Lords Sitting of 17 March 1937

Preamble
The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.
Several Lords—Took the Oath.

MESSAGE FROM THE KING.
THE DUKE OF BUCCLEUCH: My Lords, I have to convey to the House the following message from the King:
"I have received your Addresses praying that the India and Burma (Trade Regulation) Order, 1937, the Government of Burma (Immigration) Order, 1937, the India and Burma (Burma Monetary Arrangements) Order, 1937, the Government of Burma (Miscellaneous Financial Provisions) Order, 1937, the India, Burma and Aden (Transitory Provisions) (Taxation) Order, 1937, the Government of Burma (Counsellors) Order, 1937, the Government of India (High Court Judges) Order, 1937, the Government of Burma (High Court Judges) Order, 1937, the India and Burma (Transitory Provisions) Order, 1937, the Government of India (Adaptation of Acts of Parliament) Order, 1937, the Government of India (Adaptation of Indian Laws) Order, 1937, and the Government of Burma (Adaptation of Laws) Order, 1937, be made in the form of the respective drafts laid before your Lordships' House, but subject, in the case of the two last-mentioned Orders, to the Amendments approved by your Lordships' House. I will comply with your request."

MINISTRY OF HEALTH PROVISIONAL ORDER (EARSDON JOINT HOSPITAL DISTRICT) BILL.
Read 2a (according to Order), and committed: the Committee to be proposed by the Committee of Selection.
MINISTRY OF HEALTH PROVISIONAL ORDER (BEDFORD) BILL.
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.
MINISTRY OF HEALTH PROVISIONAL ORDER (COLWYN BAY) BILL.
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.
MINISTRY OF HEALTH PROVISIONAL ORDER (EALING EXTENSION) BILL.
House in Committee (according to Order) on re-commitment of the Bill: Amendments proposed by the Committee made.
MINISTRY OF HEALTH PROVISIONAL ORDER (SOMERSET AND WILTS) BILL.
House in Committee (according to Order) on re-commitment of the Bill: Amendments proposed by the Committee made.

INTER-IMPERIAL TRADE.
VISCOUNT ELIBANK VISCOUNT ELIBANK had the following Notice on the Paper:—To ask His Majesty's Government whether their attention has been drawn to a resolution on inter-Imperial trade passed at the Triennial Congress of the Federation of Chambers of Commerce of the British Empire held in New Zealand in October last, in the course of which it is pointed out that the practical application of the Ottawa Agreements has disclosed a lack of cohesion in the economic policies of the United Kingdom and of the Dominions and that the time has arrived when the relationship of industry and agriculture within the Empire must be brought into due perspective if mutual prosperity is to ensue, and in which it is recommended that future policy should provide in particular for (1) ensuring to the United Kingdom the carrying out of a reasonable agricultural policy; (2) affording to the Dominions the opportunity to develop to a reasonable extent their secondary industries; (3) minimising so far as possible the imposition of restric-

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tions on the importation into the United Kingdom of Dominion primary products; and whether His Majesty's Government will say what steps they are prepared to take to regulate an issue which is causing much concern and has become of vital importance in the economic relationship of the various parts of the Empire; and to move for Papers.
The noble Viscount said: My Lords, I rise to move a Motion of great importance in the economic relationship of the Empire; but in moving a Motion in connection with Empire trade I feel that today I should be lacking in a sense of fitness, and indeed of my own sadness, if I did not at the outset refer to the great loss that has been sustained by all parts of the Empire in the death of Sir Austen Chamberlain. Sir Austen, perhaps, was not associated with the development of the Empire to the same extent as his famous father, Mr. Joseph Chamberlain, but nevertheless he was, all his political life, an earnest worker in the cause of Empire, and the Empire will feel his loss proportionately. Those of us who knew him and were honoured by his friendship, will miss him greatly, and I am sure that our deepest sympathy goes out to his sorrowing wife and all his family.
In moving this Motion to-day, I hope your Lordships will bear with me if I stick rather closely to the notes of the speech that I intend to deliver because this is a subject of very great and, if I may put it so, delicate import to all parts of the Empire, and I do not wish that anything I may say should in any way cause offence or in any manner be misunderstood. Last October there assembled at Wellington, New Zealand, a body called the Federation of the Chambers of Commerce of the British Empire, and at that Congress there were assembled some no commercial delegates representing chambers of commerce throughout the Empire. The only Dominion that was not directly represented on that occasion—these Congresses are held once in three years—was the South African Union. The reason for that was that a very large and important Empire Exhibition was being held at Johannesburg at the same time, and therefore it was not possible for delegates to be sent from South Africa. At the same time Southern Rhodesia, which is a long way from
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New Zealand, was represented by two delegates.
At that Congress, which I might almost describe as a Commercial Parliament of Lie Empire, I happened to have the honour to preside, and we discussed all sorts and manners of subjects connected with trade and its ancillary subjects. There were probably three matters discussed which were of the most vital importance. The first was that of inter-Imperial trade, the second was migration within the Empire, and the third was British shipping. There were quite a number of subjects outside these, but these three were probably the most important. Of the three, inter-Imperial trade was the most important because, whilst there was unanimity of opinion on the need for a more balanced distribution of population within the Empire and upon the necessity for taking measures to protect British shipping against unfair foreign competition, the question of inter-Imperial trade, on the other hand, gave rise to considerable differences of opinion and controversy, and whilst the resolution that was ultimately adopted by the Congress was practically unanimous, the road by which it was reached was strewn with suggestions of failure to carry out certain of the undertakings and principles of the Ottawa Agreements. In the light of that, the fact that there should have been almost unanimity on the terms of the resolution on inter-Imperial trade as finally passed by the Congress shows the spirit of good will which prevailed and the universal desire of the delegates to reach accord on this subject, which is of primary importance in the economic and general welfare of the British Empire. It is this spirit which has built up the Empire, and it is in this spirit that the Empire will be maintained in the future. I venture to suggest that if this spirit does not prevail the Empire will not very long continue to exist.
Those of your Lordships who have done me the honour to examine the terms of my Resolution may say that it is of a very general character, and that it requires a good deal of explanation; so I will try to fill in the gaps which are not apparent. For this purpose I think it is just as well if in the first place, I were to analyse quite briefly the views expressed by the delegates at this Congress. The whole

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basis of discussion was the lack of cohesion in the economic policies of the United Kingdom and the Dominions, due to the lack of appreciation on the part of the Governments concerned of the relationship of secondary industry to agriculture. It is this point which the commercial communities of the Empire wish to have examined by the Governments and on which they want to have a policy laid down. They believe that that is necessary if the best results are to continue to be obtained from Empire trade and also to ensure that the present causes of friction which are harmful to that trade may be removed.
Let me review shortly the allegations that were made during our discussions, so that your Lordships may understand more clearly what is behind this Motion. I. might say that the United Kingdom delegates took one point of view or some points of view and that the Dominion delegates on their side were practically unanimous on the view which they held. From the United Kingdom point of view the delegates alleged that secondary industries are being developed in the Dominions regardless of the provisions of the Ottawa Agreements. Under those Agreements it is specifically laid down—and I take the words from the Agreements themselves—that
"protective duties shall not exceed such a level as will give United Kingdom producers full opportunity of reasonable competition, although special consideration may be given in the case of industries not fully established."
The English delegates gave examples where those principles in their opinion were not being observed, and argued that uneconomic manufactures were being fostered in the Dominions under high protective duties.
They further said that Import Duties in many instances even under the preferential tariffs were so high that, when coupled with 25 per cent. discount on currency, as is the case in Australia and New Zealand, they were unable to surmount the harriers presented to their manufactured goods. In this connection they further stated that the Trade Advisory Boards in the Dominions had not given them that degree of relief to which they considered themselves entitled when putting their cases before those Boards for better treatment. They further pointed to the fact that much of the primary produce imported into the
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United Kingdom from the Dominions is admitted free of duty, and that whilst this is a source of great wealth to the Dominions, and in fact they cannot get on without the United Kingdom market, the Dominion manufacturers will not take proper account of this benefit when developing their own manufacturing industries. Finally, the English delegates suggested that if they are not to be allowed to compete on reasonable terms in the Dominion markets for their manufactured goods, then the United Kingdom Government should take power to impose Import Duties on Dominion produce of all kinds so as to give the Government of the United Kingdom the opportunity to negotiate on equal terms with the Dominions regarding the duties placed on manufactures exported to the Dominions. That sums up generally the case put by the English delegates.
If your Lordships will bear with me I will now inform you of the points of view expressed by the Dominion delegates, and when I say Dominion delegates I mean those from all the Dominions, because their points of view were very similar indeed. Those delegates stated that they have no alternative to developing their secondary industries; that this they must do in order to secure what they described as a "balanced economy" in their countries; and that without fuller development of their secondary in addition to their primary industries, unemployment must continue and their countries must suffer proportionately. They further said that they are not prepared in the event of another war to undergo shortage of necessities in the shape of manufactured articles as they had to do from 1914 to 1918, when they were unable to manufacture the necessities themselves and there were no places from which they could import them. They did not admit that their Trade Advisory Boards had not played the game with the British manufacturers; indeed they complained that they themselves suffered more from those Boards than the English manufacturers. When I was in Australia the Australian manufacturers petitioned the Government to do away with the Trade Advisory Board in that country. They went on to complain that the British Government had imposed quotas and restrictions on the primary products of the Dominions to an extent that was not contemplated at Ottawa,

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and, moreover, had not reduced foreign importations of foodstuffs into this country to the degree that was then expected. They also alleged that agriculture in Great Britain is being fostered excessively and drew attention to a resolution passed two years ago by the National Farmers' Union asking that the Ottawa Agreements should be abolished and that full protection should be given to English agricultural produce against Dominion products.
These then, my Lords, were the main contentions advanced on both sides at this Congress, but it was interesting to observe as the discussion proceeded—and there were many conversations outside the Congress hall in hotels and other places—that it was plain that each side had convinced the other that certain factors were necessary for their respective economic existences, having regard especially to the conditions in each country and to the different circumstances which apply to-day compared with the time when the Ottawa Agreements were first launched. As a result of all these deliberations and consultations certain common conclusions were arrived at between the delegates. If I may, I will set them out shortly. The first one was that the development of secondary industries in the Dominions is essential to-day for both economic and defence reasons, but that in order to secure to the Dominion primary producers the greatest advantage in the United Kingdom market the development of secondary industries should not be selfishly undertaken but should be on a reasonable basis, because otherwise, as exports pay for imports, it would make it more difficult for the United Kingdom to import Dominion produce.
Secondly, it was suggested that the more intensive development of agriculture in the United Kingdom is essential to-day for both economic and defence reasons, but that in order to secure the greatest advantage in the Dominion markets for United Kingdom manufacturers and the greatest advantage to Dominion producers in the United Kingdom market, this development should be upon as reasonable a basis as possible. Thirdly, it was proposed that the United Kingdom should go as far as possible in reducing purchases of primary produce from
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foreign countries in favour of the Dominions, but in this respect the United Kingdom delegates emphasised the difficulty of withdrawing trade from the Argentine for instance, and certain other countries with which the United Kingdom has to trade for various reasons. It was also suggested—and the Government really have adopted that system—that the Ottawa Agreements should be amended, wren necessary, only by bilateral agreement and not collectively as was done at Ottawa. From the conversations that took place there emerged the belief that the policy for all should be: Your own country first, the Empire second, and foreign countries last; and that this policy should be applied by a system of preferential tariffs on all articles not placed on the free list.
These were the views reached by this Congress of representative commercial mot from all over the Empire, and I believe that they are views which, if adopted in principle by the Governments, will lead to much greater contentment and go far to remove present misunderstandings. They are, at any rate in essence, a straightforward policy, but just as the Ottawa Agreements were formulated by the Governments of the Empire so the principles which I have enumerated must be adopted and carried out by the Governments. That is why I have ventured to bring this matter before your Lordships' House to-day and to the notice of His Majesty's Government. I am anxious, as are all those who travelled many thousands of miles to attend this Congress, to see actual results accruing from our labours. We want the Government to adopt our recommendations because we have faith in them, and not only because we have faith in them but because we believe that the solidarity of Empire trade will be much strengthened by adopting the principles I have outlined, and that by removing the causes of misunderstanding inter-Empire trade will expand more quickly than has been the case hitherto.
I venture to believe that the differences to which I have referred are only temporary. They only require to be sifted to gee that they are capable of adjustment and of being removed. Within a few weeks there will assemble in London an Imperial Conference. That Conference, we have been informed, will bring

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within its purview certain aspects of Empire trade. That this issue which I have ventured to bring before your Lordships should escape that Conference I cannot believe, but in case that might happen I have deliberately brought it to the attention of your Lordships and of His Majesty's Government in the hope that the publicity that may be given to it both in the United Kingdom and in the Dominions through this debate, may lead to it being seriously discussed at the Imperial Conference.
I should not be surprised if, as a result of what I have said this afternoon and some of the facts which I have stated to you, some people will point to this as proving the failure of the Ottawa Agreements. I am not prepared to give that as a present to any one, because that is riot the case. The Ottawa Agreements on the whole have been a very great success as statistics will show. They are leading already to the adoption of revised bilateral agreements of a character more in accord with present conditions. I need only refer to the Anglo-Canadian Trade Agreement which has just been passed. I believe that at Ottawa there was laid the sure foundation of inter-Imperial trade that is expanding daily and yearly. I did not intend to inflict figures upon your Lordships this afternoon, but I must give some short statistics to prove the words which I have just spoken. In 1931, the year before the Ottawa Agreement came into force, the imports into the United Kingdom from the British Dominions and India, exclusive of gold and specie, amounted to £169,000,000. I should like to inform your Lordships that these figures are official; I obtained them through the Board of Trade. In 1936, the year that has just passed, the imports into the United Kingdom from the British Dominions and India have reached the very much larger total of £250,000,000, or an increase of £81,000,000 in tie five years since the Ottawa Agreements came into force. What is the position with regard to the exports? So far as the exports from the United Kingdom into the British Dominions and India are concerned, I found that in 1931 those aggregated £103,000,000; in 1936, the year that has just passed, they had gone up to £148,000,000, or an increase of £45,000,000.
So far as the percentages of trade are concerned: whereas imports have in the last twelve years—that is, imports into the United Kingdom from the Dominions and India—increased by To per cent., which is from 30 per cent. to 40 per cent. as against 60 per cent. foreign, the exports from the United Kingdom to the Dominions are practically on a fifty-fifty basis to-day, or have increased by 10 per cent. during the same period. Those figures speak for themselves and require very little embellishment from me. If, however, the Dominions seem to have got the better of the deal, because they have increased their trade by £81,000,000 against our increase of £45,000,000, it must be remembered that they have to provide large sums of money annually for the payment of debt services in the United Kingdom, and that therefore the balance of trade with the United Kingdom must necessarily be in their favour if they are to possess the necessary exchange of currency in this country in order to meet those debt services. But apart from this it is my belief that the Dominions will grow and expand in wealth and population, and it is to the future even more than to the present that I look to vindicate the Imperial trade policy which was inaugurated at Ottawa. In the meantime I venture to suggest to His Majesty's Government and the other Governments of the Dominions that any causes for friction or misunderstanding should and can be much minimised if the Governments will adopt the general principles outlined in my Motion and passed at the Congress in New Zealand. I beg to move.
LORD STONEHAVEN: My Lords, the noble Viscount has certainly done a service to those of us who think that Imperial affairs ought to receive far more active attention than they do at the hands of the Government or the country as a whole. The Conference that he attended and over which he presided was a fitting follow-up to Ottawa. It showed not merely the importance of the Government dealing from the Government's point of view with these complicated and vitally important questions of inter-Imperial trade and a great many other things like communication, migration and so forth, but that Government action would be of little use in a thoroughly democratic community such as the Dominions are unless that action were backed up by action on

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the part of the individuals who can speak with authority for one section or another. The lack of cohesion that one complains of is surely the one main fault that requires remedy. The noble Viscount described the differences of opinion that arose, and he was able to say that those differences were nearly all composed by the time the Conference ended. I wonder if the noble Viscount would say how many of the excellent reports of the Conference have been sold. It would be interesting to know how many people have been sufficiently interested in this very important Conference to order this very good account of it.
VISCOUNT ELIBANK: That report has only just been printed. It was only printed last week, and I have got a special copy for my noble friend. It is not actually on sale yet, but it will be very shortly.
LORD STONEHAVEN: I am much obliged to my noble friend, but I think it is important to know the extent to which the report dealing with a question is taken up by the public, for it is not a bad gauge of the interest taken in the question. My noble friend gave details with regard to Empire trade as a whole. I think it is almost more important, if he will forgive me for saying so, to take the corresponding figures for the Dominions without India, because the increase of importation into the Dominions from Great Britain has really been very striking. It is always necessary to apologise—I have never understood quite why—before quoting figures to your Lordships, but if you will allow me to do so, in the year 1935 we imported from the British Dominions £183,000,000 worth and in the following year we imported £216,000,000 worth; surely a very large increase in a short time. The effect was that of our total imports we took 25 per cent. from the Dominions alone, excluding India. The figure of what the Dominions took from us, the corresponding figure, is also striking. Instead of the 25 per cent. that we took from them, they took from us 3o per cent. in exports. When you come to think that there are only 20,000,000 white people or thereabouts in the Dominions, it surely shows that you will never find as good customers anywhere as you do inside the Dominions, and that they are the people
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whose business, merely from a business point of view, we ought to cultivate much more actively than we do.
One of the advantages, as I am sure my noble friend will agree, of the sort of meeting he attended is the personal contact that is established between business me a throughout the Empire. I remember that during the five years when I happened to be living in Australia you could count the business men of the first rank, of real importance, whose word went with great concerns, the really first-class business men that came out there, with the exception of the deputation, on the fingers of one hand. It was constantly deplored by the Australians that when one spoke to one's friends over here they had a thousand reasons why they could not find the time, and one had to accept the fact that for a journey to Australia in those days, if it was to lead to any results, you had to have six months to spare. A business man very seldom has six months to spare, but now that the air service has been established I look forward, in a couple of years at the most, to a journey to Australia which will take not more than a fortnight, so that if a man has not more than two months to spare he can still have an ample and well-arranged programme, do everything and see a great deal which will be very useful in this connection.
If I may again revert to figures—I hope one apology will do for one day—the Australian figures in this connection are not without interest. In the ten years from 1925 to 1934 the excess of payments by Australia to this country, courting interest on debt, amounted to no less than £265,000,000—not a bad sum for a population of 6½ million people. That excess was found only by the favourable trade balance, from the Australian point of view, with other countries. Australia has got already a treaty with Japan, a treaty with Czechoslovakia, another with Belgium and another with France. It behoves us to realise that she is growing up as a nation; that she is quite capable of being a nation; and that she does intend to develop all her resources and not be content merely to be a provider of raw materials for this country. Indeed, I think it was agreed all round at Ottawa that the basis of all the Dominions was that referred to by my noble friend: Ourselves first, our fellow countrymen in the

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Dominions next, and foreign countries third. The trouble about that, as I see it, is that that slogan is very often repeated but nothing like enough is done to ensure that that should be the really active policy of this country. I venture to think that there is a much livelier realisation of the importance of attacking trade questions among the 20,000,000 white fellow countrymen we have in the Dominions than there is among more than double that number in this country. It is difficult to understand in the Dominions why, in the ten years ending 1934, we should have bought from Denmark £438,000,000 worth of produce and were content to sell only £109,000,000 worth. No one is so mad as to suggest that the Empire can be self-supporting, but surely there is plenty of room for producing a better balance between ourselves and the Dominions than exists just now.
I suggested a short time ago that the one really helpful solution of the migration question lay in collaborating with the Dominions in developing their secondary industries as well as their primary industries, and there is no doubt that that affords the only hopeful prospect of doing it. I was rather disconcerted, if my noble friend will forgive me for saying so, when he Prime Minister described the programme for the Imperial Conference in May, and, after giving a list of the various items put down for discussion, said:
"It is hoped that there will be also an opportunity during the course of the Imperial Conference for exchanges of views on the subject of migration within the Empire."
That does not look very hopeful to me; it does not look as if the Government appreciated the vital importance of a redistribution of the white population of the Empire. We have got too many and the Dominions have got too few, but to suggest that the problem is easy would be to ignore the innumerable difficulties which surround it, and these difficulties become more formidable when social legislation discourages people from leaving their homes even when they are out of work and have no prospects. To complete this answer given by the Prime Minister in another place, at the end, Mr. Markham asked:
"Are we to understand from the answer just given that the subject of migration within the Empire will be treated as an optional subject pending further consultation with the Dominions?"
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I do not know whether my noble friend would give an answer to that, but I would like to know whether there is any possibility of getting a more precise statement on the matter. The Government ought to put their backs into the question of migration, because I think it is vital.
On the subject generally I would submit to your Lordships that people are quite right when they say there is a new order in the world since the Great War was fought. There is not one new order; there are at least three new orders. There is the new order which centres round Geneva, and I do not propose to say anything about that. Then there is the new order, which no one could foresee, created by Dictators. Far more important than either of these two is the new order which arose out of the Statute of Westminster coupled with the Ottawa Conference. My noble friend will remember that our representatives went there and came back with a very lively appreciation of the great difficulties and the great amount of statesmanship which would be required on behalf of the different parts of the Empire to make a really good and satisfactory arrangement; but I entirely agree with my noble friend that to suggest that Ottawa has failed, to say that anything of that magnitude can be said to have failed in a period of four years, when you see the figures which show a great improvement in trade in the Empire, is indeed perfectly childish. It has been no failure.
I congratulate the Government in having decided to carry on the negotiations arising out of the Ottawa Agreement on a bilateral basis. One wants to get the greatest possible unity within the Empire and you cannot do that by pretending that unity exists where it does not exist. The different positions in the different parts of the Empire have to be realised to the full before you can expect to do any good. It is important from this point of view. The fallacy of treating the Empire as covering a quarter of the globe and comprising a quarter of the inhabitants of the globe, surely is rather unfortunate. All that we are concerned with strictly in this Parliament is a matter of some 2,000,000 square miles, two-thirds of the size of Australia. The rest of the Empire has to be governed by their own Parliaments, with whom we are on a footing of equality and

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we can no more compel them to do things than they can compel us. I think, therefore, an opportunity such as is in front of us now gives us an opening to do what certainly my Australian friends tell me is wanted badly, and that is to give a lead. My noble friends on the Bench below are asked about once a week to give a lead at Geneva. Why cannot they now give a lead among our own people? They are afraid, quite rightly, of impinging on the rights of the independent representatives of the Dominions, but that ought not to alarm us in dealing with people of our own kith and kin who look to this country for a lead.
The Australians realise that we are determined to do what they do and be far less dependent on outside sources for our food than we are at the present moment, and that that involves developing our agriculture. But they say—surely with great reason—"Let us know what your plan is." In so far as I know, we have discussed with the Dominions to find out what their scheme is but have never had a fully cut-and-dried and fully thought-out scheme of our own. There, again, arises the lack of cohesion. Lack of cohesion does give, and is quite compatible with, independent action on the part of the different parts, but you want to know what particular attitude and action are going to be taken by each part.
I would like to add one thing more, and I apologise for detaining your Lordships so long because I know how tedious a fanatic is. I make no bones about it, I am a fanatical Imperialist, which I am afraid is not a term of endearment to the noble Lord opposite. He will forgive me, but I frankly admit that that is my position. Therefore I read in this report of the meeting of the Federation of Chambers of Commerce of the British Empire with great delight an extract from a speech made by the Hon. W. E. Parry, the Minister of Internal Affairs in New Zealand. He had attended the Conference, I understand, for the purpose of inviting as many people as possible to attend the centenary celebrations in 1940, and I hope my noble friend will continue his good work and persuade as many people as he can to go out there on that occasion. There is nothing more appreci-
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ated, and nothing more useful. This is what Mr. Parry said:
"The Great War proved how much the development from mere Colonial to Dominion status did to hind us all to Britain by the realities that count. How absurd then to imagine that the further development of a manly national spirit in each constituent part of the Commonwealth will tend to disrupt it. That very pride of nationhood, on the other hand, will give Britain, in place of a tribe of dependent children, a grown up family of virile sons, strong with the desire each to give the best of his individuality to the common good and preservation of all. In that spirit we look to 1940 not only as the end of a chapter but as the beginning of a new one."
It is in that spirit that I would invite my noble friends to approach this Imperial question—as a family matter of vital importance, not merely to ourselves but to those who look to us, who have a right to look to us, as members of a grown up family all over the world.
THE MARQUESS OF LOTHIAN: My Lords, I do not think anybody will disagree that it is very desirable that inter-Imperial trade should be as great as possible, and Imperialists like the noble Lord who spoke last are, I think, inclined to indulge in what psychologists call wish-fu thinking. They imagine that what they desire to happen is in course of happening and can be achieved. Now the central fact about this situation is the Act to which the noble Lord referred two minutes ago, the Statute of Westminster, which finally established the Dominions as co-equal nations, members of a single Commonwealth of Nations, in which no member is subordinate in any way to any other. But the corollary of that is that they have taken complete and absolute control of their economic life. The noble Lord urged the Government to take an initiative on the Imperial front. I seem to remember an initiative which was taken not so many years ago on that front in the early days of the National Government, when an astonishing galaxy of Ministers of the Crown embarked on the greatest ship which travels from year end to year end from one part of the British Commonwealth to another, the famous C.P.R. Liner "Empress of Britain," and went to Canada and held a great Imperial Conference there to transform the economic life of the British Commonwealth. When they got there, after a few protestations of brotherly love, the Conference went into committee, and for

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the next three weeks what we mostly heard were explosions and prophecies of disaster. It was, I believe, only by the genius of our present Prime Minister that we managed finally to patch up an agreement, which was absolutely different from what the great embassy which left this country expected to bring about.
The fundamental fact is that nationalism in its present form connotes high protection. The noble Viscount who introduced this Motion uses the word "reasonable." Now that was the central word which emerged, completely without effect, from the Ottawa Conference. Once you launch Yourself on the road to protection you cannot be reasonable—at least no nation has ever been reasonable vet. It proceeds to add to its duties under the pressure of vested interests and trade unions, until everything that it can possibly make within its own boundaries is made, regardless of expense. And that is the process which we are witnessing to-day, and I think that if we made another great initiative on these lines we should produce exactly the same explosive result as was produced at Ottawa. And where is this process going to end? All that happened at Ottawa fundamentally was that you added to the protective tariffs against foreign countries—you did not reduce them against the British Empire. And what the figures that have been quoted as an increase of British Empire trade amount to is simply a transfer from foreign trade, it is no addition. If you try to repeat the attempt of Ottawa you will produce exactly the same result.
What I would urge upon the Government is that they should discuss with the Empire whether the present tendency of economic nationalism is not the most fatal thing in the world, and whether the policy of bilateral treaties is not a much worse policy than the policy of Mr. Secretary Hull in going back to the most-favoured-nation clause, so that whenever you are constructing a treaty to mutual advantage by lowering tariffs between two countries, those reductions are made all round so that the area within which freer trade is possible steadily expands, without too rapidly undermining the protection that has already been built up for certain industries. There is the central problem which confronts this Government, and I am sorry to say that in the
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opinion of most foreign countries it is this Government which is the principal obstacle to-day to the reduction of tariffs. That is the view if you go to Geneva, to Canada, or to America. Wherever you go it is the British Government, you find, which is the main obstacle, and if we are to move away from war it is only by the general reduction of the barriers of trade. Although we may point to the figures of the so-called improvement of inter-Imperial trade, the price we have paid for that is our own devastated areas. By the reduction of international trade we have devastated part of our own trade.
Finally, there is this aspect of it. One of the great arguments for Dominion economic nationalism was their growing insecurity in the event of war. Were the British Navy and the British Air Force really in a position to secure that the raw materials and foodstuffs which Australia and New Zealand produce so admirably would in time of war reach this country? A school of opinion grew up in Australia which took the view that they ought to found their national future on the fact that owing to the decline in the strength of Great Britain a time might come when it would be impossible for them to get their products to their market in this country; therefore, they ought to develop their secondary industries so that, in the event of that disaster happening, they would not be compelled to give way because they had not got the manufactured articles.
If we are going to restore our defence organisation, as we are, it largely invalidates that argument if we are once more in a position to say to the Dominions that, with their help, we can practically guarantee security across the main oceans of the world both for our exports to them and for their exports to us. It immensely fortifies the general argument that, having made this immense movement towards economic nationalism, with tragic results to the world as a whole, including our own devastated areas, the time has come when the British Empire should give a lead to the rest of the world in the direction of seeing whether we cannot relieve the tension which is at the root of European trouble and is the main cause of war. It is that aspect that I press on the Government, to see whether they cannot get the Imperial Conference to take a lead in that direction rather than

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in the direction of increasing tariff barriers.
LORD BARNBY: My Lords, the noble Lord, Lord Stonehaven, has urged that the Government should take the forthcoming opportunity in the spring to consider means by which they can get a settled policy on this matter. The noble Marquess who has just sat down and who, incidentally, we are glad to see wearing that herb which is particularly appropriate to St. Patrick's Day, has taken the opposite line, and said that if there is any attempt to repeat the policy which was laid down at Ottawa we run the risk of bringing more difficulties within the Empire and lose the opportunity of giving the lead to the world which at this moment is necessary. It is the question of agricultural policy which prompts me to intervene in a debate in which there are so many members of your Lordships' House who can speak with propriety. Having been so recently in Australia, and as a past President of the Federation of British Industries having had the opportunity of speaking with many of the trade organisations in Australia and hearing the views of their members, one cannot but he impressed with the anxiety that exists in the minds of so many industrialists that the drift to higher duties—the so-called Scullin duties—would hamper exports to Australia. We see the reverse happening. The Federal Treasurer, Mr. Casey, ex pressed anxiety that imports were growing so fast that they were causing inconvenience to the trade balance. His fears might possibly have been justified had an unexpected windfall not come about through the very large advance primarily in wool and then in wheat. While the volume of exports did not change very much, the values changed tremendously, and so relieved the position.
In the Motion of the noble Viscount the word "reasonable" is used, and of course on that hangs so much of the philosophy for or against the Ottawa Agreements. As one who, like others of your Lordships, was present at Ottawa during the Conference, one realised then how critically certain aspects of the agricultural policy reacted on that Conference. I am glad the noble Lord, Lord Stonehaven, reminded your Lordships of the position of Denmark and the
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Argentine. Why should there be this tenderness for these two countries? He used figures which, without my taking time to refer to them in detail, brought out vividly how favourable to these countries is the trade balance as between exports and imports to this country. We have frequently heard it said: "Oh, but think of the big value of British investments in the Argentine." There are many whom that argument leaves quite cold. To begin with, the figure so often quoted of £400,000,000, three years ago had been reduced to about £200,000,000. Values evaporated; and, after all, what about the value to British agriculture of British land which was knocked down by this policy of unrestricted imports in the past? That has been changed now, but it does not invalidate the reasoning of those pastoralists in the Dominions, particularly in Australia and New Zealand, who complain that the agricultural policy of His Majesty's Government is not sufficiently clear and who therefore feel that the grounds which prevent their increasing their exports to this country are insufficient.
I turn to the industrial side because, as has been pointed out by the noble Lord, Lord Stonehaven, imports into Australia from Great Britain are progressively increasing. They necessarily depend very largely on what is exported from Australia to us in the shape of primary products; but if we accept the view that the Dominions should expand their secondary industries to the utmost limit possible, then the degree to which the imports of primary products come into this country from the Dominions, in priority over those from other parts of the world, is a matter that requires clear definition in our agricultural policy.
The debate up till now has referred mostly, as far as the Dominions are concerned, to Australia and New Zealand. There is one aspect with regard to Canada which involves the matter of overseas lending. There are doubtless good grounds for the decision that lending to foreign countries should be prevented as much as possible, but one wonders if there is not some connection between this fact and the fact that Canada, requiring increasing capital to develop her industries, gets so much of it from outside the United Kingdom and Canada. In other words, foreign capital largely

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from south of the line is what develops and fertilises the Imperial estate in Canada, and it seems to be regrettable that a larger part of it is not provided from this country. One realises that many of these matters connected with Ottawa involve some change from financial orthodoxy, but one wonders if the present conditions arising from extreme nationalism do not justify a revision of outlook. After all, if we go back to 1925 we remember that the return to a gold basis in 1925, prompted by financial orthodoxy, produced great disaster for our export industries. Or again, that same orthodoxy in 1921 resulted in our borrowing some £21,000,000 from France and the United States keep us on gold which was the very thing that was most inimical to the interests of industry.
We are indebted for this discussion to the noble Viscount who presided over the Conference of the Empire Chambers of Commerce in Wellington. On his return, fresh from contact with views that are current among pastoralists as well as industrialists in those two Dominions in the southern hemisphere, he has raised a very important question. One feels that there are good grounds for modifying what has been the traditional economic aspect, and one expresses the hope that the Government will not pander to those countries in consideration of which the exports of meat from the Dominions are limited. The possibility of increasing the volume of exports of primary products from the Dominions is closely interwoven with the question of Empire migration. Surely a prosperous agriculture at home would result from fair protection to the domestic producer, and the increase of the value of our home lands would bring prosperity to the British farmers and also provide a good market here for our own manufacturers. Moreover, a prosperous agriculture would surely provide a larger number of people who are prepared to migrate to the Dominions, and the more you have going out the more you are developing and increasing your potential purchasers. I do not think I can do better in conclusion than remind your Lordships of Oliver Goldsmith's lines:
"Ill fairs the land, to hastening ills a prey, Where wealth accumulates, and men decay;
Princes and lords may flourish, or may fade,
A breath can make them, as a breath has made;
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But a bold peasantry, their country's pride,
When once destroyed, can never be supplied."
VISCOUNT BLEDISLOE: My Lords, I hesitate to intervene in this debate because I am conscious that I occupied no small portion of your Lordships' time yesterday in dealing with a somewhat cognate subject—namely, the prosperity of the British farmer in this country and the desirability of augmenting the supply of essential foods particularly in face of the possibility of the outbreak of another war. But I find it difficult to sit silent when I hear a discussion in this House which involves to such a large extent the future development and prosperity of the Dominion of New Zealand over whose administration I had the honour of presiding for five years, and, incidentally, the possible effect upon their industrial development, and upon the fortunes of our own primary producers, not to mention our industrial producers in the homeland. I for my part am grateful to the noble Viscount for initiating this debate, if it is only to keep alive in the public mind the enormous importance of cementing so far as we can and finding identity of interest between the purchasers of the homeland and all our oversea Dominions.
He told us that at the important Conference over which he ably presided two main contentions were brought forward and, as I understood from him, were eventually embodied in the final resolutions of the Conference. One apparently indicated the desire for opportunities for greater development of secondary industries in overseas countries, and the other asked for the avoidance of undue restrictions on the admission of Empire primary products into the British market. I have recently come from a country, a very loyal country, a country which sends us produce of very high quality and in relatively large quantities, a country which depends upon the markets of Great Britain to the extent of no less than 93 per cent. of the exports of its primary, produce, and, although efforts have been made, particularly in view of more recent developments in our Government policy at home, to find markets for primary products such as butter, cheese, lamb, mutton, tobacco, and honey in other parts of the world, those efforts have not met with any appreciable success owing very largely to the difficulties aris-

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ing from a lack of inter-change of commodities and the difficulties of shipping direct to certain foreign countries, particularly Japan, without the extra expense involved in transhipment on the shores of some other country.
In view of what I know and what I believe to be the somewhat precarious outlook of our brother farmers in New Zealand, and of the growth, if not of hostility, at any rate of a sense of criticism on the part of our farmers of New Zealand and Australian exporters of similar products to those which they raise on their own farms, I cannot help thinking that the time has come when there ought to be a real effort to bring about some appropriate balance of production, agricultural and industrial alike, as between different parts of the British Empire. The noble Viscount who initiated this debate said, and I quite endorse what he said, that the differences that exist are capable of adjustment and removal. Ought we not to set to work to devise some sort of machine which will be capable of bringing about an adjustment of these differences? I would suggest myself that there ought to be set up some Standing Empire Economic Council representative of production, industrial and agricultural, in every important part of the Empire, not composed of active politicians, which would see that a proper balance was maintained between Empire supplies to our home market and our supplies to overseas markets—a body which might indicate to the Government of the day to what Empire countries we should look for our supplies of various land products of high quality, taking into account the relative suitability of each country to furnish them, that suitability being based, of course, very largely upon soil and climate.
It is quite obvious that, although there are many products which we can raise—always assuming that fair treatment is given to our home agricultural producers—on our own soil with a reasonable profit to the producer, and of course with very great advantage to the security of this country, there are on the other hand quite a considerable number of products which can only be raised at a margin of profit with the help of Government subsidisation, and even then they might compare very unfavourably with similar
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products coming from countries that are m ore favoured in the matter of their production. Might it not be possible to evolve a scheme under which, speaking quite generally, a due proportion of essential commodities required by our markets should be provided from those countries which are admittedly best suited for their production? It would require, no doubt, a body of men extremely well versed in the relative productive capacities of different parts of the Empire, but I cannot believe that it is beyond the wit of man to suggest a personnel which would be quite capable of satisfying both the overseas producers and our home producers of the fairness of their decisions based upon their own specific knowledge of these problems.
In that connection I myself have always been a little bit afraid of any form of Government protection in case it should put a premium upon mediocrity and the encouragement of mediocre producers. When I first heard of the Ottawa Agreements I felt that there was a real danger in the case of a country like New Zealand, which boasts of providing at least two commodities of as high a quality as is to be found in any part of the world, lest other countries should be brought into unfair competition with them owing to the fact that those commodities would not be judged fairly according to their respective qualities. There is no doubt of this, that the British proletariat do demand and are going to demand in the future nothing but the best, and I for my part do not blame them. If we are going to set up any sort of protective machinery in the supposed interests of our Empire or of our home producers which is going to result in offering to the great masses of the people in this country something inferior in the matter of their essential food products to that which they are entitled to get, I, for my part, shall cease to be a Protectionist.
My noble friend Lord Stonehaven, in a most interesting speech with all of which I Entirely agree, mentioned, if I heard him aright, the lack of enterprise on the part of some representatives of our own manufacturing firms in obtaining the amount of custom in overseas countries which, with a little more energy and a little more information, they might reasonably expect to obtain. This is a matter into which I inquired somewhat meticulously while I was in New Zealand.

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Perhaps your Lordships will bear with me while I mention four particular products in regard to which I am satisfied that our British manufacturers, although producing the best of their kind, were not pushing their goods with the same capacity and the same knowledge as their competitors from other countries. I start with Homburg hats. I discovered that something like nine-tenths of the Homburg hats which were being sold in the various cities of New Zealand were of Italian make, and the reason apparently was that the Italians, with well informed and very shrewd emissaries, had discovered that the New Zealander preferred a somewhat highly coloured hat—at any rate not always a grey hat—which was rather softer in texture than those that we were prepared to supply. The result, as I say, was that nine-tenths of the Homburg hats when I went to New Zealand were imported from Italy.
I discovered much the same thing with regard to barber's cutlery. That came very largely from France and the United States, and not from Sheffield, simply because British cutlery was not tempered in the way that the New Zealand barber preferred. It also applied to tennis shoes, which of course in a sunny country like New Zealand are in great demand. They were coming mainly from Japan instead of from our home manufacturers—I believe Scotland was at one time a great producer of tennis shoes—and the reason for that was the fact that the particular type of tennis shoes which New Zealand required was wholly different from that which the Old Country was prepared to provide. Lastly, I would mention motor cars, and. with regard to that I want to say that it is a reassuring fact that there has been an increasing amount of enterprise on the part of British motor car manufacturers during the last five years in supplying overseas countries with the sort of car they need. In New Zealand, a very mountainous country, I found, as I had discovered previously in South America, that the criticism of the British car, speaking generally, was that it had not sufficient clearance and that the engine was not sufficiently powerful to get it up the steep hills with ease. It may interest your Lordships to know that when I entered New Zealand four-fifths of the motor cars used in New Zealand—and New Zealand uses more cars per head of the popula-
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tion than any other country except the United States—were not of British make. When I left New Zealand—I am not suggesting that it was due to my own activity—four-fifths of the cars coming into the country were of British make. That represented, if I may venture to say so, not only a more Imperial spirit in the matter of domestic purchases on the part of New Zealanders but a growing consciousness that British manufacturers were providing them with what they wanted. So much for that.
The noble Viscount who opened this debate told us that the Federation of British Industries had dealt with three groups of subjects, the first being inter-Imperial trade, the second being migration, and the third shipping. I am not going to refer to shipping, because we have had many discussions in this House upon the alleged injustice to British shipping on the part of certain foreign countries who are giving what we regard as unfair subsidies to our competitors. I should, however, like to take this opportunity of thanking the Government, as participating in raising the question in this House, on the more sympathetic attitude which they are adopting to British shipping, especially in view of the enormous importance which it has in the matter of Imperial defence, compared with what we regarded as their somewhat apathetic attitude a few years ago. When, however, we consider migration, we see that it is so interlinked with inter-Imperial trade that you cannot possibly discuss one apart from the other. In that connection the noble Viscount, Lord Elibank, emphasised the fact that the Dominions, and notably Australia and New Zealand, are asking for more encouragement to their secondary industries.
VISCOUNT ELIBANK: May I interrupt just for a moment? I did not say Australia and New Zealand particularly, I said the Dominions as a whole. I should just like to put that right.
VISCOUNT BLEDISLOE: Quite right, but I say Australia and New Zealand in particular; I did not make my meaning quite clear. I am certain that in New Zealand, and I believe that in Australia, there can be no secure future in the economic sense unless there is a larger development of secondary industries in each of those countries. But so far as New Zealand is concerned, such

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secondary industries as exist are very largely ancillary to primary production. They consist mainly of cloth mills—some of them run under very uneconomic conditions—flour mills, boot and shoe factories and the like. The country possesses, however, an enormous quantity of undeveloped natural resources which have barely been tapped so far. For the development both of those natural resources and of those secondary industries we must have capital, and the trouble in New Zealand to-day is that New Zealand is a relatively poor country, almost entirely an agricultural country. She does not possess the capital within her own borders to develop these industries or to exploit her national resources, and she must look to the Old Country to help her in that respect.
After all, capital is the great lubricator of industry and employment, and without industry and employment you will get no great revival of migration to New Zealand or, I believe, to any other of our overseas Dominions. I want to make a very special appeal, if I may, through your Lordships' House to those who have control of capital to bear in mind the possibilities of investing it to very great advantage, to the increased employment of the unemployed population—very capable workers, they are—and with no small financial return to themselves, in developing the resources of that very attractive Dominion. In this connection I am perfectly certain that we are all inclined to overemphasise the fact of unemployment in our overseas Dominions. Certainly in Canada, and very particularly in New Zealand, the cost of national services such as railways, roads, electric supply and the like involve an overhead cost per head of population which is a most unfair burden upon those countries, owing to the very small population which they possess. In New Zealand, for instance, we have only one and a half million people, though the country is quite capable, without any material increase in these national services of roads, railways, and the like, of carrying a population at least five times as large. Therefore I believe that, weighing one thing with another, you will find that in spite of a prevalence of unemployment, at any rate in New Zealand, there is scope for migration if only the migrant and the capital migrate together.
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I want to say one other thing, as an illustration of what I mean. Not only does a country like New Zealand want British capital, but it also wants a greater amount of capable commercial management and acumen. A very distinguished New Zealand statesman said to me only about fifteen months ago, when he was over here for the Silver Jubilee: "Lord Bledisloe, it is all very well for you to talk about developing the gold mines and other mines in our Dominion, but we are a farming country and we have no mining sense." I answered: "If you give due encouragement to some of us in this country who have mining sense, we might possibly supply the deficiency." But there is the fact. You want in New Zealand to-day, if you are going to develop its industries, its resources and its population, to carry out to it from this country industrial capital and business capacity. Forgive me for taking up so much of your Lordships' time, but I am perfectly certain that unless you find some modus vivendi as betwen the British produce and the overseas produce, it will be very difficult in the future to maintain a solidarity of feeling and of interest be-between all parts of the Empire and to develop our overseas Dominions in the way in which they ought to be developed.
LORD TEMPLEMORE: My Lords, at the outset of my speech I should like to thank my noble friend the noble Viscount who introduced this Motion for being good enough to see me for about half an hour ore night last week and tell me more or lets the points on which he was going to talk. I am much obliged to him for so doing. I think we should all agree that we have had an extraordinarily interesting debate. Indeed, I wish there were more of your Lordships present to listen to it. It really sets forth the value of your Lordships' House, because, in addition to the speech of my noble friend, who speaks with such authority because of his unrivalled experience in the realms both of business and of politics, we have had speeches from two ex-Governors-General, my noble friend Lord Stone-haven and my noble friend who sits on the Cross Benches, Viscount Bledisloe; we have had a speech from my noble friend Lord Barnby, whom I have known so long for his business activities in the North of England and elsewhere; and, last but not least, we have had a speech

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from the noble Marquess who was leading the Liberal Party to-day and who I am sorry to see is not in his place, but whose speech was of a somewhat different nature. I rather regret that, though I saw a little time ago my noble friend Lord Arnold in his place, he did not speak. I must say that I wish he had spoken, for we should have had a regular dyed-in-the-wool Cobdenite Free Trade speech from him. However, the noble Lord has departed and I am afraid we shall not hear him this afternoon.
I consider it a great honour, if your Lordships will allow me to say so, though I feel totally unequal to the task, to be permitted to reply to the debate this afternoon. I will first of all deal with the speech of my noble friend Viscount Elibank, who introduced the Motion. Of course, the resolution referred to in his somewhat long Motion formed part of a set of resolutions on the subject of inter-Imperial trade adopted by the Congress of Chambers of Commerce of the British Empire, of which he was President, held in New Zealand last October. I might inform him and the House at once that it has engaged the attention of His Majesty's Government. There is a little doubt in some parts of the House as to the zeal and energy with which His Majesty's Government tried to implement the Ottawa Agreements made five years ago. As to that, I can only say it has been, and continues to be, the policy of the Government in the United Kingdom to promote and develop inter-Imperial trade to the maximum extent that is consistent with the interests of home producers and consumers and of export trade generally. The Ottawa Agreements, which were negotiated at a time when your Lordships will remember the trade depression was at its worst, represented an attempt to give effect to that policy by a loosening of the obstacles to trade within the Empire, within the limits possible at the time and with due regard to the need for striking a just balance between the interests of industry and agriculture, both in this country and in the Dominions. I think I may say there is really no fundamental difference between the policy recommended in the resolutions referred to by the noble Viscount and the policy initiated by His Majesty's Government at Ottawa and pursued ever since.
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These resolutions suggest that, in particular, the policy of His Majesty's Government should have regard to three principles:—(1) ensuring to the United Kingdom the carrying out of a reasonable agricultural policy; (2) affording to the Dominions the opportunity to develop to a reasonable extent their secondary industries—which was referred to by my noble friend who introduced the Motion and the noble Viscount, Lord Bledisloe—and (3) minimising, so far as possible, the imposition of restrictions on the importation into the United Kingdom of Dominion primary products. Of course, it is a truism to say that a nation cannot sell without buying. Thus, any agreements designed to promote inter-Imperial trade cannot hope to succeed if they have regard to one set of interests only, whether they be agricultural or industrial. In negotiating the Ottawa Agreements, the Government recognised the necessity for adjusting the need of apparently conflicting interests in this country and the Dominions, both agricultural and industrial, and due regard was paid to these particular principles in framing the Agreements. The necessity for maintaining our important trade with foreign countries had also to be borne in mind, as I am sure your Lordships would agree is the view of even the most ardent Protectionist in this House.
Thus, the main United Kingdom contribution at Ottawa was the guarantee of entry free of duty into the United Kingdom—apart from certain duties, mainly revenue, which were already in force—for most goods from the overseas Empire. This was a substantial contribution to the development of inter-Imperial trade, and indeed it is true to say that the entry of Dominion products into the United Kingdom is facilitated to the utmost extent consistent with the preservation of vital domestic interests. In return for the grant of free entry into the United Kingdom we secured important tariff concessions for United Kingdom goods which have served to facilitate and develop our exports to the Dominions. At the same time, it was recognised that secondary industries in the Dominions were entitled to a reasonable measure of protection, but that any protective duties should not exceed a level which would enable the United Kingdom producers to compete in Dominion markets on a fair and equitable basis. In fact, we endeavoured to secure

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the maximum opportunities for the development of United Kingdom exports to the Dominions, consistent with a due regard for the Dominions' secondary industries.
The needs of United Kingdom agriculture were equally not overlooked in the Ottawa Agreements. We reserved the right after August, 1935, if we considered it necessary in the interests of the United Kingdom producer, to review the basis of preference on eggs, poultry, butter and other milk products, and either to impose preferential duties on these products or to bring them within a system of quantitative regulation. It was none the less recognised that our ability to sell in the Dominions depends not only on the willingness of the Dominions to buy United Kingdom goods, but to a large extent on the ability of the Dominions to find a market for their agricultural products in the United Kingdom. The underlying principle of Ottawa in regard to the United Kingdom market for agricultural products was, therefore, that the home producer should come first, the Dominion producer second, and the foreign producer third. His Majesty's Government have continued to have regard to this principle in developing and formulating their agricultural policy.
Now I should like to refer for a few moments to a subject to which the noble Viscount, Lord Elibank, referred, and that is the new United Kingdom-Canadian Trade Agreement, signed last month, which represents a further step in the direction taken at the Ottawa Conference. In return for maintaining the existing grant of free entry into the United Kingdom for Canadian products, and while preserving suitable safeguards for United Kingdom agriculture, we have secured further and important reductions in the Canadian duties on United Kingdom goods, and the hulk of our trade with Canada is now either entitled to free entry or subject to moderate duties which the Canadian Government have undertaken not to increase. It has been agreed that any negotiations for revision of the Ottawa Agreements with the other Dominions, with India and with Southern Rhodesia should be undertaken separately as occasion arises, and throughout any such negotiations the Government will have in mind the desirability of doing everything possible to promote and en-
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courage inter-Imperial trade with due regard to the needs of the many-sided interests involved.
My noble friend gave us some very interesting figures and I must confess he rather took my steam away by doing so, because I have the figures here showing the growth of trade since 1931 which has been due to the Ottawa Agreements. I would only vary his remarks by giving the percentages. Between 1931 and 1036 the value of exports of United Kingdom goods to the main Ottawa Dominions—Canada, Australia, New Zealand and the Union of South Africa—and India increased by 44 per cent. The imports into the United Kingdom from these Dominions and India increased in the same period by very nearly 50 per cent.
I will next turn for a moment to the very interesting speech which was made b the noble Lord, Lord Stonehaven, and I think he rather found fault with His Majesty's Government at being, what he described I think as lukewarm on the subject of emigration from this country to the Dominions. He quoted a reply given in another place by my right honourable friend the Prime Minister, some little time ago, as rather denoting that sufficient interest was not taken. I happen to have read that reply. I have read the question and the answer, and I must say it did not strike me in any way at all that the Prime Minister or the Government ware not greatly interested in the question. I would like to say this: as my noble friend knows, and as was pointed out in this House a few nights ago by my noble friend Lord Stanhope, this has get to be a matter of mutual arrangement between ourselves and the Dominions. As one noble Lord pointed out to-night, they are entirely independent Governments. But I can say that His Majesty's Government, far from regarding it lightly, consider it a most important subject, and although I have no authority from the Cabinet or from my noble friend to say it, I believe that if occasion arises for this question of emigration to be taken up in a serious manner no question of money will be allowed to stand in the way.
My noble friend Lord Stonehaven also accused His Majesty's Government of being afraid to give a lead. On the other hand, the noble Marquess, Lord Lothian, thought that the Government gave a lead

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too much. The two criticisms therefore I think rather cancel themselves out. I can only assure my noble friend that the Government will not be in the least afraid of giving a lead at the Imperial Conference, whenever they think it right to do so, having due regard always—as people are rather apt to forget—to the practical independence of the Dominion Governments in their own affairs. I now pass to the speech of the noble Marquess, Lord Lothian, who has unfortunately left the House. He found great fault with the Government for making the Ottawa Agreements at all. I was not surprised, because I remember my noble friend, much to my regret and that of his colleagues, left the Government five years ago on account of those Agreements. But the Ottawa Agreements, after all, are only part of the policy of the Government. There have, in addition, been most important trade agreements with foreign countries, and here again two opinions cancel themselves out, because we were found fault with by the noble Lord behind me for our agreements with Denmark and the Argentine. So that I think we may say that, not for the first time, the middle course pursued by His Majesty's Government is probably the right one.
I regret that the noble Viscount, Lord Bledisloe, who spoke from the Cross Benches, has left the House, for, if I may say so, of all the speeches that we have had to-day I think his was very nearly the most interesting. I was greatly struck with his idea of forming an Empire Economic Council in order that this Council might decide on production in various parts of the Empire of those goods which come most naturally from the different parts. I cannot enlarge on that to-day; is a new idea to me and to most of your Lordships. I can only say that this will receive the most earnest attention of the Government. I was exceedingly interested to hear of the noble Viscount's great success not only in the hat department, but in the motor car trade of New Zealand, and I can only say that I think one way of improving inter-Imperial trade would be to have a few more Governors and Governors-General like my noble friend.
I know that a suggestion is made sometimes in some quarters that much of the value of the Ottawa Agreements to this
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country has been vitiated by the manner and spirit in which they have been carried out in the Dominions. I am advised that the Agreements have in general been operated fairly and reasonably on both sides, and any difficulties that may have arisen with regard to the interpretation of particular provisions have been discussed in a frank and friendly manner between the Governments concerned. Considering the varied interests of our Empire, with its Dominions in every quarter of the globe, it would not in the opinion of the Government have been very surprising had numerous and serious disputes arisen during the last four or five years over the interpretation of the Ottawa Agreements. I had not the good fortune to be one of those who represented this. country at Ottawa five years ago, but those of my right honourable and noble friends who went to Ottawa—and I know that my noble and learned friend on the Woolsack played a very great part in those Agreements—well know how difficult it was to frame those Agreements in such a way as to do justice to ourselves and all our Dominions. It is, I know, a source of wonder to the Government with what little friction and with what great success the Agreements have been worked. In conclusion, I should like, on behalf of the Government, to thank my noble friend for having raised this very important debate to-day. He has done a great service to the country in so doing, and the importance of the debate and the value of the contributions made with such particular knowledge will, I am sure, not fail to engage the attention of His Majesty's Government.
VISCOUNT ELIBANK: My Lords, I wish to thank the noble Lord for the way in which he has dealt with the subject which I have raised to-day, and especially for the kind words which he has just spoken. I am also grateful to those noble Lords who have taken part in the debate and who have contributed such valuable material to the discussion. I do not propose to traverse any of the arguments which have been put forward. It was not my intention to raise this question in order to have any controversy about it. My desire was, if I may say so, on behalf of the commercial community of the Empire, who worked these agreements but who did not

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formulate them, to present their points of view as to what has happened and what might be done to make things easier. I thank the Government for the way in which they are considering the reports to which I have drawn attention, and beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

DEFENCE LOANS BILL.
House in Committee (according to Order): Bill reported without amendment.

LOCAL GOVERNMENT (FINANCIAL PROVISIONS) BILL.
House in Committee (according to Order): Bill reported without amendment.
House adjourned at six o' clock.