WORLD ECONOMIC CONFERENCE.

HL Deb 24 May 1933 vol 87 cc999-1032

VISCOUNT SNOWDEN rose to call attention to the forthcoming World Economic Conference, and to ask for a statement of the policy of His Majesty's Government on the questions to be discussed; and to move for Papers. The noble Viscount said: My Lords, I hope that I shall not detain your Lordships at any considerable length, for the purpose of the Motion which I now submit is not to provide an opportunity for the expression of my own views but mainly to try to extract from the Government a statement of their policy at the forthcoming Economic Conference. I confess to your Lordships that I put forward this request with no very great hope, in view of the failure of the many attempts which have recently been made elsewhere to get from the Government a statement of their policy upon this important matter. Whether the reason for that is that the Government have no policy, or whether it is due to the constitutional inability of the Prime Minister to make any clear and understandable statement upon any question, I do not know. But be that as it may, the fact remains that so far all the attempts which have been made to get a clear statement of the policy of the Government at the forthcoming Conference have met with little result.

I noticed yesterday that the Prime Minister in another place replied to a question asking if the Government would publish a statement of the proposals they intend to submit to this Conference. The Prime Minister made a reply which cannot be described by any milder words than absolutely staggering. He referred the questioner to a speech made by the President of the Board of Trade in March this year, which, he said, contained a full statement of the policy of the Government. I have referred to that speech and there is not in the speech from beginning to end a word about the Government's policy at the World Economic Conference. There is no reference indeed to the Conference except the expression of a wish that it may be held as soon as possible. The rest of the speech of the President of the Board of Trade was an outline of the steps that he is taking to promote mutual trade agreements between this country and certain other countries. Well, I would suggest that the Cabinet, should look into the case of the Prime Minister, not only in his own interests, but in the interests of the country; for it is a positive danger to the country that its affairs should be in the hands of a man who every time he speaks exposes his ignorance or incapacity.

I said that we have had no statement, no clear statement, of the policy of the Government for the forthcoming important Economic Conference. The Prime Minister has been to Washington, and if all that we have heard about the results of his conversations there indicate the extent of the accomplishment on his visit, then he might just as well have saved his time and the expense; for in the joint statement issued by the Prime Minister and the President of the United States there is nothing except a repetition of platitudes which we have heard scores of times in connection with the forthcoming Conference. An experts' committee which prepared a most elaborate and most excellent agenda for the forthcoming Conference laid special stress upon the importance of the countries coming together at once for consultation about the work of the Conference and especially, they said, with a view of preparing recommendations to the Conference which would enable the different countries to make mutual concessions. I want to know if anything has been done. The joint statement issued by the Prime Minister and the President of the United States referred to this matter and said that it was intended that the Ministers who had been at Washington should at once get to work to consider the agenda of the Conference. I want to know if that has been done. I want to know if the recommendation of the experts' committee has been acted upon. I want to know if the principal countries which will meet at the Conference have been for some time, and are at the present time, negotiating upon these matters and preparing a joint programme. I have had experience of at least four International Economic Conferences and the weakness of all of them has been the lack of adequate preparation. The lack of preparation, the lack of general agreement, before the Conference met resulted in an enormous waste of time and open differences in the Conferences which might otherwise have been avoided.

I have referred to the statement issued by the British Prime Minister and the President of the United States. I have said that it adds nothing to our information upon these matters, and it gives not a glimmering of an indication of the policy of the two countries at the forthcoming Conference. May I just mention to your Lordships some of the paragraphs in that statement? It begins by saying that the primary and fundamental cause of the world economic depression is in the fall of commodity prices. Well, that statement is sheer nonsense. The fall in commodity prices is not a cause, either primary or fundamental; it is a result of other causes, and until the other cause or causes has been or are removed it is useless to attempt to deal either with commodity prices or with such questions as exchange chaos. With your Lordships' permission I will refer in a moment to what the primary and fundamental cause of the economic depression is. But after having made that astounding statement, which indicates the ignorance of those who made it, of the nature of the problem they are supposed to be going to discuss at the Conference, they go on to say that "commercial policies have to be set to a newer orientation" Well, I know who drafted that sentence. The British Prime Minister drafted that. He is very fond of high-sounding words and I am quite sure that he was very well pleased with himself when he got that sonorous word "orientation" into this statement. Now what does "orientation mean? Orientation means looking towards the East, and the only explanation Ivan suggest of this phrase, that we need "a newer orientation" of commercial policy, is that it is an obscure reference to the necessity of dealing with Japanese competition.

Let me pass on. The important questions of excessive tariffs, quotas, exchange restrictions, are disposed of in about three lines: There should be constructive effort to moderate the network of restrictions of all sorts by which commerce is at present hampered, such as excessive tariffs, quotas, exchange restrictions, etc. Now, "etc." is a very useful expression. It is used when a person has exhausted his knowledge and information, and it conveys the impression; or at any rate it is intended to convey the impression, that those who use it know a great deal more if they would only tell it. Here we have in excessive tariffs, quotas and restrictions the fundamental and primary cause of the world depression, and it is dismissed in, less space in this statement than the reference to the silver question. We are told that: the central banks should by concerted action provide adequate expansion of credit, and every means should be used to get the credit thus created into circulation. My Lords, there is no lack of credit. Banks exist for the purpose of giving credit. They make their profit by giving credit, and it is not the lack of credit facilities which is hindering trade development but the lack of opportunities for the profitable investment of credit.

The next suggestion made is that: Enterprise must be stimulated by creating conditions favourable to business recovery. I do not think that there can be very much objection to that. I think we shall all agree that enterprise must be stimulated by creating conditions favourable to business recovery. What are those conditions? How are the Government going to stimulate industry by creating favourable conditions Not a word. The next point is very important and I must ask what the Government are going to do to implement the next quotation that I give: Governments can contribute to the development of appropriate programmes of capital expenditure. I see that in a broadcast talk given by a member of Mr. Roosevelt's "Brain Trust," the other day, he minimised the importance of the work which can be accomplished by the coming Conference. He said that the problem, especially as it applies to the United States, is mainly a national problem, and its solution must be found by capital expenditure on works of national development. I have never favoured the squandering and shovelling-out of public money for public works, but I have always favoured, and when in office always supported, sound schemes of national development which would be remunerative in their character; in other words, which would at the same time give the public a valuable asset and would be revenue producing, and incidentally provide much needed employment. Merely relief works, finding work for the sake of work, has never been part of my programme of national development.

Now the next illuminating suggestion is this: The ultimate re-establishment of equilibrium in international exchanges should also be contemplated. There is something that the Government can do The Government are good at contemplating. If they were equally good at acting, then their prestige in the country, to-day, would stand very much higher than it does. I am quite sure that the present Government can be trusted to carry out this recommendation of the President and the Prime Minister, and that they will go on contemplating, hoping that perhaps they may reach the ultimate stage some time, contemplating the chaos of the international exchanges. Then with reference to the international monetary standard we are told that we must have, perhaps, some time when circumstances permit, a new standard which will operate successfully. How illuminating!

Then there is a reference to silver. I am very sorry that the British Prime Minister has allowed himself to be drawn into the net of the silver interests in the United States. They have apparently captured the present Administration. The Democratic Party in the United States has always been largely influenced by the silver interests. They spent millions about forty years ago attempting to establish a bimetallic system at the time of Mr. Bryan's presidential campaign, which was fought backed by the silver interests, and I repeat that I am very sorry that the Prime Minister has been giving, apparently, on behalf of this country, some countenance to this selfish financial agitation.

I think that is practically all that there is in this joint statement issued by the Prime Minister and the President of the United States, and I think I might sum it up in the words of Bassanio, speaking of Gratiano, that when you try to find its usefulness and value you may search all the day ere you find them, and when you have found them they are not worth the search. I think it would have been interesting, and certainly useful, if this statement had elaborated more fully two or three points in particular, and especially the question of tariffs, and given us some indication of what the policy of the Government will be at the forthcoming Conference upon this fundamental matter. We have had indications, or we have had statements, rather, which seem to indicate what the policy of the Government will be, without any definite declaration. We have, for instance, their attitude towards the proposed economic truce, a proposal which was first made by the experts' committee five or six months ago, and which was suggested about a month ago by the President of the United States.

What reception did that proposal get from the British Government? As soon as the proposal was made, the Prime Minister made a public statement to the effect that it could only be accepted with certain reservations. Those reservations have been made, and they amount to a practical rejection of any tariff truce during the sitting of the Economic Conference. The Imports Committee, the May Committee, is to continue its work as actively as before. The Government have reserved the right to impose addi- tional duties recommended by that Committee on applications which were received before May 12. The Committee, I say, is not to discontinue its work, but all the time the Conference is sitting this Committee is to be actively at work considering applications for an increase in our tariff duties. The World Economic Conference will be denouncing tariffs, declaring how injurious they are to international trade, how important it is that they should be reduced, and at the same time the British Government will be actively engaged in making preparations for a further increase in tariffs.

We have had indications as to what the attitude of the Government is likely to be, and, so far as the Prime Minister is capable of making a definite statement, or one which is not capable of half a dozen different interpretations, we have his statement that the tariff truce "was not intended to prevent us from continuing our work, the work we have now begun and which we are developing." Now what is the work? The work is the establishment of a system of High Protection in this country. He talks about a low-tariff country, but we are not a low-tariff country. Every country which has tariffs has certain tariffs at a very low rate, but surely nobody is going to maintain that a duty of 33 per cent., which is common in our present tariff schedule, can be regarded as either a moderate duty or a low duty? Then again, the Prime Minister said that excessive barriers, or unnatural barriers, should be moderated, but he went on to say that only those tariffs should come under consideration for reduction which were more than a sufficient natural economic protection. Well, I submit that that is giving away the whole case for High Protection. There is not a tariff in existence in any country in the world to-day which is not regarded by that country as necessary for its national economic defence. How is the Conference going to determine what rate would constitute a national economic defence? Every country will settle that for itself; and so long as that principle is laid down as the governing policy in national tariffs, the coming Economic Conference is wasting its time in discussing the question of tariffs.

Now with regard to prices, I say that prices were not the primary and funda mental cause of the world depression, but I do not mean to imply that the catastrophic reduction in prices is not a grave aggravation of the primary cause. In this country it is very difficult indeed to deal with this problem of prices because of the wide divergence there is between prices and costs. We have not been able to reduce our costs at the same rate as the fall in prices. One reason for that is that wages have remained relatively high, and wages cannot be reduced. Therefore our employers and manufacturers will have to look elsewhere for a reduction of costs, and they will have to find it mainly in a reduction of the expenses of production. Of course, the standing charges of interest rates have been very heavy, but now there is a favourable opportunity for a reduction of those charges, and I see that many concerns are taking advantage of the opportunity, and are converting their debentures at a lower rate of interest. But for any substantial relief that might come from an increase in prices we shall have to wait until the channels of trade have been opened and trade can flow freely between the various countries of the world. That is the primary cause of world depression. Every country now for years has been doing everything that it possibly could to prevent trade between itself and other countries, with the result that stocks have accumulated. The Report of the Preparatory Committee of Experts tells us that there are about two years accumulation of stocks. And, when trade cannot be carried on, then inevitably prices must fall.

Now, I want to say a few words about another very vital, urgent, pressing matter, and that is the question of International Governmental Debts. There is not in the statement of the Prime Minister and the President a single word about this urgent matter. The Prime Minister has told us that they discussed Debts, but what the outcome of their discussion was, if there was any outcome, we are not told. This question of the American Debt has been woefully bungled and mismanaged, especially during the last year or so. Mr. Hoover's suggestion for a moratorium was a magnificent gesture, and it would have been of very great benefit if opportunity had been taken during the twelve months' operation of the moratorium to come to a permanent settlement of this difficult question. Nothing was done. The European debtors of America met at Lausanne about the middle of last year, and they came to certain conclusions, and I think I am saying what is a fact when I state that those conclusions were arrived at on the assumption that if the European Reparations question could be settled, then the Government of the United States would be prepared to make some concessions in regard to Debts. Whether the British Government had any good reason to believe that that was so I do not know, but at any rate they were quickly disillusioned, for the Government of the United States told them, when an appeal was made to them, that they did not recognise the Lausanne Agreement as calling upon the United States of America to make any concession in regard to Debts.

However, just after the Presidential Elections in America, and during the interval between the Elections and the old President's leaving office, Mr. Hoover made an offer, or proposal, to the British Government that they should enter into negotiations in regard to the Debt. He invited Mr. Roosevelt into consultation. Mr. Roosevelt naturally was anxious not to commit himself until he had authority, and as soon as he took office he approached the British Government. He asked them to send representatives to discuss this question, and, as we all know, the British Ambassador in Washington had conversations with Mr. Roosevelt, and later he came over to this country to report to the Government the results of those conversations. What they were we do not know. We have never been told. But what we do know is that up to the present moment there has been nothing definite done in the settlement of that question. The next instalment is due in three weeks time. What is going to happen? Are we going to pay, or are we going to default? It is very significant, my Lords, that there is not a word in that Roosevelt-MacDonald statement about Debts? Why? I think the explanation is this, that Mr. Roosevelt dare not at present make any declaration on this question. As we have been told so often by the United States Government, this is not a matter for the Executive: it is a matter for Congress. Congress is very jealous of its rights upon questions like this, and Mr. Roosevelt, if he made a declaration at the present time, would, I think, find that Congress would not accept it.

The experts' committee, although they were precluded by their terms of reference from dealing with this question of Debts, said that they could not refrain from pointing out the important connection there was between Governmental Debts and the world economic depression, and that until the Debt question was settled there was little hope of anything being done which would materially improve that position. I want to know what is the position to-day. The Prime Minister said they talked about the Debt question and that they left it over for this Conference. And the Prime Minister said: "We are going to talk about it at the Conference," in between, so to speak. It will take, he said, some time, well, not a longish time, just a little time—that is, I suppose, five or ten minutes or may be a quarter of an hour—but at any rate they are going to talk about Debts at the Conference. But there is nobody coming from America to this Conference who has any authority to deal with the Debts question. It will not be settled at the Conference, and I do not believe that the United States will make, or even propose or suggest, any definite concessions on Debts until they see the outcome of the Disarmament Conference at Geneva. If America gets something out of that Conference, then it is very likely that Mr. Roosevelt will have the courage to approach Congress on the Debts question, to point out what America has gained by the reduction of armaments, and to propose that that should be an offset to a reduction of the Debt. Seeing that we are within three weeks of the time when we have either to pay another instalment of the Debt or default, I think we should have a declaration from the Government of what their intentions are. My own views are not worth much, but I have always been strongly opposed—I look upon the idea with abhorrence—to repudiation or default. I think that the honour and credit of Great Britain is worth more than the sum that the heavily-burdened taxpayers may have to contribute if we continue to pay the American Debt.

Well, my Lords, I apologise for detaining you so long. I have spoken longer than I intended, but I hope we shall get from the Government this afternoon something which those who have made similar appeals within recent weeks have failed to secure. Unless the Government go into the World Economic Conference with a clear-cut, well-thought-out, practical plan we may at once abandon all hope of any practical and successful results from that Conference. I have mentioned that Mr. Moley, the Assistant Secretary to the United States Treasury, expressed himself as being very doubtful last week whether any good will come from it or not. I do not want to appear as a pessimist—I do not want to throw cold water even by suggestion upon any well-meant effort—but I know something of the problem that this Conference will be up against. There have been four International Conferences, I believe, since 1920. The Economic Conference at Geneva in 1927 had precisely the same agenda as the agenda which has been suggested by the experts' committee. It passed unanimously magnificent resolutions on the restriction of tariffs, the regulation of currency—everything which is on the agenda for this Conference—and it all came to nothing. The Governments went home, put these resolutions into the waste-paper basket, and continued to pursue a policy of strangling international trade by increased tariffs, quotas, and restrictions. I hope, however, that that will not be the fate of this Conference, and it may be that if all the Governments represented at the Conference are determined that something shall come from it, something which will relieve the world from the terrible depression from which it has been suffering for so long—if they are determined that that shall be done, then the fears of the pessimists will be disappointed and the sanguine hopes of the optimists may be realised. I beg to move for Papers.

THE MARQUESS OF LINLITHGOW

My Lords, I always admire the speeches of the noble Viscount on the Cross Benches. I one capacity or another he has spent most of his active life in either skimming or threatening to skim the cream off the milk of commercial profits. But this experience has not in his case caused him to forget that when all is said and done a healthy cow is the foundation of all things, that the productive capacity of the creature is limited, or that, if there are to be cows and milk in the future, it is prudent in the present to leave a drop or two for the calf. If I have any criticism of his views to offer, it is that these are somewhat too conservative, and do not in my judgment take sufficient cognisance of existing trends and emergencies. I shall venture to return to that in a moment or two. Nevertheless, I am bound to confess that I find myself in substantial agreement with many of the opinions with which his name has come to be associated.

Thus, with regard to tariffs and their effect, I have never found myself able to escape from the truth of the proposition that the import duty which keeps out goods yields no revenue, while the duty which is fruitful of revenue has failed to exclude the goods. As regards the rider that where goods enter over the duty the consumer pays the tax, I am able, within the limited field of my own commercial experience, to reject this as in many cases quite unsound, for, except where the exporter controls the market, it is his everyday experience that he has to cut profit in order to hold that market. In cases of that kind no rise of consumer's prices occurs and no advantage is enjoyed by the home producer. As for the consumer, I should myself shed far more of my heart's blood for him if I could forget that by and large he is none other than the home producer, and I should think that the experience of the last four years would have taught most people that cheapness at the expense of purchasing power is fatal alike to the individual and to the State.

I regret that the noble Viscount, Lord Snowden, escaped experience at the Treasury in an emergency such as that through which we have been passing during the last four years. I should very much like to have observed his response to that emergency. If I may put the point picturesquely, it is really no use saying to the unhappy householder whose water pipe has burst, and who is busy cramming a sock into the vent: "My good man, you fail to apprehend the true nature of the calamity which is over whelming you. Have regard to the science of hydraulics and wait until the world outside your domain is pleased to reduce the pressure." What is the good of offering, if I may put it so, highbrow stuff of that sort to a man whose kitchen table is floating round the room? I do not believe that any Government which in that emergency had acted in the fiscal field in any manlier very different from that in which the National Government have acted could have survived for a month.

How serious in the case of agriculture that emergency was your Lordships know only too well. The industry was within measurable distance of irretrievable disaster. I ask leave to deal for a moment or two with the case of agriculture as it appears to me to stand oh the eve of this most important Conference. I do so partly because it is a subject to which I have had occasion from time to time for a good many years now to apply my mind, but much more because it appears to me that the rehabilitation of the primary producer and the restoration of his purchasing power is the most important of all the things that must be done if national and world prosperity are to be revived, and the very first to which Governments should address themselves at this Conference. The percentage fall in the price of primary produce, as the noble Viscount pointed out from another angle, is substantially larger than that registered for manufactured produce. Primary producers in the aggregate constitute the most important market for manufactured goods. That is the picture.

By great misfortune, a period of falling prices has synchronised with a marked anti substantial rise in the potential out-turn of produce per acre cultivated. This rise is due to technical improvements in agriculture, and it obtains in practically every important agricultural country throughout the world. Moreover, it is within the knowledge of all of us that the machine is increasing the potential output of processed goods more rapidly than science and improved practice are raising the output of the fields. When it is remembered that this rise in output both of the field and of the factory comes at a time when the populations of many important countries are about to enter upon a decline, the full significance of these facts is apparent. I dare say your Lordships were surprised, as I certainly was, to notice that in the United States of America the national survey instituted by Mr. Hoover during his Presidency shows that in that country, as in our own, the population is destined to commence a decline within the lifetime of persons now adult. Again, the rapid extension and progressive cheapening of transportation have thrown producers in every part of the world into mutual competition, and that process, too, is destined, there can be no doubt, to grow.

These are circumstances the importance of which is self-evident. They mean nothing less than this that the crux now and henceforth is not where it has lain from the beginning of things—that is to say, in production. In that regard, man's battle with nature is largely won. The issue now is in terms of distribution, and it is to improved distribution that we must look for higher standards of living. The implications of this indisputable truth are profoundly significant. Thus, territorial expansion is unlikely, in the future, to lead to the enriching of the conqueror. Rather, as I shall show in a moment, will betterment flow from the international integration of commerce. That much is plainly implicit in a world of potential over-production. It will be our own fault if the British Empire is not the first group to appreciate the importance of these new conditions and to organise to meet them. Under stress of gross over-production price as a controlling and regulating factor has largely failed us. In face of the price collapse, farmers the world over, instead of reducing out-turn have sought to sustain their individual purchasing power by growing and selling not less produce but more, and the effect of this avalanche has been cumulative, and has spread throughout the whole range of produce and throughout the entire economic system of every country.

May I say with great respect to the noble Viscount that I myself feel quite certain that the full significance of these novel circumstances—because they are novel—has escaped his attention? I agree with him entirely in holding that if you are to tackle successfully the problems of world agriculture, you have got to think in terms of commodities, of world production, stocks, prices, consumption, purchasing power. A national or parochial outlook is foredoomed to failure. You may surround your own agriculture with towering tariff walls and reinforce those walls by rigidly restricted quotas, but in doing so you will, as surely, cause your export markets to contract and diminish the purchasing power of your own consumers, and this, in turn, will re-act on the price of domestic farm produce. To attempt to raise the prices of agricultural produce by purely national devices is, to use an expressive Americanism, like trying to "lift yourself by your own bootstraps." It is just as futile, I say this with great respect, to believe that a complete return to laissez faire in agriculture will be any more effective. You cannot abolish the past. You must recognise that, however culpable, however foolish national policies may have been, world production and still more world capacity for production of the staple agricultural products, is hopelessly in excess of current or even prospective demand.

What schemes have so far been tried to meet this crisis? Some surplus-producing countries have attempted to assist their producers by such methods as direct export subsidies or competitive currency depreciation. Others have tried either by themselves or in agreement with other areas of surplusage, to sustain prices by regulating production, or shipment, or both. In no case that I can recall has this been undertaken in agreement with leading importing countries. Therefore increased markets are open to that exporting country which disregards an agreement, and the danger is always present of such a breakaway or of increased production by countries not party to the exporters' agreement but ready to take advantage of the opportunity of an extended market. A plethora of produce has confronted most industrial countries with a most unhappy dilemma. If they open their ports they destroy domestic agriculture, and if they shut out imported supplies they destroy what remains of international trade and the livelihood of an important section of their people. In some eases the outcome has been a bitter political struggle between the town and the countryside.

Some there are who advocate Customs duties as the appropriate means of regulating imports of agricultural produce. For my part I am glad that His Majesty's Government have rejected that expedient, for I can- not think that in practice and in face of the extent of world surpluses it would prove effective. Such is the pressure that no conceivable duty in my opinion could keep out the produce. Examples are always dull things, but consider for example the difficulties of the Argentine, which in the period 1927–1931 sent us in this country 85 per cent. of her total exports of meat and meat products, and over 90 per cent. of her butter exports. Or consider the case of Denmark, which in 1930 shipped to Great Britain 100 per cent. of her bacon exports, 80 per cent. of her export of eggs, 70 per cent. of her butter exports and over 85 per cent. of her exports of preserved milk.

Again, Customs duties cut across too many commercial treaties. They throw—and I attach great importance myself to this—too heavy a burden of adjustment upon unorganised producers in exporting countries, and they give no guarantee to the consumer that the home producer will respond in terms either of sufficient produce or of adequate marketing arrangements. Heavy import duties upon primary products would in my judgment unduly embitter feeling abroad and might prejudice materially our exports in manufactured goods. Frequent variations in Customs duties to meet changed conditions of commerce are none too easy of achievement since they disturb the balance of national accounts and tend also to excite the hostility of vested interests. These, I suppose, are some of the considerations which have induced the Government to adopt the twin principle of quantitative regulation of imports and the organisation of home supplies. That organisation is covered, of course, by the Agricultural Marketing Act of 1931 which stands to the credit of the Government of which the noble Viscount on the Cross Benches was a member, and by the Agricultural Marketing Bill which is now before another place. We shall have an opportunity in this House of discussing that later on, and I do not propose to do more to-day than to express the hope that at the Economic Conference the British representatives may make known the outlines of their policy as it affects other countries, and may preserve to this country full liberty to implement such plan.

I believe myself that a policy of that nature should commend itself to the Dominions and to foreign countries as the one best calculated to rescue from collapse our home producers, to safeguard the reasonable interests of consumers and the well-being of producers overseas, and to interfere as little as possible with the free flow of international commerce. It seems to me that the principle of quantitative control is one capable of very wide application. Indeed, I can discern no reason at this stage to suppose that ultimately it will not be found usefully applicable in the case of manufactured goods as well as primary produce. In so far as it offers a working alternative to the slaughter of international trade, through either competitive import duties or a bout of rival currency depreciation, I for one should rejoice at its wider adoption. It is elastic and should be easy of adjustment to changing circumstances. Reasonably managed, it should rather encourage than inhibit the rehabilitation of world trade, the return of prosperity and the growth of inter-regional harmony.

If the World Economic Conference is to have results of any substantial value it will have to tackle in a constructive fashion the problems which are now confronting producers of primary agricultural products. The reason is very plain. Agriculture is the occupation of over 70 per cent. of the world's population. The products of agriculture account for much the larger part by value of the products entering world trade, and on tae prosperity of world agriculture depends to a very large extent prosperity in the export trades of the great manufacturing countries like our own. It will, trust, be the primary task of the Conference to find means of bringing about a readjustment, to adopt concerted measures for raising prices to remunerative levels, by increasing the demand where possible, but also if need be—and circumstances differ of course from one commodity to another—by calling a temporary halt on further production, by regulation of marketing, and by other means. That is the first objective, but it is clearly possible that, in co-operating together for the purpose of meeting the present crisis in world agriculture, the nations of the world, without derogation of their national sovereignties but acting through organisations of producers in their respective territories, may be able to lay the foundations of an enduring system of planned production and trade based on an expanding international market for the staple agricultural products.

Be that as it may, it is most earnestly to be hoped that the Conference will get down to business and to this vital matter of the exchange of commodities. That is the thing that matters. Commodities are the focus of interest between peoples; they transcend frontiers; they unite nations. Commodities and their exchange should claim the constant attention of this Conference, which is primarily economic and not political.

Of all the projects born of this crisis through which we are passing it appears to me that currency devaluation or the sister policy of violent inflation are the most mischievous and the most dangerous. At best its favourable results are transitory. It is a step which, if taken by one country is certain to be followed by others. All experience shows that it is a process extraordinarily difficult of control. It invades directly and grossly the very delicate field of the consumer's acquired sense of values, distorts and cripples the selective virtue of his marketing sense, and opens the road for the worst kind of profiteering. Pushed to the extreme it bilks the holders of fixed interest securities and beggars the best of the saving elements of the population, the middle class. Thus it destroys political stability, paving the way for either social collapse or pure dictatorship. It is the road to ruin, and an unmoral road at that.

Nor can I take comfort in any proposals to found currency values upon the metal silver, whether upon the principle of bimetallism or of parallel currencies. Who advocates these nostrums?—a few Senators from silver-producing States in America, here and there persons interested in silver mining and the like, supported by those whom the noble Viscount, Lord Snowden, once in my presence described as currency maniacs. It is an illusion to suppose that a rapid rise in silver values would assist Oriental trade. In those countries silver is largely held as the woman's dower and is not readily available in the form of purchasing power. Any swift and exaggerated inflation of silver values would block China trade and for a prolonged period of time do a great deal of damage. I submit that we shall be wise to reject this notion of currency manipulation in any shape as a means to a higher price level. Leave increased gold production and the sale of India's hoarded gold to do their work. Remove the circumstances of fear and uncertainty as to currency values which have led to gold hoarding in Europe and very nearly led a few weeks ago to a currency collapse in the United States of America. Have patience. Eschew quack remedies. World commerce is far too sick to be cured by five grains of aspirin. The disease is deep-seared and the recovery is certain to be slow.

Found your hopes and your energies on the creation of conditions that will lead to the rehabilitation of international trade. In the present state of the world, a sustained rise in prices can only flow from increased demand, and increased and sustained demand will only come with improving trade. The mere lavish creation of credit will not serve your purpose unless you can induce at the same time the appetite to take it up and usefully to employ that credit. That appetite can only result from the establishment of favourable opportunities for trade and from the restoration of confidence amongst world traders. Remove where you can or lower your Customsduties. Resolve exchange embargoes. Discourage subsidies and export bounties. Restore, as soon as prudently you may, gold as the international measure of values and the common basis for currencies. Stability of relative currency values is vital to the full restoration of international trade. By all means explore the virtues of international arrangements and of international agencies as these may be used for the attainment of these ends, remembering always that relative currency values must in the long run, and in spite of any expedient you may choose to employ, reflect the inter-relation of the trade balances of the countries to which those currencies belong. Most of us are aware of some of the difficulties attaching to the setting up and the successful conduct of a central bank or banks. Nevertheless I trust that the Conference may fully explore this expedient. Such examination should at least serve to emphasise the folly of economic nationalism and to stress the futility of confining within the limits of the political unit economic policies designed for the relief of world-wide commercial decline.

In Europe there is much to be done. The banking and credit structures of South-Eastern Europe are, many of them, rotten to the core. Everywhere it has been the same story. War, the politicians, and the catchword "self-determination," have created conditions incompatible with healthy trade and sound finance. Insolvency, actual or incipient, has followed. Governments, usurping the functions of a higher power, have sought to temper the wind to the lambs that were shorn by themselves supporting the debtors. Financial skeletons may be a little harder to discern when concealed in governmental cupboards, but they remain as dead as door-nails and must sooner or later be given decent burial. In a frenzied attempt to sustain falling revenues, tariff barriers have been ruthlessly imposed against the natural flow of produce. Reason has been bound and gagged, and passion and prejudice have had their way. Empires have been and shattered mutilated—dynasties dragged into the dust. Vanity of race has been pandered to. Democracy has been enthroned. But the people, what of them? What of the peasant ruined by the disastrous collapse of his markets, the trader beggared by the decline of commerce, the professional classes robbed of their savings by currency collapse and borne down by the grievous imposts of the fisc?

This load of undeserved misery must be lifted if it can be. Humanity requires it. Nor can we hope for a prosperous Europe while these conditions in our midst are allowed to stand. Neither local prejudice nor the selfish policy of any great nation must be allowed to stand in the way of recovery. Financial help from outside there must be. But loan conditions must protect the lenders. Drastic steps are required. It is worse than useless to make loans to peoples who are virtually bankrupt, and who have been deprived, by the errors of post-War policy, of the means to pay their way. If specific matters of this kind are not on the agenda paper of the Economic Conference may I respectfully suggest that the sooner this omission is repaired the better? What in the world is the use of churning out credit when you have not the least idea of who is to use it and how?

The world is very sick and not a moment must be lost. How grave is its case your Lordships are fully aware. I think it is impossible to overstate the weight of responsibility that at this time lies upon the British Government. It has been the universal experience of mankind that at moments of crisis the thing that is essential is leadership. Let there be no mistake as to whence leadership must come in this particular crisis, and it is perhaps worth stating that effective leadership requires a sound and comprehensive plan of action. The nations are looking to this country. Never, I think, has our prestige throughout the world stood more high. I hope His Majesty's Government will be in good heart. I believe, in spite of what has been said in this House this afternoon, that in this matter of the Economic Conference they enjoy the confidence and the good will of an overwhelming proportion of the people of this country. Unrivalled knowledge in business, in commerce, and in world finance, is at their disposal, and their arm is supported by long centuries of experience and by traditions of statesmanship with-out equal. But wisdom alone is not enough. Faith also is required; and courage above all.

THE MARQUESS OF LOTHIAN

My Lords, you have heard this afternoon from two quarters an analysis of the causes of the world depression and the functions of the World Economic Conference. I only propose to detain you for a few minutes by considering one further aspect of the question to which, think, not enough attention has been directed as one of the primary causes, if at this moment it is not the primary cause, of the depression, and that is the effect of international indebtedness, both private and public. I confess that I do not expect, any more than the noble Viscount who opened this debate, any very precise answer from the Government as to their policy at the Conference, and I am venturing to make these remarks more in the hope of drawing their attention to facts and figures, than that they will here and now explain the policy which they propose to pursue with regard to the Conference.

Your Lordships may have read the speech of Professor Moley in a broadcasting address in the united States a few days ago. He is, as has been said, the leader of what is called "the Brain Trust" behind the new President of the United States, and in that broadcast address he was clearly concerned to indicate to the American people—for it was an address broadcast from one end of the country to the other—the sort of programme that they could expect the World Economic Conference to follow, so far as American interests were concerned. In that address there were these two sentences: The American delegates were especially enjoined not to permit the introduction of the subject of the Debts owed to the United States by foreign Governments into the list of the topics to be discussed at the Conference. It was the firm conviction of President Roosevelt, expressed even before his inauguration, that the subject of these Debts should not be considered in connection with general economic matters of mutual interest, although they might be discussed concurrently. Now, my Lords, it is very difficult to see how measures for the promotion or restoration of international trade, for the reduction of tariffs, and for the stabilisation of international curencies, can possibly be either discussed or agreed to without taking into account the consequences of international debts, private and public.

May I give a few figures? I do not suggest that the figures which I am going to give are strictly accurate. They are very difficult to find out, but they are the best that I have been able to get, and from my point of view it is the lesson which can be drawn from them, rather than the strict accuracy of the figures themselves, which matters. In 1910 Sir George Paish estimated that British investments overseas amounted to £3,349,000,000 These investments, to-day, are considerably larger. How much larger it is impossible to say, and nobody at this moment can tell what the precise figure is, but under normal circumstances the figure is probably something in the nature of £4,000,000,000, if not more. So far as I can make out, about half represents fixed interest bearing securities, which at the rate of 5 per cent. means an annual return on them due to this country of about £100,000,000 per annum. The balance represents shares and properties owned by citizens of this country in foreign countries, and the return on these obviously varies according to whether the world is prosperous or in depression. On an abstract calculation one might estimate that the return due to this country on all these investments would vary between £150,000,000 per annum in times of depression and as much as £300,000,000 in times of prosperity.

In looking at the actual figures, these were the figures for 1924 to 1931—The actual amounts received by way of interest and dividends on foreign properties and shares owned by Great Britain. In 1924 the amount was £220,000,000; in 1925, £270,000,000; in 1929, £250,000,000; in 1930, £220,000,000; and in 1931, £165,001,000. The whole of these payments, or practically the whole, reached this country in the shape of foodstuffs, raw materials, or some kind of manufactured articles. The whole of these payments represent one-way traffic, and there was no corresponding export of goods from this country at all. They are payments for investments which were made many years ago by the export of machinery from this country, for the equipment of railways and other things Overseas.

Let us consider for a moment the investments of the United States. They are estimated, excluding War Debts, at about £3,000,000,000. The larger part has been made since the War. It is estimated that two-thirds represent fixed interest bearing securities, and the return would amount to about £100,000,000 per annum by way of interest on these loans. If you add to that the return on shares and properties in South America and other countries, the return normally would be about £200,000,000 per annum. This is also one-way traffic inwards. The United States can only receive payment by goods and raw materials imported into the United States, without corresponding exports from the United States.

Contrast the position of the United States to-day with the position occupied by the United States before the War. It was then a debtor and not a creditor nation. We owned very large investments in American railway and other stocks and shares, and the United States met the interest obligations upon those investments by the export to this country, and other countries, of cotton, wheat, and other products. Its whole internal economy rested upon that export, which was the only way in which it fulfilled its obligations to pay interest and dividends upon investments in the United States, before the War, for the equipment of that country. Now, just contrast the position in which, instead of having to export, say, £100,000,000 a year of foodstuffs and raw materials in order to meet its obligations, it has to receive £100,000,000 to £200,000,000 a year in order to pay interest on Debts owing by other countries, either in the form of War Debts or in the form of investments in South America or in Europe. It is an absolutely vital change in the position of the United States. Applied in terms of commodities, which is the right way of thinking about it, this fundamental change in the position of the United States means that instead of having to export £100,000,000 worth of foodstuffs and cotton abroad in order to meet its obligations, it has to receive £100,000,000 to £200,000,000 instead.

The foreign loans of other countries—France, Holland, Belgium and Switzerland—have been estimated to amount to about £1,500,000,000. That is also a one-way traffic, so far as interest and sinking fund payments are concerned. International indebtedness represents a one-way traffic of between £350,000,000 and £500,000,000 per annum, carrying with it no corresponding export trade at all. You have got to add to this Reparations and War Debts if you are going to see the full effect of international indebtedness on the international trade position since the War. Under the Young Plan, which is now practically dead, the obligations of Germany amounted to something like £120,000,000 a year. The interest on the War Debts to the United States amounts to about £50,000,000 a year. Therefore your grand total liability of one-way trade during the years since the War has been between 2500,000,000 and £700,000,000, assuming that those obligations are met in full. That is far the most formidable factor which has brought about the present crisis in the world, for these one-way liabilities represent something like a quarter of the total import trade of Great Britain and the United States. How has that situation been met hitherto? It has been met just in one way—by international lending. We have lent abroad as much as, or more than, we were due to receive in the shape of interest and sinking fund payment. We exported, in other words, in the form of machinery an equivalent, or more than an equivalent, of what we received in the form of foodstuffs and raw materials, and that was the way in which the economy of the world was balanced up to 1929.

Now, just consider what has happened in the matter of international lending since the War. Before the War our annual investment, I think, was estimated at something like £200,000,000, which is not very far off the amount we were due to receive on account of our own foreign investments. Since the War the lending has been mainly by the United States and Great Britain, especially between the years 1924 and 1929-30. If you look at the League of Nations Report which was published in 1931—a very remarkable document—you find that the United States capital issues on foreign account for the years 1927 to 1930 amounted to 4,649,000,000 dollars, that is, about £1,000,000,000 at par of exchange. The United States balanced its account by lending abroad a great deal more than it was due to receive on account of its private and Governmental Debts. The British issues were rather less than that. The total investments abroad, both British and American, were probably about £2,000,000,000 as far as I can make out. There were also the elements of tourist traffic and shipping, and it is those elements which alone enabled the economy of the world to balance in the years since the War. Yet since the year 1929 those investments have ceased, and you have a strain on the exchanges of the obligations for the Debts, private and Governmental, which, as I say, total up to about £500,000,000 a year without any corresponding export at all.

I do not think there is any dispute, certainly not from these Benches, that one of the principal causes, if not the principal cause, of our present depression is tariffs, embargoes, exchange restrictions, subsidies and so on, which dislocate production, producing glut in one product or another, and reducing prices, and making the exchange of any kind of goods extremely difficult. But the thing which makes the reduction of tariffs impossible at this moment is the debt charge on the exchanges. I am not going to quote my own opinion on this matter. I am going to quote from the review of world trade issued by the League of Nations in 1931–32, which has at the bottom of it the signature of Mr. Loveday, a very distinguished British economist, who is the Secretary of that Section, and this is his analysis of the effect of international indebtedness: When the creditor countries stopped lending abroad, the transfer of the Debt -payments due to them demanded an increase in their purchases from the debtor countries While their export industries were already suffering from the reduced purchasing power of the last-mentioned [i.e. debtor] countries, their production for the whole market was thus menaced by a heavy inflow of goods at low and steadily falling prices. This threat to their economic organisation induced the majority of creditor countries to check imports in protection of their home market industries. The adoption of the Hawley-Smoot tariff in the United States in 1930 may be regarded as an early expression of this policy, which, from the second half of 1931. became prevalent in a number of European creditor countries. Thus France adopted a rigid system of import quotas on a number of food products in the autumn of 1931, and later extended this system to numerous industrial goods. The United Kingdom introduced Customs duties on the bulk of her imports as an emergency measure in November and December, 1931, and later imposed as a more definite measure duties for protective purposes, thus departing from a tradition dating from the middle of the preceding century. Switzerland in- creased her tariffs, and established quotas for numerous agricultural and industrial products. A more restricted use of quotas has been made by Belgium and the Netherlands. This increase in the trade barriers of creditor countries naturally resulted in a further drying up of international trade. At the same time, it rendered international Debt payments still more difficult; in some cases the transfer of such payments was suspended by the debtor countries, and the market value of the foreign assets of creditor countries fell rapidly. Finally, the shrinkage of the international market hastened the fall in the prices of goods outside the protected areas. Now these were the consequences of the Debt situation unrelieved by foreign lending.

In the light of these facts what meaning can we attach to Professor Moley's statement that the Debt question is to be excluded from the purview of the World Economic Conference? Is it conceivable that the depression can possibly be dealt with without taking this vital cause into consideration? In the last words of the sentence I quoted, it is implied that possibly they may be discussed on the side. I hope that is going to be the case, because otherwise this Conference is inevitably and inexorably doomed to failure, as every other Conference that has been held sine the War in which this vital issue has been left out of account, has been doomed from the start. We are either faced with cancellation or bankruptcy on a large scale, or else we have got to restore the conditions of international trade so that international lending may begin again. Those are the only two conditions on which prosperity and employment can be restored.

I would conclude by venturing to suggest that there are just two conditions on which this Conference may succeed and only two, apart, that is to say, from the very important matters of a more political character which are being discussed at Geneva. The first is that we should be willing to forego the artificial advantages we have gained in the world market through any undue depreciation of the pound as compared with other currencies. We must be willing to make an arrangement about the relative value of currency which is fair to all, otherwise we shall have a competition in depreciated currencies which would add enormously to the difficulties with which we are now confronted. The second is that the United States should be willing to face the fact that without dealing with the problem of international indebtedness no progress whatever, either about currency stabilisation or the reduction of tariffs or the restoration of world trade can possibly be made.

THE UNDER-SECRETARY OF STATE FOR WAR (EARL STANHOPE)

My Lords, we have listened to three very remarkable speeches. I think many members of your Lordships' House regretted sincerely when the noble Viscount on the Cross Benches withdrew his advice from the counsels of the Government. I think the House also regretted that he made so strong an attack on an old friend and colleague in the person of the Prime Minister. At any rate, I can say with all sincerity that we who sit on this Bench have no spirit of hostility whatever to the noble Viscount, and I hope that the hostility which he displayed this evening was merely an effervescence which does not really belong to him in fact. I personally very sincerely regret that the noble Viscount no longer sits on this Front Bench, and for very obvious reasons. It has been my lot to attempt to reply for the Government on behalf of the Treasury to a series of extraordinarily difficult questions—bimetallism, the Equalisation Account, and now this question, which is the hardest of them all. These things are outside any experience I have ever had in municipal affairs or in polities, and it has entailed long hours and hard reading to put them before your Lordships even in the inadequate way in which I have dealt with them.

The question which I am faced with to-day is by far the hardest I have had to meet in your Lordships' House. It is one which has puzzled the best financial brains throughout the world for a period not only of months but of years. The noble Viscount intimated that he did not expect any very full or complete reply on behalf of the Government, and of course he is quite right because when the noble Viscount himself was in the position in which I stand to-day he absolutely refused to lay down the definite policy which he was about to follow. Let me remind the noble Viscount that when he was asked by Mr. Lloyd George in another place, in 1929, for the policy which he was about to follow at The Hague Conference his reply, given on the 26th of July, was as follows: I am sure that honourable members will realise that in speaking upon this subject to-day I am in a very delicate and difficult position. Indeed I feel a certain amount of hesitation in dealing with the matter, and I envy the right honourable gentleman his position of greater freedom and less responsibility.

VISCOUNT SNOWDEN

Very good.

EARL STANHOPE

That, I think, applies at the present time. Therefore the House will not be surprised if I follow the good example which the noble Viscount has set me and only reply in very general terms. The Government, of course, entirely agree with President Roosevelt when he said "the Conference must succeed "—" the future of the world demands it." That is borne out by the statements which have been made by the three noble Lords who have addressed us this evening. Every one of them has said that the situation in the world is so serious in these days that unless there is to be a, crash the Conference must be made to succeed. The noble Viscount on the Cross Benches was pessimistic as to results of the Conference. I venture to suggest to him that perhaps his pessimism is greater than it need be.

After all, this Conference starts with two great advantages, if advantages they can be called. The first is that the work of the Conference has been very carefully prepared by the Preparatory Committee at Geneva, and by the discussions which President Roosevelt has held with the Prime Minister and representatives of other countries. The noble Viscount asked specifically what steps this Government have taken to carry out the recommendation of the Preparatory Committee that we should get into touch with other countries. I think the noble Viscount will agree that the two countries which are most important of all in this matter are the United States and France. He will remember that the Prime Minister has been over at Washington and had consultations in company with British experts with the President and experts of the United States. He will remember also that France sent over M. Herriot shortly after the Prime Minister was there for similar consultations with the United States. He will also remember that M. Georges Bonnet has been over from Paris having discussions with British Ministers here in London. Therefore already we have been definitely in touch with two of the greatest countries attending the Conference in order to thrash out something which will be settled at this Conference. There is this further point to the advantage of the Conference, that the situation is so critical that the Governments will be compelled to overcome difficulties which have proved insuperable on the occasion of previous Conferences, and that is particularly true of the economic nationalism to which the noble Viscount referred at some length.

I think the noble Viscount was perhaps, if he will allow me to say so, a little unfair to the President of the Board of Trade. I think if he will read that speech of the 15th of March he will find that the President of the Board of Trade dealt specifically with several matters of very great importance which will obviously have to come before the Conference. At any rate there is one statement he made with which I know the noble Viscount will agree, and that is that in the past countries have been practising what the President of the Board of Trade described as economic warfare and the Government have been doing their utmost during the past few weeks to try to get them to practise economic agreement. The noble Viscount ascribed a large part of the troubles of the world to the Protectionist system, and he suggested that that made it difficult, if not impossible, to get a reduction of tariffs anywhere. But surely the contrary is already shown to be the case? We have made arrangements with Denmark, Sweden and Norway. I admit these are all low-tariff countries, but I think the noble Viscount will agree that the result of these negotiations has been that these three countries have reduced their tariffs on a large number of articles imported from this country, and in return we have in certain cases also reduced our tariffs on products coming from those countries into the United Kingdom. That is a policy which we hope will be carried a great deal further at the Economic Conference.

I admit that it is very difficult to get countries which have very high tariffs to reduce them materially, but the other policy has been tried and has failed. The noble Viscount will agree, I think, that when he was Chancellor of Exchequer the late Mr. William Graham went to Geneva and tried to arrange for a reduction of tariffs throughout the world. But he had nothing to offer in exchange. They had everything already; they had free trade with us, and the possibility of dumping as much as they pleased of any kind of goods into this country. And what happened? Nothing happened. No country reduced its tariffs; a good many countries, in fact, after that period increased their tariffs. One result at least we can point to as a result of having imposed Protection in this country, and that is this. Already we have succeeded in getting other countries to reduce their tariffs on goods which were imported thither from this country.

The noble Viscount said that he looked on the question of prices and exchange as entirely subsidiary, but that is not the view of His Majesty's Government, or, indeed, of a great many other people. In the joint statement by the Prime Minister and President Roosevelt, published on the 26th April, I find the following: The necessity for an increase in the general level of commodity prices was recognised as primary and fundamental. To this end simultaneous action needs to be taken both in the economy and the monetary field. Then the Preparatory Committee at Geneva, in their report, said: We believe that the Governments of the world must make up their minds to achieve a broad solution by concerted action along the whole front. Action in the field of economic relations depends largely upon monetary and financial action and vice versa. Concerted measures in both fields are essential if progress is to be made in either. With that the Government agree entirely. They feel that in economics, in trade, in prices and in currency we must pursue the matter equally and not merely on one line only.

As regards monetary policy, the policy of His Majesty's Government and of the other British Empire Governments was stated at Ottawa, and is already well known. Concerted action to raise price levels must be taken concurrently both in the monetary and in other spheres. For this purpose a policy of cheap and plentiful money is an essential condition. For the time being it is our object to smooth out daily fluctuations in the exchange value of the pound so as to facilitate the conduct of international trade. Your Lordships will remember that you passed the Exchange Equalisation Account Bill only last week. Before we can go back to gold there must, as has often been stated, be a rise in wholesale prices to a level which will give an economic return to the producer and a prospect of more stable prices in the future. For this purpose there must be a continuous cooperation on the part of central banks, and the working of the gold standard must be reformed in various, ways. As is stated in the recently issued annual report of the Bank of International Settlements, "this standard will work no hotter in the future than in the past if the unregulated anarchy which has prevailed in its application and the shortsighted individualism which has been practised in its operation commence all over again."

The noble Viscount, I think, made a statement that the Government was opposed to the tariff truce and had made all sorts of objections to it. That, my Lords, is not the case. The Resolution of the 12th May contained a sentence covering the policy of His Majesty's Government to regulate the production of meat, dairy products and agricultural products. His Majesty's Government made no reserves whatever. France and Italy did make reserves about currency depreciation which were recorded in the proc ès verbal. Your Lordships, therefore, will see that the tariff truce has been accepted. Although we admit that that is only a beginning in dealing with the tariff question, at any rate it does stabilise the situation for the time being, and give an opportunity for dealing with it on wide lines at the Conference.

The noble Marquess, Lord Linlithgow, dealt, with the question of silver. The communiqu é which was produced at the conversations at Washington contained no commitment whatever in regard to silver. I am advised that the wording of the statement was that the question of silver was "discussed." The proposals examined will be discussed with the representatives of the other nations who have been invited to Washington. There is no undertaking whatever that we are going to commit ourselves to bimetallism. I think the remarks which I ventured to make to your Lordships' House some time ago on that subject will already have made that point clear.

Both my noble friend behind me (the Marquess of Linlithgow) and the noble Marquess, Lord Lothian, dealt with the question of International Debts. As the noble Marquess said quite truly, that has been ruled out of the discussions at the Economic Conference by the United States, and, if we had insisted upon including it, we should probably have found that the United States would have refused to take any further part. As the noble Marquess will appreciate, we necessarily had to rule it out. The extremely interesting speech which he made to your Lordships will, I know, he considered most carefully by the Government, and will be of very real value to the Economic Conference when it meets. He produced a mass of figures and information which obviously will have a very real bearing on solving the questions which will be under consideration at that Conference.

My noble friend the Marquess of Linlithgow dealt with a large variety of subjects, on all of which he is an expert, and I certainly am not going to attempt to follow him, but I may say that the Government entirely agree with his view that there can be no real improvement in trade until there is a restoration of confidence between the countries of the world. That has been the policy of the Government, as he knows, both at Geneva and at the Disarmament Conference, and also in the preparations which are being made at the present time for the Economic Conference. The Government are engaged upon a detailed consideration of the many questions which are to arise at the Conference, and although I am unable to make a statement to-day, for the same reasons as the noble Viscount gave in 1929, he will appreciate that it is not because the Government have got no policy but simply that they think the best time to produce that policy in its completeness and in its fullness is at the Conference itself rather than even to your Lordships' House.

VISCOUNT SNOWDEN

My Lords, there is a strong temptation to reply to some of the statements which have been made by the noble Earl, but out of consideration for the difficulty of his position, with which I very much sympathise, I shall refrain from doing so. The noble Earl has had an extremely difficult task to undertake this afternoon, and he has succeeded in a most enchanting way in saying nothing and in giving no information whatever to the House. As I said, I do not propose to reply to any of the points he has raised, because if I once got going upon them there is no saying how long I should detain your Lordships. I will, with the permission of the House, withdraw my Motion.

Motion for Papers, by leave, withdrawn.

House adjourned at ten minutes past six o'clock.