Lords Sitting of 26 February 1931

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
CALDER AND HEBBLE NAVIGATION BILL.
Read 2a, and committed.
NEW JUNCTION CANAL BILL.
Read 2a, and committed.

BUCKROSE AND DISTRICT ELECTRICITY ORDER, 1930.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF TRANSPORT (LORD PONSONBY OF SHULBREDE): My Lords, I beg to move that this Special Order be approved.
Moved, That the Special Order, as reported from the Special Orders Committee on Tuesday last, be approved.—(Lord Ponsonby of Shulbrede.)
On Question, Motion agreed to.

MOTOR VEHICLES (VARIATION OF SPEED LIMIT) REGULATIONS, 1931.
LORD PONSONBY OF SHULBREDE: My Lords, I beg to move that the Regulations, as reported from the Special Orders Committee on Tuesday last, be approved.
Moved, That the Regulations as reported from the Special Orders Committee on Tuesday last, be approved.—(Lord Ponsonby of Shulbrede.)
VISCOUNT CECIL OF CHELWOOD: My Lords, I do not know whether I might ask my noble friend to tell us exactly what this Resolution means. I am afraid I have not been able quite to follow it. It is a Resolution which appears to alter the Schedule of the Act of last year. I do not know whether it would be in order, but perhaps I might ask my noble friend when the Highway Code is likely to be presented to your Lordships for approval, and whether,
140
before it is presented, it will be possible for the Government to give some information as to how far the Road Traffic Act has been successful in diminishing the number of road accidents.
LORD PONSONBY OF SHULBREDE: My Lords, with regard to the second question which the noble Viscount put to me, the Highway Code has now been drawn up, and is in the printers' hands, and will be submitted to both Houses of Parliament quite shortly, with due notice. With regard to the possibility of the Ministry of Transport being able to give any list of accidents comparing the period since the Road Traffic Act has been in force with the previous period. I would not like to commit myself. After all, the period has been a comparatively short one for us really to draw any inferences. The noble Viscount asked for some explanation, as he very well might, of this Regulation, which is the first of its kind that has been submitted in this way. There is really no variation of speed in the strict sense of the word. It is a correction in the First Schedule of the Road Traffic Act under which at present the maximum speed limit of five miles an hour would be enforced on goods-carrying motor cycles. This was never intended, and therefore goods-carrying motor cycles are being put into the list of those vehicles which are allowed to travel at a maximum speed of thirty miles an hour. There is also a Regulation to authorise a fire engine or ambulance when being used for its proper purpose to exceed the speed limit.
On Question, Motion agreed to.

CHINA INDEMNITY (APPLICATION) BILL.
Order of the Day for the Second Reading read.
LORD PONSONBY OF SHULBREDE: My Lords, this Bill is entirely of a non-controversial character. As the former Under-Secretary of State for Foreign Affairs, Mr. Locker-Lampson, said in another place, it carries out substantially the policy of the Foreign Secretary in the last Government. Nevertheless, perhaps I should give some little explanation of the Bill with a short account of its history, as your Lordships may desire

141
to know why the Act of 1925 should be repealed and this Act substituted for it. Your Lordships will remember that the British Boxer Indemnity was £7,600,000 in 1900, and it was bearing interest at 4 per cent. Payments ceased in 1917 till 1922, and the period of repayment was extended to 1945. Payments were resumed in December, 1922, and, up to June, 1930, amounted with interest, roughly, to £3,500,000. To the end of 1945 the further sum receivable will amount to £7,850,000.
His Majesty's Government in 1922 announced that they desired to devote the proceeds of the British share of the Boxer Indemnity to projects equally beneficial to China and Great Britain. A Bill was prepared and eventually passed. An attempt was made in 1924 when the Labour Government was in office. It was revived in 1925 and that Bill—the China Indemnity (Application) Bill—was passed into law. By it payments were to be devoted to such educational and other purposes beneficial to the mutual interests of His Majesty and the Republic of China as the Secretary of State for Foreign Affairs, after consultation with an Advisory Committee established under the Act, might from time to lime determine. An Advisory Committee was set up consisting of eleven persons, three of whom were Chinese. Subsequently, in order to get first-hand information, a delegation under Lord Willingdon was sent to China and submitted a detailed Report. This Report by the Advisory Committee was issued in 1926. Perhaps I might be allowed to pause here in order to offer a tribute to the noble Earl, Lord Buxton, who I am glad to see in his place here to-day.
EARL PEEL: In his new place to-day.
LORD PONSONBY OF SHULBREDE: I am not quite sure where the Liberals will sit next. The noble Earl who was Chairman of the Advisory Committee, not only devoted time and labour to the production of the Report but has rendered signal service in formulating the lines on which various educational objects in China may best be stimulated. The thanks of His Majesty's Government, as well as those of our predecessors, are due to him for this very fine piece of public work, which is by no means wasted under the new provisions contained in the present Bill. It was recommended that
142
the Fund should not be limited to strictly educational purposes, but that a considerable portion should be invested in useful reproductive undertakings directly advantageous to China, that this investment should ultimately provide a permanent educational endowment, and that the word "educational" should be approached in its widest sense to include research. Then, from 1926 to 1928, came the disturbed period in China, when there was civil war and no Government that could be recognised. Everything was suspended during that period and it was not until comparatively recently that we got into touch with the Chinese Government and came to an agreement with them.
Your Lordships will be acquainted with the contents of the White Paper on this subject and will see there the correspondence between His Majesty's Minister in China, Sir Miles Lampson, and the Chinese Foreign Secretary, Dr. Wang. At the request of the Chinese Government, the new proposals were made. That is a point which has to be borne in mind because it is a change in the objects which were intended in the 1924 and 1925 Bills. Whatever change there is, those who criticise it because it, appears on the surface not to be strictly devoting this sum of money to educational purposes, must exonerate from any blame on the subject the Ministers who dealt with this problem and must know that the proposition for the change in question which I shall describe came from the Chinese Government. I was responsible for the Bill in 1924 and the noble Lord, Lord Cushendun, was responsible for the Bill in 1925. I believe it is possible in going through the debates to find that we contradicted ourselves and it is possible, as they did in another place, to quote both of us against the present Bill. But circumstances have changed and the noble Lord, Lord Cushendun, were he here to-day, would, I am sure, be in agreement with me that the present proposals, although differing superficially from those contained in the Act of 1925, do really carry out the purposes to which successive Governments desired that this large sum should be devoted.
The administration of the Fund is to be handed over to the Chinese Government in return for an undertaking that they will proceed generally along the lines of

143
the educational programme of what I may call the Buxton Committee, and that a considerable portion of the funds will be used in the first instance for the purchase of railway materials in Great Britain. Clause 1 repeals the Act of 1925. In subsection (2) of that clause, provision is made for the payment of £265,000 to the Hong Kong University—that is direct—and £200,000 to the Universities' China Committee in London for certain specified purposes. These were inserted in another place on the representation of the Universities, and with the assent of the Committee who interviewed the Under-Secretary of State for Foreign Affairs, and their Amendments were accepted and put into the Bill.
LORD DANESFORT: Would the noble Lord allow me to ask a question upon subsection (2) of Clause 1? Are these payments referred to in the First Schedule to be made out of the existing Indemnity Fund or out of funds received after the commencement of the Act? It looks in subsection (1) as if the payments were to be made out of funds received after the commencement of the Act.
LORD PONSONBY OF SHULBREDE: No, they will be payments out of the existing Fund—the £3,500,000. Subsection (3) provides that one-half of the annual payments shall be made to a Board of Trustees. That Board of Trustees will be appointed by the Chinese Government, and British subjects will be upon the Board. The money will be expended on objects wholly beneficial to both countries, for half will be paid to the Chinese Government Purchasing Commission, together with the balance of the accrued amount of the Indemnity, about £3,000,000.
Clause 2 provides for the establishment of the Purchasing Commission, which is to consist of the Chinese diplomatic representative in London (the Chinese Minister) as Chairman, a representative of the Chinese Ministry of Railways and four other members appointed by the Chinese Government from a panel, recommended by His Majesty's Government, of persons of standing with wide business experience. The Secretary of State will submit names from which these four members will be selected. The proposal to invest the money in railways and the income derived from it in education came, as I have said, from China, and we were
144
very ready, as will be seen in the White Paper, to acquiesce in this suggestion. The rehabilitation of the economic life of China is a matter of considerable importance to them, and opportunity is also afforded for giving work in this country which is very sadly needed. At the same time, there will still be an endowment for educational purposes. The Chinese Government are most anxious that this agreement should be implemented by an Act of the British Parliament, and the Chinese Minister has pressed us at the earliest possible moment to get this Bill through the two Houses of Parliament, in order that work may be begun which will be mutually beneficial to the two countries. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Ponsonby of Shulbrede.)
LORD DANESFORT:My Lords, I hope the noble Lord in charge of the Bill will not think it unnecessary on my part if I ask him a few questions to elucidate the real nature of this scheme, which I have been totally unable to find out from the terms of the Bill itself. I ventured to ask him, in an interruption in the course of his speech, whether payments under subsection (2) of Clause 1—namely, £200,000—and the £265,000 mentioned in the First Schedule were to come out of the existing Indemnity Fund or from moneys received in respect of that Fund after the commencement of the Act, and he was good enough to tell me that those sums were to come out of the existing Indemnity Fund. Let me call his attention to Clause 1, which says that—
"The China Indemnity (Application) Act, 1925, is repealed and the China Indemnity Fund formed thereunder and all sums received after the commencement of this Act.… shall be dealt with in accordance with the provisions of this section."
I do not think the Bill makes it clear where those two sums of £200,000 and £265,000 are to come from, whether from present or future sums paid into the Indemnity Fund. Perhaps that might be made clear, though I am afraid we shall not have an opportunity in this House of making it clear, inasmuch as this is certified as a Money Bill.
Perhaps the noble Lord could also tell me what is the existing amount of the Indemnity Fund? I gathered from his speech that something like £3,500,000 had already been paid. I am not quite sure

145
whether that is the existing amount of the Fund. That would leave an equal sum to be paid by the year 1945. Perhaps the noble Lord will tell me whether I am correct in that view. As to the £200,000 that is to be paid to the Universities' China Committee in London, there is nothing on the face of the Bill to show what that Committee is or how it is formed. I am afraid I have not had an opportunity of looking into previous Acts to see whether they provided for its formation. Perhaps the noble Lord will tell me whether this was done in previous Acts.
As regards the Chinese Government Purchasing Commission, I notice from subsection (2) of Clause 2, that it is to consist of two members of the Chinese Government and four other members appointed by the Chinese Government from a panel of persons recommended to the Board of Trustees by the Secretary of State in this country. Perhaps the noble Lord will tell me what sort of persons will be put on the panel. Will they be British, Chinese or others? This Commission will have very large sums paid into its coffers, and it will have the very important duties to perform that are specified in paragraphs (i) and (ii) of subsection (1) of Clause 2. I venture to think, therefore, that since the interests of this country will be very largely concerned in seeing that those objects are carried out, we should have an opportunity of appointing members from our own people to the Board of Trustees. On the face of the Bill there is nothing whatever to show how the panel from which these four members of the Commission are to be drawn is to be constituted, but I venture to suggest to the noble Lord that it would be very desirable to put into the Bill some provision that would protect British interests in this matter and secure that this country is properly represented on that Commission.
There is one other question that the noble Lord may perhaps be good enough to answer, regarding the Board of Trustees, who are referred to in subsection (3) of Clause 1. These are to receive one half of every sum received after the commencement of this Act on account of the indemnity. As to the other half, the wording of the clause is rather singular. It is to be paid—
146
"to such persons including persons who are British subjects (hereinafter referred to as 'the Board of Trustees') as the Chinese Government may from time to time appoint to be trustees for the purpose of receiving those moneys.…"
What does that mean? How many members of that Board are to be British subjects? It is obviously very important that this country should be properly represented on the Board. There is nothing in the Bill to show how many are to be British subjects and how many the subjects of some other country, possibly China. I would suggest to the noble Lord that it would be very desirable, somehow or other, either in this Bill or in some supplementary Bill, to make provisions that the Board of Trustees shall be properly constituted so as to protect British interests. Those are the only questions that I propose to ask, and I have ventured to ask them because I fear that we shall not have an opportunity of considering this Bill in Committee. I should be glad to hear from His Majesty's Government that they will, either by supplementary legislation or in some other way—I do not know how—make provision for the case to which I have referred.
EARL BUXTON: My Lords, I shall not detain the House for more than a few minutes but, having been Chairman of this Committee and since the Bill is somewhat different from the Report of the Committee, I should like to say a few words in recommendation of the Bill as it stands. My noble friend has gone through the history of the proposals and I will not repeat them. It is very probable that no noble Lord has read the whole of the White Paper, which goes into the matter in great detail, and I am obliged to the noble Lord opposite for having made so clear a statement as to what has occurred. I should like just to endorse what he has said. This matter, at all events, is in no sense a Party question. The original pledge was given in 1922 by Mr. Bonar Law, who was then Prime Minister, that this Boxer Indemnity of about £11,000,000 should be handed back to the Chinese Government as—a term that is too frequently used nowadays—a gesture of friendship towards the Chinese. Since then there have been, I think, four different Governments in this country—a Conservative Government, a Labour Government, a Conservative Government and

147
another Labour Government—and they have all undertaken to carry out the pledge given by Mr. Bonar Law. If the country had been fortunate enough in the interval to have had a Liberal Government, I am quite sure that they would have endorsed all that has been done in regard to this matter.
I should like to explain, if I may, why this delay has occurred. I know there has been some feeling in China that we have not generally carried out the undertaking that we have given. As my noble friend has said, the first Act was passed as long ago as 1925. Even then difficulties with regard to Parliamentary changes, General Elections and so on, and Parliamentary pressure of work, had delayed the passing of that Act for three or four years, and that Act created the Advisory Committee of which I had the honour of being Chairman. We were appointed at the beginning of 1926, and finally reported in October, 1926. So far as we were concerned there was no great delay in our operations, but unfortunately directly after we reported the unfortunate events at Shanghai and the sending of an Expeditionary Force to Shanghai created at that time great friction between the British and Chinese Governments. That caused considerable delay, although we attempted in other ways to carry out the proposals of the Committee.
When finally the matter was cleared up to a certain extent and there emerged a Chinese Government sufficiently representative and with sufficient authority to carry out the proposals which had been suggested, the matter at that time was an entirely different one. It had become obvious that this money should be handed over to the Chinese Government, not under conditions, as the original Act contemplated, from this side. The Chinese Government met the British Government and made certain proposals which are before the House in the Bill the Second Reading of which we are now considering. My noble friend has already detailed what the proposals are, and they fall short, in some ways considerably short, of the proposals of the Advisory Committee, which were that this money, the £3,500,000 already in hand and the subsequent £7,500,000, should be applied to educational matters
148
or matters of that description. We have taken a very wide interpretation of what educational matters would mean. This Bill proposes that the bulk of the money, £7,000,000 out of £11,000,000, should be applied not to educational purposes in the first instance, but to the rehabilitation and extension of the railways, although in the end, after the railways have been made successful and the money is repaid, it is also to be applied to the educational purposes agreed on by the Committee.
After all, my Committee, I think, were sensible men and women, and saw that the position had altered very considerably, that there were urgent and clamant demands for railway rehabilitation, and that these proposals were not proposals dictated here but made by the Chinese Government themselves, to which the British Government agreed. On those grounds, speaking on behalf of my Committee, I wish to say that we entirely endorse the conclusion which the Chinese Government have come to, with the assent of the British Government, to apply this money as proposed in the Bill and as explained by my noble friend. There is one matter which has been touched upon and which was the cause of the main objection taken in the other House—namely, that the bulk of this money, which was to be directly applied to the railways, was to be spent in this country, under a Commission to which my noble friend behind me has referred. That was, after all, a proposal which the late Government had in mind, and on which they had prepared a Bill on the same lines. Therefore I do not think the present Government can be blamed for carrying out those proposals, and for undertaking that this expenditure should be largely applied in this country.
That is really all I desire to say in order to show that so far as my Committee are concerned we endorse the proposals made in this Bill which the Government have brought forward. I was indebted to my noble friend for the fine compliment which he was good enough to pay me. My Committee included three Chinese members, and I do not think we could have had more loyal colleagues. I am greatly indebted to my fellow members, but especially to my Chinese colleagues.
LORD PONSONBY OF SHULBREDE: My Lords, I would like to thank the noble Earl for the support he has given to this Bill. His endorsement of the action taken by the Government will have very far-reaching effects and will give, I am sure, in China just the sort of blessing to this measure for which we had hoped. He has sketched to your Lordships the various stages through which this rather vexed and complicated question has passed, and your Lordships will appreciate the great assistance which the noble Earl has given in bringing this matter to a successful conclusion.
May I very briefly pass to the questions which Lord Danesfort asked? With regard to the two sums to the Universities' China Committee and the Hong Kong University, they will come out of the £3,500,000 now at our disposal. The amount that is due to the end of 1945 from further sums receivable comes to £7,850,000, which will be paid in instalments from time to time. The noble Lord wanted to have some particulars about the Universities' China Committee. It is perfectly true that that body has only quite recently received its charter—only within the last few weeks—but it is a body which was initiated by the Society of Friends as far back as 1925 with the object of promoting closer cultural relations between China and Great Britain. The Universities of the British Empire took up the scheme at the request of its Standing Committee of Vice-Chancellors, and the Universities' China Committee held its first meeting in 1926 under the Chairmanship of the late Sir Arthur Shipley, Master of Christ's College, Cambridge. Its objects are to promote cultural relations by lectures in England by eminent Chinese, by work among Chinese students, and a number of other objects, which have proved successful, and it is eminently a body to be supported.
LORD DANESFORT: Are the educational people on the Committee all British subjects?
LORD PONSONBY OF SHULBREDE: That I cannot answer. The noble Lord enquired who would be the four members to be put on to the Chinese Government Purchasing Commission. The panel from which those four members are to be selected is a panel prepared by the Sec-
150
retary of State for Foreign Affairs, and I really think in this matter one can trust the Secretary of State for Foreign Affairs for the time being to see that British interests are thoroughly well represented, and to see that people interested in this sort of question—people of some eminence—have their names submitted for selection. With regard to the Chinese Government Purchasing Commission, the noble Lord will see that Dr. Wang, in his Despatch of September, 1930, quoted on page 8 of the White Paper, says that the Board of Trustees in China will include a certain number of British members. I think it would be rather unnecessary for us to force him to say more than that, and the Government have not thought that there was anything in that which required any sort of criticism.
LORD DANESFORT: Is there any minimum number of British subjects appointed to this Board of Trustees?
LORD PONSONBY OF SHULBREDE: No, no number.
On Question, Bill read 2a: Committee negatived.

UNEMPLOYMENT INSURANCE (No. 2) BILL.
Order of the Day for the Second Reading read.
THE UNDER-SECRETARY OF STATE FOR WAR (LORD MARLEY): My Lords, in moving the Second Reading of this Bill, I think the House is entitled to some brief explanation of the objects and meaning of the Bill. In December of last year I presented the Unemployment Insurance Bill, and the remarks I made then apply equally to the present Bill, and I shall merely bring up to date the statistics which were involved at that time. The objects of the present Bill are to raise the borrowing power of the Unemployment Insurance Fund by £20,000,000 from £70,000,000 to £90,000,000, and also to extend the period during which transitional benefit is payable from 36 months by a period of six months, making 42 months in all.
I want to say one word about transitional benefit, because I know it will interest your Lordships to understand the

151
position in that connection. The transitional benefit payments were started in April, 1928, as a result of the Blanesburgh Committee's Report. The Blanesburgh recommendation replaced the extended benefit which then existed, and the Act which was passed to put into force the Blanesburgh Report introduced transitional benefit for a period of twelve months from the passing of that Act. In March, 1929, the then Conservative Government extended by a further twelve months the twelve months introduced by the original Act; and the present Government, in February of last year, added another twelve months, making thirty-six months in all. The provisions of the present Bill include an additional six months, making an arrangement whereby the claims which would normally have run out between the months of April, 1931, and October, 1931, endure until the period from April, 1932, up to October, 1932. The reason why the normal twelve months has been reduced in the present case to only six months is that it is expected that the Report of the Royal Commission will be received, and it is hoped that legislation will be passed before October of this year.
Your Lordships will understand that if we do not extend the transitional benefit period, persons who have been expecting this payment will be deprived of benefit under the existing legislation day by day throughout the year, and therefore I am quite sure you will realise that it is obviously impossible not to extend this benefit. At the present moment members are being transferred from the Unemployment Insurance Fund to transitional benefit at the rate of about 5,000 a week, and to-day something like 430,000 are receiving transitional benefit at a cost of something in the neighbourhood of £480,000 a week. The total estimated cost of this extension is about £20,000,000 of which £13,000,000 will fall in the financial year from April, 1931, to March, 1932.
EARL PEEL: Is it assumed that the transfer from the Insurance Fund to transitional benefit is to continue at the rate of 5,000 a week?
LORD MARLEY: It is impossible to say what will be the rate of transfer.
152
It depends entirely on the number of people whose ordinary benefit runs out.
EARL PEEL: Of course, I would not have asked a question of that sort, but the noble Lord has given a figure based on certain assumptions. I was only asking what was the assumption as to transfer which would make up that number.
LORD MARLEY: At the present moment the rate of transfer is what I said. Sometimes it is up and sometimes it is down; but the tendency must be to increase.
EARL PEEL: Might I press the question? For the purpose of arriving at the amount of transitional benefit, what average figure is taken for the next few months as the figure of transfer from one fund to the other?
LORD MARLEY: That is a calculation by the statistical advisers to the Ministry, and is based presumably on the rate of about 5,000 a week, and not based on any extension other than that which can be actuarially calculated by our knowledge of the present position of unemployment in this country.
EARL PEEL: That is, the assumption of 5,000 a week.
LORD MARLEY: Yes, with the additions which we know will take place. Other additions are incalculable, but certain additions we know will take place by a simple actuarial calculation as to the number of people who will cease to have ordinary benefit. With regard to the Fund itself, by to-morrow the debt to the Treasury will be about £69,000,000 and the number of unemployed on February 16 was 2,631,000, of whom, as I said, 430,000 were receiving transitional benefit and about 2,000,000 were on the Fund. The remainder were either not claiming or had been disallowed or were not insured. The total payment to these 2,000,000 persons amounts to £1,800,000 each week; the present rate of benefit is 17s. a week for a man, 9s. for his wife and 2s. for each child. That is not an excessive rate. I am not giving it because I expect any of your Lordships will claim this benefit at any time, but it is well that we should know it. The balancing point of the Fund, which I mentioned in December, 1,275,000,

153
is the same at the present moment. There is no change in that. In this connection your Lordships may like to know that the total number of insured persons is about 12,000,000 and that 9,500,000 of them are contributing every week to the Fund.
With regard to the question of how to deal with those who are unemployed, apart from the human side, which I do not propose to stress, it is quite obvious that they must be kept either by rates or by taxes, and it is generally felt that the method of taxation and the method of the Unemployment Insurance Fund is better than denying this organised method of assistance and putting people on the rates. Taxes are fairer and the Fund is surely a reasonable method of administration, while such improvements as are necessary in the administration of the Fund will be suggested by the Royal Commission which is now sitting and which is carrying through its work at the maximum speed possible.
VISCOUNT ELIBANK: Can the noble Lord say when the Royal Commission is likely to report?
LORD MARLEY: In that connection I have already said that we hope that the Report will be made and legislation enacted before October of this year. I cannot say whether there will be a Report or an Interim Report in May or June, but it is hoped that the Report will be issued in time for legislation to be enacted by October. One other point I wish to mention before I leave that is that the employment exchanges have been used recently more effectively for their proper purpose of placing unemployed men in jobs. There has been an increase in 1930 over 1929 of 173,000 extra men who have been placed in jobs by the exchanges. The figures are that in 1930 1,727,000 unemployed persons were placed in positions compared with 1,554,000 in 1929.
It may be asked why the proposal is to extend the borrowing powers by £20,000,000 instead of by £10,000,000, and the answer is, broadly, that, when the £10,000,000 was the extension by the Conservative Government, the deficit was increasing at the rate of £350,000 a week, whereas at the present moment the deficit is increasing at nearly three times that rate. It is essential, there-
154
fore, that we should have a larger borrowing power than the £10,000,000 then provided. I suggest to your Lordships that, in the difficult circumstances which are facing the country, this is the best means we can employ to deal with the situation.
We should remember that the position of this country does compare favourably with other industrial countries. From June, 1929, to December, 1930, unemployment has increased in this country by 132 per cent., but in Germany the increase in the same period has been 248 per cent. and in Italy 232 per cent. In France we were told for a very long time that there was no unemployment, but we are now told that there are 350,000 unemployed and about 1,000,000 partially employed. In The Times of February 25, in an article dealing with this matter, it is said:—
"It will be seen from the above figures that unemployment in France is and has been for years far more serious than any published statistics would suggest."
In the United States it is exceedingly difficult to get accurate information, but we have various estimates and we are told that the number of unemployed may be as high as 9,000,000. Lower estimates put it at 6,000,000 or 7,000,000. That is in a population of 123,000,000. In Italy we are told that those wholly unemployed at present number 642,000 out of a total population of 42,000,000, while in France they number 350,000 out of a total population of 40,000,000. In the United States we learned from an article in The Times a few weeks ago that 23.8 per cent. of the industrial workers of the United States were without employment in the first week of last December and that 21.3 per cent. were working only part time. Only 54.9 per cent. of the industrial population had full-time jobs at that time in the United States.
When we realise the appalling suffering that is going on in the United States at the present moment, the bread queues, the soup queues, the charitable organisations which are failing to deal adequately with the problem, your Lordships will be thankful that we have got a system of unemployment insurance in this country which, while the industrial system has been unable to avoid unemployment, at least has mitigated the sufferings of many of those who are com-

155
pelled to suffer unemployment at the present moment. I do not want to deal with the causes at all. In the circumstances, I think I can leave the matter at that, but I shall be very glad to do my best to answer any questions which any of your Lordships may desire to put. I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Marley.)
EARL PEEL: My Lords, I am well aware that this Bill is a certified Bill and that in that sense your Lordships have no control over it, but I make no apology at all for addressing your Lordships for a few minutes upon it, because another place can, I regret to say, in present circumstances only be called the guardian of our finances with certain very strong reservations. The noble Lord introduced this Bill and discussed it as if it were a mere matter of statistics. I am bound to say I followed his cold statement of these terrible, growing figures with the greatest anxiety. I can assure him that on this side of the House we do not regard it as merely a question of figures, but as the gravest matter which is before your Lordships and before the country to-day.
I should like first to call attention to the Memorandum on the Financial Resolution proposed relative to unemployment. These words are rather remarkable:—
"The deficiency period is defined in Section 16 of the Unemployment Insurance (No. 2) Act, 1921, as the period between the passing of that Act and the date when the Treasury certify that the Unemployment Fund is solvent. Such certificate may not be given while any advances to the Fund are outstanding."
One wonders whether there is not a touch of irony about that observation by the official who drew up this Paper as to when this debt, now growing up to £90,000,000, is to be paid so that the certificate of the Treasury may be forthcoming stating that the Fund is solvent.
Next I should like to call attention to one or two grave statements made in connection with this Fund in the evidence that has been given before the Royal Commission. The noble Lord tells us that that the Royal Commission is going to report in time for certain legislation. I venture to assert that this Royal Commission will not report before
156
the next Unemployment Insurance Bill is brought before your Lordships' House, and that then we shall have a similar speech, with perhaps similar excuses, probably made by another member of the Government from the opposite Bench. Sir Francis Flood, who is Permanent Secretary of the Labour Ministry, is reported to have said:—
"First the Fund was heavily in debt and the debt was increasing rapidly. The increase of the debt was taking place—
and these are the significant words—
"although the Exchequer now made an additional grant equal to the whole cost of transitional benefit, thereby relieving the ordinary revenue of the Fund."
When your Lordships are considering this vast increase in borrowing which we are asked to pass to-day, I would ask you to remember that that Fund is relieved entirely, by fresh contributions from the State, from all that heavy amount of transitional benefit.
I said that I would suggest that this is far more than a mere question of statistics. Let me quote from Sir Richard Hopkins, who, in his evidence before this Commission, said:—
"The State has every year to borrow large sums for various productive purposes. This additional borrowing for purposes other than productive is now on a scale which in substance obliterates the effect of the Sinking Fund."
Considering the enormous importance we have paid not only before but since the War to the reduction of our vast Debt by means of the Sinking Fund, considering the immense efforts successive Chancellors of the Exchequer have made to increase that Sinking Fund, it comes with a terrible significance from this representative of the Treasury that this borrowing is practically doing away with any effect of the Sinking Fund upon our finances. I remember making that very suggestion myself not long ago and we were told that it was the view, I think, of the Government that that was not so; that this money was secured on a particular Fund, and had nothing whatever to do with the Sinking Fund. But now we have it on the evidence of this leading member of the Treasury that it is in effect doing away with the Sinking Fund itself and with the consequent effect upon our finances.
I should like further to call attention to the observations made—I referred to

157
this six months ago, but I think it will come with greatly added weight now—by the Minister of Labour, I think over a year ago, when she was bringing forward another Bill for borrowing. She then said:—
"If you come forward and wipe out the limit of borrowing powers at £40,000,000, and went on borrowing to £50,000,000 or £60,000,000 it would be a dishonest course."
And the reason given was this—"because it would be contracting a debt that you saw no possible way of paying off." Six months or more ago, when the question of borrowing beyond £40,000,000 came forward, it was denounced by the Minister of Labour herself, on the part of the Government, as being a dishonest course because they saw no possibility of that money being repaid. They now come before us and want to increase that debt to £90,000,000—more than double the amount that we then dealt with. Are those words still true, and are the Government coming before us and telling us we must borrow up to £90,000,000 when, on the words of their own Minister,' there is no possibility of that money being repaid? We are not the guardians of the country's finances. We can only comment on them, and all I can do is to brand as doubly dishonest Ministers who come before your Lordships and borrow another £20,000,000 on the security of the Fund, and do not tell you that though they borrow on the security of the Fund there is no chance of that money being repaid out of the Fund itself.
You have only to look, indeed, at some other observations made to see how difficult, if not impossible, it is for that money to be repaid. May I cite another piece of evidence? I am not giving my own facts and figures; I am taking the figures and evidence given by these officials. I want to quote from Mr. Bowers, Accountant-General of the Ministry of Labour. He says:—
"The annual amount which would be required for interest—assumed at 4¾ per cent.—and to amortise a debt of £100,000,000 in ten years was £12,800,000, equivalent to 6d. per week in contributions, and in thirty years was £6,320,000, equivalent to 3d. per week in contributions."
Are there any of your Lordships who think that it is likely the contributions will be raised at that rate? Is there any one of your Lordships who does not realise that the chances of that debt
158
being repaid out of the Fund are exceedingly small, and that when you talk of borrowing on the security of that Fund you are not borrowing on a good security and that you are really borrowing on the security of all the taxpayers of this country, so that that sum is nothing else but an addition to the general Debt of the whole country?
Let me refer next to observations made by different Ministers when they bring, every three months or six months, Bills before your Lordships and in another place for the purpose of borrowing money. I will only take one example of this. There were three Bills in April, July and November of last year, in each of which £10,000,000 was to be borrowed. On the first occasion the reason given for this further borrowing was that some twelve months must elapse while the question was being critically examined and therefore you must allow this money to be borrowed. The next time they came before your Lordships and another place in order to get the money, the difficulty was skated over by saying there was going to be a three-Party Conference which was to be a Council of State. Then they told us that the Committee was an entire failure, that apparently nobody on it had any ideas worth noticing, and that we were going to have a Royal Commission—a Royal Commission which was going to investigate the whole thing, which is going to report some time (we do not know when, possibly before the Summer Recess) and then we are going to have, at some unknown time, legislation. If the Government could only govern as well as they are ingenious in finding excuses for producing these Bills, I should have nothing but praise for noble Lords opposite.
The noble Lord has also raised the question of why it is that we are borrowing £20,000,000 at a gulp this time instead of only £10,000,000. He says the reason—and it seems a very unsatisfactory reason—is that the money is going so rapidly that you will spend nearly £20,000,000 in something like the same time as you spent £10,000,000 before. I cannot help thinking that there is a certain carefulness or reticence on the part of the Government, and that one reason is that they do not want to come before your Lordships' House in another three months and make another set of excuses for having to borrow another

159
£10,000,000 or £20,000,000, as the case may be. The noble Lord who introduced this Bill gave a great number of reasons and excuses, and he seemed to find a certain satisfaction in the fact that certain figures from other countries showed that they were labouring in troughs of unemployment as badly as we are. He gave certain percentages, but as he did not give positive figures of unemployment it was difficult to calculate in one's head whether these percentages corresponded to the numbers we are suffering from here.
But of course the charge one brings against the Government is that, owing to the changes they have been making in the unemployment insurance scheme, they have blurred the distinction between what is really insurance and what is merely another form of public assistance. The whole scheme now has become a sort of jumble of insurance and assistance, so that nobody knows where one begins and the other ends. You cannot imagine anything more demoralising not only to the moral fibre of the country but to the financial understanding of the country than a system with these vague distinctions. It is unfair to those persons who are really insured, who make their contributions with their employers and the State, that they should in the public mind be apt to be mixed up with those who are merely receiving the "dole," so that there is no clear distinction drawn between the two classes. In addition, there is no doubt that the work of the Fund is gradually being demoralised by certain laxities of administration. I refer, first of all, to some of those legal laxities under the Act, such as the case of women who marry and go to another part of the country and remain for a length of time on the Fund. Then there are those who earn substantial sums in part of the week and live for the other part of the week on the "dole." These laxities are growing to such proportions that they constitute a very heavy and unfair charge on the Fund.
Moreover, the Government have very largely assisted the break-down of the Fund by the changes which they introduced in the provision as to seeking work. Again, I want to quote. I will quote from Mr. Price, who is Principal Assistant Secretary in charge of the Unemployment Insurance Department at
160
the Ministry of Labour. He says there is no obligation on an individual now to look for work. The onus has been removed from him to seek work. While I admit the terrible wave of unemployment now in this country, I think it is true that the Government have substantially added to it by taking away, as they have done by legislation, the incentive that before existed for a man to seek work.
There are just one or two other points I want to deal with. We have heard a great deal about economic troubles and about the shortage of trade in other parts of the world, but I submit to your Lordships that it will really not do for the Government to sit back and say that they can do nothing because of this world disturbance that is going on. If really nothing can be done to assist trade and diminish unemployment in this country, then the Government becomes a superfluous and unnecessary luxury and might as well be done away with altogether. But I submit further, that the Government have not only not assisted, but really have done everything they can by their actions to increase unemployment. I need hardly refer to their sweeping away of Safeguarding Duties. They have, in addition to that, consistently laid fresh burdens and duties on manufacturers and intend to lay more. In face of foreign competition against our manufacturers, they have done nothing whatever to assist them.
Looking at the actions of the Government and examining their functions, I am afraid that I do not see that they really are interested in the question of unemployment. The matters that really seem to interest them are such matters as the Trade Disputes Bill, the attempt to make general strikes legal, or perhaps some tampering with the electoral system of this country which may be necessary as they have to keep their bargains and arrangements with another Party. These matters seem to be in the forefront of their minds and the great matters of trade and business and unemployment seem to have slipped aside. They have given them up because they say they are involved in these general world economic difficulties.
I must say this, lastly, that this Government and their followers have done great harm in this matter of unemployment by going about the country making,

161
as they do, constant attacks on capital and capitalists, so that manufacturers have been instilled with fear as to the risks they run if they try to develop their business or try to extend their production. They tell us that the capitalist system has broken down when they have done their best to break it down, and then they turn savagely and attack manufacturers because they do not borrow large sums to develop their business when they do not know that the products can be sold. There are great difficulties in connection with this unemployment question. I am convinced that the Government hang like a blight over the manufacturing trade and commerce of this country, and the best thing that they can do to assist employment and reduce this borrowing, to staunch this flow of this money to the unemployed, is to retire gracefully and, by a great act of self-abnegation, allow better men than themselves to try to govern the affairs of the country.
EARL BEAUCHAMP: My Lords, I hope that the noble Earl who has just sat down will allow me to say that I listened with a great deal more interest to the first part of his speech than to the second. I was glad to hear the speech, but the first part of it seemed to me to be the more valuable contribution to the general discussion of unemployment insurance. I hope and believe that his remarks will be brought to the notice of the Royal Commission that is now enquiring into the subject. As one of the authors of the Parliament Act, I remember very well being told, when that Act was passing through your Lordships' House, that a certified Money Bill could never be discussed by your Lordships. We said this was not our view, but that we thought that such Bills would be discussed, and that the discussion that took place would be very valuable. After all, we in this country are governed by public opinion, and speeches in this House help to govern public opinion. I hope and believe that the speech that has just been made by the noble Earl will have considerable influence, especially in its first part, in forming public opinion with regard to unemployment insurance in this country.
From my own part, like most members, I think, of your Lordships' House, I look upon this Bill as a disagreeable neces-
162
sity which we are obliged to pass in the present situation. We wait with anxiety for the Report of the Royal Commission, whether it be a full Report or an Interim Report, enquiring into the irregularities. I should like to press upon His Majesty's Government the great desirability, if they have proof of administrative laxity in the evidence which comes before them, of taking immediate steps in these administrative cases to deal with them without delay. They can wait to deal with legal matters until the Report which deals with those matters is produced. There is a clear distinction between the two subjects, and I hope that His Majesty's Government will bear that distinction in mind. I notice that the noble Earl did not suggest any alternative to this Bill, and perhaps this is not a proper occasion. I think it would be a very valuable thing if, on some future occasion, we could have another discussion upon unemployment insurance and the administrative irregularities which are alleged to have taken place.
EARL PEEL: Admitted.
EARL BEAUCHAMP: I feel this rather deeply, because when I was in the United States the other day there was a good deal of discussion on this insurance, and it was almost taken for granted that there was an immense amount of irregularity. I am not quite sure that it is so, but if those who think it is the case would present their instances in your Lordships' House, I think it would be very valuable for His Majesty's Government to be able to go into all these cases and see what amount of truth there is in the charge. I would venture before I sit down to say how fervently I hope that the Royal Commission will report as soon as possible. I assume that the intention is that they will report at such a date that we may be able to get legislation through this House before the end of this Session of Parliament. I do not think that I am anticipating the position when I say to His Majesty's Government that, if they do produce legislation to deal with these irregularities, there is nothing that your Lordships will not do to assist them in passing the necessary legislation through this House.
On Question, Bill read 2a: Committee negatived.

BRITISH REPRESENTATIVES IN THE DOMINIONS.
LORD DENMAN LORD DENMAN had given Notice that he would ask His Majesty's Government whether they propose to appoint an accredited representative to His Majesty's Government in the Commonwealth of Australia, and whether the Letters Patent and Royal Instructions issued to Governors-General and Governors have recently been varied; and move for Papers. The noble Lord said: My Lords, in asking the Question which stands in my name on the Paper this afternoon, I desire in the first place to make it clear that I make no reflection of any kind on the recent appointment of Sir Isaac Isaacs as Governor-General of the Commonwealth of Australia. Sir Isaac Isaacs has been for many years in public life in the Commonwealth, and he is a well-known member of the legal profession. Your Lordships are all aware of the prominent, perhaps I might say predominant part which noble and learned Lords take in the proceedings of this House, and the fact that Sir Isaac Isaacs is a well-known lawyer will certainly be no disadvantage to him in discharging the duties of his new office.
At the same time, this appointment is important in that it marks a departure from the hitherto accepted practice, at all events in the case of the Commonwealth of Australia. In one sense, perhaps, it may be said that it is the direct outcome of the Imperial Conference of 1926 and, in view of the Conference, and of the agreement that was reached in it, no one could question the right of the Government of Australia or the Government of any other Dominion to recommend to His Majesty any one whom they think fit to fill these posts. It is interesting to observe in this connection that, with the exception of the Irish Free State, no other Dominion has, hitherto at all events, adopted the course which Australia has recently taken. The noble Earl, Lord Clarendon, has but lately gone out to take up his appointment in South Africa. Another well known member of your Lordships' House, Lord Bessborough, is to succeed Lord Willingdon in Canada. I listened the other day to an address to the Empire Parliamentary Association by the Attorney-General for New Zealand, Sir Thomas Sidey, in which he stated that New Zealand was
164
well content with the hitherto accepted method of appointment from this country, and that the Government of New Zealand preferred that, in the case of that Dominion, the Governor-General should remain the channel of communication between the Government of the Dominion and the Home Government.
Then there is the case of the Australian States. The Governors of the Australian States are still appointed from this country and, so far as I am aware, they still correspond direct with the Dominions Office. Your Lordships are aware that the Commonwealth of Australia is a federation—a rather loose federation—of the Australian States. These are sovereign States with their own rights, and they have hitherto jealously resisted any encroachment on those rights. I believe I am right in saying that they were not consulted as to the agreement reached in the Conference of 1926, but resulting from that. Conference the curious position has arisen in Australia at the moment that, whereas the Commonwealth was a party to the agreement of 1926 and is acting on that agreement, the Australian States have not hitherto followed the example that the Commonwealth has set in this matter.
Your Lordships will observe that I have a Question on the Paper with regard to the Letters Patent and Royal Instructions issued to Governors-General and Governors. I am informed that some modification in one or both cases has now become necessary. That is a rather technical point with which my noble friend Lord Stanley of Alderley is more familiar than I am, and which I leave him to develop should be take part later in this discussion.
I now come to the most important of the Questions that I have put on the Paper this afternoon. It is this. At the present time the Home Government have no longer a representative in the Commonwealth of Australia. The Governor-General of the Commonwealth obviously cannot act in that capacity. He is no longer the channel of communication, and I imagine that it is only by courtesy of his Ministers that he even sees copies of the Despatches which pass between the two Governments. He has no responsibility of any kind to the Home Government. In Canada and South Africa, under somewhat similar condi-

165
tions, High Commissioners have been appointed to keep touch between the Home Government and the Governments of those Dominions. In South Africa there is, of course, the special reason that the High Commissioner is responsible for the welfare of the native races. If in the case of Canada, which is less than a week's journey from this country, it is found necessary that a High Commissioner should be appointed to keep touch with the Government at Ottawa, surely it is all the more necessary in the case of Australia, which in point of distance is so much more remote, that we should have some representative to keep in touch with the Government at Canberra.
There is this special reason at the present time. Australia is passing through a period of depression, of severe, though I hope and believe only temporary, depression. Important decisions, we gather from the Press, are being taken from week to week and almost from day to day. I submit to your Lordships that a representative should be appointed without delay to keep the Home Government in touch with the Government of the Commonwealth, to inform the Home Government of the trend of events in the Commonwealth, to interpret public opinion in this country to the people of Australia, and so to serve as a link between this country and the Government and people of the Commonwealth. I hope that the noble Lord, the Secretary of State for the Colonies, may be able to give me something more than a non-committal answer on this point this afternoon. Your Lordships will observe that I have a Motion asking for Papers. If there is any correspondence which the noble Lord, the Secretary of State, can lay that has taken place between the Commonwealth and the Dominion Office, I hope he will do so. I beg to move.
EARL BEAUCHAMP: My Lords, I must apologise for speaking again so soon, but as I was the last member of the House to be in Australia I feel anxious to take some part in this discussion. I find myself between the speech made by Lord Denman and an engagement of a public character in the not very far distant future, and therefore I beg leave to say something to your Lordships at once. The really important thing, I think, is that people in this country do not quite realise the change
166
which has taken place in the position of Governor-General since the time when Lord Novar was there. There has even been a very considerable change since Lord Stonehaven was out there. The house in which he lived in Melbourne has been turned into a high school for girls.
I should like, however, to take this opportunity of expressing my admiration for the work done by Lord Stonehaven while he was in Australia. He devoted a great deal of energy and ability to carrying out his duties, and he travelled, mostly by air, all round that great Continent. I doubt if anybody, even any Australian, knows so much of Australia as does the noble Lord who was the last Governor-General. There has been a great change even since his time. In addition to the change of housing there has been since 1926 changes with regard to the powers, duties and emoluments of the Governor-General. No longer is he the channel of communication between the Dominions Office and the Prime Minister of Australia. In future he will live at Canberra. I have had the pleasure of seeing Canberra. It is the most beautiful garden city in the world, but nearly all garden and very little city. There is a charming house for the Governor-General, who will live in beautiful surroundings, but it is far remote from centres of population, and a Governor-General who lives there will find it very difficult- to keep himself in touch with the current and trend of public opinion in Sydney, Melbourne, Adelaide and elsewhere.
More than that it is not as if the Governor-General would be constantly in touch with Ministers. Generally speaking their offices are not to be found in Canberra. The Royal Military College has been moved from Duntroon, and altogether I am afraid the Governor-General will find himself in a rather isolated position, with a small Civil Service, and without any University. What is he to do when he wants to get in touch with Australian feeling and sentiment? He might go occasionally and stay with the Governors, but I am not sure that the Governor-General would be welcome if he went and stayed too often with the Governors in those various big cities. Apart from that the only practical solution that I have heard is

167
that he should take up his quarters on an Australian man-of-war and travel round from one big city to another, occupying the quarters of the Admiral. To find somebody who is a good sailor and well qualified to cross the Australian Bight several times each year, without being the worse for it, would make it rather difficult to find a suitable person to occupy the office. Sir Isaac Isaacs is well able to carry out the duties of the office. To go out from here demands great sacrifices, and it demands when we do send anybody out that he should be the very best that England can find, and I ask myself whether in most cases men of that kind are not able to do better work for the Empire here in London than out in Canberra.
The change which has taken place in no way reflects upon the loyalty of Australia. The change that has taken place is in the position of the post of Governor-General, and in view of the change which has taken place, a change desired by Australians themelves, it does not seem to me at all surprising that there should be a change in the source to which the Australian Prime Minister looks to find the Governor-General. In view of this change I do most heartily support the urgent appeal made by Lord Denman that there should be a High Commissioner appointed, if possible without delay. I believe that in Canada the High Commissioner has rendered very valuable services, officially and unofficially, and I am sure that with the appointment of a suitable person in Australia equally good work will be done. In the absence of a Governor-General appointed from home, I think it is desirable that the appointment of a High Commissioner should be made as soon as possible.
VISCOUNT NOVAR: My Lords, I join with reluctance in this discussion. Having been for six years Governor-General it is difficult to abandon the detached, nonpolitical habit of mind which is so essential in that office. I must own, however, that I strongly opposed the alteration in the status of the Governor-General effected by the Home and Dominion Governments at the time of the Coalition Government in this country. In my experience when delicate matters had to be handled the Governor-General was a useful shock-absorber,
168
intervening between the Home and Dominion Governments, at a time at any rate when both Prime Ministers were what may be described as dominant personalities. Party politicians are seldom the best instruments for dealing at a distance with inter-Imperial affairs, and it was part of the business of the Governor-General to keep Ministers, both at home and in the Dominions, conversant with the trend of affairs in both countries, also to tone down asperities when conflicting opinions occurred and to choose a propitious moment for discussing them. The Governor-General's whole time should be given to this, while Ministers have little leisure except for what is forced upon their attention by the exigencies of modern political life.
Under the new arrangement these duties, as has been so well described, have been removed from the Governor-General's sphere, and in Australia they have been delegated to no other official. Consequently, His Majesty's Government is deprived of the advantages of the services I have described, which were formerly rendered by the Governor-General, who, to my mind, was, thanks to the prestige of his office, far the best instrument for their performance. The anomaly of this state of affairs is increased by the fact, of which mention has already been made, that Governors of States still represent both His Majesty and the Home Government, and communicate, so far as I know, with the Secretary of State for the Dominions. Since these alterations have been made in the status of the Governor-General, a new situation has arisen through the appointment of a local Governor-General. I have much regard for Sir Isaac Isaacs, and would only question the method of his appointment, and express my fear lest the Governor-General should come to be looked upon as a mere Party appointment, a state of affairs which would entirely alter the character of the office, and leave the State without an impartial head possessing the confidence of all Parties in the country and able to give impartial information to the Crown. I could name men I have known overseas who were as well fitted to represent the Crown as any of His Majesty's subjects, but, even so, it is hard to think of one who, for some political cause or another, is as well suited to the office as the best of those sent out from home.

169
As I have indicated, I have never been reconciled to the alteration in the status of the Governor-General, yet I never anticipated so complete a change in the nature and system of the appointment as has recently occurred. This has happened owing to the omission, when the change took place which made the Governor-General solely the King's representative, to safeguard His Majesty's Prerogative in the matter of the appointment of His representative, and so make it impossible that His hand could be forced. Mistakes in procedure are no doubt due to inadvertence, for one has to remember that ingrained respect for tradition and constitutional practice is a plant of slow growth, and that time alone can convince a young community and inexperienced politicians of its importance. But the growth of such an understanding should be encouraged. The Governor-General is now the last remaining link between the Crown and the Dominions. It should lie made as effective as possible.
My noble friend Lord Denman has referred to the subject of the High Commissioner. I can well understand his doing so, but I am not prepared to welcome the multiplication of posts. There is much too much of that going on already. The High Commissioner from the home country to a Dominion is a political appointment, and likely to be a costly one. Dominion High Commissionerships in London are necessary, as we all know. The Trade Commissioners were useful overseas, but in what respect a High Commissioner can with advantage supersede a Governor-General, I Own, is entirely beyond my comprehension. One can speak the more freely on this subject with respect to Australia for I am confident that the Commonwealth, which is as loyal to the Crown as the old country herself, will consider long and well before she permanently differentiates her practice from that of the sister Dominions overseas in the nomination of His Majesty's representatives.
LORD STANLEY OF ALDERLEY: My Lords, I venture to approach this subject rather from the point of view with which I have been particularly associated, the point of view of the States of the Commonwealth. When the Balfour Declaration of 1926 was made it was pos-
170
sible, and even perhaps wise, to apply that Declaration to Dominions which had a unitary form of Government; but to apply that Declaration to a Federation, such as Australia is, involves you in many constitutional difficulties which I see no possibility of surmounting. For, remember what the Commonwealth is.
The Commonwealth was created by the assent of the States created by this Imperial Parliament, and at the request of the States which then held all the sovereignty which had been delegated to the Australian people; and that Commonwealth was an assembly of certain powers which previously had belonged to the States in the hands of one Federal Parliament. But the powers which were delegated to the Federation were enumerated and limited. It was only those powers which were given to the Federal Parliament which could be exercised by that Parliament. All the remaining powers which an omnipotent Parliament can exercise remained in the hands of the States. And my experience has been—I am not sure whether that is not the experience of those who have more recent knowledge of Australia than I have—that any proposition to extend the legislative or administrative powers of the Federal Parliament have been, almost invariably, strenuously objected to by the States themselves. But—what is more significant still—when these powers have been submitted to the people of Australia by a Referendum, I think without exception the people of Australia have declined to allow the extension of the Federal power.
You have, therefore, a Parliament representing the Federation of Australia, which is not all-powerful, but is a Parliament for dealing with certain subjects. You have a Government which is a Government which does not hold total sovereignty over the whole of Australia, but exercises certain functions of sovereignty, and only those functions. Now, attempt to apply the Balfour Declaration to such a situation as that. Attempt to apply the formula, which is that Dominions are self-governing communities, owing no subordination, either in domestic or external matters, to any other part of the Empire. Perhaps I have not got the words exactly, but that is the sense. In the first place, the Commonwealth Parliament has not got

171
complete control of its internal affairs. A large part of the internal affairs of Australia remains and will apparently continue to remain in the hands of the States. The whole of the territory of Australia, with the exception of the Federal Government area and the Northern Territory, is physically under the administration of the States. You have not got the condition sine qua non which enables the application of the Balfour Declaration to the Commonwealth of Australia.
As a consequence of that division of sovereignty, you have the division of the representation of the Sovereign. As has already been pointed out—and I need not enlarge upon it—the Governors of the States are still appointed, and must he appointed, from this country. The States have their rights by the Statute which created the Commonwealth. It is impossible to alter the legal condition of things in which the sovereignty is partitioned between the Commonwealth and the States, save by one of two methods. Either the Imperial Act of 1900 may be amended—it would need to be drastically amended—or, I admit, it is within the power of the people of Australia, through their own Federal Parliament, to alter their own Constitution. But, observe that to give effect to that it is necessary to have a very special system followed there. You have to have the assent of the States and the assent of the majority of the people of Australia, neither of which, it seems probable, will be obtained by a Federation desiring, as they may desire, to rectify the present condition of things.
I come to the existing state. As I understand—and I shall be corrected by the Secretary of State for the Colonies if I am wrong—the present system of appointing a Governor of a State is by the recommendation of the Secretary of State for the Dominions to His Majesty the King, who appoints a person on the advice of the Secretary of State. That Governor, when he has been appointed, receives certain documents, Letters Patent and Letters of Instruction as to what his conduct shall he when he exercises the office of Governor. Those Letters Patent and Letters of Instruction in my time certainly contained instructions which severely limited the power of the State Government to exercise those
172
functions which are laid down in the Balfour Declaration. Certain Acts of Parliament were peremptorily ordered to be reserved for the approval of the Crown, such approval being then, at least, exercised on the advice of the Secretary of State.
What is the present position? The Secretary of State will no doubt inform us whether those Instructions still hold good and whether the reserved Bills, which deal with a great variety of subjects, which are enumerated—I need not weary the House by enumerating them—are still submitted to His Majesty for approval by the Secretary of State. I maintain it cannot be otherwise because you cannot submit them on the recommendation of the Ministers of the Commonwealth, because the States would strongly object, and it would be wholly unconstitutional to allow a Commonwealth Minister to interfere between the self-governing State and the Secretary of State and His Majesty. Yet is it a fair use of words to describe Australia, which in the vast majority of its area is governed by a Governor who is appointed from this country on the recommendation of the Secretary of State, and who is under obligation to submit the legislation or certain classes of legislation to the Secretary of State—for that is in fact the case—for his approval, as fulfilling the description of it and of the other Dominions in the Balfour Declaration? The fact is that the Imperial Conference of 1926 and the Imperial Conference of 1930, not having the advantage of the presence of representatives of the States, were misled into forgetting that there is a vast constitutional difference between a Federation and a unitary Government. What was applicable, and easily applicable, to the Dominion of Canada, to the Union of South Africa, and to New Zealand, is inapplicable to Australia because of her constitutional situation.
I must pass on from that to matters which are more germane to the Question which my noble friend Lord Denman has asked and the matter immediately before us. I should like to ask whether the Royal Instructions and Letters Patent issued to Governors of States remain as they were prior to 1926 or whether they have been altered, and in what respect they have been altered. I can hardly

173
conceive they can have been altered, but no doubt the noble Lord who will reply will give a definite answer to that question. The Governor-General is appointed on the recommendation of the Ministers of the Commonwealth. I should like to get perfectly clear on that matter. His Majesty appoints the Governor-General on the recommendation of the Ministers of the Commonwealth. Has airy Minister of the Imperial Government here in London got any shadow of responsibility for the advice which is so given? I understand not, that they have divested themselves in some way of all responsibility, and that it would be irregular and unconstitutional to use the only method which lies in the hands of Parliament for criticising the action of Ministers. If, for in-stance, there was an attempt made in the House of Commons to reduce the salary of the Secretary of State for the Dominions on the ground that a certain person had been appointed to a certain Dominion, the answer would be that this had passed from his control and that the Government were not in any sense responsible for the advice which had been given.
There is a certain uncertainty existing in the minds of a large and not unimportant section of the people in Australia on that subject. The noble Lord has perhaps had the advantage, and the Dominions Office certainly have had the advantage, of reading the opinion of two very distinguished lawyers in Australia on this question. Sir Edward Mitchell, who is a leading K.C. and a person with the very highest reputation in Australia as a lawyer, has been officially and professionally consulted by certain persons in Australia as to the legal position of the recently appointed Governor-General and he has expressed an opinion in which he says:—
"Granted that the Ministers of the Crown in England have divested themselves of all responsibility for the appointment, then I have a certain opinion."
The opinion, I understand, is not accepted, nor would I press for the opinion to be accepted by your Lordships, but it is of importance to remember that there has been a legal opinion given by two gentlemen of very important position in the Bar in Australia to the effect that if there had been dissociation of the Minister of the Crown from advice to the Crown on the subject of appointment
174
then certain consequences follow. In addition to the opinion expressed by these two gentlemen, there has been a letter, of which I have a copy, written by the Chief Justice of Victoria, who is also Lieutenant-Governor of that State, expressing the same views.
Now when those views are expressed, not by irresponsible persons but by lawyers of the first eminence in the State, it is necessary, I think, in the interests of the people of Australia, that these questions should be clearly stated. I do not ask the Secretary of State to express a legal opinion, but I do ask him to make it clear to the people of Australia what the actual situation is. There should be no confusion nor uncertainty in their mind. They should know the conditions under which this appointment has been made, by whose recommendation it has been made, and who assumed the responsibility. One further question on that. If there has been a transfer of responsibility from the Secretary of State in this country to Ministers in Australia, then I presume the King has accepted his new advisers on the advice in the first instance of somebody. I take it the advice to change his advisers—I dare say the Secretary of State will understand what I am driving at—must have been given as a consequence of the Declaration of 1926. I do not know whether the advice was given during last year when the appointment was made first of all to New Zealand, subsequently to South Africa, and finally to Australia, and I do not know whether the change of advisers was accepted on the advice of Ministers, or whether there was an earlier advice given to His Majesty to accept a change of advisers.
May I say a word regarding the office of Governor-General? It is quite clear that if a Governor-General is appointed on the advice of certain Ministers then, in the event of the necessity of his recall, the advice must be given from the same Ministers who recommended his appointment. That is to say, if the Governor-General in any Dominion falls foul of or falls out with the Ministers to whom he is accredited, whether he be a citizen of the Dominion or whether he is sent from here, it is within the scope of the Ministers first giving advice that he should be appointed to advise His Majesty that he should be recalled. Now advice given for the recall of a Governor

175
does not frequently occur, but it does occur. It has occurred in the past, and it is conceivable that when the Governor-General or the Governor of a Dominion is the nominee of a particular Party, as he will be under the new system, that he may have to occupy one of two situations. He may either have to accept without question and without comment the advice which is given to him by his Ministers, whatever that advice may be, or he must expect, if he declines to accept that advice, that the Ministers will recommend to His Majesty that he should be recalled.
I do not know whether your Lordships are very familiar with Australian local history, but if you are not may I recall to you what took place in Queensland some ten years ago perhaps? I can put it very briefly indeed, but it is significant and illustrative of the case I wish to make. In Queensland some ten years ago there was a desire on the part of the Ministry of the day to abolish the Second House of the Legislature. They brought in Bills for the abolition of the Second House, which Bills were rejected by the Second House itself. They then adopted the constitutional procedure for solving a deadlock. There was a Referendum on the subject whether the Bill passed in the Lower House should become law despite the opposition of the Upper House. The Referendum took place, and the people of Queensland, by a very large majority, declared that they did not desire the abolition of their Upper House, but, as democracy frequently does queer things, they at the same time re-elected the Party which supported the Ministry that brought in the Bill.
The Party coming back into office then presented an advice to the Governor of the State to appoint sufficient members of the Upper House—it was an appointed and not an elected Upper House—to swamp that Upper House, and so carry the Bill through against the desires of the Upper House. At that time the Governor of Queensland, Sir Hamilton Goold-Adams, was on the verge of retiring, and had in fact retired before the matter came to a crisis. The man who succeeded him was a locally appointed Lieutenant-Governor, who assumed the reins of office as Governor. He was a friend and supporter of the Party in
176
power, and he had no hesitation whatever in disregarding the opinions of the electorate as expressed in the Referendum: he created a sufficient number of members of the Upper House to swamp it, and that Upper House was in fact abolished. I am not discussing whether it was wise or unwise to abolish the Upper House, but it does indicate, when you have a Governor who is a nominee of a particular political Party in any country you like, that Governor is likely to be under the compulsion of accepting the advice of the Ministers who created him, or, if there is a change of politics, he may find himself advised to do things which in his conscience he thinks he ought not to do and find himself recalled on the advice of the Ministers who are responsible for his appointment.
I do say rather seriously that Constitutions generally in this world require something in the nature of a protector. It is not peculiar to Australia that it is desirable that the Constitution should have somebody who can protect that Constitution against the excesses of any particular Party. The Governor-General in the past has been such a protector of the Constitution. The Governor-General in the future, if he attempts to exercise that office, will, I think, find himself rejected and recalled by the faction who happen to be in power. I know that very large numbers of people in Australia desire to see their Constitution protected. They do not desire to hand over the control of the Constitution to the Party which happens to be in office for the time being. Democracies change their ways, so do oligarchies. Anyhow democracies do change their mind, and it is important in the interests of Australia—I speak here for a large number of Australians—that there should be a protector outside the influence of political power in Australia to protect the permanent interests of the people of Australia against the passing whims of those who happen to have achieved power for the time being.
I must apologise to your Lordships for having detained you longer than I intended, but the matter is really of some importance, and not merely to us here. It is important that there should be close relationship between the Australian people and ourselves. It is of even greater importance to the Australian

177
people. They have not many opportunities of expressing their views to the people of this country. They are remote. They are very often of necessity inarticulate in public life—anyhow in the public life of this country. But those of us who know Australia—and there are some in this House—who are intimately acquainted with Australian feeling, have almost an obligation to speak when occasion arises in order to assist Australians. A large section, it may be a large majority (I am inclined to think it is) of Australians look upon recent changes which have taken place with regret. They desire to maintain a relationship free from political influence over their Governor-General, a relationship in which their Governor-General can exercise real functions, not merely rubber-stamps as they are sometimes described, but functions to protect the people and protect the Constitution of Australia against the assault of those who may very easily have ceased to represent the majority.
There is only one further question which I should like to ask the noble Lord. It is whether he has any correspondence on this matter. In 1926 when the question of the substitution of locally-appointed for what is sometimes called in Australia imported Governors, was under discussion, there was a White Paper issued by the Government dealing with the correspondence. It was Command Paper No. 2683 of 1926 and it sets out the argument—and a very vigorous argument—by the Government of Victoria against the substitution of a local Governor for one from this country. I am informed that there is no correspondence extant on this subject. It may be that there is correspondence which is of such a confidential nature that it cannot be published, but I would urge upon the Government, if they can see their way to publish the origin of this very important constitutional change, that they should do so, not to satisfy the curiosity of people in this country, not to satisfy those who are students of the constitutional and historical development of our Empire, but to satisfy the reasonable desire of the people of Australia to be informed how it has come about that this very large constitutional change has been effected.
LORD STONEHAVEN: My Lords, craving as I do the indulgence which I understand your Lordships are accustomed to accord to members who address this House for the first time, I am moved by very special circumstances because I have only recently given up the office which is under discussion. Having had experience of it both under the old régime and the new, I am very well aware of the delicacy of discussing at all a post which is in essence the representation of the Sovereign. But having had that experience, and realising the importance of one part certainly of the speech of my noble friend Lord Denman, I feel that I should be lacking in respect to your Lordships' House if I did not endeavour to contribute such experience as I can.
The essence of this new system is that it represents the growth of the feeling of nationality which is a prominent feature in all sections of the Empire. Australian nationality is a very real thing to an Australian—just as real as Scottish nationality is to a Scotsman—and it is absolutely compatible, indeed it is only compatible in its present form, with absolute loyalty to the Empire and particularly to the King. It is only in England, I think, that that question of nationality does not hold so prominent a place. I have seen many instances of Scotsmen, Welshmen and Irishmen occupying high positions in England and nobody appears in the least surprised. In Glasgow, I met two Englishmen holding high positions and they were pointed out as rather curiosities. The same is more or less true of other parts of the Empire. It is only in London apparently that we are so broad-minded that nationality is overlooked.
But there is a very important point in that connection; that is that now, although the Sovereign is represented in the Commonwealth, the British people as such and the British Government as such have no representative there at all. That, I think, is the essence of the whole question which your Lordships are considering to-day. My noble friend Viscount Novar and other noble Lords who have preceded me have drawn attention to the changes which have occurred in the position of Governor-General. I had experience for two and a-half years of the old system when the Governor-General was the representative of the Govern-

179
ment as well as of His Majesty, and latterly I had experience under the new régime when the Governor-General represented only the Sovereign. I had experience also of two Governments drawn from opposite political Parties in the Commonwealth. May I say at once that both Governments carried out in the letter and in the spirit the obligations imposed by the Declaration of the Conference of 1926, that the King's representative should occupy so far as public affairs are concerned mutatis mutandis the same position in the Dominions as His Majesty occupies here at home.
I say that in particular with regard to a reference made to Despatches. I think either my noble friend Lord Denman or the noble Earl, Lord Beauchamp, said that the Governor-General would never see Despatches except through the courtesy of Ministers. That is not so. The Governor-General receives copies of Despatches both in and out and copies of telegrams both in and out as a matter of right. The only change that has occurred in that respect is that instead of his receiving two sets of Despatches and telegrams and sending one copy to the Government, the Government receive two copies and send one copy to him. I myself was not so strongly opposed as my noble friend Viscount Novar to the change, because I could not help contemplating the possibility of a situation arising such as has in fact arisen, when there might be matters that would form the subject of discussion between His Majesty's Government at home and the Federal Government in which opinions might differ acutely, and I thought it was better that the King's representative should not act as the channel of communication in such circumstances.
But that does not alter the fact that all the duties so well described by my noble friend Viscount Novar still require to be done—such matters as glossing over differences of opinion, discussing matters in a friendly way with Ministers, keeping Ministers here at home thoroughly and intimately informed of changes of opinion and of the general point of view in the Dominions. All that work ought to be done, but I frankly say that the analogy of an Ambassador who in a foreign country represents the Sovereign and does perform all those duties as well, is not, in my humble judgment, applicable
180
to a Dominion because the status of the Sovereign in a Dominion is quite different from the status of the Sovereign in a foreign country, so that if it may seem an anomaly that any subject should be considered capable of pretending that he is the King—because that is what it amounts to—we are not a logical people, and our Constitution is not a logical one.
The fact remains that, having had experience of both types of Governor-Generalship, I never noticed the slightest difference in the attitude of the public at large, of His Majesty's subjects in Australia, after the change occurred. An expression was used on one occasion that I always think very accurately descriptive of the real position of the Governor-General. The Chairman at a dinner which I attended, in proposing my health—an experience which we all had such an enormous number of times that we ought to enjoy permanent good health for the rest of our lives—said: "You, Sir, are not the link that unites us to the old country, but it is your mission to keep the link bright."
The difficulty of the new situation is that the link must manifestly be attached to both ends, and my successor lacks the attachments in this country which would enable him to act as the visible being who is sent out by the King for the purpose of representing His Majesty, and who, equally, is a stranger in any connection in the Dominion, except as Governor-General and as representative of His Majesty. I do not think the point is very important, so far as the Governor-General is concerned, because no one could deny that my successor, Sir Isaac Isaacs, is certainly as distinguished a man as could possibly have been sent out from here. He has risen to the highest office. A man who is considered fit to be Chief Justice of the Commonwealth is surely equally fit, from his attainments and experience, to be the representative of His Majesty. There remains, however, the question of the link, and for the moment the link requires re-establishing. I hope that the noble Lord, the Secretary of State, will be in a position to give us a very satisfactory assurance on that point.
Let me refer for a moment or two to the magnitude of the material interests. I have alluded to the more or less sentimental interests, and no one who

181
has had experience of life in the Dominions, or indeed of public life in this country, will under-rate the inestimable value of the sentimental ties. After all, it is sentiment that is responsible for nine-tenths of the great deeds that have been performed, and the sentiment that attaches Australia to this country is so strong that I believe it will stand us in good stead in future, in peace time, just as it did in wartime. I think the point of view that we should take is that we should give the opportunity for the expression of that sentiment to someone who goes out with the mission of representing the people from whom the Australians are mainly sprung.
I hope it will not weary your Lordships if I invite you to consider the position of Australia and its population. It is often stated that Australians boast, and boast quite rightly, that they are, to the extent of 90 per cent., British in origin. The latest figures are those from the census of 1921. The population of the Commonwealth was then just under 5,500,000, and of that number over 4,500,000 were born in Australia; 459,000—almost half a million—were born in England; Scotland was responsible for 108,000; Ireland for 105,000; New Zealand came next with 38,000; and then Germany with 22,000. Those with other birthplaces represented a very small number. I think that gives you a picture of a country which is not only intensely British by origin, but intensely English. The English are not a demonstrative people and—I speak with respect of Scotsmen: I have not found them demonstrative either. I think my noble friend Lord Stanley of Alderley was quite right in suggesting that there is probably more feeling in the Commonwealth than has been given expression to in regard to the change, but I would venture to suggest that this is a matter which we would do much better to leave alone, that we cannot help by discussing it and we might say things that would be resented in Australia from the point of view of Australian nationality.
I say this for a very simple reason. Noble Lords who preceded me referred to the various sources of the Commonwealth Constitution. Since the Commonwealth was created, there has come into existence a new body, the Imperial Conference, whose authority has never been
182
clearly defined. There again I think we have to fall hack upon the, perhaps, illogical but common-sense way in which we do things, for I take it that the authority of the Imperial Conference has to be referred back to the Parliaments that send the various Ministers who come to the decisions taken at the Conference. I suppose that, if the Parliament that sent a Minister to the imperial Conference did not endorse the decision taken in the name of that Parliament at the Conference, then the decision would be turned down. In no other way would it be possible to prevent effect being given to a decision of the Conference such as has made possible this far-reaching change in the appointment of the Governor-General.
But it is for the Government of this country, as it seems to me, to decide to take the indispensable step of appointing the best man they can find to perform the duties, which are not being performed now, of representing the interests of the average man in the street, whose interests are, I suppose, to be looked after by His Majesty's Government—the interests of English, Scottish, Irish and Welsh in Australia. There are in Australia, at the moment, only two representatives of the British Government. They are both very able officials, but they have not the status which would enable them efficiently to discharge these important functions. This is most important, perhaps now more than at any time, and it will be increasingly important, for Australia is passing through very great difficulties, out of which I firmly believe that we shall help her before very long. But there are a great many things that Australia must do herself before she can be helped. When Australia realises the need for taking the action that has already been indicated to her, and when she takes that action, I hope that this country will be the first to lend her a helping hand and that, by so doing, we shall contribute to overcoming the period of difficulty through which she is passing.
Let me give you one example of a practical kind of intervention which the High Commissioner is in a position to exercise in this country, but which nobody is in a position to exercise in Australia. The noble Lord's successor at the Dominions Office made a state-

183
ment, in the course of a debate on a Vote of Censure in another place, with regard to the higher duties which, he said, were imposed on British goods entering Australia as compared with the duties on similar goods entering Germany. The High Commissioner at once took up the point, and pointed out that that statement was incomplete, because in spite of the higher duties that Australia charged Australia imported £144,000 of sewing machines as against Germany's £57,000. So that from our point of view Australia was still a more valuable customer than Germany.
I recall an analogous case in Australia where lack of someone occupying the position of High Commissioner was very much felt. Australia owes the world £1,100,000,000. £526,000,000 is owed in Australia, £520,000,000 in this country, and £47,000,000 in the United States. Of that Debt £290,000,000 is represented by War Debt, and of that War Debt the amount owed to Great Britain is £92,000,000. The amount of that Debt, compared with the whole Debt of Australia, is not very important, but a great deal of prejudice was stirred up in Australia, representing the attitude of the British Government as being inconsiderate towards Australia in regard to her War Debt. There was no one who had the right, or whose business it was, to reply effectively, as would have been done by a High Commissioner, in the Australian papers, although it is true that Australians themselves in a great part of the Press countered this allegation, pointing out that it was not the whole story. That is not enough, and as times get more difficult, and as Australia emerges from the difficulties in which she finds herself at the present time, there will be many opportunities which can only be taken by some one enjoying the confidence of the Government here, and who by his personality can earn the confidence of the Australians. I hope, therefore, that the noble Lord will be able to assure us that the Government have found the right man for this important work, and that he will be sent out to take over at the earliest moment his important duties.
THE SECRETARY OF STATE FOR THE COLONIES (LORD PASSFIELD): My Lords, no one can have listened to the instructive debate, or rather to the series
184
of expositions of experience to which we have listened, without feeling what an advantage it is that this House should have present here those who have acted as Governors and Governors-General in our great Dominions. Unfortunately these expositions of experience have taken up a good deal of time, and I cannot venture to detain your Lordships very long in answer. Yet I must in justice to what has been said do what I can in that matter. I shall save time and possibly obtain a better statement if I arrange my reply with reference not to particular speeches but with reference to the subjects referred to. The debate has ranged over a rather wide area, but I think noble Lords will not feel I am discourteous in confining my reply to the three main points, in which I think I can include some reference to some other of the details mentioned.
The most important subject that has been running through nearly all the speeches to which we have listened is the changed position of the Governor-General. That changed position of the Governor-General, is a matter, as Lord Stonehaven very properly mentioned, of some delicacy, and there are some things which, as he suggested, we cannot help by discussing, but we may injure. Therefore if I observe a certain restraint I hope your Lordships will not think it is reticence. It is because the subject is a little difficult, and it is difficult to speak plainly without being liable at a distance to be misunderstood. Of course the guiding principle which has led to the change is not the making of the present Government. It all arises from the declaration of the Imperial Conference of 1926, and I must recall to your Lordships that that was not a decision, as was incidentally said by Lord Novar, of a Coalition Government. It was actually a full-blooded Conservative Government which was in charge of affairs in 1926.
VISCOUNT NOVAR: I never attempted to evade the point that it was so. In fact I rather emphasised that I thought they had rather made a slip.
LORD PASSFIELD: I know the noble Viscount did not wish to evade the point, but he referred to a Coalition Government. It was a slip on his part. The guiding principles in the matters referred to in the Motion are to be found in two

185
passages of the Summary of Proceedings of the Imperial Conference, 1926. The first is as follows:—
"In our opinion it is an essential consequence of the equality of status existing among the members of the British Commonwealth of Nations that the Governor-General of a Dominion is the representative of the Crown, holding in all essential respects the same position in relation to the administration of public affairs in the Dominion as is held by His Majesty the King in Great Britain, and that he is not the representative or agent of His Majesty's Government in Great Britain or of any Department of that Government.
"It seemed to us to follow that, the practice whereby the Governor-General of a Dominion is the formal official channel of communication between His Majesty's Government in Great Britain and His Governments in the Dominions might be regarded as no longer wholly in accordance with the constitutional position of the Governor-General. It was thought that the recognised official channel of communication should be, in future, between Government and Government direct. The representatives of Great Britain readily recognised that the existing procedure might be open to criticism and accepted the proposed change in principle in relation to any of the Dominions which desired it. Details were left for settlement as soon as possible after the Conference had completed its work, but it was recognised by the Committee, as an essential feature of any change or development in the channels of communication, that a Governor-General should be supplied with copies of all documents of importance and in general should be kept as fully informed as is His Majesty the King in Great Britain of Cabinet business and public affairs."
May read another paragraph:—
"A special aspect of the question of consultation which we considered was that concerning the representation of Great Britain in the Dominions. By reason of his constitutional position, as explained in Section IV (b) of this Report, the Governor-General is no longer the representative of His Majesty's Government in Great Britain. There is no one therefore in the Dominion capitals in a position to represent with authority the views of His Majesty's Government in Great Britain.
"We summed up our conclusion in the following Resolution, which is submitted for the consideration of the Conference:—
'The Governments represented at the Imperial Conference are impressed with the desirability of developing a system of personal contact, both in London and in the Dominion capitals, to supplement the present system of intercommunication and the reciprocal supply of information on affairs requiring joint consideration. The manner in which any new system is to be worked out is a matter for consideration and settlement between His Majesty's Governments in Great
186
Britain and the Dominions, with due regard to the circumstances of each particular part of the Empire, it being understood that any new arrangements should be supplementary to, and not in replacement of, the system of direct communication from Government to Government and the special arrangements which have been in force since 1918 for communications between Prime Ministers.'"
Your Lordships will notice that there is the change in the position of the Governor-General, and then there is the further change in the channels of communication supplementary to the Governor-General.
With regard to the change in the position of the Governor-General—and this has a bearing on the delicate question of how the Governor-General is now appointed in the Dominions—the subject was a matter for consideration at the Imperial Conference of 1930, and the Imperial Conference of 1930 quoted the passage I have just read, and the conclusion which they drew from it was that the parties interested in the appointment of the Governor-General are His Majesty the King, whose representative he is, and the Dominion concerned. Now, it is not for me to put a gloss upon that. The subject is one to which it is not possible to give a plain and universal reply, because the Dominions all differ among themselves in the degree in which they have been evolved and the wishes of the Dominion Governments with regard to this matter. But, of course, any questions as to the propriety of the action which has been taken by Dominion Ministers in relation to the appointment of a Governor-General is peculiarly a matter for the Dominion Parliament concerned and not, I suggest, for this Parliament. Now, that is about as far as I think we can usefully go with that particular matter.
With regard to the channel of communication, there again the attitude of His Majesty's Government in this country—the previous Government as well as the present Government—has been to go slow, let constitutional practice work itself out, following the desires and the need of the several Dominion Governments from time to time. In 1928 the late Government did appoint a High Commissioner at Ottawa, no doubt—I do not remember—but no doubt, at the request, and certainly with

187
the warm concurrence, of the Dominion Government concerned at the time. With regard to South Africa, a different arrangement was made. In South Africa the Governor-General had an Imperial Secretary, and it was arranged that the Imperial Secretary should act as United Kingdom representative in the South African Union. And now that arrangement has been altered. The present Government, on the retirement of the Earl of Athlone, took the opportunity of separating the offices of Governor-General of the South African Union and High Commissioner, and a High Commissioner has been appointed. That High Commissioner, Sir Herbert Stanley, is entrusted with dual functions—namely, those previously performed by the High Commissioner in South Africa, in particular the administration of the three Native Territories in South Africa, which His Majesty's Government in the United Kingdom is still responsible for, and also the representation of the United Kingdom Government to the Union Government. That is only an instance of how we have had to take into account the particular circumstances of each Dominion with regard to this attempt to get another channel of communication.
Now, in Australia the circumstances have been different, and the system adopted—in fact during the lifetime of the late Government—was that the Dominion Government maintained a liaison officer in London, in close touch with the various Departments of His Majesty's Government in the United Kingdom. Now, I think we may say that, as far as it went, the value of that system was fully recognised, and I should like to bear testimony to the good work which was performed by Major Casey in initiating that service. Major Casey has just retired, and it is only due to him to say that the late Government, I believe, and certainly the present Government, have found that form of connection between the two Governments of the greatest value. The same facilities as were afforded to Major Casey will, of course, be extended to his successor, whom His Majesty's Government are very pleased to welcome. Now, that is another way of having the connection. It was not thought wise by the late Government, nor has it been thought wise by the present Government, to impose any one method of communication between the two Governments. We
188
feel the need for it more or less in particular Dominions. At the present time, the Dominion of New Zealand has not asked for any change, either with regard to the Governor-General or with regard to the representation of Governments—from Government to Government. And I think the wise course has been adopted of not hurrying New Zealand, not attempting to influence them. As long as they are contented with the older system there is no reason why His Majesty's Government should wish, out of any desire for a logical uniformity, to make any alteration there.
The particular Question raised by the noble Lord, Lord Denman, and again by the noble Lord, Lord Stanley of Alderley—the position in the Commonwealth of Australia—is that we have, as has been mentioned, a Trade Commissioner there. He, of course, does not fulfil these functions, but there has been a special representative of His Majesty's Government in the United Kingdom for migration purposes, appointed under arrangements made by the late Government. That has been of considerable use within the limited sphere of migration purposes, and my right hon. friend the Secretary of State for Dominion Affairs has already indicated, in reply to Questions in the House of Commons in December, that it was the intention of the present Government to review the question of the representation of the United Kingdom in the Commonwealth of Australia. This review is at present in progress, and I am not in a position to say what will be done. But the importance of the subject is fully recognised, but also the importance of not, shall I say? forcing the pace. We must proceed with the cordial concurrence which His Majesty's Government in Australia has always shown, and will continue to show, we are quite sure; but we cannot go too fast.
One other word about the channel of communication. The noble Lord, Lord Stonehaven, whom I may take the opportunity perhaps, unworthy as I am, to welcome to this House, referred to the happy expression of a link which has got to be kept bright. He pointed out that a link, to serve its purpose, must be attached at both ends. My Lords,

189
metaphors are a little dangerous. I thought at first it was a very brilliant metaphor, especially the keeping it bright; but, of course, a link which is attached at both ends might become a chain. I do not want to follow the metaphor at all. I appreciate the necessity for a link, but I am quite sure the noble Lord himself would be the first to say that a link which looked like a chain, even if it were not a chain, would not be the most suitable—
LORD STONEHAVEN: The noble Lord will forgive me. I quoted what an Australian said.
LORD PASSFIELD: I am afraid the exuberant gentleman at the dinner who proposed the toast did not sufficiently think where the analogy might lead him. But still, I think it is a very happy analogy, so far as keeping the link bright is concerned. But when we are attempting to find ways of attaching things to both ends of it, as we are, we have to be extremely careful that we are not misunderstood, and that we do not go further in the direction of these attachments than is required for communication and expression of the feelings of the respective Governments, and the danger always is that it may be considered as a chain.
Now two other words about the Governor-General. I am aware of the legal controversy which has taken place. I am only a very amateur lawyer but I always look upon counsel's opinion, even that of the most eminent counsel, with a little bit of suspicion, because it all depends on the case and on how it was put to them, and I have not seen how the case was put. In so far as it is a question of law, which, of course, means the interpretation of the Commonwealth Constitution, that appears to be essentially a matter for the consideration of the proper authorities in Australia, and at all events it is not one on which His Majesty's Government in this country had better express any opinion. In so far as it is a matter of constitutional practice and propriety, we must be guided, at any rate, if not governed, by the conclusions of the Imperial Conference. These things have been built up
190
not by correspondence but by oral communication at the two Imperial Conferences. If the noble Lords who raised this question would be good enough to refer to the Summary of Proceedings of the Imperial Conference, 1930, they would see that consideration had been given to some of the points that have been raised. It is proposed, in order to clear up some of the ragged ends, that there should be new legislation in this Parliament, which will appear in due course and which has been agreed to in advance by all the Dominions.
LORD STANLEY OF ALDERLEY: By all the Parliaments?
LORD PASSFIELD: I cannot remember exactly. In substance, yes; the Parliaments have expressed their approval. It has been done in general, if not in all. We shall not proceed, of course, without the express assent of the Dominion Parliaments. In that Summary Report of the Imperial Conference, 1930, there will be found as much as is possible of the considerations that have passed on some of these subjects. There has been no alteration made recently in the Royal Instructions to the State Governors. These State Governors still correspond direct with the Secretary of State and the Royal Instructions still provide for the reservation of Bills on certain subjects for the Royal Assent and also for the Veto. Those are points which, as regards the Dominions, were specially considered at the Imperial Conference, 1930, and there would have to be legislation on those points in order to bring the present constitutional position into harmony with the law or to bring the law into harmony with the present constitutional position.
Your Lordships will have seen that the Government are fully alive to the importance of providing some one in addition to the Governor-General, whose functions, I believe, will remain of the greatest importance still under the new system. We may exaggerate perhaps the amount of change but there will be functions he will not be able to fulfil under the new system and the Government are fully alive to the importance of providing for those as far as possible. I do not know whether a High Commissioner, such

191
as we have at Ottawa or as we have now at Cape Town, would be able to exercise quite all those very valuable functions, which the Governor-General used to exercise in tactfully dealing with his Ministers, in bringing things to their notice, removing misapprehensions, reminding them perhaps sometimes of things they had forgotten—all those things that pass between a Constitutional Monarch and his Ministers, into which we had better not enquire too closely, which are very private but extremely useful. I am not quite sure that a High Commissioner could quite fill the bill and do all the things that ought to be done but we recognise there must be some such person. Nor do I think a High Commissioner, unless of a rare personality, would really be able to represent the British people to the Australian people. That would be very difficult. I am not sure that he ought frequently to write letters to the newspapers. In some way or other we shall have to be represented.
The noble Lord, Lord Stanley of Alderley, asked why we should apply the Balfour Declaration to the Constitution of a Dominion like Australia which is a tight Federation, a very limited Federation. Undoubtedly the Imperial Conference of 1926 meant it to be applied to Australia because it made no distinction between one Dominion and another. Consequently, I do not think it is profitable to discuss whether it was wise to take that step. It was taken and it is irrevocable. We have had, as the late Government had, to work it out as well as we could. There has been no difference of opinion between us and it has been worked out very patiently and purely empirically from point to point. I ask if that is not the better way. At any rate, it is the only way open to English people. We could only do it in that way. No change has been made with regard to the formal law on the subject. There is still the provision about reservation and about the Veto which has, of course, become obsolete.
LORD STANLEY OF ALDERLEY: And the Governor-General's Instructions?
LORD PASSFIELD: Of course, there will have to be alterations. That is part
192
of the legislation which will have to be brought before your Lordships at a later period following upon the Conference of 1930. On that your Lordships will be satisfied that every care has been taken and will be taken. Now I really would ask your Lordships' permission not to go further on this matter. I have endeavoured to answer the chief points which have been raised. I can only say that the British Constitution is not a logical Constitution. There are lots of things which ought to be put right in form, which can only be put right bit by bit, and sometimes it is better not to attempt to be too logical. Certainly, that has been the practice since 1926 and we have done best by going on those lines. When your Lordships see the new legislation which is indicated in the Report of the Conference of 1930, your Lordships will see that it is proposed to put right several of those loose ends. There is no correspondence that can be produced. It has been done over a table at these two Imperial Conferences and of course a great deal was published in connection with the 1930 Imperial Conference. The Legal Committee, over which I, in another capacity, had the honour to preside and only to preside, went into all these points and produced a Report on these points—I contributed nothing to it—which is really a volume of very great value.
THE EARL OF STAIR: Before the noble Lord sits down, will be tell us if this is the only Parliament that will have no say in ratifying the decisions of the Imperial Conference?
LORD PASSFIELD: This Parliament will have a say. I cannot say it had any say with regard to the 1926 Declaration, which is, after all, the big thing. There was no debate. Undoubtedly the necessary legislation will be brought in, which can only be effected by this Parliament, for this Parliament is the only one in the whole world which has unlimited functions, and it cannot divest itself of them. Therefore it will come before your Lordships in the form of a Bill, which will give the opportunity of expressing an opinion.
LORD DENMAN: My Lords, I thank the noble Lord for the courteous reply

193
which he has made on the debate. I would like to urge upon him, if a representative of this country is appointed in the Commonwealth, that too much caution should not be exercised and there should not be too much delay, because, certainly in the opinion of Lord Stonehaven, which is much more valuable than my own, the matter is rather urgent.
194
In his opinion someone should be appointed without undue delay.
LORD PASSFIELD: I will certainly represent that to my right hon. friend the Secretary of State.
Motion for Papers, by leave, withdrawn.
House adjourned at ten minutes past seven o'clock.