Lords Sitting of 13 May 1947

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.
  TENDRING HUNDRED WATER AND GAS BILL. [H.L.]
  Read 3a, and passed, and sent to the Commons.

  MESSAGES FROM THE KING.
  2.35 p.m.
  THE EARL OF CLARENDON: My Lords, I have the honour to present a Message from the King, signed with his own hand:
  "I have received your address praying that the Government of Burma (Temporary Provisions) Order, 1947, be made in the form of the draft laid before Parliament. I will comply with your request."
  I have a further Message from the King, my Lords, also signed with his own hand:
  "I thank you sincerely for your Address and for your loyal and affectionate greetings on the return of the Queen, my daughters and myself from our journey, in the course of which we have visited the Union of South Africa, Southern Rhodesia, Northern Rhodesia, Basutoland, Bechuanaland, Swaziland and St. Helena.
  We shall always remember the wonderful and inspiring welcome which we received, and the warmth of the greetings which were extended from all parts of the Commonwealth to our beloved daughter Elizabeth on the occasion of her twenty-first birthday.
  We have been greatly touched by the reception which we have received on our return to this country."

  RECONDITIONING OF RURAL HOUSES.
  2.37 P.m.
  VISCOUNT ELIBANK: My Lords, I beg to ask the question standing in my name on the Order Paper.
  [The question was as follows:
  To call attention to the statement made in, another place on behalf of His Majesty's Government on October 17, 1945, in which they said that they hoped later on to come to Parliament to ask for an Act to enable cottages to be reconditioned, and to ask whether, in view of the great shortage of houses for agricultural workers which is augmenting the existing serious food crisis, and the little chance of this shortage being remedied in any reasonable time, they will reconsider their policy of refusal to allow the reconditioning of rural houses and introduce the necessary permissive legislation. as soon as possible.]
  LORD HENDERSON: My Lords, as your Lordships are aware, the question of reconditioning rural cottages with assistance from public funds has been the subject of an examination by a sub-committee of the Minister of Health's Central Housing Advisory Committee, under the chairmanship of Sir Arthur Hobhouse, and the Minister stated on February 24, 1947, that the Government would announce their intentions on the recommendations made by Sir Arthur Hobhouse and his colleagues before the end of the present session. The implementation of these recommendations would require legislation which could not, in any event, be introduced before that date. I can assure your Lordships that the Government are studying the Hobhouse recommendations with the greatest care, but I cannot anticipate the announcement which the Minister of Health will himself make later in the session.
  VISCOUNT ELIBANK: My Lords, I beg to thank the noble Lord, Lord Henderson, for that answer, but I should like to ask whether the Government are taking into account the fact that this is an issue which is imporant to all Parties; that it is not a Party issue at all, and that members of all Parties are asking for and would welcome legislation as early as possible. The fact that the noble Lord, Lord Quibell, in a speech last week, very strongly supported this plea reinforces what I am saying. I would like to ask whether that fact has been taken into consideration, since what the noble Lord, Lord Henderson, has just said, suggests that this legislation may be long delayed.
  LORD HENDERSON: I think I can assure the noble Viscount that all relevant considerations have been taken into account by my right honourable friend.

  MARSHAL KESSELRING.
  2.40 p.m.
  LORD DE L'ISLE AND DUDLEY: My Lords, I beg to ask the question standing in my name.
  [The question was as follows:
  To ask His Majesty's Government whether their attention has been called to the sentence of death passed upon Marshal Kesselring, the Commander of the German Forces in the field in Italy during the late war, and whether they have any statement to make.]
  LORD HENDERSON: My Lords, the trial by military court in Venice of Marshal Kesselring, after a sixty days' hearing, ended on May 6, 1947. The transcript of the shorthand note of the proceedings of trial has not yet been completed. As announced in court, the findings and sentence are subject to confirmation, and no decision will be taken by the confirming officer until the Judge Advocate-General has considered and advised him upon the proceedings. The matter is therefore still sub judice.
  LORD DE L'ISLE AND DUDLEY: While thanking the noble Lord for his reply, may I ask for an assurance that there will be an adequate interval between the decision of the reviewing authority, if adverse, and the execution of the sentence? Apart from purely judicial considerations, matters of high and important public policy are involved.
  LORD HENDERSON: I will bring the representation of the noble Lord to the attention of my right honourable friend.

  PENSIONS FOR INDIA SERVICES.
  2.42 p.m.
  LORD HAILEY: My Lords, I beg to ask the question standing in my name.
  [The question was as follows:
  In view of the statement made in the White Paper of April 30 last, that the Government of India accept liability for pensions earned by service under the Secretary of State, will the Government
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  now state the methods by which they propose to ensure the payment of these pensions after June, 1948?]
  THE SECRETARY OF STATE FOR INDIA AND BURMA (THE EARL OF LISTOWEL): My Lords, it is intended to negotiate agreements in regard to matters arising out of the transfer of power in India with the representatives of those to whom it is decided that power shall be transferred. One of the questions to be dealt with in these negotiations will be the method of assuring the payment of Service pensions.

  SUNDAY ENTERTAINMENTS ACT, 1932.
  URBAN DISTRICT OF CASTLEFORD ORDER;
  URBAN DISTRICT OF EPPING ORDER:
  URBAN DISTRICT OF WELLINGBOROUGH ORDER;
  RURAL DISTRICT OF DURSLEY ORDER.
  LORD HENDERSON: My Lords, on behalf of my noble friend I beg to move that these Orders be approved.
  Moved, That the Orders made under the Act by the Secretary of State for the Home Department, for extending section one of the Act to the said areas, be approved.—(Lord Henderson.)
  On Question, Motion agreed to.

  COTTON (CENTRALISED BUYING) BILL.
  2.44 P.m.
  Order of the Day for the Third Reading read.
  LORD REA: My Lords, this Bill has had perhaps an easier passage through your Lordships' House than it deserves, but I do not think we can part with it without making it clear that to some of us, at any rate, it is neither more nor less than a gratuitious and unnecessary attack on a perfectly legitimate trade. Moreover, it is a trade which has brought into this country considerable profits in foreign credits, of which she now stands in the direst need. I want particularly to repudiate the quite baseless and rather mean charge that was at least implied during the Second Reading debate, that the Liverpool Cotton Exchange was nothing more than a sort of gambling

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  machine, in fact an inferior Monte Carlo. There was a further implication, not quite expressed but quite clear, to which I take the greatest exception: that is, that all brokerage businesses, and even merchants' businesses, are in themselves an unjust tax on the manufacturer or the consumer. I happen to have earned my living alongside the Liverpool cotton brokers in a very similar trade over a long terms of years, and I refuse absolutely to admit that the service I performed in bringing shipowners in contact with the great coal market of Cardiff was a tax on them. On the contrary, I brought them to where they could procure the keenest competition and saved them considerable sums of money, and the commission I received—sometimes one halfpenny a ton—was not an intolerable burden on the shipowners.
  Equally, I feel that the Liverpool cotton trade perform valuable services to the manufacturers in searching the whole world over for suitable qualities for consumption, not only by Manchester but by the whole world. By their complicated system of grading cotton they have performed an invaluable service to the Lancashire cotton spinner, and this is shown when their position is compared with that of their neighbours in Yorkshire. I remember that when I had the honour to represent one of the West Riding divisions in Parliament, one manufacturer told me it was at least as important for him to be an expert in following the fluctuations of the wool market as to know the technicalities of his trade. That, at any rate, is something the Lancashire cotton spinner has not to do, because when he makes a sale he can, or he could until the Liverpool cotton market was closed, make his arrangements and know what his raw material was going to cost, however long it might be before he had to take delivery.
  Then I object to the charge that was bandied about on Second Reading that the Liverpool Cotton Exchange was a gambling exchange. All the instances given of it were most unfair, I thought, because they referred only to the gambling—which undoubtedly did take place—in shares in cotton mills, which was largely engineered by the London Stock Exchange. That had nothing whatever to do with the Liverpool Cotton Exchange. I admit, as of course one must, that there
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  is some speculation on the Liverpool Cotton Exchange. I do not know any business which has not some speculation—not even politics. It often serves a useful purpose if there is a certain amount of speculation on a future cost in the market. I can remember, though I have only a slight knowledge of the Liverpool cotton market, that some fifty years ago there were some scandals when people attempted to corner the cotton crop. But I also remember that these attempts failed, as they were likely to fail. Since then, to my knowledge, nothing on am, comparable scale has occurred of which there could be any legitimate complaint.
  As further evidence that this is not a parasitic trade, I would remind your Lordships that when Government Control came into force it was against the opposition of 80 per cent. of the cotton spinners, while something under I per cent. of them expressed themselves in favour of cotton control. That, I think, disposes of the charge of inefficiency. I would add one further point with regard to the relative efficiency of the present Government Control, because I am informed, on the best authority, that the spinners are to-day complaining that the Government Cotton Control cannot keep them regularly supplied with the qualities they require, and which they could easily get from suppliers abroad if they were allowed by the Government to do so.
  Even graver than this light-hearted destruction of legitimate trade is the fact that it is destroying our foreign trade. The Liverpool cotton market not only served Lancashire; it was the centre of the world's trade in cotton. It negotiated sales of millions of bales of cotton which never came near this country, but which brought profits and commissions in the form of invisible exports, of which, as I said before, we stand in the utmost need to-day. This profitable trade was carried on with the greatest efficiency by means of an intricate system of finance, based on quite reputable bills of exchange, with a capital investment of not more than £10,000,000; whereas the Government, who are proposing to deal only with the home trade, are asking for £180,000,000 of capital. All this is being thrown away, together with a considerable amount of income to the State, because, so long as the cotton brokers of Liverpool were working, those who made profits paid Income

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  Tax and those who failed to do so did not get anything back. I do not know whether the Government Department are going to pay Income Tax on their problematical profits. I rather doubt it. But even if they do, as in the case of coal and the railways, Income Tax will be payable only on the net result—that is, on the profits made, less the losses which will mean distinct loss to the State, even if it were possible to collect the tax at all.
  Finally, the essential difference between this Government experiment and their previous ones is that in banking, coal, transport and so on, if a loss is incurred, it is an internal loss. If we make a loss at home, we have only to tighten our belts and put up with it. But here, for the first time, the Government are taking steps to interfere with the foreign trade of this country, and I confess that that really alarms me. If, as has been hinted—not in this House, but by Ministers outside—this is only a beginning, and that world markets in which we have hitherto been pre-eminent, or, at least, have had the lion's share—such trades as shipping, the metal trade, the corn trade, and so on—are to be taken over by the Government, I see no hope for the nation. All those trades depend on long foresight, quick decisions, and the taking of risks of incurring losses as well as of making, profits. We who have been engaged in business have always known how impossible it is for a Government Department to do those things. I think the war experience has taught the whole country that fundamental truth, and I still hope, as a result of the knowledge which the country has gained, that, before it is too late, even this Government may learn that personal effort and private enterprise are the plain and indeed the only way to prosperity, and that this ill-starred Bill may be the last unhappy experiment in stifling initiative.
  2.56 p.m.
  VISCOUNT SWINTON: My Lords, I am glad that on the Third Reading a speech so full of knowledge and experience has been delivered from the Liberal Benches. Frankly, it was somewhat of a disappointment that, during the long debate which we had on the Second Reading, silence was maintained in that. quarter. I could hardly believe that with all the tradition which we associate with Liberals in the matter of trade, that silence
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  was intended to signify consent. To-day, a voice has been heard from those Benches at the eleventh hour, although it is none the less welcome because of that. This timely demonstration has been made; and not only is it timely, but it is indeed well justified.
  I am going to speak for only a moment or two. The whole of the issues were well covered in the last debate by many speakers of great experience. In vain one waited for any justification for this Bill. None was forthcoming. Nor, indeed, can I see that this raises difficult political issues for the Party opposite. We know that they feel bound—contrary to the better judgment of many members of that Party—to proceed with certain measures, because during the General Election they said that that was the kind of thing which was in their programme. But I do not believe that even the most irresponsible member of the Socialist Party put the Liverpool Cotton Exchange into his programme at the Election. I speak subject to correction; there may have been one or two. But what the Government are doing now is entirely inconsistent with the policy which they are advocating to the country at the present time, also at the eleventh hour; it would have been better if that doctrine had been preached twelve months ago.
  When there is a need for foreign exchange, why cast away the foreign exchange which the Liverpool Cotton Exchange produced? It is said that it is only £1,000,000 sterling—$4,000,000. That may be rather too narrow an estimate. But are we using figures so loosely that $4,000,000 are nothing? There is a great deal more to the matter than that. We are told that we have to build up good will if we wish to get international trade going. One of the greatest things in the building up of good will, and in international trade, is the produce markets of which London and Liverpool—the great trading communities of this country—form the centre. It is not only foreign exchange that counts. It is here that the contracts come: here the contracts are made; here are the business centres. "Where the treasure there will the heart be also." In the contracts which are made there is always a clause to the effect that arbitration is to take place in London. I am not concerned merely with the fees that lawyers may get out of such arbitration. There is a great deal more

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  than that in all the business and good will that centre in a commercial enterprise of this kind.
  The Government are anxious about cotton—perhaps our greatest exporting trade in the past. I do not know whether Lancashire will ever reach the pre-war volume of what I may call its large basic exports. What I am quite sure of is that Lancashire will get its share in the development of fine trade. In all the hundred and one types of export in textiles—I will not use the expression "fine counts," because that has peculiar technical significance—where you need a particular knowledge of the market, where you have to anticipate what the market is going to require, and possibly create the demand—what does that turn on? Everybody in the industry knows (even I, with only the knowledge I gained of this industry as President of the Board of Trade, know it) that it turns on getting exactly the kind of raw material you want in your manufacture.
  Ministers on the Government Bench spoke last time as if the industry in Lancashire supported the Liverpool Cotton Exchange as somebody might support a football pool—a sort of Monte Carlo gambling enterprise in, which it entertained them to take part. That was not in the least the reason why hard-headed Lancashire manufacturers patronized the Liverpool Cotton Exchange; nor did they patronize it in order that they might pay an extra commission to somebody. Believe me, before the war there was enough competition in export in the cotton trade for margins to be cut very narrowly. Lancashire manufacturers used the Liverpool Cotton Exchange, and paid commissions to people on the Liverpool Cotton Exchange, to get their cotton for them, because they knew that that was the best way of getting the cotton which they needed. I think it was the noble Lord, Lord Chorley (he will forgive me if I attribute to him a brilliant observation which ought to be attributed elsewhere), said what a dreadful thing it was that brokers engaged on the Exchange were employed by Lancashire manufacturers to go searching the world to find a new kind of cotton at a cheaper price. Was that a very wicked thing to do? I should have thought that to try and find a new kind of cotton, and to buy the raw material of the right kind
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  as cheaply as possible, was the first elementary principle of manufacture.
  How inconsistent are the Government! The rubber market—of which the Government seem to have made the most extraordinary nonsense while they were operating it—has been handed back to the people who previously operated it. I think the Government have been very wise in that respect. But rubber is a much easier commodity to deal in than, cotton; there is not the infinite variety which there is in cotton. Why this inconsistency? Why hand back the rubber market to free enterprise and expert knowledge, and keep the cotton market in this straitjacket of Government control? This is a matter which transcends all Party considerations. If I were thinking only of Party considerations, there is nothing I would rather have than that the Government should pass this Bill, and other Bills like it. They would be driven out of every constituency in Lancashire! But it is not that kind of victory we are after to-day. The kind of victory we are after is a victory of the British Empire and British enterprise in the markets of the world. All that is thrown away by legislation of this kind. The noble Lord said that he hoped there would not be any more Bills like this. I hope so, too.
  I do not think we could amend this Bill to make it less damaging; I do not think it is any good trying to amend it. This Bill stands or falls on its merits, and it certainly will fall, if not in its passage, in its effect. Maybe the only salvation will be when a Government with wider views are able to hand the business back to the people who really know how to run it—a business which has been of inestimable value not only to the great manufacturing industry of Lancashire, but to the trade and commerce of this country. It is one thing to embark on an enterprise of this nature, but the Government may well find they are handicapped by the fact that trade ultimately depends on good will all over the world. If the Government should then come back to the House and say:" We wish to repeal this Bill," we shall not sneer at the Government for their mistake, for if they do that they will be doing more than they have yet done for British industry.
  LORD CHORLEY: My Lords, we have listened to two speeches this afternoon.

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  which, delightfully composed and forcibly put forward as they were, I think your Lordships will agree have not actually produced any new arguments beyond those which were placed before your Lordships' House on the Second Reading of this Bill. It is not my business to defend noble Lords who sit on the Liberal Benches, but in the interests of historical accuracy, I must recall to your Lordships that we had a speech from the noble Viscount, Lord Leverhulme, who, as one coming from the middle of this business—from Merseyside itself—put the case strongly.
  VISCOUNT SAMUEL: And the noble Lord, Lord Farrer.
  LORD CHORLEY: The arguments which I addressed to your Lordships I could repeat, but we have a good deal of business this afternoon and I am sure your Lordships would not like me to go over the ground again. The noble Viscount, Lord Swinton, has said that the interests of the cotton exporting industry of this country are at stake. That is true. That is the reason why the Government have introduced this Bill. In the view of the Government the organization of the import of the raw material on which this great industry is built up is essential, and it is only on the basis of the rationalization of those importing arrangements that the necessary raw material can be produced at the lowest cost. That is essential if the industry is to recover itself. The noble Viscount, Lord Swinton, spent many years at the Board of Trade attempting to put this industry back on a sound foundation. He failed. His Majesty's Government are engaged in the process of attempting to succeed where the noble Viscount failed, and we regard this as an essential part of that programme. On those grounds I ask your Lordships to give this Bill a Third Reading.
  On Question, Bill read 3a. and passed.

  STANDARD OF MUSTARD.
  3.10 p.m.
  THE EARL OF IDDESLEIGH THE EARL OF IDDESLEIGH rose to ask His Majesty's Government what has caused the Minister of Food to lay an Order (S.R. & O. 1947/650) reducing the standard of mustard? The noble Earl said: My Lords, the Order which forms the subject of my question is the Food
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  Standards (Mustard) (No. 2) (Amendment) Order, 1947. As I am raising a somewhat technical matter I may perhaps be allowed to allude briefly to the history of the position. I understand that before the war the pungency of mustard was a matter that concerned only the mustard-buying public and the manufacturers of the product, and that it was not necessary to take up Parliamentary time by raising in this House the question of the standard of mustard. However, in 1943 the Defence (Sale or Food) Regulations were passed, and in 1944 an Order was issued laying down that in mustard the percentage of a chemical called allyl isothiocyanate must not be less than 0.35 per cent. The Order to which I am calling your Lordships' attention has the effect of reducing the proportion of this chemical to 0.28 per cent. On the face of it that sounds a very small matter. I have, however, taken advice from a food chemist, who informs me that this chemical is entirely responsible for the characteristic flavour, odour and pungency of the mustard product, and that the effect of the Order to which I am calling your Lordships' attention is to reduce the pungency and taste of mustard by one-fifth.
  As this is a product in common use, and as mustard has a particular significance to-day in enabling us to disguise the taste of a certain amount of the food with which we are favoured. I feel it is eminently proper that your Lordships should give His Majesty's Government an opportunity of explaining why it has been necessary to make this reduction, and what hope we have that in future mustard will he restored to its accustomed pungency. I do not know whether it will be possible for the noble Lord who is to reply to my question to tell us whether it is contemplated that this control of the standard of a condiment shall be a permanent matter. The right honourable gentleman the Minister of Food, who is one of the busiest and most important members of the Cabinet, has surely so many responsibilities upon his shoulders that he might conceivably welcome a suggestion that he should be relieved of responsibility for condiments which, though they have a certain significance, are hardly matters which ought to take up Government time in perpetuity. I cannot, of course, press the noble Lord for a declaration of policy in this respect. I trust, however, that the significance of the

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  situation which compels me to raise in your Lordships' House the question of the standard of a condiment will not wholly escape attention in its wider aspects.
  LORD HAWKE: My Lords, I have much pleasure in supporting my noble friend in asking this question. It seems to me to raise a question of principle, because mustard is universally used by every section of the adult population, and it is bought on faith through extensive advertisement. Your Lordships will remember that before the war there was an extensive campaign carried on, presumably by the advertising world, persuading the general public that by buying advertised goods they would always get something which was of a uniform quality. It appears to me that by this Order the Minister of Food is definitely flouting that principle, because so far I have detected no explanation—nothing in his Food Facts, or in any other direction—to let the general public know that in future when they are buying the mustard which their forbears have bought before them, they will no longer be getting something that tastes the same as it did before.
  3.16 p.m.
  LORD HENDERSON: My Lords, the noble Earl, Lord Iddesleigh, did not give me advance notice that he proposed to raise matters which I think are not strictly relevant to the question he has on the Order Paper. Therefore, I say at once that I have no intention of making a declaration of policy; nor do I intend to involve myself in some of the technical phrases to which he has referred. I propose to confine myself to giving an answer to the question which stands in his name. As may be known by noble Lords who take a special interest in mustard, mustard condiment is a mixture of white and brown mustard flour, and its pungency and flavour are derived largely from the essential oil of the brown seed. I am advised that brown mustard seed is not a popular crop with growers, and the United Kingdom acreage declined steadily throughout the war, reaching its lowest level in 1946. This trend was not checked by an increase in the price of brown mustard seed from 70s. to 90s. per cwt. in 1943, and, as I will explain in a moment, this price has since been increased to 130s.
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  Meanwhile, we have had to import more brown seed, whose essential oil content has proved to be appreciably lower than that of the seed grown in the United Kingdom. The quantity of brown mustard seed which can be imported is limited, and therefore the Minister was faced with a choice between maintaining the existing standard of table mustard, coupled with a limitation of supplies to the public, or lowering the standard but thereby maintaining supplies. The Minister chose the latter alternative, but he has been assured that the effect on the flavour and pungency of the mustard will be very slight. Growers were notified in June, 1946, that for the 1947 crop the price of white mustard seed would be advanced from 70s. to 85s. per cwt., and of brown seed from 90s. to 130s. per cwt. The substantial increase in the price of brown mustard seed appears to have stimulated planting, but it is too early to say how soon supplies will improve to an extent that will permit the restoration of the former standard of mustard. It is, however, the Minister's firm intention to restore the original standard at the earliest opportunity. Having said that, I hope that I have satisfied the curiosity of my noble friend.
  3.20 p.m.
  LORD LLEWELLIN: My Lords, I am sorry we have had to lower the standard of another foodstuff, even though it is one that is not of the greatest in nutritional value. I was always surprised, as Minister of Food, to see that we had to import mustard, a commodity we ought to be able to grow in quite sufficient quantity in this country. I am glad that steps have been taken, although somewhat late, to put up the price and so to enable the growers to live. We do not want very much of it in this country. I do not quite follow the reasoning of the noble Lord that the alternative before the Minister was either to decrease the pungency or to limit supplies, because I should have thought—knowing as much about eating mustard as most noble Lords—that if the mustard were less pungent, probably one would take rather more, and so get the same amount of pungency from the extra bit out of the spoon. It does not seem to me that there is much logic in that argument. I am sorry to think, if only as regards one of the lesser items, that one of the standards I laid down has now to be reduced.

  WORLD FOOD PROPOSALS.
  3.22 p.m.
  VISCOUNT BRUCE OF MELBOURNE VISCOUNT BRUCE OF MELBOURNE rose to call attention to the Report of the Preparatory Commission on World Food Proposals and the recommendations therein; and to move for Papers. The noble Viscount said: My Lords, I crave Your Lordships' indulgence for a maiden speech. I have never been privileged to be a Member of another place in this country, but for some years I was a Member of another place in another country. Even there, in that young Parliament, it was always the practice to extend every consideration to the "new boy." I am sure that in this Mother of Parliaments that practice is even more rigidly observed.
  The matter I have brought to the attention of your Lordships' House is the Report of the Preparatory Commission on World Food Proposals. That Report arose out of proposals that were put forward by Sir John Boyd Orr at the Copenhagen Conference of the Food and Agriculture Organization of the United Nations. Those proposals of Sir John's had both a humanitarian and an economic aspect. The humanitarian aspect was to try to raise the dietary standard of the people in all countries of the world. The economic objective was by raising food standards the world over to give a great stimulus to agriculture. As agriculture is incomparably the greatest industry in the world, employing something like 60 per cent. of the people who are gainfully employed in the world, Sir John Boyd Orr's view was that that was probably the best way to stimulate a general economic advance.
  Sir John's proposals received the general approval of the Copenhagen Conference, and the Preparatory Commission were appointed to consider ways and means by which they could be implemented. I had the honour to be appointed the independent Chairman of that Commission. The Commission met in Washington in the latter part of October, and we submitted our full Report at the end of January. I have a strong feeling that the findings of that Report have not received the consideration that they deserve. Almost as soon as we met we became certain of some fundamental facts. The first was that in the task we had been set. of increasing the consumption of food,
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  there was no possibility of achieving anything really worth while in the scale of the world's economic situation save in an atmosphere of an expanding world trade. The second fact that we discovered was that even if agriculture were stimulated in every direction, it was impossible to consider that development of agriculture save in the setting of the total economy of every country. There is not a country in the world where agriculture does not play almost a principal part in its total economy.
  The third thing that was brought home to us was that we could not think merely in terms of food consumption and agriculture, but we had to get down to the fundamentals of the world economic situation. Greatly daring, we did so. The last thing I wish to bring to your Lordships' notice is that we found we were in a unique position for any international conference I have ever heard of or attended. At an international conference you have to arrive at some result, some conclusion; you have differing opinions, and you have to compromise and get some basis on which everyone will agree. We saw that there was not the slightest need for us to agree about anything. We could have put in separate reports on every single thing. What we were asked to do was to consider the facts. If any delegation did not agree with the views of other delegations there was no objection to their putting in a minority report, a dissenting report, anything they liked. In the light of that it is somewhat remarkable that when the Report was published there was not one dissenting view or reservation. I think that is almost unique.
  The first thing with regard to food, we discovered, was that there was a considerable amount that could be done with regard to the dietary level in advanced countries. For example, before the war, in the two richest countries in the world, the United Kingdom and the United States, one-third of the people were living on a dietary below the standard necessary for health. I would describe these two as more advanced countries. I believe many countries are going a head to bring up their dietary standards: but we found that if the maximum were to be achieved in this direction it would accomplish little to the improvement of the general economic situation, and that one could achieve nothing worth while save by raising the

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  dietary standard of the thousand millions who are living at the present time on a standard that is far below the standard necessary to health.
  We also discovered that the majority of countries could raise their dietary standard by developing their own agriculture. But obviously it is economically impossible for the advanced high-standard countries to produce the food for the low-standard countries because of their low purchasing power. They could not pay for the food. We found that, with modern technique and modern science, there is no particularly insuperable objection or difficulty in the way of the less advanced countries raising their dietary standards. We also discovered this somewhat difficult fact: that the production of food could probably be increased by modern methods in those countries by as much as tenfold, and even more, but it would be done with a very reduced labour force, and you have not contributed very much if you do it in that way.
  I give a simple illustration. To deprive a man who has been deriving a precarious living from driving a wooden plough of even that precarious livelihood means that you would create a situation that would he worse than the one with which you started. Consequently, we came to the definite conclusion that, with any agricultural development, you must have parallel industrial development. We strongly stress in the Report that you have to start very, modestly. All you would do at the beginning would be to put into operation the first processing of agricultural products. That would employ people on the spot. But if you are to achieve anything worth while you must progressively expand until you work up to the point where you may have great developmental schemes carried out—water-works, irrigation plans, great power schemes and things of that sort.
  Then we found that though all these things were very attractive, they would cost a great deal, and while some of the money for them could be found in some of those countries, the hard fact was that great external credits would have to be provided. At that point, we considered whether it was necessary to make what will be probably the greatest developmental effort ever made in history. We considered whether there were any urgent
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  reasons why this vast task had to be undertaken. On the humanitarian side it was obvious that it should be done. It is the greatest blot on our civilization to-day that there are tens of millions of people in the world living at a standard which is far below that necessary for health. There are countries where the expectation of life is barely 30 years, whereas in more advanced countries it is from 67 to 70 years. In addition to these tens of millions of people there are million's who are living at a mere subsistence level and all the time in deadly peril of starvation. On humanitarian grounds we did not take long.
  We then examined the position from the economic angle, totally ignoring the humanitarian side and every decent human instinct. We just looked at it as a cold, hard, economic question: Was it economically necessary or not? The conclusion that we came to was that it was absolutely necessary, in the interests of the world as a whole, to do it. We considered the matter in three phases. We examined the period between the two wars and what had happened then and why it had happened. We looked at the position as it is to-day, and then we examined what appeared to be the future probabilities. Taking the between-the-wars period, we found that in the war of 1914–1918, in order to win the war, production was very considerably expanded. The all-over expansion. was something like 40 per cent. When the war finished, everything went fairly well for some three or four years. With the exception of a slight recession in 1921, which was very soon overcome, things went on quite well. They went well because the world was re-equipping, re-stocking and repairing the devastation of the war.
  But that came to an end, and when it came to an end the world found itself in a position where production that had been stimulated for war effort far exceeded the purchasing power that existed in the world at that time. The result was that every country tried to get rid of its exportable surplus in some market or other. Every country started protecting itself against the inrush of those things that people were trying to sell. They took action to protect their own economy. The result was that we ran into the crisis of 1929–1932 with all its unemployment and human suffering. In 1933, the Monetary and Economic Conference was held in

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  London, representatives of over sixty nations attending. They deliberated for a considerable time and the only conclusion they reached was that the way to deal with the world's ills was to restrict production. I am happy to remember today that I, as the Australian delegate at that Conference, absolutely refused to accept that decision. I pointed out that if we were to tell the world that all that could be offered to the millions of people who were out of employment—there were literally tens of millions, possibly hundreds of millions out of employment—by those sixty odd nations was restriction of production, we were heading for the worst social upheaval that the world had ever seen.
  I went on to add that it seemed to me that we should be merely creating a breeding ground for Nazism, Fascism and Communism. Unfortunately, after I had said that in the plenary session, I was approached, and it was pointed out to me that as Germans, Italians and Russians were there, it was not really very tactful of me to say that. As a result of those representations, I agreed to strike out that last bit. I have never regretted anything more in my life. That Conference, as I say, recommended restriction of production It was a ghastly failure. We had a little improvement for a while, but by 1938 the world was heading for another economic depression worse than that of 1929–1932. Then the war came and saved us from it, even if it gave us something much worse. In the interval minds have changed. It is almost impossible to-day to find anybody who advocates restriction of production as being necessary to cure the world's ills. Every person—that is, every thinking person—I believe is in favour of expansion of production and consumption.
  The next point we took was the situation after the war which has just ended. We examined the position in 1946. We found that production had been increased infinitely more in this war than it was increased in the 1914–1918 war. In the North American Continent alone—in volume, not in figures—industrial production has been increased by over 100 per cent. and agricultural production by approximately 30 per cent. The equivalent figures for 1914–1918 were 35 per cent. for industry and 10 per cent. for agriculture. When we examined the
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  position we found that exactly the same things were happening after this war as happened after the last. Taking the world as a whole, everybody is busy re-stocking, re-equipping and restoring the devastation of the war. But it is very difficult to see, when that is over, how exactly the same thing is not to happen all over again. There will not be the purchasing power necessary to absorb this enormously increased production. We shall then have the possibility of heading into a depression even worse than that of 1929–1932. The conclusion we came to was that the position at the end of this war was much the same as at the end of the last, but it was charged with a potential of disaster much more serious. We could not escape the conclusion that if a depression came, the amount of human suffering and unemployment that would be caused would be beyond anything we had ever experienced.
  I, personally, believe that if it came, the situation in America would be infinitely worse than it has ever been. During the between - the - war - years American unemployment was announced as amounting to 10,000,000. The C.I.O. maintain that it was 16,000,000. I am certain that if depression did come, American unemployment would reach 25,000,000 to 30,000,000. I want to stress that what I am saying is not an expression merely of my own views. I cordially agree with the findings of the Report, but they are not merely my views; nor are they the views of a group of experts, economists, or financiers. They the the expression of views of the seventeen Governments who have signed the Report, and who have unanimously agreed to what I have just been saying. These seventeen Governments include those of the United Kingdom and the United States of America, the two greatest industrial and commercial countries in the world. They also include those of Canada and Australia, two great exporting countries which are rapidly developing industrially. They include the Governments of a number of European countries. France, Belgium, Holland, Poland, and Czechoslovakia. They also include the Governments of the two great population centres of the world. China and India. If the noble Lords will take the trouble to look at the Report, they will find all this is said, and it has been subscribed to by all these Governments. I do not

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  think it is unreasonable to ask what these Governments are going to do about it.
  We must take into account what is being done, or attempted, at the present time. We have one very good factor, in that almost every nation has accepted the idea of the national necessity for the maintenance of full employment. Governments can achieve that up to a certain point, I believe, by adjustments to their own economy. They can go a considerable way to maintain full employment, but I venture to say that it cannot be sustained indefinitely by internal economic manipulations—I am not using the word "manipulations" in any offensive sense. Upon a sufficient amount of production, consumption, and trade in the world will depend the maintenance of that basis of full employment which we all want to see. The other effort that is being made is at the International Trade Conference now being held in Geneva. This has as its objective the lowering of tariff barriers, the getting rid of prohibitions and quotas, and the establishment of what one might call a more respectable and higher standard for international trade in general. These ideals are admirable, and I am sure everybody would desire them to succeed, but we have to be realists in this world. Every one of the subjects with which they are dealing at Geneva is highly charged with political dynamite. It will be a miracle if (save over a longish period by evolution) we can achieve what it is hoped to achieve at Geneva. Even if the Conference do succeed beyond one's wildest dreams, I venture the opinion that this is not going to increase to any vast extent the total volume of world trade.
  The other effort that is being made is through the agency of the Economic and Social Council, and all the specialist agencies, of the United Nations. I want to say at this point that I do not think any of us are quite satisfied that these agencies are showing the necessary determination and efficiency to accomplish the objective for which they were created. In a saying that, I am not overlooking one very hopeful event that happened recently; that is, the appointment, at the recent meeting of the Economic and Social Council, of the Economic Council for Europe. That is the first step, and it is
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  an invaluable step, but it must be followed up.
  I want to visualize how this affects Britain, and what is Britain's position at the present moment. I apologize for the simplicity of the way in which I am going to put it, but I am rather afraid that the people of this country do not understand the position, and they are getting more and more confused by the explanations that are given to them. These explanations are generally too technical, and apparently too well-informed, for the people fully to understand what it all means. It is not a very complicated matter; and it is relatively simple for the people to understand where we are at the present moment. Britain's position is exactly the same as that of any individual citizen. The individual citizen has the responsibility of providing for himself, for his wife, and for those dependent upon him for food, clothing and housing. Britain has to provide the necessary imports of food and raw material to keep the nation going. If the individual has a plan that he thinks will be successful, he can probably borrow money, and he can live on that money until his plans come to fruition.
  Britain is in somewhat the same position at the present moment. She has borrowed from America and Canada. But the individual, if his plans do not succeed and he is not able to meet his obligation, probably becomes bankrupt, and has to live hardly and precariously for the rest of his days. Unless Britain can find out of her own resources the credits that are necessary to pay for raw materials and food she has to import, her position is exactly the same. We should never lose sight of this, because unless we can solve that problem the future is very dark indeed. I want to explain how Britain has done it in the past, and how she must do it at the moment. Britain has been very prosperous; she provided far more than her needs and imports, and she became a creditor nation. But during this century she had various sources from which her money came—investments overseas, her invisible exports and her exports. During the war we sacrificed our investments overseas, and the volume of our invisible exports—shipping, banking, insurance, and all those things—has now diminished substantially. We are driven back to the

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  point where we have to rely primarily on our exports in order to meet our necessary commitments.
  That is clearly recognized. The Government are conducting a great campaign to bring home to the people the necessity for exports. To that end we have planned production, intensification of effort by the workers, no reduction of hours or increased pay save against increased production, more efficient management and control, and the modernization of our plant and equipment, All this is designed to increase our production and to put us in the position where we can reach the target we have set ourselves of exporting 75 to 100 per cent. more than we exported in the year before the war. All this is to the good, but there is another essential. It is not enough to produce; we must know where we are to sell what we produce. That is the problem we are up against, and we have to think pretty hard.
  The position is that before the war, on production as it then was, markets were not big enough to absorb what the various nations of the world wished to export. The result was that nations were forced to protect themselves. They had high tariffs, quotas, prohibitions, currency controls, and all that sort of thing. But in a speech—a great speech in my opinion—the other day, Mr. Dean Acheson said some significant things which we would do well to dwell upon in this connexion. He said:
  "Our exports"—
  That is, United States exports—
  "of goods and services to the rest of the world during the current year, 1947, are estimated to total $16,000,o0o,000, an all-time peace-time high. Before the war our exports of goods and services fluctuated around $4,000,000,000 annually.
  That is, that in this year, 1947, America, in exports and services, is sending out to the world four times what she was sending out before the war. I agree that this is an exceptional year. Probably American exports and services are greater and are not quite normal, but I am perfectly certain that they are going to remain very much above the $4,000,000,000 referred to.
  Another sentence from Mr. Dean Acheson makes that, to my mind, very clear. He said:
  "When the process of reconversion at home is completed, we are going to find ourselves far more dependent upon exports than before
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  the war to maintain levels of business activity to which our economy has become accustomed."
  With that extra flood of American exports into the world, without some terrific development in production, consumption and world trade, I maintain that there will be no hope of Britain selling in the markets of the world the extra 75 to 100 per cent. For that reason it seems to me that Britain has to think, and think very hard, and to determine what is to be her policy. And she has not too long to do it. The American and Canadian credits are running out. Next year they will be terminated. It is clear that it is impossible that in the period of another eighteen months, or even two years, Britain will have reached a point where she can see her way out of this difficult situation and meet all her requirements out of her own resources.
  Consequently, there is an atmosphere quietly growing now that perhaps there ought to be another credit. I want to make my own position perfectly clear. I offer no objection to the first credit. I saw, despite many arguments that were used, that it was absolutely necessary. After her terrific sacrifices, and after the complete dislocation of the whole of her economy as part of her war effort, Britain could not possibly re-establish herself and re-orientate the whole of her economic situation without a breathing space. She had to have that. I would take no violent objection to another credit provided—and the proviso is important—we could see, as a result of the credit, that we should get to the position where we could meet our obligations out of our own resources. Unless it were on that basis, I would he violently opposed to another credit.
  I want also to suggest what I venture to think are the two methods by which the United Kingdom could achieve this position. The first is by the resolute implementation of international co-operation for the expansion of world trade through the Economic and Social Council and the specialized agencies of the United Nations. The alternative is for the United Kingdom, in association with other British countries and such non-British countries as are prepared to co-operate, to form a sterling group to attempt to bring about an increase of consumption, production and trade over a more limited area. With regard to the second, I believe a great deal could be done. I believe if we are

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  driven against the wall, we can do it. I believe we can save ourselves that way, if it is necessary. But we have to recognize that that method is only second best. It will not bring a new era of happiness and prosperity to the world.
  For that reason, we must cast it out of our minds until we have exhausted every possibility of bringing about a great participation by the nations of the world in the development of plans to increase consumption, production and world trade. Until we are convinced that that cannot be done we ought to leave the second course out of our minds. When we are convinced—if unhappily that is the position—we can come to it. We should set ourselves resolutely to work; and I am convinced that whatever may happen to other nations we shall get through on that basis. For the moment, I urge that we forget it. If we are going on with world-wide co-operation, we have to consider exactly where we are going. We were all greatly encouraged by Mr. Dean Acheson's speech. Personally, I think it was a speech of great vision, realism and courage, and it will be very helpful in the present situation.
  In what I am going on to say I may appear to differ from Mr. Acheson, but I want to make it clear that I am differing only as to methods. With the broad conception and the general idea behind his speech, I am in entire accord. The point I want to make is that if Britain—whose very existence depends upon the result—is to stake everything on international cooperation, there must be a greater certainty than exists at the present time that that is going to succeed. I want to suggest a few points. The first I would urge is that if we are to have a great development of agriculture and industry in the world, the instrument through which we have to work must be the United Nations, through its Economic and Social Council and the specialized agencies. This task—really the greatest the world has ever undertaken—cannot be left to any individual nation, and that fact is brought out very clearly in our Report, to which, I would point out, the United States of America was a signatory.
  The other fact we have to bear in mind, which is involved in this plan, is the development of the latent resources of the less advanced countries of the world. We
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  have to remember that a number of those countries are developing strong nationalistic tendencies. Those countries are also quite determined that nobody is going to dominate their internal position; and even where there is one individual country coming forward and offering to help them—offering finance and so on—there will be a reluctance to accept such aid, because those nations would see behind it, through economic means, a domination being established over their country. To use an old tag, the attitude of those smaller and less advanced countries is rather in the nature of "Timeo Danaos et dona ferentes," which could be freely translated that those countries "fear great countries even when they come bearing gifts in their hands." I do not believe you could ever persuade them to agree to such help if it were on the basis of an individual country and not through this great world agency.
  The next point to which I want to refer, is that the specialized agencies (and for the moment I would include the Economic and Social Council) must be made more effective instruments; they must have defined and practical tasks set them. All those agencies, and the Economic and Social Council itself, are the children of international conferences, and to all international conferences go the representatives of anything up to sixty nations. They all make speeches through their various delegates; they make suggestions; they make recommendations, and when the party ends those ideas are all embodied in resolutions and recommendations to the unfortunate executive of the agency which has the task of carrying them out.
  This overloading of the machine is not entirely unknown in other than international spheres. I believe I have even heard it suggested in this country! But it is outstanding in these international organizations, and the position we found with regard to the Food and Agriculture Organization was that as a result of Hot Springs—where the first conference was held—Quebec, and Copenhagen, the political parents had fastened on to the unfortunate organization over 300 recommendations and resolutions, 150 of which were marked as urgent. The thing is utterly impossible. With an unlimited staff working for years they could not have done what they were asked to do. Our recommendation was that the Director-General of F.A.O. should pick out what are the immediate, vital tasks which he is

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  in a position to accomplish with the staff that he has, or any staff that he can see in sight, and then put them up to his next conference to secure their endorsement. I believe the same thing must be done by the Secretary-General of the United Nations, and by the Director, or whatever is the head, of any other of these bodies. Unless this situation is cleared up, and the staffs can do their work in an atmosphere where they will not be overwhelmed, we shall not get anywhere with any of these bodies to which such high hopes have been attached.
  Another observation I venture to make is that, if we are to pin our faith to international co-operation and to these agencies, then the nations must be prepared to allow some of their better men to go and take part in them. I can speak from personal experience of this. At the moment every Government (one might forgive them, hard-pressed as they are with all the problems of to-day) are reluctant to let anybody go who is doing a useful job. But they must let some of them go, or these things will be a failure, merely run by second-rate people. This is a great danger, and it is happening at the present moment. I would urge that strongly upon all the Governments concerned. I apologize for the length at which I am speaking. If your Lordships will forgive me upon this occasion, I promise never to offend again.
  The next point to which I want to refer is that there is no body under the United Nations, in the form of an agency or anything else, which deals with the question of industrial development. As I have tried to point out, industrial development must proceed parallel with agriculture, and there ought to be some organization that is the opposite number to F.A.O. I should imagine the way it would have to be done is by an ad hoc body to be created until such time as the International Trade Organization is brought into existence, which organization, of course, it was contemplated would do this job. But you cannot have a hiatus until the International Trade Organization does come into existence. Therefore, I think an ad hoc body must be created.
  The other thing that must be done is that all these agencies must be coordinated. That point is brought out in our Report, but I venture to say it is not
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  put with sufficient emphasis, for the not unnatural reason that we were a body representing seventeen Governments. After all, the United Nations is composed of fifty or sixty, and to go too far and say that one of those agencies—namely, the Economic and Social Council—might get on with its job a little more effectively was not felt to be quite the right thing to do. We have, however, put it in the Report. I have had an opportunity of seeing the whole position, and I have no hesitation in saying that at the moment there is no co-ordination between these vital and essential bodies. The Economic and social Council, under the Charter of the United Nations, was given the task of providing that co-ordination. I suggest it absolutely essential. If we are to commit ourselves to international co-operation to do these things, then there must be co-ordination between all these specialized agencies, and the Economic and Social Council must be made to do the job that was entrusted to it by the Charter itself.
  A fundamental of any development scheme is that the latent resources of the undeveloped countries must be developed. The first thing that would be necessary, if you are to do that, is to give the help of experts and technicians from the more advanced countries to other countries, to advise them upon the projects and schemes that they put forward. That would riot involve great expenditure, but it is urgent and ought to be done immediately. A point that is brought out in the Report is that, if our views are sound, when the re-stocking and re-equipping of the world has, been completed and the devastation has been restored, we shall then run into recession. If any of these plans have been started, or any of these proposals worked out, the demands would just begin to come to hand when we are likely to be faced with this recession. These countries should get the help of technicians and experts at the earliest possible moment.
  Another point is that great credits will be required. In our Report we have examined all the various sources from which those credits night come, and we emphasize very strongly that the major responsibility must rest on the Bank of International Reconstruction and Development, which was created for this very purpose but which unhappily has not yet got into its stride, although I

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  understand it has now approved the first loan to France. But if it is to do the job, and the job is to be worth while, it will require very great resources. Under the Charter of the Bank a large capital is provided.
  But the idea behind the Bank is not that all the nations that are subscribers to the International Bank will find the monies directly and in their apportioned share. What is proposed is that the Bank has, as its members, all the nations that have subscribed—and the majority of the nations of the world have—and their obligation under the Charter to find certain monies is the guarantee of the obligations which the Bank itself will issue. The Bank itself will issue its own securities for the amounts it is lending to the different countries of the world, and those securities will have behind them the guarantee of all the member nations. Now the question has to be faced: How is the Bank going to get its securities taken up? It is perfectly obvious that the greater part of those securities will have to be taken up in the United States, for the simple reason that the United States is the great creditor nation. Other nations really cannot subscribe in the way the United States can, to take up these securities. That question will have to be threshed out with the American authorities. Before we can enter into any international scheme of this sort we must see where the money is to come from.
  I would venture another point which I think must be dealt with, and that is the terms upon which the Bank is going to get its money. I go to the length of saying that the Bank ought to get its money on fractionally better terms than the premier securities issued by the United States Government. I agree that that is going a very long way, but I will give you my reason for saying it. The securities of this International Bank will be unique as against any security in the world. They will not have the backing of any one Government; they will have the backing of all the Governments that are members of the Bank. The second point we have to bear in mind is that it is no good thinking in terms of great development schemes for the world unless they can get their money cheaply. Schemes of this sort cannot carry high interest rates if they are
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  to succeed, and it is vital that they should succeed.
  I have very nearly finished, and I apologize once more to your Lordships for detaining you so long. Of course, there are a great number of Americans who say, "Well, when is America going to cease to be the fairy Godmother to the world?" They are quite convinced that they are doing all this in the interests of the other poor nations of the world, and quite overlook the fact that the nation most vitally concerned is America herself, because she is the country with the great production, and if she cannot sell that production then it is inevitable that she must come to economic disaster. America is the country most vitally concerned in this matter and we must say so. If we are to get anywhere in this world we have to say what the present position is.
  I greatly welcome the reinforcement Mr. Dean Acheson gave to this idea the other day which, putting it very broadly, was as follows: It is not charity by America to the world, it is enlightened self-interest. That is exactly what it is. There are a great number of people in this country who say, "We should not say anything about the part America ought to play in the development of the world." They beseech us to remember that America is gradually becoming more world conscious, that she is gradually shedding her isolationism, and, above all, that we should not do anything that would embarrass or cause her any difficulty internally. They sum it all up by saying, "We ought to be very tactful with the Americans." With that I totally and absolutely disagree. The Americans are a virile, forthright people and they like plain speaking. To my mind, what we have accomplished up to date is to make them wonder what we are up to and what card we have got up our sleeve. Tell them the facts, speak out, and America will never resent it. If you try and be tactful with them you will come to disaster. May I indicate that I am only expressing a personal view on this point, and that it has nothing to do with the Report of the Commission of which I was Chairman.
  It seems to me, in any case, that we have not very much alternative as to what we are going to do at this moment, because we have to see what our future is. To my mind Britain cannot drift into a position of requiring further credit with-

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  out a positive policy that holds out some prospect of emerging from her difficulties and again meeting her commitments out of her own resources. If that is so, we certainly have to say what is in our mind and get the points cleared up. The last point I desire to make is that I think we have to face this situation and endeavour to get international co-operation with an absolute determination to succeed. Let there be any half-heartedness and failure is certain. We must go forward, determined to achieve this co-operation, and it seems to me there is every reason why we should succeed. At the present time the world has the greatest opportunity it has ever had. It is also faced with a great peril to our Western civilization; but on that point I do not propose to delay your Lordships now.
  During the 19th Century the world made the greatest social and economic progress that has ever been seen. During that period living standards were advanced and everything went forward. There is no reason why we cannot repeat that in the 20th Century. People will tell us that there are no new continents to open up—with the possible exception of Africa—that there is no new North America, and no new Australia. My reply to that is that there is something of even greater value, and that is all that modern science has taught us and modern technique enable us to do. I believe that if we went forward to attack the latent resources of the undeveloped countries, we could achieve, over the next century, something as big as and even greater than was achieved in the 19th Century. In the 19th Century, Britain was the great creditor nation and Britain led the world. To-day, America is the great creditor nation, and it is to America that we must look for leadership. This, to my mind, is the hour of America's opportunity; and I pray God that, in the interests of the whole of the people of the world, America will rise to the height of that opportunity. I beg to move for Papers.
  4.16 p.m.
  THE LORD CHANCELLOR (VISCOUNT JOWITT): My Lords, I am glad in one way that it falls to me to answer the most interesting speech to which we have just listened. Your Lordships may have heard, but would not have known in any other way, that this is the maiden effort
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  in this House of the noble Viscount, and I count it a great honour that it has fallen to me to tender to him the congratulations which are generally given but are certainly not always so deserved as they are to-day. I think the contribution which he made was a remarkable one, whether coming in a maiden speech or in any other speech. We are singularly fortunate in this House. We have sitting with us to-day an ex-Prime Minister of Canada, and now we are able to call to our assistance the sage advice of an ex-Prime Minister of Australia; and from sources such as those two noble Lords we derive great help and strength in our difficulties.
  Coming to the substance of what the noble Viscount said, I can be very short, and for the simple reason that, except for one statement he made, I find myself in complete agreement with everything he said. He said, if I heard him aright, that he thought the work which he had done, and which is embodied in his Report, had not received sufficient attention, Amongst those people who are aware of the economic difficulties with which this country is confronted I think that is quite untrue. I believe we are all fully aware of the difficulties and the way in which those difficulties have been set out. May I remind your Lordships that the Conference at Copenhagen took place in September, 1946? The Conference over which the noble Viscount presided started in the following October and finished in January of this year. Considering the ground they covered, that was remarkable speed. The Report itself makes it even better than that, because it says: "The Commission met in Washington in October, 1946, and completed its work in January, 1946"! Now we have to go with this Report to Geneva and, as the noble Viscount knows, the meeting there is in August of this year. In the meantime, I presume that the various countries working at the Report and considering whether and in what respects they want to modify it. So far as the British Government are concerned, I can say this without binding myself to every detail of the Report—which the noble Viscount would not want me to do, and which would take much too long.
  On the broad general lines of the Report we march forward in agreement. We believe we have the maximum amount

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  to gain, and nothing to lose, by this bold international approach to the problem. We do not believe it is possible for this country to get out of her difficulties merely by being completely self-regarding. The old conception that it is our duty to produce as much as we can at home—though that is quite true—and for the rest to buy what we cannot produce at home in the cheapest market at the cheapest rate, without the slightest regard for the welfare of the person who produces it, is quite wrong; no sensible person to-day regards the interests of the producer as being wholly antagonistic to the interests of the consumer. It is not so. I entirely agree with the noble Lord that the problem is far too big for any one country to tackle. It can be tackled only on broad international lines.
  The two objects which Sir John Boyd Orr set out—that is to say, to develop and organize production, distribution, and utilization of basic foods to provide diets on a health standard for the peoples of all countries; and stabilizing agricultural prices at levels fair to producer and consumer alike—are therefore the objects that we must at all costs pursue. The noble Lord spoke of enlightened self-interest. If "enlightened self-interest" was the policy pursued by the United States, I am perfectly certain it is "enlightened self-interest" that we should pursue. I would have liked to nail to the counter one statement that is sometimes made—it has not, of course, been made by the noble Viscount, Lord Bruce. Some people have thought that the result of this Report is to bury the proposals of Sir John Boyd On. Nothing could be further from the truth. Anybody who reads this Report, and, I may add, anybody who has talked with Sir John Boyd Orr, will know quite well that what I am stating is the fact. This Report is complementary to his suggestions; his main objects are carried out in it. The Commission had to consider ways and means by which that could be done.
  I agree further with the noble Viscount that we often make mistakes, perhaps because some of us are interested in agriculture and others in industry. We are apt to get these things into water-tight compartments. You cannot get over your trouble merely by increasing the output of agricultural commodities without at the
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  same time raising the standard of living so as to enable people to pay for the foods thus made available. There is a paradox to which Sir John Boyd On called attention—and to which the noble Viscount also has called attention—at a time when hardly anybody else was calling attention to it: the paradox of there being, on the one hand, half the world's population insufficiently fed, and, on the other hand, producer nations having to destroy large quantities of foodstuffs. The consequence of over-production has been pointed out in another place, with the quotation:
  "Here lies the body of Farmer Peat,
  Who starved from growing too much wheat."
  Here we have a realistic approach to the problem and the noble Viscount has, I think, shown us the way out.
  Since this Report we have had the International Wheat Conference in London, and although we failed to reach an agreement—we could not agree on the figure—yet there was this helpful element about it: the model of the contract, the terms and basis of the contract were satisfactory and on the lines of this Report. We could not agree the figure, and this had to be postponed, but I hope it will be agreed hereafter. With regard to rice, the noble Viscount may be aware that we are sending a study group to India to take part in the study of the rice problem, on the lines indicated in this Report.
  With regard to the very pressing problem of oils and fats, the noble Viscount will be aware what we are doing with regard to a great extension of the production of ground nuts: not that that can make any immediate contribution to our great difficulty. All the problems to which the noble Viscount has called attention are obviously for the future—and perhaps not the far distant future, because some of these problems may come knocking on our door very soon. When they do, I agree with the noble Viscount that it is essential that we should do everything we can to increase exports. After all, everybody is beginning to understand to-day that exports are merely a means of paying for imports, and imports are things you must have to live. Further, I agree with the noble Viscount that we must look for alternative sources of supply. We cannot remain entirely dependent on hard currency sources. If we can

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  develop trade with other countries which are at present undeveloped, not producing what they could produce, it will manifestly be greatly to our advantage.
  The noble Viscount talked about organization. I will tell him frankly—and I speak for myself alone—that I always have a little hesitation about any suggestion that there should he still another international organization. It seems to me there are plenty of them, and I become hopelessly confused about what all their initials mean. I agree with the noble Viscount, however, that what we want to do is to try to see that the existing international organizations are working smoothly. I agree it is natural that these organizations should have their teething troubles; I agree that in some respects they are not working well. I liked the recommendation on page 62 of the noble Viscount's Report. Let me remind your Lordships that this is a unanimous recommendation of all the nations:
  "That, pending the establishment of the proposed International Trade Organization, a temporary Co-ordinating Committee, or similar body, should be created promptly by the United Nations; which Committee should keep itself informed of consultation or action in respect of inter-Governmental arrangements for agricultural and non-agricultural primary commodities, and facilitate by appropriate means such consultation or action.
  That this Co-ordinating Committee should be comprised of three highly-qualified persons,"—
  that is about the ideal size—
  "one of whom should be nominated by the Food and Agriculture Organization and should be concerned in particular with agricultural primary commodities."
  That recommendation is most certainly one that will receive the support of His Majesty's Government when the time comes.
  And so, my Lords, I leave the matter in this way. I am not going through the details of the Report and I am not going to trouble your Lordships with consideration of the topic of what is sometimes known as "buffer", stocks. I believe that, difficult though that problem is, it is essential that we should try to do something on those lines. I think the Commission of which the noble Viscount, Lord Bruce, was Chairman, have given us a realistic approach to that problem. They presented a unanimous Report. It is all very
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  well for the noble Viscount to say it was a mere finding of facts; it was more than that. It stated the facts, and pointed the direction. It was a unanimous Report, and I think it is only right that I should say that the reason why the Commission reached unanimous conclusions was because of the patience, the tact, the fore-bearance and the wise judgment of its Chairman, the noble Viscount.
  4.30 p.m.
  VISCOUNT BRUCE OF MELBOURNE: My Lords, I do not wish to detain your Lordships for more than a few minutes, but I would like to clear up one point which has been raised by the noble and learned Viscount who sits on the Woolsack. I did not in any way suggest that the Report was not receiving consideration by the Government. The point I was desirous of making was that it did not appear to have received consideration by the Press and the public; that no one seemed to know quite what had come out of the Preparatory Commission's deliberations.
  I would like, further, to associate myself with the refutation of the idea that this Report is in any way a negation of proposals put forward by Sir John Boyd Orr at Copenhagen. They were proposals which have proved an inspiration to the Commission, and it was in considering Sir John's proposals that we spent our time, We have, we submit, put forward practical suggestions, by the adoption of which those proposals can be put into effect. If they are ever put into effect, it will be to Sir John Boyd Orr for the inspiration that he gave that the credit will be due. I did not raise this matter with the object of discussing our Report. Possibly, on some other occasion there may be phases of the Report that I may wish to deal with in some detail—the wheat agreement, for example, or something else. I raised this matter to-day because of the broad issues behind the recommendations, to which I wished to draw attention. I am very much obliged to the noble and learned Viscount, the Lord Chancellor, for the reply which he has been good enough to give me, and I now ask leave, with your Lordships' permission, to withdraw ray Motion.
  Motion for Papers by leave, withdrawn.

  GOVERNMENT OF NEWFOUNDLAND.
  4.32 p.m.
  EARL FORTESCUE: My Lords, on behalf of my noble friend Viscount Swinton I beg to ask the question of which he has given private notice: Whether His Majesty's Government have any statement to make on the recent discussions with the delegation from the Newfoundland National Convention.
  THE SECRETARY OF STATE FOR DOMINION AFFAIRS (VISCOUNT ADDISON): My Lords, I am grateful to the noble Earl for giving me the opportunity of answering this question. As your Lordships will be aware, a National Convention elected by the people of Newfoundland have been meeting in that island since last September. The Convention were constituted to consider the financial and economic situation of the island and, in the light of this, to make recommendations to His Majesty's Government in the United Kingdom as to the possible forms of future Government to be put before the people of Newfoundland at a national referendum at which they would vote for the form they preferred. At the end of February, the Convention passed a Resolution asking the United Kingdom Government to receive a delegation from the Convention to make inquiries as to the financial and fiscal relationship between the United Kingdom and Newfoundland which might be expected in the event of the people of Newfoundland deciding either upon continuation of Commission government or restoration of responsible government or some other form of government. I readily agreed to this proposal and a delegation consisting of the Chairman and six other members of the Convention recently came to London.
  We have held three meetings, at which I have answered specific questions which have been put to me. I was accompanied at these meetings by the Governor of Newfoundland (Sir Gordon Macdonald) and the Commissioner for Justice and Defence (Mr. A. J. Walsh). I indicated to the delegation that it is the desire of the United Kingdom Government that the same close and friendly relationships should exist between the two countries as have always existed. On the financial side, I said it would always be our desire to help Newfoundland within our means; but
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  I also thought it right to make clear, as I explained in your Lordships' House on December 11, 1945, that the special difficulties of our financial position must preclude us from undertaking commitments which might be beyond our power. Your Lordships are well aware of the immense problems which beset us to-day in the financial field—problems, indeed, which are greater than was expected at the time I made that statement.
  I was therefore unable to hold out any hope, in response to a direct inquiry by the delegation, that the United Kingdom Government could consider taking over from Newfoundland liability for the public loan of about £17,800,000, which the United Kingdom Government guaranteed in connexion with the establishment of the Commission of Government in 1934. We shall, of course, continue our guarantee, and I indicated that we are prepared to proceed, at the earliest possible date, in agreement with the Newfoundland Government, with a conversion operation which would reduce the interest payments from the Newfoundland Exchequer. Moreover, in the present financial circumstances, I felt bound to say that the United Kingdom Government could not give such firm assurances as the delegation sought, that we should continue to purchase from Newfoundland large quantities of such commodities as frozen fish and iron ore. We recognized the importance of the industries concerned to the island's economy, and I assured the delegation that we should continue to strive to do our best to assist, but that it must be remembered that Newfoundland has a dollar currency, and our measure of assistance must depend upon our general dollar position.
  I need not trouble your Lordships with further details of the meetings. Nearly all the questions raised with me by the delegation had, in fact, been under careful consideration for some time, having already been raised with me by the Commission of Government. As to the more general financial questions of the future, I told the delegation that if the people of Newfoundland, by their referendum, decide in favour of the continuation of Commission government for a further period, the United Kingdom Government would continue to be responsible for Newfoundland's financial stability. If, on the other hand, the people decided for responsible government, this would mean

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  that full responsibility for Newfoundland's finances must rest with the Newfoundland Government and people, and that the responsibilities undertaken by the United Kingdom Government in 1934 would cease. I am sure that the talks which I have had with the delegates have been useful, and I hope that the people of Newfoundland will, at the forthcoming referendum, choose the form of Government best suited to the interests of their country.
  EARL FORTESCUE: I am very grateful to the noble Viscount for his reply.

  STANDING ORDERS COMMITTEE.
  Report from, That the Standing Orders not complied with in respect of the Petition for Additional Provision in the
  LONDON COUNTY COUNCIL (GENERAL POWERS) BILL
  ought not to be dispensed with; Read, and agreed to.
  CHESHIRE AND LANCASHIRE COUNTY COUNCILS (RUNCORN— WIDNES BRIDGE, ETC.) BILL. [H.L.]
  The King's Consent signified; Bill reported from the Select Committee, with Amendments.

  LOCAL GOVERNMENT (SCOTLAND) BILL. [H.L.]
  Message from the Commons: That they have ordered, That the Select Committee appointed by them to join with the Select Committee appointed by your Lordships to consider the said Bill do meet the Com-
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  mittee appointed by Your Lordships in Committee Room A on Thursday, June 5, at eleven of the clock. as proposed by your Lordships.

  ESTIMATES.
  Message from the Commons for leave for the Viscount Knollys to attend to be examined as a witness before Sub-Committee C of the Select Committee appointed by them on Estimates. Leave given for his Lordship to attend, if he thinks fit and a message ordered to be sent to the Commons to acquaint them therewith.