Lords Sitting of 3 December 1931

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
GOSPORT AND DISTRICT GAS ORDER, 1931.
WALTON-ON-THAMES AND WEY BRIDGE GAS ORDER, 1931.
BERKHAMPSTEAD GAS ORDER, 1931.
GLOUCESTER GAS ORDER, 1931.
CANNOCK AND DISTRICT GAS ORDER, 1931.
RHYL GAS ORDER, 1931.
SKEGNESS GAS ORDER, 1931.
WANTAGE GAS ORDER, 1931.
NEWQUAY (CORNWALL) GAS ORDER, 1931.

HORNSEY GAS ORDER, 1931.
LORD TEMPLEMORE: My Lords, I beg to move that the Special Orders named on the Paper, as reported from the Special Orders Committee on Tuesday last, be approved.
Moved, That the Special Orders, as reported from the Special Orders Committee on Tuesday last, be approved.—(Lord Templemore.)
On Question, Motion agreed to.

GLOUCESTER GAS (No. 2) ORDER, 1931.
LORD TEMPLEMORE: My Lords, I beg to move with regard to the Gloucester Gas (No. 2) Order, 1931, that the Special Order as reported from the Special Orders Committee on Tuesday last, be approved with a modification.
Moved, That the Special Order, as reported from the Special Orders Committee on Tuesday last, be approved with a modification.—(Lord Templemore.)
On Question, Motion agreed to.

LUTON GAS ORDER, 1931.
LORD TEMPLEMORE: My Lords, I beg to move as regards the Luton Gas
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Order, 1931, that the Special Order, as reported from the Special Orders Committee on Tuesday last, be approved with an addition.
Moved, That the Special Order, as reported from the Special Orders Committee on Tuesday last, be approved with an addition.—(Lord Templemore.)
On Question, Motion agreed to.

EDUCATIONAL ENDOWMENTS (SCOTLAND) BILL.
House in Committee (according to Order): Bill reported without amendment.

INDIAN PAY (TEMPORARY ABATE MENTS) BILL.
Order of the Day for the Second Reading read.
THE UNDER-SECRETARY OF STATE FOR INDIA (THE MARQUESS OF LOTHIAN): My Lords, it is with considerable distaste that I rise to move the Second Reading of this Bill to-day. It is a Bill which gives the Secretary of State the power to make reductions in pay of perhaps the most distinguished body of civil servants that the world has ever seen, a body which has rendered services to India quite unlike the services rendered even by the distinguished civil servants of this country, and which includes activities of all kinds which are in this country and in many western countries undertaken by voluntary agencies of all kinds. It is perhaps the greatest service the world has seen since the days of the great Empire of Rome. And it contains not only Englishmen, but, in increasing numbers, Indians, who have performed the most eminent services for their country.
Unfortunately, India, like the rest of the world, and like this country in particular, is undergoing the effects of what has been called the economic blizzard. There is a deficit on the Indian Budget amounting for the next two years to no less a sum than £29,000,000. That is a very large and a very serious deficit for the Indian Budget which, in magnitude, of course bears no relation to our own. In India, as here, the Treasury is endeavouring to meet that situation partly by in-

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creases in direct and indirect taxation, amounting to an addition of about 25 per cent. on the previous rates, and partly by means of reduced expenditure, and in that reduced expenditure is to be found an average cut of 10 per cent. in the salaries of Government Services, a cut very analogous, as your Lordships will realise, to that which has taken place in this country. The amount which that cut will yield in savings, taking the Provinces and the Central Government into account, is about £6,000,000, a very considerable contribution to the total deficit in the Indian Budget.
Your Lordships may ask why it is necessary to have a Bill in this House in order to make that possible. There are three classes of officers, Government servants in India. There are the provincial officials, who are enlisted by the Provincial Governments; there are the central administration officials, who are employed and enlisted by the Government of India; and there is a smaller class of officials who are enlisted and whose salaries are guaranteed by the Secretary of State. Of this last class there are two sections—those civilians who entered the Service before the Government of India Act, 1919, and those who have entered it since 1919. The class which is affected by this Bill is that small number, I think it amounts to 3,500,000, who were in the Service before the Government Act, 1919, and their salaries were guaranteed by the Act, so that they could not be altered except by a Statute of the Imperial Parliament.
I think your Lordships will realise that it is not possible to exempt from the sacrifice which practically all other officers of the Government in India, except some of the quite lowest paid, have to endure, a small section, and that the section which enjoys the highest salaries, though it also performs the most laborious and most important services. It would not be possible to make an exception of this class out of the whole range of Government officials. Therefore, in this Bill the Secretary of State in Council is taking power, having regard to the financial position in India, to make abatements from the pay of persons in the service of the Crown in India. There are three conditions attached to this Bill. In the first place it is temporary in character. It only relates to a period
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between the first of December of this year and the last day of March, 1933—that is, a period of nearly eighteen months—and it is designed in order to meet the manifest financial emergency and for no other reason. In the second place, pensions are not included; and in the third place, the Secretary of State in Council is taking the power, in cases of exceptional hardship, to direct that servants who come within that category may be exempted wholly or in part from the effect of the cut. I may add that as regards the police service, the police drawing less than 120 rupees per month are exempted from the operation of the Bill.
As I said at the beginning, it is with no satisfaction that I rise to move a Second Reading of this Bill, but I think your Lordships will recognise that it is not possible to exclude this small class from the general sacrifice that is being made by the great mass of civil servants here and in India; and I would, therefore, invite your Lordships to give it a Second Reading.
Moved, That the Bill be now read 2a.—(The Marquess of Lothian.)
LORD LLOYD LORD LLOYD had given Notice to ask His Majesty's Government whether any representations have been made to them by or on behalf of British and Indian civil servants in India as regards their present and future conditions of service; if so, what is the nature of these representations and what reply has been, or is intended to be, given; and to move for Papers. The noble Lord said: My Lords, I have a Motion standing on to-day's Paper which deals with an analogous part of the same subject, and I propose if I may, instead of moving the Motion, to offer a few observations on the Second Reading of this Bill. We have all listened with great interest and sympathy to what the noble Marquess has just told us. For my part the sympathy, I think, is not so much with what the noble Marquess has said, but with his position in having to move what he called so disagreeable and so distasteful a measure.
I think, however, it is time that the conditions of the Services in India had the consideration of your Lordships for they have received very little attention outside this House. During the Round Table Conference the depressed classes

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had their spokesmen, the European business men also had their spokesmen, the Moslem minorities and the Hindus had their spokesmen, so had the Anglo-Indians, but for the British Services in India, upon whose courage and integrity so much in the past of India has depended and so much in the future must yet depend if India is to emerge successfully from the great ordeal that faces her, no one has said a word, and indeed sometimes it seems as if there was a conspiracy of silence. Their case is too just to be heard; it is too unanswerable to be brought forward; the injustice which is to be done to them is, I fear, too obvious to warrant any treatment other than the obscurity of silence. I am referring chiefly to-day to those of your Lordships' fellow-countrymen in the Indian Civil Service, the Imperial Police, and analogous Services who day in and day out carry on administration in a bad climate in circumstances of danger and difficulty, and keep order amongst millions of His Majesty's subjects.
I am not particularly referring to members of the Service who live for most part of the year at Simla; their work is arduous and finely carried out; but it is not carried out generally in the circumstances of danger—daily danger—and difficulty which those who live in the Plains below experience. I am referring rather to the rank and file of the Services, the Judges, district superintendents of police, collectors, magistrates, revenue officers, who up and down the country, in the great plains of the Deccan and the jungles of the south right up to the coast of Madras and Bombay, or in the sterner regions of the Punjab and the North-West or the Frontier Provinces, who are the real mainstay of the administration. Men, like Judge Garlick, who was assassinated while sitting in open Court, men like Mr. Peddie, a young district magistrate who was murdered, like Mr. Sanders, the young assistant superintendent of police who was also done to death in the same way, and Mr. Holman, an Inspector-General who was murdered on duty by young men whose minds had been unbalanced and inflamed by seditious propaganda.
If I refer mainly to Europeans in the Service it is not because I, least of all, value in any way lightly the Indians in
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the Service. Their task has been burdensome and dangerous, but at least they live in their own native country amongst their own friends and kindred. The Indian in the Civil Service is not without influence; and he is the recipient of pay which, if insufficient for the European serving in a distant country in the tropics, may still leave an ample margin for the Indian. What I want to suggest to your Lordships to-day is that a powerful section of the Legislative Assembly in India, not by methods of violence but by methods more oblique, more dangerous to the future of the Service, are endeavouring to drive the English officials from the country. It is not by a policy of violence but by pay cuts, by pressure upon the Government of India, by differential taxation and by discrimination in its effects against the daily life of the English officials. It is this which is driving him into a state of debt and despair, the same kind of despair that eventually led to the appointment of the Lee Commission. To-day what the noble Lord is proposing in the name of the National Government is something very likely for the time being to nullify all the advantages, or many of the advantages, they derived from the appointment of the Lee Commission.
The noble Lord suggested in one sentence in his speech that there was some analogy between the sacrifices which the English official here is called upon to make and the sacrifices made by a British official in India. With all respect, may I say that there is no comparison between the safety of life in England and the dangers of life in India, and there has been no equality of sacrifice at all. The work of a British official in this country is not carried out in the same climatic conditions; it is not carried out thousands of miles from home; it is not carried out in daily danger. There is no comparison. Any one who has been in India knows the whole conditions of life in India are far more dangerous, far more difficult than those of an official in this country. The Government seem to forget to-day that over and above those cuts which are suffered by every State official there are other financial considerations. He forgot to mention that a great deal of the expenditure which has fallen so heavily on

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the Government of India and has led to these cuts has been due to the neglect of the advice which Indian civil servants and the police have given to the Government for a very long time past, and have actually imposed upon the Service such danger, anxiety and press of work as would have justified an increase in salary rather than a diminution in any other time than the present.
The increase of taxation, it must not be forgotten, is borne in India equally by the Services with other residents in India. I ought rather to say it is un-equally borne by the Services, because, as the noble Marquess must know, only too well, a very large measure of tax evasion is indulged in in India as regards Indians which the British official neither seeks nor would be able to achieve even if he did seek it. As regards Customs Duties, they bear infinitely more heavily upon the European servants than they do upon Indians, because Europeans are compelled by the conditions of life to import a great many articles of actual necessity, food and clothing and many other commodities which the Indian never uses and for which they have to pay enhanced prices to-day. The Secretary of State said in another place recently that if it is admitted that there must be cuts ii salaries of officials in the Civil Service it must further be admitted in the interests of justice that cuts must be made over all these Services. I do not know whether I have misread what ho meant, but it seems to mo that he suggested that the conditions of the Indian Service were comparable to those of the European Service. I have just given some reasons as to why they are not. I need not tell your Lordships that there is no comparison at all.
I remember that before the advent of the Lee Commission, when I was in office in India it fell to my lot to examine in very close detail the budgets of some hundreds of officials of different grades a id opportunities. They were sent to me in strictest confidence for my private aid personal scrutiny, and they gave the most intimate details, mostly tragic details, of the daily life of the European official in India—increasing costs at home, increasing costs of passages, increasing costs of school fees, and so on. I know that I was immensely impressed
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by the fact that scarcely any Indian official except those on the very highest pay, and not all of them, had more than the barest margin and most of them were heavily in debt. Personally I do not believe that the Service in India is ever likely to have a more sincere friend than they have got in the Secretary of State to-day, but I would ask the noble Marquess whether it is wise to allow the Government of India to inflict hardship on the Service for the sake of a comparatively trifling sum; whether he will not even now either abate his demands or reduce the period of their infliction.
There is, however, an aspect of the question more grave than any financial hardship. This Bill is a clear breach of faith with the Service. The noble Marquess has already explained to your Lordships what is the position. Let me take the case of those servants recruited after 1919. What is their position? They have a covenant with the Secretary of State which is, practically speaking, entirely unilateral in character. The entrant into the Civil Service enters upon a whole series of closely binding engagements whereby he will do what he is told and go where he is told; he cannot sue the Secretary of State, and he covenants to abstain from trade. In fact, except for one covenant whereby the Secretary of State covenants to pay him his wages, it is entirely one-sided. He gives himself over entirely to the control of Government. His only security is that he is under the control of the Secretary of State and under the care and protection of Parliament. It does seem to me that to break faith with someone so completely at your mercy as that is a very serious thing.
Moreover, may I mention that it is a very evil example to give to the Indian Governments which are to follow us? If we break faith with our civil servants, what is going to be said if they do it later on with regard to others? I believe that what you are doing to-day is going to have a most grave and prejudicial effect upon the morale of all the Services and of those whom they are going to serve. A member of the Government in another place reminded the House only a few days ago that:
"The real safeguard of the Services lies in Parliament."

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And forthwith he invited the House to prove to the Services, once and for all, how worthless the protection of Parliament was! I cannot imagine anything which would do more to destroy faith in the sobriety and repute of Parliamentary government in the eyes of the Services than such an attitude; but if such behaviour towards the ordinary covenanted members of the Services is regrettable, what is to be said of the actual breach of contract towards those civil servants recruited before 1919, who were given, as is admitted by the Secretary of State, no less than a statutory guarantee that the British Government would never do what the British Government now invites us to do?
Over and over again, in conversation with officials who expressed anxiety as to their future in India, during the four years which I spent in office in India, I was asked what their position in the future was going to be, and I pledged my word, without hesitation, that their future was assured—had they not got the statutory guarantee of the Secretary of State and Parliament behind them? What is my position, to-day, towards all those to whom, I think rightly, I pledged my faith, when the Government go back altogether upon those to whom they pledged their word? The Government may defend their proposal by saying that the Services have agreed. The very fact that they have always shown public spirit and self-sacrifice makes the Government's action still worse. I am told that they agreed just before the final decision was taken. If they did, my reply is that they ought never to have been asked, and still less ought pressure to have been brought to bear upon them.
Here I want to ask the noble Marquess a specific question, to which I hope he may be able to give me a definite reply. It was alleged by a distinguished authority on Indian affairs, in another place, that great pressure was put on the Services, and according to the OFFICIAL REPORT the Secretary of State "indicated dissent." I personally have been informed, on authority which I find it hard to disbelieve, that the Finance Member of the Government of India went so far as to explain to a member of the Services that if a voluntary cut was not
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agreed to, and Parliament refused to sanction a compulsory one,
"the Government of India found it would be legal, and to them justifiable, either to put a capitation tax on Imperial officers or a further special Income Tax."
I hope that the Under-Secretary of State will give us a clear denial of this story, for were it proved it would make every member of your Lordships' House indignant and ashamed that a Service with so great a tradition, and one whose history has been illuminated throughout by self-sacrifice and endurance, should have been treated in this manner. I hope I have been misinformed and that the Under-Secretary will be able to give us an official denial.
My Lords, as India enters upon the next chapter of her history she is bound, especially in times like these, to be faced with very great difficulties and anxieties. Never will her politicians have greater need of the best type of trained Englishmen to guide and advise them, and never will the masses of her people more urgently need the impartial sympathy of the British officer among them. If you go to the villages to-day and ask them, not if they want Swaraj, for that is what they do not yet understand, but if they want an English Judge or an English collector, you may hear their answer, and it is always one way. It is perhaps significant that since the English officials have been very much lessened in number in India, so the people have become more and more troubled. If this need of trained Englishmen is to be met, are you likely to get and to keep them in your service if you ask Parliament to break faith with them every time you come up against a financial crisis? I venture to say, my Lords, let us not use them so, but let Parliament use them after its own honour and dignity. I had hoped that a National Government would have been the last to ask this House to go behind a statutory guarantee like this to the Civil Services, and I still venture to hope that the Secretary of State, who I know has the interest of the Services at heart, may listen to our protest and our plea for justice to the Services and the maintenance of the good name of Parliament.
VISCOUNT ELIBANK: My Lords, I too have sympathy with the noble Marquess in having to raise this question in the

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form of a Bill, to-day, just as I have sympathy with the Civil Services who will have their pay cut. At the same time I cannot agree altogether with my noble friend Lord Lloyd that the situation is not such that it is probably necessary, to-day, owing to the severe financial crisis through which India is going, as well as this country and in fact every other part of the world, that something should be done in that direction. There is one point which has not been touched upon by the noble Marquess who moved the Second Reading, nor by my noble friend Lord Lloyd, and that is with regard to the High Court Judges and the Judiciary in India. Under the Government of India Act, 1915, it was specifically laid down that the Judges of the High Court, should be dealt with under a different clause in the Act. That clause, Section 104, is in these terms:
"The Secretary of State in Council way fix the salaries, allowances and retiring pensions of the Chief Justices and other Judges of the several High Courts, and may alter them, but any such alteration shall not affect the salary of any Judge appointed before the date thereof."
So far as the Civil Services are concerned they have, as my noble friend has said, agreed that these cuts must be made compulsorily. In fact I understand that resolutions have been passed by the different Civil Service associations in India, which, while they resented these cuts, have stated that they would prefer them to be made compulsorily rather than voluntarily. It is for this reason, I presume, that this Bill is brought before your Lordships. But that does not apply to the High Court Judges, and I suggest that it would be much more fitting if provision were made in this Bill exempting High Court Judges from its operation. My reason for suggesting that is that I understand that practically the whole of the High Court Judges in India are willing to make this cut a voluntary one. I think it is very important that there should be no Executive interference with or control of the Judiciary, any more than there is of the Judiciary in this, country. I see that Clause 1 of this Bill begins by saying:
"If it appears to the Secretary of State in Council that it is necessary, having regard to the financial position in India, to make abatements from the pay of persons in the service of the Crown in India …"
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It follows that the High Court Judges will necessarily come under that clause, and that they will, therefore, in effect be subject to the control and interference of the Executive. I propose, therefore, on the Committee stage to move an Amendment which will exempt the High Court Judges from the provisions of this Bill, and which will enable them, on the other hand, to make these cuts which, I understand, they are prepared to do through a voluntary measure, and not a compulsory one.
But there is one other point in connection with this. It is not only a question of high principle which is involved, but there is also a question of merit. My noble friend Lord Lloyd has described the difficulties under which the ordinary civil servants of the Crown are operating to-day—the taxes they have to pay, the additional amount they have to pay for their food, imported commodities, and so on. But I would like to remind your Lordships that those civil servants have had their pay raised since the War on more than one occasion, and I understand that they have received War bonuses as well. On the other hand, the High Court Judges have not received any additions of pay whatsoever for years—I understand not since a time before the War—and therefore to bring them within the ambit of this Bill and to reduce, their pay compulsorily is a very much larger measure of injustice to them than it is to the civil servants. I hope that my noble friend Lord Lothian will give very careful consideration to that point, and I believe that perhaps there is a chance that the Government may be prepared to give way when my Amendment is moved. This matter was raised as a definite issue in another place, and upon that occasion the Secretary of State for India indicated that he would be prepared to give consideration to the matter if it were brought up in this House or in another place on the return of the Bill there.
THE MARQUESS OF LOTHIAN: My Lords, I feel sure that you will realise the difficulty that the Secretary of State and the Government have felt in dealing with this matter after listening to the moving and eloquent speech of the noble Lord, Lord Lloyd. He has put in the most persuasive and forcible manner the

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real problem which confronts the Government. They have, however, after giving the matter the most careful consideration, felt bound to ask your Lordships to pass this Bill, and therefore I cannot accede to his request that the matter should be reconsidered. It is true that in some measure this Bill contains an element of breach of contract, or, anyhow, of legislative protection. But Section 96 (b) (2) of the Government of India Act, which protects officers appointed by the Secretary of State before the Act of 1919, was not, I think, so much concerned with a situation of this kind as with the protection of those servants from any pressure or reduction moved on political grounds. I do not think it was ever contemplated that in a grave financial emergency of this kind that small section of the officers should not share in the sacrifices which all other servants of the Crown have to endure.
And I would emphasise to the noble Lord the character of the Bill. It is not an amendment of the protection under the Act; it is a temporary power conferred on the Secretary of State in Council to make a reduction not exceeding 10 per cent. for a period not longer than between December 1 of this year and March 31, 1933. If the financial emergency continues it will not be possible to continue that cut without coming to Parliament once more to agree to it; but if, as we all hope, the financial situation rapidly improves, there will be nothing to prevent the salaries of these servants being restored before the date of the expiry of the Act.
The noble Lord asks me a question as to whether pressure has been brought to bear on the Services to agree to the cut. My information is that what happened was that a complete exposition of the urgency and gravity of the financial situation was made to meetings of the Services, but that no pressure was brought to bear upon them. The Services agreed to place their case in the hands of the Secretary of State, and if he thought a cut was essential they agreed to accept his verdict.
LORD LLOYD: I regret very much to interrupt, but could the noble Marquess be clear on this point? Was it suggested to the Services, as I indicated just now, that if Parliament did not agree, or if
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they did not agree, it was legal and, in the opinion of the Government, justifiable to put on a capitation tax, or else an extra Income Tax on Imperial officers? That is the specific question to which I am very anxious to get an answer.
THE MARQUESS OF LOTHIAN: I am afraid I can give no specific answer to that specific question.
LORD LLOYD: The noble Marquess will perhaps enquire?
THE MARQUESS OF LOTHIAN: I will make an inquiry about it. I think that covers the main reasons and the justification for this Bill, and I regret that it is not possible to accede to the noble Lord's request. In regard to the question of the noble Viscount, Lord Elibank, about the High Court Judges, I will give him a definite answer when the Bill comes before us on the Committee stage on Tuesday next. And may I give notice to noble Lords that I propose to ask that the Committee stage of this Bill shall be taken on Tuesday and that I trust that it will complete its stages before the House rises on that day? The Bill may have to go back to another place, and it is indispensable that it should be enacted into law before Parliament adjourns.
LORD LLOYD: Might I ask the noble Marquess this question—it will not be taken before the main debate on the White Paper?
THE SECRETARY OF STATE FOR WAR (VISCOUNT HAILSHAM): My Lords, I am afraid I had not heard that there was a proposal to take this Bill on Tuesday until my noble friend mentioned it just now. If it should turn out that this is necessary I think I shall have to put a Motion on the Paper to suspend Standing Orders so as to enable the Resolution to take precedence, because I think all your Lordships would wish to have the debate on that Resolution unhampered by any delay in considering this Bill in Committee. I should also like to mention that I have made arrangements subject to your Lordships' approval that the House should meet at three o'clock on Tuesday. I hope that will be convenient to your Lordships because a good many noble Lords want to speak on the India Resolu-

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tion. It is always a pity, I think, if people are shut out owing to the fact that the earlier speeches take longer than is anticipated and it is not possible to conclude the debate within a reasonable time. I think it will probably be for the convenience of the House, therefore, to meet at three o'clock on Tuesday.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

STATUTE OF WESTMINSTER BILL.
Read 3a (according to Order), with the Amendment, and passed, and returned to the Commons.

NATIONAL HEALTH INSURANCE (PROLONGATION OF INSURANCE) BILL.
Order of the Day for the House to be put into Committee read.
VISCOUNT GAGE: My Lords, in moving that this House do now resolve itself into Committee, I must offer an apology to your Lordships' House and to my
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noble friend Lord Banbury for describing this Bill, in answer to a question of his, as a Money Bill. Although largely concerned with finance this Bill is not a certified Bill. I hope that my noble friend has not been deterred by this false information from placing any Amendments on the Paper to-day. I feel, however, that it would be difficult to devise Amendments which did not raise the question of Privilege.
Moved, That the House do now resolve itself into Committee.—(Viscount Gage.)
On Question, Motion agreed to.
House in Committee accordingly: Bill reported without amendment.

BUSINESS OF THE HOUSE.
VISCOUNT HAILSHAM: My Lords, I beg to move that this House do now adjourn, except for judicial business, until three o'clock on Tuesday next.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at five minutes past five o'clock.