Lords Sitting of 20 November 1931

Preamble
The House met at eleven of the clock, The LORD CHANCELLOR on the Woolsack.
The LORD CHANCELLOR acquainted the House that he had received an office copy of an order made by the County Court of Devonshire holden at Exeter, dated the Lit day of October, 1929, annulling tin; bankruptcy of George Francis Alexander Seymour, Marquess of Hertford.

BUSINESS OF THE HOUSE.
LORD PONSONBY OF SHUL-BREDE: My Lords, I should like to ask the noble and learned Viscount the Leader of the House if he can make any statement about the business for next week.
THE SECRETARY OF STATE FOR WAR (VISCOUNT HAILSHAM): My Lords, assuming that your Lordships accede to the Motion which is to be made by my noble friend Viscount Brentford, the Motion which at present stands in his name for Wednesday will take its place first on Tuesday next. On Wednesday there is a Motion by my noble friend Viscount Elibank. I am proposing to ask your Lordships to take the Second Reading of the Statute of Westminster on Thursday, provided that that Bill passes in another place by Tuesday evening. I know that that is not a very long interval, but your Lordships will appreciate that we want to have an interval between the Second Reading and the Committee stage. I hope that this House will not be sitting very much longer, and unless we take the Second Reading next Thursday it will involve either delaying the adjournment of the Session or else practically having no interval between the Second Reading and the Committee stage.

ABNORMAL IMPORTATIONS (CUSTOMS DUTIES) BILL.
Brought from the Commons, endorsed with a Certificate from the Speaker that it is a Money Bill within the meaning of the Parliament Act, 1911; and read 1a.
VISCOUNT HAILSHAM: My Lords, I beg to move the Motion which stands in my name, to enable the House to suspend Standing Order No. XXXIX in order to deal with all the stages of the Bill to which a First Reading has just been accorded.
Moved, That Standing Order No. XXXIX be suspended for this day's sitting for the purpose of passing the Bill through all its stages.—(Viscount Hailsham.)
On Question, Motion agreed to, and ordered accordingly.

OUTRAGES IN INDIA.
VISCOUNT BRENTFORD VISCOUNT BRENTFORD had given Notice to move that leave be given for his Motion with reference to outrages in India (which now stands for Wednesday next) to be advanced to Tuesday next. The noble Viscount said: My Lords, you will see on the Paper a Motion for next Wednesday in regard to India, and I understand that my noble friend Lord Elibank has a Motion in front of it. I have consulted various sections of opinion in the House and I gather it will be convenient if my Motion is taken on Tuesday afternoon. I have consulted my noble friend the Leader of the House and also the Leader of the Opposition, and, that being so, I hope your Lordships will agree to allow me to expedite the Motion. I beg to move.
Moved, That leave be given for Viscount Brentford's Motion (which now stands for Wednesday next) to be advanced to Tuesday next.—(Viscount Brentford.)
On Question, Motion agreed to, and ordered accordingly.

ABNORMAL IMPORTATIONS (CUS TOMS DUTIES) BILL.
VISCOUNT HAILSHAM: My Lords, in moving the Second Reading of the Abnormal Importations (Customs Duties) Bill, I desire at once to make it plain to your Lordships that this measure is not, and is not intended to be, the permanent policy of His Majesty's Government in dealing with any of the problems with which we are confronted. This Bill is intended to be a temporary measure, limited in its operation to a period of six

71
months, and is moved solely with the view of dealing with a pressing emergency. Two of the major problems which engage the attention of His Majesty's Government at the present moment are the problems of maintaining the purchasing power of the pound sterling and of restoring the balance of trade, which, unfortunately, is still moving against us to a very considerable extent.
Your Lordships will remember that at the recent Election the Government, going to the country as a National Government, committed itself to no concrete policy with regard to these problems. If the Conservative Party had gone as such to the country, I have no doubt that they would have incorporated in their appeal to the country an appeal for authority to impose tariffs. That has been part of the policy of my Party for a considerable time and I have no doubt that if, as a result of that appeal, the Conservative Party had been returned to power, a Bill to carry out that policy would have been one of the first measures which we should have presented to Parliament. But that is not the situation. The National Government embraces members of all Parties, and the pledge which we gave to the country was that in dealing with the problems which we had to solve we would reject the examination of no proposal, we would investigate everything with an open mind—naturally not without the prejudices which past experience has imposed upon all of us, but still as far as possible divesting ourselves of any pre-conceived ideas, desiring only to find that solution which was best for the national interests.
Your Lordships will appreciate that if we are going loyally to fulfil that pledge it is essential that a certain time, must elapse before we can present to Parliament the conclusions which we have reached. It is essential, therefore, for some time to come that we should be engaged in the examination and discussion of these problems. But it is equally essential to see that the time so occupied shall not be used by people outside to prejudice any decision which we may ultimately reach. It appears that quite a number of people reached the conclusion that if we examined this problem impartially we should be bound to arrive at the decision that a tariff was essential. At any rate, if they did not take that view,
72
at least they thought it was sufficiently probable that that would be the result of our deliberations to necessitate their taking every means in their power to forestall that event. And the means which, in fact, they have taken—quite legitimately from their point of view—are the adoption of attempts to pour into this country great quantities of manufactured goods, very much beyond the immediate requirements of the country, very much beyond the normal importations during this period of the year—apparently intended to ensure that, if a tariff is ultimately imposed, there will be already inside the tariff wall large quantities of goods sufficient to meet any demands for a great many months to come.
The result of that policy is twofold. First of all, it imposes an increased strain on the exchange value of the pound sterling. These imports of things which we do not need at present, which we shall not require to use for many months to come, have to be paid for, and have to be paid for by our hard taxed exports which are already strained to their utmost in paying for the supplies of food and raw materials necessary for our existence. The result, therefore, of that policy, if it were allowed to go on unchecked, would undoubtedly be to produce an increasing fall in the gold value of the pound sterling. And, secondly, the result of that policy, if allowed to continue, must be that if ultimately the Government should decide to impose a tariff duty on any of the goods of the classes to which I have referred, the decision of the Government would be rendered futile, its policy would be defeated because there would already be inside the country goods sufficient to meet all demands for a great many months to come, and therefore any hope of increasing employment among our own workpeople would be utterly destroyed.
Your Lordships no doubt may desire to be assured to what extent the evil which I have indicated has actually happened. I have been at some pains to look into the figures in order to give your Lordships some information on that point, and I find that, whereas in normal years, for instance, in 1929 or in 1930, the imports of manufactured goods in the month of September do not materially differ from the average of the previous eight months; whereas in both those

73
years there was a slight increase in October over September (of course there is an extra day) and correspondingly a decrease in November as compared with October, in this year we find that the figures are as follows. The average for the eight months ending August 31 for Class III goods, goods that are wholly or mainly manufactured, was £20,654,000; in September the imports were £2,000,000 above that average, being £22,618,000, and in October they were £5,000,000 more than in September, being £27,250,000. In November, for the first ten days of that month they were being imported at a rate which would make the November figure something like £35,000,000, £8,000,000 above October and £15,000,000 above the average.
I do not think that your Lordships can fail to realise that those are Very striking and significant figures. Not only do we find that this increase has taken place, but nobody has suggested that it has any other cause than this desire to anticipate the possible imposition of a duty. It is not, I think, accurate to call that process "dumping". Dumping is more accurately used to describe what happens when goods are brought into this country and sold at a price below the cost of production in the country of origin, or sometimes when goods are produced under unfair labour conditions and sold here at a price with which goods decently produced cannot compete. There is no suggestion that these goods are being sold at any unduly low price or that any dumping is taking place in that sense. What is really happening is what is more accurately described as forestalling; that is to say, anticipating the imposition of a duty, and that this is the reason is corroborated by the observation that the goods in which the greatest increases have occurred are precisely those goods which have either already been safeguarded and therefore likely to be the objects of a duty if one were imposed or goods which notoriously have been the subject of a considerable pressure for the imposition of duties.
I do not want to weary your Lordships with a great number of figures, but I find, for instance, that in wrapping paper, which your Lordships will remember was the subject of one of the Safeguarding Duties, the average of importation for
74
the eight months ending in August was some 273,000 cwts., in September that went up to 355,000 cwts., in October to 487,000 and in November it has been brought in during the first ten days at the rate of nearly 800,000 cwts. Again in the case of knives, which were the subject of a Safeguarding Duty, the figures are equally striking. In the first eight months of the year the monthly average was 37,439 dozens, in September that had gone up to 68,772 dozens and in October to 82,941 dozens. In November they are coming in at the rate of 90,000 dozens a month. The iron and steel group is, perhaps, one of the largest and most important groups and comprises a large number of different manufactures. In iron and steel we find that against an average monthly importation of £1,500,000 sterling value, in October it had gone up to £l,830,000 and in November it is at the rate of £3,000,000. Woollen tissues are another striking instance, and I could give your Lordships a number of others if it were necessary. I do not suggest that those are the only groups of articles in respect of which an increase has taken place, but I think the fact that the increases have taken place to such a very marked extent in those kinds of articles which are most likely to be the subject matter of a duty if a duty is to be imposed, or those thought to be the subject matter of a duty if a duty is to be imposed, is a corroboration of the deduction which we draw that it is forestalling which is taking place.
There is a very considerable range of articles which are showing signs, by an accelerated rate, of this process being in operation. The Customs were able to say that definitely in the case of something like 35 per cent. of the total imports in this class, more than one third, they could find clear evidence of forestalling importations in abnormal quantities, and there was another 10 per cent. which looked as if on investigation they would show the same. So that very nearly one-half of the total articles falling in this class seem to indicate that forestalling operations are taking place and, of course, they are taking place in an increasing degree. In those circumstances, in our view it became the clear duty of the Government to take effective steps to put a stop to that proceeding

75
and the proposals of the Bill are designed for that purpose.
If your Lordships would be good enough to take the Bill I might very shortly run through its main provisions in order to show the House the course which we suggest ought to be taken. The Bill begins by providing in Clause 1 (1) that if the Board of Trade are satisfied that articles of any class or description comprised in Class III—that is the wholly or partly or mainly manufactured articles—are being imported in abnormal quantities it shall be lawful for the Board of Trade, with the concurrence of the Treasury, to apply the Act to articles of that class or description. Then, in order to maintain the control of the House of Commons over taxation proposals, it is provided in subsection (2) that an Order made under the section shall be laid before the House of Commons and must be the subject of an affirmative Resolution within 28 days—that is 28 sitting days—or otherwise it will lapse.
Clause 2 (1) of the Act provides what is to happen when an Order is made. The effect of making an Order is to impose upon the importation of any articles named in the Order Customs Duties at such rates as are prescribed in the Order, not exceeding 100 per cent. as a maximum. That does not mean, of course, that 100 per cent. will always be the rate imposed. It is intended to act as a prohibitive duty. This legislation is not intended for revenue purposes. The object is to prevent goods coming here in these abnormal quantities, and the duty must be fixed at such rate as, in the judgment of the Board of Trade and the Treasury, is sufficient to achieve that purpose. Subsection (2) exempts Empire products from the duty. Empire products, as your Lordships know, are always defined in Finance Acts as being goods which are produced or grown or manufactured within the Empire, and the definition of such goods is comprised in regulations which lay down that at least 25 per cent. of the labour value of the goods has to be expended within the Empire country. We have thought it right, first of all because there is no evidence that such forestalling is taking place from any part of the Empire, and secondly, because we desire to encourage the view that in this type of legislation we do not want to penalise the Empire
76
and do not want to interfere with Empire trade. We have thought it right to leave the Empire out altogether. It would have been possible, no doubt, to arrange for some system of Preference as between Empire goods and other goods, but we have thought it simpler in this emergency to say quite boldly that Empire goods are not to fall within its provisions at all.
In Clause 3 provision is made for fixing the ad valorem value. Those are familiar provisions which have appeared for the last ten or twelve years and have always worked smoothly. In subsection (2) provision is made for enabling the Customs to obtain information in order to fix the proper value. Clause 4 enables disputes to be determined by a referee to be appointed by the Lord Chancellor instead of the more expensive and lengthier process of going to the Courts. Clause 5 exempts goods in transit in order to protect our entrepôt trade and Clause 7 limits the operation of the Act for a period of six months, with a proviso that that limitation shall not affect the validity of anything which has been done before the six months expires. Those are, stated shortly, the main provisions of the Bill. Naturally I shall be only too glad to answer any question which may occur to any of your Lordships upon any of the clauses.
Some criticism has been directed at the fact that there is no mention of agricultural produce in this Bill. I quite understand that that point should be raised. The answer which I have to give to your Lordships' House is twofold, in the first place there is no evidence of any forestalling taking place in the case of Class 1 goods. We find that there is no increase beyond the normal annual increase k. these months in regard to Class I goods between October and September, or, so far as we have been able to detect, between November and October. Secondly, agricultural products do not lend themselves to forestalling, partly because the cost of warehousing is generally large, partly also because many of the goods are perishable products which cannot be kept indefinitely stored awaiting consumption. If, in fact, this were going to be part of the permanent legislation which we are asking the House of Commons and this House to endorse then I confess I should feel it very difficult to

77
defend the exclusion of agriculture, but that is not the purpose of this Bill. This Bill is intended to prevent an existing evil continuing or growing worse during the six months of its operation, and while our permanent proposals are being framed and brought before Parliament for its approval. So far as we are able to judge, here is no real risk of forestalling taking place in regard to what are called goods in Class 1; therefore there was no purpose in including Class 1 goods within; he provisions of the Bill, and, obviously, their inclusion would have raised questions of principle with regard to which there may be considerable difference of opinion which will have to be resolved by careful examination of all the relevant facts.
I make no doubt at all that, before the six months have elapsed, at the end of which this Bill will cease to operate, and therefore will have had to be replaced by a more permanent structure—I make no doubt at all that long before that six months has elapsed the Government will be in a position to place before both Houses of Parliament their constructive proposals for agriculture as well as for other industries, because I altogether decline not to regard agriculture as one of our industries. I hope that the proposals which we then bring forward will be such as to commend themselves to the country as a. whole, and to satisfy those champions of the agricultural interest which we know exist, I am glad to say, in this House as well as in another place. Personally, I could not be a party to a scheme which proposed to exclude agriculture from the consideration to which the Government is pledged; but, having regard to the temporary character of this Bill, I hope your Lordships will realise it is not unreasonable to confine it to those cases for which a necessity can be made out, and in limiting it, as we do, to a very short period of time, I give your Lordships, as I am authorised by the Minister of Agriculture to do, the assurance that he is actively engaged on the framing of a constructive policy which he hopes to be in a position to lay before Parliament at the earliest possible moment after it has been considered and approved by the Government as a whole.
For those reasons I invite your Lordships to give to this Bill a Second Reading, and if your Lordships should be
78
pleased to do that I would ask then that we should proceed—presumably there will not be a Committee or Report stage, because it is a certified measure—to the Third Reading. I ask that for the reason that it is obviously essential that if legislation of this character is to be effective it should be passed into law at the earliest possible moment after it has been made public. For that reason another place compressed their own time-table and passed all the stages and the Resolutions, connected with the legislation within the period of three days. If your Lordships are pleased to accept the proposal which I put before you the Bill will, I hope, receive the Royal Assent this afternoon, and, although I have no knowledge of what the intentions of the President of the Board of Trade may be, I personally hope that we shall find the Bill in operation within a day or two of that time. I beg to move.
Moved, That the Bill be now read 2a.—(Viscount Hailsham.)
LORD MARLEY: My Lords, I shall attempt in opposing this Bill on behalf of the Party I represent to be as brief as the noble Viscount the Leader of the House. We have a number of objections to the Bill, and I propose to deal with those as shortly as possible. In the first place, we desire to protest against the procedure adopted. This unseemly haste, this compression of Parliamentary time, is surely unnecessary unless some real emergency is proved. This Government, which was conceived in a crisis and born in an emergency, has to continue to find a series of crises in order that it may live. This sham emergency is the temporary crisis selected to tide over the differences which are already appearing in the Government ranks between the Free Trade and the Tariff groups. Tariffs, as the noble Viscount pointed out, have been the policy of the Conservative Party for a considerable period. They have been the only policy of the Conservative Party. They have been the substitute for thought. One has only to say "tariff" and that is sufficient to provide for every evil from which the country suffers. The dumping emergency is an emergency which replaces the facts of the situation.
We on this side suffered for a considerable period from the policy from which the National Government has

79
already suffered during the first few days of its existence—the policy of procrastination, the policy of inquiry, the policy of committees to go into the question of whether tariffs are necessary or not. The Prime Minister, as we learnt to our cost, is a master of committees, a master of inquiries, a master of arrangements to enquire into inquiries, a master of committees, of inquiries into inquiries. It was our task, again and again, to put before the House, unfortunately, the delay which Commissions were able to impose. It has been said of the Prime Minister, with regard to his "doctor's mandate," that "An inquiry a day keeps the crisis away." That has already been put before the National Government, and this measure, to-day, is the revolt of those who feel that they have the country behind them on the question of tariffs, and their determination to have some measure of tariffs before any adequate inquiry has been carried through.
The fact is that Parliament is too slow for many of the new members. It was a well-known Admiral, Admiral Campbell, who said that he contested his Division in order "to give politics a hell of a kick in the pants." "Pants" as the Admiral knows, is not the usual naval term. The matelot prefers something more fundamental, but this is the "hell of a kick" which Parliament is now receiving, and I protest against Parliament allowing itself to be kicked in this way. Parliamentary procedure has been built up during centuries, and it ought not to be misused or abused. In particular I want to remind the House that while it is true that the Labour Party received a very heavy defeat at the last Election—they were subjected to a frontal attack, to an attack in the rear, to bombing and mining, and had poison gas to deal with, and were heavily defeated—we still have 7,000,000 supporters in the country, and the representation in the House of Commons of 49 should on that proportion have been no fewer than 180 members. In this House the disproportion is and always has been extremely marked, and I do suggest that that is a reason why special consideration should be given to the opinions of the Opposition in this matter, because of our weakness, which is a weakness which is not really representing the opinion of the country.
80
The second point which I want to protest against is legislation by Orders in Council. I have here a dozen Orders in Council, which represent what I might call the mushroom spawn of the emergency Government. Now we start again with legislation by Orders in Council. Of course this really amounts to a form of dictatorship—dictatorship cutting down Parliamentary control and putting in the hands of the President of the Board of Trade powers which Parliament ought to have kept for itself. The safeguards referred to by the Leader of the House, in Clause 1, are of course quite worthless, because we know that Parliament will not be sitting for the next two or three months and therefore any tariffs imposed will not be, subject to the 28 sitting days affirmative Resolution. We may well have a tariff actually in force, without any agreement by Parliament, for between three and four months. It was Bagehot, in his "English Constitution," who said that the most dangerous of all sinister influences is that of the Executive Government. He said further that a Second Chamber might be of value if of the opposite sort, but we have a Second Chamber here which is not of the opposite sort, and which has resumed the rôle, which this Chamber adopted for many years, of being a committee of the Tory Party. That is a regrettable feature in the constitution which this House ought to take very great care not to press too hardly, because the results might very well be unfortunate for the Constitution of the country.
I want to turn for a moment or two to the Bill itself. I want to say at once that the Labour Party do not agree with either forestalling or dumping. We are opposed to forestalling because it is an action which in substance is illegal, although not in actual fact, and we are opposed to dumping because dumping involves conditions of trade which may do harm to the conditions holding in this country. We are told by the noble discount that this Bill is intended to keep goods out, and not as a Revenue Bill. I cannot see why, if the Bill is to keep goods out, it should not be a Bill either prohibiting or restricting imports. Merely to apply a tariff has the effect either of keeping certain goods out or of letting other goods in at an enhanced price, and therefore it seems to me that

81
rather than to use the weapon of tariffs merely to keep goods out, or, if it is desired, to let some goods in, the method of restriction would have been better. It seems to me that the use of tariffs is a purely fatuous proposal if it is intended merely to keep goods out.
I will deal with the other reasons and the main reasons put forward for the Bill. First of all with regard to the question of the balance of trade. The tirade balance, I would remind the House, has been favourable to this country for very many years, up to and including 1930, and this year we are actually not yet in a position to say whether the balance of trade will be favourable or unfavourable. The President of the Board of Trade, speaking in the House of Commons on November 17, said, in reply to a question as to what was the position with regard to the balance of trade:
"I cannot furnish at the present time an estimate in a mutter so subject to modification in accordance with day to day developments."
The Macmillan Committee, in examining the position earlier this year, pointed out that the visible balance at the beginning of this year would actually be more favourable to this country than in previous years. Of course it is quite true that there are many aspects of the balance of trade which will be adverse to this country. I have no doubt that the income from international banking work will be down, and that dividends from investments abroad will be less than last year, and I am certain that if this Bill is carried through, and is used with all the power it places in the hands of the President of the Board of Trade, the income from shipping will be down this year. Nevertheless we are not in a position to say yet whether or not the balance of trade will be adverse or favourable, and I submit that it is entirely wrong to have emergency legislation of this character upon a hypothetical difficulty. The President of the Board of Trade, speaking in the House of Commons last Monday, said:
"The only permanent way of restoring our trade balance without imposing any sacrifice upon our people is by expanding exports rather than curtailing imports. The two things are not incompatible. Both can be achieved."
This Bill is precisely the opposite to that suggestion of the President of the Board
82
of Trade and it would be interesting to have an explanation why one has been adopted and not the other.
The second reason which has been given for this Bill, but not by the noble Viscount who leads the House, is that it is to deal with dumping. I do not propose to deal with that aspect except to remind your Lordships that all goods dumped into this country must be goods ordered by some British trader. Some British trader must have ordered those goods, because they are not put out of the ship on the sea shore and left to be distributed by the nation. They are ordered by some presumably good, patriotic British trader to meet the demands of our people. The abandonment of the gold standard, which was the first act of the emergency Government, makes dumping virtually impossible so that there is no excuse for that as a reason for this Bill. In any case, if there were dumping, this is not the way to deal with it. The way to deal with that is, of course, by boards to control imports, boards which can prohibit, which can licence, which can themselves purchase. In that case the more dumping, the more soiling below the cost of production that takes place, the better it would be for this country, because the import board would purchase at a low price and release en our markets at the price which would give a reasonable return to the British producer. I commend that to your Lordships for consideration as a suitable method to deal with this problem should it arise.
The third reason, which was particularly emphasised by the noble Viscount, is that goods are entering this country in abnormal quantities. He used the words, that they were pouring into this country. I wish to examine the figures for a few moments, because he and I have both examined the figures and have apparently come to rather opposite conclusions. I will tell him what the figures appear to indicate to me and perhaps he will tell me, if I am wrong, where I am wrong. First of all, with regard to general imports (not Class III imports), looking at the figures I find that October shows no abnormal increase either over September, 1931, or over October of last year. The facts are that in October of this year our total imports were valued in round figures at £80,600,000, an in-

83
crease of £12,300,000 over September of this year. But last year the increase of October over September was precisely the same. It was £12,200,000, so that there was no difference at all. There is, therefore, no abnormal increase in October over September this year and, when we come to the actual figures, we find that in October of this year the total imports are more than £10,000,000 less than last year. The total imports in October this year were £80,600,000, while the total imports in October last year were £90,800,000, a difference of over £10,000,000. The Financial News on the 12th of November, dealing with these figures, used these words:
"October is the time of the year when the seasonal purchasing of raw materials and foodstuffs normally begins. This year's increase between September and October is £12,400,000 against £12,200,000 last year. The trend of buying is as it should be and is therefore upwards.… The conclusion then is that.… the so-called dumping of goods, to which much prominence has been given, has amounted at the outside to goods worth roughly £200,000 for the month of October."
Another way to examine these total imports is to examine the shipping returns—
VISCOUNT ELIBANK: And the ships in the port of London.
LORD MARLEY: The noble Lord confines himself to the port of London, but I would remind him that there are other ports in this country, including Liverpool, Glasgow, Hull, Southampton and Avon-mouth, all of which must be taken into account in calculating our imports. The totals of ships entering our ports with cargo, from a tonnage point of view, show that the tonnage entering our ports in October of this, year is lower than for any of the last five months and lower than for any October for the last four years. The total tonnage was 5,200,000 tons for October of this year and was lower by hundreds of thousands of tons than the tonnage entering in any previous month during the last four or five months of this year. There is no evidence of an abnormal increase in the importation of goods in October of this year. When we examine the ten months ending October, I want to remind the House that here we see a very big decrease. The figures of shipping tonnage entering our ports for the first ten months of this year amount to 50,500,000 tons. Last year
84
they were 53,600,000 tons, or 3,000,000 tons more in the ten months. There is no evidence of abnormal imports there.
Now I come to Class III goods. Class III goods are the goods included in the present Bill. Any of your Lordships who are interested and who will get the Import and Export List, will find that 52 pages of this list are used to detail all the items included in Class III, of which there are something like 1,500 kinds of goods, articles wholly or mainly manufactured. Here the noble Viscount used the figures which he presented to your Lordships' House in a way which was perhaps convenient to the very bad case which he is attempting to support, but by omitting the year 1928 he omitted the year in which the increase was equivalent or similar to the increase of imports in this year. The increase for the last four years in October over September in Class III goods amounted in 1928 to £3,400,000, in 1929 to £1,800,000, in 1930 to £2,100,000, and in 1931 to £4,600,000. Those are not very striking increases, there is nothing abnormal about them, and, as I shall show in a moment or two, these figures can very easily be explained away. I am quite sure that every one of your Lordships will realise that they are misleading in the way in which they are put.
Coming to the ten months of this year applied to Class III goods we find this fact, that for Class III goods in the first ten months of this year the figures are £47,000,000 less than for the first ten months of last year. Where is the evidence of abnormal imports when we look at those figures? Those figures, I may say, are, of course, quite undeniable. They are all figures taken from the Trade and Navigation Returns issued by the Government Department concerned—£47,000,000 less this year than last year, something like £60,000,000 odd less than the year before. November has been instanced as a special example of the increase in imports showing the need for this measure, and the noble and learned Viscount told us that the imports for the first ten days of November indicated a monthly rate of £35,000,000, as compared with £27,000,000 in October and £22,000,000 in September. If my figures are in any way wrong I trust the noble and learned Viscount will correct me.

85
In giving those figures to the House of Commons the President of the Board of Trade used this sentence:
"I must point out that import figures for so short a period as ten days are liable to give a misleading impression as to the course of trade."
Those figures have given a misleading impression as to the course of trade and it is curious that the President of the Hoard of Trade who made that statement on Monday of this week, should proceed on subsequent days of the week to found this sham emergency upon figures which he himself says are misleading if used to judge the course of trade.
The one factor which the Government and the President of the Board of Trade emitted to take into account is the one factor which vitiates the whole of the figures for October and November—the factor of price. I would remind your Lordships' House that we have gone off the gold standard in the last two months and that therefore the price of goods imported is higher by reason of the fact that the pound is now only worth something in the neighbourhood of 15s. Therefore, to get the real facts as to the volume of imports—and the President of the Board of Trade was very careful to inform the House of Commons that he had no facts as to volume of imports—you must reduce the figures for October and November, which are given as £27,000,000 and £35,000,000, by from 20 to 25 per sent. to compensate for the reduced purchasing power of the pound, it is quite evident that the noble and learned Viscount the Leader of the House does not understand those figures. He is so overcome with amusement that he does not understand them. Let me put it to him in this way. When the pound—I trust noble Lords will follow these figures because they are important—stood at 125 francs in Paris an importer of French goods worth 125 francs received £l for them. To-day he only receives 15s. In other words to-day if he imports goods which were valued at £1 he only receives for them 100 francs. Therefore, if the volume of imports were the same the number of pounds paid for those imports would be greater. I trust the noble and learned Viscount follows those figures and is not too much amused at the difficulty of the facts. This number of pounds
86
should represent a similar volume of imports. That is why I suggest that this emergency upon which this Bill is founded is a sham emergency and bears no relation to the facts
If we take the details of Class III goods we find that they are classified under twenty headings from A to T. I am not going through those headings. I am only going to tell the House that only under four of those headings out of twenty does October of 1931 show any increase in values over October, 1930 and October, 1929. Under the remaining sixteen of those headings there is a decrease in value in 1931 as compared with 1930 and 1929. Therefore I venture to suggest that the emergency tariff proposals are founded on doubtful, insufficient, inadequate and misleading evidence. The evidence, I admit, is in many case3 conflicting, but it has been bolstered up by a misuse of figures, an omission of some facts and over-emphasis of other facts, which I suggest vitiates the whole of the basis upon which this Bill is based.
Finally, I want to deal with the results which will come if this Bill—and I may say when this Bill—becomes law. I believe that it is already having, and that it will have, many disastrous effects on our international relations. The International Economic Conference which took place in May, 1927, resolved—and it was supported by the delegates of Great Britain—that tariffs are one of the chief obstacles to trade and therefore represent a failure to realise the economic interdependence of nations. That fact is understood by the Prime Minister, and when he spoke at the Guildhall a very few days ago he used this sentence:
"We have been witnessing a complete breakdown of the doctrine of economic self-sufficiency."
This Bill reflects the attitude of mind of many of the Conservative candidates at the last Election, who took the line that we must treat foreigners as our enemies and not as our friends. I remember seeing a Conservative poster in one Division: "Vote for Jones and kick the foreigner out." That is not the way to encourage the export trade of this country upon which so many millions of our people depend. The result of the return of a Parliament of which nearly 500 members are pledged to tariffs is that the main and indeed the only policy to be adopted for

87
this country has already begun to destroy good relations and confidence with other countries.
The uncertainty of the tariffs to be imposed under this Bill, whether there are to be tariffs or not to be tariffs, whether they are to be 25 per cent. or 50 per cent. or 100 per cent., must make export trade extremely difficult, if not in many cases impossible. Many of the imports which are liable to taxation, partly-manufactured goods, are the raw materials of our industries. How can forward contracts be made when at a moment's notice the new dictator of our financial and fiscal policy, the President of the Board of Trade, is able to impose a new tariff or to double an existing tariff? The result is bound to be a blow to our export trade, and to the shipping trade. It endangers the most favoured-nation treaties which have been built up for many years with other countries, and I am afraid that retaliation is inevitable in our international relationships; in fact we have already seen signs of it in France and in Canada. It is the wrong way of dealing with an emergency, even if such an emergency exists. I have indicated that the right way is by using import boards, which may be a channel of communication, a channel to arrange for the interchange of imports between one nation and another, instead of using a weapon such as tariffs—openly used as a weapon to hit at foreign countries and foreign traders.
The effect of this Bill at home is bound to mean higher prices to consumers at a time when many of the consumers, especially among the workers, have been hit by economy cuts, by reductions of wages, and by reductions of benefit and other means. Higher prices of semi-manufactured goods are bound to mean increases in the cost of raw materials to many of our industries. Some industries, of course, will make higher profits by tariffs, some shareholders will no doubt receive higher dividends. But the result on our export trade is certain to be serious, and I think may very well prove to be disastrous. The Times, in their City Notes last Monday, used these words:
…. the smaller the amount of our imports the smaller must be the amounts that foreigners will have available to spend on British goods. Any unnecessary restriction of imports is to be deprecated, for it would
88
limit exports, and thereby reduce the total volume of international trade."
I say that this Bill, therefore, is to be deprecated, because, by limiting exports, it is bound to limit the purchasing power of other countries for British goods and therefore to be an attack upon our export trade.
Already the new Government, by its well-known determination to impose the heaviest possible tariffs, has caused a depression in trade, has caused depression on the Stock Exchange. The sham industrial revival about which we have heard so much is due—and anybody who is honest will admit it is due—to going off the gold standard, and not to any remarkable effort of the present Government. The sham improvement in unemployment figures, which we have been told week by week has taken place, is an improvement owing to the removal of tens of thousands of people from the exchanges by reason of their being no longer able to draw benefit. The figures given in the House of Commons yesterday show that dose on 80,000 people have been removed from the registers of unemployed. That is where the reduction of unemployment, which is so trumpeted abroad each week, has taken place. There is not actually a decrease in those who are wholly unemployed. The number of persons wholly unemployed in this country as a result of this type of policy is actually showing an increase week by week, and not a decrease.
I have tried to show that the proposals are not fair to Parliament, both as regards discussion and as a means of legislation. I have tried to show that these proposals are founded on evidence which is misleading and very doubtful. I have tried to show that this Bill, when carried into law, will hurt our international relationships and injure us at home; and I venture to suggest that a fair reading of the figures upon which the whole Bill is based must indicate that it is hasty legislation, which is undesirable as a means of dealing with a subject so vital to this country as our international trade.
VISCOUNT BRENTFORD: My Lords, I can partly understand now why we got our very large majority at this Election. I am told that the noble Lord who has just spoken did his Party the service of making a tour throughout the country;

89
and I imagine, from what I saw in the newspapers, that in that 400- or 500-mile tour he made more or less the same kind of speech he has just made—a good, old-fashioned, Free Trade, love-your-international-friends-more-than-yourself kind of speech. I am not surprised, if that was the doctrine put before the people, that re got our enormous majority. Then the noble Lord comes here and makes the same sort of speech, totally oblivious of the fact that there has been a General Election, that the vast majority of the people of the country have decided that forestalling and dumping have to be stopped, and that, for the benefit of our own country, we are entitled to put on tariffs, whatever effect they may have on people in other parts of the world.
The noble Lord ended his speech on the international note that we ought not to regard foreigners as enemies, but as friends. I think that is perfectly true. I do not think there is any suggestion of regarding foreigners in this matter as enemies, but what I think is still more true is that the first duty of a Government is to have regard to its own friends, the well-being of its own nationals, rather than of the nationals of other countries. Their Governments look after their interests. The noble Lord said that retaliation would very soon begin. That is not the case. It is true that France has already increased, without reference to ourselves, certain import duties, not because of this Bill, but because of what toe noble Lord referred to—the change in the value of English money; and, thinking that exports from here or other countries which have gone off the gold standard would be better made in France, they put up certain tariffs. We are not hostile towards France for that reason. They are entitled, exactly as I submit we are entitled, to do what they think is best for their own people and their own manufacturers. I am not going into figures. of unemployment or the statement made by the noble Lord. Let him go and make another tour. Let him go into the cotton district, into the Midland district, and he will find throughout all those manufacturing districts that work has already increased, that men who have been out of work, or working on half-time, for many months are now getting back into decent work. I claim to have some knowledge of
90
the working class opinion in this country, and I have fought a great many more Elections than the noble Lord.
LORD MARLEY: I have fought five.
VISCOUNT BRENTFORD: Five! That is nothing. I have fought nine, and had two unopposed returns in addition. And some noble friend reminds me that in all the noble Lord's five fights—but no, I will leave the noble Lord to tell the House what the result of those fights was. He admits that he is against forestalling and dumping, but he actually has had, if it had been in another place I should say the audacity, but I will say the courage to ask your Lordships, as a remedy for forestalling and dumping, to go in for the discredited policy of the Socialist Party of import boards, inspectors and that kind of thing. We have decided that we will not do it. The country has decided that it will not have it. It is no good the noble Lord coming here with his small representation—I do not want to make fun of the efforts that I am sure noble Lords opposite will make to uphold their views, but with his small representation in the country, where he has been beaten by two to one, and suggesting those things when, as I have said, the country has decided that it will not have import boards and that the Government is to take what steps it possibly can at the earliest moment to get rid of dumping and forestalling.
I do not propose to follow the noble Lord further in this matter, but I should like to say one word in defence of the Minister who brought him really into public life. The first part of the noble Lord's speech, if he will forgive me for saying so, was a very ungenerous reference to the Prime Minister. All that could be said against the Prime Minister was said on public platforms by his colleagues of higher eminence even than the noble Lord. And the country came to the conclusion, and rightly came to that conclusion, that it believed in the honour and the honesty of the Prime Minister. The people believed that he was prepared to take the very gravest risks that any politician could have taken—he risked his whole future and position—and came to the conclusion that they believed in his desires and intentions. We, at any rate, on this side of the House, and I think I may speak for a very large number of noble Lords, are proud to be led by a man who gave

91
up the great position he held, who put the whole thing to the test and received an enormous vote of confidence from the people of this country.
LORD MARLEY: If I may interpose for a moment, I made no reflection either on the sincerity or the honour of the Prime Minister. I merely said that he possessed in an enhanced degree the Cross-Bench mind. Therefore, he was always trying to enquire still further into the aspect of a case and his support of continual Commissions, inquiries and committees was what I was referring to.
VISCOUNT BRENTFORD: My Lords, I do not wish to misunderstand or misinterpret the noble Lord, but he will see to-morrow the report of his speech, though the actual print cannot report the vailed sneer in the words and manner of the noble Lord, and I think he will find and that the country will realise that he was not fair to the Prime Minister under whom he has served.
There is one point that I want to stress for a few moments. I want to renew the appeal made in another place and by noble Lords in this House in regard to agriculture. My noble friend in his speech told us that a certain time must elapse, of course, before we can have the Government views on agriculture. But may I submit, in the first place, that time is the very thing that agriculture cannot afford to give at the present moment. We are now in November. We have almost got beyond sowing time. We have got to the period when, as everybody knows, for speeches have been made in this House and another place, notably by Lord Hastings the other day, and it is common knowledge here and at all events throughout the country, that agriculture is at such a low ebb that it is at least entitled to demand not a cut-and-dried Bill from my noble friend—that I admit might be difficult—but some statement of a more definite character than that made either by my noble friend or by the Prime Minister yesterday, that they really do intend to bring forward measures for the benefit of agriculture itself. My noble friend did not seem to realise that dumping had touched agriculture. On the other hand the Election proclamation of his Leader, Mr. Baldwin, stated that the Conservative Party at all events would stop the dumping which was so
92
ruinous to agriculture. It is dumping exactly of the same kind as that which is doing harm to the manufactures and workmen of this country that I know the Government could stop in regard to agriculture, the fanners and the agricultural labourers. A vast number of the very finest men in this country, agricultural labourers, have been put off during the last few months because of dumping and the uncertainty of the Government policy. It is on behalf of those men that I desire to plead with the Government to give us a really more substantial hope and a more substantial policy than they have as yet given us.
My noble friend told us that the time which must be occupied in coming to their conclusions must not be used by people outside to prejudice those conclusions. But it is being so used to-day. It is being used for the dumping of agricultural produce which is so far prejudicing any conclusions the Government may come to that it is ruining farmer after farmer in the country and putting off thousands of agricultural labourers. Their position must be prejudiced because the longer the Government's consideration the worse it will be for those farmers and agricultural labourers who are trying to keep their heads above water. Your Lordships will forgive me for quoting a few figures because I want to show that difficult as the position is in regard to manufactured goods under Class III, dangerous as the position is to our manufacturers and workpeople, it is even more so in regard to agriculture under Class I. The noble Lord opposite dealt a good deal with figures in pounds sterling and, if I may say so, he made play with the effects of the slightly increased value owing to the abandonment of the gold standard and so forth. I will not deal with pounds sterling. I will deal with cwts. What really affects the farmer is the bulk of goods that come in in competition with him.
Let me take the very first case of all, the dumping of wheat. It is idle to say that there is no dumping in agriculture. These figures, as the noble Lord knows, are given for the ten months up to October; we cannot have them for November yet. I am quoting from the same document as he referred to in his speech. For the first ten months of 1930 there were 6,500,000 cwts. (I need not

93
give the full figures) of wheat from Russia. Certainly my noble friend would agree that in every sense of the word wheat from Russia is dumped wheat, grown under conditions that it would be impassible for our men to put up with in this country. This year that had risen from 6,500,000 cwts. to 23,750,000 cwts. I do not care about the pound sterling: here is additional dumping of 17,000,000 cwts. of wheat from Russia in competition particularly with our own farmers and equally in competition, of course, with those parts of our Empire, Canada and elsewhere, where wheat is produced. The import of barley has also increased by 2,000,000 cwts. in the ten months.
I would call the noble Lord's attention to the remarkable fact that the total import of grain of all kinds for the ten months in question rose from 142,000,000 cwts. in 1930 to 176,000,000 cwts. this year—a very large increase. The noble Lord led us to suppose from the figures he gave that there were no actual increases in imports during the current year.
LORD MARULEY: I was not dealing with those figures at all.
VISCOUNT BRENTFORD: I thought the noble Lord gave the total. He is right in this respect and this is what I want to put to him because of the reference he made to the value of the pound. It is perfectly true that the importation of 176,000,000 cwts. cost £44,000,000 this year; last year 142,000,000 cwts. Costing £59,000,000. I quite agree there is a difference in the value of the pound sterling. What I want the noble Lord opposite to realise is that it is the totality of the imports which really matters. The question of the balance of trade is a different question, and I am not dealing with it at the moment. To the grower and the manufacturer it is the totality that matters and not the value.
There is still more. My noble friend quoted some figures in regard to the last few months. Let us take the two months of September and October last year and the same two months of this year. The noble Lord quoted total figures in regard to those months. Actually in the two months of last year the total import of wheat was 21,000,000 cwts. This year, in the same two months, up to the end of
94
October, the total import was 30,750,000 cwts. That shows clearly that dumping is going on. My noble friend does not like the word "dumping." Well, let it be "importation." It affects the farmer just the same; it prevents him knowing whether he has to face an importation of 30,000,000 cwts. in the two months of next year or 20,000,000 cwts. It is the uncertainty which causes him not to know whether he will be able to sow wheat or not during this autumn or in the spring. Wheat is not the be-all and end-all of farming in this country. Let us take, if I may, bacon. You will find that the import of bacon has increased enormously in volume. I am quoting these figures to dispose of the noble Lord's statement that there was no real increase of imports. From Denmark last year the importation was 4,750,000 cwt. This year in the ten months it is 6,000,000 cwt. That is an enormous increase. The same applies to the Netherlands and even more in proportion to other countries. I am leaving out our own Dominions.
LORD MARLEY: What about the United States?
VISCOUNT BRENTFORD: The United States has gone down.
LORD MARLEY: 400,000.
VISCOUNT BRENTFORD: It went down last year from 429,000 to 176,000.
LORD MARLEY: And the Irish Free State?
VISCOUNT BRENTFORD: The totality of all imports of bacon has gone up from 7,400,000 cwts. to 9,216,000 cwts. in the ten months of this year. The main rise in those imports is from the countries I have mentioned—friendly countries, it is true. Perhaps the noble Lord may have a kindness in his heart for Denmark. So have I, but I have a greater affection for those who breed and rear pork and bacon in this country, because they are our own people, and because we are bound to look after them and, I do not hesitate to use the word, protect their interests in this matter. I could give the same quotations about butter, but I do not want to weary your Lordships. There the same thing, has occurred. From Russia the import of butter has more than doubled during, the ten months of this year as compared

95
with the ten months of last year. From Denmark it has increased by 100,000 cwt.; and so one could go on.
If your Lordships will allow me for one moment I would like to say a word about the importation of potatoes, because potatoes are a very important item in the farming of this country. We find a most extraordinary rise in the import of potatoes from Germany. Two years ago Germany exported less than 4,000 cwts. of potatoes to this country. Last year she exported 72,000 cwt. This year she sent us 2,700,000 cwt. of potatoes, and a very large rise also took place from other countries. The totality is a rise from 5,000,000 cwt. to over 12,000,000 cwt. of potatoes into this country in the first ten months of this year as compared with the ten months of last year. It is after the General Election, and it is incumbent upon His Majesty's Government to take these matters into consideration. I am quite aware that they are going to take them into consideration. In fact I always feel, while I am speaking here in the presence of my noble and learned friend who leads the House, that I am speaking to one who holds probably the same views as I do myself in this matter.
There are also some remarkable rises in regard to sugar beet, which represents one of the attempts that our farmers have made to tide over bad days. I am sure my noble friend Lord Cranworth knows the effect in the Eastern Counties of this enormous rise in the importation of sugar beet. I do not care what you call it, whether you call it dumping or whether you call it forestalling, or whatever it may be, the facts and the figures which I have given to your Lordships' House cannot be denied. They are all bulk figures, not sterling figures. There is every possibility, I think of the English agriculturist growing a very large proportion of those imports in our own country. I have been the victim of farming myself, at one time, and lost a good deal of money on it; therefore I have had some experience. I have recently made a tour through the Eastern Counties. I have consulted landlords, agents, farmers, and others, and one and all tell me that it is impossible for the farming industry to go on very much longer under present conditions. That, I think, must be admitted.
96
Therefore I appeal to my noble friend who leads the House that he will ask the Government if it is possible—I think it may be possible before the House rises—to make some statement which will relieve the minds of the farming and the agricultural community in this country and give them fresh courage to go forward. I do not ask for a Bill, I do not ask for a definite statement that there shall be a tax here and a tax there, but I do ask that the Government will make a far more definite statement than they have yet done, that they will say to agriculturists: "You may safely go forward, you may spend more capital, you may sow more seed, you may take on more labour, and we at least will guarantee you that the position which you are in this year shall be very much improved by the time next year comes round."
LORD ARNOLD: My Lords, the noble Viscount who has just spoken is always entertaining to listen to and the more unsound his arguments are the more vehemently he advances them. I have rarely listened to a speech, if I may say so with respect, further removed from the facts and more inconsequential. Take the question of Russia. As we know Russia to the noble Viscount is a "King Charles' head." If the noble Viscount had made the world Russia would not exist. If he were the world's arbiter it would be blotted out of the map. Happily the noble Viscount did not make the world, and Russia does exist. It is a very large country, and a very rich country, and it does an enormous trade. The noble Viscount seems to think that his day's work is not wasted if he takes some of the trade away from us and makes a present of it to Germany and the United States. That is what he did when he was in office with his preposterous Arcos raid, taking away from this country our badly-needed trade and increasing unemployment, and making a present of valuable trade to Germany and the United States. He has quoted figures in regard to wheat, showing an increase of imports of wheat from Russia. No doubt the imports of wheat from Russia have increased, but that is because Russia is rapidly developing, and is resuming the place which it had before the War.
The noble Viscount did not refer to Russia as a large exporting country of

97
Wheat—the noble Viscount did not tell your Lordships what the exports of wheat from Russia were before the War. There was no complaint made about Russia then. I have not looked into the figures lately. If I had known the noble Viscount was coming here to-day I should have done so because I would have known if he was to speak that he would be sure to speak about Russia. I do not know precisely, but I believe that I am not fir removed from the fact if I say in regard to the exports of wheat that the totality of the, figures he has given are very little larger, if they are at all larger, than they were in quantity in the years before the War.
LORD MARLEY: Not as much.
LORD ARNOLD: I am a moderate person. My case is so strong I can afford to be so. My noble friend tells me that they are not so large. That being so, the case which the noble Viscount has put proves to be absolutely vulnerable. Russia, as my noble friend tells me, is not, as a matter of fact, sending us now even, despite this tremendous harangue of the noble Viscount, as much wheat as before the War. Then he comes and says that this cheap food coming into the country is an injury to the workers. Nothing could be more untrue. Free Trade has given to Great Britain the cheapest and best bread in the world and this National Government is intending to take away that supreme blessing from the working classes. I will not say any more about that, for the time will come when there will be a very different state of things to discuss in this House from that which exists to-day.
I will now refer to this unprecedented Bill, which has been put forward with arguments almost as unsound as those of the noble Viscount, Lord Brentford. I do not make any complaint of the Bill being rushed through this House, because your Lordships have no power in finance. I make no complaint of that at all, although it is not strictly true to say that you have no power in finance. Far be it from me to add to your Lordships' powers, but I will make you a present of this, that perhaps it is not so widely known is it should be that as a matter of fact you can amend a Finance Bill, even one certified by the Speaker, and can send it down to another place for discussion, and
98
if your Amendment is accepted then it becomes the law. There is, I think, one month allowed. Therefore it is not true to say that your Lordships can do nothing with a Finance Bill, although I think myself that probably it would be a good thing if you could do nothing.
Lord Marley, in an able and singularly temperate speech, has to a considerable extent exposed this Bill, and I will endeavour in what I have to say to attack it in the main from somewhat different standpoints. I will not deal with the question of its unconstitutionally, though of course it is an unconstitutional measure, but having been eight years in this House I know that your Lordships do not worry about constitutional matters if they stand in the way of what you want. The noble Viscount opposite perhaps remembers what happened in connection with the Coal Mines Act. However, I will leave that and come to the Bill. The alleged case for the Bill—and I would like to have the attention of the noble Viscount, because I think there was certain misunderstanding in what he said—is, I understand, put forward broadly on two grounds. The first is that it will rectify the adverse balance of trade, and secondly that it will avoid the loss of revenue through forestalments. In that sense it is a revenue-getting Hill although the nobly Viscount said if was not a Bill for that purpose. That, however, was the whole case put forward by his colleague in another place. The object of this Bill, as I understand it, is to check imports now which, if they came in now, would not pay duty but which in all human probability will pay fluty a few months hence. In that sense it is a postponed revenue-getting Bill.
Then as regards the balance of trade. No case whatever can be made out for this Bill as being one which will help to rectify the balance of trade. It will do nothing whatever to help the balance of trade. There is no necessity for Parliament to deal with the balance of trade, because now that we are off the gold standard the balance of trade will rectify itself. Big purchases from abroad will at once cause a fall in the value of the pound. That will mean an increase in the price of imports and will automatically itself check excessive purchases, and also the fall in the value of the

99
pound, by reducing prices for exports, will increase exports. Therefore, you have a mechanism already at work for redressing the balance of trade, and in so far as this Bill reduces imports then it will reduce exports. That cannot be denied, and therefore this Bill can have no such effect upon the balance of trade as is claimed for it. No economist of note would support the contention that this Bill is necessary to deal with the balance of trade. I challenge the noble Viscount—I have done so before with singular lack of success—to name a single economist of note who supports the theory put forward by the President of the Board of Trade and by himself today. I have here extracts from the greatest of living English economists. Professor Edwin Cannan, speaking at Oxford last week in the Sidney Bull lecture, said:
"The immense volume of silly talk about the balance of trade which has emerged from the highest quarters, both of the political and the business world, has convinced me that we economists have hitherto completely failed in our duty to make this matter clear to the public. So completely have economists failed in the 200 years since they began to exist as a class, that if David Hume were still alive he could repeat today with perfect truth what he said in 1752: 'This apprehension of the wrong balance of trade discovers itself whenever one is out of humour with the Ministry, or in low spirits.'"
He goes on:
"The guise in which the bogey of 'a wrong' or 'adverse' balance of trade has appeared, has indeed changed somewhat since Hume's time, but the bogey remains as unsubstantial as ever. There is a large class of people who spend their time in arguing that their country is going to the dogs, who take every opportunity of raising a scare that their country is not really able to pay for all the imports it is taking—a course which they say can only end in some rather unexplained phenomenon called ' national bankruptcy.'"
Then he makes a most interesting speech on the aspects of the present position and towards the end refers to certain difficulties which face us. He then says:
"Even so we managed to carry on, and whether on or off the gold standard we certainly shall not benefit by reviving the 300-year-old and long-ago-exploded superstition that the balance of trade must be watched over and kept right by Parliament—a superstition which can only be ranked with the once equally widespread belief that witchcraft must be smelt out and witches burnt at the stake."
100
Those are words of the greatest living English economist and I think his opinion absolutely smashes to smithereens the kind of argument doled out from the Treasury Bench in this House and the other House in support of the Bill.
There is no case for the Bill on those grounds which have been advanced and that is quite apart from the fact that these imports are not simply consigned here and put on the beach. They are ordered and if the amount is rather more during one month it cannot go on indefinitely. Traders cannot go on buying indefinitely. They only buy to sell again and the amount they can buy is limited. Thus you have that check also upon the case put forward by the noble Viscount. As regards the balance of trade argument, it simply cannot be sustained.
Now let me come to the second argument, which requires very close scrutiny, that this Bill is necessary to avoid a loss of revenue because of forestalment. This argument contains some very significant implications and I would ask your Lordships to follow a little closely while I endeavour to put the case as I see it. If the case for this Bill means anything, surely it means that the tariffs, which are subsequently put on by the President of the Board of Trade against certain goods when this Bill is passed, are indications of the tariffs which are going to be put on when the Budget comes. That must be so, as otherwise there is no object in it; there can be no fore-stalments if there are to be no duties later on. If that is so, and if these tariffs are forerunners of some of the tariffs—because I am afraid there will be others, too—in next year's Budget, then what becomes of the Prime Minister's statement about the position of the Government at the election?
The noble Viscount was very cross about the very moderate observations made by the noble Lord, Lord Marley, about the Prime Minister. Apparently we must not mention him, if that is the sort of thing that is going to happen. I am not going to be intimidated. We have 3ur duty to do here and I am going to quote what the Prime Minister said at the last Election. The Prime Minister made it clear that the mandate was not to impose tariffs at once, and he gave a special interview at an hotel on Barnby

101
Moor in which he said that the mandate Which to investigate and then, if later on they were found necessary, they would be imposed. There has been no investigation here whatever. Almost before the Government got on the Treasury Bench it took this action. Only a week before the Prime Minister was asked about this, just before he was driven into this Bill and was trying to stave off the Bill. He still had his Election pledge in his mind and he then said that they would have to examine and consider separately each of the articles of importation and also examine collectively the effect of such duties as these on our general trade and commerce. All that has gone by the board. This Bill has been rushed through because the Government has been obliged to yield to the clamour of those behind it. The real reason for this Bill is not forestalment or revenue, but the necessity of placating the huge Protectionist majority.
If the noble Viscount claims that there is a majority which gives power to impose Protection, I do not dispute that. I shall not go into the way in which that majority was obtained, although we shall hear more about that later. I have no doubt that the Government has a mandate to impose a certain amount of Protection and that, even if it had not, it will go forward with it, having regard to the tremendous pressure exercised on the Ministry. I cannot understand how men like Sir Herbert Samuel, Mr. Runciman and Mr. Philip Snowden can agree to this Bill. They are—or are supposed to be—strong Free Traders. This Bill if a pure Protectionist Bill. There is no emergency made out to justify it. I am not able to understand how these gentlemen can reconcile it with their consciences to support this Bill; still less I cannot understand how they reconcile it with their intellects. Nobody could oppose it more strongly than they. Nobody could oppose it more vehemently than Mr. Snowden himself. He has changed and his venomous and vitriolic vocabulary is now placed at the disposal of those vested interests which up to now he has spent his lifetime in attacking. I leave these gentlemen to reconcile their action as best they can. The responsibility is a heavy one.
It cannot be too strongly emphasised that this is a Protectionist Bill; it is
102
not a Bill to deal with dumping. Mr. Runciman gave up the attempt to define dumping. There is no dumping and in any case you cannot administer anything on that definition. It is all very well trying to keep out goods which come here, as the noble Viscount said, below the cost of production in the country of origin. Again and again it has been attempted to proceed on those lines and it has been found impossible to ascertain the cost in the country of origin. Under the Act of 1921 there was machinery set up to deal with dumping and cases of alleged dumping could be brought before a Committee. In the ten years since then only two cases were brought before the Committee and neither of them was substantiated. That shows the difficulty of dealing with it and, as Mr. Runciman and the noble Viscount have both said, this Bill is not to deal with dumping but with abnormal imports. The noble Lord, Lord Marley, made an interesting speech on that point and showed that, if you take into account the changed values, having regard to the fact that this country has gone off the gold standard, it is a very different case to that which the noble Viscount put forward.
If it be the case that there are abnormal importations, how does the matter stand with regard to forestalment of revenue, which is the only remaining argument that can be put forward to support this Bill? This Bill applies to Class III, articles wholly or mainly manufactured. Those articles are divided into various categories and about one third of them are definitely raw materials for our manufacturers here. Presumably it is not proposed by the President of the Board of Trade to put any duties upon them because, if he is going to do that, the position would be extremely serious for many people in this country, and he has given a pledge—as I understand it—not to injure any of our people or any of our industries. That pledge cannot possibly be carried out because anything done under this Bill will injure somebody in this country. As regards putting a duty on that third of the articles in Class III which are definitely raw materials, that will be such a clear and definite injury that I do not think that even this Government would do it.
I was rather perturbed to hear the noble Viscount talking gaily about iron

103
and steel. A great proportion of the steel imports into this country—which are greatly exaggerated—are really raw materials for various manufactures. Out of the total steel of this country, home produced and imported, something like one half is exported in one form or another. What is going to happen to the export trade, which even Mr. Runciman has not altogether forgotten now that he is among his new friends, if you increase the cost of steel when about one half of the total is exported? In 1929 the total production of home produced steel was about 9,000,000 tons, a record year except for a war year. This trade, which Protectionists say is down and out, had a record production in 1929. In addition to that we imported 2,900,000 tons, so that, out of a total of 11,900,000 tons, 9,000,000 tons was home produced. About half of that total was exported. If you increase the cost of that, you are going to injure your export trade and you are going to increase the competition in neutral countries abroad, because the steel you do not take here will enter into competition with you there.
Then about 12½ per cent, of Class III goods are partly manufactured goods. Again those are in the nature of raw material and presumably will not have any duty on them. About 12½ per cent. already pay a heavy duty of from 25 to 33 per cent. Presumably, it is not intended when the Budget is brought in to increase duties above 33 per cent., which is an enormously high duty. I believe I am correct in saying that before the War in Germany, which was regarded as a high protectionist country, the average of the duties was about 6 per cent. Presumably these duties are not going to be increased. There can be no question of forestalling there because you are paying duty now. So you are left with somewhere about 40 per cent, of wholly manufactured articles of various kinds which might come under the operation of the Bill. I suppose this year that 40 per cent, will probably amount to about £100,000,000. Let it be supposed that that £100,000,000, owing to the so-called abnormal importations, will be increased by 50 per cent. It is an enormous assumption to make, but I can make it because my case is so strong. I can afford to be generous and make it 50 per cent. Taking the most extreme case it
104
means that that £100,000,000 would become £150,000,000 in the course of twelve months, so that in six months the increase would be £25,000,000.
I believe that is too high, but if you assume that and if you put on that £25,000,000 a 33⅓ per cent, duty it will amount, speaking broadly, to about £8,000,000 gross. That is, of course, on the assumption that all these goods continue to come in. You cannot get away from the inescapable dilemma that we cannot get revenue from goods and at the same time keep them out. The utmost conceivable loss is £8,000,000 a year, but from that we must deduct cost of collection, so that probably you would not lose more than one penny in the pound on Income Tax so far as that is concerned, but the effect on home trade would be so damaging that you would lose far more revenue on home trade than you could possibly make on the revenue which you are proposing to put on to prevent forestalling. The matter really will not bear analysis. It is not a business proposition. Even from the revenue point of view, if you examine the Bill you will find that it rests on an insubstantial and unsubstantiated foundation.
I hope the noble and learned Viscount, when he replies, will deal with some of these figures, because I am sorry to say that my experience of fiscal debates in your Lordships' House is that a case is put but no attempt is made to answer it. I have taken part in I do not know how many fiscal debates, but no attempt is made to deal with the arguments advanced from this side. I think that if we have a debate figures, if they are wrong, should be rebutted or if they are right should be admitted, and I hope the noble and learned Viscount in his reply—he is very competent to do so—will deal with the figures and show why they are wrong, if they are wrong. Otherwise we cannot get the true perspective of the matter debated. I can only say in conclusion that it is a matter of profound regret that the Government, almost before they have found their places on the Treasury Bench, should bring in a Bill for which no case can be made out and which, as my noble friend below me hinted, will, if it is put into operation, be found to do great harm to the delicate and complicated mechanism of trade, not only of export trade but home trade.
LORD CRANWORTH: My Lords, I rise for only one purpose and that is to express a measure of regret that in this Bill of which I so heartily approve there is no question of extending benefits to agriculture and to join in the appeal made by my noble friend Viscount Brentford, that at an early date some statement on the subject may be made. The noble and learned Viscount who leads us said that the reason for the exclusion of agriculture was that this Bill was not an anti-dumping Bill but was a forestalling Bill and I am quite certain he is correct, but unfortunately 100 per cent, of the fanning community and I think 95 per cent, of the population of these Islands think that it is an anti-dumping Bill and do not know that it is an anti-forestalling Bill. It may be said—it has been said—that the agricultural community are impatient and unreasonable in expecting so quickly, within a month, to have some such policy as they have been promised explained in detail.
I do not think the farming community are impatient or that they do expect any policy in detail, but when they see in this Bill that they are excluded from its benefits and when, in the gracious Speech from the Throne, they see no mention of agriculture they are filled with apprehension and dismay, for this reason, that for thirty years now it has been a case with agriculture of "jam yesterday and jam to-morrow but never jam to-day". The reason why they have had no jam today, is, I think, that they have never had friends enough to see that they got the jam that was their due. I am glad to say that that is not the case to-day. They have always had plenty of friends in your Lordships' House and to-day in another place there must be at least 350 members who hold their seats as the result of pledges which they gave that agriculture is to have fair play. Furthermore, there are in this country many millions of people—not only in country districts but in towns—who also are firmly determined that agriculture shall come into its own at last. At the last Election by an enormous majority a mandate was given to this Government. There are various interpretations put upon that mandate but I venture to think that it will not be denied that this is one interpretation: that this Government should use their
106
vast legislative powers, not for the purpose of retaining or gaining votes but for the purpose and the sole purpose of Te-storing prosperity to this country.
We have heard about the balance of trade. I have been given to understand that the adverse balance is somewhere in the region of £300,000,000 and I listened with admiration to the mistaken optimism of the noble Lord opposite, Lord Marley, when he said that he did not think it was proved that there was any adverse balance of trade at all. With regard to that adverse balance there is one quite obvious method whereby it may be helped and that is by producing in this country food which we at present import. I believe it to be perfectly possible that £100,000,000 worth of food at present imported can be produced at home. When I say that, it is not one of those things which we hope may be or which we think may be. We say it is so and for the reason that we have done it. Seventy years ago this Island fed entirely 26,000,000 people and those 26,000,000 people were almost all Grade Al people. To-day we feed less than eight million people whose category is considerably below Al and is below largely for the reason that they do not eat enough food produced in this country.
You may ask, and it has been asked: "Did you not hear the pleasant words of the President of the Board of Trade? Were; they not good enough for you? "I did read the pleasant words of the President of the Board of Trade and I heard the equally pleasant words of the noble and learned Viscount just now. They are good enough for me because I know both of them to be men of their word and I know also that the President of the Board of Trade was one of the few men who left the Ministry of Agriculture with a higher reputation than when he entered it. But, unfortunately, farmers and agricultural labourers do not know that, and they say: "We have had plenty of fine words before. What we want is action." And I would join in the appeal of my noble friend Lord Brentford that we may have as soon as possible some further action which will show the agricultural community that there is an intention and determination at long last that they shall have their fair share of whatever good things are coming.
VISCOUNT HAILSHAM: My Lords, I do not wish to detain you very long but there are certain points which I have to deal with. The noble Lord, Lord Marley, who stated the case of the Opposition, began by complaining of the unseemly haste with which we were bringing in this legislation and then went on to point out that he knew that our procrastination was so great that we should never do anything. I think I can leave those two arguments to counterbalance one another. Then he went on to tell us that this was a wicked Bill because it gave a dictatorship to the Executive. A dictatorship to the Executive controlled by Parliament is not at all a bad thing. I think it is not at all a bad plan in these days that the Executive, so long as Parliament retains its control, should be given by Parliament in appropriate cases the power to act swiftly and energetically.
Then he went on to discuss the financial aspects. I hope the noble Lord will forgive me if I say that as an exposition of the official attitude of his Party it seemed to me that his speech displayed that profound ignorance of the facts which he was proposing to discuss which does not characteristic him of course, but which is only too characteristic of the Party for which he was speaking. He told us that the right way to do this was by prohibition not by tariffs. If the noble Lord had begun to study the problem he would have ascertained what probably everybody on this side of the House knows, that we cannot proceed by prohibition without breaking a whole series of Treaties to one of which at least the Government of which he was a member was actually a party. Then he went on to say that there was no evidence that there was an adverse balance of trade and he quoted the President of the Board of Trade in another place as saying that he did not know yet what the figures were. It is quite true that we do not know on November 20 what the figures are going to be on December 31. We cannot tell your Lordships what exactly the adverse balance is going to be on that date, but nobody who has studied the problem in this country has any doubt, so far as I know, that there is a very large and" increasing adverse balance of trade. And the fluctuations of the pound sterling are unfortunately the most conclu-
108
sive and damning evidence of that fact, and the Bill is designed to check that strain on the exchange value of the pound. Can anybody doubt that the exchange value of the pound requires fortifying and requires protection?
The noble Lord, Lord Arnold, said that a Bill is quite unnecessary because as the flood of imports goes on the value of the pound will more and more be reduced until at last its purchasing value will be so low that that will automatically check the flood of imports. It is quite true. That is what would happen. The price of all goods imported would go up until they reached such a prohibitive level that we could not go on buying. But just observe how that which the noble Lord thought was the right way of dealing with the question would operate. Floods of manufactured goods which we do not want and shall not consume for months to come are to be poured into this country and paid for with our exports as far as they will go till the pound sterling is depreciated down to a worthless price.
LORD ARNOLD: Oh no.
VISCOUNT HAILSHAM: To a very much lower price. That was his argument.
LORD ARNOLD: Not a very much lower price. It would not make much difference to the price but it would be sufficient to do the trick.
VISCOUNT HAILSHAM: I do not know how much lower but so much lower that we could not afford to buy foreign goods. That is the essence of it. What are the goods which we should not be able to buy I They are not the manufactured goods. They are the wheat, the raw material, the food which our people have to get from abroad and at all costs; and the result of the noble Lord's proposal therefore is that the people of this country are to be faced with famine prices for necessaries, that our factories are to be stopped because they cannot afford to buy raw materials in order that the foreigner without check may pour goods into this country. A more ridiculous proposal for dealing with a serious economic problem I do not suppose this House has ever listened to. And the fact that it is seriously put forward by the noble Lord is perhaps the best evidence of how entirely impossible it is to

109
persuade the members of the Socialist Party to begin to face facts and to under-stand the problems with which they so rashly attempt to deal.
Then Lord Marley went on to say that this Bill does not help our exports. I am glad to hear that at last the Socialist Party are beginning to take a little interest in exports. They succeeded in halving them in two and a quarter years and what they would have been down to now if they had remained in office I do not know. It is true that this Bill does not help exports. Its purpose is to check imports and that purpose I think it will very effectively carry out. Then figures were quoted. We were told that the general imports, if you take all the classes together, do not show any abnormal increase. But we are not dealing ii this Bill with the general imports. What we are dealing with is one class of imports and the fact that the grand total does not show any alterations only shows that the increase in Class III is masked by the other classes, and why the Opposition should desire to show that it is less possible to buy raw materials because of the parlous state in which the Socialist Government would reduce the country by continuing to import goods that we are quite able to make ourselves is a thing that I am quite at a loss to understand.
The noble Lord said that the total shipping tonnage of this country did not show an alteration which bore out the figures. But he forgets two things. He forgets first of all that the total tonnage has nothing whatever to do with the problem we are discussing because the total tonnage deals with all the imports and we are dealing only with one particular Class. And he forgets also that if he looked at the tonnage of shipping coming into the ports where this forestalling is going on—mostly London and Harwich—he will find that there has been a very considerable increase during November. The figures were given in another place and they are something like 30 per cent., but I am speaking from memory. And it is entirely foreign shipping so I hat it does not help our own shipping trade.
LORD MARLEY: It was not the tonnage, it was the number of ships. That was the point.
VISCOUNT HAILSHAM: After all, what matters is not how many ships come in,
110
but how big they are, and the number of ships; and at the ports of London and Harwich you have had more ships in and they have been of bigger tonnage.
LORD MARLEY: That is definitely not the case; it is more ships, but less tonnage.
VISCOUNT HAILSHAM: I read only to-day of the "Bremen" that it was so large that there was the greatest difficulty in handling it.
LOUD MARLEY: One ship!
VISCOUNT HAILSHAM: "One ship" says the noble Lord, but how many more will there be following that ship if we do not put a stop to it? Then he went on to say that the price factor had been ignored. There are two answers to that. In the first place the price factor has not been ignored, because I gave not only values but quantities. I gave three or four instances, and I could give half a dozen or more in which there had been a dramatic change. In the case of leather there was an increase of over 10O per cent., and in the case of razors 200 per cent. I could give other figures, but I do not want to take up time. But there have been numerous instances in which there has been an increase in quantity, quite inexplicable except on the ground that these are forestalling importations. And the noble Lord forgets that the price factor argument is a double-edged one. Because your Lordships will appreciate that the reason why it is said—or one reason why it is said that the drop in the value of the pound acts as a protection to our people is that the result of the depreciated value of the pound is to increase the cost of the foreign goods and thereby render it impossible for the foreigner any more to bring them into this country. If, in spite of the price factor, you still see an increase in the quantity of importation then that reinforces very strongly the arguments I put forward when I introduced the Bill to your Lordships.
Then the noble Lord, Lord Arnold, said first of all that of the two purposes of the Bill, as he understood them, the purpose of improving the balance of trade was an impossible one, because you could not do it by Act of Parliament. That is one of the things which the country has told us to do and, although the noble Lord states that we cannot, in that pontifical manner

111
of which he is so great a master, we are going to do it and before Christmas he will see that we have begun to do it. We are not in the least discouraged by the prophesies of the noble Lord, because we know they are based on those Free Trade premises which experience has so often proved to be untrue.
He went on to say that this Bill must mean that we are going to impose this sort of tariff or a tariff at any rate on these goods. If I was speaking not as a member of the Government, but as a member of the Conservative Party, I should say: "I wish it were true"; but it is not. We are taking power to impose these duties not because we have made up our minds to put on a tariff, but because we have made up our minds that if hereafter we should decide to put on a tariff we are not going to have the tariff made ineffective by something that has happened in advance. It does not in the least commit us to put a tariff on these or any other goods to ask your Lordships' House, as we do to-day, to give us power to stop goods being poured into the country in advance and so render the ultimate tariff, if it comes, ineffective. The noble Lord also said that the Bill was a Revenue Bill because the object of the duties, when they come, will be to raise revenue. The object of the duties when they come will not be merely to raise revenue. I hope it will not be mainly to raise revenue. It will be to improve unemployment which the noble Lord and those with whom he is associated very signally failed to deal with when they had the power.
I do not wish to occupy your Lordships' time, but there is one other matter about which I must say a word or two. I have had from my noble friends Lord Brentford and Lord Cranworth a very strong appeal to represent to those with whom I am associated the plight of agriculture and the urgent necessity of doing something at least to reassure those who are engaged in that, the greatest of our industries. I hope my noble friends will believe me when I say that I need no such encouragement to make those representations. Your Lordships will understand, and I know that my noble friends will, that I am not in a position and have no authority to make a statement on behalf of the Government which will pledge the word of the Government. I can pledge myself to them that I will
112
present, as far as my ability permits me, those pleas which they have so powerfully put forward to the Minister of Agriculture in the hope that he may be able to do something to meet their requests. I hope that he will be able to do something, but I cannot undertake that he will do something because the matter has not been the subject of a Cabinet decision which would give me that authority.
I can only say that I am sure it is not only myself but the Government as a whole who realise the tragic position of many of our great branches of farming to-day. We do realise, I am sure, that the agricultural industry has a right to expect, as a result of the Election, that something will be done to help it in the straits in which it is. I, at any rate, feel confident that the Government, when the proposals of the Ministry of Agriculture are considered, will be in a position to do something effective, and I shall do my best to urge that that decision, so far as it can be taken for the time being, should be taken at the earliest possible moment. I cannot give a wider promise than that, but I hope very much that the fulfilment will be something better than the actual promise involved. At this hour I do not want to take up further time. I have attempted to answer the objections which have come from the Benches opposite. I have attempted to give the best assurances I can to those who think with me in this matter and I ask your Lordships, with some confidence, to give a Second Reading to the Bill which is only designed to deal with a temporary emergency and which is to deal with an emergency which calls for action and which can, I think, be dealt with effectively by the measures which we propose.
On Question, Bill read 2a.
Committee negatived. Then (Standing Order No. XXXIX having been suspended), Bill read 3a and passed.

MERCHANT SHIPPING (SAFETY AND LOAD LINE CONVENTIONS) BILL. [H.L.]
THE UNDER-SECRETARY OF STATE FOR WAR (EARL STANHOPE): My Lords, I beg leave to introduce a Bill to give effect to an International Convention for the safety of life at sea, signed in London on the 31st day of May, 1929, to give

113
effect to an International Load Line Convention, signed in London on the fifth day of July, 1930, and to amend the provisions of the Merchant Shipping Acts, 1894 to 1928, relating to passenger steamers, life-saving appliances, wireless telegraphy, load lines, timber cargoes, and other matters affected by the said Conventions; and to move that it be read a first time.
Moved, That the Hill be now read 1a.—(Earl Stanhope.)
On Question, Bill read 1a and to be printed.

GRAMPIAN ELECTRICITY ORDER, 1931.
Special Order to increase the capital and borrowing powers of the Grampian Electricity Supply Company:
Laid before the House, (pursuant to Act) and referred to the Special Orders Committee.

NAPTON AND DISTRICT ELECTRI CITY ORDER, 1931.
Special Order in respect of part of the rural district of Southam in the County of Warwick:
Laid before the House (pursuant to Act) and referred to the Special Orders Committee.

TORQUAY ELECTRICITY (EXTEN SION) ORDER, 1931.
Special Order in respect of parts of the rural districts of Kingsbridge and Totnes in the County of Devon:
Laid before the House (pursuant to Act) and referred to the Special Orders Committee.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION.
The following Bill received the Royal Assent:
Abnormal Importations (Customs Duties) Bill.
House adjourned during pleasure.
House resumed.
House adjourned at a quarter past two o'clock.