Lords Sitting of 14 February 1939

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.

KING'S BENCH DIVISION VACANCIES: MESSAGE FROM THE KING.
THE EARL OF CLARENDON: My Lords, I have to convey to your Lordships the following message from the King:
"I have received your Address praying that, in pursuance of the Supreme Court of Judicature (Consolidation) Act, 1925, two Judges may be appointed to the High Court of Justice to fill vacancies in the King's Bench Division thereof, and I will issue directions in accordance with your desire."

CURRENCY AND BANK NOTES BILL.
Brought from the Commons; read 1a; and to be printed.

OFFICIAL SECRETS BILL, [H.L.]
THE LORD CHANCELLOR (LORD MAUGHAM): My Lords, I beg leave to introduce a Bill to amend Section 6 of the Official Secrets Act, 1920, and I move that it be read a first time.
Moved, That the Bill be now read 1a.— (The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

CITY OF LONDON (VARIOUS POWERS) BILL, [H.L.]
Read 2a, and committed.
GOSPORT CORPORATION BILL. [H.L.]
Read 2a, and committed.
MEDWAY CONSERVANCY BILL. [H.L.]
Read 2a, and committed.
MERTHYR TYDFIL CORPORATION BILL. [H.L.]
Read 2a, and committed.
OSWESTRY CORPORATION BILL. [H.L.]
Read 2a, and committed.
TYNEMOUTH CORPORATION BILL. [H.L.]
Read 2a, and committed.
LONDON BUILDING ACTS (AMENDMENT) BILL. [H.L.]
Read 2a, and committed: the Committee to be proposed by the Committee of Selection.
MACCLESFIELD CORPORATION BILL. [H.L.]
Read 2a, and committed: the Committee to be proposed by the Committee of Selection.
METROPOLITAN WATER BOARD BILL. [H.L.]
Read 2a, and committed: the Committee to be proposed by the Committee of Selection.
SMETHWICK OLDBURY ROWLEY REGIS AND TIPTON TRANSPORT BILL. [H.L.]
Read 2a, and committed: the Committee to be proposed by the Committee of Selection.

CUSTODY OF CHILDREN (SCOTLAND) BILL.
Order of the Day for the Second Reading read.
LORD THANKERTON: My Lords, in asking your Lordships to give this Bill a Second Reading now, I would express the hope that your Lordships' House will give the measure, small as it is, as warm a welcome and as easy a passage as it got at all stages in another place. I may explain that there is only one point in the Bill. In Scotland we

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divide children for the purposes of control into pupils and minors, a pupil meaning, in the case of a girl, until she attains the age of twelve years, and in the case of a boy, until he attains the age of fourteen. In Scotland the powers of the court at present with regard to making orders in respect of the custody, maintenance, education and so on of children are limited to control in the case of pupil children. In England, as I understand, that control persists until true majority is reached at the age of twenty-one, a person being called an infant under that age whatever age he or she may be. We are not seeking to go as far as that because sixteen is recognised in many modern Statutes as a suitable age. The sole purpose of this one-clause Bill is to extend the powers of the courts in Scotland beyond the age of attaining puberty, at twelve years in the case of a girl and fourteen years in the case of a boy, to the attainment of the age of sixteen. That is the purpose, and the sole purpose, of the Bill.
Instances will readily occur to your Lordships of the great usefulness of this power of control by the court, but I may perhaps give one illustration which will bring it home to you. By far the larger number of the divorces that take place in Scotland are divorces among the poorer classes, who have the benefit of what we call the Poor's Roll, which is known as the Poor Persons Act in this country. In most cases the parties are probably living in the same street or in the same district, and will continue to live quite close to each other. The unfortunate child, say, a girl of thirteen or a boy of fifteen, has to make up its mind without assistance from the court at present, but with pressure doubtless from this parent or the other, as to which it is going to live with. The father has a prior claim in one sense. Your Lordships will readily realise that it is of the utmost advantage for the peace of mind, not only of the most important person of all—the child itself—but also of the parents that a neutral party in the shape of the court should be able to control the question and to settle it definitely for the unfortunate child. The court, of course, as everywhere, always considers the interest of the child as the primary interest in these cases. That illustration will perhaps suffice to bring home the value of this Bill. I need not detain your
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Lordships longer except to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Thankerton.)
THE SECRETARY OF STATE FOR INDIA (THE MARQUESS OF ZETLAND): My Lords, I should like, if I may, on behalf of the Government, to associate myself with the mover of this Bill, and to commend it to your Lordships' most favourable consideration. It does seem to me that for once Scotland appears to have fallen a little behind England in respect of its social legislation, and the purpose of this Bill, as the noble Lord has explained, is to place Scotland on the same footing as England in this matter. As I understand it, in England the High Court can deal with these questions in the case of a person below the age of twenty-one. The courts of summary jurisdiction have been given power to deal with similar questions in the case of persons below the age of sixteen, and it seems only reasonable that the courts in Scotland should have similar powers, and should be able to deal with these very difficult and often very delicate and painful cases of control, at least up to the time when the boy or girl reaches the age of sixteen. I hope very much, therefore, that your Lordships will give a very cordial reception to this Bill.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

EXPORT GUARANTEES BILL.
Order of the Day for the Second Reading read.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR FOREIGN AFFAIRS (THE EARL OF PLYMOUTH): My Lords, in asking the House to give this Bill a Second Reading I do not think it will be necessary for me to detain your Lordships very long. This is a Bill to amend the Export Guarantees Act of 1937, in order to give the Government further powers to help the export trade generally. Under that Act the Board of Trade were empowered, with the consent of the Treasury, and after consultation with an Advisory Committee, to give guarantees in connection with the exports from the United Kingdom of goods not being "munitions of war." The House will,

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of course, be aware that the Advisory Committee consists of a number of eminent business men, who have devoted much of their time to this task, and to whom we are therefore very greatly indebted. The guarantees given to exporters under this measure, in return for a small premium, are an insurance against loss through failure of overseas buyers to pay for the goods supplied. In certain cases protection can also be obtained against the risk that a solvent buyer abroad may be prevented from discharging his debt in consequence of exchange restrictions imposed by his Government.
By enabling United Kingdom exporters to expand their business in the confidence that their main risks are covered these guarantees have undoubtedly had great influence in encouraging this country's export trade. They are also of material assistance in helping exporters to obtain the financial support which is in many cases one of the traders' main problems. The growth of the Department's turnover during recent years has been most remarkable. During the year ended March 31, 1938, the total amount of its contracts, policies and guarantees was approximately £43,000,000. That is more than double the entire total annually only two years previously. In the short space of five years the annual turnover has increased from £7,500,000 to £43,000,000, nearly six times. Since 1926, when the present guarantee scheme came into force, the total value of the contracts, policies and guarantees issued by the Department has exceeded £200,000,000, and these guarantees have been given entirely without cost to the taxpayer. The premiums charged have exceeded the whole of the claims paid and the administrative expenses throughout that period of over twelve years.
I feel certain your Lordships will agree that this is a very remarkable record. I am glad to see that my noble friend Lord Mancroft is present in the House this afternoon, for he was intimately concerned not long ago with an early stage of the development of the Export Credit Guarantees Department. I am quite sure that the progress made by the Department will therefore be of special interest to him, and that he will be gratified to see that his belief in its future has been so amply justified. It can be justly said that the system of export guarantees, which at its inception was regarded as a small-scale
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experiment, has now become a large and important factor in the export business of this country. It has to a very large extent assisted trade in a form which acceptance business and long-term foreign loans were at one time able to do. The facilities provided by the Department have in fact now become an integral part of the commercial system of this country.
Under the present Act of 1937 the aggregate amount of the guarantees which may be at any time outstanding is limited to £50,000,000. This limit has now proved insufficient in consequence of the increasing demand by traders for the guarantees, and it is proposed in Clause 2 to increase the limit to £75,000,000. The opportunity is also being taken to make certain modifications designed to increase the flexibility of the scheme and to extend its usefulness generally to traders. The amendments of the existing scheme are briefly these: First of all, in the present Act there is a prohibition against the giving of guarantees in respect of "munitions of war." This expression, "munitions of war," is capable of a very wide interpretation and it has been found desirable to define the prohibited articles more precisely. In the proviso to subsection (1) of Clause 1 they are defined as "weapons of war or other goods which in the opinion of the Board of Trade are constructed or intended for destructive use in war." Other provisions in Clause 1 of the Bill will enable the Department to adapt its facilities more readily to customary forms of export practice and to meet new trading conditions as they arise. Thus it will be made possible for the guarantees to cover sales by manufacturers to merchants in this country of goods intended for export, sales of United Kingdom goods from stocks held abroad and, within certain limits, expenditure on services which are of benefit to trade in the export of goods.
Within the new limit of £75,000,000 provided in Clause 2 there is a limit of £7,500,000 up to which guarantees may be given in respect of goods not home-produced though they must be re-exports. The present Act gives power to cover such goods to an extent not exceeding one-quarter of the price of the goods to which the guarantee relates. The general limit now substituted will be of more convenience in the day-to-day work of the Department. And so this part of the Bill makes provision for the continuance

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of the commercial work of the Department on the existing basis but with certain minor amendments to the scheme which have been found by experience to be necessary. In addition to this, certain new powers are conferred upon the Board of Trade under Clause 4 which will enable the Board with the consent of the Treasury to give guarantees in certain cases where the normal method involving consultation with the Advisory Committee is not considered appropriate but where the Board considers it expedient in the national interest that guarantees should be given. The prohibition in respect of "weapons of war" does not apply to guarantees given under this clause. The aggregate amount of the liability of the Board of Trade in respect of such guarantees is limited to £10,000,000. Clause 5 provides for returns to be published giving certain particulars of guarantees given under these powers. The accounts of such transactions will be kept entirely separate from those of guarantees given under the Export Credit Guarantees Scheme.
That, shortly, is a description of this Bill. I will not detain the House any longer at this stage, but I will of course be only too glad to try to the best of my ability to answer any question which may be put to me during the course of the debate. I beg to move that the Bill be read a second time.
Moved, That the Bill be now read 2a.—(The Earl of Plymouth.)
LORD STRABOLGI: My Lords, on behalf of my noble friends I desire to give a welcome to the Bill and to support its Second Reading. I would also congratulate the noble Earl on the very clear, lucid, and yet brief explanation with which he furnished your Lordships. Having said that, may I make one or two brief observations? I welcome the new definition of "munitions of war." When the original Bill of this series was introduced in another place in 1920—the first one known as the Overseas Credit Insurance Bill—I was responsible for the Amendment, which was accepted, that it should not apply to "munitions of war." I am glad to see that this new definition is more explicit on that point; but I am a little uneasy with regard to Clause 4 as, if I understood the noble Earl aright, the Board of Trade can give guarantees in
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the case of munitions of war despite the re-enactment in Clause 1. I ought to say at once that some of us think that is rather dangerous.
Observe, my Lords, that the Board of Trade is exempted from seeking the advice of the Advisory Council. Presumably the Advisory Council are there as experienced business men, and why the Board of Trade should not consult them just as they are consulted in other matters, we do not understand. I should have thought that their advice would not delay matters but would prevent the Board of Trade from making mistakes. We are putting rather large power in the hands of the Board of Trade. I am not, myself, so confident of the general policy of His Majesty's present advisers that I want to see them given any more powers; and these might be used for political purposes. That is quite clear. In the national interest it may be considered right to guarantee certain trades, including the export of munitions of war. From what I have seen of the doings of this Government in recent years, I am rather reluctant to give them this extra power. The Bill says that the Board of Trade shall publish half-yearly returns showing, in respect of each country, the guarantees given under Clause 4. The specific question I wish to ask the noble Earl—and I am sorry that owing to pressure of other matters I was not able to give him prior notice—is in what form will this information be published. Will it just be a little table saying that this country and that country have guarantees up to so much, or will details be given? That is necessary in the public interest, and I want the noble Earl to tell us, either now or before we finally part with this Bill, whether all reasonable information will be given about the transactions of the Board of Trade.
With regard to the general principles of the Bill, we have had ample reason for something of this kind for many years past. As your Lordships are only too well aware, business in the world is still much upset and dislocated, and we have not indeed recovered from the terrible events of 1914–18. Business has hardly been normal over more than about a third of the world since then. You have some of the greatest countries in the world exercising all kinds of controls and restrictions on their traders, subsidising trade here, prohibiting it there, and you still have great difficulties with exchange and

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currency in about a third of the countries of Europe. You cannot get your money out after you sell your goods in those countries, and the unfortunate merchant has altogether a very bleak time just now in most of the world's markets. Therefore we as a Party welcome anything that will help the export trade in these difficult circumstances. And indeed think the time has come when we have got to give even wider and greater help to the export trade.
I think the barter systems that are being introduced in certain countries, such as Germany, require an answer. From certain remarks made by the Parliamentary Secretary of the Department of Overseas Trade in another place, that matter is apparently going to be tackled, and we have already had some examples of what can be done. I believe that the time has come when we have to be prepared to buy in bulk in certain markets and to sell in bulk. I hope that that matter is being pursued very vigorously by His Majesty's Government. I know they are very alive to the necessity of something of the sort being done, because it is of the greatest importance. I meet great numbers of business men who are coming round more and more to that point of view. I know examples of very important trades where the producers would be delighted to have dealt with us on a bulk basis, but they were forced to deal with other countries against their will because the organisations did not exist in this country for bulk sales and bulk purchases. This Bill is very like the one we debated in another place as long ago as 1920. It is only really an extension, with certain modifications, of that Bill. I think the time has come when the Government should seriously tackle a wider development of help to our export trade generally, and I would particularly venture to suggest that this whole question of bulk sale and bulk purchase should be examined very seriously indeed. I support the Bill.
VISCOUNT SWINTON: My Lords, this Bill, as is clear from the speech of my noble friend, is welcomed in every quarter of the House. It is certainly very welcome to me, because I find myself rather in the position of a grandparent. The Bill which the noble Lord who leads the Opposition to-day amended in 1920 was, I think, the first of all the Bills, and it was largely drafted and was
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certainly introduced by myself. Then, learning from the experience and with the great assistance of that admirable Advisory Committee which we established, we set up the system which has gone on and been reinforced from time to time. The noble Lord, Lord Man-croft, and I tackled the system afresh in 1926, and produced the system as it has existed practically ever since then, and on the whole it has worked extremely well.
If it is true of any country it is true of this country that we must have export trade if we are to live, and the expansion under this system which the noble Earl has indicated to the House shows what a substantial assistance to export trade the export credit system has been. The Department and the Advisory Committee, to whom the Department is very greatly indebted, with their cumulative experience, have been able to extend their risks, to-take I think steadily a rather wider view of risks that may reasonably be entertained, and have achieved the enormous volume of business which the noble Earl has recited to the House, while at the same time not only making not a penny of loss, but piling up—I believe I am right in saying—a not unsubstantial reserve fund to the credit of the account. A system that has been as successful as that obviously ought to be continued and extended on quite a wide scale. And surely no time could be more opportune than the present for such an extension. Export trade is not an easy matter in these days with uncertain conditions, controls, and so on in almost every country of the world, but it is not less a national necessity than it was when such trade was easier. But I think there is even more to it than that. The more export trade can be developed, the more countries can be linked in mutual trade, the more do we establish those contacts and that confidence which are really the only possible solid foundation of international peace. This Bill enables the Government to back with its credit our own industry, both in getting new trade and in meeting international opposition.
I would like to ask one specific question. I was very glad to have a general indication that wide powers were being taken not merely to give specific guarantees in respect of specific transactions, but also to give help in what I think my noble friend called general servicing and matters

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of that kind. I take it that he was referring to the power which is taken under Clause 1 (4) to give guarantees
"in connection with any other matter which appears to the Board of Trade to be conducive to the establishing or encouraging of such trade or branch of trade as aforesaid."
I would be rather glad if my noble friend when he replies would just elaborate that a little and explain to us what is the kind of assistance which the Government propose to give.
In all trade, whether it be domestic or foreign, there must be a large element of competition, but there should also be a large element of co-operation. Trade can be conducted, if I may use a colloquial metaphor, either as an organised hunt or as a dog-fight, and if the industry of one country works as a trained and disciplined pack, while the corresponding industry in another country engages in an internal dog-fight, then the organised disciplined pack will find and kill very often, and the undisciplined pack will be found, not having been very successful, rather reluctantly licking its wounds.
I should like, if I may, to say how wholeheartedly I have admired the vigour, wisdom and vision with which the present Parliamentary Secretary of the Overseas Trade Department has launched and pursued his campaign for extending our export trade and for getting reasonable co-operation within industry in this country and between the industries of different countries in international trade. He deserves, within industry and outside it, all the support he can get. But a Minister, like Providence, can only help those who help themselves, and it surely is greatly in the interest of all the export industries in this country to put themselves in a position where the Government can help them to the fullest extent. In international negotiations, whether they are conducted by the Department of Overseas Trade and the Foreign Office or whether they are conducted, as they must largely be, by the industries themselves, it is impossible either for the Government or for an industry to achieve satisfactory results unless that industry is so organised that in its international negotiations it can speak and act as a unit. Only so can it take full advantage of the help which the Government are only too anxious to give;
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only so can it deploy the strength which will enable it in international negotiations to secure the best terms for the national industry; and only so can we, through the industry, achieve that international co-operation which is both good business and good statesmanship.
I sometimes think parts of British industry are inclined to be too individualistic. Initiative is absolutely necessary, and it is quite possible to combine initiative with co-operation. Those industries which are combined together, which, for example, have pooled research and pooled patents, which have so organised their industries that they can speak as a unit both at home and abroad, certainly have not shown any lack of initiative in the development of new processes or in seeking new outlets for their products, and they certainly have not been the least successful in the trade competition of the time. I think there is a much greater readiness to-day to organise and to cooperate than was at one time the case. I know the Minister for Overseas Trade wants to encourage that organisation and that co-operation. Indeed, it is essential to him in his policy. He must be able to deal with each industry as a unit in order to carry his policy through to success. Some of our industries are completely and thoroughly organised. With them it is easy for him to deal, and they can easily engage themselves in their international negotiations. Others are not so well organised, and yet I believe that in all the important industries there is a very genuine desire, certainly on the part of the majority in those industries, to get together, to get their organisation right so that they can play their part most effectively.
At the same time I know that during a good many years when I was at the Board of Trade I found, and I expect the Minister himself finds to-day, from time to time cases in industry where, although the majority of people, and the most efficient people in the industry, are only too keen to get together to get the industry properly organised, for some reason or other it hangs fire; the job does not get done. There may be inertia somewhere; there may be suspicions within the industry. The smaller firms in the industry may be chary of following the lead of the larger firms. For one reason or another the job does not get done. Now, based on my own experience at the

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Board of Trade, I would like to make this practical constructive suggestion to the Minister; indeed for all I know it may be already in his mind. It is vital to him and vital to industry that the industries that are important for export should be so organised internally that they can act as a unit and play as a unit both in their dealings with him as a Minister and in their negotiations with foreign industry.
If it is found in any industry which is important in the export trade and which ought to be in a position to negotiate that there is some obstacle, some delay in getting the industry rightly organised—and delay may be fatal; I am confident that there are opportunities which are available now, and will be available perhaps in the next few months, to industry in this country and industries abroad for making arrangements which would be to the mutual benefit of both of them and would be of great benefit for the closer relations of their respective countries, opportunities which must be seized at the right moment and which, if allowed to pass, may not easily or perhaps ever return again—in such a case I would suggest to the industry that it should go to the Ministry and say: "Will you give us an independent chairman who will help us in our organisation?" I would even say to the Minister: "If you know there is a case like this, if you know that an industry is finding these difficulties, make that offer to the industry yourself." We have done it before now, we have done it with very great success, and both the Government and the industry have found how invaluable such an independent chairman has been.
He should be quite independent of the industry. He will be trusted completely by the industry and by everybody in it because he has no interest except the common interest of the industry as a whole. He would render great service to the industry, and I think the Minister himself would find the appointment of value because such a man can present the problems of the industry more fairly and more dispassionately to the Minister than perhaps anybody individually engaged in it can do. I make that suggestion based as it is on very successful examples that will occur to any of us and are ready to hand. I am quite certain that the Minister would easily find men ready to take on a task like that.
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It may well be that such a man is only required to act for a comparatively short time, until the industry itself is completely organised. The value of the work cannot be in dispute. The right kind of man would readily undertake it, for it is a very important form of national service. I sincerely trust that where difficulties occur, if they are occurring, to prevent these export industries organising themselves effectively, that line may be followed, because I believe that by following it much may be done to help the Minister to achieve the success which his policy so rightly deserves and which it is so much in the national interest it should attain.
LORD MANCROFT: My Lords, this Bill deals with the export trade, and I do not think it is possible for anyone to have contributed a more useful word than that just uttered by my noble friend Viscount Swinton when he said that in our attempt to compete in the overseas markets we should organise our industries each one as a unit. As one connected with manufacturing—I know nothing about City work—I know how necessary is such a policy. If I may go from the general to the particular in order to support the views of my noble friend, I would say that the first thing to do is to make industrialists understand that there are too large a number of unessential variations of designs, sizes, qualities and prices, and by reducing those unessential variations you will at once reduce costs and in reducing costs you will be in a better position to deal with foreign competition which faces you, probably backed by Government help, in other countries. I am very glad that my noble friend mentioned that matter, and if I can do anything to help through the Association of British Chambers of Commerce I should like to do so.
This is a very good Bill, good in principle, and I am in complete accord with it. But I would ask your Lordships to give me a few minutes so that I may disclose some points I have in mind. There is much more in this Bill than appears on the face of it. The noble Lord, Lord Strabolgi, reminded us that its policy goes as far back as 1920. I remember very well the speeches made then. The noble Lord and myself have taken part in every step of this policy for the last nineteen years, and the noble

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Viscount, Lord Swinton, is perfectly right in saying that he is the great-grandfather of this Bill and its policy. As far back as 1920 or 1921 he asked me to sit on the Advisory Committee. As he has mentioned my name, I may perhaps say that I served on that Committee for Export Credits, and was, later on, for three years responsible for the policy covered by the earlier Export Credit Acts, as Minister for Overseas Trade in the House of Commons. I am thoroughly convinced that it is a good policy.
I think the Bill might be given a more correct title. There is no reason why the title given it should not subsist, but really it is a Bill to enable British traders to insure against risk of losses by bad debts in the export markets. It is true there is a company doing the work but behind these efforts of His Majesty's Government you have skilful civil servants who carry out the details of the work. They are a very expert body of men who have done extremely well for us and we ought to offer them our gratitude. They have abroad what a commercial company cannot have, the assistance of the nation's consular servants, who can obtain and give early information about the standing of foreign people to whom it is desired by our exporters to give credit. My noble friend mentioned the Advisory Committee. Much of the success of this scheme has been due not only to its staff of civil servants but also to the help of the Advisory Committee. I cannot refrain from saying with what grief we heard of the death of Sir Sidney Peel and how much the country has lost by being deprived of his devoted and selfless services as Chairman of that Committee.
I was astonished to hear my noble friend the Earl of Plymouth say that credits had reached the total of £200,000,000, including £43,000,000 in one year. As we have seen in the reports of the Public Accounts Committee, there has been no loss on the transactions over a long period taking one year with another. There has been loss one year and profit another year, but the scheme as a whole has been carried on without any cost to the taxpayer. If I have a complaint to make against the Bill it is that the amount proposed is not big enough. I shall seek to show that the amount ought to be much bigger than £75,000,000 and will have to be, eventually. I rule
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out altogether trade done with countries within His Majesty's Dominions and shall only refer to foreign trade. I am aware also that there is an embargo on the issue here of foreign loans.
This Bill focuses attention on the fact that in future it will be very difficult for foreign countries to borrow in the open market of this country. Very few of them are credit-worthy, and those who are credit-worthy do not want to borrow. It will be very difficult for those who are uncredit-worthy to borrow again in the open market in Great Britain. When there has been foreign borrowing in the past money has been raised from the private investor; it has come back to pay for the goods and services which foreign countries have obtained from this country; but the paper bonds or certificates issued by those borrowers who have shown themselves uncredit-worthy have become very nearly valueless. The result, to take the matter to its logical conclusion, is that most of the exports sent to those uncredit-worthy countries in the past have really been paid for by our own people out of their own savings, by their taking up of foreign loans now in default.
Let me quote three instances which have given a shock to public confidence, a shock so great that I think it will entirely stop the private investor from lending his money again outside His Majesty's Dominions, to provide exports as gifts to foreign nations. There is Mexico, where we have equipped the railways and harbours, electricity works and tramways; Brazil, where we have developed natural resources and built the beautiful city of Rio de Janeiro; Greece, which we helped out of her troubles. All these countries have defaulted and certainly two of them—namely, Mexico and Brazil—have repudiated their liabilities to those who lent them money. One does not like to use strong terms in this House, but I consider their conduct nothing less than common vulgar dishonesty. They have had and have shirked every opportunity of coming to a composition with us. They have shown to us by their conduct that we must have a Bill of this kind if there is to be foreign export trade in the future.
Take the case of Brazil. We have sunk £160,000,000 in Brazil and on £152,000,000 of that not a penny interest was paid last year. The Brazilians did not in common honesty say, "We are in

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difficulties but we will do our best to come to some arrangement with you." Their conduct is dishonourable. In the case of Mexico, the Government have snapped their fingers at those who lent that country money. As to the Argentine, we put £277,000,000 into that country for providing railways and on £177,000,000 of that not a penny in interest has been paid for some years. Argentina refuses to remember that without the railways we provided she could not move a bullock or a sack of grain. It will be very difficult for the Anglo-Argentine Railways to get money again when they want to buy heavy engineering material. They will not be able to raise money here from their shareholders; they will be frightened to sink any more. This type of Bill will have to come into operation if the Anglo-Argentine Railways want to buy heavy engineering material from Northumberland or the Clyde. Those who have heavy engineering material to sell will need to come to the Advisory Committee and then they will be able to get paid by means of bills which the Government for a small commission will be willing to back. That will be the only way for these railways to raise money, the only way in which they can get heavy railway material and the only way in which we can get work for our people on the Clyde and in Northumberland. That will be the only way to finance the export of British goods made by credit-worthy borrowers for export purposes, payment for which now cannot be raised from private persons because the foreign borrowers have proved to be uncredit-worthy. In the case of the Argentine railways it has been due to the hostile treatment of British capital by the Argentine public authorities.
The Bill covers more than appears on the face of it; we shall have to go to over a hundred millions as time goes on. I do not know whether it is realised in this House that we have sunk in Latin South America—that means it has mostly gone out in goods and services—£1,200,000,000 and that we have received not one penny of income return on £650,000,000 in 1938. This cannot go on and the public will not lend again. Take another country which does wish to be honest, China. China does make an attempt to be honest and when this struggle with Japan has ended she will require to be re-equipped. But it will be
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very difficult even with the cover of the Maritime Customs for China to raise money here. Then we shall have to come along and help trade with China with export credit. £75,000,000 will be nothing as compared with what will be required to put China on her feet with re-equipment.
I think that successive Governments in this country have been very foolish in adopting a policy of developing into negligence to defend the interests of those who have sunk their savings in investments in foreign countries. If the Government overlook the interests of those who in the past have sunk their money in foreign countries they invite the ill-treatment of British investors in the future. The Government should not forget that the foreign investments have fostered exports and employment. I think that with regard to certain of our foreign investments the Government should have taken active steps. For instance, they should have taken steps to have brought Brazil to her senses. We threatened with effect a clearing scheme with Germany; but we cannot have such a scheme with Brazil because I think the balance of trade will not permit it. But other methods should be taken. Of course we might suffer for some months, but it would be better if we said quite plainly that we will not have Brazilian imports here until Brazil comes to a bilateral arrangement to put right the default on her loans. Of course we should lose mutual trade for some months. Yet, on balance, in the long run it would I think repay us to close our ports to Brazil for a time.
I have nothing to say further about this Bill except this that the principles about foreign lending which I have laid down have been supported in a very interesting report which I hold in my hand. It is the report on Export Trade of the Association of British Chambers of Commerce. It was issued on January 11 last. The Chairman of the Association's Committee was Sir Cecil Weir, one of the most prudent and responsible public men in Glasgow. Here is one of the paragraphs in it which have emboldened me to say what I have said to-day. It is as follows:
"The Association is not prepared to advocate a general resumption of the former policy of Britain lending to foreign borrowers. In former times this policy was an effective

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stimulus to our export trade.… But the losses which have fallen on British investors in recent times make this policy undesirable now unless there is fair security for such loans. If for national reasons"—
that I think is the point which has arisen to which Lord Strabolgi drew your Lordships' attention: the Board of Trade being allowed to do certain things—
"it is desirable to provide an uncredit-worthy foreign borrower with a loan, such loan should be made by Parliament with national money or guarantee as part of the national policy. If the money is lost, the loss will then properly fall upon the general taxpayer, in whose interests the loan was made."
That is how and why an extension of the sum mentioned in the Bill must be made as time goes on. I do not think I can say anything better than that.
It means that as so many of the foreign borrowers in the past who have raised money here have defaulted and as those loans in the past have created an export trade which has now turned out to be of no use to us, as the exports were merely gifts paid for by the savings of British investors, the country will not lend more savings in future to stimulate the export trade. The Government will have to use this type of guarantee Bill to stimulate export trade. The day of exports by gift is past. For that reason I have ventured to trouble your Lordships with my remarks. I agree with that paragraph of the Weir Report on Exports which I have read and I hope that His Majesty's Government will take a look round and see where it stands when faced with the need to build up export trade. If the nation wants the export trade to foreign countries to grow it must lend money abroad, but it will not be able to raise it by means of loans from the general public as individuals. Consequently Parliament will have to make up its mind to pass other Bills containing not power to guarantee export sales up to £75,000,000, but up to a much larger sum. I thank your Lordships for your patience and I heartily support the Bill.
THE EARL OF PLYMOUTH: My Lords, I would like to thank the three speakers for the very cordial reception which they have given to this Bill. In the course of their remarks they have not only dealt with very important matters and aspects of this question, but they have raised a
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certain number of points on which I will try to give them an answer. The noble Lord, Lord Strabolgi, while giving his blessing generally to the Bill, referred to Clause 4 and expressed certain doubts as to whether the new powers that are contained in that clause could with complete safety be entrusted to the present Government; and he asked why, in guarantees to be given under that clause, the Advisory Committee were not to be consulted. I think it is quite clear that this clause provides for guarantees in cases where other than normal business considerations enter into the matter. For that very reason it would not be possible I think for the Advisory Committee to tender advice on all matters of that kind. There is nothing to prevent the Advisory Committee from being consulted with regard to matters on which they can speak, but, of course, there is no obligation. I hope the noble Lord was not serious in expressing these fears and doubts, and I feel certain that the House will agree that the present Government can well be entrusted with the wider powers which this clause provides.
He also raised a question with regard to Clause 5, which provides that returns shall be made giving details of transactions under Clause 4. I should like to say that these returns will be as full as is compatible with the interest of the traders themselves, but it may not always be in the national interest to give all details of every transaction. If the noble Lord is worried about the countries to which facilities might be given under this clause, I can tell him that it is provided that these shall be named in the returns. That is all I can say on that point.
I turn to the extremely interesting speech of my noble friend Lord Swinton. In the first place, he asked whether I could elaborate the provision in subsection (4) of Clause r. The explanation I can best give is this, that this subsection is intended to allow guarantees to be given in respect of matters which, though they are not strictly tied up with the export of any particular goods, are nevertheless of benefit to trade in the export of goods. For example, the Department will be able to cover such items as fees to consulting engineers engaged on preliminary surveys which are often required before any agreement for the export of goods can be entered into, and similar matters of that kind. Serious difficulties have occurred in the operation

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of large credit agreements in the past owing to the Department's inability to include such expenditure in the guarantee.
VISCOUNT SWINTON: Would this, for example, be included? Supposing it was desired to make a drive for export to a particular country, and it was very important that there should be good service given. For instance, a combination of firms either in the electrical industry or the motor industry might want to establish a big depot and service station to facilitate export by giving what is called service on the spot. Would it be possible to obtain an advance for that purpose? I am not asking for an advance; I am only asking for information.
THE EARL OF PLYMOUTH: I do not feel qualified to answer that question straight away, but I shall certainly make inquiries. I feel justified in saying that the Government do approach this question from a very sympathetic angle indeed, and are anxious to help in every way possible. The noble Viscount then dealt at some considerable length with the overridingly important question of the organisation of industry generally. His views commanded the support of all of us in this House. He instanced a particular case. He pointed out how, in order to compete with any chance of success in foreign markets, it was absolutely essential that a big industry should be able, not only to be completely organised, but also, as it were, to play as a side. He instanced a case where an industry might be finding some difficulty in getting that complete agreement which was essential, and asked whether the Government would be prepared in a case of that kind, either at the request of this industry or even spontaneously, to offer their help by way of finding a suitable person to act as independent chairman and guide that particular industry through its difficulties to a successful conclusion. There again I am afraid I am not able to give an absolutely categorical answer because, as your Lordships know, I am personally not very closely acquainted with these matters. But once again I can say that we are anxious to help in every kind of way, and that does seem to me a suggestion which should receive the close and sympathetic consideration of the Government.
The noble Lord, Lord Mancroft, also made a very interesting speech, but he
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dealt with a number of matters of wider importance which, though I admit they are related to the subject matter we are discussing, are perhaps not directly relevant to this Bill. They are matters of great importance, but once again I feel I am not qualified to discuss them this afternoon, though I can say they are matters which seem to me to warrant the very fullest consideration. They will undoubtedly be brought to the attention of Ministers, as indeed will all the suggestions made this afternoon. I do not think I can add anything else in answer to the speeches which have been made, except once again to thank your Lordships for having given this Bill such a warm reception and to ask you to be good enough now to read it a second time.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

FENCING OF ELECTRIC RAILWAY TRACKS.
LORD KILMAINE LORD KILMAINE rose to move to resolve, That in the case of an electric railway where the current is on the ground and not overhead, the company be required to fence in their track on both sides throughout, so as to make it impossible for children or dogs and other domestic animals to stray on to the line and come in contact with the live rail.
The noble Lord said: My Lords, some time ago I addressed your Lordships' House on the running of local services on the Southern Railway. Now I wish to draw attention to the danger to the public, especially to young people and to domestic animals, of an electric railway line which derives its motive power from a live rail on the ground. My experience of electric railways is limited in this country to the London electric railways and to the Southern Railway, on which I have travelled a good deal. I have travelled on electric railways in Switzer land and France, but there they use overhead wires. The Southern Railway line between Hastings, Eastbourne, Brighton, Lewes, and Victoria is in places so poorly fenced that any child could climb over and get on to the line, and almost any dog could get under the fence. I know that several foxhounds have been hurt by coming in contact with live rails, and I know that many farmers are anxious about their livestock. I myself have seen

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two unfortunate dogs—one at Hastings Station and the other at Bexhill—run on the line and come in contact with the live rail, which was not at all a pleasant sight.
The Southern Railway by electrification saved a great deal of expense to the directors and shareholders, and I think they ought to be advised to fence in their line in such a way as to make it safe to the public. I have several times noticed parties of small poor children on the railway embankment gathering primroses. What more natural than that children, who know nothing about electricity, if they see no train in sight and catch sight of far finer flowers on the other side of the line, should stray across the line to get them? It may be said that nobody has any right to go on railway property except the officials and the workmen, who are acquainted with the line, but to children of a certain age there is no greater thrill than occasionally to do what is wrong, and one of the greatest thrills is to go on property that is out of bounds. Also I have noticed that the Southern Railway goes through sporting country. I have seen pheasants and other game near the line. Suppose during a shoot in October a pheasant is wounded and a valuable retriever is sent after it. If that pheasant tries to go across the line it may get across all right, but if the retriever goes across and touches the live rail that is the end of the valuable retriever. I beg to move.
Moved to resolve, That in the case of an electric railway where the current is on the ground and not overhead, the company be required to fence in their track on both sides throughout, so as to make it impossible for children or dogs and other domestic animals to stray on to the line and come in contact with the live rail.—(Lord Kilmaine.)
THE EARL OF RADNOR: My Lords, it is true of course that the Southern Railway have a very large proportion of the electrified lines in this country—something like 680 miles out of a total in this country of 900 miles—and that all of that on the Southern Railway is third-rail electrification. But there are two points which I would like to make. There has recently been agitation from various quarters on the lines of the noble Lord's Motion. It started among the sporting interest as recently as 1927, particularly
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among hunting people, and it started, not as a result of electrification in areas where there was a dense population and there-for a greater likelihood of people and children straying on the line, but as a result I think of extensive electrification in the open country, where it interfered to a certain extent with the activities of the various hunts. But the railway was there before, and even a railway not electrified interferes with the hunting interest. The actual amount of damage that has been done through electrocution of hounds is not very large, though I have not got the figure.
After the hunting interest had met the railway companies and discussed the matter, the companies did a certain amount to meet their wishes in the way of putting up fencing, over which neither animals nor hounds could get. That is a matter of experiment at the moment, to find out whether it is effective and whether it is necessary. As to the matter of the noble Lord's wounded pheasant and sending the retriever across to fetch it, I thought for one moment when he was speaking that he expected us to fence our line not only against the beasts of the field but against the birds of the air, which would mean encasing the whole line in a wire fence. But I think anybody who has the hardihood to send a retriever across any railway line, whether electrified or not, is running very grave risks and should be distinctly discouraged. I would not do so.
Perhaps it would be just as well to give your Lordships some idea of the measure of this problem. It might be inferred from what the noble Lord has said that we are daily killing children and valuable livestock on our electrified lines. Speaking again only for the Southern Railway, so far as children and grownup people are concerned, in the year 1938 the total number killed by electrocution accidently in electrified areas was six. There are many other activities in the transport world which are far more dangerous than that. Actually the accidental deaths from electrocution of the public in the last nine years total only forty-three—forty children and three adults. I have not included, of course, the suicides, which are numerous, but they would probably be killed whether the line was electrified or not; and, as a matter of fact, unfortunately as a rule they choose to be run over rather than electrocuted.

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But that is the measure of the problem so far as deaths are concerned.
The noble Lord suggests that we should be required to fence our tracks on both sides so as to make it impossible for children, or dogs and other domestic animals to stray on the line and come in contact with the live rail. He himself said that there is nothing that children like better than doing that which they are forbidden to do, and my own experience of children is that if they really want to do something nothing seems to be impossible for them, and no fence seems to be unclimbable. And so it is impossible for us to put up a fence which it is impossible for children to scale some way or other. Also there are all such things as stations, level crossings, accommodation crossings and the like, which must give access to the line if they are to be of any use whatsoever. Every possible precaution is taken at such points to prevent accidents, and the effect is that on the whole the mortality is not very great.
The noble Lord hinted that the better system would have been to follow the Continental practice of overhead lines. I will not go into details on that, because we have got the live-rail system, and the cost of converting it into overhead lines would be so colossal that no railway company could possibly consider it. But I would say this. So far as the third-rail system is concerned, that system has been approved by Parliament. Two systems have been allowed by Parliament. One is the overhead system, with a maximum current of 1,500 volts, and the other is the third-rail system with a maximum of 750 volts, and the general voltage on the systems in this country is 660. I might add to that that in the Weir Report on main line electrification, this question was considered very carefully, and it in practice reaffirmed what was said in the Pringle Report in support of the system which is now in force, the third-rail system. It was said in the Report, if I remember correctly, that none of the expert witnesses who came before them had any criticism to make of the third-rail system, as then and now in use. I do not think that you can put all the blame for the method used on the railway company concerned, because the public as represented by Parliament must take some of the blame. I do not think there is much more that I can add beyond the fact that if the line was fenced on
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both sides throughout its length with an unclimbable and imperishable fence of a type we are now using in increasing amounts at danger spots, it would cost the railway company somewhere between £300,000 and £350,000, which is a considerable sum in these days for railway companies, and would produce no increase in the income of the railway company, and I very much doubt if it would do much to decrease the very small mortality.
May I say one word in conclusion? So far as I understand it, I think this is the root of the problem: the agitation about the dangers of the third-rail is based much more upon fear than upon reality. The facts as to the numbers of people who are killed are as I have given them to your Lordships. They are not very big, but I do know that a very large number of people are much more agitated as to the danger resulting to activities such as hunting or children's parties near an electrified line than they are in the case of such events near an ordinary railway line, but in fact, as the figures show, the number of people who are run over as opposed to the number electrocuted is greater in the electrified areas, while the number who are run over in the non-electrified areas is greater than those run over in the electrified areas, so that the danger on the line is much more from other causes than from electrification. If only people would realise that I think this agitation about the third rail would not be such a source of fear to them. I must add, finally, that the noble Lord fails to realise that anybody who is on the line, that is, any member of the general public, is a trespasser and has no right to be there.
THE EARL OF ERNE: My Lords, I am sure that your Lordships appreciate the motive that has prompted the noble Lord to initiate this debate. He aims to create conditions of greater security of life, more particularly perhaps of child life, and that must command the sympathetic consideration of this House. It also gives me this opportunity to make a statement on behalf of His Majesty's Government on this important subject. Now it is necessary in the first instance to recognise where the responsibility lies in matters of this sort and if the House will bear with me I propose to state, quite briefly, what are the responsibilities of the railway companies and the powers of the Minister

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in regard to the fencing of railway lines. The statutory obligations of the railway companies are of a general character and are laid down by Section 68 of the Railways Clauses Consolidation Act, 1845. They are limited in effect to the protection of the adjoining lands from trespass and the prevention of cattle straying from such land by way of the railway.
Before a line is opened for electrical working the approval of the Minister of Transport has to be obtained under Section 41 of the Road and Rail Traffic Act, 1933, and this approval is not given until the lines have been inspected by the Minister's inspecting officers of railways. The Minister's powers too are limited for he may not withhold his approval if he is satisfied that the use of the railway as adapted for electrification will not be attended with danger to the public using it. In practice the companies go further than is required by Statute. The Minister's inspecting officers of railways, when inspecting new electrifications, so far as possible look out for and draw attention to any places where they consider proper fencing has not been provided; and the railway companies are generally willing to comply with these suggestions although they go beyond their strict statutory obligations. The companies are not prepared, however, and the Minister has no power to compel them to provide unclimable fencing throughout all their electrified railways, nor does the Minister think this is necessary. It must be remembered, as the noble Earl, Lord Radnor, has just mentioned, that any railway, whether electrified or not, is private property and that there must always be some element of danger to persons who, in spite of precautions, make their way on to portions of the line where they have no right to be. None the less all steps reasonably necessary to prevent trespass are taken.
Following certain fatalities on the Southern Railway in 1937 the Minister asked that company to give their earnest consideration to all possible means of preventing such accidents occurring in future, and a statement was obtained from the company respecting their practice together with an undertaking as to their future policy. This was communicated to Parliament by the Minister at the time, but perhaps I may repeat the statement
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which is an important and authoritative presentation of the Southern Railway I Company's attitude in the matter:
"The company's officers have been giving active consideration to the provision of more effectual means for preventing children from trespassing upon those parts of the company's system which are electrified on the conductor rail system. At the same time, regard has been paid to recent complaints which have been made in respect of increased mortality from this cause among animals which have penetrated the company's fences. The company has decided to instal in future, under certain conditions, two improved types of fencing which embody the use of chain-link meshing. It is intended that an active policy shall be pursued in the matter. Considerable lengths of the new fencing are to be ordered and erection will be put in hand without delay when the material is received.
"In all places in the electrified area where trespassing is prevalent, but where the existing 8 or 10-wire fencing is not due for renewal, the meshing, 4 ft. 6 ins. high, will be fixed to the outside of the existing concrete posts, leaving the horizontal wires in position; to increase rigidity, a new post will be added between the existing posts where these are 18 feet apart. The bottom of the meshing will be kept as close to the ground as possible to prevent penetration under the fence.
"An entirely new type is also to be adopted as a standard in new construction, or when renewing existing fencing, in electrified areas where trespassing is likely to occur. For this type the 4 feet 6 inches high meshing will be carried by three horizontal wires on the railway side of concrete posts, which will be erected 9 feet apart. Above the meshing, four further horizontal wires will be run, about 2½ inches apart, the lowest being on the railway side of the posts, the next through the posts, and the top two on the side of the posts remote from the railway. The top wire will be about 5 feet 3 inches above the ground, and it is considered that the outwardly projecting 'cornice' formed by these wires will make the fence more difficult to surmount either by trespassers or animals. The bottom of the meshing will be kept as close to the ground as possible to prevent penetration under the fence. The smallness of the meshing makes the fence difficult to climb, and the serrations above the top supporting wire are also of value in this respect.
"Consideration is also being given to the modification of the fencing in those parts of hunting country where there may be special risk of hounds getting on to the line.
"The company consider that the measures now to be taken will meet all reasonable requirements."
During last year that company put up over 50 miles of the improved type of fencing, which covered all places where trespassing had been reported as prevalent or likely to occur. I may add that up to the end of January, 1939, this com-

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pany has, in fact, erected 63 miles of special fencing. In view of the action taken by the Southern Company and the fact that, in actual practice, the inspecting officers have found the railway companies willing to provide improved fencing where these officers recommend it, the Minister does not feel justified at present in asking Parliament to impose on the companies a statutory obligation to put up this fencing throughout the whole of their electrified lines. But the House may rest assured that the Minister is fully alive to the importance of this question and that he will continue to give it his careful and constant attention. Nevertheless he is grateful to the noble Lord for bringing about what it will be agreed has been a helpful debate.
LORD KILMAINE: My Lords, I only want to add that I did not intend to demand that the Southern Railway should
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be asked to do anything impossible or anything that would cause great expense. My chief reason for bringing forward the Motion was that, travelling to Eastbourne about three days in the week, I have noticed that the line runs alongside some allotments and is very badly fenced at that point. It has struck me again and again that in the summer some man may go on to his allotment with his little son or daughter, and while his back is turned the child playing with a ball may throw it on the line, run after it and get electrocuted. However, I am quite satisfied with the noble Earl's statement that the Government have the matter in hand and will take the necessary steps. Therefore I ask leave to withdraw my Motion.
Motion, by leave, withdrawn.
House adjourned at five minutes before six o'clock.