RECIPROCAL ECONOMIC AID.

HL Deb 06 March 1946 vol 139 cc1151-97

2.50 p.m.

LORD ALTRINCHAM

had given Notice that he would move to resolve, That this House recognizes that reciprocal economic aid between kindred peoples is indispensable to the coherence of the British Commonwealth and the welfare of the Colonial Empire; and further is calculated to stimulate multilateral trade and world recovery. The noble Lord said: My Lords, last week, in another place and again in a broadcast on Sunday evening, the Prime Minister made an appeal to the nation for a united effort in working for recovery. The appeal was clear, it was cogent and it was, unquestionably, timely. I am sure that in all quarters of the country, and by all sections of the population a great effort will be made to respond to it, and I should like to assure His Majesty's Government that, so far as we on these 'Benches are concerned, we will do our very utmost in every way to further it.

On the other hand, however great is the effort, even if we recover the unity which we had in 1940, even if everybody were capable now of the same standard of work and concentration, a national effort alone will not be sufficient. As Mr. Chesterton once said, this is a country that lives on the edge of things. As the result of our enormous industrial development in the last century, we are more dependent than any other country in the world on our export and import trade. Therefore, our policy for recovery, our economic policy, must also be a world policy. In fact, recovery in this Country depends in equal measure upon two things—a united national effort in the country, and the wisdom with which we devise, pursue and expound our policy in external affairs, both political and economic. This latter question is not one for the nation at large. It is, obviously, one for debate in Parliament and for leadership by His Majesty's Government. It is that external policy which is the subject of my Resolution this afternoon.

Before I come to the Resolution I would ask leave to make three preliminary observations, to which I attach the very greatest importance. In the first place, we know that Europe, at the present moment, is a devastated and prostrate continent. We know, and we ought to recognize, that in the American continent there lies the only large, undevastated, organized, productive area with adequate population and with an adequate scheme of production, particularly of food-stuffs, to give Europe the help it requires. Our dependence on the American continent—do not let us disguise it—whatever we do in this country, whatever we do in the Empire, is great, though the dependence in Europe is greater, and I am sure that the United States, with their generous-hearted people will respond to the need of Europe when once that need is fully appreciated.

The second thing upon which I should like to insist as a preliminary is recognition of the fact, which no one can conceal, that owing to our sacrifices our financial position is, for the time being, extremely difficult. I would not, therefore, say a single word which might in any way seem to decry the importance of the line of credit which has been promised to us by the American Administration, provided it can get the support and the concurrence of Congress. You may discuss this matter, and you may criticize this point or that point about the terms presented to us and finally settled in regard to that line of credit, but, broad and long, it certainly shows exceptional consideration for this country; it certainly shows great generosity. I also believe that it will be found to be very good business for the United States. Nothing, therefore, that I say this afternoon, will, I hope, militate in any way against the acceptance in the United States of the line of credit which has been proposed by the American Government.

There is a third thing which I should like to make plain. While I am going to discuss our economic and trade relations with the United States, nothing I say is intended to suggest any departure from the terms of the agreement for the International Trade Conference which we have made with the American administration. The Prime Minister, in another place, and the noble Viscount the Leader of the House here, have thoroughly expounded the significance of those proposals as they affect us, and I am sure you will agree that in this country our word is our bond, and that there will be no deviation by a hair's breadth from our engagements under this document. What we seek on this side of your Lordships' House is clarification, and, in particular, we wish to call attention to certain material and still more to certain moral considerations affecting this great issue, which in our opinion are not fully appreciated at the present time in the United States of America. I would lay particular emphasis on the moral considerations, since it is those considerations above all which must govern us as the head and heart of a great Commonwealth and Empire. I suggest, therefore, that we are in duty bound to define these moral and these material obligations with precision for the negotiations which lie ahead of us.

We are to have, I understand, an Imperial Conference towards the end of April, and an International Trade Conference is proposed to be held later in the year. Unity and clarity of purpose in the way in which we present our views at those Conferences are absolutely essential, and this Resolution is an attempt to further that unity and that clarity. I have hope that it may be accepted in that spirit by His Majesty's Government. If in this way your Lordships as a Council of State—a phrase with which we are becoming familiar, and which I venture to think is a very good phrase and a very good description of the service we render at the present time—can promote the common effort to which the Prime Minister has exhorted us, you will, I think, have done a good day's work for the nation, the Commonwealth and the world. I do not see, and I hope noble Lords on the Benches opposite will agree with me, why our domestic differences on economic questions should in any way impair our national unity on this kind of external issue. The policy set out in this Resolution can be pursued effectively whatever solutions we adopt on the Party questions that divide us, provided only that we do not lose sight amid the hot haze of political controversy of our most vital needs, which are greatly increased production and expanding trade in the outside world.

Everyone will agree that in external relations our first duty is to do all we can for the Commonwealth and Empire. I think everyone will also agree that we must hold to our historical rôle of championing the freedom of the smaller nations in any way in which they desire it and in which we find we can help. Everyone will agree that the crux of both these policies, our policy towards the Commonwealth and Empire and our policy towards the smaller nations, depends upon the relations we maintain with the United States. The American people have become the greatest economic power in the world. Mr. Churchill in his great speech at Fulton, Missouri, last night said they had reached an unexampled pinnacle. That is true at the present moment. We need assistance from them, and they need co-operation from us, and the real question we have to determine between us is: on what terms.

Let me say first that I can imagine nothing more disruptive of the moral and material power which is now in the world to build up the Four Freedoms of the United Nations Organization than any deep divergence of policy, whether in political or economic affairs, between the British Commonwealth and the United States of America. I have travelled a good deal in the United States during the last forty years, and that long experience has bred in me a steadily increasing affection and admiration for the American people. They descend in large part from the most vigorous and independent types of men and women that Europe has produced. In many cases their ancestors left Europe because they were so vigorous and so independent, and their whole life is permeated by the invincible spirit of the pioneer. Warm-hearted, hospitable, intensely human and nobly generous, as this war has proved, they are glorious friends and they are sure, as only greatness in its first youth is sure. Obstacles mean nothing to them when once they have taken an enterprise in hand. They are in some ways the Greeks of the modern world, always in search of something new. With their vigour, their momentum and sheer vitality, their vast resources and organizing capacity, and their inventive skill, they constitute a power without equal in the world, and that power, I am deeply convinced, is a power for good as we understand it in ordinary affairs.

What danger, then, can menace the fullest co-operation between ourselves and them? Assuredly, not any difference of ultimate aims and ideas. We want a maximum of production and a widespread increase of producing power. So do the Americans. We want to abolish all trade restrictions which can be shown to hamper production and stunt the growth of trade. So do the Americans. We want to co-operate to the utmost with America in building up prosperity throughout the world. I believe the Americans wish to co-operate with us in the same way. There is indeed a fund of friendship within the United States which I do not think can be found anywhere at all outside our own family circle in the Commonwealth. You may have listened to a broadcast by Mr. Edward Morrow on a recent evening when he spoke about the people of this country and the character of this country after long experience during the war years in which he shared our vicissitudes with us. I am sure those of your Lordships who heard that broadcast will have found it to be a deeply moving tribute to this people and I am bound to say I have not heard anything of that kind on the air from Russia, France or China, to mention only the three permanent associates we have on the Security Council.

The danger, then, of misunderstanding between ourselves and the United States, lies not in any difference about ultimate aims but, as I fear and believe, in a really serious difference upon the value and significance of the Empire and more particularly of the moral obligation which it constitutes for us. There is, I fear, a very great divergence between American thought and ours in that all-important field. The American thesis is a simple one. It is based on two fundamentals, namely, maximum production in the United States and maximum freedom of trade throughout the rest of the world. Americans ask what hampers the maximum freedom of trade which they so desire, and they answer "Discriminatory practices." Therefore, they conclude, all such practices should be abolished, including British Imperial Preference, which they more particularly condemn. They accordingly advocate a rigid and universal application of the most-favoured-nation clause under which no State can give a preference of any kind to a near neighbour or a kindred State without conceding the same advantage to all other States.

Under such a system Imperial Preference would cease to have any value or significance at all. This ideal, let us remember, we ourselves pursued with great tenacity in the second half of the nine- teenth century. And with what result? It destroyed our agriculture; I am afraid it increased the poverty of our slums, it certainly increased their extent and it landed us with an unbalanced economy which it is now very difficult to retrieve. The conditions now are different. The unceasing process of political development, greatly accelerated by two world wars, has since that time completely transformed our relations with many parts of the Empire and also our whole attitude of mind towards it. The wars themselves we could not have survived had the peoples of the Empire not stood by us and given us their valuable aid. Those wars have taught us in the most eloquent of all languages, the language of help, what the Empire means to us when mortal peril is at our throat. Yes, and what it means to the future of the United Nations and the rule of law in international affairs.

We know' now that there will be no enduring peace or stability if the British Empire loses its coherence as part of the structure of the world. The Commonwealth and Empire is no mere trade or business association with a purely material significance. It is for us a family circle to which we are bound by the strongest of human ties. To default in any way in our duty and affection towards it would be for us a moral degradation. To do our utmost for it in the world to-day is not a question of mere political expediency or material interest. It is a moral obligation much more deeply and widely felt by us here because of the knowledge we have, derived from the two 'terrible ordeals of this century, of what the Empire has done for us and for humanity. On this great issue then we must be absolutely clear, because the American people do not understand what the Empire is or how indispensable its coherence is to the cause of peace and recovery everywhere. Nor do they understand the moral obligations which bind us to it. There is good reason for this in American history and in the whole course of the American line. "Empire," in any form at any period, has been inconsistent according to American opinion with the principles upon which human society has been founded, which are to be found in the Declaration of Independence and more broadly in the Rights of Man. The Declaration of Independence is read to Americans at least once a year and they imbibe its principles out of the very atmosphere they breathe from the moment they are born.

I observed the other day in the Manchester Guardian, which is not an Imperialist organ, an article saying with much truth that any country in American eyes which is not sovereign and independent must be subject to Imperialist exploitation. That is broadly speaking the universal American point of view. The mass of Americans not only see no virtue in the British Empire at the present moment but they regard it as definitely bad. On this point I hope you will allow me to quote an authority, who again cannot be dismissed as a militant or reactionary Imperialist, Sir Norman Angell. He has written one or two very interesting articles about recent travels in the United States, and this is what he said in one of them contributed on January 3 of this year to the Daily Mail: Any Englishman travelling or living in America is likely to find himself asked to 'explain the British Empire' in much the same offensive tone that a man might ask you to 'explain' how you came to be carrying his umbrella. For about 99 out of 100 Americans regard the simple existence of the Empire as a crime. They believe the time for repentance—and liquidation—has come.

LORD CALVERLEY

As long as we put them in as the receiver.

LORD ALTIONCHAM

It is inconceivable to me that because the Americans do not understand the Commonwealth and Empire, we should ourselves be false to it. Surely the right and honest course is to explain exactly where we stand, and that in certain matters we are governed by ties of principle and sentiment which we cannot break for any consideration in the world. The issue may come up in very practical forms. We may be asked whether Danish butter is to have the same consideration in our market as New Zealand butter. I have a great regard for the Danes, but they have not done for us what the New Zealanders did for us in this war. That is a consideration which we in this country cannot possibly forget. We may be asked whether New Zealand and Australian meat is to be treated on exactly the same level as Argentine meat. Well, I have less regard at the moment for the Argentine than I have for Denmark, and I am quite clear what our answer should be in a matter of that kind. And there is also the whole question of the Colonial Empire on which we cannot concede anything to the American point of view.

The Americans are after all a fair-minded people and I do not believe that misunderstanding would possess them if our position in these matters was clearly and resolutely explained. The one thing I fear is equivocation. We have had a terrible example, long protracted, of the results which follow from equivocation in the case of our policy in Palestine. It was never understood on both sides of the argument in the same way. It was certainly never clearly appreciated in the United States, and it has been one of the factors which has made for difficulty in the United States and particularly for the feeling about us in Congress. There are, then, I suggest, two points on which we should declare our position unequivocally. We have in our hands an enormous power, the power given us by the British market for imported goods. All the world looks to it, including the United States. Its value to the world depends upon our recovery and our recovery depends, I am deeply sure, upon the well-tried policy set out in this Resolution which I have the honour to put before your Lordships to-day. Its main principles, I repeat, are two; first, freedom for the British Commonwealth and Empire by reciprocal aid, and secondly, freedom for other nations or group of nations to build up their welfare in the same way.

Our principle should be the British family first, so far as we ourselves are concerned, and the same principle for other groups of nations as we claim for ourselves. To insist on these principles is not, I repeat, to admit any real divergence of aim. The need of the world is maximum production and the greatest possible expansion of trade. The real test of our policy should be this: Will it build up our own prosperity at the expense of others, or will it increase the total of production and therefore of purchasing power in the common interest of all? I do not wish to develop that theme. I hope that later this afternoon my noble friend Viscount Swinton, who has had great experience as President of the Board of Trade and also as Colonial Secretary of the way in which the Colonies may be affected by our policy in this respect, and also Lord Hailey, whose authority on this subject is universally recognized, may have something to say about it. All I would say is that the key to expanded trade is expanded production, and it is there that the American thesis fails. Under it production in the American Union and in the Soviet Union would be secure, but it would not be secure in the British Commonwealth or in many small nations that cannot build up their economies under a rigid application of the most-favoured-nation clause.

We must therefore do our utmost to persuade the makers of policy in the United States that the policy set out in this Resolution is as much in their interest as ours. Is this impossible? There are certainly great difficulties? Americans are Federalists in the bone, and they insist upon an interpretation of the rights of national sovereignty which is inconsistent with our own feeling that national sovereignty may be usefully combined in an association like that of the Commonwealth—a free association in which people simply choose to hold together because they have an affection and regard for each other and feel they have a common purpose and ideal in the world.

The attitude of well-informed Americans to that freedom which we postulate for the nations of the Commonwealth is well-stated in a book written by a man whom I knew very well and whose acquaintance I made a long time ago—Mr. William S. Culbertson. He was for a long time Vice-Chairman of the Tariff Commission of the United States. I often discussed this matter with him, and I can only pay a tribute to the knowledge and the strength of argument with which he defended his case. But this is what he said in an earlier book and repeats in his last one which was published only in 1937: The Dominions have apparently assumed that the British Empire is a unit for commercial purposes but an alliance of separate nations for purposes of diplomacy. It is that freedom which Americans like him condemn.

We all know that the relationship which we have established between the sovereign members of the Commonwealth is a new and unexampled relationship between sovereign States. Constitutional lawyers, abounding in the wisdom of the past, may think it indefensible, but the plain answer is that this unprecedented, this reprehensible, this self-ordering family of nations has saved the world twice for the type of Government in which we and the Americans believe. It stood by us, after all, in the long period between Dunkirk and Pearl Harbour—something like two and a half years. We could not have been equal to our high task in those years but for the cement and the peculiar relationship which has kept this Commonwealth a family in spite of the national development in so many of its richest and most productive States.

Let me give an illustration of what the help of the Empire meant to us, particularly in those terrible years. All the Dominions did splendidly, and I quote Canada in particular only because her contribution to the common cause can more easily be compared with the help which was given us at that period by the United States. I am not disparaging American help; I am merely praising what the Canadians did. The United States, in population and in wealth, stands to Canada roughly in the proportion of thirteen to one; one million in Canada means thirteen millions in the United States. I quote these figures from an old issue of the Economist. They are figures which go up to the end of the year 1943—that is to say, our hardest period in the war. On that basis, Canada's assistance to us in financial grants, in services and in munitions without cost was, up to the end of 1943, per head of population, ten times that given us by the United States. Can we forget that? Canada is absolutely free to make her policy in any way she chooses. She is a great sovereign State and indeed becoming now a great Power. She stands in a very special relation to the United States. What she chooses to do is her own affair, but in view of what she and the other Dominions have done for us I say there is only one line that we can take in regard to our market, and that is to say: "The British family first, so long as it wants an admission to our markets on better terms for its goods."

Another difficulty with American opinion—and I hope that later on Lord Hailey will develop this—is the Colonial Empire. A well-known American writer says: The purpose of Empire is to exploit colonies. If Imperialism did not exploit colonies the possession of colonies would have no sense. All I would say is that we would make little progress with expanding production, increasing purchasing power and raising the standard of living for Colonial peoples under the Colonial Development Act if we could not also assure them of a preferential market for what they produce. The argument for loyalty to our mission in the Colonial Empire is indeed broader still. Colonial peoples also assisted us nobly in the War. We must help them to the utmost, so long as they are unable to stand by themselves. The character of the Empire is changing rapidly, but as a political and economic structure it is going to be absolutely indispensable for a very long time to the orderly government of the world.

It is interesting to observe how Americans respond to the argument about the Colonial Empire when it is clearly put to them. In this respect I would like to cite an unofficial conference which was organized, I think in 1942, in Canada by the Institute of Pacific Affairs. Many countries were represented. There were all the Pacific Powers except Russia and Japan, and they included, of course, the United Kingdom and the United States, but only a small minority of the delegates, those from the United Kingdom, the Netherlands and Fighting France, represented Colonial Powers. The great majority of the Powers represented at that unofficial conference were not Colonial Powers, and therefore came to it with no predilection in favour of Colonies. Although it was an unofficial conference, the representatives were very distinguished. In the American representation there was one Senator, and the British Delegation was led, with all his distinction and authority, by Lord Hailey.

The conference started with a strong bias against the administration of Colonies by single Powers. That was perfectly clear at the outset, and it went on for some time. Let me quote, not from the British report, but from the American report of the conclusions which were reached after the arguments had gone on for a considerable time: Although some members had come to the conference prepared to advocate the immediate dissolution of all Imperial systems and a single international trusteeship for undeveloped areas and backward peoples, the practical difficulties of such a transformation were soon recognized in the give and take of argument, and when the round-table finished its labours, the proposal was in the limbo of forgotten things. I think that is a remarkable conciusion to be arrived at by a conference in which the Colonial Powers were in a very small minority and the American representation very strong. It is therefore surely not over-sanguine to suggest that if the principles upon which this Resolution is founded are frankly and cogently explained, they may find their acceptance in the International Conference which we and the United States are sponsoring later in the year.

It will be said, I know, that trade will be obstructed by the formation of economic associations of any kind which do not exist at the present time. I find it very difficult to be patient with that argument. There are at the present moment two enormous economic blocs in the world, the American Union and the Soviet Union. I cannot understand the argument which says that although they confront each other with absolutely incompatible creeds, they will not constitute a danger if the rest of the world is left divided between a lot of scattered and much weaker, indeed helpless, smaller sovereignties. Surely the argument for peace is the argument which Mr. Churchill stated again at Fulton, Missouri, yesterday. It is the argument for intermediate organizations in economic as well as in political affairs. In that way not only will there be no danger to peace or friendly dealings between nations, but there will, I believe, be an increase in production, and therefore an increase in multilateral trade.

You will remember that as long ago as March 21, 1943, Mr. Churchill made a broadcast in which he stated the argument for regional or intermediate associations as an essential element in the future peaceful organization of the world. As I say, he repeated that argument yesterday. A few days after Mr. Churchill spoke on the air, the theme was taken up in the United States by a very distinguished Senator, Senator Taft, of Ohio. I should like to read what Senator Taft then said, because it shows that the danger of leaving a part of the world divided between two very large economic blocs with incompatible creeds and leaving the whole of the rest of it unorganized is appreciated in high places in Washington. This is what Senator Taft said in a speech delivered on March 26, 1943. I apologize for reading rather a long extract, but I think your Lordships will find it interesting. He said: The modification suggested by Mr. Churchill last Sunday that we have regional councils to act within their respective regions is a very reasonable modification. It seems to me that the United States should be only a secondary guarantor of the peace of Europe, to be called in only when the problem seems to be beyond the resources of the European council. Then he goes on to the economic side: After this war we must try to establish Customs Unions between nations whose economies are complementary, so that they can be reasonably self-sufficient. We must assure to each one of these nations and groups of nations the raw materials which they require to keep their industrial development. We must assure to each an outlet for sufficient products at least to pay for their raw materials. If we interpret freedom from want to mean this fair and equitable economic treatment, then I think it is a reasonable goal and absolutely essential to future peace. Further, our efforts should be to make the different regions or groups as self-sufficient as possible, and eliminate the tremendous competition for foreign trade which itself has been one of the causes of war. If each of these countries or groups of countries can be made prosperous within itself, the foreign trade which will result will be infinitely greater than that which existed before the war. That is exactly our thesis, the thesis which is framed in the Resolution before your Lordships this afternoon. It is encouraging to find that it was so clearly stated by a distinguished Senator in the United States. It is true that Senator Taft speaks only of Customs Unions, but that is because, being an American, he is a Federalist to the bone; he can conceive nothing except that kind of association under a central sovereignty. But that does not affect the value of the argument from our point of view. If a rigid Customs Union is desirable in different regions of the world, then surely so is the much more flexible and much less rigid form of economic co-operation through reciprocal aid which we advocate. I believe that the principles embodied in this Resolution may find acceptance if they are potently presented in the United States, and that in presenting them we shall be arguing not only for ourselves as a nation, or Commonwealth, or Empire, but for the freedom of many other weaker nations who depend on our support. I am convinced that we shall also be arguing the principles which give the best promise of widely-spread production, increased purchasing power, economic stability and peace

This is not the time to grow faint or lax in the mission which our long history has bequeathed to us. It is not a question of showing our medals as if they were our only argument, like the tragic figures of demobilized men who could be seen after the last war upon our streets. We are for the time being tired, and we are for the time being impoverished, but we are not decadent, although we seem to have given that impression to many people in the United States. I apologize for reading yet another extract, but it is of the utmost importance that we should realize how at present we figure in American eyes and what kind of attitude we must adopt in order to secure acceptance for the point of view which we represent. From many comments which all point the same way, I select one from an amusing correspondent, Don Iddon, the New York correspondent of the Daily Mail. I expect your Lordships sometimes read him. I always find him extremely illuminating. Writing about our attitude in the United States he stated: We are for ever on the defensive, apologizing and explaining. More and more America is coming to think of us as a tiny impoverished group of islands in the North Sea, and rarely if ever as the vital head and heart of a powerful Empire. If that be a true report, as many commentators and travellers suggest, it is high time that this impression that there is decadence in these islands should be wiped out.

In the concluding passage of his great speech at Fulton, Missouri, last night, Mr. Churchill gave us once again that clarion call to greatness in unity which twice in the present century has saved all Western civilization. No living man can lift up our hearts as he does, and give us the faith which we need now in ourselves and faith in our mission in the world. All but our own kin in the Commonwealth, after all, gave us up as lost in 1940 and 1941. All others lost faith in our power to win through. The world outside our own family, outside the Commonwealth and Empire, was mistaken then. It is mistaken now." Let no man, "said Mr. Churchill last night" underrate the abiding power of the British Commonwealth and Empire "We all desire the fraternal association which he urged between ourselves and the United States. But such an association must depend on strength and virtue in all its component parts, and that means on unity in the British Commonwealth. Without one essential wing, our wing, the great structure will be built on sand, unstable, crumbling and valueless. It is that governing, ineluctable truth for which we must seek American recognition and understanding. Americans respect candour. Americans respect firmness and strength. Americans also respect our international sense and wide experience. The Prime Minister has exhorted us to great national effort. This is the necessary world framework of policy for it. This Resolution stands for the part we have to play as head and heart of a powerful Empire with a mission in the world which no other political system can fulfil if we ourselves default on it. I commend it therefore to your Lordships and to His Majesty's Government.

Moved to resolve, That this House recognizes that reciprocal economic aid between kindred peoples is indispensable to the coherence of the British Commonwealth and the welfare of the Colonial Empire; and further is calculated to stimulate multilateral trade and world recovery—(Lord Altrincham.)

3.43 p.m.

LORD PAKENHAM

My Lords, the House has followed very carefully the weighty speech of the noble Lord, Lord Altrincham, for behind every word lies a long life—I do not know that it is a very long life but at any rate a lifetime—of service to the Commonwealth and Empire, in civil administration and in arms. If one could use one phrase about his speech one would say that it was above all things a speech of reconciliation. I do not know whether others of your Lordships besides the noble Viscount, Lord Samuel, and Lord Cherwell are philosophers, but if you are you are probably acquainted with the works of the philosopher Hegel. According to him all development of thought involves a three-fold process. First thesis, then its opposite, antithesis, and finally, synthesis. I think that the noble Lord, Lord Altrincham has provided us with a synthesis between the extreme positions that have often been assumed on these questions in the past—shall we say fairly or unfairly between Viscount Samuel and Lord Beaverbrook, whom one is sorry not to see here to-day, between the economics of the News Chronicle and the Daily Express. For that and many other things we are grateful to the noble Lord.

I intend to deal more briefly with this subject than it deserves, fortified by the reflection that the noble Viscount the Leader of the House is to wind up the debate. I do not know whether it is in accordance with the best cricketing practice to have the tyro as wicket keeper and the pundit as long stop, but it seems to work out very well in politics. The noble Lord has stripped the question of many minor legalities and technicalities, and we can approach it in a broad way. Your Lordships will not want me to run right through Command Paper 6709 "Proposals for Consideration by an International Conference on Trade and Employment." It has been discussed and accepted by your Lordships' House and now it has once again been endorsed by the noble Lord. But may I remind your Lordships of what seem to me the essential steps of reasoning is that document? They are, it seems to me, four in number. First, recovery of the British standard of life to pre-war level is quite impossible unless our export trade in terms of volume can be raised to a figure far higher than its pre-war level. Secondly, such a tremendous increase in our own export trade can never be snatched from a diminished total of world trade, but requires a great expansion of world trade above its pre-war level. Thirdly, such a big increase in world trade is quite inconceivable unless there is a substantial reduction in trade barriers compared with those that existed before the war.

In order to achieve such a reduction in trade barriers it is necessary to get all the nations of the world together and obtain their consent in a series of bargains to reducing barriers which, although looked at as a whole were obstacles, may in individual cases have served most useful purposes. Therefore this policy has been framed by the American Government in consultation with His Majesty's Government of calling this great conference which is to be held later in the year, the principles of which the House has already accepted. One further point. I would remind your Lordships that the initiative, although taken in conjunction with us, comes strictly from the United States. I know that certain noble Lords who spoke in the debate which we had in this House on the American agreement took the view that while a reduction in trade barriers is thoroughly desirable it is most unlikely to occur.

May I suggest that if these proposals in Command Paper 6709 represented simply a series of proposals by His Majesty's Government for reducing trade barriers, without any knowledge of American reaction, while they might provide grounds for an interesting economic debate on a slack afternoon they would hardly deserve any prolonged attention from your Lordships. The whole point is that these proposals represent not only an American acquiescence but an American initiative arrived at in the closest consultation with ourselves. The Administration in America recognize that their barriers before the war were very serious obstacles to the development of world trade, and there is recognition also on the part of the American Administration that they must sweep away many of the obstacles they have created in the past if world trade is to flourish after the war.

That I felt was a point that must be cleared away before I came to the precise Resolution.

Your Lordships will ask whether the Government are going to accept this Resolution. Perhaps you will allow me to answer that later in order to maintain the best principles of dramatic construction. I once wrote a play. There may be much better playwrights in the House than I, but I wrote one and I showed it to a manager. He said it was a very good play, or a fairly good play, or at any rate a play. He would very much like to have put it on, he said, but unfortunately everyone would have left after the first five minutes as I had given away the secrets too early. Therefore I will indicate the operative attitude of the Government at the end of my remarks. Let us survey this question broadly. The noble Lord has said that there is no conflict between his Resolution and the policy declared by His Majesty's Government in Command Paper 6709. That is also our view. The matter, as the noble Lord has said, was cleared up by the noble Viscount, Lord Simon, and by the noble Viscount the Leader of the House, and the seal was finally set on the matter by the noble Viscount, Lord Swinton, who said he was satisfied on the three points in the Command Paper. The noble Viscount, Lord Swinton, said he was satisfied, and if I may say so in a friendly way, he is not always easy to satisfy. He was satisfied that there was no question of selling Imperial Preference down the river.

We can divorce ourselves from the legal or formal question between the Resolution and the proposals of the Government, but you may expect from me, before the Leader of the House finally replies, some clear statement of the mind of the Government towards this matter, and of what lies behind the Government's mind as they approach these tremendous negotiations, because after all that is the kind of thing for which this House exists. I follow the noble Lord who moved the Resolution in dividing the subject into the moral and the economic aspects as he did and I was very glad to see that he laid so much stress on the moral side of things. No one could have sat in this House throughout the American loan debate without becoming aware that behind the commercial anxieties expressed by various noble Lords with regard to Imperial Preference lay a depth of feeling which went far deeper and goes back far further than purely commercial considerations. That, I think, was evident from the speeches of the noble Lord, Lord Croft, and the noble Viscount, Lord Bennett.

We on these Benches yield to no one in the importance we attach to the moral side of the Commonwealth and Empire. We do not take our ideas about the Commonwealth and Empire from noble Lords opposite. They must forgive me for saying that. It may be that our ideas to-day coincide. If so, well and good, but in our view it is we who have remained the same. We have not changed but the noble Lords opposite have trained on. At any rate we are not likely to underestimate the vital importance to the world of the moral principles which underlie the Commonwealth and Empire, the idea of equality between nations which have grown to manhood, and trusteeship for nations which have not yet reached man's estate. Imperfect in realization, as are most things human, these ideas seem to us to be the embodiment of that Christianity to which this country at her best gropes increasingly forward.

So much for the moral side of things. We yield to no one in the importance we attach to that side of the matter but Jet us look for a moment at the economic side. Here I have a surprise for your Lordships, not I hope of an unpleasant kind. It is not a Government pronouncement of any significance but it does bear upon the debate. I have taken a great deal of trouble to prepare myself for this debate and I suppose there is no figure of any relevance which bears on the effects of the Ottawa Agreements, using that word in a rather loose sense, which has not passed through my consciousness in the last few years or even in the last few days. It is said that figures can prove anything. It may be a pleasant or an unpleasant surprise to inform you that I am convinced on this subject that figures will prove nothing. Therefore, you are going to be emancipated from a statistical thralldom which might otherwise have been imposed on you.

The Ottawa Agreements, using the term broadly—I have in mind that sugar duties were initiated long before Ottawa and that other forms of economic aid have been applied since—were introduced at the bottom of the deepest world slump in history. In the years that followed world trade and Empire trade recovered. There was a general recovery but I would challenge anyone to prove a strong, clear case that the Ottawa Agreements increased the trade of the Empire and the world faster than they would otherwise have increased. I feel that some conclusions can be drawn and I will lay four points very briefly before you which seem as incontrovertible as anything can be. I suggest that the Ottawa Agreements in the broadest sense were the sheet anchor in time of trouble. They made a great difference to certain producers of commodities in this country and the Dominions and they were indispensable to whole communities which, had there been no agreements of the Ottawa character, could not have survived. It has been amply demonstrated that there is no logical incompatibility between an expansion of trade within the Empire and trade between the Empire and the outside world. The two may well go forward together. There is no logical contradiction.

Finally, and I would not linger over this point, although it is one over which one might well linger, the Ottawa arrangements paved the way to something better. I venture to suggest that if we had not been put in the bargaining position which Ottawa placed us in it might have been harder to acquire that development of multilateral trade and the reduction of trade barriers which were secured in 1938. I do not know whether you wish me to underline the moral of all that but it seems to me that there have been very solid advantages arising from the kind of reciprocal aid we have been discussing.

We are going into these negotiations. I need hardly tell you that we intend to make them a success. On the other hand, we are not fawning and prostrate. We are going into the matter neither with our tongues in our cheeks nor with our caps in our in hands. We are going in in a fashion which is at once candid and tough, with our hearts on our sleeves but with our heads on our shoulders. That is the attitude in which we are embarking on these negotiations. But if we do have to surrender what in isolation under restrictionist conditions have proved of value in the past in order to gain greater benefit under the expansionist conditions of the future, you must trust us to make sure we will obtain full value for the sacrifice. I would also add this, that what is going to be bargained over and discussed and negotiated is really just the external trappings of the Empire. What goes on to the bargain counter will be what is already in the shop windows, simply the external trappings.

None of your Lordships, I am sure, would wish me to end on a jingoist note. If ever a Government of this country was pledged to international co-operation, economic and otherwise, it is His Majesty's Government to-day. May we be given strength to realize that ideal. If ever the people of this country felt a strong and universal desire for abiding friendship with the American people, it is the British people who feel that desire at this moment. It is not within my sphere to comment on Mr. Churchill's broadcast last night, but I cannot forbear to refer to the opinion that he gave that a special relationship between the United States and the British Commonwealth was probably the only means by which the new world organization could attain its full stature and strength. Without commenting on that, because it is not for me to do so, may I suggest—and I know the noble Lord will agree with this, because it seemed to me to be one of the most cardinal aspects of the argument—that a strong coherent Commonwealth is the best means and the only means to lasting friendship between this country and the United States of America. As we open these momentous negotiations, with charity in our hearts for all, we turn to the British Commonwealth and Empire and say, "If we forget you, may our right hand forget its cunning." I am sure that message goes out from the whole House on a matter which rises far above any question of Party. If we forget the British Commonwealth and Empire, may we in our turn be forgotten. On behalf of His Majesty's Government I have much pleasure in 'accepting the Resolution of the noble Lord.

4.3 p.m.

LORD CROFT

My Lords, I desire to say only a few words to your Lordships this afternoon. I am speaking in a purely personal capacity, because as some of my noble friends in this House will always remember in regard to this particular issue, I have regarded it as one which far transcends any Party or political view. It is something outstandingly great upon which some of us feel that we have survived in the past, and on which we can only successfully win through the great troubles of the future. Again, I am speaking personally, because I do not know that I have a great deal of conflict with the Party opposite and the noble Lord who has just sat down. Indeed, I hope I may be forgiven if I may say that I think his speech was distinctly less woolly than those of some of my own political friends in days gone by. I am not speaking of the present moment. I think everyone in this House will congratulate him on the wit and the clarity of his statement.

Now in the remarkable debate opened by Lord Tweedsmuir last week, there was a consensus of opinion, I think, in all sections of the House, that there had been grave neglect of the education of our people on the true meaning of the system within the Commonwealth and Empire. It was felt, I think, not only amongst children, but also amongst adults, that there was a lack of knowledge which was pathetic, if indeed not deplorable. Lord Elton's great book, as I like to describe it, was referred to in that debate. I would add this, that if noble Lords have read the two little works to which I am going to refer, I am sure they will agree with me that if the general public had mastered two very fine little pamphlets, one by the Professor Ramsay Muir, who was a political opponent of mine, which I think was called The Empire, How it Grew, and the other, a little pamphlet by a political friend of mine, Mr. W. A. Wells, How the Colonies joined the Empire, and if the facts stated therein were recognized, it would be appreciated how little of this vast system joined this great family because of any form of aggression, and how much of it actually came in of its own free will, and frequently by the request of the indigenous populations. If we appreciate these facts we will change that spirit of apology and that atmosphere of indifference which has been so general in the past and we will henceforth speak, as I think the noble Lord did, certainly as my noble friend who opened the debate did, without apology, and with great pride of the achievements already to our credit, hoping that we may be worthy of continuing to build up the great structure, the foundations of which our fathers so splendidly laid.

May I just remind your Lordships that when Mr. Joseph Chamberlain went to the Colonial Office, and I was a very young man, he believed you could only really uplift the native populations of the Empire if you were greatly to improve communications, and take such gifts as we really have in western civilization—although there are many that we are not so proud of—right into the hearts of those countries by the speediest communications. It was his great vision which stimulated the growth of railways, docks, harbours and roads, and brought about other remarkable changes, so that communities were able to mix, so that warring tribes of natives in various Colonial territories ceased their bloodshed and turned to peace, law and justice under British guidance. Well, within ten years, I think I am right in saying, of the departure of Mr. Joseph Chamberlain from the Colonial Office, all the Colonies, many of which had been a great financial burden to us in the past, had turned the corner. I think all were on their feet, and have continued to pay their way, with the exception of one or two cases like Newfoundland, under financial stress in the last year or two. That was done by communications.

Why did we stop there? Why were we so callous or indifferent as to fail to determine to uplift this mighty host of peoples in the Colonial territories by the only way, namely, giving them some shelter for their primary production as they were marching to the full estate of manhood? Instead, we let them drift. We allowed hundreds of our settlers who went out there to be ruined in every Colony. Wonderful opportunities were missed of benefiting both the natives and the British who had risked their all in venture for production. Only in 1919 was it that we made a small start to prefer the products of the Colonies and the Empire. I admit that it is courageous of some people to quote figures in your Lordships' House, but I congratulate the noble Lord on using no figures at all, because I think on this particular subject figures are so staggering that they are wiser avoided unless you are whole-heartedly in favour of my noble friend's Resolution. I ask your Lordship's just to look at the results to a few products effected by the original preferential duties Which were granted in the year 1920, I think, or 1919. Percentages I know are very bad things to use, but if they give an answer which cannot be questioned, I think there is something to commend them Let us take the case of these various commodities in 1921 compared to 1937–38. These are results which I think your Lordships will agree were extraordinary.

In the first year, 1920–21, we imported in the case of rum 76 per cent. from the Empire. In 1937–38 we imported nearly 100 per cent—99.5. In the case of wine we imported only 6 per cent. in 1920 and in 1937–38 31 per cent. In the case of cocoa in 1920–21 we imported 92 per cent. That was a large quantity even in 1920, and in 1937–38 that had risen to 95.8 per cent. Coffee, in which I have been personally interested—I think I must make that declaration in this House before proceeding—which stood at 49 per cent. in 1920–21, rose to 55.5 per cent. Sugar rose from 22 per cent. to 69.9 per cent.—a remarkable rise. Raisins rose from 8 per cent. to 40.5 per cent., and tobacco, for which we must find dollars to equip ourselves with the inferior Virginia leaf (as it is so regarded by pipe smokers like myself), from 3.3 per cent. to 24 per cent. These figures, I submit to your Lordships, are startling proof of our success in abandoning the policy of laissez faire in favour of the Empire. If we can develop the importation of Empire tobacco and multiply it by eight times in sixteen years, and can, if we have the will—I am authoritively informed it is so by those who know—double or possibly treble that in three years, we surely ought not to contemplate perpetual dependence on dollar countries for our supplies of the fragrant leaf.

When the great depression took place in 1930–32 at last we had the Ottawa Agreements—the extended Agreements for which we owe so much to my noble friend Viscount Swinton, and to the hospitable help and guidance of Viscount Bennett, to which I think we would all pay tribute. Imperial Preference, under the Ottawa Agreements, marked the immediate revival of the Commonwealth and Empire, and because we thus raised one quarter of the world, as my noble friend has indicated, to a sounder economy, in my opinion the whole world benefited. It was for only six short years, but we know that there had been a depression and we led the world in the recovery under the Ottawa Agreement.

LORD PAKENHAM

The noble Lord has been so kind to me that I hesitate to intervene. It would be rather hard, however, to prove that the British Empire moved forward faster during those years than certain nations—some of them associated with sterling but others not, as, for instance, Japan.

LORD CROFT

I am afraid I have not the Japanese figures before me, but I think generally it must be admitted that the recovery was surprising. I think it was admitted in the United States that it was even more surprising in the Commonwealth than in other countries.

LORD PAKENHAM

Forgive me for interrupting; I only do it to be helpful. I agree that there was a surprisingly quick recovery in the British Empire.

LORD CROFT

I will leave it there. Our imports from British Empire countries increased from £250,000,000 in 1931 to £410,000,000 in 1937. Domestic exports rose from £171,000,000 in 1931, to £252,000,000. As to trade between British countries other than the United Kingdom, their imports increased from;£179,000,000 to £157,000,000.

The point was made by my noble friend and I rather gather is not altogether dissented from by the noble Lord opposite, that the foreign world apparently did not suffer from our preferential arrangements. In fact, the trade between British countries and foreign countries, increased as follows in those six years: Imports from £932,000,000 to £1,068,000,000, and domestic exports from £468,000,000 to £636,000,000. How grotesque, I venture to assert, is the suggestion made in certain high quarters in the United States that this country was guilty of discriminatory trade arrangements of the type which destroyed the freedom of trade during the 'thirties! How a policy which was adopted in fact after the depression, as a partial cure, could have been the cause of that depression, passes the wit of man. I think it must be agreed that it is not a fact. Trade between British countries and foreign countries, far from being restricted because of the restored prosperity of the Commonwealth and Empire and the increased purchases by ourselves and all the countries of the Commonwealth and Empire from the foreign world, increased. Our recovery, I venture to suggest, actually started world recovery. Our preference harmed no one but it certainly was of immense advantage to the peoples of the British Empire and, indirectly, to others outside who traded with us.

I do not want to detain you at too great length but I want to suggest that food is the crying need of mankind. Will your Lordships deny that the greatest possibility of the expansion of agricultural production lies within the Commonwealth and Empire? These vast areas, in my humble opinion, are in fact the key to the recovery of civilization, and the succour of all humanity can be looked for there. In this matter of foodstuffs, the peril of shortage of which has become so obvious owing to the vast increase of the population of the world, more especially in Far Eastern countries, there is a special call to the peoples of the Empire. Twice in our lives—is it much of an exaggeration to say this?—we have been within something like a month of starvation. Largely we were saved because we had the safe food supplies of the British Empire, placed splendidly and unreservedly at our disposal by our fellow subjects. Therefore I do most earnestly ask your Lordships, when we see some who seek to make the elimination of Imperial preference one of the consequential conditions of the grant of the American loan, is this the moment to introduce such a proposal?

I am very glad that the reassurances given to us by His Majesty's Government in this House and another place on the American loan show that at any rate they are anxious to make clear to their countrymen that their hands are at least free and not tied with this frightful suggestion. If those who were advocating this policy had their way it would be not only a tragic blow to the Colonial Empire to follow such a proposal but would also be a very serious injury to Dominion producers. I do not speak from an academic point on this subject. Ever since I was a very young man I have believed that it was the duty of anyone who had the worldly possessions to try and do all he could to develop the backward parts of the British Empire, and I have had my experience. After all, it is a purely domestic affair if we choose to lower our duties in favour of our own people.

Far from eliminating Imperial Preference, the only sane British policy is that if we are going to reduce our tariffs—and I do not object to that—in conformity with a world agreement, we should still further increase our preference in our own family, so that our own people do not suffer. We are told in nice phrases: "Ah, yes, but none of us really want to get rid of Imperial Preference unless we get a wonderful quid pro quo in advantages elsewhere." My submission is that there is no quid pro quo in regard to Imperial Preference. No dreamer, however well he "did himself" the night before, can really believe that we shall be able or permitted to expand our trade in the United States to such an extent as to compensate us for the great advantages we receive from the preferences of the Dominions and the small advantages we receive from the very small preferential duties we get in the Colonial Empire.

But even if the United States of America is prepared to give us complete free trade—and what a hope!—does anyone believe, having regard to the wonderful power of American production, that we shall sell our motor-cars, our electrical instruments, our textiles, our fittings, our radios, to any great extent—to the extent of, let us say, £100,000,000 or £200,000,000 a year—in the United States of America? Even if we were so intoxicated with ancient Victorian theories that we believed that might be possible, I would ask, as my noble friend asked, what right we have to offer the Dominions and the Colonies on such an altar which might do such great injury to themselves? How long would Australia continue to exist under the free blast of American competition? How long would motorcars be produced in Canada if there were no Imperial Preference? Who would suggest that the United States is going to buy an expanding quantity of the tobacco, sugar and other products of the Colonial Empire on which that Empire depends for its very existence?

I will not detain your Lordships any longer, because I know there are many who desire to speak, but I would like to say that this great collection of peoples has only recently come through a trial of a magnitude to which perhaps few countries have ever been subjected. Very remarkably we won our way to victory and saved our peoples from enslavement and serfdom. I 'believe it is essential that we should preserve our liberty in all ways. I feel most strongly that we must be no party to any policy which will deprive us of our power of fiscal decision or make us subordinate to the policy of any single foreign land. I believe that in all sections of the House it is realized that we are now fighting for our very lives in the matter of production and export. I submit to your Lordships that the greatest hope for the people of this country, for the peoples of the Commonwealth and Empire, and ultimately for the peoples of the world is that our whole economy shall be united and sound. I beg that we shall not deflect our minds at this moment and throw grit into the complicated and delicate machinery of industry in this country, with all the possible consequences of class hatred which might ensue, but that we will search out those old British traditions of comradeship, of unity and of affection for each other within the British system. By so doing, I believe—putting aside all Party questions in this greater Imperial conception—we shall lead our country to that great prosperity which is, I hope and pray, its destiny.

4.23 p.m.

LORD REA

My Lords, there was a great deal in the early part of the speech of the noble Lord who introduced this Resolution with which all of us could agree; and even in the very early part of the speech of the noble Lord, Lord Croft, there was something we could all follow with agreement. But I am bound to confess that both of them drifted, more rapidly than I could have wished, back to the Resolution in its original form which was something quite different from this Resolution. Indeed, this Resolution has undergone a most surprising change since it first appeared on the Order Paper. It began, if I may so express it, as "pure Beaverbrook"—a simple call for Imperial Preference, but the speech of the noble Lord, Lord Altrincham, gives me some hope that I am interpreting this revised version as something rather more modern and more in accord with recent thought than the crude statement which first appeared on the Paper.

LORD ALTRINCHAM

If the noble Lord is asking for an interpretation, I can only tell him that he is wrong from beginning to end.

LORD REA

I wonder what the noble Lord means by "reciprocal economic aid between kindred peoples." That is an object we can all support. The reference later to "multilateral trade" is a further encouragement to those of us who believe that a prosperous Empire can only exist in a prosperous world. The earlier form of the Resolution gave me some cause for anxiety, and if the imposing extra verbiage of the latest addition is merely to cover up the nakedness of the original, it is time someone made an effort, however modest and ineffectual, to show that times have changed and that Imperial Preference, as imposed upon a reluctant Britain—and I still maintain that that is a fact—some fourteen years ago no longer serves our needs. I have no wish to be controversial, and I will not argue whether the policy was a success or the ghastly failure which I believe it to have been, in spite of the figures put forward by the noble Lord, Lord Croft. I am anxious to keep fully in mind the debt we owe, and which we can never repay, to the Empire and to the Dominions for their help in our hour of need. I believe there can be no going back on Ottawa, with all its consequences, without the full assent of all who were parties to that Agreement.

The point I most particularly want to make is that the result of this fourteen years' experience both in peace and in war has been to show the need, not for raising but for lowering tariffs everywhere. The Dominions themselves are certainly coming to this conclusion. Perhaps I may quote the words of an economist who has perhaps the best right to speak for the Dominions, Professor Fisher. He was born in New Zealand, was educated in Australia and is now Professor of Economics at Chatham House. He says: In the best interest of harmonious Commonwealth relations themselves, the Commonwealth's place in the world economic structure demands a turning away from the exclusive tendencies of the last decade and a closer integration with world economic freedom as a whole. In fact the Dominions have learned by hard experience the principle which we Free Traders have always urged, namely, that we cannot live by taking in one another's washing and that the markets of the whole of the rest of the world are as essential to our prosperity as to theirs. It is not the Dominions alone who have found this out; the United States is coming to the same conclusion and is being steadily driven to recognize that if she is to export, as she must, she must import as well. She is preparing to reduce her barriers and she has given the strongest evidence of this in the Atlantic Charter.

This complete change of attitude of the United States is perhaps the most important and most hopeful economic decision that has been taken in our time. It is significant that it has been endorsed by the Governments of the United Nations, while the Hot Springs agreement was signed by the representatives of forty-five nations including Great Britain and four of the Dominions. We have evidence of a world-wide desire to reduce barriers to trade. Already a modest beginning has been made in the Customs Union Agreement between Holland, Belgium and Luxembourg, with the Scandinavian countries, showing, perhaps, some signs of interest in it. Surely we might lend a hand to bring about such a union without any too violent breach of earlier commitments, whether we are Free Traders or Protectionists. If, as we are told, -Russia might object, surely the reply is—as Lord Altrincham has said—that such a union would be small, compared with the free trade areas in Russia and in the United States, in Russia particularly. I agree that this is a minor point.

My real object in rising to-day is to draw attention to the enormous opportunity to increase the wealth, security and happiness of the whole world which is laid open to us by the unexpected and generous action of the United States. When I say that the action is generous, I do not fail to recognize that it is in her own interests as well. It was greeted with great enthusiasm all over the world at first, but what is disquieting me is that there is grave danger that unless we continue to show our appreciation much more clearly than we have done recently, and take some definite steps to meet the United States half way, to show that, at least, we are sympathetic with their desires, their enthusiasm may cool down and we may loose an opportunity that may never recur. It is that fear that makes me dread such Resolutions as this was in its original form, and leaves me to hope for some assurance—which in spite of the noble Lord's interjection I trust that we may have—that my interpretation of the Resolution we are discussing is a not tin-sound one. That being so, I would associate myself with the noble Lord who has spoken for the Government and in that sense would gladly accept this Motion.

4.35 p.m.

LORD CHESHAM

My Lords, I am afraid that I must express a certain amount of disagreement with some of the phrases used by my noble friend Lord Rea. I cannot quote his exact words, but I think that he said that, in his opinion, Imperial Preference had not done much good.

LORD REA

I quoted an Australian authority to show that it had not met the case.

LORD CHESHAM

The Australian authority did not seem to think that it had met the case. I cannot agree with that. The noble Lord went on from that to fundamental matters of belief—such as Free Trade—but I am not prepared to go into that question at the moment. All I want to say is that very definitely the people who live in the Colonies and who work in them attach the very greatest importance to the maintenance of the closest trade relations both with this country and with the rest of the world. Certainly in the African Colonies it has been of the very greatest value, and these Colonies definitely owe a very large part of their present stage of development to Imperial Preference. That is why I so warmly welcome the speech of the noble Lord, Lord Pakenham, and the indication it contained that this Resolution might be accepted.

There is another matter to which I wish to refer. It is indeed a matter of urgency, and it has already been raised by the noble Lord, Lord Croft. I am speaking, of course, of the question of the world shortage of food which was debated in your Lordships' House recently. What I want to bring particularly to the notice of your Lordships is the contribution which can be made by some of our Colonies, which have not already made their maximum contribution. The Dominions and many of our Colonies have been marvellous in their promises and in their contributions to meet the really serious crisis with which we are faced. But there are Colonies, especially in East Africa, which are capable of tremendous expansion in the direction of food production. I have made speeches previously in this House and elsewhere on this subject, but the fact is that the result has been negligible. I am not complaining, but what I do say is that this crisis, this food situation, does make this a matter of the very greatest importance at the moment.

Throughout the whole of East Africa it is very noticeable how relatively low is the production of food as compared with the population and with the possibilities of food production which exist in those countries. Many parts of the territories out there are extremely fertile, and are capable of producing a great deal of foodstuffs, especially grain and maize and things of that kind. But even out there you do get local famines and they are becoming almost annual events in many parts of the country. The remedy which is employed is to import grain into those territories from South Africa or elsewhere to feed the natives. Now, to anybody who knows those territories that is just too stupid. I hate to refer to the action of a Government like that, but really the whole idea is ridiculous, because there is ample capacity in those territories themselves, not only to maintain themselves and support their own people, but to make a very considerable contribution towards the export of food.

What is wanted is encouragement to the Africans themselves to produce more foodstuffs. At the moment, the African is very much inclined to produce just what he wants for himself and his family. If his crop fails, then these famines occur. The natives then have no course open but to appeal to the Government to feed them. Now that situation can be dealt with by the Government giving encouragement to the natives, through the officials who are in such close touch with the Africans, to produce more maize, more mealies. I do not say that they could do it easily, for it would mean a certain amount of trouble, but arrangements should be made so that the African can grow his stuff and sell it through the proper channels at fixed and suitable prices. Then there is the question of grain storage, which also is not beyond the bounds of possibility. It is a matter which, if tackled firmly, would be comparatively easy in that territory.

The present official remedy even for these local famines appears still to be imports from South Africa where I understand the harvest has to a great extent failed, and the other suggestion which I have received is that of a ship from South. America. I also understand that there is a serious danger that the harvest there will fail too, so where they are going to get it from I do not know. There is also Tanganyika, very large in extent but small in financial resources, which is spending £300,000 a year on dealing with these famines, and that large amount for a territory of that kind will continue to be demanded every year unless the local Government step in and help to organize the food supply and get some initiative for the Africans to produce more. I do not want to refer only to maize. The same thing applies to other food supplies such as tea and coffee and especially to meat. I want to refer to that shortly for a moment. The whole of East Africa is alive with cattle at the moment. The world outside is screaming for meat. What is wanted is some kind of organization to get the two together. I am told on good authority that it would be quite possible, with good organization, to get as much as one million head of cattle a year from East Africa. Efforts have been made in the past, in pre-war days and particularly during the war, to start this but those efforts have been somewhat halfhearted.

If you will forgive me, I want to quote for one moment from the report of the annual meeting of Liebig's Extract of Meat Company. The report of their meeting on February 12 this year seems to sum up the situation far better than I could. Liebig's have been operating in Kenya and Tanganyika for some time and are experienced in this subject. Their report says: Our factory in Kenya was again engaged in the production of corned beef for Government account, but the number of cattle supplied by the Colony was once more disappointing. Prospects for the forthcoming season are uncertain, for Government assistance,. on which the supply of cattle required to fulfil the orders for canned meats has been almost entirely dependent, is now being withdrawn for victualling the armed forces. It would seem, however, in the light of the serious food shortage which threatens Europe, and on which so much emphasis is being laid in these days, that the decision to suspend the system of contribution whereby the native stock-owner has been called upon to deliver a quota of his cattle to the East African Commissariat should be carefully reconsidered. A little later the report says: The cattle potential of East Africa is normally greater than the consumer requirements, but its economic exploitation which would advantage both native and Government, requires organizing. … It is thus to be hoped that the dire needs of food-starved Europe, no less than the long-term interests of the Colony, will not be allowed to pass unheeded. I cannot add to that; it explains the position in a nutshell. There is one other aspect I should like to mention. We have frequently in this House, in this country and also in Africa, paid lip service to the necessity of raising the standard of living of the African, and lip service is just about where it has stopped. Very little, if anything, has been done to implement the wonderful remarks which we all make. The best way of dealing with the problem—the only way of dealing with the problem—of raising the standard of living of these millions of Africans for whom we are responsible, is by encouraging them to sell what they have got for money with which they can buy the things they want and which they cannot get at present.

Government action in this way would accomplish, in the way I have outlined, a twofold object. It would make a very big contribution to the food supply—I mean big, too—and it would be an inestimable benefit to the African. I may be told that the scheme I have outlined is a long-term policy and that it will be too late to help this food supply. I am afraid I do not agree. My information about the world shortage of food has caused me very great concern. I hope I am wrong, but I fear I am right. My information is that this world shortage of food is not a purely temporary, passing matter but that it is likely to increase to a very alarming extent in the next three or four years. I am told that it will probably reach its peak in about two years' time and that after that it will take another three or four years to get back to normal harvests. I do not want to be gloomy about the prospects, but if my information is correct, I believe that is the very, very, serious situation which the whole world has got to face.

Do the Government appreciate the gravity of this situation? Are they prepared to take very exceptional methods to deal with it? We have just fought, and won, probably the greatest war in history. We fought it as an Empire. The whole Imperial Forces of this Empire of ours got together. Now we have got the menace of world starvation in front of us and we have got to face a more serious fight. Can we not face it in the same way, on an Empire basis? Cannot we pool our resources? Cannot we pool the knowledge and experience of our Dominions, their personnel and the machinery that may be available, because it is only by a united effort that we shall overcome this crisis? The noble Lord, Lord Altrincham, referred to the Imperial Conference which is to take place in London shortly. There we shall have the leaders of the Dominions and of many of the Colonies. I do suggest that this subject should receive the very highest priority in the discussions at an Imperial Conference of that kind. The gravity and the seriousness of this crisis demands most exceptional action. I would like to suggest that we cut out a lot of the delays and cumbersome methods that we have got into the habit of employing in dealing with these Colonial and Imperial matters, that we cut out the surveys which take years, cut out the reports which have to be sent home and considered, pigeon-holed, and then some decision taken on them in a matter of months later, or years in some cases. Cannot we mobilize our man-power and face up to this critical situation with drastic and prompt action instead of the rather cumbersome methods we have employed in the past?

4.52 p.m.

LORD HAILEY

My Lords, I am in somewhat of a quandary. The noble Lord, Lord Altrincham, put forward his Motion with great conviction and cogency, a cogency I may say that we might well expect from the author of his very interesting book on the British Commonwealth. In the course of that speech he suggested that I might support that part of his Motion which referred to reciprocal economic aid as necessary to the welfare of the Colonies. My quandary arises from this, that the Motion has already been accepted, and very handsomely accepted, by the Government, and I doubt whether such support is necessary.

I am unwilling at this late stage of the debate to trouble your Lordships with a good deal of statistical and economic material, pleasant as the subject may be to myself, and I do not want to put your Lordships under that kind of statistical thraldom to which Lord Pakenham referred. If I do rise to support this Motion, I will do so in abbreviated terms and I will avoid statistics as much as possible. But I feel that that particular part of Lord Altrincham's Motion which refers to the necessity for reciprocal aid for Colonial welfare, is one which needs somewhat separate consideration by your Lordships. Let me remind you that in negotiating economic reciprocities the Dominions and India are free agents, not subject to our control; but it is we who have the responsibility for deciding whether a system of preferences does actually make for the welfare of the Colonies; in the last resort we have the power to impose it; and it is we who will have to argue the case in any negotiations of an international scope which will decide the future of the system of reciprocal preferences.

In approaching this matter it would not I think be satisfactory if I were to argue the merits of the system of reciprocal preferences merely in relation to the welfare of the Colonies. We are bound to consider it also in relation to our own economy, a consideration never more important than at the present time. Let me therefore start by endeavouring to make clear the range of interest which our Colonial trade represents as seen in relation to the total value of our overseas transactions. It is necessary to do so, because one often encounters a tendency to generalize on the subject of our Colonial trade and to base on these generalizations an argument which is not justified by the facts.

I shall merely say as a preliminary that I propose to define Colonial trade as that coming from or going to the countries for whose tariffs we are ultimately responsible; this would therefore exclude Southern Rhodesia, but for the purpose of convenience would include the Sudan. If we take the figures of a normal year like 1937 or 1938, imports from the Colonies have constituted seven to seven and three-quarters per cent. of our total imports from all sources and our own exports to the Colonies have constituted from nine to ten per cent. of our total exports to all quarters. I must make one reservation. These figures represent trade with the Colonies as a whole. But there are certain territories, chiefly in Africa, in regard to which either because of treaty commitments such as those arising under the Congo Basin Acts, or because they are held under Mandate, it is not possible for us to institute a system of preferences, If we exclude these our exports to the Colonies may be for our present purpose more correctly stated as between seven and eight per cent. of our total overseas trade.

That may seem to be a somewhat restricted range of interest taken in relation to our total overseas transactions, but it is not on that account negligible. And it becomes necessary therefore to examine the measure to which, within that range of trade, the system of reciprocal preference can actually be of advantage to the United Kingdom. There are two questions which require consideration. In the first place, does this system actually enable the United Kingdom to obtain a more secure or a cheaper supply of the raw materials of industry or consumer goods from the Colonies? Now it is clear that the system of preference can in itself affect little in this respect, since the Colonies will normally seek to sell their products in the dearest or the most convenient market. The only way of guaranteeing the diversion of supplies from other markets to that of the United Kingdom would be to impose discriminatory duties on the export materials from the Colonies, in favour of the United Kingdom. We have only made one or two experiments so far in this direction, the most outstanding being of course the discriminatory tariffs on Malayan and Nigerian tin ore. There were similar measures taken at one time with regard to hides from India and palm kernels from West Africa. Those were short-lived, and that on palm kernels led to some rather undesirable results in stimulating production of palm oil in the Netherlands East Indies. Such discriminations are not only difficult to reconcile with our position as trustees, for if we apply them to agricultural products they may tend to reduce the income of the producing Colony, but they are often very doubtful in their economic effects. They are hardly likely I think to be repeated.

In the second place, and this is more important, how far does the system of preference ensure a benefit to our own export trade?

LORD PAKENHAM

If the noble Lord will forgive me for interrupting, in the absence of the Leader of the House I am anxious to make sure exactly what he has said. He argues there is no real effect arising from preferences in our getting cheaper raw materials or foodstuffs.

LORD HAILEY

Yes, that is so, unless we impose a definite discrimination. I need not point to the difficulty of calculating the precise effect on our export trade of the pre-Ottawa and Ottawa preferences which were given by Colonies to our exports. The noble Lord, Lord Pakenham, has spoken of the difficulty of drawing precise or secure conclusions from figures extending over a series of years, years which have included, as I need not point out, changes in the value of both sterling and of the dollar. And of course the most substantial advantage enjoyed by British exporters does not always lie in any preferences our exports may receive in the Colonial tariffs; it lies largely in the more intangible preference given by old- standing trading and financial connexions and by the use of a common currency.

But a critical analysis recently made shows results which may be summed up as follows. It is beyond question that the preferences granted by those Colonies which have not been precluded by Treaty or Mandatory arrangements from according them have resulted in increased purchases of British goods. While this is so, there is some difficulty in assessing the value of this on balance to British trade. I will not enter into the technical reasons for this. It is enough to say that the general conclusion of such analysis is that the benefit of the system lies perhaps rather in the fact that in some cases it enables United Kingdom industries to maintain a market which would otherwise be lost to cheaper and poorer quality goods. There are certainly some who, as the result of analysis the figures of Colonial trade, are inclined to hold that on balance the United Kingdom possibly loses more by the preferences given by it to imports from the Colonies—which extend of course to all Colonies—than it gains by the preferences accorded to its exports by certain of those territories.

If this conclusion is correct—and it is of course debatable—the result is not necessarily to be regretted. The Colonies are an integral part of the Empire, and it may be well viewed as one of our responsibilities to assist their development in this particular manner. Let me then proceed to examine how far the preferences given by us to the Colonial products coming to our markets have actually proved of benefit to the Colonies themselves. In considering this point there are several facts of importance to be noted. In the first place, there is a considerable range of imports from the Colonies on which no preference is granted, such as rubber, tin and copper. About 60 per cent. of the total exports of the Colonies to all quarters falls into this category. Secondly, a preference clearly confers no price benefit on the countries eligible for it if they are producing in the aggregate more than is required by the preferential market. That means to say that a considerable block of Colonial products, headed by cocoa and oil seeds, receives little or no benefit from our United Kingdom preferences. This class amounts roughly to about 18 per cent. of the total Colonial export production. There is again a third class to which the preferences granted by us are of variable value. There, again, I will not give the precise economic reason; I will merely say that into this class fall such products as sisal, timber, and certain of the oil seeds. This class constitutes about 2 per cent. of the total Colonial export.

Up to this point therefore the preferences granted by us are either of no obvious value to the Colonies or only of variable value to them. But we now come to certain classes of Colonial exports in which our preferences are of proved benefit to the Colonies. There are, in the first place, certain products which, owing to their quality, would, in the absence of preference, command only a limited market compared to products coming from elsewhere The most typical case is tobacco from our East or Central African Colonies. The total amount coming from all source, when viewed in relation to our total import of tobacco from all sources, may not be important, but it is of the greatest importance to the Colonial territories concerned. Next there is the class of goods where the existence of a preference has proved to give to the preferential goods a clear advantage over similar goods coming from elsewhere, such as tea, coffee, and some of the fruits. This class has an important place in our Colonial export trade, and constitutes about 9 per cent. of the whole.

Finally, there is the class of product where the preferences granted to the Colony are not merely useful to the producing Colonies but essential to 'their economic life. The outstanding goods of this class are sugar, bananas and some of the citrus fruits. They constitute about 10 per cent. of the total Colonial export. But their real significance lies in the fact that, without the preference, some of the West Indies and the Island of Mauritius would go out of production for what has proved to be their most suitable crop, for which no alternative has yet been found.

To sum up these figures, there are about two per cent. of Colonial exports which may benefit to a variable extent by the preferences we accord; about nine per cent. in which the preference is of clear value, and a further ten per cent. in which the preference is vital to the economy of the producing Colony and the maintenance of its standards of life.

It may be argued that a general abolition of a regime of preference should not preclude our giving preferences to Colonial products in our market, so long as we did not claim that the Colonies should, in return, give preferences to our exports in their own markets. Such a process should be no more open to objection from others than the block purchase of such goods by the United Kingdom Government at a preferential price—a continuance, in fact, of the process to which we have become accustomed during the war. There has been, I admit, in this country a school of thought to which this alternative would seem desirable, for this school has always been opposed to claiming from the Colonies anything in the nature of reciprocal preferences, holding that our duty as trustee is to give to their people the opportunity of purchasing in the cheapest market the goods required for their material development or social needs.

That may be the ideal, but it is frankly an ideal that it is difficult to commend to our own people in our present circumstances, and in face of the overriding necessity to extend our export trade. So long as it can be shown that the reciprocal preferences accorded by the Colonies to our exports do not in fact impair their acquisition of essential capital goods, and do not raise the cost of consumer goods so as to affect their standard of living, then these reciprocal preferences seem to me to be justified. So far they do not seem open to this objection. They certainly create nothing like a monopoly for our trade; of the total imports into the Colonies a little less than one-third come from the United Kingdom. In respect only of two items, footwear and certain textiles, has it ever been claimed anywhere that our system of tariffs does prejudice the Colonial consumer, but this was mainly due to the imposition of quotas against Japanese trade, which I hope can be regarded merely as a temporary expedient.

The conclusion seems to me to be obvious. We and the other self-governing members of the Commonwealth may hold our individual views of the value of the reciprocal aid we render to each other by a system of trade preferences. We may hold our own views, and they will not always be the most complimentary view, as to the motives which have inspired the attack on this system. We may hold different views of the limit of the concessions we can make to meet this attack. But we, in the United Kingdom, who are responsible for the non-self-governing portion of the Empire, must stand fast to certain requirements which its welfare demands. We must retain the power to continue the system of preferences, or some analogous system which would give the same results in cases such as those to which I have pointed. The extent of reciprocal benefits thus secured to our own export trade may be a matter of debate; but we should fail in our duty as trustees if we permitted any invasion of our capacity to render to certain of our Colonies the economic aid which it is our responsibility to accord to them.

5.9 p.m.

THE EARL OF GLASGOW

My Lords, at this late hour I do not intend to range over all the subjects which are embraced in the noble Lord's Resolution. I want to bring to your Lordships' notice two points. At the present time we are under war conditions and all our overseas purchases of food are made by the Ministry of Food. Imperial Preference at the moment has no practical significance. I hope and believe that this state of affairs is only temporary, but as soon as free marketing conditions are again in operation the importance of preference to the overseas producer will again be vital. I ask the noble Lord if he will take notice of this particular point. When the Conference begins its discussions—and that time is not very far away—there is a real danger that modification or elimination of preference may be conceded as a result of American pressure during the present abnormal situation, when the markets are in the seller's favour, and grave injury may thus be done to the future of a number of primary producing industries in the Empire which will badly need the assistance of a tariff preference in the United Kingdom when ordinary conditions of trading return. That is my first point. I know the noble Lord has been so good as to say the Government are going to take care, that we are going to be tough and have no nonsense and all that kind of thing, but at the beginning of this Conference we shall be in an abnormal situation and I hope the noble Lord will take note of it.

The American attack on preference ignores the fact that the United States has built up an elaborate preferential system covering its imports of sugar which gives free entry to sugar grown in Puerto Rica and in Hawaii, which are just as much Colonial territorities as are our West Indies. America also gives reduced rates to sugar coming from Cuba and from certain other foreign countries. Why should they have it both ways? Cotton, tobacco, canned and dried fruits are products of which the United States have a considerable surplus for export and which they are naturally anxious to sell here on an equal footing with the Empire producers. The noble Lord, Lord Croft, has dealt with cotton and tobacco and I wish to bring to your Lordships' notice the conditions with regard to dried and canned fruit. Before the war Dominion producers of those commodities were faced with intense competition from the United States and were only enabled to retain their position in the British market with the help of the preferences they received under the Ottawa Agreements. The industry expanded considerably between the two wars. United Kingdom imports of Empire canned fruits rose from an average annual amount of under 19,000 tons in the five years from 1919 to 1923, to 81,000 tons in 1938. The percentage of Empire imports compared to total imports rose in the same period from 25½ per cent. to 40 per cent., touching 45 per cent. in 1937. I am talking about canned and dried fruits only.

During World War II Australian and South African products have been largely consumed by the Allied forces, but the need for re-entering the British market on an even larger scale than before 1939 will soon become urgent if food production is to be maintained. Canada, Australia, South Africa and Malaya are all interested in this because together they sent 90 per cent. of the imports of canned pineapple which came to this country before the war. Without the help of Imperial Preference that will not be possible in the future. Then again, important wine industries in Australia and South Africa have been built up since preference was granted in 1925, and since the Ottawa Agreements Empire coffee producers had a preference of Id. in the pound, which has enabled them to hold their own. All these Dominions and Colonies from which these imports come will deplore any interference with these preferences, which have been of great moral support in stimulating their industries. The British Empire Producers' Organization (of which I have the honour of being a past President) and the Tobacco Federation have taken early and vigorous action in this direction which appears to have had some results, because in your Lordships' House on October 24 last the noble Lord, Lord Walkden, gave an assurance on behalf of the Government that in discussions with the United States no decisions would be taken which would affect the obligations of the British Commonwealth in the commercial field without the consent of the Dominions. No doubt the noble Lord meant that the Dominions would be consulted on every point in that connexion.

The Bretton Woods plan and Imperial Preference within the Empire hang together. I assert that the traders and manufacturers of this country and of the Empire are of one Mind, namely, that it would be fatal to adhere to the Bretton Woods plan if that involves a sacrifice of Imperial Preference. I saw in the Press yesterday that a gentleman who had just been to Jamaica to investigate economic conditions there stated that Jamaica without Empire Preference would be one great poorhouse or one great burial ground. Whether that is exaggeration or not, it is a risk which the Mother Country should do its best to avoid. Finally, I believe that most of our people feel instinctively that this country and the Empire are sound enough to ensure their own economic salvation if only they work hard enough, and that we do not need to give anything away in order to be given an opportunity of proving it.

5.17 p.m.

LORD HAWKE

My Lords, there have been hints in the Press that by our signature to the Bretton Woods plan and by the Loan Agreement we have sold the Empire up the garden and abandoned Imperial Preference. If this were true or were believed in the Empire it would be a very serious matter, but so far as I have been able to understand from a study of the documents it is completely untrue. I would crave your Lordships' indulgence in stating what I believe to be the position and the consequences arising there from. There was an underlying purpose both in the loan and at Bretton Woods to remove trade restrictions. Commonly these restrictions are of three types. There are monetary restrictions, the exchange controls; there are quantitative restrictions, the import licences system; and there are tariffs, with or without preferences for one's friends. In normal times we were addicted to tariffs with preferences for the Empire, but in the difficult times of war we have worked usually by means of import licensing, though before import licences were granted monetary, shipping and other factors were taken into consideration. The Articles of Agreement of the International Monetary Fund recognize that until members can see their way to square their balances of international payments they may have to employ monetary restrictions, but if they continue to do so after five years they must consult the Fund. The Final Act also recommends that the members shall meet together as soon as possible for the purpose of removing obstacles to foreign trade. There is no specific mention of quantitative restriction. So much for Bretton Woods.

The Loan Agreement provides, inter alia, for the release of existing sterling balances by instalments and for the free convertibility of fresh sterling balances into any currency as they accumulate. It also provides that we shall not practise monetary discrimination, but that we may practise quantitative discrimination provided that in so doing we do not discriminate against United States products. What will be the effect of all this? Firstly, if our export prices are so unattractive that the countries who acquire sterling prefer to take it elsewhere to spend, we shall have to take steps which might even include devaluation under Article 4 of the International Monetary Fund. Secondly, I believe—this is a purely personal opinion—that we shall have to maintain some form of quantitative restrictions for a considerable time. Otherwise I do not see how our exports can possibly pay for the enormous volume of imports we should like to receive to lighten our miserable state as well as to free the instalments of old sterling and pay with them the instalments of the American loan, both starting in 1951.

During this time of transition, of restriction by import licences, we shall be at perfect liberty to import anything we like from anybody we like in any quantity we like so far as Bretton Woods and the Loan Agreement are concerned, provided that we do not discriminate against United States goods in so doing. What will this amount to? I presume that we shall have to grant to the United States the same share of our markets that they held in some datum period. I cannot guess at the datum period, but if 1937 were taken, we imported goods to the value of £1,000,000,000, of which £400,000,000 came from the Empire, £114,000,000 from the United States and £500,000,000 from other foreign countries. The United States had 11 per cent. of our markets in fact. Of the £114,000,000, approximately £50,000,000 represented agricultural products

It is agricultural products in which I think we have the greatest interest to see that our Empire has the first call on our markets. These agricultural products were: grain 4 per cent of the market, meat 3 per cent. of the market, fats 12 per cent., fish 13 per cent. Then we get on to where the share was appreciable—fruit and jam 17 per cent., cotton 42 per cent., tobacco 79 per cent. These three products are the ones in which we may have to promise the United States a very appreciable share of our markets. Take the case of cotton. Our Empire has never been able to produce all the staple cotton that Liverpool requires and the competition has nearly always been between Egypt, Brazil and the United States. So I do not think the Empire is the loser there. I am afraid we shall none of us be at all happy about fruit and jam. It seems fairly clear that those are things on which we may have to cut down because we cannot afford to import heavily. That will bear no doubt very hardly on certain, perhaps rather small, parts of our Empire which depend very largely for their existence on fruit-growing. I was thinking, perhaps, of Palestine. Under Clause 9 (b) of the Loan Agreement it is possible that we might be able to claim that special consideration should be given such countries in that their economy was disrupted by the war. Tobacco I am afraid is an old story, and it has been mentioned already tonight. As a smoker of Rhodesian tobacco of long standing I should be most unhappy at not allowing Rhodesia to export all the tobacco she wished to our market. But I fear that cotton and tobacco are very political matters in the United States and that they may be considered to be part of the price of the Loan. I might point out that in 1937, at all events, Australia, Canada and New Zealand appeared to take no raw tobacco from the Empire at all, and it is possible that Rhodesia, if she has not done so already, might be able to find a better market there.

So much for the transitional stage of restricting imports by licence. After that we reach the stage of imports controlled by tariffs, modified by any agreements into which we may enter in the meantime. As both sides of this House, with the possible exception of the south-east corner, appear to accept the policy of Imperial Preference, I hope that the noble Lord, Lord Pakenham, will be as good as his word and "fight like a tiger." But even before we reach the happy stage of import without licence, I think we shall find that the original economic purpose of Imperial Preference, to secure a market for our Dominion produce, will have receded in the light of certain new factors.

There are some very important new factors in the world to-day. There is the International Fund primarily designed to supply dollars to the world. If the world has dollars America has employment, and it was unemployment, particularly in America, in the 1930's which led to so much under-consumption. There is also U.N.R.R.A., a body to buy goods where it can and give them away to those who would never have had them otherwise. That, of course, makes for consumption. The third, but 'by no means least, factor is the translation of India from a debtor to a creditor area, and one which, by reason of her vastly increasing population, may play the classical role of a creditor nation by importing foodstuffs—grain and milk products—on a very large scale. Your Lordships will be well aware that, at the present rate of growth of the Indian population, in thirty years' time it will be nearing 600,000,000, and that before the war the area under crops in British India was some 200,000,000 acres. I doubt very much whether there was half as much again in the Native States. I think we may live to thank our stars that Hindus do not eat meat. In conclusion I would say that I 'believe that whereas the problem of the past has been to secure markets for the products of our Empire, in the future the problem may well be to secure our own daily bread. Sentimental and commercial ties fostered by Imperial Preference have been of great value in solving the old problem, and I Dominions have an entirely free hand to believe that they will be of equal value in solving the new one. But in so doing Imperial Preference may well fulfil a role which was never dreamed of by its detractors, and which might surprise even some of its creators.

House adjourned during pleasure.

House resumed.