obliterate that cleavage is an admission, with whatever safeguards and checks that may be found

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necessary, that the Legislature and all its members are an essential and working part of the machinery of Government, that the action or inaction of every member influences the working of the whole.
Allow me to draw your Lordships' attention, so far as the Government of India is concerned, to one more clause, and that is Clause 26, because there also a new feature is introduced in place of the old device of the official bloc, for the purposes of enabling the Governor-General to obtain the legislation which he considers necessary for his purpose. The Governor-General is able to pass any law which he thinks necessary for the safety and tranquillity of India, provided that the ordinance will require the sanction of His Majesty before it becomes law. Of course, the power of this ordinance, in cases of emergencies, already exists, and it remains as it is, so that for emergency purposes the Governor-General will be able to pass such laws as he thinks necessary, provided that they will be liable, as they are now, to be vetoed by His Majesty in Council.
With regard to the provisions of the Bill relating to the Secretary of State, I need say little. They make no constitutional changes, but are designed to modernise and make more elastic the statutory provisions—many of which are relics of the days of the Court of Directors—relating to the working of the India Council. Power is taken to adopt the recommendation of Lord Crewe's Committee to appoint a High Commissioner for India, and no time will be lost in working out with the Government of India the details of this purpose if it receive the sanction of Parliament.
There is one further matter with regard to the Council—namely, that the number has been reduced. The minimum was ten and the maximum fourteen. These are now reduced to eight as a minimum and twelve as a maximum. There are to be at least three Indian members of the Council. The salaries are to be £1,200 a year, with £600 extra for the Indian members, and the Committee remark that this salary was calculated on a prewar basis, so that the Secretary is not precluded from granting to these members of the Council what other permanent officials are getting here—namely, a war bonus.
Part IV of the Bill relates to the Civil Services in India, and its provisions are intended generally, while enabling a new
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classification of these Services to be made, to safeguard the pay and position and rights to pension of existing members of those Services, and to pave as smooth a road as possible for future members. The Services, my Lords, need no tribute from me. Their work is plain for the world to see, and it is their work in the main, and its great results developing through the years, that have made India fit for this great experiment. But the passage of this Bill does not close the chapter of their ungrudging toil. India still needs, and will long need, men of the type which Great Britain has so long given her, and I refuse to believe that she will not continue to receive from the sons of Great Britain the same loyal and devoted service as she has received, to her lasting benefit, in the past. I also cordially echo the hope and conviction, expressed in the Report of the Joint Select Committee, that these Civil Services will accept the changing conditions and the inevitable alterations in their own position, and devote themselves in all loyalty to making a success, so far as in them lies, of the new Constitution.
Finally, the Bill gives power to appoint a Commission of Inquiry to report to Parliament on past progress, with a view to enabling Parliament to judge what further advances can be made. The Bill provides for one such Commission after ten years' trial. This does not imply the belief that in ten years the process of training will be complete. It is perhaps unusual to legislate for an event ten years ahead; it would be clearly inappropriate to legislate for a longer period. But periodical inquiries are of the essence of the scheme, and the Bill would obviously be incomplete without some provision of this kind.
So far as Part VI of the Bill is concerned, there is only one clause to which I need draw your Lordships' attention—namely, Clause 42, which modifies Section 124 of the principal Act with regard to persons engaged in any trade or business becoming members of the Executive Council or Ministers, provided they do not, during their term of office, take part in the direction or management of that trade or business. The changing conditions of the country absolutely require that there should be some such provision made, because, if it is not, the Government will lose the benefit of the services of people who are best calculated as commercial

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or mercantile people to take part in the actual work of Government.
I fear that I have made a large draft upon the patience of your Lordships' House. But even if there are those amongst your Lordships whose position in this House would lead them to view my presentment of this matter critically and with caution as coming from a representative of His Majesty's Government, I am confident that the position which it is also my privilege to hold, of a representative of my countrymen, will have ensured me an indulgent and sympathetic hearing. Above all, I am confident that there is no member of this House who will be deterred by individual opinions or by my personal shortcomings from approaching the examination of this Bill in that traditional spirit of British fairness and impartiality. and with that earnest desire for the advancement of India's welfare, which has done so much for the betterment of India in the past.
There may be those amongst your Lordships who think that the passage of this Bill will not advance India's welfare, who think that the system of government which has, with little essential change and with so many beneficial results, endured through the changes of the nineteenth century, should be continued, unchanged in essentials, through the twentieth century, and that the time has not arrived to sever the leading strings. Believe my, my Lords, that is a view which, if you wish to secure a sense of gratitude and contentment amongst the populations of India, can no longer be maintained. The whole course of your administration of India, the whole of its fruitful results, culminating in the recognition which you have accorded during the past five years to India as a real partner in the Empire, have produced expectations (and I say justified expectations) that you will now agree to treat her as having outgrown her political infancy. I do not claim, and reasonable Indians do not claim, that her people as a whole have to day reached, politically, man's estate. If I claimed this, I could not consistently support this Bill. But I do claim on behalf of my countrymen that they have reached the age of adolescence. The stage of growth is notoriously a difficult age. It is surely human experience that the guardian best serves his ward's interests, and best conserves a relationship of mutual trust and affection, who so orders his
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control at this period that the aspirations for freedom and self-expression which inevitably accompany healthy adolescence should receive his wise and reasonable indulgence, and that active control should be exercised only to prevent irretrievable errors and to correct undesirable developments.
I believe that this Bill will enable the British Parliament to adopt that attitude towards India, and I have sufficient faith in the character of my countrymen, and in the essential wisdom and justice of the Mother of Parliaments, to believe that the results of this measure will be to inaugurate a relationship between them which will enable India in due time to reach the full stature of a prosperous, loyal, and grateful partner in the privileges and duties which belong to the great world-family of the British Empire.
Lastly, I ask your Lordships' leave to address a few words to those of my fellow-countrymen who may still be inclined to dispute the substantial nature of the advance proposed. Of course, I do not agree with them; but even if there was any substance in their doubts and suspicions, let me tell them in the words of the great Book, if I may do so without irreverence, that what is being given to India is like the grain of mustard seed which a man took and sowed in his field, which now is the least of all seeds, but when it was grown it was the greatest amongst the herbs and became a tree so that the birds of the air came and lodged in the branches thereof.
Moved, That the Bill be now read 2a.—(Lord Sinha.)
LORD CARMICHAEL: On behalf of Lord Harris, I beg to move that the debate be now adjourned.
Moved accordingly, and, on Question, debate adjourned until to-morrow.

IRISH RAILWAYS (CONFIRMATION OF AGREEMENT) BILL.
Order of the Day for the Second Reading read.
THE CIVIL LORD OF THE ADMIRALTY (THE EARL OF LYTTON): My Lords, this small Bill has been introduced for the sole purpose of giving statutory effect to certain provisions of the agreement made between

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the Government and the railway companies of Ireland. This agreement was made in 1917 when the Irish railways were taken over by the Government and the operations which require statutory confirmation are set out in the Schedule of the Bill. The agreement follows the line of that made between the Government and British railway companies and provides that for the purpose of accounts which are prepared by railway companies in Ireland in connection with any guarantee of interest, dividend, or working expenses, the net receipts for 1913 shall be deemed to be the net receipts for the corresponding half-years during the period of Government control.
In Ireland, as in England, this year was considered a favourable one to take as the datum year for the Irish railway companies because the net receipts of that year exceeded by £200,000 the average of the preceding years. But when this agreement was drafted it was not realised that some cases differed from those which are referred to in paragraph (10) of the Schedule from which I have just quoted. It was not realised that in some cases the line, in respect of which the guarantee is given, is worked by another company on the basis of the payment by the working company to the owning company of a percentage not of the net receipts but of the gross receipts from the guaranteed line. In these cases the position is different, because the factor of working expenses does not come in and it is possible that in some cases the gross receipts from the guaranteed line may have increased during the period of control, in which case, the payment by the guaranteeing authority would be proportionately reduced. The passenger fares have been increased by 50 per cent. and there may have been some increases in agricultural traffic, but against this must be set the reduction in the number of trains.
A specific case has been brought to my notice by Lord Killanin—the Loughrea and Attymon Railway which is guaranteed by the Galway County Council. Another case has also been brought to my notice by Lord Oranmore and Browne on behalf of the County Council of Mayo. The case of the County Council of Galway may be taken as a precedent for all the other cases. In that case the Loughrea & Attymon Railway, guaranteed by the Galway County
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Council, is worked by the Midland & Great Western Railway Company of Ireland under an agreement which provides for payment by the working company of 45 per cent. of the gross receipts to the owning company. The latter is in turn guaranteed by the Galway County Council a 5 per cent. dividend upon a capital of approximately £50,000. The amount payable therefore under the guarantee depends upon the difference between the amount representing 5 per cent. of the gross receipts of the line and the sum necessary to pay 5 per cent. on the £50,000. In this case the local authorities fear that their ratepayers may be prejudiced by the passage of this Bill. They feel that their ratepayers may be compelled to pay in future upon the basis of the net receipts instead of on the basis of the gross receipts as provided under the guarantee, and I think the fear is amply justified, because in the past year they have actually paid on that basis; and in the case of the Galway County Council that authority at the present moment is taking action to recover from the Government sums which they consider have been overpaid.
I hope that Lord Killanin will agree that I have stated accurately the fear of the County Council which he represents. I am able to give an assurance to the noble Lord, on behalf of the Government, that just as the agreement set forth in the Schedule of the Bill did not contemplate a case of that kind, so the passage of this Bill will in no way affect the position of such a local authority. On behalf of the Government an invitation was extended, while this Bill was under consideration in another place, to those local authorities to confer as soon as possible with the Minister of Transport, with a view to arriving at an agreement, mutually satisfactory, which would not only govern the relation between the Government and the railway companies in the future, but also be retrospective in its effect. The Government gave a further undertaking that in view of an agreement being reached they would be prepared to bear the expense of the action taken by the Galway County Council up to this point.
I would ask my noble friend to use his influence with the county council of which he is a member—and other noble Lords who may be interested in this subject on behalf of other local authorities—to persuade those authorities to reply to that

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invitation and to confer with the Minister of Transport at an early date, with a view to arriving at a decision, and that the litigation now pending should be suspended until such agreement can be reached. I would only say in conclusion to the noble Lord that if there is a failure to reach an agreement on this point the local authorities will be in no way prejudiced by the passage of this Bill. So far as past action is concerned they would have the remedy which the Galway County Council are now taking, and with regard to the future the Government will be compelled to keep accounts in such a way as to show the gross receipts of the railway. Therefore they will be in no way prejudiced by the passage of the Bill, and other local authorities will be considerably benefited. Therefore I hope that your Lordships will allow the Bill to proceed.
Moved, That the Bill be now read 2a.—(The Earl of Lytton.)
LORD KILLANIN: My Lords, I should like to express my obligation to my noble friend who has moved the Second Reading of this Bill, for the careful attention which ho has given to the representations which I made to him in reference to this Bill as soon as I knew that he would have the conduct of it in this House. I am much interested in the matter, because it was thought that this Bill might affect adversely and wrongly the interests of county councils and bodies of rate-payers in Ireland, and I happen to have the honour of being a member of one that would be affected. For that reason I have followed carefully the progress of this Bill in another place, and it seemed to me that there was considerable misunderstanding about the whole matter. Even the official authorities seemed in considerable doubt about the scope and effect of this Bill, judging from communications which I had with them. Certainly the local authorities in Ireland were in a considerable state of fear as to how this Bill would affect them.
These doubts and fears arise from the fact that when the terms of agreement were come to by which the Irish railways were taken over by the Government in December, 1916, a certain particular class of railways in Ireland was entirely overlooked or forgotten. They were a small class of railways, but they have their statutory rights. When therefore the Government proceeded to carry out the
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I terms of the agreement it was found that this agreement was inapplicable to many of these cases, and the county councils, rightly in my opinion, in many cases objected to the demand made upon them, and hence a considerable amount of friction, difficulty and litigation has arisen in the matter. Now I am thoroughly satisfied, so far as I can understand the matter, with the statement of the noble Earl this afternoon, because I gather that he says that the terms of this Bill would not apply to or affect in any way the Baronial Railways, where the guarantee is based on the gross receipts. I am thoroughly satisfied with that statement, and I thank him and the Minister of Transport for the manner in which they have treated my representations in the matter. He asked me to use my influence with the Galway County Council to induce them to come to an understanding in reference to pending litigation. I will certainly do all I can, and I ask him on his part, now that he is thoroughly familiar with all the facts of the case, to do all he can in order to bring this matter to a speedy and fair settlement.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

UNEMPLOYMENT BENEFIT BILL.
Read 3a (according to Order).
Clause 2:
Amendment of section 13 of 4 & 5 Geo. 5, c. 57.
2.Notwithstanding the increase in the rate of unemployment benefit effected by this Act the expression "unemployment benefit under the principal Act" in subsection (1) of section thirteen of the National Insurance (Part II. Unemployment) Act, 1914 (which limits the power to make or continue arrangements with associations under section one hundred and five of the National Insurance Act, 1911), shall, during the period ending on the thirty-first day of December, nineteen hundred and twenty, be construed as meaning unemployment benefit at the rate payable before the commencement of this Act.
VISCOUNT SANDHURST: My Lords, I have two small Amendments to Clause 2. The first is, after "expression," to insert "which is at least one-third greater than the provision represented by". The other is at page 2, after "meaning" ["construed as meaning"], to insert "which exceeds the provision represented by unemployment benefit at the rate payable after the commencement of this Act by an amount which is not less than one-third of the

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provision represented by." I beg to move that they be agreed to.
Amendments moved—
Clause 2, page 1, line 17, after ("expression") insert ("which is at least one-third greater than the provision represented by")
Clause 2, page 2, page 2, line 1, after ("meaning") insert ("which exceeds the provision represented by unemployment benefit at the rate payable after the commencement of this Act by an amount which is not less than one-third of the provision represented by").—(Viscount Sandhurst.)
On Question, Amendments agreed to.
Bill passed, and returned to the Commons.

ISLE OF MAN (CUSTOMS) BILL.
LORD HYLTON: My Lords, I beg to move that this Bill be now read a second time. It amends the law with regard to Customs in the Isle of Man, and it passed through the other House without objection.
Moved, That the Bill be now read 2a.—(Lord Hylton.)
On Question, Bill read 2a.
Committee negatived.

THE CABLE CENSOR'S STAFF.
VISCOUNT TEMPLETOWN: My Lords, I beg to ask His Majesty's Government whether, in view of the important results obtained, the strenuous nature of their duties throughout the whole of the twenty-four hours and of the abnormal number of officers whose services were lost to the Department through sickness and death mainly due to the exacting condition of their employment, it is proposed to recognise by a step of promotion in military rank the services of those military officers on retired pay who were detailed before the commencement of hostilities for duty on the Cable Censor's staff and who served in that capacity during the period of the War, including other officers who voluntarily served in that Department for various periods.
THE UNDER-SECRETARY OF STATE FOR WAR (VISCOUNT PEEL): My Lords, in reply to this Question I desire to say that it is not proposed to grant a step of promotion in military rank on ceasing to be employed to any officers who served during the war except as laid down in Army Order 376 of 1918. It is not considered that a step in rank above that held during
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the war is a suitable form of recognition for services rendered, as it would tend to make rank meaningless, and would depreciate the value of rank granted as a result of selection to command in the field. It is also to be borne in mind that any exceptions made to the Rule published in A.O. 376 of 1918 will at once necessitate the reconsideration of countless claims and recommendations for higher rank which have been refused by the Army Council as not coming within the prescribed conditions which are now widely known and accepted by the Army at large. Finally, it is considered that the recognition of valuable services rendered during the war should preferably take the form of awards rather than the grant of rank.
In forwarding recommendations for awards to the officers on the Cable Censor staff the fact that they were not eligible for higher rank on ceasing to be employed was known and borne in mind. The following awards and honours were granted to military officers who served on the staff of the Cable Censorship in the United Kingdom during the war:—1 K.B.E., 1 C.B., 1 C.M.G., 4 C.B.E's., 5 O.B.E's., 1 M.B.E., 3 Brevets (of Lieutenant-Colonel), about 30 mentions in Secretary of State's list. Some five hundred officers served on the staff in the United Kingdom from first to last. In addition, three officers who served in Allied countries abroad as representatives of the Cable Censorship received C.B.E's. I have read out a list of nineteen honours which would form, as the noble Lord sees, a percentage actually higher than the percentage of honours given to those who served in the field. Therefore I do not think that the Censor's Department really can complain that they have been badly treated in this matter of the award of honours.
VISCOUNT TEMPLETOWN: I am much obliged to the noble Viscount for the answer that he has given.

FRENCH CHILDREN AND MILK SUPPLY.
VISCOUNT TEMPLETOWN: My Lords, I rise to ask whether, in view of the fact that the children of France have been left out of the Archbishop's world-wide appeal for the "Save the Children's Fund" and that these children are suffering terribly from the want of milk, His Majesty's Government will insist on the Germans

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fulfilling their obligations and returning to France without further delay the cows they took from her.
LORD STANMORE: My Lords, the obligations referred to are contained in Part VIII, Section 1, Annex 4, Paragraph 6 of the Treaty of' Peace with Germany, under which the German Government undertakes to deliver 90,000 milch cows to the French Government in equal monthly instalments during the three months following the coming into force of the Treaty. The responsibility for securing the execution of this and similar provisions of the Treaty is an inter-Allied responsibility, and does not fall upon His Majesty's Government alone. The Reparation Commission is the body charged under the Treaty with the carrying out of the provisions which I have mentioned. Although that body does not come into existence until the date when the Treaty of Peace becomes operative, the particular question to which the noble Lord refers is already being carefully examined by an inter-Allied Committee, which is organising the work of the Reparation Commission. His Majesty's Government fee the warmest sympathy with the sufferings of the French children; but, in the circumstances which I have described, the problem of looking after their interests and of remedying
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the hardships caused by the shortage of milk in France is one that naturally devolves upon the French Government rather than on our own.

MILITARY KNIGHTS OF WINDSOR BILL. [H.L.]
VISCOUNT PEEL: My Lords, I ask leave to introduce a Bill to make amendments with respect to the constitution and endowments of the foundation of the Military Knights of Windsor. Its short title is Military Knights of Windsor Bill.
Moved, That the Bill be now read 1a.—(Viscount Peel.)
On Question, Bill read 1a, and to be printed.
[From Minutes of December 10.]

SWINTON AND MEXBOROUGH GAS BOARD BILL.
Returned from the Commons, with the Amendments, agreed to.
House adjourned at twenty-five minutes before nine o'clock until to-morrow three o'clock.