Lords Sitting of 28 June 1923

Preamble
The House met at a quarter past four of the clock, The EARL OF DONOUGHMORE on the Woolsack.

WILD BIRDS PROTECTION BILL. [H.L.]
VISCOUNT GREY OF FALLODON: My Lords, I beg leave to introduce a Bill to repeal the enactments providing for the protection of wild birds and to substitute other provisions therefor, and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(Viscount Grey of Fallodon.)
On Question, Bill read 1a; and to be printed.

FORESTRY (TRANSFER OF WOODS) BILL.
Brought from the Commons, read 1a, and to be printed.
COTTON INDUSTRY BILL.
Brought from the Commons, read 1a, and to be printed.
CALEDONIAN RAILWAY BILL.
Read 3a, and passed.
GREENOCK CORPORATION ORDER CONFIRMATION BILL. [H.L.]
Read 3a (according to Order), and passed, and sent to the Commons.
MINISTRY OF HEALTH PROVISIONAL ORDERS (No. 3) BILL.
Read 3a (according to Order), with the Amendments, and passed, and returned to the Commons.

EXPLOSIVES BILL. [H.L.]
Order of the Day read for the consideration of the Commons Amendment.
Moved, That the Commons Amendment be now considered.—(The Earl of Onslow.)
On Question, Motion agreed to.

COMMONS AMENDMENT.
[The reference is to Bill No. 17.]
Clause 3, page 2, line 31, at end insert the following new clause:
By-laws as respects dockyard ports.
(".—(1) The powers of the Minister of Transport to make by-laws under Section thirty-four of the principal Act as respects any part of the coastal or tidal waters for which there is no harbour authority may, as respects any dockyard port, be exercised by the Admiralty.
(2) In this section the expression 'dockyard port' means a dockyard port as defined under the Dockyard Port Regulation Act, 1865, and the powers given by this section shall be in addition to, and not in derogation of, any powers otherwise vested in the Admiralty.")
THE EARL OF ONSLOW: My Lords, I beg to move that your Lordships do agree with the Commons Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Earl of Onslow.)
THE CIVIL LORD OF THE ADMIRALTY (THE MARQUESS OF LINLITHGOW): My Lords, you may, perhaps, desire me to say a word or two about the Amendment which was inserted in the Bill in another place at the instigation of the Admiralty. The position is this. The last subsection of Section 34 of the Explosives Act, 1875, which is the main Act referred to in the new clause, gave powers to the Board of Trade to make by-laws for any part of the coast where there was no harbour authority. These powers, as your Lordships know, have since passed to the Ministry of Transport. The Admiralty is not a harbour authority within the meaning of the Explosives Act, 1875. The Commons Amendment, which is Clause 4 in the Bill as it is now before your Lordships, seeks to extend to the Admiralty, in its own right, in respect of a dockyard port where there is no harbour authority competent to make such by-laws, the powers at present possessed by the Ministry of Transport under the principal Act. It is, perhaps, as well to point out that shipper "of explosive" and others interested in the matter need not regard the insertion of this clause in the Bill with any alarm. The effect will simply be that whether a shipper of explosives goes into a dockyard port or into a port controlled by a harbour authority—that is to say, a private port—he will find
686
himself controlled by by-laws made under one and the same Act, or rather under the general Explosives Acts.
On Question, Motion agreed to

EDUCATION (SCOTLAND) BILL. [H.L.]
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Viscount Novar.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF DONOUGHMORE in the Chair.]
Clauses 1 and 2 agreed to.
[The EARL OF DONOUGHMORE in the Chair.
Clause 2, to insert the following new clauses:
Amendment of 8 & 9 Geo. 5, c. 48, s. 3.
("3. For subsection (2) of Section 3 of 'the Education (Scotland) Act, 1918, the following subsection shall be substituted:' A school management committee shall, subject to any regulations and restrictions made by the education authority, have alt the power "and duties of that authority in regard to the general management and supervision of the school or group of schools, including attendance thereat; Provided that the education authority shall in every case themselves retain, exercise and perform all their powers and duties in regard to—

'(a) the raising of money by rate or loan and the control of expenditure;

'(b) the acquisition or holding of land;

'(c) the appointment, transfer, remuneration and dismissal of teachers;

'(d) the appointment of bursars, and the exercise of the powers conferred by the section of the principal Act relating to power to facilitate attendance at secondary schools and other institutions; and

'(e) the recognition, establishment or discontinuance of intermediate or secondary schools or of centres of advanced technical instruction.' ")

Amendment of 8 Edw. 7, c. 63, s. 3 (3).
("4. To subsection (3) of Section three of the Education (Scotland) Act, 1908, as amended by paragraph 5 (a) of the Fifth Schedule to the Education (Scotland) Act, 1918, there shall be added the following words:

687
Provided that if in any case an education authority can satisfy the Scottish Education Department that the provision of facilities under this subsection would involve less cost than the provision of new school accommodation or the continuance of existing school accommodation which would otherwise be necessary for any part of their area, it shall be within the power of that education authority, subject to the approval of the Department, to provide such facilities without having special regard to the circumstances of the parents of the children concerned. ")
The noble Duke said: I will be as short as I can upon this not very cheerful subject, Scottish education, but it is necessary that I should give some explanation of these clauses which I move to be inserted. The reason for doing this is that in the Education (Scotland) Act, 1918, it is provided by Section 3 that every education authority shall appoint school management committees. These committees for the most part consist of co-opted members. The school management committees are to have all the powers and duties of the authority subject to any regulations and restrictions made by the education authority. It is, however, specially provided, under subsection (2), that in the case where a school management committee in a county has under its management a secondary school it shall not have its powers and duties restricted by any regulations or restrictions made by the authority. There is a general provision that in every case the authority shall retain its powers and duties in regard to the raising of money by rate or loan and the general control of expenditure; and other powers are also reserved.
Very serious difficulties have arisen on account of the provision that committees with a secondary school are to be free from regulations by the authorities, and friction between school management committees and authorities is constantly occurring. In some cases the school management committee has defied the authority, with the result that the authority has been unable, although it is the parent body, to carry out its policy. Such a school management committee may have not only a secondary school under it "charge but also one or more primary schools, and it means that such a committee, being unrestricted in its work, may act both with regard to the secondary school and the primary schools entirely independently of the authority
688
and may flout it. If the difficulty is attempted to be got over by having a separate committee for the secondary school and a separate committee for the primary schools, it means the duplication of machinery and, of course, additional cost.
Difficulties have occurred in eleven counties. They have arisen over every conceivable point—over the curricula, over school attendance, over the policy with regard to the provision of schools, over religious teaching, and over finance. In one case the school management committee refused absolutely to carry out acts of administration which had been agreed to by the county authority. Another committee refused to carry out the rules with regard to the fixing of holidays. In other counties the remedy was found by the authority securing a majority of its own members on the committee. That was done, but it is, of course, rather a farce.
With regard to some other counties, the committees have claimed the right to deal exclusively with exemption from school of children below the age of fourteen or even thirteen and thus to get round the Act As the Government grants are, in part, based on the average attendance of scholars it is of importance that a committee composed mainly of co-opted members who have no responsibility to the ratepayers should not control attendance to the prejudice of the revenue of the authority, nor should they be in a position to vitiate the policy of an authority favourable to the extended school life of children. The only control which the authority has left in the case of such committees is with regard to expenditure, the acquisition of land, the appointment of teachers, the appointment of bursars, and the recognition, establishment, or discontinuance of intermediate or secondary schools. But even the right of control over finance has been challenged in one county by a committee which claims that the 1918 Act only gives general control over expenditure and that the committee has charge of detailed expenditure. It is obvious that co-opted members without responsibility to the ratepayers should have no control of expenditure, either in detail or otherwise.
Further, it has been held by a decision in the Sheriff Court at Linlithgow, in connection with the prosecution of parents of children for non-attendance,

689
that such committees have the power to prosecute, and accordingly an authority which has retained otherwise the right to deal with defaulting parents is prevented from carrying out a general policy in this respect either by the failure to act of, or by the action which may be taken by, such a school management committee. Generally speaking, it may be said that such school management committees constitute themselves as rival bodies to the authority in the management of such schools as are under their charge.
I have given your Lordships these details because there is a good deal of misunderstanding on the point. What is desired is to give control to the properly constituted authority, the elected authority. I may add that the whole of the education authorities in Scotland are in favour of the Amendment proposed, and I have been asked officially to bring this Amendment forward. I hope the Secretary of State for Scotland may see his way to accept it.
Amendment moved—
After Clause 2 insert the said new clauses.—(The Duke of Atholl.)
VISCOUNT HALDANE: Before the noble Viscount answers for the Government I venture to join in the appeal to him to consider this proposal favourably. The Education Act, as it stood, embodied a section which was intended to make easy the transition from the old Scottish system of local parish school boards managing the education of Scotland to the new system of larger authorities with large areas but still directly representative of the electors. This system has now been working for four years and has worked very well, but the difficulties to which the noble Duke has alluded have cropped up. The little committees which manage in a parish are composed of people who care very little about the education of the children, and take away a year from their education in order that they may work on the farms at the age of thirteen. That, of course, is destructive of anything like uniformity of chance for the children in education, and this proposition is that the education authority, which is just as representative of the farmers as anybody else, for it represents the whole community, should have the right to say what is to be the principle followed in these, cases. Then
690
there is the other question as to control of the monies. Surely that control should be in the hands of people who are responsible to the ratepayers and not co-operated in by co-opted members who have no such responsibility. From every point of view I would venture to suggest to the Secretary for Scotland that this position is well worth considering favourably.
THE SECRETARY FOR SCOTLAND (VISCOUNT NOVAR): I feel quite convinced by the arguments brought forward by the noble Duke, supplemented as they have been by the views of the noble Viscount opposite. I understand that the first of the two clauses which the noble Duke has put upon the Paper is directed towards removing what has proved in some cases to be a source of complexity and of administrative friction. The fact that the education authorities of Scotland without exception are in favour of the Amendment being given effect to entitles it, of course, to the very serious consideration of your Lordships' House and of the Government. The result of the introduction of the new Clause 3 would be to get rid of what has proved a real danger, the growth of an imperium in imperio, a school management committee whose precise relation to the parent body was not free from legal doubt and which might, therefore, in certain circumstances, put forward a claim for powers which the main part of the clause expressly vests in the education authority. After looking at the matter I am satisfied that the object in view is a desirable one and, subject to one reservation, I am prepared to accept the Amendment.
The new Clause 4 is put forward under circumstances that are not dissimilar. It has behind it the unanimous support of the thirty-seven education authorities, and its purpose is to make it possible for an authority, in suitable circumstances, to exercise a judicial economy by concentrating, without thereby placing an unfair burden on the parents of individual children. That is; where it can be shown that it would be more economical to pay the travelling expenses of pupils to an existing school than to erect another school in the immediate vicinity of their homes, it would, under the proposed new Clause 4, be open to the

691
authority to accept the less costly alternative without inquiring as to whether the parents can afford to pay the cost of conveyance. The Department must in every case be satisfied that a saving will be really effected. This seems a reasonable change, and I propose to accept it, subject to one reservation.
The Bill now before your Lordships' House, being a non-contentious measure, will have to continue to be so. A deputation waited upon me some little time ago and informed me that they had satisfied themselves that the Amendments put forward by the noble Duke were not contentious in any quarter. If this anticipation is borne out there can be no difficulty, but if, on the other hand, there is any serious opposition to the new proposals when the Bill goes to another place, then the new clauses will have to be reconsidered. I may perhaps draw attention to a slight matter of drafting. In paragraph (d) of the new Clause 3, instead of the words "the principal Act," it should read "this Act." The Act of 1918 is itself the principal Act referred to.
THE DUKE OF ATHOLL: I will, of course, accept that drafting alteration.
On Question, the proposed new Clause 3, as amended, agreed to.
On Question, the proposed new Clause 4, agreed to.
Remaining clauses agreed to.

WAR MEMORIALS (LOCAL AUTHORITIES' POWERS) BILL.
Order of the Day for the House to be put into Committee read.
LORD ROCHDALE: My Lords, in moving that the House resolves itself into Committee on this Bill I may say that on the Second Reading of the Bill a doubt was expressed as to whether it included all war memorials. Since then I have had a letter from the most rev. Primate asking me that particular question. I have seen the draftsman who assures me that the Bill covers all war memorials either at the present time or at any future time to be vested in local authorities. Certain local authorities can spend money on war memorials and other authorities cannot. The object of the Bill is to make it
692
possible for all local authorities mentioned in the Bill to spend money on the preservation and protection of war memorials.
Moved, That the House do now resolve itself into Committee.—(Lord Rochdale.)
EARL BEAUCHAMP: My Lords, perhaps my noble friend will allow me to express my thanks to him for having gone into this question. We are all anxious that the object of the Bill should be carried out, and I am glad to think that the doubts which were expressed on the Second Reading prove to be ill-founded. I have had some correspondence with the most rev. Primate on the Bill, and the question he raises is whether the words "which may be vested in them" would include war memorials vested in local authorities after the date of the passing of this Bill. If the noble Earl who represents the Department dealing with this subject can assure us that there is no doubt on the point I shall be very glad.
It is very desirable that in all legislation we should not allow any question of doubt to pass without some comment or assurance. It is wholly wrong, and derogatory to the position of this House, that we should pass legislation of which we are not quite certain, or legislation which will give rise to further legislation afterwards. Let me point to the next Order on the Paper, the Agricultural Holdings Act (Amendment) Bill. We ought not to find it necessary to have such a Bill brought forward for Second Reading, and if we had properly and without delay considered the matter, this amending legislation would not have been necessary. I do not want amending legislation to be introduced in this House; that is why I have ventured to draw your Lordships' attention to this matter. I hope I may have the approval of your Lordships' House in this respect. On the immediate point I invite the noble Earl who speaks for the Government to tell us whether in the view of the Department there is any doubt or not with regard to the interpretation of the words I have quoted.
THE PARLIAMENTARY SECRETARY OF THE BOARD OF EDUCATION (THE EARL OF ONSLOW): My Lords, the noble Earl opposite has asked me for my opinion. I had a few words with him beforehand, and though I have not had an

693
opportunity of consulting the Department, I have consulted the learned Government draftsman, who tells me that this is the usual method of drafting, and that the words mean "which may be or become vested in them." I understand that an Act of Parliament always reads as if it were in the present, and therefore any memorial which came into possession of one of these parties, even many years hence, would be subject to the Bill. If it applied only to those actually in their possession at the present time the words would be "which may be vested in them at the time of the passing of this Act." I understand that to be the position, and I hope that the noble Earl will be satisfied.
On Question, Motion agreed to.
House in Committee accordingly: Bill reported without amendment.

AGRICULTURAL HOLDINGS ACT (AMENDMENT) BILL.
Order of the Day for the Second Beading read.
LORD HASTINGS: My Lords, this small amending Bill, which I venture to introduce to your Lordships' notice, has passed through all its stages in another place without meeting any opposition there, and I am hopeful that it may receive equally favourable consideration at your Lordships' hands. The purpose of the Bill is to make watertight certain leaky provisions in the Agriculture Act, 1920, and to give to tenant farmers certain compensation rights which Parliament determined to give them through that Act but which have been found, after a test case in the Courts, to be unobtainable by them in certain circumstances.
I fancy that many noble Lords will agree with me that the Act of 1920, shorn as it has been of that part of it which established some form of stability in agriculture and dealt out equal treatment to all classes engaged in that industry, now remains only a bad piece of class legislation and a blot upon the Statute Book. Probably, the majority of noble Lords would prefer to support me in making an effort to repeal that Act altogether rather than give it their tacit assent by agreeing to the passage of an
694
amending Bill. But I hold the view, and I feel confident that many noble Lords share it, that it is both unfair and improper to take advantage of a technical flaw in an Act of Parliament in order to confound the purpose of Parliament, particularly when such action is bound to stir up bad blood in the rural districts where good relations between landlord and tenant are of paramount importance.
The flaw in the Act of 1920 can be very briefly explained. Under the Agricultural Holdings Act, 1908, a tenant farmer quitting his holding is entitled to compensation for improvements effected by him. Under the Act of 1920 it was intended that compensation for disturbance should be awarded to a tenant farmer quitting his holding under certain conditions. It has been found, in a test case recently tried in the Courts, that a loophole is afforded to landlords whereby they can avoid paying this compensation. The tenant farmer is compelled, under the Act of 1920, to give certain specific notice to the landlord of his intention to claim compensation under the two Acts, but if the landlord wishes to sell his land and to give vacant possession, and withholds from the tenant to whom he has given notice the name of the purchaser, he can thereby, in certain circumstances, escape the liability of paying the compensation which is the tenant farmer's due. That is really the whole case which it is proposed to put right. It does not seem proper that a loophole of this character should be afforded, and I desire to commend this Bill to your Lordships' favourable notice in the hope that it will be passed without any opposition. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Hastings.)
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF ANCASTER): My Lords, I can only say, on behalf of the Ministry of Agriculture, that we accept this Bill and hope that it will pass into law. It will merely be necessary for me to move an Amendment in the Committee stage in order to enable us to get this amendment of the law printed in the Consolidation Bill which has been passed this Session.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

RAILWAY FIRES ACT (1905) AMENDMENT BILL.
Order of the Day for the Second Reading read.
LORD HASTINGS: My Lords, this also is an amending Bill which I desire to bring to your Lordships' notice. Under the Railway Fires Act, 1905, the damage for which a railway company was liable was limited to £100 in the case of fire having occurred among standing crops, or crops that had been reaped but not removed from the ground. Under this Bill the limit of damages is raised to £200. I should like to say one word on the general point of damages payable by railway companies. For my own part, I am unable to understand why there should be any limit to the amount of damage payable. In every other case of an individual, company or firm doing damage to somebody else's property the liability is limited only by the amount of damage caused, and it seems very peculiar that a railway company should enjoy a specially favourable position by such a limitation of liability.
This Bill was accepted in another place, and I trust that your Lordships will not desire to amend it by increasing the liability, for if this were done the Bill would, undoubtedly, be lost. It is a two-clause Bill. The second clause does not alter the statutory time within which a claim shall be made against the railway company: the time was seven days and it remains seven days. But this Bill increases from fourteen to twenty-one days the time during which the amount claimed may be stated. Those are the only alterations which this amending Bill proposes. I do not suppose your Lordships will think it necessary for me to go further into the matter. The Bill explains itself and is extremely simple. I therefore beg, without further comment, to move that it be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Hastings.)
LORD STUART OF WORTLEY: My Lords, owing to recent changes the interest in railway companies which I used sometimes to manifest before your Lordships has become more academic than it was, but at the same time I do take an interest in this Bill. The question asked by the noble Lord who
696
moved the Second Reading as to why there should be any limit to the amount paid by railway companies does, I think, demand an answer. It must be remembered by your Lordships that any damage inflicted upon crops or upon woodlands by railway engines is inflicted in the exercise of statutory powers and, indeed, in the discharge of statutory duties; and, further, it may have been inflicted notwithstanding a total absence of any negligence on the part of those using the engine, and in spite of the exercise of the greatest care and of all available scientific means for preventing any such damage.
There are some cases in which the Legislature has said that those using powers of that kind should be placed in the position of insurers, notwithstanding the total absence of negligence, and that has made it a proper answer to give in a case of this kind as to why the amount of damage is limited. I hope the mover of the Second Reading of this Bill will not object to my attempting to remove the prejudice which attaches to this Bill. There will be no opposition to the Second Reading from myself or those with whom I have been accustomd to act in past times on Railway Bills, but if there should be any attempt to restore in Committee a provision for longer notice than is found in this Bill I cannot promise that there will be such a smooth passage through the Committee stage as I hope will be given to the Second Reading.
THE EARL OF ANCASTER: On behalf of the Ministry of Agriculture I wish to express their cordial approval of the Bill, and I hope your Lordships will give it a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

IRISH FREE STATE AND WAR LOAN STOCK.
THE EARL OF DESART THE EARL OF DESART had the following Notice on the Paper—
To ask the Secretary of State for the Colonies whether his attention has been drawn to a statement made by President Cosgrave on June 1 in the Dail to the effect that the 4 per cent. War Loan Securities which were issued by the Imperial Government as "free of

697
Income Tax" will be subject to Free State Income Tax; and also that "it was hoped that some financial arrangement could be arrived at with the British Government which would warrant the Free State Exchequer in continuing this exemption, but the Government (the Free State Government) has now been informed that the British Government does not propose to enter into any such arrangement;" and what, if any, steps are proposed to be taken by His Majesty's Government to give effect to the contract made by them with the holders of the securities who are now resident in the Free State.
The noble Earl said: My Lords, the purpose of the Question that I have put upon the Paper is apparent from its terms. It arises as one of the consequences of the creation of the Free State, as it has always appeared to me, without any or at any rate without much, consideration for the possible consequences to British subjects and to persons who were formerly, if I may so express it, citizens of the United Kingdom, of such a transfer. You will remember that during the war there were frequent issues of War Bonds and War Loan Stock—that there was an appeal made by the Government to the patriotism of its citizens to subscribe to these War Bonds and War Loans, and there was offered to those who did so the security of British credit, which was unassailable, the certainty, or practical certainty, of interest, and a fixed period during which any Bonds issued would be redeemed at par. Among those issues were 4 per cent. War Bonds and stock of 4 per cent. War Loan. They were all short-dated, though the War Loan was longer dated than the War Bonds. Everyone knows that they were largely subscribed, and I do not suppose that any human being who bought that stock had any doubt that he was absolutely and entirely secured, both in his interest and in the ultimate redemption of the stock.
I may say, of course, that I am perfectly aware that they were only exempt from British taxation. That is in accordance with the specific terms of the issue. With regard to the 4 per cent. War Loan and the 4 per cent. War Bonds the terms were identical, and were published with the issue—namely, "Interest on the 4 per
698
cent. Bonds will be exempt from liability to assessment to British Income Tax other than Super-Tax"; and the dates of redemption were duly set out. At that time, of course, the union of Great Britain and Ireland was complete. The United Kingdom was in existence, and therefore those resident in Ireland who bought these Bonds had not to look to the possibility of the Bonds being taxed in Ireland as they might have been in one of the then existing Dominions. The holders were subject only, as citizens of the United Kingdom, to taxation in the United Kingdom, and they were by the terms of the issue secured against Income Tax.
Therefore, I was rather surprised when, on June 2, I read in the Irish newspapers a report of a speech by President Cosgrave, in which he made this statement. Referring to these securities he said:
"These securities are the tax-compounded securities on which the British Government compounded for payment of Income Tax in the future, and in consideration for this composition contracted to pay a lower rate of interest. It was hoped that some financial arrangement could be arrived at with the British Government which would warrant the Free State Exchequer in continuing this exemption, but the Government has now been informed that the British Government does not propose to enter into any such arrangement. In these circumstances, we have no alternative but to tax these dividends in the ordinary way to Free State Income Tax, and the charging provision of Clause 4 of the Finance Bill will accordingly operate in regard to such dividends receivable by residents in the Free State. "
I suppose the Free State have the power to impose this taxation, there having been, I presume, no provision made to secure those who invested in these Bonds in the rights they thought they had acquired, but it did give one to think when one read that statement.
I put down this Question at once, in order to ascertain what view the Government took of this matter, because it will be noticed that, rightly or wrongly, President Cosgrave put, or endeavoured to put, the responsibility on the British Government for the result that the Free State was unable to exempt these securities from Income Tax. But, however it came about, the result was that persons, citizens of the United Kingdom, who had entered into this contract with the

699
British Government, in which both the financial security and the honour of the British Government were pledged, found themselves deprived of that security and not able to enforce in any legal way the obligations into which the British Government had entered at that time. That appeared to me, I confess, a very serious matter and I put the Question down almost immediately. I should like to say that I hold none of these Bonds. I did not raise the Question at once because the noble Duke asked me to put it off so that he might have some further communications with the Free State Government. Obviously, there had been previous communications. On June 13 President. Cosgrave, in the Senate I think, made a speech in which he proposed, or said he was going to give, so to speak, a breathing time to the holders of these stocks, and they would not be taxed before some subsequent date, in order that they might have relief until that date and an opportunity of disposing of the stock. On the following day, I think in the Dail, there was an Amendment of the Finance Bill, to the effect that "British 4 per cent. War Loan, tax compounded, will not be liable to Income Tax until after October 1, 1923," and that is the position so far as I know-it at the present moment.
It is true that in the circumstances in which the Government have been placed—by inheritance, not by their own fault—they are, possibly, not able to do anything with the Free State Government. It is, I apprehend, true that President Cosgrave is under no obligation in the matter. I think he ought to have been, but, as I understand, he is not. It might have been wiser of him, for the purposes of Irish credit, not to have imposed any tax on these Bonds, and to have given honourable effect to the obligations of the British Government. However, he has not done so, and the result to the stockholder and bondholder is that, although it is possible that, between now and October, they may be able to dispose of their Bonds without loss, they most certainly have not got the benefits of the contract into which they entered with the British Government, because that contract was for freedom from Income Tax as long as they held the stock, and certainty of redemption at par. They now have only freedom from Income Tax
700
at the pleasure of the Free State Parliament for a limited period, and they have to take the chances of the market as to whether they lose or not by the sale of their stocks. An any rate, they have not got that which was given them on the faith of the British Government—the finest security and the most certain obligation in the world as they thought.
I recognise that the Government have done something to relieve financially the position of the stockholders, but that is not the same thing, and I think it is very unfortunate that it should be possible for people to be handed over in this way without some thought being given of the consequences. This is far from being the only case, but I do not want to go into other matters; there are some which are far more serious to some of us. But this is an instance of the somewhat light-hearted way in which we are handed over to a new system without numerous problems which were ound to arise being guarded against. I make no complaint of the Free State Government—the exigencies of their position may have forced them to such a course—and I make no attack on the British Government, but I ask them what is their attitude to people who have made this contract with them and who are now, by the action of the British Government, left without the benefit of it, unable to enforce it, and in the position of having to accept whatever is offered to them. I hope they may not lose, but certainly they have not got that which they paid for and which they firmly believed was secured for them.
THE SECRETARY OF STATE FOR THE COLONIES (THE DUKE OF DEVONSHIRE): My Lords, in the first place I hope my noble friend will accept my thanks for his kindness in having postponed the Question, which he had put down for an earlier day. I asked him to postpone it in order that I might have a further opportunity of seeing what I could do for those on whose behalf he has spoken so eloquently this evening. The facts which he relates in the Question are correct. This stock was issued free of Income Tax. It was impossible for His Majesty's Government to ensure that any holder who was domiciled in one of the Dominions should have that same privilege extended to him in that

701
Dominion. I think your Lordships will agree that, whether or not it was wise and justifiable, at any rate the Free State Legislature had the right of imposing taxation, if it thought fit to do so, on this class of security. It is not a very large quantity of this stock which is held in Ireland, hut I appreciate that questions of this character are not solved by amounts, but by principles.
The only way in which, as I understand, we could have assured the holders of this class of stock of the full benefits and rights to which they might be legally entitled was by repayment, either to them or to the Irish Government, of the difference. That would have entailed a further charge upon the British taxpayer. We have endeavoured to do what we could to sec that the holders of this class of stock are not placed financially in a worse position, and President Cosgrave, who was also Minister of Finance in the Free State Government, gave an undertaking, in response to a request made by a considerable number of Members of the Senate, that a further opportunity of selling this stock should be granted to holders. That undertaking has been carried out by the insertion in the Finance Bill in the Irish Legislature of a provision that no taxation should be levied on this security till October 1. I understand that Members of the Senate who are interested in this matter, and who spoke on behalf of the holders of this stock, expressed themselves as satisfied. I can only trust that the arrangement which has been arrived at will save holders of that stock from any loss.

COMPENSATION FOR DAMAGE IN IRELAND.
LORD CARSON LORD CARSON rose to ask His Majesty's Government whether it was part of the arrangement made by the late Government at the time of entering into the Treaty (or shortly afterwards) for the creation of a Free State in Ireland that all remedies for enforcing decrees for compensation for malicious injuries recovered in the established Courts under British authority before the Treaty should be barred and repealed; and whether they were so barred and repealed with the consent of the said Government; and whether there is any precedent to be found for setting aside
702
judgments lawfully obtained and preventing British subjects from enforcing them; and whether the present Government will undertake to pay the amounts of such decrees which have been so nullified by the act of the late Government under political exigencies.
The noble and learned Lord said: My Lords, I have put this Question on the Paper, I frankly admit, because of a document which was sent to me from Ireland last week. I have no reason to doubt its genuineness, as it really explains a good deal of what I have myself said from time to time in this House. This document purports to be an arrangement between the Free State and the late Government—which, of course, binds the present Government. I venture to think that it embodies the most tyrannical and the most unprecedented provision as regards British subjects that you will find in any arrangement ever entered into between the British Government and even any foreign State, affecting the interests and security of those who are loyal to the King. I hope I shall get a specific answer upon the two Questions that I have put down:—(1) as to whether this is a genuine document, and (2) what are the precedents for it. I think your Lordships, before I have finished, will see how serious this matter is, and to what serious consequences it has led.
That your Lordships may understand it, I must try to bring your minds back to the condition of Ireland in 1920 and the earlier part of 1921. At that time rebellion was rampant in Ireland. There were daily crimes against life and property, and those who were satisfied with the British Government and desired the British Government to remain there were encouraged by the Executive of the day in every way to assert their position, thereby encouraging the active hostility of all those who were then, to use their own phrase, waging war against this country. So grave became the question of the destruction of property and of life that in 1921 the late Government passed an Act giving additional remedies to those who were able to obtain decrees for compensation under what are known as the Malicious Injuries Acts. A number of people then had the courage—at the risk of their lives, I should think, in every case—to proceed in the ordinary Courts of the land under the British Government

703
to assert their title to compensation for damage either to their purse or their property. The assertion of one's rights under those circumstances may seem a small thing, but I am of opinion that no man in Ireland at that time ventured to assert his rights, even under the laws of this Parliament, without danger of immediate assassination or further injury to his property. Indeed, there were many cases in which those who were trying to assert their rights were wounded and, in some cases, assassinated. However, they obtained decrees in the legally constituted tribunals of the land.
Then the so-called truce was made in December, 1921. Your Lordships would have expected that in that truce there would be some provision for securing the person and the property and, above all things, the decrees which these people had obtained in the circumstances which I have tried briefly to depict to your Lordships. But there was not a word about it in the Treaty. Time went on, and then, apparently, a tribunal was set up in Ireland which proceeded to deal with these claims and with the decrees of the Courts of this country—for they were the Courts of this country—and proceeded as if the decree of a Court under British law had no validity or power whatsoever. I am bound to say, in order to do justice, that I thought that was the arbitrary action of the Irish Free State Government. It never occurred to me that in handing over their loyal subjects to a newly-created State, any British Government would say to that newly-created State: "You are at liberty entirely to disregard the decrees which were made by the Courts before you took over the Government."
The document in my possession, if is genuine—and that is the substance of the Question which I have placed upon the Paper—professes to be an arrangement between the British Government and the Irish Free State. It contains, amongst other very interesting clauses which at some future time we may have to discuss, this provision—
"That all proceedings including pending proceedings and proceedings for the enforcement of decrees already given under the enactments relating to compensation for criminal injuries be barred, and that a Resolution in this sense be passed and promulgated by the Provisional Government "—
704
and mark this !—
"to be followed by legislation in the British Parliament."
Now, I venture to assert that you may examine the whole history of this country in relation either to its Colonies or its-subjects in any foreign State without finding anything, I will not say in the nature of a precedent but anything approaching the nature of a precedent for stating, after all these people have gone through and when at the risk of their lives, they have taken advantage of the Courts which you had set up, that: "We agree that these decrees shall be set at naught, that all remedies be barred, and that if it should become necessary we will bring forward legislation in the British Parliament." I say that such a provision as that, if it is genuine, is not only a disgrace to this country, but it goes to the very foundation of the value of the Courts, the value of the proceedings in them, and of the decrees obtained as the result of those proceedings.
I do not think it is necessary on that matter to do more than mention this agreement to your Lordships. I hope the whole of it will be published. Let us know the worst! Let us have no more of these mysterious answers which are given from time to time, which give us no information, and which always suggest that there are difficulties in the way of the Government which the Government are unable to overcome. Let us know the whole of it. A short time ago I asked a Question in your Lordships' House, and I intend to put it down again, as to the financial relations between the two countries. In the document which I hold in my hand, if it is a genuine document, I can see the real reason why the Government have never given the information for which I have asked. However, that is enough for the moment.
But what is happening under that provision? The Free State Government are proceeding to get rid of these decrees. I receive from sixty to seventy complaints about it every week, and I have selected two or three that have come to hand since I placed this Question on the Paper in order to show your Lordships something of what is going on. I take, first of all, the case of a man whose property was raided and whose stock-in-trade was

705
stolen. He went into the ordinary Court and made a claim for compensation for malicious injury.
"I claimed the sum,"
he says—
"of £3,500 for damage and loss of property, and I was awarded the sum of £2,000 by the Recorder of Cork,"
who is a very well-known, upright and painstaking Judge.
"Subsequently, a Commission was appointed, called the Shaw Commission"—
I do not know why it is still called the Shaw Commission; I rather resent my noble and learned colleague being mixed up with it—
"who went through each claim"—
now, just listen to this; this is in substitution for the Courts !—
"in a solicitor's office without a chairman and reduced the awards to ridiculous amounts. My award of £2,000 was reduced to £77."
That gives you an idea of the way in which you can say that you are paying-claims while at the same time you are wiping them out. Fortunately, in anything connected with my country there is always some slight cause for amusement. This man who sent me these particulars sends me a copy of the proceedings and of the award that was made, and I find that his claim for malicious injuries was reduced from £3,500 to £77. They had the grace to give him a few shillings interest upon the £77 awarded, but they deducted Income Tax to the amount of 7s. 8d.
There is one other case that I should like to quote. It has reference to a place that I knew. I do not know anything about it in recent years, as it was purchased after the time at which I used to go to that part of the country in which it is situated. The gentleman who owned it sends me particulars about his house, a magnificent castle, well known in Ireland. It is of no use to mention names. That castle was burnt to the ground. He applied for compensation. The Recorder of the county heard the case, which was defended. The Recorder reserved judgment, and subsequently put the case in his list for the June Sessions, 1921, when he asked that additional evidence should be furnished as to the general letting value of the place as distinct from the replacement value. The case was fully gone into, and
706
judgment was again reserved. The Recorder himself was quite familiar with the castle and its surroundings, but he procured an independent report from his own court valuer. The gentleman says in his letter:
"The Recorder admitted to my surveyor that the replacement value was approximately £15,000, but at this time he felt bound by the decision of the Court of Appeal to refuse replacement value, and so he fixed the value of the place at £4,850."
But he never got paid even that. The Shaw Commission came down and the £4,850 was reduced to £1,500, although the Recorder had said that it would take £15,000 to replace the building. Your Lordships, or some of you, may call these legal proceedings. I call it sheer robbery. But that is nothing new in Ireland. This is done under express agreement with the British Government. That is the point, and that is why I bring the matter before your Lordships to-day.
Here is another letter that I got this morning. It will show your Lordships what people are going through, and how they are being met in regard to their claims:—
"I am the widow of my much lamented husband, a sergeant of the Royal Irish Constabulary, who was cruelly murdered last March twelve months. I was awarded £3,000 compensation, £1,500 for myself and £1,500 for my children. It has not been paid. Having no home and no friends I am living in lodgings, going from one district to the other owing to the insults, which I have borne bravely for the sake of my poor husband. He had 29½ years' faithful and honest service. The English Government came to my rescue, and since then they have fed me and my children. When he died I was left, I may say, on the streets. I had no home, and how I pulled through remains a mystery. I was a walking ghost, but God brought me safely through. I suffered great hardship. I was called to Dublin six weeks ago with solicitors and witnesses before a Commission. Since then I have not heard anything further. My pension even has not been settled. "
That is the pension she is entitled to as the widow of a murdered policeman. She concludes her letter:
"I beg of you, my Lord, to help me to get away from here and look after my case. I beg to be forgiven for the trouble I am giving you. "
I put it to His Majesty's Government that such a state of affairs as that ought not to be allowed to exist.
That money ought to be paid to this poor woman for the, murder of her

707
husband. Ought not the British Government to pay it, and then look to the Free State Government, or whoever else may be responsible, and negotiate with them? Why do you leave this poor widow helpless and starving in a country like this to tackle matters of this kind? They are hostile to her in every place to which she goes, and she is only able to bear up for the sake of the man who had given 29½ years' service to his country. The way this matter is dealt with brings the greatest discredit upon this country, and involves the greatest hardship upon these poor people in Ireland. Officialdom has no heart. It never had, and I suppose it never will have.
I will give one other case, which is the last with which I will trouble your Lordships. It shows the impossibility of making any progress in the direction of getting a settlement of these matters. I have a letter from a merchant in Southern Ireland. It is dated June 22, 1923, and states:
"In 1920 the Royal Irish Constabulary took possession of my whole stock of arms and ammunition "—
He is a man in business, and at that time it was necessary in order to prevent arms and ammunition being taken by the rebels that the British Government should take possession of them. The letter says:
"The Royal Irish Constabulary took possession of my whole stock of arms and ammunition amounting to £160 12 s., and for the past year I have been trying to get paid for them. I have several times applied to the Colonial Office, Irish Branch, London, They refer me back to Dublin, and when I write to Dublin they refer me to London, and that has continued for a year. I had to sell my business here at half price. I am going; out to New Zealand, and I want the money to pay the passages for my wife and self and six children."
I may remind your Lordships that under the decision of the Government, because Southern Ireland is now no longer part of Great Britain, it has been held that the Overseas Settlement Act does not apply to Southern Ireland, and therefore these people are debarred from the rights they would otherwise have had in getting assisted passages. This merchant also says in his letter:
"This is only one small item of hundreds of pounds I have lost during the past seven years which I will never get, and I therefore earnestly pray that you will assist me, as here in the West we have none to help us. All we can do is to clear out."
708
He sends me two recent letters which are really too good an example of officialdom not to quote to the House.
He wrote in May to the Colonial Office, Irish Branch, and he received the following letter in reply:
"In reply to your letter of the 12th instant I am directed by the Secretary of State to inform you that he cannot entertain a claim for compensation in respect of property handed over by you to the Crown Forces until you have approached the Minister of Defence, Dublin, with a view to secure the return thereof."
Then he wrote to the Minister of Defence, Dublin, and this is the answer he got from a Government Office in Dublin, called the Chief Lands Officer, Ireland:
"With reference to your letter of the 5th instant addressed to the Irish Office for claims against the British Crown Forces, 5a, College Street, Dublin, will you kindly communicate with the Secretary of State. Colonial Office, Irish Branch, Old Queen Street, S.W.I, to whom your letter has been forwarded."
He writes to one office and they tell him he must write to Dublin. He writes to Dublin and the people there send his letter on to London and communicate with him to the effect that he must begin again at the Colonial Office.
I have given up attacking in any way the Irish Free State Government. It is not my object to-day to attack that Government. The Irish Free State must get its chance, much as one may dislike it, The more I see the more I think the difficulties have arisen from haste and want of prevision. But would it not be well, even to help the Free State, that there should be a real grip taken of the situation over there as regards our own people? Is it not high time to get out of the way all this bitterness, this humiliation, this cruelty and anxiety, amongst these people, who were your own supporters? Would it not help the Free State itself? It would enormously improve the feeling amongst numbers at home who have to come in contact with these poor people. Do not think that because they are hopeless and helpless, with no political influence or votes, there are not many in this country of all grades of politics who think they ought to be fairly, liberally and decently dealt with. I have said it so often that I am ashamed to repeat it, but you ought not, in a great change of this kind, a revolution, to run it on the cheap. You ought

709
to have the money at once and the staff at once to deal with such cases and put an end to this suffering by those who are not in the least responsible for the conditions which now exist.
THE EARL OF MAYO: My Lords, before the noble Duke replies on behalf of the Government, I should like to say something on what the noble and learned Lord has just said. He bases the whole of his argument on a document. I am a Senator in Ireland, and I should like to know what that document is. I do not know whether it is going to be published, but I think it is only fair that those who are trying to carry on in most difficult circumstances in that country should know exactly what that document is. You base the whole of your argument on that document. Perhaps there are some people who belonged to the former Government who may be able to tell us, but I cannot stand up in the Senate and say anything about your speech unless I know what, that document is. You say that there is not a word in the Treaty with regard to these decrees. That is quite right, and I do not see how there could have been. The Treaty was finished about 1 o'clock in the morning in circumstances that were perfectly terrible. I have been through it all. I have been through every bit of it since 1916. You also say that the Free State Government is getting rid of these decrees. The Free State Government has nothing to do with them, absolutely nothing. The Shaw Commission was appointed by the British Government. There was one representative of the Irish Government on it, but if the Shaw Commission has reduced the decrees given by English Judges, that is not the fault of the Irish Government. You also said that you were not—
THE LORD SPEAKER: I do not want to interrupt the noble Earl but he has, at least four times, addressed the noble and learned Lord directly. I must remind him that it is usual to address the House.
THE EARL OF MAYO: I beg your Lordships' pardon. The noble and learned Lord said he was not attacking the Irish Free State but his statement that the Irish Free State Government was getting rid of these decrees may, I think, be construed as an attack.
LORD CARSON: The noble Earl has not apprehended what I did say. He is wrong in saying that the Irish Free State has nothing to say to the tribunal. It is set up jointly between them and the British Government. When I said I was not attacking the Free State I specifically stated that what I was complaining of was that the British Government should have handed over this power to the Irish Free State—a power which the Irish Free State have a perfect right to exercise, having got it.
THE EARL OF MAYO: I repeat, the Shaw Commission was appointed by the British Government. There was only one member of the Irish Free State on it, and if that Commission was appointed by the British Government then the British Government is responsible for it. The whole argument of the noble and learned Lord was based on a document of which this House knows nothing and of which people in Ireland know nothing. I hope it will be published so that we shall know exactly where we are in relation to the late Government and also in relation to the present Government.
THE DUKE OF DEVONSHIRE: My Lords, before I proceed to answer categorically the Questions on the Paper I should like to assure the noble and learned Lord that if he will bring specific cases to my personal notice I will do my best to investigate and attend to them. On a previous occasion he made reference to a certain case. I admit that I am still making further inquiries, but so far as I have gone I have been able to ascertain that the case which he specifically mentioned, where an award of £1,500 made by a county court was subsequently reduced by the assessors to £500, was that of a police barrack which had been destroyed, and which had been let for an annual sum of £25. I must honestly say that I think an award of £500 for a police barrack in Ireland—and many of your Lordships know the value of those buildings—is almost sufficient, as it produces, and was intended by the assessors to produce, an income which, arising from gilt-edged securities, would be similar to that which was obtained when the building was let. I merely give that as an instance that it is necessary, before I can make any sweeping statement, that

711
these cases, which I know are very often cases of very genuine hardship, should receive careful and full investigation.
I turn to the Questions on the Paper. It is evident, and my noble and learned friend, I think, emphasised the fact, that the class of cases with which he is dealing is that of what are generally known as pre-truce eases. In January, 1922, an agreement was drawn up between the British Government and the Provisional Government and embodied in a Paper which, I think, is the Paper to which my noble and learned friend has already referred. It is entitled "Heads of Working Arrangements for implementing the Treaty." In another place, on Monday last, my hon. friend the Parliamentary Secretary promised that this Paper should be laid before Parliament, and I trust that early next week it will be in your Lordships' hands. This Paper is an agreed Memorandum as to the steps necessary to be taken in order to implement the Treaty. Among other matters referred to was the establishment of what was known as the Shaw Commission, but I hope I can relieve my noble and learned friend's anxiety on that point by telling him that the Commission is now known as the Wood-Kenton Commission.
The Commission was established under that agreement, and with your Lordships' permission I will read the exact words of the document. It was agreed—
"that all proceedings (including pending proceedings and proceedings for enforcement of decrees already given) under the enactments relating to compensation for criminal injuries be barred, and that a resolution in this sense be passed and promulgated by the Provisional Government, to be followed by legislation in the British Parliament."
I hope that I have categorically answered the first two parts of the Question on the Paper.
In the third part of the Question I am asked whether there is any precedent to be found for such an enactment. So far as I know there is no exact precedent, but I think that in this connection I am justified in referring to the Law and Procedure (Emergency Provision) (Ireland) Act, 1916, and the Indemnity Act, 1920. I do not speak with legal authority, but I am advised that in both those Acts provisions were inserted of a character somewhat analogous to that to which I have referred.
LORD CARSON: Would the noble Duke tell us what are the terms of those Acts which are analogous? If it is not convenient now I do not mind, but I should like very much to know what parts are said to be analogous, for I know of no case in 1916 where decrees were abolished
TUE DUKE OF DEVONSHIRE: If I may have an opportunity of inquiring, I shall be very glad to furnish that, information. The last part of the Question asks the Government whether the present Government will undertake to pay the amount of such decrees which have been so nullified by the act of the late Government under political exigencies. I gather that the suggestion of my noble and learned friend's Question is that the British Government should pay those decrees whether they have been before the Wood-Benton Commission or not, whether they are reasonable or not, and it is further suggested that it is inequitable that the decrees of the county court, in whatever circumstances they may have been issued, should be liable to revision. On several occasions in your Lordships' House I have given an assurance on behalf of the Government that we intend to adhere to the undertaking given by my predecessor and contained in his letter of July 26, 1922. But I cannot hold out any hope of suggesting to the Government that they should give the under taking proposed by my noble and learned friend.
In this respect I think that I ought to refer your Lordships to the debate which took place on February 24, 1922, in another place. In the course of that debate the decision to establish the Commission now known as the Wood-Benton Commission was first announced to Parliament, and on reading through that debate carefully I find that not only did the then Government announce the decision as being the only proper and equitable arrangement in the circumstances but all Parties, including many of those Members who are generally associated with my noble and learned friend, accepted it as such. In the course of that debate Mr. Churchill stated:
"A Commission will be established—the existing processes of the Courts will be barred in both countries. … This Commission. … will have power to

713
review awards already given in undefended cases. Where an award has been given in cases of personal injuries we accept it, but where an award has been given in a case of damage to property, where the case has been undefended, that will be subject to review by the Commission, in older to deal with the very extortionate claims which had been made in some cases on purely ex parte evidence."
Mr. Churchill went on to say that this power of review
"has been accorded by mutual consent between the two Governments, because it is well known that in some of the cases the awards made on ex parte statements were greatly in excess of the loss which had actually been sustained, and neither the British nor the Irish Government intend to lend themselves to the artificial inflation of these claims for damages."
I understand that no objection was raised, except through one well-known and distinguished Member of the House of Commons, during that debate. The arrangement was perfectly well-known to all the interested parties, and it was published in the terms of reference to the Commission, presented to Parliament in May, 1922. So far as I am aware no objection has been taken to the procedure there laid down and subsequently-placed before Parliament in the White Paper, till the provisions were embodied in legislation passed by the Irish Free State.
I am aware that the late Government fully intended to bring legislation before the British Parliament to put this into effect. However, as your Lordships are well aware, several unexpected events occurred in the autumn of last year, and it was impossible for the then Government to find an opportunity of bringing forward legislation. Owing to the Parliamentary situation of the moment there was not time for the new Government to bring forward the necessary legislation which had been undertaken by their predecessors, before December 6. I am advised that under the legislation which came into operation on December 6 it is no longer possible for the British Parliament to deal with this subject, and, accordingly, the legislation was passed by the Irish Parliament. Apart altogether from the legal and technical aspect of this question. I venture to say there is hardly anyone who would not be prepared, to-day, to take an award under the Wood-Renton Commission with a view to obtaining eventually—I hope we are making
714
such progress that I may venture to use the word "promptly"—some, and I trust adequate, compensation. The idea of proceeding under the old system, and obtaining a decree for whatever the amount may be from the county courts would, I think, not be willingly accepted by those who have a prospect of obtaining a decree under the Wood-Renton Commission. I can assure your Lordships that I am most anxious that these specific cases should be brought to my individual attention, and that we shall continue to do everything which we can to see that the unfortunate victims of these outrages receive prompt and adequate compensation.
LORD CARSON: My Lords, with your permission I should like to say one word. In my opinion the statement of the noble Duke is profoundly disappointing. Like many other statements which have been made, it expresses a great deal of sympathy, but announces that they will do nothing. I must say that nothing could have given me more surprise than that the present Government, which I believe calls itself a Conservative Government, should treat in a light-hearted way, as the noble Duke has done, the setting aside of decrees given by British Courts at the time when the British Government was in Ireland. I think it is fair to tell these people boldly and openly that what the noble Duke has said means nothing and means no relief. I have met a few Russian refugees over here, and the one thing I found about them was that they wiped out the past and looked forward to trying to live as best they could in the future. It is far better that you should not pretend to these people in Ireland that you are going to do something for them, when you are going to do nothing, and that they should try to bear the wrongs and outrages which have been perpetrated upon them in the name of English law as best they can. I am not at all sure that if Mr. Churchill had been at the Colonial Office, having regard to his previous assistance, these people would not have had better terms.

SEIZURE OF LIQUOR ON BRITISH SHIPS.
THE EARL OF BIRKENHEAD THE EARL OF BIRKENHEAD had given Notice to ask whether the attention of His Majesty's Government has been called to the seizure on British ships

715
in American waters of alcoholic stores to which the seals of the British Customs had been affixed; and to ask what is the policy of the Government in relation to the consequent difficulties by which British shipping is confronted.
The noble and learned Earl said: My Lords, we have recently been exhorted by distinguished authority to keep cool in dealing with this matter. I am not sure that any of us have shown any temptation to examine the matter in any but a spirit of complete calmness. It is, I suppose, generally recognised in this country that no friendly and reasonable representation that might be made, on behalf of British interests, to the American Government could fail to receive a friendly and reasonable reception. Indeed, it would be an amazing circumstance if the contrary were predicted. It would be as amazing as to put it forward that if the American Government thought a legitimate American interest was being injured in this country, it would not be proper for them in courteous and reasonable language to put forward the grounds which had led them to that conclusion.
What are the circumstances which, to-day, threaten so much injury to what is perhaps almost the most important industry in this country—namely, our mercantile marine? It is, of course, the operation of prohibition in the United States of America, in so far as that operation has been made to extend over neutral shipping in territorial waters. One may clear the ground at once by pointing out, what is of course elementary, that no one in England has the slightest pretension or slightest desire to make any criticism of any kind at all as to the domestic policy of the United States of America in relation to the drink problem. The same distinguished authority to whom I referred a moment ago has again exhorted us to allow them to make this experiment in their own way, and without any interference from this side of the water. We have not the slightest claim or title to interfere, and we have not made the slightest attempt to interfere, with the workings of this great experiment, as it is called, of prohibition in the United States. Our concern begins and ends with the effect of that which is done in American territorial waters to British ships and to that which is contained in British ships.
It is rather important that our minds should be clear upon certain legal points which are involved, and which, I think, can be quite compendiously and clearly explained. It was at one time supposed by a considerable school among international lawyers that when a British merchant ship left a British port in order to proceed on a voyage she carried with her, for all absolutely domestic purposes, the nationality of the country whose flag she flew so completely that she was sometimes said, in the jargon of the legal textbooks, to carry with her wherever she went, for all domestic purposes, the territoriality of the country to which she belonged, and so it was said that merchant ships were territorial. I limit that claim, even in its most extreme form, and for evident reasons, to matters which are domestic to the ship—that is, to all that takes place within the little economy of the small society which constitute the crew and the passengers of the ship. Obviously, it never could apply to any contact between those on board the ship and those who lived in the country within whose territorial waters she lay. On the whole, and taking a balance of the authorities, that view did not commend itself, and the view which has, on the whole, prevailed, both in the United States of America and in this country, is that, for reasons of comity, and for reasons of convenience, foreign countries are extremely reluctant to interfere with anything that is purely domestic which takes place upon a neutral ship in territorial waters, but that there is no legal right which protects those who are on board a neutral ship from the operation of the domestic law of the country in whose territorial waters she lies.
So much for the law of the matter. Now let us consider what has happened in this case. I observe with interest and with pleasure that many distinguished Americans, and among them many distinguished American lawyers, are evidently extremely sorry that a situation quite beyond the power of the American Law Courts, if I understand the situation aright, to correct, but by no means beyond the power of diplomacy to correct, has produced a series of accidents which, from every point of view, can only be described as unfortunate. The Volstead Act, which made prohibition effective, became law in circumstances which are

717
well known to your Lordships. It is certainly no exaggeration to say that it is doubtful whether a single competent lawyer in the United States of America ever suspected, ever dreamt, at the time the Volstead Act became law, of such a consequence following upon it as has been produced by the judgment of the Supreme Court.
Your Lordships know well that the effect of the judgment of the Supreme Court is that if a neutral ship proceeds to an American harbour containing alcoholic stores at all, be they under official British seal or not, they are liable to seizure in the American port, with the obvious consequence that the neutral vessel cannot conceivably, unless it adopts the inconvenient and expensive course of obtaining liquor outside the territorial limit, have any alcohol for the return voyage. This was the decision, of the Supreme Court of the United States, and it is proper that it should be made plain, though most of your Lordships need no assurance upon the point, that the Supreme Court of the United States of America is not only technically one of the most accomplished tribunals in the world, but it is also one whose single-minded desire to reach a true conclusion upon such problems of law as present themselves before it is universally recognised with admiration by lawyers all the world over. I may begin, therefore, by laying it down in the clearest possible terms that the Supreme Court took the relevant sections before them, examined them as lawyers, and reached the conclusion which, by a majority, they have confirmed, the conclusion being that, whatever the intention of the Legislature was, the effect of the legislation which they have passed is such as to exclude from the United States waters alcoholic liquor, even officially under bond, and to render that a legitimate object of forfeiture.
The first observation which falls to be made is this. That which the Supreme Court has declared it proper and legal to do is not in any way required for the purpose of making prohibition effective. That is the reason why it is to diplomacy, and not to law, that British shipping is, I think, entitled to look for some help in the very difficult situation in which it finds itself at this moment. The papers have been lightly saying, "Let the
718
British shippers institute a test case in the Courts of the United States and carry it to the Supreme Court." I cannot myself see the usefulness of this advice, nor can I believe it is a course which any practical person is in the least likely to adopt. The Supreme Court of the United States has just applied its mind to this very state of facts, and it has pronounced upon them. It is not, believe me, a Court of such instability of view that it is in the least likely, in two, or three, or four months to adopt a different view; indeed, the period would be longer, because at the present moment there are very considerable arrears before the Supreme Court, so that it might easily take eighteen months, or even two years, before a final decision was pronounced by the Supreme Court. But whenever that decision is pronounced there is not the slightest reason to suppose that a Court which holds itself just as surely bound by deliberate conclusions, deliberately reached, as your Lordships do when you sit judicially, will reverse the conclusion which it has already reached and already published.
We are, then, face to face with this situation, that there is small hope of any recourse to the Law Courts by any British shipowners. What, then, is the alternative? Are we to say at once that, for a purpose which does not in any way make ineffective the attempt to make prohibition complete in the United States of America, without even a word of friendly discussion with the United States of America—are we to say to our shipowners, who constitute so important a part of our commercial interest: "We cannot give you the slightest help; there is nothing that it is in our power to do, and you must hereafter make up your minds, if you go to an American port, that you must only take so much alcohol as will suffice for the crew and the passengers until you reach the port to which you sail, and you and the passengers must be content to come home from the United States of America to a British port without any alcohol at all on board"?
Observe how complete are the guarantees to the American Government that there will be no violation of any kind at all of their Prohibition Law. I can quite conceive the American Government saying: "It is not consistent with our view that alcoholic liquors should be consumed

719
on any neutral ship so long as it is within American territorial waters." That would be logical and intelligible, and I, for one, should find no occasion whatever to criticise such a decision. But, of course, that is not what they say. They say: "Not only shall you not consume alcohol upon British ships in American waters, but you shall not even keep it there under the official British seal"; and, if I may say so with great respect, I think the Prime Minister, in the answer which he gave in the House of Commons a night or two ago, a little underrated the importance of the official seal.
It is perfectly true that sometimes—though, much more rarely, I think, than the Prime Minister appeared to suppose—occasions do arise for touching the seals which have been imposed by other nations. But the importance of the seal here is not to found upon it any technical case that it is illegal to touch it. The importance of it is this, that it does afford the American Government the pledge of the representatives of the British Government that that seal will not be touched while the vessel is in American waters, and that there cannot be, either directly or even in the most indirect way, any consumption of liquor in American waters. But it is interesting to notice that the American Government themselves, at a time of diplomatic discussion with Spain which preceded a very critical period, made use of the following expression—
"We do not question the right of every nation to prescribe the conditions in which the vessels of other nations are admitted to its ports. But nevertheless we point out that those conditions ought not to conflict with the received usages which regulate commercial intercourse between civilised nations. Those usages are well known and long established, and no nation can disregard them without giving just cause of complaint to the nations whoso interests would be affected by their violation."
No one could state in more admirable and restrained language the kind of case which, in justice to the great shipowning interest of this country, I suggest to the Government it is their duty, through diplomatic channels, to make.
In this connection it is interesting to notice that there were two dissenting judgments delivered by the Supreme Court. In one of those dissenting judgments a very interesting expression occurred to which, I have no doubt, the
720
attention of the Leader of the House has been directed. It was Mr. Justice Sutherland, I think, who said—
"A merchant ship of one country voluntarily entering the territorial limits of another subjects herself to the jurisdiction of the latter. The jurisdiction attaches in virtue of her presence, just as with other objects within those limits. During her stay she is entitled to the protection of the laws of that place, and, correlatively, is bound to yield obedience to them."
Then there is an even more important passage in the judgment of the majority, to which I commend the attention of the Leader of the House—it was a majority judgment—
"Of course, the local sovereign may, out of consideration of public policy, choose to forgo the execution of its jurisdiction or exert the same in only a limited way, but this is a matter resting entirely in its discretion."
Now, I, cannot conceive how the Supreme Court, arriving, and, I rather infer, reading respectfully between the lines, arriving somewhat reluctantly, at a conclusion the inconvenience of which to friendly neutrals must have been so apparent, could have made it more plain that there did nevertheless survive its decision a mean6 by which an inconvenience so intolerable and so unnecessary might be avoided. And they made it plain in the passage I have just read that the execution of the jurisdiction may be foregone by the, local sovereign out of considerations of public policy, and that this is a matter solely in the discretion of the executive Government.
The suggestion which I make to the Government is this, that it would not be right that an inconvenience not required, as I have pointed out, by the social policy of the United States, in no way necessary in order to make that policy either effective or consistent and, by universal admission, involving the passenger vessels of this country not only in great inconvenience but in very great financial loss, it may be, should be passed in absolute silence by the Government: so far as official communication is concerned. That would be, I think, both unfortunate and unnecessary. As I have already-attempted to point out, there is no nation in the world that has at the same time a higher conception of common sense, of reasonableness, and of law than the United States: and it is to me quite inconceivable that representation made

721
with the tact and the courtesy of which the Secretary of State for Foreign Affairs is capable would be received by them with anything but the greatest possible respect and friendliness.
I hope that it will be possible for the diplomacy of this country to do what I know for certain many responsible American citizens are anxious that it should do—to make such a representation to the United States of America and to ask them, in the exercise of that discretion which the majority of the Judges of the Supreme Court carefully pointed out that they possess, to introduce some mitigation of this system which, while maintaining unimpaired the policy of the United States Government in relation to this matter, will at the same time relieve British shipping of a very serious and, as many of us think, a very unnecessary burden.
THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS CURZOK OF KEDLESTON): My Lords, this is a very difficult and delicate matter raising, as the noble and learned Earl has pointed out, grave issues both of International Law and of policy and, as such, I am personally very glad that it was brought before your Lordships' House, as it was bound in any case to be, by such an acknowledged authority upon International Law and practice as the noble and learned Earl who has just addressed us. It is a question that clearly ought to be dealt with, as indeed he dealt with it, in language of extreme circumspection, and he did not need to urge your Lordships to examine it in an atmosphere of calmness because we may truthfully say that that is an invariable feature of our proceedings.
Now, the noble and learned Earl was, I think, right in saying that there are certain aspects of this case which it is unnecessary for us to allude to this afternoon. We are not concerned here, as he quite fairly pointed out, with the policy of prohibition now being pursued by the United States Government. Different views may fairly be held both upon that policy itself and upon the methods by which the American Government is carrying it out. That is a matter—I think he used the phrase—of the domestic policy of the United States Government upon which we, as a Government,
722
are not concerned to express any opinion and which is really not relevant to anything that we are discussing this afternoon. Neither have we any desire, nor have I any intention, here to discuss the interpretation by the Courts of the United States of the laws of the United States. That also would be outside the purview of our debate. Nor, again, are we here to discuss the legal right of the United States to impose conditions upon foreign vessels entering then-waters, because that is a position about which International Law is decisive.
What we are concerned with this afternoon—and I think the noble and learned Earl used the very words which I am about to employ—is the treatment that has been meted out to British shipping in United States territorial waters, and what we have to consider is the degree to which that treatment conforms to or departs from international practice. That is a very important question, and, as defined by the noble and learned Earl, it is a question to be resolved not so much by considerations of law as by the methods and tactics of diplomacy. That I understand to be the general object of the questions he put to mo to-night. At one period of his remarks he seemed to assume—and I am not complaining, because, of course, he had not official knowledge—that His Majesty's Government might conceivably have treated the case that has thus arisen in absolute silence. That is far from having been the ease, and my object in replying to him will be to state succinctly and consecutively to your Lordships' House the steps that His Majesty's Government have taken from the start. If I do that I think I shall satisfy the quite legitimate curiosity which the noble and learned Earl has expressed.
This case has not arisen solely, although it has come to a head, in the past few weeks. The question whether the Volstead Prohibition Act applied to foreign merchant vessels in the United States territorial waters was first heard of by us in October of last year. At that date the Attorney-General of the United States gave a ruling that it did so apply. The steamship companies then took the matter into Court, and His Majesty's Ambassador at Washington, on instructions from us, addressed a note to the

723
United States Government in which, while questions of International Law were reserved for future consideration, we made representations on the ground of what were described as certain broad and important international considerations of a wholly general nature not necessarily in any way connected with the use of alcoholic liquor as a beverage. We pointed out that for any State even constructively to project the operation of its strictly domestic municipal law on to foreign vessels on the high seas (which was the practical effect of the American ruling) would be unprecedented, and that if this course were to be adopted by other States it would subject all shipping other than coast-wise shipping to the evils flowing from a conflict of authority. The United States Government acknowledged the receipt of this note, but they did not enter into any discussion of the arguments which it contained.
We then come to the decision of the Supreme Court. That was given on April 30 last, when the American Supreme Court, with one dissentient, made a ruling which interpreted the Volstead Prohibition Act as forbidding the carriage of liquor, even under seal, on merchant vessels, either foreign or domestic, within the territorial waters of the United States.
THE EARL OF BIRKENHEAD: I thought there were two dissentients.
THE MARQUESS CURZON OF KEDLESTON: My information is that there was only one. This ruling was given on an appeal from the decision of a New York district court entered by the twelve British, Italian, French and United States steamship companies. Effect was at once given to the ruling under a series of Regulations to be enforced on all vessels leaving their home ports after the 10th June last. These Regulations provided, as your Lordships will have seen from the newspapers, for the seizure of all liquor on such vessels, except such as was carried under the law of the vessel's country, and within an amount adjudged reasonable by the United States authorities for medicinal purposes.
Since the ruling of the Supreme Court was given we again, in May last, addressed the United States Government.
724
We pointed out that while we did not dispute that a ship entering the territorial waters of a country subjects itself to the jurisdiction of that country, yet the extent to which each country should compel the observance of its own laws on the ships of another, and the nationals on board those ships, was of primary importance in the regulation of intercourse between nations, and we said that in our view the jurisdiction could not be exercised except to restrain acts calculated to disturb public order. We further pointed out that an impossible position would be created in international voyages if the precedent now proposed were made general, and if conflicting national laws were imposed by each nation on the vessels of other nations within their territorial jurisdiction. Accordingly, we urged the United States Government to discuss this matter with the other maritime Governments before making so material a departure from the common practice of all nations. At the same time, we instructed our Ambassador at Washington to place himself in communication with his French, Spanish, Italian, Danish, Dutch, Swedish and Norwegian colleagues with a view to ascertaining what action they were taking. Although it was not found possible to arrange for concerted representations, some of the other nations, notably the French, having already lodged a protest on their own account and on grounds similar to those advanced by us, all the Governments mentioned above have since made representations. The reply of the United States Government came in the first week of June, and while undertaking to consider in a friendly spirit the views advanced in the British Note, it expressed the inability of the American Government to discuss the legality in an international sense of the operation of an Act of Congress the scope of which, within the territorial limits of the United States, had been authoritatively decided by the Supreme Court.
What is the legal position as interpreted by His Majesty's Government, acting upon the advice of their legal authorities? It is as follows. There are two recognised principles of International Law which prevent us from contending that the United States have committed any violation of International Law in forbidding foreign vessels to

725
bring alcoholic liquor within their waters. The first is that foreigners and foreign ships trading with a country must comply with its laws. The second is that every sovereign independent State is supreme over all persons and property within its dominions, including ships within its territorial waters. That is the strict interpretation and definition of the law, but there are, as was pointed out by the noble and learned Earl, other considerations of equal, or, at any rate, of scarcely inferior, validity and importance. In the case, for instance, that has arisen of foreign ships coming within the waters of a State for trade or for other purpose, the principles to which I have referred cannot be pushed to extremes, but must be applied with moderation and good sense. This becomes clear if one considers that a ship is a travelling unit which passes from one State to another and, therefore, cannot escape the necessity of complying with other legal systems which may not be in every respect consistent with the law of the particular country which it may happen to be visiting at the moment. Furthermore, it is universally recognised that a ship stands in a particularly close relationship to the State whose flag she flies and that on many matters it is to the general convenience that all Governments should recognise the law of the flag State as paramount.
The net result of this complex of considerations has, therefore, been that on many matters the practice has grown up that a State should not exact compliance with its own law even though a ship is within its waters, but should leave such matters to be regulated by the law of the flag State. This, however, is international practice rather than International Law and, accordingly a departure from it involves a breach, not of International Law, but of the comity of nations. The sanction for it, such as there is, is that if a State acted unreasonably towards the ships of other nations when they came within its jurisdiction, it would find that its own ships were unreasonably treated when they were within foreign jurisdiction. It was a statement of this case, of these propositions, in other terms but in better language, that was the substance of the declaration read by the noble and learned Earl just now and which formed part of the declaration made some time
726
ago, I forget exactly when, by the United States Government to the Spanish Government in connection with a case not analogous to this but which raised the same broad considerations.
Then I come to the case to which the noble and learned Earl alluded only in a few sentences, the seizure in the last few days, in New York harbour, of the liquor under seal in British and other foreign vessels, and here, I think, there has been some misapprehension as to what I am told is the ordinary practice. The noble and learned Earl alluded to an answer which was given by the Prime Minister in another place two days ago, and he seemed to think that that did not altogether cover the ground. The case, as I am informed, stands as follows. The British Customs seal is affixed as a matter of routine in all cases where goods which are subject to the higher rates of duty (wines, spirits, tobacco, etc.) are exported from this country under bond as part of "ship's stores." The only obligation which is entailed by this procedure is that the seal shall not be broken within British territorial waters. For this purpose, bond is given by the shipowners and an entry is made in the log of the time and position at which the seal is broken. Such seals have, therefore, no sacrosanct character, and His Majesty's Government cannot object to their being broken by United States officials within United States territorial waters. The noble and learned Earl, speaking, of course, with vastly greater experience than I possess, said that corresponding cases rarely occurred in this country. That is not my information. I am told that foreign Customs seals are habitually broken within British territorial waters with the object of checking the amounts of articles subject to duty in the United Kingdom which are included in the returns of "ship's stores" furnished to the British Customs by the masters of the vessels.
Now we come to the action that has been taken in consequence of this seizure in the United States. It is quite true to point out—I think the noble and learned Earl hinted at it—that the object of the British shipping companies in bringing liquor under British Customs seal into New York was not—although I have seen it assumed that it was—in order to bring a test case into Court. Their intention

727
was, while affording the United States Government every possible guarantee that the liquor was not to be landed in the United States, to see whether that Government really meant to proceed in violation of international practice and to refrain from availing themselves of what was regarded as the loophole in the Supreme Court's decision. When speaking of the "loophole" I am alluding to the sentence in the finding of the Court which was quoted by the noble and learned Earl, particularly to that passage in which the Court use these words:
"Of course, the local sovereign may, out of consideration of public policy, choose to forgo the execution of its jurisdiction, or exert the same in only a limited way, but this is a matter resting solely in its discretion."
There is another consideration which in common fairness we must remember. It is this. The real motive of the United States Government in allowing the matter to come to a head at the present time is most probably their desire to put pressure on us to check the traffic in contraband liquor carried on from British territory (mainly, the West Indies) and under the British flag by vessels which hang about outside American territorial waters. This appears from the fact that the latest proposals addressed to His Majesty's Government by the United States Government couple the two questions.
The history of these proposals is as follows: In June, 1922, the United States Government proposed, through His Majesty's Chargé d'Affaires at Washington, the conclusion of a Treaty for the purpose of checking liquor smuggling and the recurrence of certain irregularities, such as the issue of double clearance papers and the grant of British registration to American vessels on fraudulent pretences, which had been proved against the local authorities in the Bahamas. The proposed Treaty was to obtain reciprocal provisions authorising the authorities of each Government to exercise a right of search over vessels of the other beyond the three-mile limit to the extent of twelve miles from the shore. His Majesty's Ambassador at Washington was instructed to decline to enter into any arrangement of the kind proposed, on the ground that His Majesty's Government have consistently opposed any extension of the limit of territorial waters
728
such as was suggested. We felt that the outbreak of smuggling which had led to the proposal could not be regarded as a permanent condition, and while we were, therefore, desirous of assisting the United States Government to the best of our ability in the suppression of the traffic and in the prevention of the abuse of the British flag by those engaged in it, we did not feel that we could properly acquiesce, in order to meet a temporary emergency, in the abandonment of a principle to which we attach great importance. At the same time we undertook, short of entering into a Treaty of the kind proposed, to take any steps within our power to prevent any infractions of the local law by persons engaged in liquor smuggling.
That was the general tenor of our reply to the proposal from the United States Government, the reply being given by us in September, 1922. There the matter rested until a fortnight ago. When these seizures were made, and after the Regulations of the United States Government against the carriage of liquor by foreign vesesls had been put into effect, the United States Government reverted to their proposal for a Treaty extending the three mile limit to the twelve-mile limit. This extension was proposed by them only a few days ago, about ten days ago, as a temporary and ad hoc arrangement, which was not to be regarded as extending territorial limits as hitherto accepted but merely as conferring the right of search and seizure on the officers of one country against the vessels of the other in cases where there is reason to believe that the vessel, or those controlling her, are engaged "in the wilful commission of acts which constitute a violation of the laws of the State of which such boarding officer is an official with regard to the unloading or importation of any article or articles."
The proposed Treaty then went on to provide for a modification of the Prohibition Act and a reversal of the Supreme Court's ruling by permitting the bringing of articles, the importation of which is forbidden by the laws of either party, within the territorial waters of that party subject to such article being kept under seal until the vessel leaves territorial waters. This proposal, which is a somewhat complex one, is now under consideration by a Committee which is

729
sitting under the chairmanship of the Under-Secretary for Foreign Affairs. This Committee is in close communication with other Departments of His Majesty's Government. It would, of course, be quite premature to say, and, indeed, I do not know, what will be the result of their labours, but this I can say, that there is no chance of our agreeing in any circumstances whatsoever to the proposal for a twelve-mile limit.
I have now given in chronological order an account of the present position, of the steps that led up to it and of the line that has been taken by His Majesty's Government. I have shown to your Lordships that, so far from having indulged in only one word or a few words of friendly discussion with the United States Government, we have been engaged in that discussion for the best part of a year. That discussion is continuing at the present moment. I hope that what I have said will convince the House that we are thoroughly alive to the importance of the case, and that the channels of diplomacy to which the noble and learned Earl made such frequent appeal are being utilised to the best of our ability to find an exit from a situation which is undoubtedly disagreeable and which ought not to be allowed to continue.
VISCOUNT GREY OF FALLODON: My Lords, I know nothing about this subject except so much as may be gathered from the newspapers, but sufficient is known of it generally to give rise to some degree of anxiety as to the effect which this question may have on the relations between the two countries. The noble Marquess said that this state of affairs, which ho implied must necessarily be exasperating to the United States Government (he did not use that word, but I think that was the sense of his remarks)—the fact that there are, just outside American territorial waters, and perhaps in British territory outside those waters, elaborate and continuous preparations afoot to import liquor illegally into the United States—was a temporary state of things which was not likely to continue. If that is so, if these manifestations disappear in a short time, that particular risk of friction between the two countries will be out of the way.
But I do not know that it is likely to be a temporary state of things. If the Prohibition Act in the United States is
730
not temporary—and we are told that it is not temporary, and so far as we can judge it is not intended to be a temporary Act at all—then the particular inducement to continue this sort of practice will also continue, and I think there is a real risk of friction between the two Governments if this kind of thing goes on indefinitely. It is undoubtedly irritating to both sides. It is obviously inconvenient for the United States that neutral ships should come into their waters having under seal a store of liquor which, the moment they leave the United States port, can be opened on the high seas and served to all passengers on those ships. That means that all neutral vessels taking passengers into United States ports have a great advantage over United States ships, which cannot have any liquor on board and which cannot therefore supply that form of pleasure to their passengers on the voyage. It must necessarily be an exasperating state of things for a Government to see neutral vessels leaving its shores equipped with this advantage which passenger ships of their own nationality are unable, are indeed forbidden, to provide.
On the other hand, it is undoubtedly exceedingly irritating to neutrals that their ships, that British ships, for instance, should go to the United States ports, should carry liquor in such a way that it cannot possibly contribute to the breaking of the law within the territorial waters of the United States, should stay in port without committing any breach of the United States law in spirit or in practice, and yet should be deprived of that liquor in such a way that every British subject who leaves a United States port on a British ship is compelled not only to observe the Prohibition Law, as he is bound to do while he is in the United States, but to observe it for a week or so after he has left United States territorial waters altogether. Anybody who has listened to the speech of the noble and learned Earl behind me must realise that we do feel, that British subjects and British shipowners naturally must feel, a sense of grievance. At the same time it must be remembered that great breaches of the United States law are said to be taking place and to be due to the action of neutrals outside.
The only conclusion which I would draw is this. I think it is very desirable that the two Governments should come to

731
some arrangement. I gather that the United States has made a proposal on the subject. I quite agree that the three mile limit constitutes a doctrine of International Law so important and so generally recognised—by the United States Government, I understand, as well as by us—that we should be very chary indeed of consenting, even temporarily, to anything which might look like a breach of that doctrine. It is, indeed, possible to maintain that the mere fact that by mutual consent for a particular purpose a doctrine is waived is in itself a confirmation of the general rule of that doctrine by both parties. But I agree that it is a matter which wants to be very carefully watched. I should, however, be hopeful that His Majesty's Government might find some way out, and that the United States Government on their side would be more willing to meet our grievances if we could meet the complaint of the illegal importing of liquor from British ships in some better way than simply by suggesting that in time it will come to an end of itself; because I very much doubt whether it will come to an end of itself. I think we may do a good deal to meet the United States Government in that direction, but it must be done in such a way that it does not merely deal with such illegal traffic as may be going on in British ships without touching the activity of other neutrals. Whatever action is taken must not involve simply a disability to British Colonies or British shipping without also putting the same disability upon other neutrals.
I admit that the question is an exceedingly difficult one and I would only suggest to the noble Marquess that it would be undesirable that irritation should be allowed to increase and the matter allowed to drift without a real attempt by the two Governments to settle it. If there does not seem to be any likelihood of progress, I think it would be very desirable to discuss with the United States Government whether it would not be to the advantage of both countries that the whole of the correspondence which has passed between the two Governments, not merely with regard to this aspect of sealed liquor on our ships but with regard to the whole question, should be published, so that the people of both countries may at any rate be in possession of the full facts of the case.
THE EARL OF BIRKENHEAD: My Lords, I am very much indebted to the noble Marquess for the extremely full reply he has made to my observations and I shall read it with great care in the OFFICIAL REPORT to-morrow, because it is full of technical matters. The interesting speech which the noble Viscount has just made contained much with which I agreed, but there were two observations with which I do not agree so fully. He spoke in the first place of this illegal English trade for the purpose of evading the American laws. The whole point of it is that it is not illegal. It might be illegal for American ships to engage in it, but it is not in the least illegal for English ships.
VISCOUNT GREY OF FALLODON: I quite agree. That is a verbal inaccuracy on my part. I should have said a practice which is not illegal on the part of British Colonies or ships, but which could lead to illegal importation into the United States. I quite accept the correction of the noble Earl with regard to the technical part.
THE EARL OF BIRKENHEAD: The second point is that when the noble Viscount balanced two exasperating circumstances he put it in this way. He said it must be very exasperating to the United States to see the ships of neutrals leaving that harbour in which the Statue of Liberty stands—this is my language and not that of the noble Viscount—stocked with these refreshing beverages, and to know that their own ships are entirely bankrupt of these too delightful refreshments, and that it is, on the other hand, exasperating to Englishmen to know that for four, or five, or six days they have to do without those refreshing beverages, although their abstinence does not make any contribution to the cause of prohibition in the United States. But mark you how ill-balanced those exasperations are. The United States Government can alter it to-morrow, and we cannot, and every time that the Statue of Liberty ironically smiles on the vessels which sail past her, on their way to Southampton and Liverpool, if she ever reflects on the august experience which now crowns her, I hope she will reflect upon the difference of our fates.
House adjourned at five minutes before seven o'clock.