INDUSTRIAL UNREST.

HL Deb 19 February 1919 vol 33 cc178-229

Debate on the Motion of Lord BUCKMASTER—viz., "That there be laid before the House Papers relating to the present industrial and economic conditions",—resumed (according to Order).

LORD RIBBLESDALE

My Lords, I think there was a general feeling expressed by those who spoke in the Debate last night, that in view of the menacing and uncomfortable position in which everybody seems to be placed by labour unrest, we were all more or less entitled to state—I think Lord Buckmaster used the words "with frankness and without reservation"—any views we had on what. I suppose we must call the situation, and the remedies which might possibly be found to apply to it. At the outset of his observations Lord Buckmaster referred to the very considerable inconvenience to which the public have recently been exposed by the Tube strike, and he had a good deal to say upon the looseness and ambiguous nature of certain agreements which had been arrived at which had led to misunderstanding. Here, however, authorities appear to differ, for although Lord Buckmaster declared that there had been considerable misunderstanding, and that he himself was not clear as to what had been settled, the Lord Chancellor from his seat on the Woolsack gave quite a different view and said he did not think there had been ambiguity, for if there had been all sorts of different things would have happened, and that as regards that part of the business we might all go home and sleep comfortably. I will not attempt to compose differences between such high authorities as the ex-Lord Chancellor and the present Lord Chancellor, but I submit that unless we, the public, prefer to wear or to be run by our rulers and governors in blinkers it is not the precise meaning or interpretation of words and clauses in agreements that we have to understand. What we have got to understand, and what we must not shrink from, is that we have to recognise a new phase, as it were, in the body and estate of industry, that is of labour, which to my mind involves the pounds, shillings, and pence relations, and indeed precipitates for any solution the pounds, shillings, and pence relations of Capital and Labour.

Last night all sorts of causes were assigned to account for this state of things. I shall not labour that. Every noble Lord who addressed us provided some gloomy economic or picturesque contribution to the general effect and cause of the general derangement. But, after all, I think it all boils down to this—that we, the public, have got to recognise and to deal with the growing impression, perhaps even the formed resolve, of Labour that it has become entitled to receive a larger share of the profits of Capital and of what we may call the otium cum dignitate of Capital. I can see that labour is very well aware of the difficulties and the slowness of legislation; of trying to get things in a highly complicated civilisation like ours up to the profit-sharing basis for industry, which arrangement would have to be implemented by legislation. I think labour is quite aware of that, and for a moment labour claims its share of capital apparently, rightly or wrongly, in very high wages and very short hours. No doubt in the present circumstances of our national finance—which were developed, in a manner that really made me feel very uncomfortable, both by Lord Buckmaster and by Lord Lansdowne—any request of that kind is a most formidable one indeed, preferred as it is at a time when, as I think Lord Lansdowne pointed out, of all others you want output stimulated, and when you have to pay your way and have to get out of the difficulties which the great war has got us into. If labour at this moment says, "We think now we must have very much more pay, and do very much less work," the dilemma in which we are placed is sufficiently obvious to all that I need not say a word upon it. Indeed, if you get rid of the progressive desire which lies at the root of civilisation and which begets the wealth of nations, one can conceive a state of things in which the appetite of labour for high wages and for short hours would result in complete paralysis of the mind and body of all the enterprise which we understand by Capital.

Lord Lansdowne referred last night to a possible remedy against that demand. Make labour comfortable that capital may not go away. He instanced the case of the works which are going to be settled at Vancouver. That might succeed in one or two cases, but a great deal of industrial capital, and a great deal of industry, cannot get away, and I do not know that we can rely upon that as a very great deterrent to labour from taking the line which it seems to be bent on taking. What is to be done? Last night all kinds of remedies were suggested. Publicity and inquiry was one remedy. Then there was candour, and the development of the Whitley Council. The latter was suggested and carefully worked out by my noble friend Lord Islington, and I think he went so far ultimately as to create a sort of super-man Whitley Council. A great deal of the noble Lord's suggestions were adopted afterwards by Lord Lansdowne, and he, I think, went so far as to say that the super-man Whitley Council, as I understood, was to have actual powers to punish delinquents. Then the Lord Chancellor relied a good deal on our old friends propaganda and education. I really do not know what propaganda was to do, but as regards education I think that one of the difficulties that we are in is that labour is perfectly well educated enough to understand balance sheets, and it has come to the conclusion, particularly since the Excess Profits Tax has realised such very large amounts to the country and the shareholders have not suffered very materially in dividends, that something can be done in time of peace out of excess profits just as it can be done in time of war, and that that something should be done in their favour.

What surprised me was an omission on the part of the Lord Chancellor, and I do not think we heard it from anybody else. I live in a pastoral country on the fringe of the West Riding and the fringe of Lancashire. A good many manufacturers have told me that much of this difficulty would disappear if something could be done to release food, if you could get food prices down and allow the ordinary laws of supply and demand to come into operation as quickly as possible. We heard nothing about that from the Lord Chancellor; yet I am bound to say it is one of the things—I do not say it is the whole. Question—which lie at the root of the present phase of labour conditions in this country.

Turning to these remedies, I think that they may be all good in their way, but to my view they are only in the nature of prophylactics and palliatives. I do not believe they touch the spot. What we have to do, I think, is to find out the best and fairest way by which the results of the co-operation of Labour and Capital, that is the pounds, shillings, and pence available for divisible profits, can be shared between the parties; and beyond and above that I should not only like to see Labour admitted to a greater share of the profits Of Capital but I should like it to share in the responsibilities and the vicissitudes of the administration of industries. To summarise, and perhaps to repeat myself, I think that you have to make up your minds that somehow or other, by legislation or otherwise, we have to run this country industrially on a profit-sharing basis. That to my mind is time only way by which you can stimulate output and stabilise labour, and it will be common agreement amongst everybody that increased output and steady labour are things both requisite and necessary, indeed vital, to this country we are to pay our Way, get rid of our liabilities, get back to everyday life, and repair the great waste of the four years' war.

LORD EMMOTT

My Lords, I shall not attempt to cover a great deal of the ground that has just been dealt with in the speech of my noble friend behind me. The general impression left upon my mind at the present moment is that at the bottom there must be some genuine misunderstanding between Capital and Labour as to the economic possibilities of the future of finance and business. Experts on every hand assure us, and I am quite convinced they are right, that there must be a hard struggle in this and succeeding years in order that we may keep our place in the industrial competition in the future, and in order that we may be able to meet foreign competition successfully, under present conditions of wages and costs, even if there is in this country complete harmony and co-operation all the time between Capital and Labour. The capitalist knows that we have been living in a fool's paradise during the war in an economic sense. He knows that the adjustment of prices downwards, which is bound always to be a difficult operation, must be made much more difficult by the immense load of taxation required to pay the interest on the Debt and pay a double wages bill, and he knows that unless we can compete in the next few years successfully our commercial and financial supremacy is gone for ever. Therefore he looks with great anxiety to the future even, as I say, under the most favourable possible conditions at home.

Labour, on the other hand, appears to look upon these matters in an entirely different way. Labour appears to think, because during the war it was possible to advance wages very materially, to pay excess profits, and also to pay very satisfactory dividends on the whole; because the heavy taxes levied during the war did not bring the ruin that was prophesied when it was suggested that more should be spent on social reform—because of all these things Labour argues that it would be possible after the war and under peace conditions to go on improving the position of Labour without doing any material harm in the long run to Capital. Both sides hold these views very tenaciously, and both of them unfortunately cannot be right. Time alone can show whether the vaticinations of Capital or the more optimistic anticipations of Labour are really sound; and in the meantime the country has to make a most fateful decision—because I think it is the country, rather than the immediate combatants, that will have to make the decision.

Personally, I was often very much astonished during the war to hear the easy optimism that was talked as to what our financial condition was going to be after the war was over. Perhaps my own experience, both official and personal, may have been unfortunate. The one vital consideration, it seems to me, at the present time is to get our export trade going again. Until our export trade is going again in a satisfactory way it is perfectly impossible to make ends meet in national finance; it is perfectly impossible to, make London once again the free market for gold and the great financial centre that it was before the war. That being the prime consideration, in my mind, it has been my unfortunate fate to see immense damage being done to our export trade, some of it necessary, some of it perhaps unnecessary—damage so serious that I feel a great deal of it is irreparable.

I have told the tale before, and I am not going through it in any detail to-night. But I may summarise it in this way. In the first place by the blockade, rigidly carried out as it was, we had to stop goods going to neutrals adjacent to Germany. These people were rationed; in many cases we carried out the system so far that we deliberately forced them to manufacture for themselves goods that we had been in the habit of supplying them with. Because Holland, for instance, had large stores of raw rubber we would not send Holland any rubber manufactures. The result has been that we have forced Holland to learn to manufacture for herself these goods which we supplied her with before the war, and that we might have continued to supply her with had we not taken that particular step. That is one instance out of many that I could give.

Again, it became necessary, owing to home shortage, to put a great many commodities under the charge of special controlling authorities in this country. Naturally, the special controlling authority in this country did not give its first attention to the necessity of keeping up our export trade. Very often, and very naturally, they took an extremely narrow view, and it was very difficult to induce them to allow the smallest quantity to go abroad in order to keep open the channels of our export trade so that we might go ahead again with trade after the war. That is not a question of blockade; it refers equally to countries which were not concerned in the blockade. Towards the end of the war the Treasury came in on other grounds, curtailing our exports to some of our Allies for exchange reasons. I am not complaining that that was the case. All the time our shipping conditions were growing worse. We had to stop imports on a large scale, our manufacturing was curtailed, and there was a relative loss in the export trade because the goods could not be manufactured.

In addition we absolutely killed our entrepót trade, which was reduced by the end of the war to something like one-tenth in volume, I should imagine, of what it was at the beginning. With what result? America and Japan have, quite naturally and quite properly, stepped in and taken a great deal of our trade which it will be extremely difficult for us to recover. Again I say I am not complaining. Much of this was inevitable. But facts are facts, and the results will be what they must be. The facts are that, partly owing to shortage, partly owing to a deliberate policy, we have driven neutrals, both those adjacent to Germany and other neutrals, to learn to manufacture many things for themselves with which we used to supply them. We have thrown much trade into the hands of our competitors who were better able to carry on the trade during the war than we were. Our shipping has decreased, our entrepoôt trade—a very valuable thing in itself—has now to be reconstructed. London is less the financial centre of the world than was the case before the war, or has been at any moment during the last 100 years, I should think. Wages have been doubled, or more than doubled; coal and other commodities are all dearer; we suffer under a huge load of debt, a first charge upon our industry in the future. Much of the rest of the world is greatly impoverished, and I dare say a good many countries will make it more their care than ever to foster their own industries before they admit the products of ours.

To one who thinks as I do the prospect is absolutely appalling; and now the one vital matter is, it seems to me, to increase our export trade in order that the country may be able to live—in order that we may be able to pay wages, apart from interest and profits. Now, less than four months after the close of hostilities, we are threatened with a complete stoppage of work, we are menaced with a step on the road which must lead to industrial ruin and financial disaster. In these circumstances I ask, Can anything be done to bring patience and common sense to bear at this tremendous crisis?—for it is a tremendous crisis. Can anything he done to avert the ghastly tragedy of a general strike? I hope I am not impertinent in saying that debates in your Lordships' House, valuable and interesting as they often are, have not often, I am afraid, a very beneficial effect upon labour. Most unjustly a good many of us are suspected either of being profiteers or friends of profiteers. So far as I am concerned, I confess I feel unable to gauge the mind of labour at the present time. I have not been much in close contact with the workers for a good many years, although I feel that my past life ought to have enabled me to know more of them than has been the case with some of your Lordships. But I have done my best to pick out from the speeches of some among the more moderate exponents of labour what appears to me to be really working in the mind of labour at the present time. Of course, there is a certain nervous reaction after the strain of four years of war. In a minority—as I hope, a small minority—there is a certain amount of blind class jealousy, akin to Bolshevism. I cannot believe, on the other hand, that the fact that the railways and mines have not yet been nationalised is causing serious trouble. Independent of anything else, that would mean adding to a National Debt, already not inconsiderable, a sum of something between £1,500,000,000 and £2,000,000,000.

I think there is something in what my noble friend who spoke last said as to the exasperation that has been caused by not taking more immediate steps to give the workers a larger share in dealing with workshop conditions. But there must be some deeper difference still; there must be something which is agitating their minds more than can be entirely accounted for by those various matters. I am sure that they cannot regard the future with the grave apprehension that I do, and that many people much better informed than myself do. There is one thing on which I feel sure they are misled. I believe that they are profoundly misled on the question of profiteering. It seems as if they argue it in this way: that because a certain number of people have unquestionably made large fortunes and increased their incomes during the war, all shareholders and capitalists are enormously richer than they were, They argue from this that there is somewhere an illimitable fund of wealth which can be exploited. They forget that the bulk of shareholders are, after all, modest people, many of them with incomes far smaller than those of well-paid artisans to-day.

The kind of thing which operates in the workers' minds is something like this. In a speech—to which I shall have further occasion to refer—made by Mr. Thomas in the other House recently, he referred to the Maypole Dairy Company. Imagine somebody, some working man, who had read Mr. Thomas's speech, going home and telling his wife that the Maypole Dairy Company had made 225 per cent. Profit. His wife would say, "And the price of margarine went up so much so many weeks ago; what a shame it is that the price of Margarine should go up and that seine-body should make 225 per cent, profit out of it." I have not had time to examine the special circumstances which must exist with regard to that large institution; but I mention it because the Maypole profits were no question of war-time profiteering. That company was making about 212 per cent. before the war began; for some years their profits have been enormous. That particular profit of 225 per cent. is not a question of war profiteering at all, and therefore not ad rem in this argument. That is perfectly true, but it is extraordinarily difficult to bring such a fact home to the mind of the worker.

I come now to some words used by my noble and learned friend Lord Buckmaster in his speech yesterday, to which I am sorry to say I had not the pleasure of listening. I am going to quote from the OFFICIAL REPORT. The noble and learned Lord said— … The war did something else. It produced, as an object lesson for all industrial classes to see, the most amazing profits that this country has ever witnessed. It is found that in one year 80 per cent. of the profits made due to the war, over and above the profits made in industry before the war, amounted to about £360,000,000; and the remaining 20 per cent. would be about £90,000,000, making about £450,000,000 of profits made owing to the war and during the war and in excess of the profits made before the war. Accepting the figures of my noble and learned friend—although they differ from those given in the Budget, they are sufficiently near for my purpose and very likely much more nearly correspond with the actual facts, for anything I know to the contrary—what I want to point out is that, even if they are absolutely correct, the amount of profit that has gone to the profiteer (if you like so to call him) is only £90,000,000. There may have been some other profits to add to the £90,000,000 on the part of people who did not make extra profits as defined by the Act. On the other hand, the figures of the noble and learned Lord make no allowance for anybody who earned less than he earned before the war; and I am pretty well convinced that if we could have the whole matter looked up we should find that the total extra profits made by the wealthier classes probably did not exceed £100,000,000, whilst the wealthier classes must have paid in extra taxation during this war a sum which I calculate to amount at the least to from £150,000,000 to £200,000,000. There fore I argue—and I shall have some other figures shortly to present to your Lordships in support of that view—that the general effect of the war has been to reduce somewhat rather than to increase the net income of the wealthier classes of the people in this country taken as a whole.

I may be wrong about the figures that I am going to give, but I ask that they may be examined by anybody who objects to them. It is clear that the national income as a whole has gone up enormously. The point is how the increase in the national income has been divided. Taking the total number of people employed both in the Forces and in industry during the war, the numbers must have increased rather than diminished. There is no question at all, I think, that wages on the whole have been doubled, in many cases more than doubled. That means that the working classes in this country, out of the increased national dividend made during this war, have received from £750,000,000 to £1,000,000,000 more per annum than they did before the war; whilst I cannot see that the amount paid to capitalists—in gross, before taxation—can have been materially more than £100,000,000 in addition to what their capital was before the war.

I can put forward some other arguments in regard to this matter. I was rather nervous about using the argument, and I went to some people eminently well qualified to advise me; I also took the trouble to get hold of the last Report of the Commissioners of Inland Revenue. I looked up in that Report the figures for the last year given—1916–17—and I found under Schedule D. (the Schedule which would, if enormous extra profits had been made in industry, inevitably show them) what the increase in the figures was. The increase in the gross income brought under the review of the Department is very large; it rose in the one year from £732,000,000 to £998,000,000—an increase of £260,000,000. But when I looked further down the page, to see the incomes on which tax was received after the various deductions had been made, I found that the amount had increased only £60,000,000—from £533,000,000 to £593,000,000; the fact of the matter being that the enormous increase shown in the early figures is obviously due, if those figures are studied, to the enormous increase in the number of working men who began to be in that year Income Tax payers for the first time. That will be obvious to anybody familiar with these figures who will take the trouble to study the deductions.

Then I turned to the only other figures I could find that materially help—namely, the Super-Tax figures given in the same Return. I give the figures for two years—1914–15 (which clearly must have been founded upon incomes before the war, I think), and 1916–17. The figures for 1914–15 are these: 30,211 people had their incomes assessed at £244,769,000. The figures for the last year given (1916–17) were 29,723 persons whose total incomes were assessed at £247,000,000. There are a few variations of interest. The incomes of £100,000 and over have increased in number by five. The £3,000 to £5,000 incomes, the first in the scale, have decreased from 15,524 to 14,463. The net result is that the total number of Super-Tax payers in the later year was materially less—perhaps I should say somewhat less—than the number in the earlier year, and the total amount paid by them was only about 1½ per cent. larger.

I suggest that it should be possible for the Govern rent to give the public later figures, and figures perhaps more correct, than those which I have ventured to lay before the House this evening, and I would appeal to the Government to take that step. If the old tables have been kept up at the Inland Revenue—it is possible that some of them have not been owing to the shortage of clerks—they could give figures which would show pretty clearly what amount of the figures in the Income Tax return was due to the taxation of small incomes and what was due to profit on, large businesses. If we could have those figures it would be of real assistance, I venture to think, at the present time. On the face of it the net result of the figures which I have given to you is that the workers have had from £750,000,000 to £1,000,000,000 a year extra—I admit this is a figure which I have guessed myself, but which must be somewhere near the truth—and the profiteers only among employers may have had another £100,000,000 before the result of extra taxation was felt, and a great deal more than that £100,000,000 must have gone, I think, in the extra taxation imposed, and properly imposed, on account of the war.

I referred a short time ago to a speech made by Mr. Thomas, the well-known Labour leader, in another place. After alluding to the Maypole Dairy Company, he referred to the cotton trade and said— For two years the Lancashire cotton operatives were earning less than they ever earned before, and yet during that period of short time, last year the average profits in the cotton trade in Lancashire were not only higher, but were equal to 45 per cent. on the total subscribed capital. The working classes, I submit, are entitled to draw their own deductions from that fact. Mr. Thomas is by general consent one of the ablest, most courageous, and most fair-minded of the Labour leaders to-day, and, that being the case, I almost despair when I see a statement so misleading in tendency as that about the cotton trade of Lancashire.

Cotton, as your Lordships know, was in short supply because of the lack of shipping, and therefore it had to be rationed to the cotton mills that used it. There was a heavy fine imposed upon those mills that, worked more than the regulation hours, which were materially reduced during the later period of the war, and that heavy fine went to unemployment benefit for those who needed it. But the shortage of work was not met by working what is commonly called short time, but by reducing the number of spindles and looms at work, and by reducing the number of operatives actually employed. The reason was that employment in Lancashire, as elsewhere, was so extraordinarily good that operatives would not work short time at the cotton trade, but went elsewhere, to munition and other works, if they were asked to work short time. Employment was never so good and wages were never so high, and I do not think the Lancashire operatives were ever more prosperous, on the whole, than they were as regards mere money during the war. Therefore the real effect of what happened was that a smaller number of operatives were employed, earning higher wages. Wages have gone up in the cotton trade—I admit rather late in the day—and now are 115 per cent. higher than before the war began. I only pray that the cotton trade may be able to face the fierce competition which it will have to face in the future under such conditions.

The statement about profits is no less misleading. The tendency is to make out the cotton trade as unscrupulous profiteers. Let me again give the facts. At the time, so far as the production of cotton goods was concerned, the Government was the principal buyer, and made its own terms because it controlled the prices. The bulk of the rest went, not in the home trade, but of course overseas, as it has done for many years. Therefore, so far as profiteering is concerned it was the foreigner or the overseas men that were made to pay, and not the poor person at home. That, however, is not the main point. Forty-five per cent., I have no doubt, was earned, but that is not 45 per cent. on the whole capital employed, but on the capital subscribed. It would be nearer 25 or 30 per cent. on the whole capital. It is far too big a profit, and cannot possibly last, but it was due to a temporary and a very temporary inflation of prices. Prices have dropped 30 to 40 per cent. since the first of November, and already that profit has disappeared, so far as future business is concerned. The outlook is very bad indeed, and I venture to say that the operatives of Lancashire, quite as much as the employers, are likely to congratulate themselves that a good deal was made in the year 1918, and that most of it has not been paid away but saved up for a rainy day.

Finally, the unfairness of the argument is also shown in this way. On the whole the cotton trade is worked on extremely bare margins. For the 20 years, 1888 to 1907, the average dividend paid by the Oldham Spinning Mills was exactly 5 per cent. For the ten years, 1908 to 1917 inclusive, the average dividend paid was 7 per cent. My Lords, it does not stand in the mouth of anybody to say that a trade which averaged for thirty years—a trade of a fluctuating character—a dividend of only 52/3 per cent. can be charged with being profiteers, because in one year it happened to make a good deal more.

I saw another statement in a paper called the New Statesman the other day. It said, "Why should it be possible for a relatively small number of private persons to become £5,000,000,000 richer than before the war?" Why indeed! I wonder who they are. I wonder whether this is a net addition to their capital, if any such change has taken place, and I wonder what increase in real wealth it signifies. Also, incidentally, is it true? I looked at the "Stock Exchange List," and I thought there must be some figures in that List which would show sonic great increase if any such enormous addition had been made to the wealth of individuals in this country. What is the result? British Government stocks, Indian Government stocks, Colonial Government stocks—all gone down. Home railways, Indian railways, Colonial railways, foreign railways—every one decreased in value. Banks are about the same. Canals and docks are down. Gas and electricity companies are down, of course. Insurance companies—some down and some up. Mines are down on the average. I know nothing about mines, but so far as I could see from the "Stock Exchange List" that was the case. Commercials and industrials, of course, vary. Some are down and some are up. Only on oils, shipping and breweries and distilleries should I say that there had been any general advance; and in the case of breweries in particular it must be remembered that there is a great deal of borrowed money and preference capital and that the debenture capital and the preference shares have all gone down in value although the ordinary shares have risen. On the whole I should say there was a fall rather than a gain of thousands of millions, so far as the "Stock Exchange List" is any guide.

Again it is known that we have sold an immense amount of our foreign investments. It is known that we have borrowed, as my noble friend opposite said, £1,200,000,000 from the United States of America. I do not want to bore you with my private experiences and I apologise for having spoken so long, but I must say that, looking at my own little fortune—a fortune which I venture to say is not on the whole badly invested, but happens to be invested, for so small a fortune, in a great many different fields—all I can say is that I know it is worth a very great deal less than it was worth before the war, so much less that I have never ventured to price my investments. As to my income, I believe it has decreased a little in the gross, and I know, as regards the net income, it is enormously less. I do not want to rely on my own cage at all. Take people with fixed incomes in Trust funds. They are enormously worse off. Take the poor clergy, about whom we have heard so much. It is the fact, as we all know, that the average income of the clergyman is not so large as that of an artizan to-day. Take another case, of somebody wealthier than the average clergyman but of modest means. One thousand a year gross before the war, giving at least £900 or more, even if unearned income—to furnish the same purchasing power at to-day's price would require a gross income of at least £2,100 a year.

I might give other cases of hardship, but it is correct to say roughly that, with the present taxation and present purchasing power, the incomes of wealthy men, after taxation is paid and prices are allowed for, only buy at present prices from one-third to one-half of what they bought before the war. These are incontrovertible facts. Only if it can be proved that there is a great additional gross income accruing to the well-to-do—to those who were well-to-do before the war and who remain well-to-do to-day—is there any answer to what I believe to be the case, namely, that the bulk of the previously wealthy people in this country must henceforward until prices fall (as no doubt these people did to a large extent during the war) reduce their style of living if they are to make both ends meet at all. For I feel pretty confident that the increase to their gross incomes is comparatively small on the average, if there is any increase at all, and that the net income in the majority of cases is, with to-day's standard of taxation, less than before the war.

If that is the case it ought to be known authoritatively on the part of the public, and I maintain that it is not known at the present time. If it were known it might do something, at any rate in course of time, to quieten labour unrest and to give the country a breathing time to see where it is before these deadly strikes take place in such large numbers as are threatened. If I am correct, the publication of the figures would do good, and the public at large and the workers might grasp what it is absolutely essential they should grasp sooner or later, and that is that the nation has not got a bottomless purse. If on the other hand I am misinformed and wrong, I shall have the satisfaction of knowing that the danger I have feared for our trade is not so imminent as it was, and I shall be able to look forward to the future with greater courage and greater hope.

LORD LEVERHULME

My Lords, I welcome more than words of mine can express the great privilege of the opportunity of speaking to your Lordships' House on the subject which we are now debating, but I am suffering front the infirmity of defective hearing and consequently I have been dependent upon the papers to-day for the speeches that were given yesterday and I have not completely heard the speeches delivered to-day. I know your Lordships' House is always most generous and I claim your indulgence if I am in any way wearisome owing to this disability. We are met to consider the question of labour unrest. Believe me, it is the healthiest sign in the country at the present tine. There is no unrest of the Bolshevist order. Our soldiers have returned, and I do not think yon will find a single Bolshevist among them. Our men are returning to their work. The Bolshevists whom we have in this country are the men who resisted conscription and the men who refused to go and fight and who generally have not proved themselves good citizens during the war and are not expected to be entirely idle now the war is over. It is not a deep-rooted emotion in this country.

On the subject of strikes, let us consider what a strike is. There is no commodity bought and sold between any two individuals but what a small strike takes place. The seller asks too much and goes on strike if the buyer will not pay. In the markets at Liverpool, London, Glasgow or elsewhere when the demand exceeds the supply, the strike is one by the seller; when, on the other hand, the demand is not equal to the supply it is by the buyer. I cannot see how we could with advantage attempt to deprive any body of men of the right to use this means, common to all of us, in connection with the only article that they have to sell—namely, their labour. And it would seem to me, therefore, that we must hear patiently with this state of affairs at the present time. We must endeaveur to show broadminded sympathy with the objects of those who resort to a strike, bearing in mind this fact—and it is rather a curious coincidence—that on this very day when we are discussing this subject a noble Lord got up to call attention to the inadequate pay of the clergy. I should certainly say that the same observation applies equally to the ministers of the Nonconformist denomination of which I am a member, and those of all Nonconformist denominations. But we have had no strike from them. I have never heard of a clergyman striking against his inadequate pay, and I am certain of this—that the consciences of those who attend churches and chapels are not less amenable to their duty to the clergy titan their consciences when they are in the factories and workshops granting rises to their work people. But the clergy have not struck, and we have had attention called in this House to-day to their inadequate salaries.

For thirty years, from about 1887 or 1888 up to 1918, or rather up to the outbreak of war, say for twenty-five to twenty- six years, the rise that has taken place in the wages of organised labour was round about one penny per hour. But in the four years of war we have had strike on strike with rapid succession, and the rise that has taken place in the wages of organised labour has not been 1d. but over 100 per cent. Do you not think we have been rather teaching the lesson that a scarcity of labour has brought advantages through the operation of strikes that a plentiful supply of labour has not brought, and have we not rather taught that by means of strikes wages have been advanced, and that where no strike has taken place salaries have not been advanced? I think it is deplorable it should be so, but that is the position. How can we deal with it? I venture to say that at the present time there is a deep-rooted suspicion between employers and employed which ought not to exist. I think it entirely arises from misunderstanding. It may be within your Lordships' memory that we have often had reports appearing in the Press of letters sent by sons of employers, sons of members of this House, who have, fought in the trenches and have come into contact with organised workpeople fighting as privates under their command. They have written home their surprise that. these men, whom they thought, were so poorly off, were very fine men; men who had studied political economy and in some cases it was acknowledged understood more about it than their officers. That surely was all to the good. They have come back with an improved idea of the working man, and I venture to say that equally the working man has come back with a higher ideal, a higher knowledge, and better acquainted with his employer and his employer's son. It has been a mutual advantage that they have been fighting the common enemies of the country, for many misconceptions have been brushed aside.

We are rather afraid of what is called Labour. We have no reason to be afraid of it. I visited Australia in 1892 at a time when labour there was beginning to show some activity. There was a general alarm on account of this upheaval of labour and the power labour was getting. If you want to know how strikes are energetically, not to say drastically, dealt with you must not come to a Government in England; you must go to the Australian Government, a Labour Government, and you will there find that the strikes are dealt with in what we should call a drastic and effective way. We have nothing to fear; I am confident of that. We have everything to gain. I want us to bear in mind that the workman is not a machine to be merely kept well oiled by high wages and smoothly running by good housing, although that is a very important matter, and I welcome the remarks of the Lord Chancellor on this point yesterday. But the workman is not to be kept running as a machine by satisfying his wants. Every fresh aspiration of the workman that we grant to-day will lift him higher and give him new aspirations to-morrow of still greater and increased demands, and so we shall always have what we call labour unrest if we are to be a healthy community.

Some reference has been made in the course of the debate to the question of co-partnership. Perhaps I can speak more freely on this subject as I am a convinced believer in the principle of co-partnership and have put it in operation, as far as my limited powers go, to as great an extent possibly as any one. But let me point out the weakness of co-partnership. We have heard of profiteering and of the enormous amount of profits made. The drawback I invariably hear against co-partnership from the workmen themselves is that it does not give them enough; that the dividends they receive as co-partners are not sufficiently high to be of interest to them. That is the only complaint I have ever heard against it. They expect the profits to be higher than they really are, or than they ever can be. They have an inflated idea, and that is one of the causes of the unhealthy unrest. I think it was Lord Buckmaster who referred to the amount paid as excess profits. I venture to say that we had better at once analyse these figures. The Government can do it possibly much better than any one else as they have access to the figures.

But the figure mentioned yesterday was £450,000,000 as having been returned. That I suppose is calculated over the last two years and is the Government's share, and from that you can calculate what has been the excess profit of the employer, as you may call him. As the excess profit has never been less than 50 per cent. and is now up to 80 per cent. you will find that if the arrangement had been made with the working people of this country at the outbreak of war that, instead of having increased wages, they should have all the excess profits their employers made, they would have made a very poor bargain. The excess profits remaining in the hands of the employers, if you calculate them, would not have given the workmen 4s per head per week. What has the worker obtained by the ordinary bargaining methods of his trade union, more often without a strike, but sometimes with the aid of a strike? He has obtained over 100 per cent. That must mean that he has obtained considerably over £1 per week, so that the rise in the wages of the worker has been five times or more the amount of the increase of profits of the employer.

It is ignorance, my Lords, on this subject that we ought to remove; there is a wrong idea on the part of the working people. In war time, with stocks rising, it is impossible to avoid making abnormal profits, and the Government itself has, in the ordinary course of conducting its various Departments, made these excess profits. I do not say that the Government should have avoided it or taken any other course. Let us take the Income Tax returns, because from them we can get an idea of what we should gain and give to the working people if profit-sharing was universally practised. I have not the latest figures; the latest I could get were for the year 1917, and they are Income Tax returns. The profits of business are put down at something over £500,000,000—well under £600,000,000. Let us assume that they were £600,000,000 for the year 1918. We shall find that this, first of all, must be subject to a deduction for interest on the capital, whatever source the capital came from. It could have been employed in Government securities, or in other kinds of investment, such as property, and would have returned 5 per cent. or so. From this sum must be deducted—how much I cannot say, and the Government might help us by ordering a return to be made of what the profits were—the interest on the capital employed. I ant confident that we should find, after deducting salaries for the management, now taken in the form of profits—the employer would surely be entitled to a salary—and after deducting the interest at 5 per cent., that if the whole of the profits of all the industries and all the businesses wholesale and retail of this country had gone to the workers and others engaged in them it would not have raised their wages by another 4s. a week.

These are facts the workman is never told. I have mentioned them at meetings of workpeople, and they have expressed surprise. I have asked them to work them out for themselves, aid they have been unable to challenge the accuracy of or to dispute the figures. Whilst, therefore, this war has been going on wages have, rightly and properly, for tile workpeople advanced by over 100 per cent., but if instead of that 100 per cent. increase they had received the whole of the profits made in all the industries of the country the rise in their wages would not have been 30s. a week, but would have been well under £1 a week. These are facts that I want our workers to understand. If we are to prevent strikes—and I think the question is the prevention of strikes it is not for us to say to the worker that he shall not have the same right as other citizens to demand as high a price as the market can give for his labour, but it is our duty to see that the worker is properly acquainted with conditions under which lie works and the effect upon industry of every rise of wages.

What are strikes for generally? Putting little disputes on are side—there will always be little disputes—strikes are generally either for an increase in wages or a reduction in hours, or both. If we refuse point blank to admit that there should be a strike for an increase of wages, we should equally refuse that there should be a strike for a reduction in hours, and point blank refusal will lead us nowhere. If we let this matter proceed to the length of a strike, then I venture to say that the employer, even if he wins, has in reality lost, and if it is a prolonged strike the worker will have equally lost. I will give you an experience of what, from an employer's point of view, was a successful strike. It was a strike upon a question of wages. The employer refused to grant the demand, and a strike took place. In the end the workpeople surrendered, and went back to work on the employer's terms. What did the employer find? He found that his workpeople went back soured and discontented, and that he did not get the output from his plant and machinery which he had a right to expect; in other words, although nominally the rise in wages had not been granted and he had broken the strike, actually his cost of production had advanced more than if he had had a contented body of workpeople back at their employment with the increase in the wages conceded to them. He had in reality lost by his refusal to grant an increase in wages.

Why Should we not recognise that it is a right and proper human aspiration for a workman to desire an increase in wages? Those who, like myself, have been born and bred in a Lancashire manufacturing town have listened between five and half-past in the morning, whilst lying in bed, to the patter of the clogs of people going down the street on the way to the mills, and we have heard the same patter between five and six o'clock in the evening when the workpeople have come back. Some of you, like myself, may remember the condition of the workers in the late fifties, when, amongst male operatives, you could only see two patterns of legs—the knock-kneed and the bow-legged. That was the result of immature youths being forced to work long and laborious hours in the vitiated atmosphere of mills and foundries. Their poor feeble legs either bent inwards or outwards. When there was a reduction in the long hours we were told that the industries of the country would be ruined. A member of your Lordships' House, the late Lord Shafts-bury, brought forward in another place the question of the age at which child labour should enter mills, and it was raised. Instead of our industries being ruined they were more prosperous than ever, as we all know.

I want to point this out to your Lordships. When we receive a request for an increase of wages and a reduction of hours it is not in our power to give a point blank refusal, because that inevitably will bring about a strike, and if we are victorious we shall still have lost. But it is in our power to take our workpeople into a partnership in which we say to them, "We recognise your desire for a higher income out of which you can not only meet the higher cost of living but can also live on a higher scale. You will not only have to meet the cost of higher living but have to live higher. We will recognise that. That is a thing you and we have to consider. You also want shorter hours so that you may enjoy the green fields and the country, or may visit picture galleries so that there may be something more than Saturday afternoon for shopping and attending to all the other interests of your life. You will want sometimes to cultivate your mind and soul in libraries among books. Do not let either of us forget that our living depends upon successful industry, and that this country is dependent on its overseas trade, and that we are in competition with the whole world. Let us see how we can get both. Can we get both shorter hours and higher wages, or are they out of our reach? If they are not to-day practicable except at a large increase to the cost of production then you, the workers, will be the first to suffer. The higher cost of commodities would out-balance any increase of wages that you might receive. You are 95 per cent. of the consumers. If coal goes up in price you feel it more keenly than any other section of the community. If the cost of boots and shoes goes up in price you will have a difficulty in buying boots and shoes for yourselves and your wives and children. Every article that you advance in price by a strike for increased wages and reduction in hours will not benefit you if it advances the price of the commodity. We have got in this country to produce so cheaply that our articles are sought all over the world, and if they are not sought all over the world, and if we have not the overseas trade, then we have no means of exchanging for the food that we cannot grow in our limited area in this country, and we have no exchange for the raw materials that we require."

Let us sit down and see how it can be done. We shall at once come to this position, that our workers are obsessed with the idea that their best interest is in limited production. They have thought that excessive production will mean warehouses full, mills and factories shut down, and unemployment stalking our streets. They are obsessed with that idea. They do not know what it means if the articles in the warehouses are cheap. One celebrated writer, a very thoughtful writer, says that if we made only mouse-traps cheaper than anybody else can make them, the whole world will beat a track to our door. They do not realise it. They are merely thinking of bulk; they do not think of price. When they work a machine they do not think that the machine is costing more in interest, repairs, and renewals than the man who attends to the machine. They are not thinking of these things; they have not been taught to think of them.

Let us sit down with them and let us say, "The position is this. Here are the figures of production per worker in this country and the production per worker in the United States. In the United States there is no limitation of output. The trade unions there do not object to a man's output being as great as ever he can make it; and the result is that., whilst you here ill England are working for certain wages, which is the maximum your union has been able to obtain for you, if you take a boat and go across to New York, though you will be no better a workman when you land there, you will be welcomed there, for the British workman is welcomed in every part of the world. The British workman is second to none in the whole world, and he will be welcomed there at double the British rate of pay. But surely you must inquire the reason. You must want to know why it is that you are only worth one rate of pay here in England, and double the rate if you land in America. You will find out if you search the figures that the output per man in the United States is considerably more than three times that per man in this country. At any rate, if I say from two to three times I am speaking conservatively."

Cannot we put our heads together and say to our workmen, "You want more wages and shorter hours; then let us see if we cannot work so that you can have both. But the key to the position is not that the shorter hours are merely working short time. The key to the position is that if we shorten hours and increase wages we must reduce cost of production. If we do not reduce the cost of production then you as the workers will find, however much your wages have gone up, their purchasing power (as you have found during the war) is reduced; and, if you are paid sovereigns for every shilling you are now paid, the articles would have gone up to such a price that, with the restricted output, you will still be short of boots and shoes and clothing and houses—still be short of everything that makes civilised life happy and comfortable."

I believe that if we admit that the workman (as we know the British workman is) is as fine a type as any there is in the world—and in my experience more amenable to argument and to logic and to proof than any other section of the conununity—if you do this, and we then set our minds to try if we cannot satisfy his natural and right ambition for an improved social position, admit that there are only two classes, after all, in this country (and I am certain that in this House it would be agreed to as readily as in any Assembly in the world, the two classes being those who do their duty and those who fail to do their duty) and that we can all join together in endeavouring to do our duty to each other, discussing as partners what road we shall take; then I believe on those lines, and working in that way, we shall find that the bogey of strikes will be shorn of all its terrors, that a strike will be merely a prelude. to consideration of the situation; and that quickly and readily we shall not only raise ourselves as a producing nation, so that our goods are more welcome in every country of the world than they were before the war, but here in England the price of commodities will come down, and in this process we shall have taken the only course that will enable us to discharge our heavy load of debt. We shall not be able to discharge that debt unless production is great, unless output is great and—the consequence—profits on reduced cost are great; so that the tax collector, with the sweet simplicity of Income Tax and Super-Tax and any other tax that may be required, will find active commerce and not stagnation, active shipping because of the goods that will be moved to the country and from the country, active industries in every direction, and work increasing. I want to say, in conclusion, that I have Spoken with great diffidence. I may have repeated what many other speakers have said, but I have welcomed this opportunity, and I am more conscious of the privilege of speaking in your Lordships' House than words of mine can express.

EARL BRASSEY

My Lords, I should like to express to the noble Lords who placed the Notices on the Paper my gratitude for having produced the interesting discussion to which we are listening. I share to the full the anxiety of the noble Lord who opened this discussion, as well as that of the noble Marquess, Lord Lansdowne, as to the economic condition of the country. There are many people who believe that this country is in sight of national bankruptcy. I am not sure that they are not right. At any rate, I am very much alarmed that there is no indication in the King's Speech or in the Government programme of any intention to do what Lord Lansdowne described as putting an end to the era of reckless borrowing and returning to an era of sobriety and carefully regulated expenditure. Instead, we have proposals for the creation of new Ministries, of which we have had enough created during the war, and of lavish expenditure in very many directions.

It seems to me that the elaborate schemes that are being brought forward for bettering the conditions of the people cannot be carried out, or cannot at any rate be effectively carried out, unless we have the money to pay for them. I know from practical experience that it is impossible to begin to improve the conditions of your workers and to pay good wages unless the business is being worked at a profit. So in the case of the nation, I believe it is impossible to improve the lot of the masses unless the country is paying its way. The first step in reconstruction and towards the improvement of the conditions of the masses is to return to a sounder economic position, and to establish effective control over public expenditure.

In the prosecution of the war it seems to me that the permanent interests of the country have been more or less lost sight, of. If the country is to pay its way—as Lord Emmott and others have pointed out—production must be increased, and we must recover the trade we have lost during the war. Neither result is attainable so long as the energies of merchants and of manufacturers are paralysed by Government control and by uncertainty as to the fiscal policy which is going to be adopted. There has been a good deal of talk about Imperial Preference and about the protection of pivotal industries. What steps are being taken in that direction? Unless steps are taken in that direction I believe we shall be unable to find employment for many of our people, and still less be able to better their social conditions as so many of us desire. I agree with many of the speakers who have preceded me in this debate that the economic condition of the country is very grave, and I can only hope that the debate will result in turning the serious attention of the Government to this question.

As to industrial unrest, I may, perhaps, be pardoned for saying that I approach the consideration of this question as the grandson of one of the great railway builders of the last century, a man who constructed portions of the first railways in this country and in many countries of the world, who had at times 70,000 men in his employ, and who never had a strike. I approach it also as the son of a man known to many of your Lordships as one who took an active part in securing the legalisation of trade unions by Parliament. Further, I ask permission to address you on the ground that I myself have been for the last twenty years the manager of a large mining business employing some 5,000 workmen, that I have made it my duty in the conduct of that business to know the conditions under which all the workers work as well as live, and because I can say that which I do not think any other member of this House can say—namely, that for many years before the war I spent more than a miner's week underground. I am a firm believer—like Lord. Leverhulme who preceded me—in the worker having a share of the profits of the industry in which he is engaged, and also having a voice in the management.

I am satisfied from personal experience that the employers in this country are, in far too many cases, one of the principal causes of industrial unrest; in too many cases there has been the tendency in the past—though I am happy to say that this tendency is passing away—to treat the workman not as a human being bat as a machine. Big companies have spent thousands, tens of thousands, maybe hundreds of thousands of pounds, in sinking a pit, in erecting a factory, or in acquiring some new and expensive plant, but they have taken no thought whatever for the housing of the men who work in that pit or in that factory. Nobody feels more strongly than I feel that you cannot have a contented working population unless that working population is properly housed. It is the duty of the employer, whether he be an individual employer or a company, to take some pains to see that the conditions under which his workmen live are good when they are absent from his factory or from his pit. That, in my opinion, is the first cause of industrial unrest. The second cause is obviously the extravagance of public expenditure during the war—more especially the extravagant way in which industry had been conducted by the Munitions and other Public Departments. The third cause is one which has been referred to more than once in the course of this debate—namely, the large profits which have been made by a good many people, profits in which the workers do not share.

A word as to the special demand with which we are now face to face of the miners, the railway workers, and the transport workers, for higher wages, shorter hours, and better conditions of employment. In view of the fact that the granting of these demands will impose a very heavy burden on the community, will be a heavy burden on industry, will restrict production and trade on which employment largely depends; in view of the fact that a fall in the cost of living is very probable in the near future—and if Mr. Runciman is correct (and I attach very great weight to anything the ex-President of the Board of Trade says on this subject), a fall in the cost of some of the most essential articles of consumption could take place almost at once, provided Government control were removed; in view of all those facts I am not sure that the demands put forward by the miners and railway workers are very reasonable at the present time, and I think they ought not to be granted without very careful inquiry.

Before I sit down I want to say a word on the demand which is being actively put forward not only by the classes of worker to which I have referred but by other workers—that is to say, for the nationalisation of mines, of railways, and other industries. I myself am strongly against the carrying on of industry by the State. After our experience of the State control of industry during the war, I do not think that in the interests of the community State control of industry is desirable. The Welsh coalowners, in a statement published the other day, said that the experience of State control during the past four or five years was in itself a convincing argument against the interference of the Government with business; and they did not hesitate to declare that, had it not been for the service of men possessing practical knowledge and experience of the coal trade, and the check which this knowledge provided against incompetence, em- ployment in the coal fields would have been much more irregular and the loss of trade would have been far greater than it has been. I know of nobody engaged in business who is in favour of the Government carrying on industry for themselves.

The second reason why I am against the State control of industry is this. I think labour will be much more unreasonable in its demands, or at any rate much less reasonable in its demands, if the cost of meeting those demands is met by the taxpayer, whose pockets are believed to be bottomless, and if the decision as to whether these domands is should be conceded rests with a Government who are spending other people's money, than if labour learns the consequences to the industry in which it is employed, from an increase in wages or shorter hours, after a conference with employers round a table. I fully share what has been said by other speakers on this point, that it is absolutely essential, if we are to have better relations between Capital and Labour, that joint committees of employers and employed, as suggested by the National Alliance and in the Whitley Report, should be established.

The third reason why I am against the carrying on of industries by the State is that Parliament has no time, under present conditions, for controlling the carrying on of industry by Public Departments. There can be no more striking instance of the breakdown of our Parliamentary institutions than the fact that the Government have had to call an extra Parliamentary conference to discuss these questions. In a democratically governed country these questions ought to be discussed in Parliament. We have been said to be fighting for the triumph of democracy. Democracy, if I understand the meaning of the word aright, means that the people should, through their representatives in Parliament, control legislation and administration and public expenditure. If that is true, we have not got democratic government in this country to-day, and we cannot have it so long as we attempt to deal in one Parliament, by one set of men, with three distinct classes of business—the separate interests of England, Scotland, Ireland, and Wales, the affairs of the United Kingdom as a whole, and the affairs of our widely-extended Empire. I believe that there will be no end to industrial unrest, and can be no end to it, until we have established in this country National Legislatures, which can give their time to considering all these social problems in which workers are mainly interested, to which representatives are elected for their competence on these questions and not for some totally different reason, as they have been elected at the last Election, and in which labour may have a predominant voice and the opportunity of forming a Government.

VISCOUNT HALDANE

My Lords, I have had the advantage of hearing the whole of this debate and also of restudying that part of it which has already appeared in print, and I have been much impressed by one feature which the debate bears. Your Lordships are keenly conscious—that is everywhere evident—that a new and menacing problem has presented itself for solution, that a new spirit has come (that has been the phrase of some who have taken part in the debate), but there has also prevailed a comfortable sense that, menacing as the problem is, it would be dispelled if only the workmen had sufficient knowledge, such knowledge as some of your Lordships have felt you possessed.

On the controversy that arises between two theories it is no intention of mine to take part, but I wish to point out that it is a fallacy to suppose that the working classes, as represented by the Labour Party, are not furnished with all that knowledge which we had presented in outline so admirably by Lord Emmott to-night, and much more. If any of your Lordships who walk home down Tothill-street will look into the Bureau of the Labour Research Department, on the left hand as you go north, you will see a variety of books, pamphlets, and articles dealing with, I think, every one of the subjects which have been discussed to-day, and with a great many more. These are not the work of ignorant workmen who have not time to look up or study these things. These writings are the production of some of the most brilliant young economists in this country. If you go to Oxford or Cambridge, or to any of the Universities, you will find a very large proportion of the younger men—I am not sure it is not a majority—on the side of Labour. They call themselves the Friends of Labour. Among them are a proportion of very eminent students, men who have devoted their lives to the study of these labour and industrial problems, and who have produced a mass of learning on the subject Which compares most favourably with anything produced by any other Party in the State. It does not stop there. You may say that that is only the work of those who advise the Labour Party. Turn to a journal like The Round Table, which cannot be said to be the organ of any particular Party. Read the article appearing four quarters back in that journal, and in these articles, and in such books as the brilliant volume of articles by Mr. Zinmern, you will find the subject put in a wider form than it has been put to-night, with full knowledge of the facts and appreciation of things said, and with other circumstances which give the matter a new meaning.

We have been told to-night to look at the excess profits and to see what a large share of the profit made during the war has gone to the working men who were employed, and what a comparatively small share has gone to the employers. The Labour Party and its advisers would answer that this is a sure fallacy. The fallacy is that you are dividing that profit, and all profits, between Labour on the one hand and Capital on the other, as if they were two equal entities, but the true entity is what you discover as you go through the streets. Walk through London, or any crowded city, and go into the churches, and listen to the sermons on the contrast between rich and poor, and you will be told that millions of workmen are living in a condition which presents the sharpest and keenest contrast to the mode of living of the comparatively few who share the surplus wealth. If you take the comparison, not as between Capital and Labour, but per capita, then you will find cases of inequality which display themselves at large in the condition of our slums, as mentioned in that Report of the Scottish Commission to which my noble friend Lord Buckmaster referred so forcibly yesterday, and in the indications on every hand that the contrast between rich and poor is one of a very extraordinary character.

The question has been referred to as new question. In one sense it is. It never became as acute as it has done during what may be called a period of industrial development. The enormous strides which have been made in industry and in manufacture during the last century, and the latter part of the century before, made the contrast more great, and the workman became more and more a machine. The result was that by 1848 the question of to-day had begun to take shape in an acute form. That was a revolutionary time, and it was to those days that the origin and influence of Marx and Lassalle and the other great socialists who have been quoted may be traced. Thrones were shaken even then, but the convulsion of 1848 was not comparable to the convulsion that has taken place within the last five years.

This change has brought the question into a still more living form than it assumed in 1848. The contrast between rich and poor is more glaring. Thrones are shaken, institutions are affected all over the world. The spirit of revolution is penetrating, with the result that at this moment perhaps the only rather conservative country in the world is the United States of America, and in consequence the question with which we have to deal is not any local question. It is not a question which is peculiar to this, that, or the other country. It is a great question which is extending itself over the whole civilised world. We here may be thankful that we have it in such a mild form. Go to Russia and see the form it assumes there. Remember that the predecessor of the Government which now exists in Russia was a Government which, from the point of view of industry and of those social standards of which I am speaking, was a thoroughly bad Government. What has succeeded is the counter-revolution which takes place when there has been a Government that has ignored the rights of people to the extent that the old order of things in Russia did. This has spread West. Germany is in a revolutionary state, far in advance of anything which you have among the Allied Powers that have been victorious. But take the Allied Powers themselves, take even the United States—labour unrest is everywhere, because this great question, which became acute in 1848, has become acute ever so much more now, because its character is not one limited to disputes in this or that industry, and because of the great contrast between the lot of the rich and poor in the world.

I agree with Lord Buckmaster that this is not a question which is going to be put right very simply. I do not lose courage over it. It will require a great effort, but I think if you approach it and deal with it in the right way the world will come through it and will emerge a better world than it was before—a world which, I do not disguise from myself, has undergone very great changes. One school speaks as if it was Labour that created wealth, and the other school speaks as if it was Capital that created wealth. I think it is perfectly obvious that neither Capital nor Labour creates wealth. Wealth, almost the whole of it, is created by mind. Labour, no doubt, plays a very valuable part., but taken by itself and apart from instruction and skill it plays a merely mechanical part. Capital, on the other hand, is something which nowadays you can hire in the market if you can give security and pay a sufficient rate of interest. It is the organiser that makes the money. Very often the person who really puts the money into his pocket is somebody who has contributed very little to the process by which the wealth has been produced. It is often my lot to sit in your Lordships' House earlier in the day when the judicial sittings are in progress and to have to decide patent cases. In two cases out of three they are cases in which some body, some company, which is contending for its monopoly during fourteen years, has bought the patent of the invention of some patentee with a very high degree of brain who has discovered a new secret in the conversion of the potential energy of the earth into the kinetic energy which goes to make wealth, and has bought it for a comparatively small sum so that the company and its shareholders can put the profits arising from the monopoly into their pockets. I am not complaining. That happens. But to say that that company is the source of the wealth that has been so created and distributed is to say what is not the fact. That is only an illustration of what we have nearly everywhere.

For myself, I do not think we shall be in sight of a solution of this question until the working classes realise that every man has his chance, that there is equality of opportunity for everybody in the competition which is essential in human life. There is a great deal of talk of leisure for the working class. I should not give anything for that leisure unless it was well-spent, and you can only make it thoroughly well-spent leisure if you take the workman and provide him with the means of using his leisure time to the greatest advantage. Therefore, to the minimum of his wages and his hours you must add a third minimum—the minimum of knowledge, without which he cannot make the Most of his life for himself or his children who are to come after him.

The truth is that the industrial side of the question cannot be separated from what I may call, in a comprehensive sense, the spiritual side. The two must come together, and if we are to make a better world it is a world that must take all these timings into account. What is the attitude likely to be of a workman sharing the views which are common to-day when he hears such a proposition made as that there should be a conference and an adjustment on some labour question which is likely to end in a strike that seems to be impending? He will say, "You are only touching the fringe. You are not going to the root of it." He will probably say this—"There are arterial industries which affect the very life of the social organism, such as the railways on which there was a strike in London a few days ago, or the coal mines which represent a necessity of life for the people of the country." Perhaps I might add transport—because it, is almost equally an arterial industry—and the workmen will say, "I recognise to the full that these arterial industries are vital and ought to be protected. They should be protected. Striking ought to be made a crime as it has been made in Australia. "Whether altogether successfully or not, the fact remains that the principle lies been adopted.

But the workman will say something else. Before you dare make these things a crime against society you must perform the correlative duty, which is to take care that the workman gets the fullest and most just treatment in the work that he is practically compelled to do in these industries. I think the modern workman will say that there are certain things—railways and mines—in which there is no reason why he should earn profits for some outside capitalist. He objects to the person who is a profiteer. He says the profit should go to the State; pay your directors, and your men of science and skill, as high a salary as you like; we recognise the justice of the high salary. But that it should be left to accident and fortune how these great arterial industries are to be controlled, and who is to reap time fruits that are earned, is one of the propositions which I suspect we shall see the subject of very close questioning in the times that are immediately ahead. What applies to these industries applies to others also, although there are many industries which it is almost impossible to deal with and avoid management by anybody but the individual who may perhaps have founded them and directs thorn, and who will expect to make his own out of them. But at least the State can lay down certain conditions below which the workmen must not sink in any industry, and in arterial industries to attempt possibly to establish such a control that you may expect the workmen to put out his best and fullest exertions.

I entirely agree with what has been said in this debate as to increased production. Our financial burden is so enormous that unless there is increased production we shall not be able to meet the situation which we have to face. I agree Altogether with what Lord Emmott said About the necessity of putting us in a position to resume our export trade, and I think it is most unfortunate that during the conduct of the last Election speeches were made about cutting off very valuable parts of the import trade without which that export trade cannot exist.

But it is more than that. You will have to get a larger product out of the workman, and you will have to get it not by treating him as a machine and overdriving him. You will have to give him better hours, better homes, better education, and better wages, and get more out of him under better conditions. That you will only do by better organisation and a better application of science to industry. For two years during the war I was Chairman of a Committee which sat to investigate the conservation of the nation's coal, and I only mention what is well known—that it was proved that at least two-thirds of the coal used in industry is wasted so far as the supply of energy which comes from it is concerned. Substitute electrical production for the present wasteful methods and you will get a much larger supply of tools at the disposal of the workman which will enable him to produce much more. This has been done in the United States and other parts of the world, and in some parts of England, but to an extent which is far too small to produce the result we require and enable us to cope with what we have here.

It has been said in the debate that we are very extravagant just now in our expenditure, and very extravagant in our educational expenditure. Unless we take full advantage of the fine reservoir of undeveloped talent which there is in the sons and daughters of our working people and develop it by education we shall not be in a position to overtake that enormous mass of increased production which we must overtake if we are to get to the point we desire to reach. Therefore in dealing with questions of economy you must always bear in mind that there is a certain expenditure which is required in the interests of production, which is reproductive expenditure, and which you cannot cut off. But be that as it may, what the working I classes are demanding is that you should put their condition on a footing which more nearly approaches to what they call justice than is the case at the present time.

The Lord Chancellor, in a speech which we all enjoyed yesterday for the lucidity of its diction and the readiness with which he fell into the habit which will distinguish him in his high position, spoke of the fact, which I believe to be a real fact, that the Government is quite alive to the largeness of the question and the seriousness of the impending dispute. But he said, "Trust the Government. We are doing all we can. We have been away in Paris and are busy with many other things, but only trust us and we will bring the thing through." I hope they will, but I own I do not feel confident. In the course of the last Election a good many speeches were made on behalf of the Government which proceeded on the principle of promising before thinking whether you can perform. There were many things said which seemed to me to show that these questions have not been taken with the intense seriousness with which they must be taken.

The truth is that in dealing with the kind of problem which we have got now no knowledge except exact knowledge will serve the purpose, and, more than that, we have got to make the requisite study along with the working classes if they are to be convinced and carried with us. And the main point I have risen to make to-night is that the conferences which are talked of in connection with the general situation are doomed to failure if they are the old and the usual kind of conference. It is not enough to make the facts known. There must be a serious study of what are new problems such as will satisfy the community that that study will result in exact knowledge.

I believe that what we are suffering from more than anything else is that the working classes do not believe what is said to them. Every kind of promise and undertaking is made, and made perfectly bona fide. Why is it that they do not receive credence. It is because it becomes evident that the things which have been said have been said without sufficient study and exact knowledge of the conditions of the problem. After ail, these great industrial changes, the problems of finance and commerce, are problems which require minute consideration before you embark upon a campaign for their solution, and require just as minute and close a consideration as great military problems. Before this war if anybody had a doubt as to the value of a General Staff as a preliminary to operations, his doubt has now been dispersed. Nothing has been better proved than that victory lies with these who have the best knowledge and are able to put their resources into operation.

It is so with industrial questions. You require your general staff just as much as in the case of military operations, and you must have close and exact study. You also want to impress the people you are dealing with that you are making that close and exact study. I do not know what the Government are going to do, but I. think there is much to be said for this course—to tell the public that the mind of the Government is perfectly open to very far-reaching proposals, it may be to take over complete control of the railways and mines and any other industries that are arterial and control the conditions of labour, and to say that if competition is carried on it must not be carried on so as to keep sweated industries in life. It is much better that they should perish than that the health of the community should be affected by them. Let other people produce cheap goods for them to purchase. And, to consider how best the numerous group of problems is to be solved which are connected with these things, let the Government set up an organisation that will be thoroughly and completely trusted.

For myself, I think that in the case of one or two of the disputes at the present time it might be well, possibly, to get representatives on whom labour would rely, armed with exact knowledge of the comprehensive kind of which I Lave spoken, and get them to meet representatives of the other point of view with equally exact and comprehensive know ledge, and let them assemble under a neutral chairman who need not give a vote, but whose business it would be simply to guide the deliberations. I do not mean merely another conference. We have had plenty of conferences, and we shall no doubt have abundant promises of more conferences. I mean taking the matter in bitter earnest. I mean studying all these questions as Marshal Foch did his operations before he put them into force during the recent campaign. I mean a minute and careful sifting of the facts from every point of view, and with the very best expert assistance, because I think that is the only way in which you can really get the working classes to believe in you.

Do not imagine that it is going to be an easy matter. A long period of distress and disappointment has worked a good deal of mischief, but there is still time if, instead of leaving the investigation and the dealing with these questions to business men, the Government, will deal with them on a yet higher footing. I have every admiration for the work of business men in connection with their own business, but when they come to deal with the business of Government and to deal with other people's business it seems to me that they are not so good. I think the Government reaped a great advantage by the employment of business inert for speeding up the output of munitions, and so on, but these industrial problems are problems of enormous difficulty. Our machinery for dealing with them requires considerable improvement. It fell to my lot to preside over a Committee appointed to investigate the condition of the Executive Government, and I had as colleagues two very distinguished representatives of Labour, Mr. J. H. Thomas and Mr. Sidney Webb, and two very distinguished Civil Servants—one an ex-Civil Servant—Sir George Murray and Sir Robert Morant, and I also had the assistance of the Right Hon. E. S. Montagu, Secretary of State for India, and Sir Alan Sykes, M.P. We came to a unanimous conclusion that the manner, machinery, and instrument of Government, as it exists to-day, is one with which it is astonishing that we should ever be able to get on as we do—overlapping of subjects, overlapping of details at every turn, and the source of contention all round.

While the Government is making the comprehensive investigations of which I have spoken, there is plenty of work to be done in putting right the instrument which is to administer the better state of things when it comes into existence. if the policy which I have indicated were taken up with such earnestness and thoroughness as would carry with it the consent of people who are now suspicious and distrustful, then there would be a chance—I think a good chance—of our being able to bear the enormous financial burden which lies in front of us. I have not risen to reproach the Government for not doing the best that is possible. I know how enormous are their difficulties, and how great is the multitude, of their problems. I think they have been rash in holding out hopes which they would not have held out if they had exact knowledge of the difficulties of the situation. I think that now they will have to take very thorough and drastic means of the kind that I venture to suggest to deal with the situation. At the same time that situation is one upon which I think every party in the State will have to endeavour to co-operate if the present problem is to be solved.

THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF CRAWFORD)

My Lords, the range of subjects covered in this debate shows how pretty nearly everything is concerned, directly or indirectly, with industrial problems. I feel quite sure myself that social reform must depend upon the solution of those industrial problems, not to mention the solvency of our country and the whole future of our Empire. The Government, conscious of this, is anxious to examine the matter fully in all its aspects and most sympathetically. The inquiries to be instituted by the Government are not, as Lord Haldane rather indicated, with a view to shelving the subject. They are genuine and comprehensive schemes for probing these issues to the full.

I need not at this stage try to analyse the causes of all these troubles, and how far they are measured by reaction from war conditions, but that much labour unrest arises from genuine and lofty ideals I entertain no doubt. Lord Leverhulme said that this in itself was a healthy sign, that more fruitful leisure was required, and better conditions of life and housing; and indeed that some bad prevailing conditions are themselves the source of much labour disquiet. Housing for instance. The housing difficulty has been greatly exaggerated by the war. For four and a-half years practically no new artisan houses have been built. During that time there has been a suspension of nearly all repairs, and I would remind your Lordships that before the war there had been a good deal of neglect in this matter.

We entered the war with a serious shortage of cottages. For several years before the war, from one cause and another, the building trade had been scared from building cottages, and the accumulated deficit resulting both from that pre-war policy and from the actual results of the war have now reached a very serious stage. A large expenditure is forecasted, and indeed it will have to be gigantic in order to meet the requirements. This cost can only be met by industrial activity and by increased production. If this industrial activity is checked, housing reform in turn is going to suffer, and those for whom the building policy has been outlined will be the first themselves to feel the loss. We have to be very careful that in this particular matter we do not organise for ourselves another vicious circle which will produce graver trouble than I like to contemplate. Industrial peace is a large and a potent ingredient in prompt housing reform. Another cause of industrial trouble arises from very much less praiseworthy ideals—from what is called Bolshevism; the advocates of turmoil, the wrecker, the author of those "misunderstandings" of which we hear so much, and which in themselves are very often extremely difficult to understand.

That misunderstandings, doubts, hesitations, and so forth are deliberately propagated I have not a doubt in my mind, and I do not under-rate it. Several of your Lordships have spoken of this danger as if it were negligible. I neither under-rate its numbers nor its influence. Lord Buckmaster complained that propaganda on this question of Bolshevism was inadequate. That may be so. We once had a Department to deal with propaganda, but it was the subject of very hostile criticism, notably in your Lordships' House, and that Department has now been demobilised. In any case, propaganda in time of peace must be very discreet. The Government cannot take too partial a view of any controversy, and will have, in any case, to content itself with bare statements of facts, without exhortation.

I fancy, however, that the broad facts of the Russian experiment are pretty well known to the public as a whole. Bolshevism began in disorder—perhaps in drunkenness. Dirt followed, and dirt in Russia means disease; and the chaos and confusion is now beyond belief in that country. Lots of artisans earn up to £10, but, of course, it is paid in paper. They are reverting to the conditions which prevailed late in the French Revolution, when, under the assignat system, one had to pay 500-francs for an orange or 10,000-francs for a cabfare. The money was available but it was paper money—it was bogus, in all senses of the word. And that is exactly what has happened in Russia. The only universal article in Russia is the paper rouble, which circulates in thousands of millions, representing on paper immense and fabulous stuns of money; and yet the people are starving. Disorder has dislocated their whole transport system; chaos has ensued, and Starvation.

From all the information which reaches me I think I am justified in saying that there is plenty of food in Russia to feed the inhabitants of that country, but it cannot be moved, through the disorganisation of industry, and through their typhus-stricken towns. Petrograd is shrinking into a small town, and the death-rate is tremendous. For every woman and child who lost their lives during the war through Prussian brutality at least a hundred must owe their deaths in Russia to the new system of Russian autocracy. For the artisan population as a whole Bolshevism simply means suicide.

These facts are pretty well known. But on the economic side of our industrial troubles steps are being taken to inform all the parties concerned of the issues at stake. One cannot, however, force the public to learn. The matters in themselves are not very simple, and there are a good many people who do not intend to learn. Your Lordships have seen that in the course of a few hours a very large conference on the general matter is going to assemble. It would only discuss, I take it, general principles, but sub-committees can be appointed, if necessary, representing all interests and all concerns.

Meanwhile reference has been made to the proposal to have a special Inquiry into the coal side of the problem. This Inquiry will be set up shortly. I notice that the miners seem reluctant to participate in that Inquiry. That is regrettable, but the Inquiry must none the less be held. Lord Buckmaster asked for cost-sheets of coal—rather scolded us, I think, for not having them ready. Many of your Lordships know how difficult it is to produce a cost-sheet of so elementary an article as milk. To produce a cost-sheet of coal is one of the most complex and intricate actuarial problems in the whole business world. But this Inquiry will go into that. Cost-sheets of coal produced six months ago, of course, are quite irrelevant and useless for the present problem, because the whole relation of coal to the Ministry of Munitions and the Munitions Levy is now changing. But, as I say, this Inquiry can investigate all these subjects. It can show the ratio of wages to the total cost of production, and also the relation of Income Tax to interest on capital, to which Lord Leverhulme referred. There is no reason, as Lord Haldane, I thought, indicated, to fancy that the range of this Inquiry must be limited. It can, I imagine, inquire into any and every aspect of the whole question, not merely the economic but the social and the political side of the coal-mining industry.

I do not wish to go far into a question to which a good deal of reference has been made—the question of profiteering. Inquiry has been suggested into that. There is a good deal of misapprehension on the subject, as Lord Leverhulme pointed out; there is a good deal of misapprehension as well. But certainly in no belligerent country has so large a proportion of profit been intercepted by the State. I do not deny for a moment that profits and profiteering have existed. They always will exist in peace or in war, and in every class, section, or walk of the community. But one must remember, as Lord Emmott clearly pointed out, that, in assessing the high dividend, sterling value must be taken into account. It is a very material factor which is generally overlooked, and, per contra, it must be remembered that through Government agency and Government control the sterling value of wages has been very largely maintained; so that, while dividends have depreciated in sterling relatively, that depreciation has applied very much less to wages. For instance, one very common illustration is the loaf of bread. The loaf of bread costs 1s. 3d. or more to the State, and 9d. to the individual. Lord Ribblesdale suggested further reductions in the price of food. I do not propose to anticipate the debate that is down for next week. I would merely say this word of caution, that the Government intend so far as is possible to reduce these prices, but no permanent reduction can be effected unless there is a permanent reduction in the countries of origin; neither is it wise to reduce prices before you are quite secure in your supplies. Until those conditions are fulfilled, and until we are quite certain that ample tonnage is available—which is far from being the case at the present time—it would be imprudent to take any active step in that direction. Inquiry can, of course, be held into profiteering if there is any real cause shown.

But I want to remind your Lordships that industry now is stagnant; it is alarmed, and it is nervous. I do not know that, if we had to inquire into each separate business of any particular industry, we should not, by harassing and by distracting the trade at the moment when one wants them to concentrate on reconstruction, do very much more harm than good to the industry of the country as a whole. One must consider that aspect of the case, and not hastily produce fresh anxieties unless the public necessity really demands it. We want trade to revive, and trade must have confidence or else it will not do so. As your Lordships have been reminded several times this afternoon, we are faced with very formidable competition. There are belligerents who have been undamaged by the war—notably Japan and the United States of America; and unless we can re-establish our industrial position those rivals, and many other countries too, will undercut our position in a most dangerous fashion. We must strain every effort to re-establish our export trade.

It is a lamentable thing that to-day there are scores if not hundreds of British ships outward bound in ballast because no coal was available when they sailed. In old days we used to have a very good market in the Plate for our coal, where I think from 8,000,000 to 10,000,000 tons were sent every year. That was useful for our mining industry, for our railway industry, for our dock industry, for our mercantile marine. It was useful also because that outward freight cheapened the return cargo of grain, or wool, or hides, brought from South America for consumption in this country. We cannot afford to lose a market which took 10,000,000 tons a year of our coal; and unless we are cautious we shall find that the United States of America—which has good seams and new seams, and where there is a notable disposition on the part of the craftsman and the artisan to avail himself of labour-saving machinery—will exclude us from a market where we onsidered ourselves supreme.

Or take the case of India, to which Lord Emmott referred. If the cost of fuel rises unduly in this country we naturally injure our home consumer, but we may paralyse our export trade as well. Our valuable trade with India, where we send piece goods, Manchester goods, is already subject to very formidable local competition from Bombay and the neighbourhood; but Japanese competition is there, too; and before very long United States competition will also make itself felt. We cannot, therefore, consider the home conditions of an industry in isolation; they must be considered in relation to our export trade; because we are already, alas! a debtor country, and if we lose our export trade we shall, of course, be a third-class Power in fifteen years' time. The Government is blamed because there is trouble here or trouble there, or because everything does not work out—as Lord Haldane seems to think it can work out when you are dealing with trade unions—with purely mathematical precision, I aught almost say upon the basis of astronomical accuracy. There are human factors which make it impossible to guarantee that your forecast will be correct. As I have said, only a few weeks have elapsed since the condition of British industry was revolutionised from top to bottom, and it is not really quite right to blame the Government because contingencies arise which not only the Government but nobody else, whether in trade or out of it, foresaw. I think that some patience is required.

Trade is still dislocated; it is still trying to feel its way; and, as Lord Ribblesdale pointed out, the present is a most embarrassing moment at which extreme demands should be pressed. The immediate difficulty is unemployment, and we must be most anxious to do nothing which may stimulate unemployment. Reference has been made to the unemployment benefit. I should like to explain that this was placed on the high side for reasons which I think were adequate. After the Armistice it was anticipated that, while demobilisation was in progress, the rate of unemployment would be pretty high. That has been the case. All sorts of factories, employing immense numbers of people, were abruptly closed when the Armistice came; work-people who had been receiving high wages were suddenly turned adrift; industry was not in a normal condition and could not absorb those unemployed. There is now no normal fluctuation of employment as there is during ordinary times—three, four, or six weeks of unemployment in old days generally would end the difficulty, but now it is much more serious because we have not only to absorb these persons into ordinary employment, but, before doing so, factories have to be remodelled, and in sonic cases entirely scrapped and new equipment installed. The benefit, therefore, was put on the high side. In Ireland that has been found liable to abuse. The incidence of the unemployment benefit in Ireland is now being revised, and the balance of the money which it was estimated would be spent upon this unemployment is being devoted to reconstruction work which in itself it is hoped will find fresh employment, and therefore (so to speak) produce again to the public from both sides of the balance-sheet. As regards Britain, the circumstances are a good deal different. The whole economic, basis of this unemployment benefit is now the subject of close examination.

May I shortly refer, in conclusion, to a general survey of the position? The desire of the Government is to ensure that, consistently with maintaining our economic stability, the best conditions and the highest wages shall be afforded to the artisan population of this country. Much has been done—much more, perhaps, than people know. Great reductions, for instance, in hours have already been arranged. Somebody asked yesterday why we do not make more agreements with people. I do not think your Lordships should ignore the agreements already made. The public is not aware of how much has been achieved. The public hears of failure to prevent some strike, but gives no credit for success. The public does not always read its newspapers either. Lord Buck-master blamed us for not publishing the text of that last agreement about the Tube strike. He did not know, although he is a traveller on the Tube, that it was published on that morning, but Lord Buckmaster did not happen to notice the paragraph.

LORD BUCKMASTER

The noble Earl misunderstood me. My complaint was that in the discussions between the Government and the representatives of the railway there was never published a consecutive account of what was going on, so that any person could understand what had occurred; and I said—and I think there are a great many people who agree with me—that up to this hour I do not know what is the exact position as between the Government and the railway.

THE EARL OF CRAWFORD

There were two complaints. Perhaps a little more history should be published, and I have rather expressed my view in that sense.

LORD BUCKMASTER

Will the noble Earl tell us what is the position between the railways and the Government?

THE EARL OF CRAWFORD

No, not without notice.

LORD BUCKMASTER

It was the thing I wanted to know. The whole of London was thrown into confusion for nearly a week, and we have not been told what was the result.

THE EARL OF CRAWFORD

I must apologise to the noble and learned Lord if I have provoked his asperity.

LORD BUCKMASTER

If the noble Earl tells me he is unable to give me the information, I say no more.

THE EARL OF CRAWFORD

If the noble and learned Lord will put down a Question for Tuesday next, or for to-morrow, I can undertake to give him a complete answer. However, I will not pursue the matter. I think I am on perfectly good ground in the criticism I have made. I say the public are not aware, always, how much has been achieved. For instance, on this question of hours which is so fruitful a source of dispute, much is done without advertisement or publicity to-day. Excluding such industries as the coal-mining and railway industries, no fewer than 3,000,000 employees are under agreements covering the hours of their labour. Other trades are in process of getting reductions, but uni- formity, which is so often demanded, cannot be granted without very close scrutiny, as trades differ so much and react in so many ways upon each other.

One condition is essential to lasting improvement, not only in railways or in mines, but indeed throughout industry as a whole. There must be improved production. Improved production is the basis of high wages and better conditions. That is the ideal to which the Government, and I doubt not everybody else, desires to attain. Every possible concession will be made; but on the other hand labour, I think, should not shrink from taking its share in responsibility. The responsible leaders must help promote this improved scale of production, and one hopes that they may be able to discourage unauthorised disputes and to enforce agreements when arranged. Such information as can be given always will be given. But apart from statistics and data, and so on, which can be communicated to the public, Capital, and Labour too, and of course the great public as well, must recognise the difficulties of the situation—the reaction from war conditions, the gradual revival of industry, the dangers of existing and of new competitions. I think, therefore, that one may ask not merely from critics but from labour and the business world that everybody should exercise as much patience as possible. I believe, myself, that with good will and with cool heads our problems are in process of solution.

THE MARQUESS OF SALISBURY

My Lords, the noble Earl who has just sat down has, as in duty bound, made it his business to defend the Government to which he belongs, and I certainly do not rise for the purpose of criticising the Government. Much of what the Government said—indeed, as far as I know, all the Government said—is admirable. The two representatives of the Government, the noble and learned Lord upon the Woolsack and my noble friend the noble Earl opposite, have spoken of firmness, of restraint, of consideration of all legitimate complaints, of patience, of education, of sanitary reform—all these things are excellent. They have testified to the need of publicity. Of that we are very glad. It is clear from what the noble Earl has just said that he is conscious that there has not been sufficient publicity up till now, and no doubt that was in the Lord Chancellor's mind. All these things are of very great importance, and indeed one wishes that the public, who have got to judge of these matters, had been present during a great part of the debates of these two nights in your Lordships' House. Certainly, with great respect, I have never heard a debate in this House more full of matter, more full of important considerations, more full of educational efficiency, than the great speeches to which we have listened. I earnestly hope that they will find their way to the cars of the public.

But, my Lords, information is not sufficient by itself. The noble and learned Viscount, Lord Haldane, who spoke just now, said that this was in part a spiritual question, and that is perfectly true. We must approach the wage-earning classes not merely from the point of view of Capital, not merely from the point of view of those who have got statistics and information to give them, but also from the point of view of missionaries, who are there to persuade and convert employers and employed to the necessity of working together. That is what is essential. That is, indeed, a spiritual process. It is not a spiritual process of a long date to which the noble and learned Lord referred—he was speaking of educational changes over a long period of years—but the necessity is at the door. If we can, we have got to prevent this great danger to our country and our Empire which is absolutely awaiting us, and we must persuade the employers and the wage-earning classes of the necessity of coming to terms. That is my only criticism, if I may make an exception to what I have said, in respect of the noble Earl's speech. I do not think he showed quite that the Government realise their responsibility in the matter. He realised the responsibility of doing what he could to improve the conditions of the working classes, but it is up to him (if I may use the phrase), and up to the Government, to persuade the working classes. They must do it. That is what is essential.

I am not going to take so gloomy a view of the situation as some of the noble Lords who have addressed your Lordships. It appears to me that there is a good deal which gives us cause for hope in this controversy. In the first place, I think it can be made clear to the point of absolute demonstration to the working-class representatives at the conference which is approaching, that it is not merely a question between labour and "profiteers." From a good deal of the talk which we hear you would imagine that there were only two parties to the controversy—labour on the one side and "profiteers" on the other. But there is the public. It can be shown that, unless peace can be preserved, it is the public which is going to suffer, and it can be shown by any one who listened to the speech of Lord Emmott and other speeches which we have heard to-night that those who will suffer most of all are the persons of very moderate means, of fixed incomes, who, on the top of the loss in the value of money and of the taxation that they have to endure, are going further to be burdened with all the consequences of a general strike. That is the sort of simple fact which I am certain can be, and no doubt will be, brought home to the representatives of labour at the coining conference.

But there is more than that. There is the speech—which has been referred to several times in the course of the debate—that was delivered by a distinguished representative of labour in the House of Commons, Mr. Thomas. That was a brave speech, and in most respects it was a speech which I humbly say I entirely agree with. I do not mean to say I agree with every word of it, of course, but its broad outlines. What was Mr. Thomas's first position? It was this. That representatives of labour must recognise that their position as citizens came first, and that they were not entitled to ignore their position as citizens and to make war upon society. I have not quoted his words, but that was the effect of what he said. If that is a representation of what labour thinks, it is a very important point. The whole conception of the general strike, which is to hold up all the industry of the country and to make war upon the country, is, according to Mr. Thomas, ruled out.

The principle, however, goes further. It is not merely that the workers are not entitled to hold up the rest of their countrymen, but that they are not entitled to live upon the earnings of the rest of their countrymen. Upon the Address a speech, which has been referred to, was made by the Prime Minister, who showed that whereas at the beginning of the war the railways in the hands of the Government were making a large profit, now that profit, in consequence of the cost of working the railways, was turned into a deficit almost as great as the profit had been. This means, of course, that if that state of things is to continue the railways would be worked at a loss—a loss which has to be made good by the taxpayers—in other words, that that particular business would be supported not by the legitimate earnings of the men but by a subvention from the State. That is inconsistent with the interests of the State, and the principle that labour must recognise the position of its members as citizens before their position as organised labour, applies to that state of things. And we may say at once that none of these businesses, neither the railways nor the mines, can be carried on at a loss and at the cost of the taxpayers. If labour recognises that, that again is a point which tennis towards agreement.

Let us go further. There is the question—a great question for which labour has always fought—of recognition of the trade unions. There is really hardly any question between us about it. There is no question of principle between employers and employed on that subject now. There is certainly no question as between the Government and labour or as between your Lordships' House and labour on such a point. We all desire that labour should be recognised. The universal approval with which the Whitley Report was received testifies to that. It shows that we all are most anxious, if we can, to go every length in recognising organised labour. Mr. Thomas went a step further, and said in his speech that labour now considered that it had a right to have a share in the management and control of their daily affairs—that is to say, a share in the management of industry. For my part I am entirely in favour of their having a share in the management of industry, and I believe I am speaking the views of a great many others.

Your Lordships listened with approval to the very important speech of Lord Leverhulme to-night. He said he believed in joint management between employers and employed in business. I understand he has practised it in his own case. That is another point upon which it appears there is not very much which divides the parties; recognition, and then management. The noble Lord, Lord Islington, who made a most interesting speech last night, went a step further. He said that he would like to see trade unions, as I understood him, universal, all labour organised: he would like to see them incorporated. That certainly would be a very important step. For my part I would not exclude it, provided labour would undertake all the obligations which such a recognition would involve, and would accept the necessity, which all other Englishmen are under, of answering for their actions before the ordinary Courts. In that case I am not sure whether we should not all of us be ready to see the organisation of labour universal, and I see no reason why we should not come to some agreement in that direction.

I will not speak of profits. Everybody agrees that formerly labour had not a sufficient share in the profits of industry. I do not want to adopt quite the language which Lord Buckmaster used last night. I admired his speech immensely, but I think the phrase he used towards the end of it, to the effect that he thought every concession ought to be made which was possible, is capable of misrepresentation. I do not think he meant quite so much as that. We do not want to concede anything to labour except what is fair. There is nothing to be gained by a sort of panic-stricken concession to labour at the expense of other people, and by so doing inflicting great injustice. I do not look for peace on such terms, but I believe that if you could once get to grips on these questions, if you could once get labour to hear and ponder and appreciate these points, you would find them to be as reasonable as Englishmen always are.

I listened with great interest and sympathy to a passage in Lord Leverhulme's speech when he spoke of hearing from his own sons, or the sons of friends of his, officers at the front, how easily they got on with the men who were the representatives of labour at home. Why should it be that in such a capacity it was easy enough for the two classes to get on, and yet that there should be all this misunderstanding and industrial unrest now before us? I do not believe such a state of things is natural. I do not believe it is at all necessary, and I am not in despair that such a conference as the Government are about to institute will be successful. Let us not go into the conference in that sort of spirit. Let us go into it in the sure and certain hope that we shall persuade both sides, employers and employed, to take the view which reason, sympathy—and may I say Christian charity?—prescribes, and in so doing, as we have saved our country in the war, so we shall save it from the consequences of industrial unrest.

LORD BUCKMASTER

The noble Marquess will forgive me if I correct him now. I did not wish to interrupt him in his speech. I do so because what I said has been misreported in the daily Press, and I think it is open to grave misrepresentation. What I said was that— Every concession that can be made to the very last limits should be made before a decision is taken that nothing further can be done, and when that line has been reached that it is never abandoned.

EARL RUSSELL

My Lords, I understand that there are several noble Lords who desire to take part in this debate, and that it would be convenient to the House if it were now adjourned. I beg, therefore, to move that the debate be adjourned until to-morrow.

THE MARQUESS OF CREWE

Before the Question is put, perhaps the Chancellor of the Duchy of Lancaster could tell me whether or not it is proposed to take this debate as the first Order to-morrow. It may be to some extent a convenience were that done. There are not many noble Lords who desire to continue the debate, and it would be convenient if we could dispose of it as the first Order, if the Government would agree to that course.

THE EARL OF SELBORNE

If that is not possible, would the noble Earl consider putting the adjourned debate down for Tuesday next? We want to avoid taking the debate at a late hour, and if it cannot be taken as the first Order to-morrow can it be taken on Tuesday?

THE EARL OF CRAWFORD

I am entirely in your Lordships' hands in the matter. It is not a late hour now, and we might have had another speech or two. To-morrow we have a Question by Lord Burnham about Procedure, and the Lord President of the Council is anxious to address your Lordships on that subject. We have also an interesting Question from Viscount Bryce; and an important subject to be raised by the Marquess of Lansdowne. My impression is that we ought to take these subjects first, and I understand they will occupy about an hour. The learned Clerk reminds me that for Tuesday next Lord Sydenham has tabled a Notice on an Indian subject, and Lord Gainford has a. Question on the Paper which I imagine would only take a short time. It is entirely as your Lordships desire. I do not think there Would be any serious objection to taking the adjourned debate to-morrow.

THE EARL OF SELBORNE

I beg to move that the debate be adjourned until Tuesday.

EARL RUSSELL

I have no objection to moving Tuesday. I said "to-morrow," because I was told through the usual sources that it would be more convenient. I think there is a good deal to be said for Tuesday.

LORD BUCKMASTER

If the debate I put down for Tuesday, I hope that the Government will permit it to have precedence, because I do not think it is quite right that a debate of this importance should be put behind other matters which may occupy a considerable time. I respectfully suggest that it should have precedence over other business on Tuesday.

THE EARL OF CRAWFORD

We really cannot complain that we are sitting late to-night, and I would point cut most emphatically to your Lordships that we are not sitting late. I am disinclined to invite your Lordships to sit on Friday. At the same time I am most reluctant to take away from unofficial members of your Lordships' House rights they have already secured by placing Notices on the Paper. I have not got the terms of Lord Sydenham's Notice for Tuesday, but I imagine it is a subject of some importance.

THE MARQUESS OF SALISBURY

Probably an arrangement could be come to with Lord Sydenham.

THE EARL OF CRAWFORD

Certainly.

Moved, That the debate be adjourned until Tuesday next.—(Earl Russell.)

On Question, Motion agreed to, and debate adjourned accordingly.