Sitting of 15 July 1912

Preamble
The House met at a Quarter before Three of the clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Bognor Gas Light and Coke Company (Electricity) Bill,
Fleetwood Gas Bill,
Ivybridge Urban District Water Bill,
Metropolitan District Railway Bill,
Lords Amendments considered, and agreed to.
Houghton-le-Spring District Gas Bill [Lords]
Read the third time; Verbal Amendments made; Bill passed, with Amendments.
National Electric Construction Company Bill,
As amended, considered:—
Ordered, That Standing Orders 223 and 243 be suspended, and that the Bill be now read the third time.—[The Chairman of Ways and Means].
Bill accordingly read the third time, and passed.
Blyth Harbour Bill [Lords],
Read a second time, and committed.
Ordered, That Standing Order 211 be suspended, and that the Committee on the Bill have leave to sit and proceed on Thursday.—[The Chairman of Ways and Means].
Great Central Railway (Grimsby Fish Dock) Bill [Lords],
London Trust Company Bill [Lords],
Read a second time, and committed.
North Killingholme Pier Bill [Lords],
To be read a second time upon Monday next.
Nottingham Mechanics Institution Bill [Lords],
Read a second time, and committed.
London and North-Western Railway Bill [Lords] (by Order) (King's Consent signified),
Bill read the third time, and passed, with Amendments.
Bradford Corporation Trolley Vehicles Provisional Order Bill,
Lords Amendments considered, and agreed to.
Norfolk Fisheries Provisional Order Bill (by Order),
Second Reacting deferred till To-morrow.

MARRIAGES, BIRTHS AND DEATHS (IRELAND).
Copy presented of Forty-eighth detailed Annual Report of the Registrar-General of Marriages, Births and Deaths in Ireland, 1911 [by Command]; to lie upon the Table.
NATIONAL SCHOOLS (IRELAND) (INSTRUCTION IN IRISH).
Return presented relative thereto [ordered 4th March; Mr. Nannetti]; to lie upon the Table.

NATIONAL INSURANCE ACT.
Copy presented of Provisional Special Order made by the National Health Insurance Joint Committee and the Scottish Insurance Commissioners, acting jointly, entitled the National Insurance (Special Customs) Provisional Order (Scotland), 1912 [by Act]; to lie upon the Table, and to be printed. [No. 239.]
Copy presented of Provisional Special Order made by the National Health Insurance Joint Committee as to Outworkers who are Married Women [by Act]; to lie upon the Table, and to be printed. [No. 240.]
Copy presented of Regulations, dated 11th July, 1912, made by the National Health Insurance Joint Committee as to the Accounts of Approved Societies [by Act]; to lie upon the Table, and to be printed. [No. 241.]
Copy presented of Provisional Special Order made by the National Health Insurance Joint Committee and by the several bodies of Insurance Commissioners, acting jointly, entitled the National Health Insurance (Special Customs) Provisional Order, 1912, No. 1 [by Act]; to lie upon the Table; and to be printed. [No. 242.]
Copy presented of Provisional Special Order made by the National Health Insurance Joint Committee and by the Insurance Commissioners and the Welsh Insurance Commissioners, acting jointly, entitled the National Health Insurance (Special Customs) Provisional Order, 1912, No. 2 [by Act]; to lie upon the Table, and to be printed. [No. 243.]
Copy presented of Provisional Special Order made by the National Health Insur-
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ance Joint Committee and by the several bodies of Insurance Commissioners, acting jointly, entitled the National Health Insurance (Subsidiary Employments) Provisional Order, 1912, No. 1 [by Act]; to lie upon the Table, and to be printed. [No. 244.]
Copy presented of Provisional Special Orders made by the National Health Insurance Joint Committee and by the several bodies of Insurance Commissioners, acting jointly, entitled the National Health Insurance (Subsidiary Employments) Provisional Order, 1912, No. 2 [by Act]; to lie upon the Table, and to be printed. [No. 245.]
Copy presented of Provisional Special Order made by the National Health Insurance Joint Committee and by the several bodies of Insurance Commissioners, acting jointly, entitled the National Health Insurance (Subsidiary Employments) Provisional Order, 1912, No. 3 [by Act]; to lie upon the Table, and to be printed. [No. 246.]
Copy presented of Provisional Special Order made by the National Health Insurance Joint Committee and the Insurance Commissioners, acting jointly, as to Fishermen remunerated by share [by Act]; to lie upon the Table, and to be printed. [No. 247.]
Copy presented of Provisional Special Order made by the National Health Insurance Joint Committee and the several bodies of Insurance Commissioners, acting jointly, with reference to persons employed by or under the Crown [by Act]; to lie upon the Table, and to be printed. [No. 248.]
Copy presented of Provisional Regulations of the National Health Insurance Commission (Wales) as to Inspectors' Certificates of Appointment [by Act]; to lie upon the Table, and to be printed. [No. 249.]
Copy presented of Provisional Regulations of the National Health Insurance Commission (Wales) as to Notices by Employers under Section 47 of the Act [by Act]; to lie upon the Table, and to be printed. [No. 250.]
Copy presented of Provisional Regulations made by the Irish Insurance Commissioners as to Inspectors' Certificates of Appointment [by Act]; to lie upon the Table, and to be printed. [No. 251.]

TRADE REPORTS (ANNUAL SERIES).
Copies presented of Diplomatic and Consular Reports, Annual Series, Nos. 4939, 4941, and 4943 [by Command]; to lie upon the Table, and to be printed.
LUNACY.
Paper laid upon the Table by the Clerk of the House:—Copy of Return to the Lord Chancellor of the number of Visits made and the number of Patients seen by the several Commissioners in Lunacy during the six months ending on the 30th June, 1912 [by Act].
PROTECTION OF ANIMALS ACT (1911) AMENDMENT BILL.
"To amend the Protection of Animals Act, 1911, in respect of its imprisonment penalty." Presented by Mr. GEORGE GREENWOOD; supported by Colonel Lockwood, Sir Frederick Banbury, Mr. Chancellor, and Mr. Dundas White; to be read a second time upon Thursday, and to be printed. [Bill 277.]
ROYAL SCOTTISH MUSEUM (EXTENSION) BILL.
Mr. Wedgwood Benn, Major Anstruther-Gray, and Mr. Charles Price nominated Members of the Select Committee on the Royal Scottish Museum (Extension) Bill.—[Master of Elibank.]

FRANCHISE AND REGISTRATION BILL.
Copy ordered, "of Explanation of Repeal Schedule."—[Mr. Joseph Tease.]
Paper presented accordingly; to lie upon the Table, and to be printed. [No. 252.]

ASYLUM OFFICERS (EMPLOYMENT, PENSIONS, AND SUPERANNUATION) BILL.
Second Reading upon Wednesday, 16th October.

PUBLIC PETITIONS COMMITTEE.
Ordered, That Mr. Hughes be discharged from the said Committee.
Ordered, That Mr. Haydn Jones be added.—[Master of Elibank.]

NEW WRIT.
For the County of Cheshire (Crewe Division), in the room of Walter Stowe Bright McLaren, esquire, deceased.—[Mr. Illingworth.]
ORAL ANSWERS TO QUESTIONS.

  China.
  Mr. NEWMANasked the Secretary of State for Foreign Affairs, whether he can give any information as regards the breakdown in the loan negotiations between the Chinese Republic and the six-Power group; and whether, in the event of the Republic resuming negotiations on a fresh basis, the fact that more than 50 per cent. of her export and import trade is conducted with the Empire will constitute an adequate reason for preferential terms being asked for on behalf of British financial firms?
  The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Acland): I am not aware that the loan negotiations have broken down, but, should they for any cause be temporarily suspended, I have no reason to suppose that, as far as the mutual relations of the groups are concerned, they would not be resumed on much the same basis as before and preferential terms for one nation as against the others in the matter of loans based on the ground suggested would be quite impracticable.

  Board of Agriculture (Horticultural Department).
  Mr. CHARLES BATHURSTasked the President of the Board of Agriculture whether he has yet appointed the chief entomological expert of the new Horticultural Department of the Board; if so, who is lie; at what salary has he accepted such office; and whether such salary is less than that of the post which he is vacating in order to accept it?
  The PRESIDENT of the BOARD of AGRICULTURE (Mr. Runciman): Negotiations are proceeding, but I regret that I am not yet in a position to answer this question. If the hon. Member will repeat it one day in the latter part of next week I hope then to be able to give him the information which he desires.

  Foot-and-Mouth Disease.
  Sir JOHN LONSDALEasked the President of the Board of Agriculture whether his attention has been called to the hardship and pecuniary loss entailed upon exporters of hay in Ireland by the order prohibiting the export of hay to Great Britain; and whether, having regard to the fact that foot-and-mouth disease has not appeared anywhere in Ireland except Swords, he will endeavour to get the embargo removed so far as it affects the northern districts of Ireland and the ports of Belfast, Coleraine, and Londonderry?
  Mr. RUNCIMAN: Perhaps the hon. Member will allow me to refer him to the full statement which I made on this subject on Thursday last in reply to the hon. Member for North-East Cork. I am aware of, and much regret, the loss occasioned by the Order to which the hon. Member refers, but under existing circumstances I do not see my way to modify it in the manner suggested. I may add that it has always been the practice of the Irish Department to adopt a similar measure of precaution whenever foot-and-mouth disease has made its appearance in Great Britain.
  Sir J. LONSDALE: Is the right hon. Gentleman aware that the hay exported from the northern ports is grown in a district which is entirely free from the least suspicion, and having regard to that fact that this hay has been prepared for export, whether he will allow it to be exported.
  Mr. RUNCIMAN: I cannot agree to that; but when foot-and-mouth disease broke out in this country, even although it broke out in Somerset county, hay from Northumberland was not allowed into Ireland.
  Mr. C. BATHURSTasked whether there have been any further outbreaks of foot-and-mouth disease; whether any of these are outside the previously scheduled areas; and whether the cause of the outbreaks in Cumberland or Surrey has been traced to any feeding stuffs or other vehicle of mediate contagion found on the infected premises?
  Mr. RUNCIMAN: I much regret to say that, early yesterday morning, suspected foot-and-mouth disease was reported from premises near Market Harborough, in Leicestershire. The Board's assistant
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  veterinary officer at once proceeded to the premises, and found that the disease existed, fourteen animals out of sixteen being already affected. An Order was at once issued stopping the holding of markets and the movement of animals in the area surrounding the infected place. The inspectors of the Board are on the spot, and steps have been taken with a view to discover the existence of disease elsewhere in the locality and to prevent it from spreading. Two outbreaks of the disease have also occurred at Saddle-worth, within the Lancashire scheduled area. The total number of outbreaks is now forty-six. The reply to the last part of the question is in the negative.
  Mr. C. BATHURST: Do I understand from that answer that the new Order will add both Leicestershire and Northamptonshire to the infected counties?
  Mr. RUNCIMAN: It will add a portion of Northamptonshire and almost the whole of Leicestershire.
  Colonel YATE: The Market Harborough Division of Leicestershire, or the whole?
  Mr. RUNCIMAN: The area within a radius of fifteen miles of the infected place will be scheduled, quite irrespective of the artificial county boundaries.

  Forest of Dean (Verderers).
  Mr. C. BATHURSTasked the President of the Board of Agriculture whether, in view of the fact that the ancient office of Verderer of His Majesty's Forest of Dean, held by four persons of repute in that locality who have been duly elected by the whole body of freeholders in the county of Gloucester, with the traditional object of adjudicating as between the Crown and His Majesty's subjects upon cases relating to vert and venison within the forest has in recent years become a sinecure, he will consider the desirability of allocating to them fresh duties similar to those entrusted to the Verderers of the New Forest and more in consonance with modern requirements and conditions?
  Mr. RUNCIMAN: I do not consider that there is any need at present for the allocation of fresh duties to the Verderers of the Forest of Dean. Such a change could not be carried out without legislation.
  Mr. MACMASTERasked whether a property has been purchased in Surrey for the purpose of establishing an experimental station for treating the diseases of

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  cattle; and whether the authorities have taken sufficiently into account the danger to establishing such a station in a thickly settled portion of the community where agricultural pursuits are the predominant interest?
  Mr. RUNCIMAN: The answer to both parts of the question is in the affirmative. With regard to the second part of the question, I may mention that the site is for the most part surrounded by open common. The main purpose of the station is the testing of cattle with a view to the issue of certificates that they are free from disease. It may safely be assumed that the large proportion of the animals brought to the station will be in perfect health, but the most stringent precautions will in every case be taken for the isolation of the animals and the prevention of the spreading of disease.
  Mr. MACMASTER: Is the right hon. Gentleman aware that on the common adjoining this property the cattle of neighbouring farmers are grazed, and that by establishing this station there the whole of these cattle are put in jeopardy? And has the right hon. Gentleman verified the fact, as I have, that the land in this district is mainly agricultural land?
  Mr. RUNCIMAN: I know the site, and the statement of the hon. Member is partially, but only partially, correct. With regard to the risk run by surrounding farmers, I think it is very small. In fact, if you are to have an experimental station anywhere in England, I cannot imagine any place where less harm is likely to be done.
  Mr. MACMASTER: Would it not be infinitely preferable to establish a station of this character in a part of the country that is not wholly devoted to agriculture or thickly settled, but rather in some part that is thinly settled, where the danger would be less?
  Mr. RUNCIMAN: I have already said that a large number of sites in the country would be available for an institution of this kind, but I can imagine none where the risk would be less.
  Mr. MACMASTER: Would the right hon. Gentleman defer action in this matter until he can confer with the people of the neighbourhood?
  Mr. RUNCIMAN: No, I am afraid I cannot.
  Captain GILMOURasked the President of the Board of Agriculture if the Irish Department have, on every occasion when recent outbreaks of foot-and-mouth disease have occurred in England, immediately closed their ports to all stock from Scotland; and, if this is the case, will he undertake to maintain the present restriction on the movement of all Irish stock to Scotland till Ireland can be certified to be clear of infection, in the interests of breeders of Scottish stock?
  Mr. RUNCIMAN: The answer to the first part of the question is in the affirmative. As regards the second part, the hon. Member may be assured that I shall sanction no modification or withdrawal of the existing Regulations until I am satisfied that the conditions are such as to obviate any danger of the introduction of foot-and-mouth disease into either Scotland or England.
  Mr. BUTCHERasked whether it is possible, consistently with the public interest, to sanction the entering of fat cattle into the city of York, for immediate slaughter, from unscheduled areas, and thereby to avoid the depletion of the meat supply of the city, which must otherwise occur?
  Mr. ROWNTREEasked the President of the Board of Agriculture whether he can see his way to modify the Order affecting the movement of cattle in the York area so as to allow fat stock to come under licence to the city slaughter-houses from non-infected areas for immediate slaughter?
  Mr. RUNCIMAN: Investigations as to the possible spread of disease in the East Riding scheduled area are being carried out as rapidly as possible, but at the moment I do not think it would be safe to relax the restrictions in the manner suggested. I will, however, keep the position of the city of York steadily in view. Perhaps my hon. Friend would repeat his question in two or three days' time.
  Mr. BUTCHER: Can the right hon. Gentleman give any clearer indication as to when the restrictions will be relaxed?
  Mr. RUNCIMAN: I cannot say at the present time. If the whole of our investigations during the next few days prove that there has been no spread of the disease in this area I hope we may

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  be able at once to relax the restrictions. But I should not like to give a definite promise to-day.
  Mr. BUTCHER: Has there been any further disease since the outbreak discovered on Friday?
  Mr. RUNCIMAN: No.
  Mr. T. M. HEALY: May I ask the Vice-President of the Department of Agriculture for Ireland, if he has any information to give with regard to foot-and-mouth disease in Ireland?
  Mr. T. W. RUSSELL (Vice-President of the Department of Agriculture, Ireland): All the information I have to give is that there has been no further case in Ireland.
  Mr. T. M. HEALY: Will the right hon. Gentleman communicate with the Department of Agriculture in England, with a view to taking off the restrictions upon Irish exports of cattle? What is his opinion? Has he given the opinion of his Department to the English Department as to whether the condition of things in Ireland warrants the restrictions being kept up against that country?
  Mr. RUSSELL: I am in constant communication with the President of the Board of Agriculture.
  Mr. O'SHAUGHNESSY: With regard to the Waterford and Limerick ports, is the right hon. Gentleman able to announce when these ports will be open?
  Mr. RUSSELL: I hope I may be able to make a statement with regard to the ports of Waterford and Limerick on Wednesday.
  Mr. C. BATHURST: Has the right hon. Gentleman yet been able to trace the cause of the original outbreak at Swords?
  Mr. RUSSELL: No, Sir.

  Tylenchus Devastatrix.
  Mr. CHARLES BATHURSTasked the President of the Board of Agriculture whether he is aware of the havoc which is being wrought to the oat crop in the West of England by the worm known as Tylenchus devastatrix; what, in the opinion of his expert advisers, is the best method of checking or destroying this pest; whether it is inadvisable where it is prevalent to adopt the common practice of leaving the land under clover seeds on the footing that the same pest is productive of clover
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  sickness; and whether he will publish in the provincial Press any advice on these matters?
  Mr. RUNCIMAN: There have been many reports of damage done to the oat crop by Tylenchus devastatrix, commonly known as stem eelworm, but there is good reason for believing that much of the damage attributed to this pest is really due to frit fly. I am advised that the best way to check eelworm is to lengthen the rotation. I am also advised that, although the eelworm may destroy clover, it is not the common cause of clover sickness, excellent crops of clover being sometimes secured after a diseased oat crop. The Board have already published a leaflet on eelworm, and I propose to issue a notice to the Press referring both to eelworm and to frit fly, and inviting application for leaflets.
  Mr. C. BATHURST: Is it not desirable, before advocating any particular remedy, that the Board should make up its mind whether this particular insect is the frit fly or the eelworm, because each requires different treatment?
  Mr. RUNCIMAN: What I said was that the insect named in the hon. Member's question was commonly known as the eelworm, and there is good reason to believe that some of the damage attributed to the eelworm is really done by the frit fly.

  Technical Instruction (Agriculture).
  Mr. HINDSasked the President of the Board of Agriculture if he contemplated linking up Glamorganshire and Monmouthshire with Bristol University for technical instruction in agriculture; and if he is aware of the objections expressed by agricultural and educational societies in Wales against such a proposal?
  Mr. RUNCIMAN: The Board have asked the University of Bristol if they would be prepared to investigate questions sent to them by agricultural instructors or farmers in a group of counties including Glamorganshire and Monmouthshire, and to advise in cases where useful advice could be offered. The university have agreed to place the services of certain members of their scientific staff at the disposal of agriculturists for these purposes. I propose to hold a conference of representatives from the counties concerned on 25th July. The Glamorganshire Education Authority have, however, informed me that they do not wish to be associated with the scheme, and I have

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  expressed the hope that I may be able to confer with them at a later date, when I meet the representatives of other Welsh counties. I have received no protest from Monmouthshire, and I understand that representatives of the county intend to be present at the conference on 25th July. I am anxious to act, as far as possible, in harmony with the local authorities.
  Lord NINIAN CRICHTON-STUART: Will the right hon. Gentleman use his influence to create an area for a centre in South Wales?
  Mr. RUNCIMAN: I cannot say anything further on this question until I have had an opportunity of conferring with the authorities.

  Wood Distillation Factory.
  Mr. C. BATHURSTasked whether prior to placing with a German firm a contract for the supply of plant and machinery for the Government wood distillation factory in the Forest of Dean, British manufacturers of such plant and machinery were given an opportunity of submitting a tender and securing the contract?
  Mr. RUNCIMAN: British manufacturers were not invited to compete, because the special type of plant, which on inquiry appeared to be most suitable, is made in Germany only.

  Tailors' Strike (Police Protection).
  Sir J. D. REESasked the Secretary of State for the Home Department whether, during the tailors' strike, the employers have asked for greater protection for non-union workers; and, if so, what answer was returned to their request?
  The SECRETARY of STATE for the HOME DEPARTMENT (Mr. McKenna): In any case where protection has been asked for the police have given it.
  Sir J. D. REES: Was it asked for in this case?
  Mr. McKENNA: In every case in which it has been asked for it has been given.
  Sir J. D. REES: Was it asked for in this case?
  Mr. McKENNA: I cannot say.

  Metropolitan Police (Extra Duty).
  MARQUESS of TULLIBARDINEasked what allowance is given to members
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  of the Metropolitan Police for extra duty, and after how much duty; and whether this sum is a fixed sum or whether it varies with the amount of extra time done?
  Mr. McKENNA: The Police Orders provide that 1s. per day may be drawn when nine hours' continuous duty is performed. It is the practice, when the exigencies of work permit, to give "time off" for all periods beyond this nine hours.
  MARQUESS of TULLIBARDINE: In view of the disagreeable nature of strike duty and the long continued duty caused by the strike, will the right hon. Gentleman consider the granting of special pay?
  Mr. McKENNA: All the circumstances will be taken into account, I am quite sure, by the Commissioner of the Police.
  Mr. W. THORNE: Including the breaking of strikers' heads?

  Prison Warders' Wages.
  Mr. WILLIAM THORNEasked the Secretary of State for the Home Department if he can state when the last increase in wages was granted to prison warders in the various prisons of the United Kingdom; and whether, should no increase have been given in recent years, he will state whether an increase can be granted in view of the increased cost of living?
  Mr. McKENNA: There has been no general increase in the scales of pay since 1891, but since that date there has been a progressive improvement in the condition of service of different grades, as I stated in the reply which I gave to the junior Member for Newcastle-on-Tyne on the 13th March last. The whole question of the pay and hours of duty of all grades of prison officers has lately been the subject of review, and, in addition to the introduction of shorter hours of duty, there has been a practical improvement of the scale of pay and prospects of the teaching, engineering and instructing staffs. The additional rent allowance now given, where quarters cannot be provided, in localities where house rent runs high, has, it is hoped, done much to meet the increased cost of living, so far as higher rentals contribute to this.

  Royal Commissions (Return).
  Mr. MacCALLUM SCOTTasked the Secretary of State for the Home Department whether he will grant the

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  Return mentioned in the Motion which stands in the name of the hon. Member for the Bridgeton Division of Glasgow?
  Mr. McKENNA: Yes, Sir.

  Norman Tree (Sentence).
  Colonel BURNasked the Secretary of State for the Home Department, whether he has come to any decision in the case of Norman Tree, is now undergoing a sentence of twelve months' imprisonment and who is suffering from tuberculosis; and will he favourably consider the remission of the unexpired term of the sentence in order that this man may be treated at a sanatorium?
  Mr. McKENNA: I have carefully considered all the facts of this case and regret that I do not feel justified at present in recommending any remission of the sentence. The prisoner's health will receive careful medical attention in prison.
  Colonel BURN: Is the right hon. Gentleman aware that a Justice of the Peace for Surrey, who has interested himself in this very man, is willing to undertake to send him to a sanatorium, and pay his passage afterwards to a foreign country, in order that he may get employment there?
  Mr. McKENNA: I understand that a Justice of the Peace for Surrey has made an offer substantially in the terms stated by the hon. Gentleman.

  Shot-Firing in Mines (Safety Appliances).
  Mr. RICHARDSasked the Secretary of State for the Home Department whether, in view of the fact that last year there were no less than thirty-eight deaths and 503 more or less serious accidents as the result of shot-firing in mines, and that two colliers, named Abraham Price and William Pryse, of Treorky, have invented appliances which they claim make shot-firing and the handling of detonators absolutely safe and casualties impossible, he will, without delay, instruct the chief of the Explosive Department of the Home Office to investigate the merits of Messrs. Price and Pryse's invention?
  Mr. McKENNA: The appliance mentioned in my hon. Friend's question has been brought to my notice, and I have referred it to the Chief Inspector of Mines for consideration.

  Insanitary Offices.
  Lord H. CAVENDISH-BENTINCKasked the Secretary of State for the Home Department, in reference to the subject of the insanitary surroundings in which clerks and typists are often obliged to work, whether he has yet consulted with the President of the Local Government Board as to whether the existing powers are sufficient to enable local authorities to deal with conditions injurious to persons employed, and whether any extension or amendment is desirable?
  Mr. McKENNA: I am consulting with my right hon. Friend on the subject.

  Established Church (Wales) Bill.
  Sir J. D. REESasked the Secretary of State for the Home Department whether he has seen a petition to Parliament from 511,957 adults in Wales and Monmouthshire against the Welsh Disestablishment Bill; and, if so, what action the Government propose to take in the matter?
  Mr. McKENNA: Until the petition in question has been before the Committee I am unable to make any observations upon it. The answer to the second part of the Question is that the Government intend to take the remaining stages of the Bill as soon as possible after the Recess.

  Whist Drives.
  Mr. TOUCHEasked the Secretary of State for the Home Department if he can say whether instructions have been given to or by the Commissioner of Police to stop whist drives in the North London district?
  Mr. McKENNA: So far as the Metropolitan Police District is concerned, the police will only take action if any breach of the law, as laid down in the recent case of Morris versus Godfrey, appears to have been committed.

  Irish Provident Assurance Company.
  Mr. GINNELLasked the Secretary to the Treasury if he can state the total number of policies issued by the Irish Provident Assurance Company similar in character to the policy in question in the case of Flood against that Company; and the number of these policies transferred to and accepted by the London and Provincial Assurance Company?
  The PRESIDENT of the BOARD of TRADE (Mr. Buxton): I have been asked by my right hon. Friend the Secretary to the Treasury to answer this question. The Board of Trade have no information as to the number of policies of the nature referred to which were issued by the Irish Provident Assurance Company, Limited, or as to the number transferred to the London and Provincial Assurance Company, Limited.
  Mr. GINNELLasked the Secretary to the Treasury, in view of the opinion of the Attorney-General for Ireland that the policies of the Irish Provident Assurance Company were not life policies and the decision of the Irish Court of Appeal in the case of Flood against that company that they were life policies, and that the assured persons were entitled to have their premiums refunded, whether the Treasury will enable those insured persons, too poor to bring an action, to recover the sums paid by them in premiums in the foregoing circumstances?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Masterman): I do not think this is a matter in which the Treasury could assist private claimants.

  NATIONAL INSURANCE ACT.

    SHIFNAL MAGISTRATE.
    Mr. PRIMROSEasked the Secretary of State for the Home Department, whether he will call the attention of the Lord Chancellor to the action of Mr. A. J. Hoole, who advocated non-compliance with the provisions of the National Insurance Act in a meeting at Shifnal, though as a magistrate he assists in the administration of the Law?
    Mr. McKENNA: If my hon. Friend will furnish me with a report of the speech to which he takes exception, I will at once consider the matter.
    Lord ROBERT CECIL: Will the right hon. Gentleman say in what respect this case of Mr. Hoole, if the hon. Member's statement is accurate—as I have no doubt it is—differs from that of the passive resisters, with whose action as magistrates the late Sir Henry Campbell-Bannerman in 1907 declined to interfere?
    Mr. MASTERMAN: I think I should ask for notice of a question which would require me to enter into an elaborate statement.

    PROVINCIAL WATER COMPANIES ASSOCIATION UMPIRE'S DECISIONS).
    Mr. PETOasked the Secretary to the Treasury whether his attention has been called to the decisions of the Umpire, the practical effect of which Mr. Bickerdike, the Registrar, informs the Secretary of the Provincial Water Companies Association, under date 29th June, is that contributions are payable under Part II. of the National Insurance Act in respect of water companies' workmen engaged wholly or mainly in constructing mains other than services, the cost of which is usually chargeable to capital account, and are not payable in respect of workmen engaged in laying services or mains the cost of which is usually chargeable to revenue account; and whether he can say what steps the employers should take to comply with the Umpire's decision, seeing that it is frequently impossible to decide at the time to what account particular work of this kind is chargeable, and that in respect of replacing mains with pipes of a larger diameter only that portion of the cost is chargeable to capital account that represents the greater value of the larger main, and further of the effect of the payment of only an occasional weekly contribution under the provisions of the Seventh Schedule of the Act?
    Mr. BUXTON: I understand the distinction drawn by the Umpire not to refer to the account to which the work performed by any particular workman is actually charged, but to the classes of work which, according to ordinary trade practice, are usually charged to capital or to revenue account respectively. I have no authority to interpret the Umpire's decisions, but it seems to me that the distinction drawn is likely to be helpful in determining a number of borderland cases. If any cases of real doubt remain the Board of Trade will be glad to give their assistance in clearing up the difficulty if the company affected will communicate with them. The case of the workman in respect of whom contributions are only payable for a portion of the year does not appear to me to present any difficulty of principle, in view of the fact that his claim to benefit is in proportion to his number of contributions.

    DOMESTIC SERVANTS.
    Mr. PETOasked the Secretary to the Treasury whether any Regulations have been issued by the Insurance Commissioners which will provide for the case

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    of an employer of domestic servants who is absent on the day when wages are paid and consequently cannot personally attend to the stamping of cards; and, if not, whether he will state what arrangements should be made by an employer in such a case who pays wages by cheque during his absence, and has no person whom he can depute to act as his agent in the matter?
    Mr. MASTERMAN: The Regulations make an employer responsible for seeing that the stamps are affixed in respect of each week not later than the time at which wages are paid for that week. He must make his own arrangements for this to be done, but the stamps may be affixed either before or at the time when wages are paid.
    Sir C. KINLOCH-COOKE: Will the right hon. Gentleman say what is to be done in the case of board wages paid fortnightly or monthly?
    Mr. MASTERMAN: I am not quite sure. I think I should have notice of that question.
    MARQUESS of TULLIBARDINE: If one's servants object, what is one to do?
    Mr. MASTERMAN: Get the stamps oneself from the post office.
    MARQUESS of TULLIBARDINE: Is the right hon. Gentleman aware that the post office have refused to supply people?
    Mr. MASTERMAN: If the Noble Lord will bring any case of the kind to my notice I will have it seen into. Many thousands have been, I think, got from the post office.
    Mr. BUTCHER: What means are there of ascertaining whether or not the stamps are put on the card?
    Mr. MASTERMAN: I do not think that arises out of this question.

    ENFORCED CONTRIBUTIONS.
    Mr. GODFREY LOCKER-LAMPSONasked the Secretary to the Treasury whether enforced contributions will be returned to insured persons in the event of their being unable to obtain the sanatorium benefit to which they are entitled under the National Insurance Act?
    Mr. MASTERMAN: I am not in a position to state what action would be taken in the contingency contemplated in the question, which I have no reason to suppose is likely to arise.
    Mr. G. LOCKER-LAMPSON: Has the right hon. Gentleman seen the decision of the members of the Medical Association in Brighton, who say that they will not work under the Insurance Act?
    Mr. MASTERMAN: That will not prevent sanatorium benefit being given.

    PROVISIONAL INSURANCE COMMITTEES.
    Mr. GODFREY LOCKER-LAMPSONasked the Secretary to the Treasury whether the provisional insurance committees can bind their successors, and whether they are empowered to spend money?
    Mr. MASTERMAN: With regard to the first part of the question, I would refer the hon. Member to the answer which I gave last Monday to the hon. Member for Leominster. The answer to the latter part of the question is in the affirmative.

    SANATORIUM BENEFIT.
    Mr. GODFREY LOCKER-LAMPSONasked the Secretary to the Treasury if he will state on what date and out of what moneys the £4 5s. per 1,000 of the population mentioned in Clause 34 of the Memorandum No. 112, I.C., dealing with the administration of sanatorium benefit, will be paid over to the provisional insurance committees?
    Mr.GODFREY LOCKER-LAMPSONalso asked whether the 1s. 3d. provided for in Clause 16 of the National Insurance Act, in respect of every insured person, will be available for sanatorium benefit for the first year commencing 15th July, 1912?
    Mr. MASTERMAN: Provision will be made to meet expenditure necessarily incurred on sanatorium benefit between now and January next by the insurance committees out of the National Health Insurance Fund. The precise dates of issue will depend upon the moneys from time to time available upon the account of the fund and the requirements of the respective committees. The sum mentioned in the Memorandum 112, I.C. is about half the estimated normal half-year's contributions for sanatorium benefit, and represents the amount which the Commissioners think will be required in the first half-year for the treatment of insured persons. If more than this sum be required for treatment of such patients, it will be possible to make a further allocation within the amount indicated by the Act.

    GREAT SOUTHERN AND WESTERN RAILWAY COMPANY (IRELAND).
    Mr. BARNESasked the Secretary to the Treasury if his attention has been called to the action of the Great Southern and Western Railway Company, Ireland, who are making membership of the company's benefit society compulsory for the purposes of the National Insurance Act; and if he can take any steps to prevent the carrying out of the scheme?
    Mr. CLANCYasked the Secretary to the Treasury whether his attention has been directed to a resolution passed at a meeting of employés of the Great Southern and Western Railway Company of Ireland, at Inchicore, Dublin, complaining that a new rule has been made (apparently by the company) by which membership of the sick fund society of the company is denied to persons who desire to obtain the advantages of the National Insurance Act through their respective trades societies or any societies other than the sick fund society; and whether, if such a rule has been made, the Insurance Commissioners for Ireland propose to take any action in reference thereto?
    Mr. MASTERMAN: The Commissioners understand that it is intended to discontinue the existing Great Southern and Western Railway Sick Fund, and that the Assistant Registrar for Ireland is in communication with the officials with a view to the submission of a scheme under Section 73 of the Act. Application has been made to the Commissioners for the approval of a new society called the Great Southern and Western Railway Employés Benefit Society, which, in addition to undertaking insurance business under the Act, proposes to provide benefits independently of the Act. Under the rules submitted membership for the purposes of the Act is not conditional upon membership of the society for other purposes outside the Act.

    AGE OF EMPLOYÉS.
    Mr. JAMES THOMASasked the Secretary to the Treasury whether he is aware that a number of employers in Derby are compelling their employés to give their ages for the alleged purposes of the National Insurance Act; and, as this information is only requisite for approved societies, whether he will take action to prevent men from being weeded out as being too old?
    Mr. MASTERMAN: I am not aware that employers in Derby are taking action
    22
    of this kind. Perhaps my hon. Friend will give me further particulars and I will consider whether I can usefully communicate with the employers he has in mind.
    MARQUESS of TULLIBARDINE: Are the employers not bound, if they suspect the age in the return is not accurate, to ask for a birth certificate?
    Mr. MASTERMAN: No, I do not think any employer under the Act is bound to ask for, nor is an employé bound to furnish, a birth certificate.

    DERBY MANUFACTURERS AND THEIR EMPLOYÉS.
    Mr. JAMES THOMASasked the Secretary to the Treasury whether he is aware that Messrs. C. Dould and Company, manufacturers, Derby, have issued a notice to the whole of their female employés that, unless they are prepared to pay the whole 6d., the amount required from the employer and the employé to the National Insurance Act, they will receive one week's notice; and what action he proposes to take to deal with this action on the part of these employers?
    Mr. MASTERMAN: Only the proportion of the contributions laid down in the Act can be deducted from wages. As to new contracts, employers have no more right, or power, to reduce wages than they had before the Insurance Act was passed.
    Mr. J. THOMAS: If an employer intimates to every employé that unless he undertakes to pay the employer's contribution as well as the employé's he will not be allowed to start work, is that, may I ask, contrary to the Act?
    Mr. MASTERMAN: It is contrary to the principle of the Act. I do not think it is contrary to the law, unless there is a contract already existing.
    Mr. J. THOMAS: Are there any means of punishing an employer who has already dismissed 300 girls?

    NATIONAL INSURANCE COMMISSION.
    Mr. NEWMANasked the Secretary to the Treasury whether he can now state the total number of leaflets, pamphlets, and memoranda issued by the National Insurance Commission, explanatory of provisions and regulations of the National Insurance Act and their estimated cost, exclusive of distribution and postage, between the date of the Act receiving the Royal Assent and the date of the Act coming into operation?
    Mr. INGLEBYasked the Secretary to the Treasury if he can state the number of the separate leaflets, pamphlets, and papers distributed by the National Health Insurance Commissioners; what, approximately, is their aggregate number; and what has been the cost of printing and circulating them?
    Mr. MASTERMAN: I beg to refer the hon. Members to the replies I have already given to the hon. Member for Enfield on the 9th May and 13th June. The information asked for would of course involve intricate calculations not only by the Commissions but also by the Post Office, and by the Stationery Office who have arranged for the supplies of leaflets at a cost of a little over £200 a million. When the contracts and issues of leaflets are completed, I propose to issue a statement on the matter.

    GLASGOW PROTEST.
    Sir HENRY CRAIKasked the Prime Minister whether he has received a protest signed by 72,000 citizens of Glasgow and the district protesting against the National Insurance Act of 1911; and whether he can see his way to accede to the request therein contained to submit the Act to the verdict of the electorate?
    The PRIME MINISTER (Mr. Asquith): I have received a protest from Glasgow. As the approval of the majority of the representatives of the electors of the United Kingdom was obtained for the Act, I see no reason to accede to the request made therein.
    Mr. WATT: Will the right hon. Gentleman, before he comes to a conclusion, secure a handwriting expert to see how many citizens of Glasgow are among the 72,000?

    PRINTING.
    Mr. W. THORNEasked the Secretary to the Treasury if he will state the name of the firm or firms who are printing the cards and books and other printed matter now being issued in connection with the National Insurance Act?
    Mr. MASTERMAN: I will circulate a list of the names of the firms. [See Written Answers this date.]

    QUESTIONS AND ANSWERS DURING THE SESSION.
    Mr. W. THORNEasked the Secretary to the Treasury whether he will have all the Questions regarding the National Insurance Act put during this
    24
    Session and the Answers thereto published in book form with an index in order to facilitate reference?
    Mr. MASTERMAN: The Stationery Office have no longer command over the type of the Official Report of Debates for the early part of this Session, and considerable expense would be involved in resetting and reprinting. The ordinary volumes of Debates including insurance questions are fully indexed.

    NUMBER OF MEMBERS OF APPROVED SOCIETIES.
    Mr. CHARLES BATHURSTasked the Secretary to the Treasury if he will state what is approximately the number of employed persons who, prior to the coming into operation of the National Insurance Act, have become members of approved societies for the purposes of the Act; and what proportion of these are women?
    Mr. MASTERMAN: Members are now being recruited every day in great numbers by the different approved societies, and until the cards are returned the Commission will have no official information as to their exact numbers. Information received direct from the societies indicates that the approximate number is between nine and ten millions, but does not enable me to state at present what proportion of these are women.
    Mr. C. BATHURST: Does the right hon. Gentleman mean to convey that all the members of the old affiliated orders are members of these orders for the purposes of the Insurance Act?
    Mr. MASTERMAN: Oh, no. The information we are concerned about is as to members of approved societies.
    Sir C. KINLOCH-COOKE: What proportion were already insured in their own societies?
    Mr. MASTERMAN: I could not say offhand. Perhaps about 4,000,000.
    Mr. RUPERT GWYNNE: Are we to understand that the 10,000,000 mentioned in the statement of the Chancellor of the Exchequer on Saturday included people who joined not for the purposes of the Act at all?
    Mr. MASTERMAN: The statement I made to-day is that nearly 10,000,000 are now members of approved societies.
    Mr. BUTCHER: Does that mean that they joined for the purpose of the Act or that they are members of friendly societies?
    Mr. MASTERMAN: They are members who are members of approved societies for the purposes of the Act.
    Mr. BUTCHER: That does not answer my question. Have the 10,000,000 joined these societies for the purpose of the Act?
    Mr. MASTERMAN: I cannot make it any clearer. Every man starts afresh under the Act as a member of an approved society. There were no approved societies before the Act came into force. There are now 10,000,000 of such members of approved societies.
    Mr. SPEAKER: Further questions upon this subject should be put down.

    FARMERS AND BRICKMAKERS.
    Mr. RUPERT GWYNNEasked if the right hon. Gentleman will state who is liable as employer under Part I. of the National Insurance Act in the case of a farmer and brickmaker who employs a man as working foreman for the season to make, stack, and burn bricks, the foreman employing such men as he thinks fit and drawing money weekly on account to pay wages, and finally squaring up accounts at the end of the season; will the farmer be liable as the foreman's employer and the foreman as the workmen's employer, or will the foreman be exempt as a contractor?
    Mr. MASTERMAN: On the information given it would be impossible for me to give an answer to this question. Procedure is established by the Act under Section 66 for dealing with these and similar questions, and any of the parties concerned can apply to the Commission for a judicial decision through the local officer of Customs and Excise.
    Mr. R. GWYNNE: If it is possible for the right hon. Gentleman to explain the matter to me privately as he suggests, why is it not possible for him to give me an answer publicly now?
    Mr. MASTERMAN: All the particulars are not stated in the question. If the hon. Member will communicate with me and put the full facts before me, I shall probably be able to give him an answer.
    Mr. R. GWYNNE: I have stated a precise case which I know exists.

    CUSTOMS AND EXCISE SERVICE (APPOINTMENTS).
    Mr. HARRY LAWSONasked if the right hon. Gentleman can state how many
    26
    applications were received from members of the Customs outdoor branch of the Customs and Excise service for positions under the National Insurance Act; how many appointments have been made from such applications, and the salaries attaching thereto; how many applications have been made from the Excise outdoor branch of the Customs and Excise service, and how many appointments have been made from such applications and the salaries attaching thereto; if no appointments have been made from the Customs outdoor branch of the amalgamated service, if he will state whether there has been found one qualified candidate from this branch; and, in view of the influence which the present Selection Committee is exercising, if he will personally look into the qualifications of the applicants from the Customs branch?
    Mr. MASTERMAN: The number of applications received from members of the Customs outdoor branch for appointment to the outdoor staff of the English Commission was 310, and from the Excise Outdoor Branch, 609. Sixty officers of the amalgamated service were selected for interview by the Committee of Selection, and out of these seven have been appointed as inspectors and seven as assistant inspectors, respectively. All the officers so appointed belonged to the Excise branch prior to amalgamation; one officer belonging to the Customs branch has been placed on a reserve list, in the event of further vacancies occurring for transferred Civil servants. I do not propose to look into the qualifications of any applicants personally or to interfere in any way with the discretion of the Committee of Selection, and I would remind the hon. Member that that committee is solely concerned to find the best men available for the work that is required of them and not to distribute appointments, equally or otherwise, among the various Government Departments.

    SCOTTISH INSURANCE COMMISSION.
    Mr. WATTasked whether any estimate has been formed by the Scottish Insurance Commissioners as to what the fees of the solicitor employed by them will amount to between the passing of the National Insurance Act and a year from that date; and, if so, what did the estimate amount to?
    Mr. MASTERMAN: The consulting solocitor is paid the ordinary solicitor's

    27
    charges in Scotland. It is impossible to estimate the total amount of the fees for a year from the passing of the Act. The amount will depend upon the extent to which his services are called upon.
    Mr. WATT: Can the right hon. Gentleman say whether the Commissioners have considered the advisability of employing a solicitor of their own instead of sending work of great volume to a solicitor who has other business?
    Mr. MASTERMAN: I cannot say, but I will communicate with the Commissioners for Scotland.
    Mr. WATTasked whether an appointment has been made to the position of solicitor to the Scottish Insurance Commissioners, or has the solicitors' business of that body been given to one particular firm; if so, will he say who it is does this work; was the position advertised beforehand; and, if not, will he explain why that was not done; and on whose recommendation the firm was appointed?
    Mr. MASTERMAN: In the beginning of January last Mr. James Watt, W.S., was appointed consulting solicitor to the Scottish Insurance Commission and is paid the ordinary charges for work done as between agent and client, his accounts being taxed in the usual way by the auditor of the Court of Session. The appointment is temporary, and as it had to be made immediately it was not possible to advertise it. Mr. Watt is a Fellow of the Faculty of Actuaries, as well as a Writer to the Signet.
    MARQUESS Of TULLIBARDINE: Is this gentleman also the consulting solicitor for the friendly societies, and is it possible for him to do the two duties?
    Mr. MASTERMAN: I have no knowledge on that point.

    PRIVATE SCHOOLS (ASSISTANT MASTERS).
    Colonel BURNasked, in the case of the assistant masters in a private school who are engaged by the term, if he will state who is to pay the employer's contribution under the provisions of the National Insurance Act during the holidays?
    Mr. MASTERMAN: If, as stated, these assistant masters are employed by the term only no employer's contribution would be payable during the holidays, and the employés would come under the ordinary arrangements of the Act with re-
    28
    gard to arrears. If, however, as in normal cases the engagement is not specifically for a term, only the employer's contribution would be payable throughout the whole period of engagement.
    Mr. W. THORNE: Does that mean that if a man is on a week's holiday he has to pay the employer's contribution as well as his own?
    Mr. MASTERMAN: There is another question later on upon this point.

    NOTTINGHAM LACE TRADE.
    Lord H. CAVENDISH-BENTINCKasked, in view of the fact that neither employers or employed in the lace trade in Nottingham, numbering many thousands of people, are represented on the insurance committee of that city, and in view of the fact that the boot and shoe operatives, who number only about 200, have a representative on that committee, whether the right hon. Gentleman will state what steps he is prepared to take to remedy this treatment of an important trade?
    Mr. MASTERMAN: At the suggestion of the Nottingham Chamber of Commerce, the chairman of that council, who is also president of the Leavers Lace Manufacturers' Association, was appointed a member of that committee.

    HOLIDAY CONTRIBUTIONS.
    Sir HENRY DALZIELasked whether, in the case of workmen who will come under the National Insurance Act who happen to be on holiday during the first week of the operation of the Act, they will be required to pay, on resuming work, the contribution of the employer as well as their own?
    Mr. MASTERMAN: If the men on holiday receive wages in respect of the first week or any part of it, the ordinary contributions under Part I. of the Act will be payable in respect of that week. If they do not receive wages, no contributions will be payable.

    STOKE-ON-TRENT INSURANCE COMMITTEE MEDICAL MEMBERS).
    Mr. BOOTHasked if he can give the names of the medical members of the Insurance Committee for the County Borough of Stoke-on-Trent, and from whom the nominations came in the several instances?
    Mr. MASTERMAN: The only medical practitioner at present appointed to the Insurance Committee of the County Borough of Stoke-on-Trent is Mr. A. R. Moody, M.B., who was appointed by the County Borough Council.
    Mr. BOOTH: Is the right hon. Gentleman aware of any demand that these doctors should withdraw or has he heard of any persecution on this question?
    Mr. MASTERMAN: I have not heard anything on this subject.

    Development Commission (Osier Growing).
    Mr. HINDSasked if the application made by the Carmarthenshire County Council to the Development Commissioners for a Grant for osier growing has yet been sanctioned; and, if so, how soon will the Grant be available for the purpose in view?
    Mr. MASTERMAN: The Development Commission have recommended and the Treasury have agreed that a Grant not to exceed £500 in all be made, subject to certain conditions to the Carmarthenshire County Council. The Grant will be available when the conditions are satisfied.

    London University (Site).
    Mr. KINGasked the Prime Minister whether the Special Committee appointed by the Senate of London University to recommend a site has reported; and whether a site on the south bank of the Thames near the new county hall has been considered?
    The PRIME MINISTER: The matter is one which rests with the Senate of the University, and I would suggest that my hon. Friend should communicate with that body with a view to obtaining the information he desires.
    Mr. KING: Are we to understand that this matter rests entirely with the Senate, and not with the Royal Commission, which has been dealing with the matter?
    The PRIME MINISTER: Well, I think so.

    Court of Appeal (Scott v. Scott).
    Mr. KINGasked the Prime Minister whether he is aware that the Court of Appeal decided on Saturday, 6th July, in the case of Scott v. Scott, that where a case is heard in camera the parties to a suit are not entitled to disclose the proceedings; and whether, having regard to
    30
    the extent to which this decision may be pressed in preventing persons whose character and conduct may have been vindicated in a Court of Law from reaping the benefits of such vindication, he proposes to take any steps in this matter?
    The PRIME MINISTER: The matter will be considered. I cannot make any further suggestion.

  BRITISH ARMY.

    RESERVES OF TRAINED MEN.
    Mr. NEWMANasked the Prime Minister whether, in view of the fact that the system of enlistment and the terms of service in the Regular Army do not admit of the accumulation of reserves of trained men which are at the disposal of Continental nations, the Government have had under consideration the sources of expansion which would be available were we engaged in a serious war; whether the problem has been submitted to and been considered by the Imperial Defence Committee; and, if so, whether he can indicate to the House the outcome of their deliberations?
    The PRIME MINISTER: The Government are fully alive to the importance of a sufficient reserve of trained men. The best methods of maintaining such a reserve has engaged the attention of the Committee of Imperial Defence, but I do not think it would be to the public interest to state the outcome of their deliberations. The whole question has been exhaustively discussed on several occasions, both in the House of Commons and in another place, and the attitude of the Government fully explained.
    Mr. NEWMAN: It is a question of expansion, not a question of reserve?
    The PRIME MINISTER: That is included in my answer.

    Taxation of Land Values.
    Mr. NEWMANasked whether, in view of the fact that, a Lord of the Treasury has been appointed as an ex-officio Member of the Committee to deal with the question of land reform by means of taxation, he is prepared to make any statement as to the policy of the Government with regard to the further taxation of land values?
    The PRIME MINISTER: The answer is in the negative. I would refer the hon.

    31
    Member to the reply given to him by my right hon. Friend the Chancellor of the Exchequer on the 6th ultimo.
    Mr. NEWMAN: Would the right hon. Gentleman answer the point about an official Member of the Treasury being appointed to an unofficial Committee?
    The PRIME MINISTER: An official Member of the Treasury is not a very accurate designation. He is appointed to the Committee for the purpose of giving useful information.
    Mr. BUTCHER: When does the right hon. Gentleman expect to be able to announce the new land policy of the Government?
    The PRIME MINISTER: Not this Session.
    Mr. C. BATHURSTasked the Prime Minister whether he has included or proposes to include any Unionist Member or Members in the Committee which has been appointed with his approval to consider the possibility of benefiting agriculturists by the further taxation of land; and, if not, why the Unionist party is to be un-represented on such Committee?
    The PRIME MINISTER: The answer to the first part of the question is in the negative. As I have already stated, the Committee is a purely unofficial body, and any expenditure it may incur will be met from private sources. The question of personnel rests, therefore, entirely with those who have formed the Committee.
    Sir GILBERT PARKER: Arising out of that answer, may I ask whether the terms of reference to the Committee are not of such a partisan nature as to exclude those from all sides of the House who might be ready to view the question impartially in regard to taxation which might further injure an already injured industry?
    The PRIME MINISTER: I say it is purely a question of a private inquiry.
    Mr. C. BATHURST: May I ask whether the decision as to the construction of the Committee has been come to on the footing that sympathisers with agriculturalist needs are confined to the Radical benches?
    The PRIME MINISTER: No, Sir, certainly not. It is purely a matter of inquiry on a primary question.

    Rent Fixing Courts (Ireland).
    Captain CLIVEasked whether it is the intention of the Government to institute rent-fixing Courts for Great Britain; if he can state the cost up to date of a similar institution in Ireland, the number of rent-fixing cases that were taken into Court, and to appeal in Ireland; and the cost to date of the Irish Land Purchase Act?
    The PRIME MINISTER: I have already said I am not prepared to make any statement with regard to the intentions of the Government on the question of land reform. During the period that has elapsed between the passing of the Land Law (Ireland) Act, 1881, and the 31st March, 1912, the number of applications to fix fair rents have been to the Land Commission 352,035; to the Civil Bill Courts 58,635—the number of appeals in the same period being 100,319. I understand that it is not possible to estimate at all precisely the costs, either of the Land Law (Ireland) Ace or of the Irish Land Purchase Act.

  INDIA.

    BUDGET.
    Sir J. D. REESasked the Prime Minister whether he can now fix the date on which the Indian Budget will be taken?
    The PRIME MINISTER: I hope on Tuesday, 30th July.

    House of Commons (Vote for Payment of Members).
    Mr. ARNOLD WARDasked the Prime Minister whether, in allocating the Votes to be discussed in the remaining days for Committee of Supply, he will arrange for an opportunity for the discussion of the Vote for the payment of Members of this House?
    The PRIME MINISTER: I have already stated that I would do so if it was the general desire of the House. It is now a matter for discussion between the Patronage Secretary and the Noble Lord opposite.

    Mental Deficiency Bill.
    Captain CLIVEasked the Prime Minister if he can yet say when the Second Reading of the Mental Deficiency Bill will be taken?
    The PRIME MINISTER: I am sorry that I cannot yet fix a date, but I hope it will be possible to take the Second Heading before the Adjournment.

    First Lord of the Admiralty (Visit to Cork).
    Mr. RUPERT GWYNNEasked whether the entire cost of giving a public welcome to the First Lord of the Admiralty and his friends on his recent visit to Cork, including decorations, bands, vocalists, motor cars, lunch, and banquet, was paid for out of Harbour Dues; whether this included a banquet for 200, which cost £1 11s. 6d. per head; whether the total cost was approximately £500; and whether he will consider the propriety of checking such expenditure by means of audit by the Office of Public Works (Ireland), or otherwise?
    Mr. MASTERMAN: I have no knowledge of the matter referred to by the hon. Member, and no responsibility for expenditure incurred by the Cork Harbour authorities.
    Mr. R. GWYNNE: Will the right hon. Gentleman give us an assurance that on the occasion of the Prime Minister's forthcoming visit to Dublin no public money will be wasted in a similar way?
    Mr. MASTERMAN: I cannot give any such assurance. The matter is entirely outside my Department.

    Postage Stamps.
    Mr. EVELYN CECILasked whether the right hon. Gentleman can state the cause of the continued delay in issuing postage stamps with the portrait of His Majesty other than of the values of ½d. and 1d.; and whether any date can yet be given for their appearance?
    Mr. MASTERMAN:I regret that owing to the printed sheets of stamps being far below the standard which it was possible to obtain with the proof sheet, it is necessary further to delay the proposed issues while steps are taken to improve the plates. Every effort will be made to issue the stamps at the earliest possible date.

    Civil Service Commission (Examinations).
    Mr. WATTasked whether the Civil Service Commissioners would be willing to exhibit, on payment of a small fee, examination papers adjudged upon in any particular examination, so that candidates might see in what respect they had failed and in what respect succeeded?
    Mr. MASTERMAN: I understand the Civil Service Commissioners do not see
    34
    their way to adopt the hon. Member's suggestion. In nearly all cases of competition the marks awarded to a candidate in each particular subject are published, and show sufficiently his strength or weakness.
    Mr. WATT: Has the right hon. Gentleman had representations on this matter?
    Mr. MASTERMAN: I have had no representations, but I should be glad to receive them if the hon. Member is willing to make them.

  TELEPHONE SERVICE.

    GOVERNMENT TELEPHONE FACTORY (EMPLOYÉ).
    Sir J. D. REESasked the Postmaster-General whether he is aware that employés in the National Telephone factory at Nottingham do not regard the reduced hours as a benefit but, on the contrary, as a grievance, because the reduction in time involves a reduction of wages; that they do not consider the privileges of annual leave and sick pay as any sufficient set-off for such reduction; and whether he will intimate at an early date at what decision he has arrived regarding the reduced rates drawn by these employés who have, contrary to the pledge given, been injuriously affected?
    The POSTMASTER-GENERAL (Mr. Herbert Samuel): The whole of the circumstances at the Nottingham factory are receiving close consideration in connection with a revision of the rates paid to the various workers, and I will write to the hon. Member as soon as numerous outstanding points have been settled.

  POST OFFICE.

    WIRELESS TELEGRAPHY.
    Mr. PETOasked whether the right hon. Gentleman is aware that a charge of 5s. is made for supplying weather reports to the captains of merchant vessels fitted with wireless apparatus approaching our coasts; whether information of this character is supplied free of charge by the Canadian and American authorities; and whether, in the interest of safety of life at sea, he will now issue instructions that these weather reports shall be transmitted free of charge from Marconi wireless stations on the coasts of the United Kingdom?
    Mr. HERBERT SAMUEL: The charge of 5s. referred to by the hon. Member is made to cover the cost of the radiotelegram conveying a weather report to a ship as well as the radiotelegram asking for the

    35
    information, and this is below the ordinary rates. I understand that radiotelegrams of this character are transmitted at the request of ships without charge from Canadian and American wireless stations, but not elsewhere, and the International Conference which has just concluded its sittings recommended that the ordinary rates should be charged. Radiotelegrams relating to the position of derelicts and other objects dangerous to navigation are transmitted to ships free of charge from British wireless stations, but I am not prepared to furnish weather reports gratuitously.

    INGATESTONE POST OFFICE.
    Mr. PRETYMANasked if the right hon. Gentleman is aware that at the Ingatestone Post Office a staff of eighteen men, three messengers, and four clerks have only one small room, about sixteen feet square, provided for them; that the ventilation of this room is insufficient; and that the sanitary arrangements are inadequate, there being no privy for their use except at the postmaster's private house; whether representations on this subject have been repeatedly made to him and his predecessors during the past three years; and whether he will at once provide decent temporary accommodation pending the erection of new premises?
    Mr. HERBERT SAMUEL: The accommodation at the Ingatestone Post Office is admittedly unsatisfactory and inadequate. More than one scheme of improvement has been under consideration, but none has hitherto been found suitable. Further measures are now being taken. The desirability of taking temporary accommodation to supplement or supersede the present office has not been overlooked. So far no suitable premises have been found, but the inquiry shall be pursued.
    Mr. PRETYMAN: Does the right hon. Gentleman not consider, especially in view of the present weather and health and sanitation, it is his duty to make instant provision for these men, and does he not consider it to be an urgent matter?
    Mr. HERBERT SAMUEL: I understand that there are no other premises suitable, but I am having further inquiries made.
    Mr. PRETYMAN: Is the right hon. Gentleman prepared to pay more money? If he is, he can always get accommodation if he will pay for it.
    Lord H. CAVENDISH-BENTINCK: If the Development Commissioners are prepared to spend £20,000 for the growing of osiers, is it not advisable for them to spare a few hundred pounds to build a cottage for the postmaster at Ingatestone?

    OVERCARRIED MAIL (NAPLES).
    Sir EDWARD COATESasked if the right hon. Gentleman will state why the mail, which was overcarried through an error in the waybill past Naples in the ss. "Osterley," was not landed at Toulon when the steamer arrived on 19th May, or at Plymouth when the steamer arrived on 24th May?
    Mr. HERBERT SAMUEL: The mails were brought on to Tilbury in accordance with the erroneous instruction on the way bill, which indicated that they were intended for the all-sea route. I have caused representations to be made to the Colnoial post offices concerned with a view to fixing the responsibility for this irregularity.

    Sheffield Bankruptcy Court (Henry Richardson).
    Mr. JAMES HOPEasked the President of the Board of Trade whether his attention has been called to the use of misleading legal arguments as disclosed in the recent case of Henry Richardson in the Sheffield Bankruptcy Court; and whether he proposes by legislation, or otherwise, to take any steps in the matter?
    Mr. BUXTON: As at present advised, I do not propose to take any action with reference to the case referred to.

    Law Integrity Insurance Company.
    Mr. GINNELLasked whether the Board has noted the manner in which the Law Integrity Insurance Company, Limited, has evaded trial in the action brought against it by Glover; whether the surrender of the company was due to the policy in question having been a life policy or to its being ultra vires the company's memorandum and articles of association; and, in view of the practical admission by the company that its business is illegal and its continued operation as a means of obtaining money from people unable to bring actions, he will say what action the Board proposes to take for the protection of the public?
    Mr. BUXTON: The Board of Trade have no information as to the action referred to, or that any life assurance policies have

    37
    been issued by the Law Integrity Insurance Company, Limited, but if the hon. Member can furnish me with evidence that such policies have been issued I will consider whether any action should be taken.
    Mr. GINNELL: May I ask whether anybody on behalf of the Board of Trade in Ireland watches public reports of actions against companies like this?
    Mr. BUXTON: Observation is always taken of these matters, but we have to act under statutory restrictions, and we cannot go beyond them.
    Mr. GINNELL: Then the Board of Trade take no action on behalf of the public?
    Mr. BUXTON: We cannot go beyond the law.

    Colonial Mutual Life Assurance Society, Australia.
    Mr. GINNELLasked if the Colonial Mutual Life Assurance Society of Australia denied that its practice of lending money to its own directors is one of the causes of its failure to keep its engagements; what evidence it submitted to the Board in support of the denial; if it did not deny the practice, what notice the Board has taken or proposes to take of the practice; what proportion the payments now being made by that society at the end of tontine periods bear to the sums which the society promised through its estimates and agents that persons insuring would be entitled to receive; what proportion they bear to the sums paid in premiums; and whether the Board has called the attention of the Director of Public Prosecutions to this society's methods of obtaining and using money?
    Mr. BUXTON: I am not aware that the Colonial Mutual Life Assurance Society, Limited, has failed to keep its engagements, as suggested in the hon. Member's question. So far as is known to the Board of Trade, the society has neither admitted nor denied that it lends money to its directors, and the matter is not one in which the Board have power to take any action. The information asked for relating to the proportion which the payments made by the society bear to the estimates, and to the premiums received, is not required to be disclosed in the society's returns, and I am therefore unable to furnish it. The Board have not called the attention of the
    38
    Director of Public Prosecutions to the business of the society.

    Trade Boards Act (Shirtmakers).
    Mr. BARNESasked the President of the Board of Trade if he is yet in a position to take steps to include shirtmakers in the schedule of sweated trades for treatment under the Trade Boards Act?
    Mr. BUXTON: I am afraid I cannot promise any immediate extension of the Act, but the question of shirtmaking will receive careful consideration, along with other trades.
    Mr. W. THORNE: Has the right hon. Gentleman made himself acquainted with the wages and other conditions of these poor people and the prices paid for the work?
    Mr. BUXTON: There is the question as to when it may be expedient to extend the Act. It has not been very long in operation, but I am giving the matter very careful attention.
    Mr. CHIOZZA MONEY: May I ask the right hon. Gentleman whether the Board of Trade are collecting any body of evidence with regard to the wages paid?
    Mr. BUXTON: We have a good deal of information, and we are obtaining more.
    Mr. WATT: Are we to understand the right hon. Gentleman's Department denies that shirtmaking is a sweated industry?
    Mr. BUXTON: No, I am not denying that.

    Pilotage Certificates.
    Mr. KINGasked the President of the Board of Trade whether he can lay upon the Table of the House a Report of the negotiations and conferences with the French Government on the granting of pilotage certificates?
    Mr. ACLAND: Communications with the French Government are still passing, and we are therefore not in a position to lay Papers at present.
    Mr. KING: Will the hon. Gentleman give us the assurance that the Pilotage Bill will not be proceeded with until these negotiations are completed?
    Mr. ACLAND: That does not arise out of the answer.
    Sir G. PARKER: Are we to understand this Government has not given an assurance to the French Government that any pilotage will not be re-established which—
    Mr. ACLAND: Perhaps the hon. Member will put down a question. That does not arise out of the answer.
    Sir G. PARKER: The hon. Member might allow me to finish my question.

  ROYAL NAVY.

    ROYAL MARINE DIVISIONS.
    Lord CHARLES BERESFORDasked the First Lord of the Admiralty what was the total number of officers, seamen, and boys, Coastguard, and Royal Marines, borne on ships' books and at the Royal Marine divisions and provided by Vote A on the 31st March, 1905; 31st March, 1906; 31st March, 1907; 31st March, 1908; 31st March, 1909; 31st March, 1910; 31st March, 1911; and 31st March, 1912?
    The PARLIAMENTARY SECRETARY to the BOARD of ADMIRALTY (Dr. Macnamara): The numbers actually borne on the 25th or 15th March, the nearest dates to the 31st March, for which actual figures are available, in each of the years in question, were as follows:—

    25th March,1905

    …

    …

    130,130

    25th March,1906

    …

    …

    127,467

    25th March,1907

    …

    …

    127,147

    25th March,1908

    …

    …

    127,480

    25th March,1909

    …

    …

    126,933

    15th March,1910

    …

    …

    128,902

    15th March, 1911

    …

    …

    131,920

    15th March, 1912

    …

    …

    133,715

PORT OF LONDON (STRIKE).

  INSURANCE POLICIES (NEW CLAUSE).
  Mr. HUNTasked the Secretary of State for the Home Department whether his attention has been called to the fact that Lloyd's has been obliged to insert a new Clause in insurance policies because of the increasing lawlessness of strikers; and whether he proposes to take any fresh steps to prevent the increase of this state of affairs and to prevent the attacks on men going to and from their work?
  Mr. McKENNA: The answer to the first part of the question is in the negative. As to the latter part, the district is well policed, and the police have throughout the strike done all in their power for the protection of life and property.

  STATUTORY OBLIGATIONS (CASUAL EMPLOYMENT).
  Lord H. CAVENDISH-BENTINCKasked the Prime Minister, in view of the fact that under Section 28 of the Port of London Act, 1908, the Port of London Authority are under a statutory obligation to diminish the evils of casual employment, and also in view of the fact that the Port of London Authority are requiring men who have been on their permanent staff to sign a document on their return to work placing them on the Class B or casual labour class, what steps he is taking to ensure that the Port of Landon Authority fulfil their statutory obligation under Section 23 of the Port of London Act?
  The PRIME MINISTER: Section 28 appears to leave considerable discretion to the Port Authority, and opinions may differ as to the best method of carrying it out. The Port of London Act confers no power on the Government to compel the Port Authority to adopt any particular course of action under the Section. Communications have from time to time passed between the Board of Trade and the Port Authority with a view to voluntary cooperation under the Section.
  Mr. HAMILTON BENN: Have the Port Authority submitted a draft scheme dealing with casual labour more than a year ago, and was that scheme signed by Mr. Gosling on behalf of the men; and have the Government or the Board of Trade given any answer either of assent or dissent to that proposal?
  The PRIME MINISTER: That does not come within my own knowledge. Perhaps the hon. Gentleman would put a question down.
  Mr. CROOKS: May I ask whether the answer of the Port Authority on the question raised by the hon. Gentleman opposite was not a distinct declaration of increasing casual labour by the methods they set up and not decreasing it?
  Mr. W. THORNE: Have the Government or the Board of Trade any control over the men who sit upon the Port Authority or Trinity House?
  The PRIME MINISTER: That is a question of which notice should be given.

  LICENSED LIGHTERMEN (WAGES).
  Sir J. D. REESasked what is the average rate of wages drawn by the licensed lightermen of the Port of London?
  Mr. BUXTON: According to Returns received in connection with the General Wages Inquiry of 1906, the average earnings of the lightermen in London included in the Returns in the last pay week of September in that year were 48s. 6d. This average is based on Returns relating to 368 lightermen, irrespective of whether they worked full time or less or more than full time. At the date of the Return the men were working under Lord Brassey's Award of 1889, and their daily rate of wages was 6s. for 12 hours' work. A new agreement was made in August last, under which the agreed rate is 6s. for ten hours' work. Under both awards special rates are paid for overtime, night work, and Sunday duty. The number of hours lightermen are at work or in attendance in a week varies very considerably.
  Sir J. D. REES: May I ask whether, according to the records of the right hon. Gentleman's Department, 48s. 6d. is a high, a low, or a moderate wage?

  ACTION OF GOVERNMENT.
  Sir HENRY DALZIELasked whether the Government are taking any steps, or intend taking any, to bring the dispute in the London Docks to a speedy termination?
  Mr. BUXTON: The good offices of the Board of Trade are, as always, at the service of the parties to the dispute. I have no statement to make in the matter.
  Mr. O'GRADYMay I ask the Prime Minister a question, of which I have given him private notice, whether he can now make a statement with respect to the position of the transport workers' dispute in the Port of London?
  The PRIME MINISTER: No, Sir. I think in the interests of all parties it is better I should not make a statement today.
  Mr. O'GRADY: Will the Prime Minister be able to make a statement tomorrow?
  The PRIME MINISTER: I hope I may be in a position to do so to-morrow.
  Mr. O'GRADY: On the Adjournment tonight?
  The PRIME MINISTER: No.
  Mr. O'GRADY: To-morrow?
  The PRIME MINISTER: Yes, I hope to be able to do so to-morrow.

  SAILING BARGES (RATES OF PAY).
  Mr. W. THORNEasked the President of the Board of Trade whether he is aware that, under an agreement of 11th August, 1911, between sailing barge owners and men, a schedule of rates of pay was prepared by the Board of Trade, and that since that date several owners have refused to pay the rates agreed upon; and if he will state what steps he proposes to take to secure the carrying out of this arrangement?
  Mr. BUXTON: A list of rates for sailing barges on the Thames, Medway, etc., was compiled by the Chief Industrial Commissioner, in consultation with representatives of the parties, but I have no power to compel an owner to pay rates in accordance with this list.

  HYDE PARK DISTURBANCE.
  Mr. LANSBURY: I beg to ask the Home Secretary a question, of which I have given him private notice, whether he is aware that at the demonstration in Hyde Park yesterday a disturbance caused by the insulting remarks of a well-dressed man took place, and that the police, acting under orders, closed the exits from the park, refusing to allow those who wished to leave to do so; and that when the crowd was making its way back to the meeting place constables and officers of all kinds committed unprovoked assaults upon old and young; by what authority the police refused to allow persons to leave the park, and by whose orders was a cordon drawn round the crowd so that whichever way people moved they were hustled by the police; and if he will issue instructions that the police are to arrest persons guilty of breaches of the law and not assault them, and also to remove from such open-air meetings persons whose conduct causes a breach of the peace, instead of hustling and assaulting those persons who resent the interruption?
  Mr. McKENNA: As the suffragists occupied the usual meeting ground near the Reformers' Tree, the meeting organised on behalf of the transport workers was held on ground known as the Guards' Ground facing the roadway between Grosvenor and Stanhope Gates, and at a greater distance from Hyde Park Police Station than the Reformers' Tree. My information is

  43
  that while speeches were being made some person in the crowd called out for three cheers for Lord Devonport and was immediately set upon, knocked down and badly treated. The police at once closed round him for his protection and commenced to remove him towards Grosvenor Gate, the nearest and most convenient exit from the park. A large crowd followed coming up from all sides, and the police were hustled, missiles were thrown, chairs, bottles, stones, etc., and several arrests had to be made. The persons arrested and the man who was under protection were got to Grosvenor Gate, and as the police anticipated serious trouble if the large crowd following them got into Park Lane, they closed Grosvenor Gate. Their action probably prevented serious disorder in the streets. No other exit from the park was closed. No cordon was drawn round the meeting; the number of police available would not have made this possible. The crowd that had assembled in the vicinity of Grosvenor Gate was then dispersed by the police. I have no reason to think that the police unnecessarily hustled the crowd or did more than was required to prevent the disorder from developing into serious rioting.
  Mr. LANSBURY: Is the right hon. Gentleman aware that the statement he made as to the calling of three cheers for Lord Devonport is absolutely untrue and that a cordon was not drawn round the crowd? Is he aware the suggestion is that a cordon was drawn not round the people, but round that part of the road near Grosvenor Gate, and that not only were the public refused permission to go out at Grosvenor Gate, but that a line of patrols refused to allow people to go out at the Marble Gate entrance? And will the right hon. Gentleman allow an inquiry to be set up into the whole of the circumstances, because I can say from personal observation that the statement that has been made is absolutely inaccurate from beginning to end? [HON. MEMBERS: "Oh."] Well! I was there.
  Mr. McKENNA: The information which I have read to the House is the information supplied to me by representatives of the police force who were present. I will certainly investigate the facts alleged by my hon. Friend, but I would point out to him that it is quite possible the statements are not inconsistent. My hon. Friend did not hear the persons who were subsequently badly treated shout out, "Three cheers
  44
  for Lord Devonport," but it does not follow from that they did not in fact do so.
  Mr. LANSBURY: I beg to give notice that on the Motion for the Adjournment this evening I shall raise the whole matter. It is impossible by answer and question to state my view of the case. I was there the whole time.
  Mr. McKENNA: I am afraid that there will not be sufficient time to make complete inquiries between this and the Adjournment to-night.
  Mr. LANSBURY: Give us the Adjournment now.
  Mr. McKENNA: If my hon. Friend will raise the question to-morrow on the Adjournment, I think I shall then be able to answer it.
  Mr. LANSBURY: I beg to give notice that I will put my case to-night and give the right hon. Gentleman an opportunity of answering it.

COAL MINES (MINIMUM WAGE) ACT. (ARBITRATORS' SALARIES AND EXPENSES.)
Sir FREDERICK BANBURY: Arising out of an answer given last Wednesday by the President of the Board of Trade, may I ask you, Sir, whether the Government have any power to divert money from one item in a Vote to another item which is not included in that Vote, and whether the spending of money upon a new service is not illegal until the authority of Parliament for that expenditure has been obtained?
Mr. SPEAKER: The matter to which the hon. Baronet refers arises in respect to the payment of salaries and expenses of the arbitrators appointed under the Coal Mines (Minimum Wage) Act. It is true that no provision has yet been made by Supplementary Estimate, or otherwise, for that payment, if any is to be made; I do not know whether any such payment has been made or not. The hon. Baronet suggests that it is my duty to say whether the Board of Trade would be justified in making any such payment. It appears to me that if I were to do that I should be anticipating the duty of the Comptroller and Auditor-General and of the Public Accounts Committee. It is their business to say whether an expenditure made has been made under the authority of Parliament, that is to say, whether each particular Department has got authority to spend money which it has spent. It does not seem to me to be part of my duty to say whether or not that has been done. The only point at which my duties come in at all is this: If the Board of Trade were to lay upon the Table a Supplementary Estimate, and if the point were raised, it would be my duty to say whether that was or was not a new service within the Standing Orders dealing with Supply. Of course, as the hon. Baronet and the House know, if it were a new service the Supplementary Estimate would have to lie upon the Table or be submitted to the Committee for consideration before the final closure for a certain number of days. If and when that Estimate is submitted then I shall be quite prepared to say whether it is or is not a new service. Until that question arises, I do not think that I am called upon in the exercise of my powers and duties to express an opinion.
Mr. AUSTEN CHAMBERLAIN: In view of the ruling of the Speaker, I desire to ask the Prime Minister what course
64
the Government propose to take. Perhaps I may be permitted to say, in order to make the matter clear to the House, it is within the knowledge of the Prime Minister, that when a Bill before Parliament involves new expenditure it is customary to have a Resolution in Committee of Ways and Means authorising such expenditure, and stating that the House will make good whatever expenditure is incurred under that Bill. In the case of this particular Act there was no such Resolution. I am not sure that there was any notice given to the House—I think there was not during the passage of the Bill through the Committee—that any expenditure was contemplated under the Act, and I think it was not until the Committee stage had passed that we had the first intimation that these posts would be salaried posts. I am told that it was after the Committee stage and after the Act had been passed. In those circumstances I ask the Prime Minister whether he will not make good the omission at the earliest possible moment, in so far as he can, by presenting a Vote for this new service. I assume there as no doubt that it is a new service. It is not a matter for Mr. Speaker to decide now, because this is a service created by an Act during the present Session of Parliament, and there is nothing in the Board of Trade Vote, and no heading in that Vote, under which such service can properly be charged or under which such service is included.
The PRIME MINISTER: It is a very technical matter, and I should like a little more time to consider it before pronouncing a final opinion. My first impression is that the proper course would be to present a Supplementary Estimate, and leave the House to pass an opinion upon the subject. There are various other questions which arise and which involve the powers of the Treasury to apply the savings from one subject to another. It is a matter upon which I should like some time for consideration.
Mr. AUSTEN CHAMBERLAIN: I think that is a very fair answer, and I think the right hon. Gentleman is entitled to take time to consider it. May I take it that in the meantime the omission to move a Resolution in the case of this Act was due to an oversight, which was, perhaps, due to the necessity for payment not being known at the moment. I take it that it is not to be taken as a precedent for dealing with further Bills which impose new charges?
The PRIME MINISTER: I did not think money would be needed for the purpose.
4.0 P.M.
Sir FREDERICK BANBURY: May I ask whether it will not be necessary not only to put a Supplementary Estimate upon the Paper, but also to take a Resolution in Committee of the Whole House authorising the expenditure? I think the right hon. Gentleman will find that that is so. May I ask also whether he will give us an answer within two or three days, because I intend to move, that the right hon. Gentleman the President of the Board of Trade has committed a breach of the privileges of this House in spending public money without any authority from Parliament, and I have here all the precedents. I do not think we should dispense with the General Orders and Rules of this House. It is an extremely important matter. I do not in the least wish to take any advantage of the temporary forgetfulness of hon. or right hon. Gentlemen opposite, but the Rules which we have had in this House and have observed for many centuries should be preserved, and if, as I understand, the right hon. Gentleman, the Prime Minister, will in two or three days give us an answer I will not move as I am entitled to move that the right hon. Gentleman the President of the Board of Trade committed a breach of the privileges of this House. I wish to safeguard myself, Mr. Speaker, because my recollection is that a Motion declaring that a Member has committed a breach of privilege of this House must be brought forward at the moment that the Member bringing it forward is seised of the fact that, in his opinion, a breach of privilege has been committed. As in deference to the right hon. Gentleman I do not now move that Motion, may I ask if my right will be safeguarded should the right hon. Gentleman not give us a satisfactory explanation?
Mr. SPEAKER: I am prepared to consider the Motion. I will not count against the hon. Baronet the fact that he did not make it to-day. I do not wish to be held as saying that I would accept that as being a breach of privilege.
The PRIME MINISTER: I am not minimising in the least degree the importance of this matter. I take a most strict view of the necessity of preserving the control of the House of Commons. Whatever steps are necessary in accordance with
66
our traditions to vindicate that principle in this case, the hon. Baronet may be assured that I am as anxious as he is to take them.
Mr. AUSTEN CHAMBERLAIN: Will the right hon. Gentleman be able to answer my hon. Friend's question and my question on Wednesday—will that be reasonable time?
The PRIME MINISTER: I may be away myself, but somebody certainly will be here to answer.

ROYAL COMMISSIONS.
Address for "Return of all Royal Commissions issued in each year from 1904 to 1911, inclusive, specifying the objects of each such Commission, the name of each Commissioner and Secretary, the date of each Report, or if still sitting, and the cost of each up to the 31st day of March, 1912 (in continuation of and in the same form as Parliamentary Paper, No. 315, of Session 1904)."—[Mr. MacCallum Scott.]

FINANCE BILL.
Order for Second Reading read.
Motion made, and Question proposed, "That the Bill be now read a second time."—[Mr. Lloyd George.]
Sir MAX AITKEN: The privileges of this House in regard to finance have developed over a long period of years and culminated, as no doubt hon. Members opposite will think, in the Parliament Act of last year. Since that Act has deprived an ancient Assembly of the right to intervene in the domain of taxation, it should, I think, make a prudent Chancellor of the Exchequer more critical and careful in producing his Financial Resolutions to this House. The knowledge that looseness might encourage irregularities ought to make us very careful in examining the financial proposals brought forward. The Chancellor of the Exchequer's office is, I think, a great one, and the Standing Orders have prescribed for him certain limits beyond which he must not deviate. The first rule of our Constitution is that a Money Bill shall originate in a Committee of the Whole House, and we are entitled to claim adherence by the Chancellor of the Exchequer to this common

67
law bargain. If he finds himself compelled to submit changed or new proposals from those he originally outlined they should be propounded in a Committee of the Whole House. The Chancellor of the Exchequer submitted a Resolution of the Committee of Ways and Means on the 2nd April last, and on the Report stage, on 24th June, he submitted new proposals. He then proposed that there should be £1,000,000 taken for the Navy, and £500,000 for East Africa. The practice of Parliament is laid down in Standing Orders 67 and 69. Standing Order 67 says:—
"This House will not proceed upon any Petition, Motion or Bill, for granting any money, or for releasing or compounding any sum of money owing to the Crown, but in a Committee of the Whole House."
Standing Order 69 says:—
"This House will not proceed upon any Motion for an Address to the Crown, praying that any money may be issued, or that any expense may be incurred, but in a Committee of the Whole House."
I submit that the practice of Parliament is the law of Parliament, and the Chancellor of the Exchequer who departs from it must show cause for it. It is an innovation, and he must give the House reason for it. I therefore listened with interest to his speech on the 24th June, when the right hon. Gentleman made his announcement about the contribution to the Navy, the £500,000 for East Africa, and the disposition of the balance of the surplus, but I did not hear one word uttered by him in justification or defence of the course he took in coming down to this House and, entirely without notice, producing an Amendment to the Resolution passed in Committee of Ways and Means. He took the House by surprise, and that in itself is an important charge. I see it is recorded in the OFFICIAL REPORT that the Chancellor of the Exchequer first moved his Amendment to the Resolution and then proceeded with his speech, but the fact is that he first proceeded with his speech and afterwards moved his Amendment. The Chancellor of the Exchequer concealed with dramatic effect, until very nearly the close of his speech, the fact that the sum of £5,000,000 was to be applied to the Old Sinking Fund. It is not to what the Chancellor of the Exchequer has done with regard to the allocation of the money, but to his actual conduct in this House that I take particular exception. I ask the right hon. Gentleman why notice should not have been given. To my mind it was simply in order that the right hon. Gentleman might spring a sensation upon
68
the House. I recognise that the Chancellor of the Exchequer in his Budget statement is entitled to produce surprises respecting his taxation proposals, but when he does so he is speaking in Committee of Ways and Means, and the surprises he proposes are necessary, because on such occasions he is bound to preserve secrecy lest forestalling should take place. But on 24th June we were not in Committee of Ways and Means. Mr. Speaker was in the Chair, and we were on the Report stage of the Resolution which originally hung up the surplus—the Resolution which was introduced on the 2nd April.
The Chancellor of the Exchequer had originally announced that the surplus was to be hung up and the proceeds devoted to the Navy, or possibly to other things. When he produced his Amendment to the Resolution on the Report stage it was his duty to have recommitted his first Resolution to the Committee of the Whole House. I maintain this is a matter of grave importance. The Chancellor of the Exchequer has imposed what is in effect a new form of closure; he has curtailed the right of Members, which is unlimited in Committee, and he has set a precedent which he may follow himself, and mischievously follow, in introducing future Budgets. Hereafter we may have to discuss Budget proposals with Mr. Speaker in the Chair; the Chancellor of the Exchequer may not set up any Committee at all, and instead of discussing the question of the £6,500,000 on the Committee stage, we may be precluded from discussing the whole taxes of the year in the Committee stage. I know that the right hon. Gentlemen is skilful in defence, and he may present very plausible reasons for his violation of the Standing Orders, but I think the real reason is clear. He violated the Standing Orders because he introduced an unconstitutional Resolution in Committee of Ways and Means. I think he introduced that unconstitutional Resolution in Committee of Ways and Means to serve his political purposes. In order to make my case clear, I must ask the House to examine the situation as it existed before he carried his Amendment on the Report stage. When he first introduced his Budget he had a surplus of £6,500,000. That surplus should have been handed over to the National Debt Commissioners under the law, and should have been applied in reduction of Debt; but the Chancellor of the Exchequer proposed to circumvent that law, and as he did not immediately

69
decide what he would do with so large a sum, he decided to delay it. Therefore he introduced his Resolution in Committee of Ways and Means to suspend the operation of the Old Sinking Fund, and to hoard up the surplus.
In so doing, he evaded the cardinal principle the House has laid down, not only for its own guidance, but for the guidance of every Colonial and subordinate Parliament in this Empire. That principle is, that moneys raised from the subject in any one year shall be for the services of that year, and shall not be capable of accumulation. This rule was devised in times of trouble to guard against the oppression of the subject. If it was right to raise £6,500,000 and leave it loosely unappropriated, as the Chancellor of the Exchequer did, there is no reason why £60,000,000 or £600,000,000 should not be raised and left loosely unappropriated, to be diverted either this way or that, for purposes not disclosed, and at the whim of officials. England has set an example to her Colonies, and, so far as I know, the Colonies have not departed from that example. I do not think any Parliament in Europe has departed from this constitutional rule, except when Bismarck attempted to raise seven years of supply for the German army and navy for the purposes of aggression, and even that German departure failed. The right hon. Gentleman apparently believes in and admires German methods, and so he stated to the Committee of Ways and Means that his reason for accumulating the £6,500,000 was on account of the Navy and, as I understood him, on account of the growth of the German shipbuilding programme. I know there were other reasons. This was intended, I think, to lull the House of Commons into accepting a proposal which the Opposition would have refused. I think the right hon. Gentleman gilded the pill for us by suggesting that it was unpatriotic on the part of the Opposition to object to a departure from centuries of precedents, by reason of his assertion that the money might be required for defensive operations. Thereafter we heard very little about the Navy, and we heard very little about the shipbuilding programme, although the visit of the Prime Minister and the First Lord to the Mediterranean gave an appearance of reality to the Chancellor's statement. Then we heard rumours about the Insurance Act, and we were told the
70
doctors would be the object of the Chancellor's bounty. The money was not accumulated for a specific purpose, but was put like shifting ballast in the mind of the Minister to be diverted this way or that as gusts of sympathy or passion swayed him. He was shifting the ballast to suit the changing winds of popular opinion in the event of a General Election. It is a striking fact that on every occasion on which this, I think, sin of accumulation has been attempted against the constitutional rule as to the raising and spending of money those who now sit on the Treasury Bench were in Opposition, and not only maintained those principles for which I contend, but insisted on their being carried into effect at no matter what inconvenience to the Government of the day. Sir Erskine May clearly lays down, not in any narrow or doubtful terms, but in the widest and most explicit manner, that:—
"Statutory provision must be made by Parliament during each financial year to ensure that all the money raised therein for the service of the Crown should be applied to a distinct use, either wholly or partly, within the current financial year, and the proceeds of the taxes should not be reserved for accumulation pending the decision of Parliament or otherwise."
I submit that the Chancellor sinned against this established canon. He did reserve and did accumulate the proceeds of taxation, and what makes his action the less excusable is that such giants of finance as Mr. Gladstone and the present Prime Minister maintained steadfastly this sound principle of finance. While the constitutional rule laid down by Sir Erskine May has its roots in the past, recent precedents illustrate and illuminate the point with all the force of modern authority. In 1903 the right hon. Gentleman (Mr. Wynd-ham) was apparently anxious not to rouse the forces of bigotry, and accordingly, as England had received under the Education Act of 1902 a specific sum for educational purposes, the Irish Secretary submitted a Financial Resolution appropriating an equivalent Grant of £185,000 for Irish purposes without specifying its destination. This was an act of justice to Ireland, yet those Friends of Ireland, who have since become Ministers and now boast of their attachment to Home Rule, fastened on to the proposal, stuck their fangs into it and compelled the Irish Secretary to reveal his purposes and to place his cards on the table. The Government of the day, through the then Chancellor of the Exchequer (Mr. Ritchie), were forced by the Opposition to declare that the moneys should be specifically earmarked, and should come under the control of Parliament. The matter was

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debated on both the Committee and on the Report Stage of the Resolution, and foremost in the struggle for constitutional regularity at every stage was the present Prime Minister. The Prime Minister declared that Mr. Ritchie had apologised for what he said as a regretful departure from well-established practice. He declared it an extraordinary revolution, characterising the act of His Majesty's present advisers in relation to this money, and he asked why is this admitted by the right hon. Gentleman to be an objectionable Act for which it is impossible to cite a precedent? Then he tore to tatters the fancy precedent which Mr. Ritchie had given, and he denounced the plan, saying:—
"You leave the purpose to which it is to be applied and the amount of it to be specifically applied as between these purposes vague and indefinite and subject to future change. The Government ought to have had the purposes for which the money is to be applied specifically ear-marked and sanctioned by Parliament. I renew the protest which we made, and which we shall continue to make at subsequent stages, against a method of procedure which is totally unsupported by precedent."
The Chancellor of the Exchequer spoke again on a similar subject on 24th June last, and explaining the sum of money that had been voted to Uganda, he said:—
"In regard to the part of the realised service which it is proposed to divert to Uganda, the case, I think, is a very simple one. This matter was not sufficiently ripe between the parties concerned for my right hon. Friend to bring it forward at the time he made his Budget statement."
In 1903 the Prime Minister complained against Mr. Ritchie that he left the purposes to which it was to be applied and the amount specifically applied as between those purposes vague and indefinite and subject to future change. But he declared that the Uganda proposal was not sufficiently ripe as between the parties on the occasion of the Budget being introduced on 2nd April, 1912. How does he explain the sum of money being accumulated for purposes which were not sufficiently ripe to be disclosed to this House in view of his condemnation of Mr. Ritchie's conduct? In order to make quite clear the irregularity of the Resolution in the Ways and Means Committee of 2nd April last, I must go back still further to the much larger case in which Mr. Gladstone, Sir William Harcourt, and other leaders of the Liberal party ranged themselves on the side of the Constitution, and when the Speaker of this House himself, the present Lord Peel, laid down in words declaratory of the century-old usage of this House, that "according to the settled practice of Parliament money raised in any
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year cannot be made the subject of accumulation." It appears that the Speaker was appealed to to decide the constitutional propriety of the course taken by the Government. Mr. Goschen had imposed a tax of 6d. per gallon on whisky, which shocked the Opposition and the Irish Members, who supported a 3s. 9d. tax on the same commodity two years ago. Mr. Goschen's proposals to apply this 6d. duty for the purpose of extinguishing-licences and compensating the publican were put an end to. The proposal failed. Then Mr. Goschen proceeded to insert a Clause leaving unallocated the amount of the money raised by the tax of 6d. on whisky. Thereupon the hon. and learned Gentleman (Mr. T. M. Healy) appealed to-the Speaker, and drew from the Chair a grave and reasoned ruling. After hearing all the great leaders of the day, Sir William Harcourt, Mr. Goschen, and Mr. Gladstone, Lord Peel laid down his decision in weighty words. He said:—
"The hon. and learned Gentleman (Mr. T. M. Healy) has raised a question the importance of which I do not think he has overrated. I respectfully give the House such opinion as I have formed on the matter, although I regard it as a matter affecting the constitutional relations of this House and greatly affecting the whole question of Money Bills and Appropriation."
He was certainly not aware, in the comparatively short time he had had to examine into the matter, of any instance of a tax being raised and the proceeds appropriated to any particular authority and to any specific object. Then he laid down what he declared to be the general principle underlying our own law, namely, the appropriation of money to a specific use-within the existing Session of Parliament. However, dealing with an accumulation, similar with the accumulation of last April, he said:—
"I confess, looking at the matter from the constitutional point of view. I know of no precedent for such an accumulation."
I submit that it is therefore quite clear that the Resolution in the Committee of Ways and Means was unsound, dangerous and unconstitutional. It was, I think, a daring departure from precedent and instead of confessing that he was wrong, the Chancellor brazened it out. He realised that he could not any longer impound the surplus, so in order to screen the weakness of his position, he endeavoured to mask it with an apparently trivial Amendment on the Report stage, but it is no more trivial than the omission of the word "not" from the Eighth Commandment. The Chancellor was detected in respect of his Ways and Means Resolution, but he

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is a still greater offender by reason of the methods he adopted to escape from the dilemma which was the result of his own recklessness. That he was originally wrong was proved by the ruling of your predecessor. That he is wrong to-day is established by the Standing Orders. The Finance Bill before the House is the culmination of these irregularities, and it is founded on two Budgets. The first was introduced in Committee of Ways and Means, and the second with the Speaker in the Chair, but two Budgets will not make-one sound Finance Bill. There are rulings for the guidance of this House which even the Chancellor of the Exchequer cannot override. This Bill is therefore a Parliamentary monstrosity which, as to one of its Clauses, is not founded on a Resolution passed in Committee of Ways and Means. Mr. Speaker Peel quoted a ruling in 1894 when he declared—
"It is important that a Resolution passed in Committee of Ways and Means shall cover nil the provisions of the Bill subsequently introduced."
Will the Chancellor of the Exchequer declare that the Ways and Means Resolution of 2nd April covered exactly all the provisions of the Finance Bill now before the House? If he will, I shall ask him to explain the statement of the Prime Minister on 24th June, that the case is a very simple one. Referring to 2nd April, he said:—
"The matter was not sufficiently ripe between the parties concerned for my my right hon. Friend to bring it forward at the time he made his Budget speech."
The Ways and Means Resolution in its inception, it is fairly established, was illegal inasmuch as it attempted to impound taxation without allocation. Having attempted to legalise it by an irregular Amendment, the Bill now before the House lacks validity for three reasons. First, the Chancellor introduced an irregular Resolution—an illegal Resolution—in Committee of Ways and Means, on 2nd April. Second, the Chancellor amended the said Resolution on the Report stage, contrary to the Standing Orders of the House. In the third place, the Finance Bill in one of its Clauses is not founded upon a Resolution passed in Committee of Ways and Means. Of course, the majority can do anything. When a Minister has a majority he can make or unmake a Constitution. Ministers who disregard the Preamble of their own Bill with relation to the House of Lords may be expected to disregard the regulations of this House. But I realise that though the Chancellor of the Exchequer may force this Bill through the
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House, he cannot escape the responsibility for his own sinister contrivances and newfangled proceedings. He attempted to provide himself in the surplus of £6,500,000 with a weapon not for national but for party objects. He attempted to furnish himself with it in direct contravention of the constitutional safeguards which this House has provided in the Standing Orders.
Mr. C. T. MILLS: I do not intend to pursue the constitutional aspect of the Finance Bill, which has been so ably dealt with by my hon. Friend (Sir Max Aitken). There is another point to which I wish to draw the attention of the House, and that is the enormous height of the Exchequer balances at this moment. On 31st March this year the balances in the Exchequer stood at the enormous sum of £11,468,000—a higher figure than they have ever stood at before, with the exception of last year, and, I think, the year 1874. I also notice that during the past two years these balances have been higher than the figures at which it was ever the practice of former Chancellors of the Exchequer to have them. I think we can realise that these enormous figures are not accidental, but are the result of settled policy on the part of the present Chancellor of the Exchequer. Coming to 22nd June, we find that they had risen to over £18,715,000, as against £8,300,000 in 1907, and £8,396,000 in 1908. That is to say, these figures, which were far larger than any previous balances were £10,000,000 larger than the balances which were thought sufficient by the right hon. Gentleman's predecessor, the present Prime Minister. Therefore, perhaps, these figures help the case I wish to make. The Chancellor of the Exchequer may say that 22nd June is not a fair date to take, because the half-yearly payments of the dividends and interest on Government securities have to be paid. If we take the balances on 6th July last, after the dividends and interest had been paid, they stood at £12,500,000, as against £5,200,000 in 1911. It seems to me obvious from these figures, first of all, that the Chancellor of the Exchequer had piled up far more money than was necessary to meet his immediate needs, and, secondly, that the figures were greater than needful for his entirely new policy. I wish the Chancellor of the Exchequer to state his reason for making this high accumulation of public funds. I believe I know his real reason, although I do not think he will

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admit it. His real reason was that he wished to provide himself with money in order to make himself independent of Parliament, and to avoid the necessity of having to come to this House and thereby give the House and the country an opportunity of discussing again his financial policy.
After all, this is only part and parcel of the same line of policy which has been so severely criticised by my hon. Friend. I venture to say this policy is contrary to the spirit of our Constitution, as it takes away from this House proper control over finance, a privilege of which the House has always been peculiarly jealous. When we come to consider how these balances are made up the point I am trying to make is even clearer. We find this: The Chancellor of the Exchequer's policy is indeed directed to free himself of the financial control of the House of Commons. On 31st March last the Treasury Bills outstanding amounted to £8,100,000. In February this year he had retired £6,000,000 of Treasury Bills. Under the Revenue Act of 1906 I find that the Chancellor of the Exchequer was legally entitled to reissue these Treasury Bills during the current financial year, or within three months of their expiration. That is to say, before 31st June. I have tried to show that his balances were abnormally high. In March they were quite high enough to meet any immediate calls made upon them. What did he do with these Treasury Bills? He deliberately went and reissued £6,400,000 of Treasury Bills, although there was no necessity to do so—£3,000,000 on 21st May, and £1,500,000 on 1st June, and the remaining £1,900,000 in what are called "Otherwise issued," and in regard to which it is not possible to find out the exact date of issue. I would like to ask why he wanted this money, and why he made this entirely superfluous issue of Treasury Bills?
I wish to draw the attention of the House to the fact that whereas in this July the balance stood at £12,500,000, in July, 1911, it was only £5,200,000. If the Chancellor of the Exchequer had not issued the extra £6,000,000, his balance now would be approximately the same as the balance last year, though nearly double the balance his predecessor considered sufficient for running the business of the country. I know there are certain liabilities which the Chancellor of the Exchequer has to meet during the current
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year. For instance, there are £4,700,000 Exchequer Bills which will be due for repayment in October. I suggest that if he intends to repay these bonds in October, that is not the slightest reason why he should issue Treasury Bills in May to meet them. There are also payments to the National Telephone Company, but a very large proportion will be made in stock, and further, the payments will not be necessary for a considerable time. I do not suppose the right hon. Gentleman would plead that this balance was necessary for the Insurance Act, for I understand that no benefits will be paid until January. Therefore, there will not be very large outgoings from the Treasury for the purposes of the Act until that time. Last year he had large liabilities to meet later in the year, but he was more virtuous then than now, for he did not issue Treasury Bills so early to meet his liabilities in October. He issued £4,000,000 at the end of August. The Chancellor of the Exchequer has succeeded in doing what the Stuart Kings and other tyrannical monarchs tried to do and failed. He has accumulated enormous sums of money which he can spend how and when he likes without anybody in this House being able to have the slightest control.
Quite apart from the constitutional aspect of this case, I think the policy is decidedly unbusinesslike, and opposed also to the best commercial interests of this country. I would like to draw the attention of the Chancellor of the Exchequer to the fact that this large accumulation is costing the taxpayer very considerable sums of money, as the enormous balances are earning nothing. Apart from that, the taxpayer is paying 2¼ per cent and 2½ per cent. upon £14,500,000 of Treasury Bills outstanding. This appears to me to be a purely unnecessary waste of public money, and I think this policy also must be bad for the business community. It is obvious to anybody that this money must have come off the market. You cannot have these increases in the Government balances without two obvious results following. In the first place, it must tend to keep down prices; and, secondly, it must tend to stiffen discount rates. At this time of the year we expect cheap money. Merchants and traders expect to be able to discount their paper easily and cheaply. Of course, I know that we have had a light bank rate, and for that reason money has been appreciably cheap. At the same time I think it must be taken

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into consideration that the lowness of the bank rate is due to the purely extraneous fact that the bank was able to supply itself easily with gold. But the low bank rate has been effective, and traders have been able to discount their bills at a rate lighter than would otherwise have been the case. We see in the papers every day, "Not much paper was offered at current rates." That must put difficulties in the way of merchants and traders, and I think the difficulties which have been put in the way is largely due to the policy of the Chancellor of the Exchequer.
There is a minor point to which I wish to draw attention in connection with the issue of Treasury Bills. Of the £14,500,000 outstanding at this moment only £7,500,000 was issued to public tender. On 31st March, £16,500,000 of Exchequer Bonds and Treasury Bills were held by the public departments, and I suppose that now, after recent issues, the figure has almost risen to £20,000,000. It seems to me most undesirable that the public departments should hold this very large amount of unfunded debt. It may be urged that the balances at their disposal were purely temporary, and that that was the only means by which the balances could be invested. I think a very large proportion of these balances were permanent, and I would suggest that with Consols in their present deplorable condition, the Chancellor of the Exchequer ought to do everything in his power to try to steady the market and to keep the price up. I would suggest one of the many ways by which he can accomplish that object. The other ways I have brought to his notice before now, but without success. One way is to send the public departments into the market and make them buy Consols, and, what is more important, make them hold Consols. I ask the Government to give us some explanation of their reasons for piling up these enormous balances. I venture to believe that it is a policy contrary to the best commercial interests of the country. I believe also it is contrary to the spirit of the Constitution, and that it is a perfectly unnecessary waste of public money
Mr. SAMUEL ROBERTS: The Second Reading of the Finance Bill gives the opportunity for dealing with the national position, and I think the House should realise, and I am sure it does, the rapid increase of expenditure in recent years. When the present Government took office
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in 1906 our total expenditure was about £150,500,000. This year the estimates are nearly £187,000,000, an increase of £36,472,000. I know that with regard to that increase the Chancellor of the Exchequer will say that we on this side, at all events, consent to a large part of the expenditure. The right hon. Gentleman is correct in that. We consented to the increase on the Navy, which was absolutely necessary for the National security. We were also parties to the expenditure on old age pensions, although when that expenditure was first incurred the Prime Minister said that it would not come to more than £6,000,000 per year, and now it is more than double that amount. Outside those items there is a great increase in the Civil Service expenditure of £9,482,000. That sum is spread over various Departments, public works, buildings and salaries, and expenses of Civil Departments—law, justice, education, science and art, and Labour Exchanges. Those items account for the greater part of it. When the present Prime Minister made his first Budget statement in 1906, he drew a very grave picture of the very rapid increase which there had been during the Unionist administration. He went back to the year 1895–96, when the total expenditure was about £101,000,000—not including the large sum allowed for local taxation—and he compared that figure with the enormous estimate which he was then proposing of £141,786,000; and he said:—
"That shows an increase of 39 percent. over 1896. Those figures make a return to a more thrifty and economic administration the first and paramount duty of the Government."
We all know that no return has been made; but instead of a return to the £101,000,000 of 1895–96, we now get £179,000,000, or an increase of 75 per cent. in sixteen years, which is at the rate of £4,500,000 each year. I am again deducting the amount for local taxation contribution, because it was deducted from the former figure. The Prime Minister was not alone among his colleagues in making these statements about thrift and economy. The right hon. Gentleman the present Colonial Secretary (Mr. Harcourt) said in the year 1905, the next Parliament—that is, the Parliament in which they came in—this—that is the economies—would be one of the greatest and most beneficent tasks of the Liberal party, and no higher honour could they obtain than the achievement of that sanity of expenditure which is the basis and security of

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the national safety. There was not a point on which the late Mr. Gladstone was more thorough than on the principle of national thrift and Economy. He made several speeches on the subject, but he drew special attention to the danger which the nation was always under, and that was the spirit of growing expenditure, which could not be controlled.
"In the year 1863,"
he said,
"there grew up what may be termed a spirit of expenditure, a desire, a tendency prevailing in the country which sensibly and unconsciously perhaps but really affects the spirit of the country, the spirit of Parliament, the spirit of public departments, and perhaps the spirit of those whose duty it is to submit the Estimates to criticism, who are most specially and directly responsible from disbursements by the State. When this spirit of expenditure is in action we must expect to find some relaxation of the old principle and rules of thrift which direct and require that whatever service is to be performed for the public should be executed in the most efficient manner, but at the same time at the lowest practicable cost."
I am afraid that since then Parliament has become possessed of the spirit of expenditure against which the late Mr. Gladstone spoke so forcibly. This extra expenditure has been met by the Government most largely out of direct taxation. Comparing the year first named with the Estimates for the present year, we find that Income Tax and Estate Duty together—those were the two principle factors which the Chancellor had to rely on—amounted to £44,000,000. The Estimates now under this head are £69,000,000, so that there has been increase of over £25,000,000. Under the Unionist administration the proportion between direct and indirect taxation was about equal. It was 50.4 direct against 49.6 indirect. In answer to a question in the spring of this year the Chancellor gave the proportion as 57.27 direct and 42.73 indirect. Therefore you have got the proportion entirely turned round. Is that a wise thing? It is not following the principles adopted by our three great competitors—the United States, Germany, and Canada. By far the larger proportion of their taxation is indirect. In the United States last year, out of a federal revenue of 701,000,000 dols., 314,000,000 dols. were Customs alone; and another sum very nearly equal, to that is indirect revenue which is principally Excise. In that large country—the United States—they are getting their revenue very largely from Customs Duties, and in doing that they have this in view, that they are making the farmer contribute to the revenue. It must be so. If the farmer does not come down
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in his price he cannot compete in the markets of the United States with goods which are not taxed under a Customs Duty. That is a principle to which those who advocate the present Free Trade system have never been able to reply. The State's revenue of Germany last year was about £72,500,000, but of that no less than £59,000,000, or 82 per cent. was collected from Customs and Excise alone. Take France. The estimated tax revenue alone is £125,000,000; of that sum Customs and Excise come to £73,000,000, or 68 per cent. All these big countries go on the principle that they are to get the larger part of their tax revenue from indirect taxation.
I could quote some opinions of experts which I am sure will be received with respect by everybody in this House. John Stuart Mill said that direct taxes on income should be reserved for a great national emergency, and that any tax on profit or anything in the nature of capital accumulations like that in England is most detrimental to national wealth. Sir Robert Giffen, the late very able adviser in the Board of Trade in these matters, said that new taxes must be raised when a larger revenue is required, and they must be added to indirect rather than to direct taxation. The late Mr. Lecky said that no truth in political economy is more certain than that the heavy taxation of capital, which starves industry and employment, will fall most terribly on the poor classes. I am afraid that the effect of these large taxations which we have had in recent years has been greatly to alarm capitalists and investors in this country. People who have savings and who invest, if asked where their money is going, will tell you that it is going in the safe, gilt-edged securities in Canada and the United States very largely. They argue, and I think rightly, that if they can get a return of 4 per cent. for their money absolutely as safely as they can get the return from Consols they prefer to invest the money in those other securities. The price of Consols on Saturday touched the lowest figure—75 5–16. It is a very serious thing for one class of people—unfortunately I am one of them—bankers. The Chancellor knows that in making up every balance sheet investments have to be written down to the market price. I believe that I am correct in saying that during the last ten years no less than £14,000,000 has been written down by bankers in their investments. It has to be done, and we are anxious to

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know where this process is going to end. The question of Consols is most serious. During the life of the present Government the price of Consols has gone down by 13 points.
The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George): What have they gone down before that?
5.0 P.M.
Mr. S. ROBERTS: I admit they had gone down before that, but in December, 1905, the lowest price was 88½, and now it is 75 5–16; and the security of other countries has not gone down in proportion. In Germany, the fall has been about 4 points; in France, 4; in Austria, 2; in Spain, 1½; and in Japan, ¼. In Russia it is higher—11; and, in Italy, 10. During that period several of these countries—Japan, Russia, America, and Spain—had to pass through wars; and Japan borrowed more money for the Russian war than we did for the South African war: she borrowed no less than £250,000,000. I do not want to sit down without making one or two suggestions, to which I am sure the Chancellor of the Exchequer will be good enough to listen. What steps can be taken to reduce expenditure? One thing which can be done is this: more consideration should be given to the Estimates previous to their being laid before Parliament. The Estimates Committee has been set up, and I am glad of it; but I am very much afraid that the good to come from that Committee is not going to be what we expected, because we have not got the Report of the Estimates Committee before us previous to the Estimates being brought into this House.
Sir F. BANBURY: I do not wish to interrupt the hon. Gentleman, but I desire to state that the Report of the Estimates Committee for this year is ready, and, when we have decided upon it, it will be submitted to the House. Next year we hope that our procedure will be quite different, and that our Report will be presented to the House before the particular Votes to which it refers have been passed.
Mr. S. ROBERTS: I am very glad to hear that from the hon. Baronet. Mr. Gibson Bowles, writing to the "Economist" on 18th May of this year, said:—
"What is proposed seems to be, not a Committee to advise and report on the Estimates before they had been voted, but to report upon them after they had been voted. This is failing in the whole object of the Committee proposed by me, which was to afford the
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House information for discussion of the Estimates before they had been voted, so that the discussion could be with knowledge instead of, as at present, without knowledge."
This is what Mr. Gibson Bowles wrote, and I had not heard of what the hon. Baronet stated. I was a member for some years of the Sheffield Corporation Finance Committee, and I should like to make a suggestion which has proved most useful in Sheffield in keeping down the rates and capital expenditure. A consultative committee was formed, with the chairman of the finance committee presiding, and the chairmen of the spending committees as members. The estimates came before that committee both as to revenue and expenditure before they were presented to the council. I have a letter from the treasurer here in which it is stated that it is the duty of the committee to examine all estimates for rates, both borough ond general district rates, and also amendments of the proposed expenditure where necessary with regard to capital expenditure. All such proposals are carefully considered and no expenditure is allowed until it has been approved by the consultative committee. By a resolution of the council all proposals of the council involving capital expenditure are referred to the committee. That system at Sheffield has now been in existence for a number of years, and there is not the slightest doubt that efforts have been very beneficial in the way of checking expenditure and keeping the rates of the city down. The committee inquires into all the expenditure, and they say that if the expenditure is accepted the rates are going to be so much higher. That result has been avoided and the rate has been kept down, first by consideration between the various spending departments, and then by submission of the proposals of the council to the consultative committee. I suggest that before these Estimates are presented to this House, there should be a Committee of the Cabinet, or of the Spending Departments, called together to show what the effect of the taxation would be on this country if the Estimates were accepted. If that can be done in a small way, as I have shown by my reference to the system followed in Sheffield, I am quite sure in regard to the nation, a great deal of money might be saved for the country. Both sides of the House—I am not speaking from a, party point of view—ought to contend against this spirit of expenditure which exists both in this House and in the

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country, and which Mr. Gladstone denounced as bad and wrongful. Next there should be a more thorough check on the Estimates before they are presented to this House; and, finally, the Sinking Fund for Consols should again be restored to the figure which the late Sir Stafford North-cote put it at, namely, at least £28,000,000. With the revenue increasing as it is, if it could be £28,000,000 then, why should it not be £28,000,000 now? It would have a very great effect in keeping up the national credit and in assisting the right hon. Gentleman to borrow in the open market, when required to do so, as cheaply as possible. I hope the result will be that on all hands we will resist the spirit of expenditure which has prevailed in recent years, and act on the principle laid down by the late Mr. Gladstone.
Mr. JAMES PARKER: I, like the hon. Member opposite, have had a considerable number of years' experience on the finance committee of a large corporation, and the practice adopted by that corporation was very similar to that described by the hon. Gentleman as being followed in Sheffield. But there is a difference between the practice of a corporation and the practice of Parliament, and I do not see exactly how we are to get over it. The consultative Committee of which the hon. Member spoke consists of the chairmen of the spending committees, and those chairmen have power to reduce the expenditure in their respective departments. We have nothing of that kind in Parliament. I do not know how far anything corresponding to it will be practicable. In order to get something on the lines adopted by the Sheffield Corporation you would require a Committee dealing with the War Department, the Admiralty, and the various Departments of the Civil Service, and then the heads of those different Departments might come to the Committee after the Estimates of their respective Deparments had been prepared. But I do not think Parliament is prepared at the present time, possibly it may never be prepared, certainly not at the present time, to take the responsibility from the Cabinet and invest it in a Committee of this kind. Like all Members of this House, I am sorry to see a certain class of expenditure of the nation rising to the figures which are before us to-day, but in regard to another class of expenditure, I consider it has been long overdue. Roughly, the Budget expenditure is divided into three—the first on defence, the second is the
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expenditure on an increasing number of public services which are being taken over, and then there is the expenditure on what is called social reform. I do not think there is any Member who would withdraw such a measure as the Old Age Pensions Act, or the sanatorium benefit and other benefits in connection with the Insurance Act. That observation also applies to Labour Exchanges and other projects of that kind.
Those are the kind of services which appeal to some of us with much greater force than the large capital expenditure on defence. I am appalled by the enormous growth of that expenditure. I certainly desire to see that amount cut down and not increased; and I think a large number of Members on both sides of the House agree with that proposition. As to the Consultative Committee, I have not yet seen their Report, and it will have to be criticised before it is presented to the House; but I am convinced, whatever power that Committee may have, it will be rather a help in preventing extravagance in the future; and if that Committee does its work as well as the Public Accounts Committee has done its in regard to public expenditure, then I think we may say that at least the money has been more economically spent than, I fear, has been the case on many occasions up to the present time. The part of this Budget which I do not like, the part I am called upon to vote for or otherwise reject the Finance Bill as a whole, is the extravagant expenditure in regard to the purposes of defence. I cannot lay claim to know what it is; in fact, this House has to be guided by the experts outside, and we can only come individually to our own judgment as to whether it is or is not necessary under the guidance of the experts. It is leading us to a position of this sort, that half the entire expenditure of the nation is upon Army and Naval purposes. It may be argued, if you choose, that because other nations are arming it is absolutely necessary and essential we should do the same, but we hope that in the great community of nations the wisdom of a higher policy than this, which involves so large an expenditure to the respective nationalities, will be seen, and that the day is not far distant when we will combine, not to-make party points on either side, but to-get this enormous expenditure reduced.
Mr. G. D. FABER: Speaking personally, I always enjoy listening to the hon. Member opposite,
whose views are couched in

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an extremely moderate form; but I trust he will not be disgusted when I say that in regard to his views I differ from him as widely as the Poles are asunder. He rather gave his case away in regard to the expenditure on defence when he said we were obliged to rely on the experts.
Mr. PARKER: What I said was that we relied on the experts, and I do not see what else we can do at present.
Mr. FABER: We are not experts, or very few of us are, and, therefore, we must depend on experts in naval and military expenditure. I do not at present propose to go into a dissertation on the general ethics of the question. It is sufficient for us that the civilised world is a civilised world in arms. We have got to meet arms with arms or else go under. Therefore, I think the logic of the hon. Gentleman was rather wanting when he put social reform first and defence second. Surely the condition precedent to our existence as a great country is that our defence is sufficient. What becomes of social reform if our Army and Navy do not prove sufficiently strong to meet the enemy when the day arrives, the day which we all hope will be long distant. If we go under what is the good of talking then about old age pensions and labour exchanges and national insurance? That really is my answer to the hon. Member. We are all social reformers if we had the purse of Fortunatus. It all depends on what a nation can do at a particular time. My view is that we have gone too fast. We all want to make this country a happy country to live in, but a nation cannot afford to go faster than individuals, and it must be controlled by the money it has at its disposal. In the case of the Army and Navy, you have got to spend. There is no going too fast there as long as you do not go ahead of the necessities of the case. We have not. Everybody knows that not only have we not overspent, but we have underspent, and we all know that all this hurry-scurry going on in the Cabinet on this question of national defence is because we have underspent. The hon. Member says, "Do you approve of old age pensions?" Yes, I do; but I have got to consider whether the national pocket can afford them if and when, old age pensions are given. Again it is a case of the purse of Fortunatus. If money was unlimited we could try and make all the people happy by Act of Parliament, and by giving money here, there, and everywhere, but already our Budget is
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too high. When the hon. Member for Sheffield was talking about national economy, the Chancellor of the Exchequer said "Hear, hear." They preach economy which partly they are not able to practise, and which partly they do not. In 1906, when the present Prime Minister introduced his first Budget, there was still there the financial shadow of that great protagonist of sound finance, the late Mr. Gladstone. The Prime Minister in 1906, as Mr. Gladstone had done before him, gave expression to that spirit in his first Budget speech. At that time he was talking about figures which were from thirty to forty millions less than the total to-day. He said:—
"Those figures appear to me to call for no comment. They speak with an eloquence which needs no rhetorical embroidery. In my opinion they make a return to a more thrifty und more economic administration, the first and paramount duty of the Government."
The hon. Member for Halifax, no doubt, cheered that sentiment at the time, and cheered it genuinely. Since then we have travelled a long way, but not in the direction of economy which the present Prime Minister promised, but in the other direction with a Budget of one hundred and eighty millions. The Prime Minister told us in 1906 that a return to a more thrifty and more economic administration was the first and paramount duty of the Government). The Prime Minister has many first and paramount duties now-a-days; the return to economy was one; to establish a Second Chamber was another, and there are so-many promised duties that I venture to prophesy that they will have no time to perform them. There does remain the deadly fact that the Government that promised in 1906 a return to economy has swelled the national expenditure by between thirty and forty millions. Some figures were taken out in the "Morning Post" in the Spring in a series of very able articles, however little hon. Gentlemen opposite may agree with the conclusions. They brought out this fact that in 1905–6 the tax revenue was 129.9 millions, and in 1911–12 153.7 millions, or a total increase of £23,800,000, and that is the Government of economy.
Mr. PARKER: Can the hon. Gentleman give us what the increase in the Navy has been during that same period?
Mr. FABER: That would be rather dragging me away from this part of my argument. I am talking of the growth of expenditure which includes not only the

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Navy, but also social reform. That increase has fallen almost entirely on Income Tax payers and on payers of Death Duties. The people generally have not paid for the increase in the Navy nor for social reform. Those who have paid are a very small proportion of the people of this country, something like 1,100,000 Income Tax payers who also pay the larger part of the Death Duties. The new Licence Duties are estimated to amount to £2,100,000. Therefore the increase in the Income Tax and the increase in the Death Duties between 1906–12 accounts for £23,800,000, and as well as that you have the two millions of increase in the Licence Duties. Therefore let nobody say that the people with money in the country have not paid. They have paid the whole of the increase during the last six years. I am not this afternoon pronouncing any opinion as to whether that is right or wrong, but it is a tremendous reversal of the old policy. The hon. Member for Sheffield pointed out that in the old days there was supposed to be a balance struck between direct and indirect taxation. The Chancellors of the Exchequer in the past tried to arrange so that you would have 50 per cent. of direct taxation and 50 per cent. of indirect taxation. That policy has now been vitally altered to the detriment of direct taxation. The right hon. Gentleman opposite says "Hear, hear," to that, but I am not on the question of policy, but on the question of fact. I am only saying what has been said by great men in the past when I say that when the day of necessity arises do not forget that in time of peace you have been trenching tremendously upon your war-chest, which is direct taxation.
From the days of Mr. Gladstone onwards it has been the practice to keep direct taxation low in time of peace, in order that if and when war came you could turn the screw on and get money. You have turned the screw on to such an extent in time of peace that I am perfectly certain any financier, whatever might be his political opinion, would say that the outlook for the country if war were to come would be extremely bad. You have got an Income Tax which in the case of those who pay Super-tax amounts to 1s. 8d. in the £. You have got Death Duties on a scale never known before and never approached in this country. How are you going to get more money if diplomacy goes wrong and if war supervenes? The Income
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Tax will run dry. The patriotism of the people would rise to the occasion, but it might well be that with an increase in the Income Tax the financial results would not be forthcoming. With the height which the Death Duties have reached you are taking great chunks out of the national capital. If those duties were small you need not take the matter seriously into account, but when they run to 25 per cent. they are a distinct spending of national capital which you want if you go to war. When you go to war you will want every shilling you have got and it will not be there. That brings me to the present crisis in British gilt-edged securities. In the case of ordinary securities they have to take their chance, but gilt-edged means that you come in on the ground floor, and if there is anything to have you come first. What has happened to our gilt-edged securities? I was not at the bankers' banquet last week. The Chancellor of the Exchequer is a sensitive man; he has not got that political hide which he will probably get with long years of political experience. Sensitive as he is, it must have given him a very nasty jar to hear the plain speaking, for it was plain speaking, of the governor of the Bank of England, and to listen to the loud and continued and general applause at his remarks from that great company of financial magnates and experts. The governor of the Bank of England said, in effect, that the long-continued and continuing depression in the best securities of this country was giving rise to widespread alarm. And so it is. If we were not party politicians we should all put our heads together to see how we could stay the rot. It is much easier to start a rot than to stay one. Who started it? Or, rather, who knocked Humpty Dumpty off the wall? The Chancellor of the Exchequer in 1909. In that year off went Humpty-Dumpty from the wall, and however much you may try to put him on the wall again it is an extremely laborious if not impossible thing to do.
I have always tried to be fair in this argument as to the whys and wherefores of the present deplorable price of the best British securities. I agree that the extension and expansion of the trustee market has had a good deal to do with it The loophole was there, but what made trustees go through it? The Budget speeches in 1909, the malignant spirit, the attacks on capital. The loophole was there; trustees found that they could go outside this country, and they went.

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They are now getting higher interest, they think they are secure, and they are not coming back again. Not only are they not coming back again, but more and more money is following, with the result that there is less and less to keep up the market at home. There is a perpetual drain going on, which sends up the market abroad, but sends down the market at home. That is going on all along the line, and Heaven knows where it will stop. A Liberal peer—Lord Blyth—in one of the papers this morning states that he would not be surprised to see Consols at 50. What is going to happen to our national finance if Consols go to 50? How are you going to raise money if it is wanted? If you wanted to raise a loan of £100,000,000, which is not such an immense sum in a great emergency, to support your naval policy, at what price do you expect you would be able to raise it? I speak with great deference in the presence of the hon. Baronet (Sir F. Banbury), who knows the money market better than I do. Would he care to issue such a loan in the present position of the money market at less than 3¾ per cent. or perhaps at 4? Where then is your national credit? The Government dare not face a loan. They would sooner go on with the uncertainty and danger. It would unmask the whole position. What would happen to Consols if they did attempt to raise a loan? Consols would go down and down, and everything else would follow.
This is not at all exclusively a rich man's question. Far from it. What was the reason of the fall of the Birkbeck Bank? It was brought down, bringing with it crashing to the ground a large number of small men, by the great drop in all the best securities, breweries amongst them. The Governor of the Bank of England referred to the fact that gilt-edged stock in breweries had gone down by something like 50 per cent. When you throw a stone into the water the ripples go far. The effects of this policy do not stop with the big men; they may be able to last, but the little men go under. It was the same with the Yorkshire Penny Bank. It is an open secret that the York-shirt Penny Bank would have gone under and carried widespread ruin in the North of England if, in order to prevent a general collapse and disaster, a number of important banks had not formed themselves into a syndicate to hold the securities until a brighter day came. Little
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men all over the country are concerned in this question of sound finance. The greatest indictment I can bring against the party opposite is that they have smashed our national finance and securities. I hope I have not spoken with undue warmth. I am not speaking in any way as a party politician. If I were on the other side of the House I hope I should have the hardihood, the strength of purpose, and honesty to speak out in the same way. The Government have smashed the machine, and I do not know if they will ever be able to put it right again. I had intended to speak on the Licensing Duties, but in order not to intrench on the time of the House longer than is absolutely necessary I will leave that question in the expert hands of the hon. Baronet beside me (Sir G. Younger). I wish the Chancellor of the Exchequer would not deal with this question in a party spirit, as though it were a matter of making party scores, but would try to realise the extraordinary position of danger in which we should stand if a great war came upon us. We are taxed up to the hilt on Income Tax and Death Duties, and if they wanted £500,000,000, £600,000,000, or £1,000,000,000 in a national emergency, God knows how they would get it.
Mr. DAVID MASON: I listened with great interest to the speech of the hon. Member opposite (Mr. G. Faber). On many occasions I have agreed with a great deal that he has said, but to-day, although I agree with his statement of facts, I find myself in disagreement with his main conclusion. In regard to the enormous expenditure on naval and military works, he says that we must spend and continue to spend. He sees no remedy for it. That is a policy of despair. He is perfectly frank and we honour his straightforwardness. He holds that there is no remedy in sight for this devastating and sterilising expenditure. He then proceeds to attack the Chancellor of the Exchequer for smashing the machine. He ascribes the present state of the national credit entirely to Lloyd George finance.
Mr. FABER: Largely.
Mr. D. MASON: Largely. At the same time he says that we must continue this naval and other defence expenditure. I am sure that, as a banker, he is sufficiently cognisant of the facts to know that the laws of political economy govern the effect of expenditure, and, whether it is

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necessary or not, if this expenditure goes on in this country and throughout Europe generally no power on earth will stay the depreciation in gilt-edged securities. The sterilising and devastating impoverishment of the world generally will go on if the great nations persist in the absurd policy of using up capital on expenditure which everybody knows is un-reproductive in character. Let the hon. Member be fair to the present Government, as no doubt he wishes to be. While this expenditure, for which he sees no remedy, is of an unreproductive character, many schemes of social reform are of a reproductive character; they tend to increase the efficiency of the nation and of the productive agencies of the country. If, for instance, the Insurance Act brings about improved health and improved efficiency in the producing agencies of the country, as I believe it will, the expenditure involved will surely be money well spent. The policy of despair advocated by the hon. Member can have only the one effect of still further impoverishing the resources, not only of this country, but of the world generally.
Sir F. BANBURY: The hon. Member is no doubt aware that the public securities as well as the national securities of other countries have not fallen to anything like the same degree as British securities have done.
Mr. D. MASON: That I have heard on more than one occasion from the hon. Baronet, and it may possibly be the case. I have gone into the question, and I agree that up to a point certain national securities belonging to other countries have not fallen to the same extent as ours. But I think the hon. Baronet will agree that finance is an international affair, and if a great expenditure of this character goes on in any one country it has its effect not only in that country but throughout the world generally. Still, that does not alter the main point of my argument, that we ought to try, and, if possible, do something to check the impoverishment that is going on. For example, why should not the right hon. Member for East Worcestershire (Mr. Austen Chamberlain) apply his mind to this question, and ask us on this side to co-operate with him in some means whereby a cessation or a decrease of this enormous expenditure might be brought about. Might not something possibly be done by urging the Government to
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proceed with the policy which was enthusiastically supported by the right hon. Member for the City of London (Mr. Balfour) when the Foreign Secretary delivered his epoch-making speech in favour of a treaty with America for the creation of an international tribunal for the settlement of disputes between nations? Why should not hon. Members opposite unite with us in urging His Majesty's Government to take up that question at once? We all agree that we must have a strong Navy. As the world is at present constituted we must have adequate defence. But let us be fair. We cannot both have our cake and eat it. If we spend our capital on that which is admitted on both sides to be unproductive, then we shall be so much poorer.
Mr. FABER: If we spend unnecessarily.
Mr. D. MASON: I wish the hon. Gentleman would approach this question, as he asks us to do, from the proper attitude of mind—that we, as fair-minded men, could approach this question as a matter of fact, which it is. If the hon. Gentleman agrees with me—
Mr. FABER: No, I cannot. The expenditure may be necessary.
Mr. D. MASON: Yes, quite so. The hon. Gentleman says the expenditure is necessary. But I thought he agreed, as an economist, that whether it is necessary or not, this expenditure has an impoverishing effect. To dispose of your capital—to use it in this way, whether necessary or not, is bad. This is not the time to go into the question as to whether the expenditure is or is not necessary, but the money is lost; in a few years there is nothing to see for it! It is unproductive, and, as it has been well described, sterilising expenditure. I submit, therefore, that if the hon. Member is sincere—and I have no doubt he is—in desiring the restoration of national credit, he should support those of us on this side—and hon. Gentlemen who think this way are not confined to this side, for there is an increasing number on the opposite side—who think that the time has arrived when there should be a joint effort on the part of all patriotic men to unite together, if possible, to arrive at some method whereby this awful folly may be at least decreased, if we cannot do away with it altogether. I hope I have said sufficient to emphasise that point, and to show that the hon. Gentleman is

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not quite fair in his criticism when he demands an ever-increasing expenditure in one direction, while asking us on this side of the House to improve our credit in another. It is impossible, if you persist in this expenditure, to do so.
It may be, as the hon. Baronet the Member for the City of London says, that there are variations in the national credits, but it is admitted on all sides that national credit generally all over the world during the last decade has decreased. The rate of interest has increased. A great activity in trade, a great demand for capital, trade expansion, accounts for some of this; but in the main it is due to each nation wasting their fellow nations in the way that has been described. We are doubtless sincerely anxious for the improvement of our national credit. Depreciation is not confined to this country only. If another nation pursues this policy, that nation will affect our national credit, and if we pursue this policy, and if we rush into the matter still further in pursuance of this policy—as is hinted at in certain quarters—and the thing is followed out by the Continent of Europe, we may see a still further depreciation in our gilt-edged securities. I submit therefore that if we are wise men we should confer with all the other Powers of Europe and see if it is not possible to come to an understanding. I am rather dubious in this matter of an agreement. I know it is advocated in various responsible quarters that we should have a conference and seek to come to an agreement with the Powers of Europe with regard to limiting this expenditure. Honestly I doubt if such a conference would be effective. I do not believe that any self-respecting Power is going, either at the bidding of this or any other nation, to state what it is prepared to spend upon its defence. I notice that my hon. Friend agrees with me in that, and I am glad that we are in agreement so far. I would be delighted if what I have suggested could be brought about, but I am bound to state that I doubt the feasibility of the Powers coming together and having an agreement upon this matter. The hon. Gentleman also stated that this expenditure was governed by expert opinion. I venture to contravert that statement. In proof of my contention I would refer to the statement made by a very distinguished statesman on the opposite side—Lord Beaconsfield. That statesman well said:
"That it was policy which governed expenditure."
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If we can through diplomacy, through a proper understanding, through coming to a better feeling with other nations, do something in the direction indicated, so much the better. The right hon. Gentleman the Leader of the Opposition, in a very able speech on the Foreign Office Vote, laid very considerable stress upon the supreme importance of having a good understanding with Germany. The Secretary of State for Foreign Affairs, in an equally impressive speech that evening, was able to assure the House that our relations with that Power were now excellent. That is all to the good. If we can come to a better understanding with the Powers, and also unite in doing something of a tangible character in advancing this idea, of forwarding these treaties of arbitration between the Powers, the taking up of the question of a treaty with America, and, if possible, with Germany and with France, it will be well. France, I believe, was preparing to enter into a similar treaty with America to the one we put forward; possibly Germany would also be prepared to enter into a treaty with Great Britain.
If France was prepared to enter into a treaty with America possibly Germany would also be prepared. The unfortunate miscarriage in the Senate of the Treaty between Great Britain and America meant that that treaty did not go through. But is there any reason why similar treaties should not be formulated, and perhaps entered into, between France, Germany, and ourselves? Hon. Members on both sides can surely support these suggestions? So we might get the Powers of Europe to state that they are prepared for the creation of a new international tribunal wherein questions in dispute may perhaps be settled. It is through these efforts, I believe, that in future we shall create an atmosphere which will not necessitate a continuance of rivalry of this most unfortunate and devastating character. I hope I have said sufficient upon that point. I hope it is a point on which we may receive support of hon. Members on both sides. I believe that all patriotic men are agreed that if we can find a remedy we would only be all too pleased to bring about such a happy state of affairs as I have referred to.
I will make a few observations upon the Finance Bill itself. I should like to ask the Chancellor of the Exchequer or the Financial Secretary, whom I see present, if any hope can be held out to us of some possible reduction in our taxation? The

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hon. Member who has just sat down adverted at considerable length on the enormous hunks—I think that was the expression he used—which we were taking out of our capital, and to which to a certain extent I have already referred. I have shown, too, I think, how a great deal of this capital which we certainly have been getting in Death Duties and from the Income Tax has been used, whether of necessity or not, as both sides agree, unproductively. I would just like to say that from our point of view the statement the hon. Gentleman made that an amount of the capital which we have used has come from the well-to-do classes, is rather a source of congratulation for the Chancellor of the Exchequer and the Budget which he draws up, because, surely if we have to get revenue it is right that our taxes shonld fall heaviest upon those best able to bear them? I quite agree that there is no particular virtue in taxation in itself. If we can reduce taxation I, for one, say it should be reduced.
I agree with the hon. Member that it is in no way a source of congratulation that we have a one and twopenny Income Tax in times of profound peace, and that we have these heavy Death Duties. But I do say that if you have to raise the revenue, the taxes should fall heaviest upon those best able to bear them. I would reduce taxation if I could, but our first duty is to the poor. We have had a good deal of talk about labour unrest. It is, as we all know, not entirely though largely due to the increased cost of living. We have recently emerged in the present Budget with a surplus of six millions and a half. Surely that is an encouragement to the Chancellor of the Exchequer, who, although he must admit he has been guilty of over-budgeting—I do not say deliberately so—surely that is the time—if any time—that he should be encouraged to come down to this House and propose some reduction of taxation? I would therefore ask that the right hon. Gentleman on the Treasury Bench should give us, perhaps this evening or before the close of this Debate, some idea that the Government can hold out some hope that we may perhaps see some reduction in taxation. There is the question of the Customs, of 5d. on the tea. I should be glad to hear that the Government can hold out a hope of a reduction of the duty on sugar, for that would decrease somewhat the cost of living. It might
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possibly tend to allay—if not entirely allay—that unrest that prevails amongst the working classes. I hope, therefore, the Government will give that suggestion their most serious consideration. They may be able to hold out some hope that with their surplus of 6½ millions, with still expanding trade, with favourable conditions of trade all over the world, so far as we can see, they may be able to relieve those classes which unquestionably feel the burden most.
If we can look to a reduction of the Income Tax and Death Duties; if we could reduce taxation generally it would, as Mr. Gladstone once well pointed out, "Stimulate industry by relieving the burdens upon it, thereby tending to expand industry and increase the area of employment." That is not a rich man's question. If we could, through our finance, through, economy in administration, through wise agreements or good arrangements with the Powers of Europe, do something to relieve and decrease the expenditure which is unquestionably an impoverising expenditure, then I believe it may be possible for us to increase our Sinking Fund, to reduce our Income Tax, to get rid of the Tea and the Sugar Duty, to do other things to stimulate the trade and expand the industry of the country and improve conditions generally. I quite agree that this is a supreme question—this question of our national credit—but I do ask hon. Members opposite to be fair to the right hon. Gentleman the Chancellor of the Exchequer. I have had occasion in previous times, as hon. Members will confirm, to criticise my own side. That is not a pleasant duty for me to do. We who are Free Traders believe that the fact that we have achieved a surplus is another proof of the elasticity of our finance. But the fact that we have been able to do this is no reason for not if possible reducing taxation. I should be very glad to join with hon. Members if they had a better system of finance, and if they could improve matters, and if they could give us a better way of reducing these burdens, and of increasing the Sinking Fund and improving our national credit. I should join forces with any hon. Gentleman in making for economy, but I submit to hon. Members that there is only one road to improve our credit. There is no Royal road to the increase of wealth either for nations or individuals. There is only one way of improving your credit, and that is the old-fashioned one of reducing your

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charges and lightening your burdens, and in that way alone can you do something to improve the prosperity and progress of the whole nation.
6.0 P.M.
Mr. AUSTEN CHAMBERLAIN: It would be as useless as it would be uncharitable to commence a pot-and-kettle recrimination between the two sides of the House as to their respective responsibilities while discussing the Second Beading of the Budget. I confess I do regret that a larger number of Members are not present to hear a Debate which has given rise to several speeches of very considerable interest, and which have been of a very practical and concise kind. I suppose in these days I must not complain too much that we get the Second Reading of the Finance Bill towards the middle of the month of July. Compared with the last two years that may be said to be a phenomenally early date, but if you exclude the last two years it would be quite exceptionally and abnormally late, and I hope the Chancellor of the Exchequer and those responsible for Government business will revert under the stimulus of the Law Courts, to the earlier and better practice. I suspect we should not have had the Second Reading of the Finance Bill even now, the third week of July, but for the public spirit and enterprise of a late Member of this House, Mr. Gibson Bowles, who has vicariously hauled the Chancellor of the Exchequer, through his instruments, before the Courts of Law, whose judgment has not yet been given. I cannot but suspect that the sudden announcement that the Budget would be proceeded with, after so much doubt had been cast upon the intentions of the Government to deal with it at all until the Autumn Session is not altogether to be disassociated from the advice their Law Officers have given them as to the probable result of their action.
A discussion of this kind is necessarily discursive, unless we were to move a specific Amendment upon one particular point and so exclude hon. Members from touching upon other ground. Our discussions to-day without such an Amendment have been rather of a discursive character, and I am afraid I myself, while saying a few words upon some subjects already raised, must also introduce fresh subjects into the discussion. None of us who follow finance, whose business it is to do so, and who find an interest in the subject, can be altogether happy about the position in
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which we find ourselves. The hon. Member who preceded me in Debate confessed to a considerable amount of sympathy with the views put forward by my hon. Friend behind me. I do not wish to speak in terms of quite such keen alarm as my hon. Friend did, but I do say the situation is one for grave thought; it is one which never ought to be out of the mind of this House, whether it is Budget day or any other, and it is certainly one which may well call for the co-operation of all of us to bring things to a better position, if we can. The hon. Gentleman opposite urged that as long as the nations of the world were spending so much money upon military and naval defences their securities would continue to be depreciated. Our expenditure upon military and naval defence is only a portion of our total expenditure, and though it is a very formidable proportion, it is not by any means the only portion which has grown rapidly or largely within the last few years, and it is the one part which remains really outside our control. Technically, of course, it is within the control of this House, as well as any other matter, but in regard to expenditure upon social reform, in regard to expenditure upon internal development, in regard to expenditure upon domestic service, we have it within our power in this country without regard to anyone else to settle what we would like to do, and to settle how much we can afford to do at any one time. In regard to our defensive expenditure, the position is entirely different. There there is something we must do, nothing less will suffice than something to secure our defence, and that does not rest with us. We cannot determine it; it rests upon comparison of the naval and military forces of other Powers with our own naval and military strength.
The hon. Member opposite quoted a much-used saying of Lord Beaconsfield, that "policy dictated your naval and military expenditure." No doubt that is true up to a certain point; it is true if you go about the world in a provocative spirit without any regard to the rights and interests of other people. If you are aggressive, grasping and mauvais coucheur, no force or power would be sufficient to protect you against an outraged world; but it is not true to say, in the sense in which the hon. Member used the argument, that our naval and military forces of to-day depend upon our policy. Our policy is a peaceful policy. Neither party in the State seek new extension. No portion of

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the Empire desires to see a further extension of our responsibility. We are not a restless Power; such a restless Power as causes European turmoil and so adds to the armaments of any European family. Take the hon. Gentleman's own illustration. He himself confessed what I think hon. Members in every quarter of the House do not always recognise, that there is no prospect of our being able to reduce armaments with any agreement with other Powers. This Government have tried that road; they have found it blocked. They were not the first to make an offer of that kind. In earlier days when I was at the Admiralty I remember the late Lord Goschen, who was then First Lord, making an offer from the Government Bench opposite to reduce his Estimates if the Estimates of another naval Power were reduced. I cannot give the exact year, but I think it was between 1896 and 1899; it was an offer publicly made in this House.
Mr. LLOYD GEORGE: That was an offer to France.
Mr. AUSTEN CHAMBERLAIN: Yes, at that time it was an offer to France. The present Government have, as is common knowledge, sought to arrive at some similar understanding with Germany, but no such understanding is to be had. The hon. Gentleman opposite recognised, as he stated, that no self-respecting Power is going to come in under an obligation as to what it will spend upon its own Army and Navy. I do not know that it is necessarily contrary to the self-respect of a Power to make such terms of its own accord, but I understand it is not possible for a self-respecting Power to have such a bargain forced upon it. However that may be we have got to deal with the fact, and if nothing else resulted from the excursion of the Lord Chancellor to Berlin, at any rate by this time the Government know it is quite useless to raise that question. Then the hon. Gentleman suggested that treaties of arbitration are an advantage, and that disputes should be referred to The Hague Court, and that that might solve our difficulties, and he took as an illustration that such an agreement could be made with the United States of America. I do not think the hon. Member would blame the last Government or this Government for not having been willing always to march along that line whenever they found
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other Powers willing to do the same. If my memory serves me right, the present Government did sign an arbitration of that kind with the United States, not quite as broad as they would like, but as broad as they could get the United States to agree to, and it was so emasculated in the American Senate that the American Government have not thought it worth while proceeding with it. That is no reason for not trying again, if and when the circumstances are more favourable, but it is not a very hopeful one. It does not show a very near prospect of reducing naval and military expenditure. But suppose the Government signed such a treaty, would it be possible for His Majesty's Government to recommend the reduction of armaments by a man or to decrease a single vessel in the shipbuilding programme? No, they might have signed that treaty and our naval and military demand would remain and must remain just the same. A moment when the greatest military Power in the world and the second greatest naval Power is not merely adding a new Army Corps to its land forces, but a new squadron to the Fleet, is hardly the moment for lecturing the British House of Commons on its duty to reduce armaments. I cannot help thinking that the appeals of the hon. Member would be more applicable to some foreign nations than here, where we should be only too willing to restrict our expenditure if we could do so without injury to our national and Imperial safety.
That being the case, I come back to our strictly financial position and I am bound to say, without using the language of exaggeration, I think it is one that gives rise for anxious reflection. I do not want to go again over the ground we have so often travelled as to the price of Consols and gilt-edged securities. I have tried to state the case in criticisms of the Government without exaggeration and without unfairness. There remains a difference of opinion between the Chancellor of the Exchequer and myself as to the question of which Government is responsible, but, be the causes what they are, the results are of sufficient gravity for the House of Commons to treat them seriously and to try if we can ameliorate them. What is the position? The hon. Member who preceded me spoke of high taxation, higher in fact than we have ever known before. He spoke of recent years of good trade and of an enormous expansion in our exports and imports. Usually in the past when that is true,

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Governments have been able to make progress with some social or other reforms that required the expenditure of money, and at the same time give immediate relief to the tax payer by the remission of taxation, and in that way make provision against years when trade is less good and less flourishing and when unforeseen emergencies call for exceptional efforts on the part of the British nation. Have we done that? In the years of bounding prosperity described by the hon. Member opposite and the Chancellor of the Exchequer, with a super-abundant revenue have we laid by anything in reserve fox the future? Have we relieved the burdens which rest on the community? We have done neither. I want to treat this question broadly as it affects the country and I am not dealing with it as it affects a particular class. It is true that threepence roughly was taken off the Sugar Tax. That is sufficient for my purpose because I am not considering the apportionment of the burden between different classes, but I am considering the burden on the country as a whole, and I therefore regret that remission in regard to the Sugar Duty as I regret the 1d. remission on tea, which I do not think did any good to anybody except the trader, and the advantage was outweighed by additional burdens in the shape of other taxes. What is the result? Our first reserve for war, the Income Tax, stands now at what used to be considered a war figure. The Sinking Fund, our second reserve for war, is at a low peace footing. We are making no provision whatever by way of a reserve for future contingencies. What has become of the revenue? All this growing revenue, all this new taxation is swallowed up as fast as it is received in increased expenditure, and it is not enough for the Chancellor of the Exchequer or the Government to say to hon. Gentlemen on this side of the House: "Pick me out the Bill you do not like, or the particular Vote which I ought to have reduced."
Mr. LLOYD GEORGE: Pick me out the Vote which hon. Gentlemen opposite did not wish me to increase.
Mr. AUSTEN CHAMBERLAIN: My withers are unwrung in that respect. The Chancellor of the Exchequer has always acknowledged that perfectly fairly. At any rate, I have felt that responsibility, and I have spoken under a sense of that responsibility not merely on Budget days
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but on other occasions. I hope, however, that the Chancellor of the Exchequer will allow me to say that he never will get an Opposition from whatever party it is drawn to be the guardian of the public purse. There was a time when an Opposition did largely fulfil that purpose, but I do not think it will ever occur again. It certainly will not occur as long as the Chancellor of the Exchequer goes on offering free boons to one class of the community.
Mr. LLOYD GEORGE: Which are free boons?
Mr. AUSTEN CHAMBERLAIN: I have in mind the right hon. Gentleman's speech at some meeting in London where he said, "Was it not a splendid thing to be able to choose the doctor whom you like, and have somebody else to pay for him?" A promise which I am glad to recall on "Joy Day." I was led aside at the invitation of the Chancellor of the Exchequer, but my point is that you have greatly shifted the distribution of taxation. You have paid for great social reforms in the main out of the taxation put upon a limited number of people. The only exception the Chancellor of the Exchequer made was in respect of his Tobacco Duty. I leave out of consideration the insurance premiums, because the burden of taxation in this respect is not felt severely and perhaps felt very little by those who derive the greatest advantage, and for whose benefit these social reforms are wholly conceived. At a time when the Chancellor of the Exchequer is himself going through the country advocating a new raid upon a particular class of property for some unknown and undisclosed boon for the masses of the people, it does not lie in his mouth to accuse the Opposition of not giving sufficient support in resisting taxation. The Chancellor of the Exchequer ought to be—and if he is not nobody ever will be—in the true sense of the word the guardian of the public purse. The great misfortune of the last few years has been that the Treasury, instead of guarding the public purse, has transformed itself into one of the biggest spending Departments. Those who ought to be checking and controlling: expenditure have now the pleasure of spending most of the money.
I am not one of those who believe in putting the cat in the dairy to protect the cream, but if you do put the cat to guard the cream you should not be surprised if the cream goes. We are

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spending our resources up to the hilt. The hon. Member speaks of the surplus of £6,500,000, and he thinks that that ought to have been devoted to the reduction of taxation. In old-fashioned years it would have been applied to a reduction of taxation. Even after making allowance for the fact that £2,000,000 was due to an error, avoidable or unavoidable in estimating, it means no reduction of taxation now, because we are not merely spending the money up to the hilt but we have mortgaged it in advance, and we have mortgaged every penny of increase which we expect to get. That is an aspect of the case which gives thinking men most cause to think, and which explains a great deal of their anxiety. You had old age pensions introduced in an estimate of £6,000,000, and they are now over £12,000,000. That is a kind of estimate which I think the Treasury ought to have been able to protect us against. On the top of that you have the £18,000,000 levied in respect of the Insurance Act. I am talking now of the money levied directly as taxes, and that is the contribution from employers and employed. That is an enormous addition to the burdens of the nation. It is an enormous additional burden upon trade and the industries of the country. I am not going to dwell upon it now, but I have to take note of the fact that these proposals under the Insurance Act are unaccompanied in the case of this country by such provisions for the security and the encouragement of trade as were the basis and foundation of similar insurance provisions in Germany and elsewhere.
Those are enormous figures in themselves, but they are nothing to the liabilities we have to meet in the future and which no later Chancellor of the Exchequer can control. The present Chancellor of the Exchequer and his predecessors have created a monster which will rule them, and rule all who come after them, whoever they may be who sit on the Treasury Bench in the future. Take old age pensions. They are not going to stop at £12,000,000. In thirty or forty years' time they will probably be £24,000,000 owing to the increase in the length of life through improved conditions and other circumstances. That is a rise which will take effect year by year. Take the Insurance Act. I repeat in this respect the criticism of the Leader of the Opposition that if any Department, except the
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Treasury, had been responsible—I do not want it to be thought that I am attacking the permanent officials—and if any Minister but the Chancellor of the Exchequer had been responsible for the Insurance Act, the financial provisions contained in it would not have been allowed to go through as they have gone through. The Chancellor of the Exchequer has deliberately thrown the burden upon future years, and he is not meeting his fair share of liability now. For the sake of being able to say that he is giving twopence, while he is not really giving it, he throws a much higher liability on future years, when, in other respects, apart from that, the liabilities would steadily and naturally have risen. But that is not all. The worst feature of the Insurance Act, by common consent, is the treatment of the man known as the deposit contributor, who is not really a depositor in the Savings Bank of the Post Office. So indefensible do the Government feel their proposals to be that they altered their Bill themselves in order to bring their proposals in this respect up for review in three years' time. When they come up in three years' time what are you going to do?
Mr. LLOYD GEORGE: We did not make that proposal.
Mr. AUSTEN CHAMBERLAIN: At any rate, the Government adopted it and made it part of the Bill. If you are going to do anything for the deposit contributors you will have to spend more money. You cannot reallocate the money you have to spend, because that will have created vested interests which henceforth you will be unable to disappoint. That is another liability for the right hon. Gentleman or his successors in future years. Now we come to the final proposals of the Chancellor of the Exchequer in respect of this Budget, and we find, even when he has reduced his true liabilities in respect of the year by throwing them forward on to future years, he is not able to pay his way out of the revenue of the year. He is obliged to borrow from the surplus of last year, from money which is allocated by law to the extinction of debt, in order to provide for the naval expenditure of the year, because it is perfectly fair, though we do not yet know what that expenditure is to be exactly, to assume it is not expenditure once undertaken and then done with, but expenditure which will be recurrent year after year. The Chancellor of the Exchequer, in his earlier days, repeatedly drew a contrast between defence

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and social reform, and said we must choose between the two. I think there is no real choice, because, although we can choose what we do in respect of social reform, we cannot choose what we do in respect of defence. If we do not do enough, we might just as well do nothing. I only draw the attention of the Chancellor of the Exchequer to that now because his obvious hope in those days was that in a year or two, by the time we have got to now, he would be able to safely reduce our naval expenditure and so have a reserve for social reform. He cannot have that hope now. He cannot hope there will be a decrease in naval expenditure; it must for years to come be an increased expenditure. In my opinion, when people ask why Consols are depressed as they are and why gilt-edged securities in this country are in such an unfortunate plight, it is not to be explained, as the Chancellor of the Exchequer would like to explain it, by the effect of a war which finished ten years ago, by the extension of trustee investments twelve years ago, by the increased production of gold, or by the activity of trade. Those have affected Consols, but they are not the only causes.
Our credit has been affected by this rapid increase in expenditure and by seeing all our increase of revenue swallowed up as fast and even faster than it has occurred. It has been increased by the spirit in which the Chancellor of the Exchequer deals with matters, by the appeals he makes to one class against another class, by his reckless attacks, under the guise of denouncing the idle rich, on those who are probably serving their country as well as any of us can claim to serve it, and by the general insecurity which the class of speech he makes, and the kind of agitation in which he indulges, produces in the minds of the investing public. I have no cut-and-dried scheme for restoring Consols to a more satisfactory position. When a depression of this kind has been so long continued and has been so progressive, it is not easy to arrest it. It tends to reproduce itself. The Chancellor of the Exchequer thinks people move their investments for the sake of a higher interest. That is the least of the considerations that have affected the former holders of Consols. What they care about is security. They could always have got a much larger interest. What they thought they had was a stock which would not vary markedly in capital value and of which at any given moment they
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could realise, large quantities without any appreciable effect upon the market. It is because those conditions no longer prevail that Consols have fallen so low and are likely to fall lower. It is for those reasons, and because there are no buyers for them except the Government broker. The Government broker seems wonderfully slow in trusting himself to that market. I do not press the Chancellor of the Exchequer to reveal to us what he did not reveal to the bankers: how exactly he is going to spend the money he now has to spend. But I do desire to join with my hon. Friend, who thinks the time has come when the Chancellor of the Exchequer should devote his attention to Consols rather than to the balance of the Floating Debt. I am not going to say any more, and I am not going to press the Chancellor of the Exchequer for an answer. I do not expect, if he does, it will have any phenomenal effect upon the price of Consols; but I do think it may do something to stay a process which is going a dangerous length not merely for our national credit, but for the commercial credit of London and of this great industrial country.
I must now come to the case raised in a very able speech by my hon. Friend who spoke first this afternoon. I agree with my hon. Friend that the course of the Government in regard to this Budget has been one which it is eminently undesirable should be a precedent. There was some question at Question Time to-day as to the financial correctness of the course of the Government in regard to another Bill and another matter. The Prime Minister, whilst acknowledging the importance of the subject, spoke of it as highly technical. These questions are all highly technical, and I hope the fact they are technical will not conceal from the House that they cover real substance. That there are technical restrictions on dealing with financial Bills or Bills involving expenditure and oh Votes is the result of the wisdom of our ancestors evolved from their experience. I am afraid the wisdom of our ancestors is apt to get short shrift now-a-days. No doubt changed conditions have rendered some of their precautions useless and even harmful; but at any rate their precautions were the result of the experience of their day, and, in dealing with finance at a time when complaint comes from both sides of the House that we are spending too much and with too little thought, the Government

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ought to be more than usually scrupulous to preserve the whole of the traditions, the object of which was first and last, and above all things to give this House a real knowledge of what it was doing to enable it to deal with the finance of the country and of the year as a whole, and not to involve it bit by bit in an expenditure greater than it would have sanctioned if it had had the whole of the facts before it.
I join with my hon. Friend in a protest against the original form of the Resolution on which this Bill was founded. The Chancellor of the Exchequer then proposed to keep in the Exchequer balance £6,500,000 for an indefinite period and for a wholly indefinite purpose. He indicated that some of it might be required for the Navy, and he indicated that some of it might be required to make good a falling off in the revenue owing to the great industrial dispute which was then coming to an end; but he never pretended that he required or intended to use the whole of that money for either of those purposes; and he gave us no indication of the amount he was likely to use for either. And as to the rest he stoutly refused at that time to make any statement whatever. If the House is going to allow Budgets to be conducted in that way, and Chancellors of the Exchequer to have that licence, then I warn the House that the last shred of their financial control has gone. We shall see future Chancellors of the Exchequer accumulating sums of money to be spent at some future time as may then appear to them most convenient, not without regard to the immediate electoral fortunes of the party to which they belong. It was a good and sound rule of our ancestors that the surplus of the year, unless immediately appropriated for some other purpose, should go to the reduction of Debt and to nothing else. I think the House, before they are asked to proceed with the Second Reading of the Budget, ought to have before them the proposals of the Government for using so much as they do not allow to go to this normal purpose of reducing debt. It is not sufficient to say we are going to spend the money on the Navy; we want to know how it is going to be spent on the Navy, and we want to know what is the total of that expenditure of which this is to be this year's part. We want, in fact, a complete Budget statement instead of a partial Budget statement, which is all we have at present, even in the third week of July, when we are asked to read this Bill a second time.
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What do the Government propose to do? By law £1,500,000, which they still withhold from Debt, was allocated to the redemption of Debt. By the Resolution on Report, and by the Bill as introduced, they propose to arrest that £1,500,000. Ought not the Bill to provide the conditions under which that £1,500,000 shall be retained and kept and spent? The Chancellor of the Exchequer did the same thing with a similar sum last year. He then lent £250,000 to British East Africa. That Resolution was moved in Committee of Ways and Means; was agreed to by the House on Report, and was embodied in a Clause in the Finance Bill. Why have we had no Resolution in Ways and Means this year? Why has there been no Report uf such a Resolution, and why is there no such Clause in the Finance Bill? What reason is there for the Chancellor of the Exchequer to depart from the precedent which he himself set last year, and why is the House less scrupulous in dealing with this expenditure now than it was a year ago? The very fact that the Chancellor of the Exchequer comes back to the House for a second loan should make the House more scrupulous to see that these forms are fulfilled. At any rate, if these forms are to be altered, they should be altered by the House after full consideration, and on general principles, and not as a matter of convenience to help the Governmeut. The position with regard to the other parts of this money, with which we are dealing in this Bill, and which we are holding up by this Bill, is even more curious. I understand, after the Bill has passed its Second Reading, and has got through Committee, we are to have disclosed to us by a Naval Estimate, for the first time, what is the use to be made of the money. That really does not preserve any efficient control for this House. It is playing fast and loose with those securities which our predecesors devised, and if the House does not resent it, is a kind of practice which inevitably perpetuates and extends itself. What one Government finds it convenient to do, other Governments will do. What one Government is allowed to do by the majority which supports it, other Governments will be allowed to do by majorities which are drawn from different parties. No Government would give up an advantage which its opponents have enjoyed without check or control. You cannot expect them to do that. You cannot expect them in a matter of that kind—if I may use the word—to say, "We will be honest men, though our predecessors were not, and will not be

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if they get in again." What I mean is, that I hope we will be stricter. I do not want to be offensive, I do not wish to impute any personal dishonesty to Members of the Government or to Gentlemen who support them; but I do say this, that the kind of restrictions which the Government are now waiving or evading were devices partly to keep expenditure down and partly to keep corruption down, and if you abandon those precautions you will run the danger of corruption springing up again. It will not be exactly the old kind of corruption, such as bribery of individual Members of this House; but it will probably be a form quite as bad, the bribery of their constituents for direct political or electoral purposes. I join in the protest, therefore, which my hon. Friend made against the financial procedure which has been adopted by the Chancellor of the Exchequer this year.
About the Bill itself, what is in the Bill itself there is very little more to say. We now need only to renew the taxes, and so long as we are able to renew them we are told to be content with our present taxes, and that we have only to renew the Income Tax and the Tea Duty. But the Finance Bill gives us an opportunity of reviewing other taxes which do not need renewal; and surely it is high time that the Chancellor of the Exchequer himself, and not merely his critics, should seize upon that opportunity. He has legislated in a bold and fearless spirit; he is a great believer in the idea that if you only pass a Bill your permanent officials will somehow make it work, and he is generally not disappointed. The permanent officials are wonderful people, though he sometimes sets them a task which is beyond even the capacity of British Civil servants, and he introduces an amount of confusion into our national life for which people pay not only in taxes but in loss of business and loss of profit and loss of employment. Is it not time that the Chancellor of the Exchequer considered some of the promises which he made during the passage of his famous Budget? Is it not time that he set himself to review the administration of the law, or the law as it turned out to be in the light of the expectations which he held out as to what it would not be? Is it not time that he considered the removal of the anomalies which he announced would not be created by that Bill, and the removal of the injustices which he protested that Bill was never intended to inflict? When are we going to have from the Chancellor of the Exchequer that new basis for the Licensing
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Duties which he promised three years ago? Three years ago he greatly increased those Licensing Duties, and he admitted in the course of the discussion that the basis on which he was raising them was unjust as between man and man within "the trade" and would work hardship; but he said that was the only basis he had at the moment, and that these duties were only temporarily imposed upon that basis, and that he would get a new basis which would be just, and, although he was assessing his duties then on that basis, that within a short time, within a few months—I think he said six months—he would deal with the matter. That few months extended to six months and three years; and I think that promise is about due; I might almost say it is overdue. The Chancellor of the Exchequer made another promise to the licensed trade. He said, "I want a certain sum of money." The gentlemen who represented the trade said, "Your proposals will take more than you say you want." The Chancellor of the Exchequer differed from them; but he said, "If that happens, I only need so much money and I will refund—perhaps that is not the right word—I will relieve you in future of the excess which I am taking from you."
I asked for a Return which has only been put into my hands since this Debate was in progress, and I have not been able to give any detailed study to it; but as I make out, the Chancellor of the Exchequer is taking about £350,000 more out of those Duties than he estimated them to produce, and that £350,000 he promised to return to the trade. He said, "If you pay in excess of my Estimate, I will revise the scale of Duties in order that the trade shall only contribute as a whole that sum of money for which I believe I am asking." Is not that promise due and overdue? Why is there no Clause in this Bill dealing with that injustice and remedying it? The Chancellor and his Friends talk a great deal about the large surpluses which he has had. I think "the trade," as it is usually called, has good reason to complain of the Chancellor of the Exchequer's self-congratulations upon those surpluses. I think he took a half a million out of them on what was known as the Wriggles-worth case. The Solicitor-General at the time when the law was passed, and the judge who tried the case said, that that was the effect of the law as it stood; and the judge said it was an effect that no honest man could intend. That was a case in which the Chancellor of the Exchequer

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ought to have refunded the ill-gotten gain. He is content to swell his surplus with it and to congratulate himself that he is a very good man because he has paid off more debt to that extent. I think these promises are a little overdue. I think the time has come, assuming the principle, for revising the working of the Land Taxes Valuation and the Land Taxes Law. That also is overdue. We have had speech after speech in these Debates, and even from two or three very competent hon. Gentlemen who supported these taxes. They supported the Increment Taxes in Debate, and supported them by their vote; we had from them very able arguments; and yet they have since told the Chancellor of the Exchequer again and again and proved that he is doing by his law as it stands what he said he would not do. He is taxing builders' profits and taxing men on the results of their exertions, foresight, enterprise, and skill. He is taxing for a rise in the site value when there has been no rise in the value of the site.
I think Members of the House who have not followed this matter will hardly think it is credible; but witness after witness who were called for the Revenue authorities and counsel for the Revenue authorities have deliberately claimed that where there has been no rise in the value of the site there yet may be a taxable increase in the site value. That was not what we were told. We were told that if there was not a rise in the value of the site, there would be no taxes. We were told that if there was a rise in the value of the sites, but if it could be shown to be due directly or remotely to the exertions or the expenditure, the brains or intelligence, of the owner, there would be no taxes. Well, I do not know whether it is good law or bad law; but I ask when is the Chancellor of the Exchequer going to bring the matter under discussion, because he is going in defiance of every statement he made in the House by which he secured the passage of this Bill? Is he going to allow the Inland Revenue to claim from citizens one after another in the Courts of Law or before the Referees taxes which he declared he was not raising, or taxes under circumstances in which he declared that there should be no taxes? It is not fair to the individual citizen to put him in case after case to the expense of going to arbitration and perhaps to the Court, in order to find out whether that is the law
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or not which the Chancellor of the Exchequer and his fellow Ministers who conducted that Budget through the House of Commons declared should not be the law.
7.0 P.M.
This last difficulty arises I believe out of an Amendment moved by the then Attorney-General himself, and which was criticised at the time it was made by the then Leader of the Opposition on the very ground that it would produce this result. He said, "What is taxable is the difference between the original site value and the site value on the occasion"; and by the Amendment which the then Attorney-General proposed to the House it seemed to him that he was taking a different method of arriving at the site value of the occasion from the method which he took of arriving at it for the original site value; and he said that if you took a different method of arriving at it you would get a different result, even though in reality the value had not been altered. You would get a different result by the two operations even at the same moment, if you adopted the two different methods of procedure. My right hon. Friend, who is a very keen critic, though he is not a lawyer, foresaw this, and what he then foresaw is now taking place. That which the Attorney-General said should not be done and would not be the effect of his Amendment is now being claimed as the law of the land by the agents of the Treasury, and I say the Chancellor of the Exchequer ought to have waited, or he ought to have said at once to his advisers, "you must not press these cases. If you advise me that that is the effect of the law I must bring in an amending Clause at once to make good my words and to keep the pledges by which the Government secured the passing of this Act." The Chancellor of the Exchequer has gone on year after year with these pledges unredeemed; and he introduces his Budget and says it involves no new principle and no new taxes, and that therefore there is no need for discussion; that it may be held up to December, or it might this year have been held up to March next, but for Mr. Gibson Bowles. He makes no offer, and has given little opportunity to others to make any effort to redeem the pledges of the Government or to secure the taxpayers against injustices against which they were guaranteed by the language of the Government at the time the taxes were passed. That is my real

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complaint against this Budget, and it is more serious even than the complaint as to the form of the Budget, or the vitiation of our financial procedure, which my hon. Friend complained of. It is that the Government are knowingly and wilfully perpetrating an injustice, in defiance of their own pledges and their own statements, when they passed the Budget of 1909. It was their bounden duty not to wait for the Opposition to produce Clauses for a Bill which the Government have thought fit to put down for Second Reading in the Dog Days or in the autumn, with a jaded House of Commons; but it was their duty to set themselves to bring in a Budget which would remedy those grievances. So far as this Budget goes it shows no effort on their part to remedy them, and that, apparently, there is no intention on the part of the Government to redress grievances which are long overdue.
The SECRETARY of STATE for the HOME DEPARTMENT (Mr. McKenna): I rise only for the purpose of replying to one part of the right hon. Gentleman's speech, that part in which he followed the hon. Member for Ashton-under-Lyne (Sir Max Aitken). There the case brought against the Chancellor of the Exchequer and the Government is that they have been guilty of a grave offence in their manner of dealing with last year's surplus, not from a moral point of view, but as a matter of constitutional practice. What actually happened was this: Last year showed a surplus of £6,500,000. At the time that surplus was realised there were several unknown factors materially affecting the finance of the coming year. In the first place, there was the coal strike pending, which, if it had continued long, would have materially affected the revenue of the coming year. There was, in the second place, an announcement made by a foreign country of an intended increase in its naval programme. Surpluses have again and again been intercepted by Chancellors of the Exchequer, and prevented from being used for their normal legal purpose of the Old Sinking Fund. There is no question about that. I do not think the right hon. Gentleman would allege for a moment that there is not abundant precedent for using the surplus of any year for a purpose other than the Old Sinking Fund.
Mr. AUSTEN CHAMBERLAINindicated assent.
Mr. MCKENNA: Then the only question is on what constitutional ground or on what ground of precedent it was justifiable to use the surplus for any purpose other than the Sinking Fund on the present occasion. That is the first point. The second is the form in which it is done. The first point is whether it was justifiable or not. The hon. Member who opened the Debate said it was a grave offence to use this sum of money for any purpose other than the Old Sinking Fund.
Sir MAX AITKEN: I said it was wrong to accumulate a surplus and tie it up without disclosing the purpose for which it would be used.
Mr. McKENNA: "Accumulate" is a word which, in this connection, I do not quite understand. The surplus had accumulated on the 31st March.
Sir MAX AITKEN: By the word "accumulate" I mean that the surplus was intercepted, and that the purpose for which it was going to be used, although in the minds of the Government, was not disclosed to Parliament.
Mr. McKENNA: That is the very point I am coming to. It will be observed that the factors on the 1st April, the moment when this surplus came into existence, which determined the Government not to use the whole of this money for the ordinary purposes of the Old Sinking Fund, were two wholly uncertain factors. The first was the factor affecting the revenue of the coming year, namely, the continuance or not of the strike; the second was a factor affecting the expenditure of the coming year, namely, the amount of the naval programme of a foreign Power, which had announced its intention of increasing its naval programme, so that the Government, if this surplus was to be intercepted at all, could not on the 1st April know the amount or purposes, or the definite purposes of the total amount, or the definite purpose in respect of each amount, for which the surplus should be intercepted. The Government, on the 1st April, had not got these facts within their own knowledge; therefore, if the money was to be intercepted and not used for the purposes of the Old Sinking Fund, the amount of money which was to be intercepted on the 1st April must have been unknown. What followed? On the 29th April, the Chancellor of the Exchequer, having justified, in a way which I now

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understand is not objected to by hon. Gentlemen opposite, the interception of this £6,500,000, or part of it, from the Old Sinking Fund, asked leave of the House, by Resolution in Committee, to intercept this money. That leave was given. On the 29th April, the amount which would need to be intercepted, either on the ground of deficient revenue in the coming year, or on the ground of naval preparations which would have to be met, was still unknown. Consequently, on the 29th April, the Chancellor of the Exchequer asked for general powers. But that was only the first stage of the Resolution—that was the Resolution in Committee. On the 24th June, the Resolution came up again on Report. By that time the Chancellor of the Exchequer knew more or less precisely whether he could anticipate any deficiency in the Revenue owing to the coal strike, and what would be the additional amount he would require for the purposes of the Navy. The moment he knew that he had good reason not to anticipate a deficiency in his Revenue he abandoned all claim upon the surplus in order to make good that deficiency. With regard to the Navy, he was advised by the First Lord of the Admiralty that a certain sum would be required. He stated it as £1,000,000. He could now give the precise figure which he needed to intercept out of the surplus in order to meet a new and expected but incalculable expenditure. A further item then arose—
Mr. T. M. HEALY: Why did you not recommit your Resolution?
Mr. McKENNA: If the hon. and learned Gentleman will allow me, I will come to that point in a moment. There was a further item which the Chancellor of the Exchequer had had in view, but which was not definitely determined; the item of a loan of £500,000 to an African Protectorate. Supposing he had not used any part of the surplus for the purpose of this loan, what would have been the consequence? It was resolved that the loan should be made. He would have been obliged to pay off Debt with one hand, and incur a certain amount of loss, which there always is in paying off Debt—you have to pay agents, and take the turn of the market—and on the other hand, having paid off £500,000, he would have to borrow another £500,000. That would have been bad business.
Mr. T. M. HEALY: Has this House become a huckster's shop?
Mr. McKENNA: It is most undesirable that it should become a huckster's shop; and it is equally undesirable that the House should not take advantage of ordinary business methods and endeavour, so far as it can, not to waste public money by borrowing with the one hand and paying off Debt with the other. That was the reason for the use of the £500,000. I have brought the House in this story to the 24th June. The Resolution came up on Report on that date. An Amendment was moved by the Chancellor of the Exchequer. In Committee he had received general powers to intercept the whole £6,500,000. As soon as he knew the facts, he himself moved an Amendment to cut this down from £6,500,000 to £1,500,000. The hon. and learned Member (Mr. T. M. Healy) asks why did he not recommit the Resolution? The Rules of the House have provided for that contingency. The Rules of the House allow a Resolution to be cut down on Report, but it cannot be increased.
Mr. T. M. HEALY: Read the Rule.
Mr. McKENNA: It is the practice of the House. I have refreshed my memory and consulted the Clerks at the Table, and I understand that is the Rule on a Resolution, that, if it is desired to increase the amount a Resolution on Report must be recommitted, but if it is only desired to cut down the amount there is no need to recommit. Cutting down may be done on the Report stage. I hope the hon. and learned Gentleman will accept that explanation. The whole procedure up to 24th June was strictly in order. There was abundant precedent for it, and there could be no suggestion that it was unconstitutional.
Sir GEORGE YOUNGER: Does not that merely affect taxation? This was not taxation; it was a surplus.
Mr. McKENNA: I understand that a Resolution on which the Finance Bill is founded cannot be extended on Report, but can be cut down.
Mr. AUSTEN CHAMBERLAIN: That is not the point. The sum we were concerned with in Committee and on Report was £6,500,000. In Committee you allocated it one way and on Report another way. Does the right hon. Gentleman find a precedent for that?
Mr. McKENNA: Yes. We did not cut down the £6,500,000; it was not allocated at all in Committee, or, rather, it was not appropriated. What was done was that the Chancellor of the Exchequer was relieved from the obligation to put £6,500,000 into the Old Sinking Fund for the redemption of Debt. On Report he was relieved of a less obligation. He was relieved of the obligation only to pay in £1,500,000. The Resolution having been cut down on Report, he remained bound to pay in £5,000,000 to the Old Sinking Fund for the redemption of Debt, so that the Resolution on Report, being a cutting down Resolution and diminishing his original obligation, the Chancellor of the Exchequer followed the usual practice. He was strictly in order in asking the House to adopt a Resolution so amended on Report. Now we get to the Bill. I understand the charge made against us is that it is unconstitutional to appropriate this £1,500,000 to any purpose unless it be done in a Finance Bill. At the present moment, this £1,500,000 is not appropriated to any purpose; it remains at the disposal of the Chancellor of the Exchequer; it is in the Exchequer balances. It will be appropriated, and Parliament will be asked to appropriate it to certain services in the Appropriation Bill.
Mr. T. M. HEALY: Monstrous!
Mr. AUSTEN CHAMBERLAIN: Does the right hon. Gentleman mean that the only authority for the loan to Uganda will be in the Appropriation Bill?
Mr. McKENNA: It will be appropriated in the Appropriation Bill. Estimates will be introduced in the ordinary course of Supply, and Parliament will vote the Estimates of the expenditure. These Estimates, when carried in Committee and on Report, will be introduced as a Schedule to the Appropriation Bill, and in the Appropriation Bill Parliament will appropriate the money to the particular services of the year. Thus precisely the ordinary procedure will be followed with regard to this expenditure which is followed with regard to the expenditure of £180,000,000 which this House annually votes and annually appropriates. The hon. Member is clearly in error when he assumes that the Finance Bill must appropriate the money which is raised under it to the purposes on which it is to be expended. That is the function of the Appropriation Bill.
Mr. T. M. HEALY: When did you do it last year?
Mr. McKENNA: The Appropriation Bill will, in due course, be founded upon a Resolution passed in Committee of this House and on Report, and the annual Appropriation Bill of the year will authorise the appropriation of this particular money and, so far as I have been able to discover, so far from its being a grave offence of being unconstitutional, nothing except the most ordinary practice has been followed on this occasion.
Mr. BONAR LAW: It is very technical, and I wish to understand it. It seems to me that the right hon. Gentleman has not even touched the criticism of my hon. Friend. That criticism was that in the case of the two precedents he named, that of the right hon. Gentleman (Mr. Wyndham) and that of Mr. Goschen, in framing the Resolution, the Opposition held, and the Speaker upheld them in their contention, that they had no right to keep back the money without a specific purpose. How does the right hon. Gentleman meet those precedents? That is the point.
Mr. McKENNA: I am sure it is entirely my fault, but I really thought I had met those points. I explained at the time when the Resolution was introduced that it was impossible, because on the 29th April the Chancellor was quite unable to say how much revenue he would lose in consequence of the coal strike.
Mr. MITCHELL-THOMSON: It is not that at all. It was over on 24th March.
Mr. McKENNA: It was not really over on the 24th March, It was not over till the second week in April. You could not tell what the loss of revenue would be from labour troubles at the time. There had been a material loss of revenue and it could not be stated whether that would be made good. There is nothing to conceal in the matter whatever. That is the first unknown factor. The second unknown factor was the amount of naval expenditure which would be necessary in order to meet the German increase, which at that time was unknown. How could the Chancellor of the Exchequer introduce a Resolution allocating certain sums of money to these two purposes when he did not know at that time what the amount in either case would be, and although he knew for a certainty that possibly both, and certainly one, of those items would have to be met?
Mr. BONAR LAW: How do you get over the precedents?
Mr. McKENNA: If the right hon. Gentleman was only to act in accordance with these precedents, and he could not act in accordance with them on this occasion, the only alternative must have been that he would have left them out of account. What would have been the consequences? Was he to raise new taxes which might not be wanted in order to make good a possible, though not a certain deficit at the end of the year from revenue, or was he to raise new taxes in order to meet a certain increase of naval expenditure, the amount of which he did not know? Why should he? He had the money in his hand. He could meet both these liabilities as soon as he knew them, and they were both liabilities which might very properly be met out of the surplus of the preceding year. They were both approved by the Opposition. Take the case of the Navy. A large part of this surplus which had been raised from the taxpayers of the year was due to the fact that the Board of Admiralty had been unable to expend all the money which they had raised in the year from the taxpayers—£1,500,000. That expenditure was only postponed. Would it be reasonable to call upon the taxpayers again to pay this money—to postpone expenditure for the sake of posterity, making the present taxpayers pay twice over for the same purpose in order to relieve posterity from a certain amount of debt? That would have been unreasonable. The Chancellor of the Exchequer rightly and properly held up a part of the surplus which had been obtained from unexpended naval money for the purpose of meeting new and certain expenditure on the Navy.
Mr. AUSTEN CHAMBERLAIN: Will the right hon. Gentleman tell me why under these circumstances the Chancellor of the Exchequer could not accept the Amendment which defined the purposes for which the surplus might be withheld?
Mr. McKENNA: I have not the words of the Amendment, but I am told it would have more than covered the Resolution.
Mr. AUSTEN CHAMBERLAIN: It would have covered what the Government are now doing.
Mr. McKENNA: I understand the Mover of the Amendment himself said that the language of the Amendment was
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not appropriate. It was a manuscript Amendment, and no Chancellor of the Exchequer could accept a manuscript Amendment.
Mr. T. M. HEALY: The right hon. Gentleman's own was a manuscript Amendment.
Mr. McKENNA: It was considered beforehand. I understand the Mover of the Amendment himself stated that it would require further Amendment. But is not all that beside the mark? We are dealing with a question of procedure now on this Bill, and the whole of that was settled on the 24th June, the moment the Chancellor of the Exchequer had the material facts within his knowledge. Although I fully agree with the force of the precedents referred to by the right hon. Gentleman, still they were not appropriate to this situation, because the facts were not within the knowledge of the Chancellor of the Exchequer at the time. Undoubtedly in these circumstances and to that extent, and to that extent only, a new precedent has been made. But it is a new precedent only in form, because before the Report stage of the Resolution the money was allocated—not in the Resolution itself, but it was declared by the Chancellor of the Exchequer both as to the purpose and as to amount, and Estimates will be introduced in order to effect the purpose and in order to absorb the money to that amount, and the House will have an opportunity on the Estimates and on the Appropriation Bill to discuss and criticise the purpose and the manner of this absorption into the Old Sinking Fund. I readily admit that the hon. Gentleman (Mr. Aitken) brought before the House what appeared to be a strong case, but I hope he will recognise on examination that the Appropriation Bill is the proper Bill to appropriate this money and not the Finance Bill; and although, in form, a new precedent has been created, in fact the Government have only been following a whole series of precedents under which money has been taken from the purpose of the Old Sinking Fund and devoted to the expenditure of the year.
Mr. T. M. HEALY: The right hon. Gentleman has made a most adroit and able speech. The Chancellor of the Exchequer, adroit as he is, was well advised in putting up the Home Secretary to make the point he has done. I think I may be allowed, having made a protest upon this point on 24th June myself, to say one or two words

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in reply to the right hon. Gentleman. I conceive that Ireland, as the poorest of the three Kingdoms, has a special interest in the regularity of finance. It is the member of the three Kingdoms always swindled by the Treasury. It was deceived by the Treasury two years ago. We were told by the Treasury that £400,000 was the extent of the Budget, and already they have confessed that our taxation will amount to more than £1,500,000. Therefore this question, as I raised it now nearly twenty-five years ago, when Mr. Peel was in the Chair, has always had a special interest for myself. The Home Secretary has shown himself adroit in evading the point before the house. Do not let the Chancellor of the Exchequer imagine for a moment that I am objecting to his proposal in regard to the Navy. I am not. I have said before, and I do not hesitate to repeat it, that I believe there is a distinct and serious menace against the three Kingdoms, and I believe our Kingdom will be the greatest loser if any misfortune should occur. Therefore, as far as I am concerned, I do not intend to offer the smallest criticism against the allocation of money; but I think I am entitled as against the form to point out what the right hon. Gentleman has done. Let me first take this point. Everyone knows that Budget night is the greatest occasion in the year. It is the occasion on which the humblest villager takes an interest in Parliament. He sees whether the tax has been taken off raisins, sugar, or whisky, as the case may be, or whether it has been increased. Everyone is interested in the Budget, and, accordingly, if you split that occasion into two, a big Budget and a little Budget, you not only deflect interest in this House but you rob the country of that criticism which is always expended upon the Chancellor of the Exchequer's Budget statement. That is my first point. What is being done here?
Let us suppose for a moment that this £500,000 for Uganda had been put into the Budget on this occasion, as the £250,000 was put in last year. Does the right hon. Gentleman mean to say that, tame cats as some sections of this House have become, especially in relation to Ireland, a howl of protest would not have gone up on Budget night against a proposal to take £750,000 for these gentlemen in Africa out of money contributed by raising taxes upon our tobacco and our whisky? Of course it would, and therefore the right hon. Gentleman, in pretermitting that occasion, in my judgment has prevented the
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House from having the adequate opportunity to which it was entitled. Furthermore, let me put this point. On Budget night everyone can speak as often as he pleases. If the matter was debated on Budget night hon. Members would have the right to speak again and again and again. What did the right hon. Gentleman do? He kept this secret up his sleeve until the Report of the Resolution, and then, with extreme adroitness, when his speech was three-quarters done, he came down with a bang on the £750,000 for Uganda. Is that the way this House ought to be treated? Has finance become a matter of Ministerial dexterity? I maintain that the Budgets of the country ought to be so framed that the humblest in England or Ireland should understand them. That is not the course taken by the right hon. Gentleman. The Home Secretary has now made an announcement evidently under pressure of the speech of the hon. Member for Ashton-under-Lyne (Sir Max Aitken) as to his future course with regard to Africa. He has stated that a £500,000 loan to Africa is going to be put into the Appropriation Bill. I thought it was pretty tough last year when you said that you would pay salaries to the Members of Parliament without passing any Bill, and by running the charge into the Appropriation Bill. Members of this House are now going to be put on the same level as the niggers of Uganda. I quite appreciate the distinction made by the Home Secretary as regards a Taxing Bill and an Appropriation Bill. One finds the money, and the other spends it. But what was the course taken last year? Who created this precedent? The Lloyd George Finance Bill. It was created in the Budget of last year.
I pointed this out on the 24th June. Therefore, surely if there is going to be anything like consistency and regularity of procedure the course taken last year should be taken this year. I think lawyers have some reason to complain. I would ask the Attorney-General is it reasonable from the point of view of groping after facts in Statutes? Would any lawyer, I care not where, look for a proposal in regard to Uganda in a Budget Bill? Would you not rather look for it in some measure connected with the Colonies? But when you did create the precedent by putting into a Finance Bill a Vote of £250,000 for a harbour at Mombassa, or some other work in that region, why do not you stick to it?

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Why do you say, "We will put it into the Finance Bill one year, and we will put it into the Appropriation Bill next year"? I want to know why last year it was put in the Finance Bill, and why, this year, when you have doubled the amount, you stick it into the Appropriation Bill. They cannot both be the proper place. Therefore I turn the argument of the Home Secretary against himself. He said to the Hon. Member for Ashton-under-Lyne, "Oh, but the Appropriation Bill is not a Taxing Bill." Where did you appropriate it last year? This sin is your own. It does not lie with the right hon. Gentleman to say that a Taxing Bill is not the proper place for the appropriation.
Having set the precedent last year we are entitled to know why it is not being followed this year. I will tell you why it is not being done. You want to hide it from the Irish Members. You are now going to give £500,000 to Uganda. Of course, it must come out of something. You raised the Whisky Duty, so that this money will come out of the Scottish crofter and the Irish labourer who drink whisky. Why did you put 3s. 9d. a gallon on whisky? You must have put it on, not in the interest of virtue, but for some fiscal purpose. I want to know what is the excuse for hiding it away. Remember this money is not a gift; it is a loan. Is there any precedent for this, and would any man expect to see the terms of a national loan in an Appropriation Bill? I put that question to the Attorney-General. Why! the notion is abhorrent, because the purpose of an Appropriation Bill is to appropriate. It should not legislate, and therefore when you put this into the Appropriation Bill that £500,000 is to be given to somebody in Africa on loan at 4 per cent. or 4½ per cent., that is legislation. That is the reason why last year when you did provide for Uganda, you put £250,000 into the Finance Bill. It was because you had to deal with the matter by means of legislation. Having done that, you suddenly say this year, "Oh, we will stick it into the Appropriation Bill. It will be the month of August before it comes on, and Members will be very tired. The Irish Members will have gone home." This is the important point. I am only suspicious, but the learned Home Secretary with all his skill was absolutely staggered on the point. Why did the right hon. Gentleman not explain, when the question
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was put to him by the hon. Member for Birmingham and others, as to why last year the amount for Uganda was put into the Finance Bill, while this year it is to be put in the Appropriation Bill. The right hon. Gentleman says he was specially put up—specially briefed—by the Treasury to answer this point, and that is the one point he has been unable to answer. I asked a question by way of interruption, but did not receive an answer. I am not quarrelling with what was said by the hon. Member for Ashton-under-Lyne with regard to the £1,500,000. I am not going to talk about a question I do not fully understand. I will stick to the point I do understand.
The right hon. Gentleman said—and I think there was some justice in his remark, though I think it was going very near the windy side of the law—that it was the opinion of the Table that the original Resolution enabled the Chancellor of the Exchequer to divert or deflect the whole of the £6,000,000 to the Sinking Fund, that this was a deflection only of £5,000,000, and that therefore he was entitled to do what he has done. If that is the opinion of the Table, I am very sorry for it, because anybody who has come into contact with the Table must feel that there is great skill shown in dealing with matters of finance. In 1881, when Mr. Gladstone did not interpose a day's delay between the last Report on the Estimates passed in Supply, and the First Reading of the Appropriation Bill, I remember, being then a new Member of the House, I went to Mr. Milman, who did a great deal for the regularity of our procedure, and asked why it was that a day was not interposed between the Report stage and the First Reading of the Appropriation Bill. Mr. Milman shook his head and said: "Well, you know, I never approved of Mr. Gladstone's finance." I respectfully say this to the Table, "By your Parliament Bill you have practically made a revolution in your methods of dealing with finance That is to say, you have decapitated the power of one House to deal with finance." That being so, ought it not to make us more strict, especially those of us who are representatives of a poor country, in exacting the last ounce of whatever rights we have over finance in this House? What does the right hon. Gentleman reply? I would not like to contradict the Table on a matter like that, but I would like to see the rule in black and white—I would like to have cited the precedent which the right hon.

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Gentleman says exists. The hon. Gentleman beside me quoted three or four highly important precedents. There was one in 1903 against the right hon. Gentleman the Member for Dover. There was one in 1890, when I got the Speaker to rule, and there was another on a point raised by Mr. Thomas Gibson Bowles in another year. You will find them all in Erskine May's Book. It is no esoteric matter. The Speaker on each occasion ruled for the Opposition and against the Government, and I say that in matters of finance, where we are resisting proposals to increase charges on the subject, the ruling of the Chair ought always to be with the Opposition in a doubtful matter.
If the opinion of the Table is as the right hon. Gentleman says, I will not set myself against it. I have not followed how the insurance controversy stands. When the National Insurance Act was passed I washed my hands of it. I always read the speeches of the Chancellor of the Exchequer, but I have not yet finished the speech he made on Saturday. That was not from want of will, but from want of time. I would point out that when he had in his hand a surplus of £6,500,000 there was immense temptation to give the doctors a slice of it. The Home Secretary says that the right hon. Gentleman in March was not quite free of complexities. If the Government were well informed they ought to have known what was the intention of Germany with regard to its neighbours. Has Germany the capacity of the evil eye? I do not know that she is able to build £2,000,000 worth of ships without England having knowledge of it. Must not the Government have known two months ago that they would not need any such extra sum as £6,500,000 for shipbuilding this year? Germany is, after all, a poor country, comparatively speaking. They tax their electric light and a number of other things, and at all events we have not got so near the knuckle. We might have known that Germany was not likely to spend anything like the sum which the right hon. Gentleman had kept in his pouch, this £6,500,000. What I protest against is, you raise money off poor people and when you do so you should not hold it up and leave it exposed to the temptations of politics to be used as the Government would like from time to time. The right hon. Gentleman gave no answer to my question as to why this Resolution is not to be committed. I regard this matter as very serious. I had hoped to
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have heard from the right hon. Gentleman some statement as to whether there is any precedent for amending a Resolution in Committee of Ways and Means in a drastic manner—at least on the Report stage. The right hon. Gentleman below me stated there was not, and I take it that there is not until he is contradicted. But the right hon. Gentleman opposite did not contradict him. I put it to the Chancellor of the Exchequer himself. He will be in opposition one of these days in the normal course of affairs; with what severity would be come down upon a Tory Government if, let us suppose, his Nonconformist conscience was at boiling point about some proposal about Catholic universities, which was what the Member for Dover was at when he was stopped by the Prime Minister of that day.
The right hon. Gentleman has said you did not provide for this in Committee of Ways and Means. We have come to kittle times when the Chancellor of the Exchequer does not take the House into his confidence on a matter of this kind. I do not suppose it will occupy half an hour of the time of the House, and yet to save half an hour of the time of this House the Home Secretary has to confess that a new precedent has been created. I say if it is a new precedent it is a bad precedent and should never have been created. This £1,500,000 we are now told is to be made the subject of an Estimate. Did you ever hear of an Estimate for a loan? In other words, instead of having a provision that Mombasa Harbour or Uganda Railway is to have a half a million spent upon it, there is to be in the Estimates "Be it enacted that we lend the Governor of Uganda for his occasions half a million sterling at 4 per cent. interest and a ¼ per cent. for sinking fund with the provision of paying off in forty years." The thing is absurd. What is more, it cannot be done. I venture to say that the Government will be driven when they see the hollowness and the absurdity of the position and to bring in a Bill, and it would be franker, better, manlier, and more in accordance with the traditions of the right hon. Gentleman and this House, for the right hon. Gentleman to take the House into his confidence and admit a mistake, as was done before now. Nobody expects infallibility on the Treasury Bench. Prime Ministers make errors. They are only human beings, like the rest of us; even the great seal of office is not

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like being made a Pope, and therefore the right hon. Gentleman might very well have come down and—I will not say confess his sins in a white sheet or anything like that—but say that he has been advised by my right hon. Friend or some gentleman connected with the Treasury that he cannot turn the financial corner quite as sharply as he expected, and therefore he has got to bring in a Bill. I venture even now to appeal to him, because, after all, the Tory party when it comes in is bound to be more spendthrift than the Liberal party, and furthermore, if the Home Rule Bill is going to pass, we are only going to have forty Members here to criticise this kind of procedure. On all these grounds I join very heartily in condemning the practice that is being adopted, and I do not think it is too late to ask the right hon. Gentleman himself to take a step backward on the road to redress his position and put himself right before the House.
Mr. SPEAKER: Perhaps, if the House will allow me, I may interpose some observations on the technical points which have been raised. There seems to be some doubt in the mind of the House as to whether the Amendment which was proposed by the Chancellor of the Exchequer to the Resolution passed in Committee of Ways and Means was a proper Amendment. No exception was taken to it at the time.
Mr. T. M. HEALY: It was done without notice.
Mr. SPEAKER: That is so; but no exception was taken to it at the time, and even if exception had been taken to it, I cannot see that there was anything improper in the Amendment. The Amendment was a perfectly proper Amendment, and if the House wished to pass it there was nothing in the Rules of the House to prevent it being passed. If the Amendment had been one which would have involved any increase of taxation, then it could not have been in order, and it would have been necessary either to withdraw the Resolution and introduce a fresh Resolution in Ways and Means or to recommit that particular Resolution to the Committee of Ways and Means. But there was really nothing improper in the Amendment by itself, because it did not impose any fresh taxation upon the subject, and therefore I could not have ruled against it.
Mr. EVELYN CECIL: I hope we shall get some more specific reply from the Front Bench opposite to the questions of my right hon. Friend the Member for Worcestershire and the hon. Member for North-East Cork, because the more the matter is looked into the more doubtful does the speech of the Home Secretary appear to be. It is a matter of very great doubt whether the Chancellor of the Exchequer has really followed all the precedents in his action. I have here before me one which seems to bear very closely on the matter, and which has not yet been referred to. On May 24th, 1894 the Finance Bill was put into Committee. Mr. Speaker Peel was in the Chair. Mr. Gibson Bowles raised the very point which is now raised before the House, and Mr. Speaker then ruled:—
"It is important that the Resolution passed in Committee of Ways and Means should cover exactly all the provisions of the Bill subsequently introduced. The hon. Gentleman has done right in referring to the importance of the matter. In my opinion the original Resolution in Committee of Ways and Means upon which this Bill is founded did not contemplate the extra imposition of duty which may be involved by the operation of Clause 15. It will be necessary not to withdraw the whole Bill, as the hon. Member seems to contemplate, but before we come to that Clause to go into Committee of Ways and Means and adopt a new Resolution which will cover the particular Clause."
I should like to lay special emphasis on the fact that Mr. Speaker said it was important that a Resolution passed in Committee of Ways and Means should cover exactly all the provisions of the Bill. The Chancellor of the Exchequer's Resolution does not cover exactly all the provisions of the Bill. That being so, I think that it is perhaps a matter for your ruling, Sir, or, at any rate, for criticism or comment in this House, why he has not done so, and why he has not followed the precedents such as those which my hon. Friend the Member for Ashton-under-Lyne has quoted. But if we come to the more specific pleadings of the Home Secretary it makes matters not better, but very much worse. The whole speech of the Home Secretary was directed to telling us that it was quite unnecessary to limit or accept the limitation proposed in the Amendment of my hon. Friend the Member for Sheffield on the 29th April, because the Government have generally committed themselves to the expenditure of the 6½ million pounds. The whole speech of the right hon. Gentleman was as though the Government had on 29th April committed itself to the expenditure of this money, at any rate, in a general way; but I have got the Debate before me, and I have been reading the speech of the Chancellor of the

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Exchequer, and he there, dealing with an Amendment from my hon. Friend the Member for Sheffield, lays down specifically that he is not binding himself generally at all. He says that if my hon. Friend wants to bind the House of Commons and the Government at this stage it cannot be done. He wished to bind it to the expenditure of that £6,500,000 either on the Navy or on emergencies connected with the strike. The Chancellor of the Exchequer says it cannot be done:—
"Supposing the Amendment is carried? Supposing I said I would not oppose the Amendment, does the right hon. Gentleman really think that he is binding the House of Commons not to spend this money on any other purpose?"—[OFFICIAL REPORT, Monday, 29th April, 1912, col. 1627.]
8.0 P.M.
The Chancellor of the Exchequer specifically says, or at least leaves it open that this money may be used for any other purpose; and it has been suggested outside this House, I know not with what authority, that one of the purposes contemplated was to square the doctors over the Insurance Act. In face of what the Chancellor of the Exchequer says here, I think the whole of the Home Secretary's speech just now becomes a mere piece of ludicrous excuse. His whole line was that the Government was generally bound on 29th April. The Chancellor of the Exchequer himself on 29th April left it open to the House of Commons to use this money for other purposes than those suggested by my hon. Friend the Member for Sheffield. There is absolutely no logical sequence; no following of precedent. There is a mere excusing of themselves for a convenient course in this emergency in all the speeches of the Members of the Government and those who have spoke for it. I only hope that when the Chancellor of the Exchequer speaks for himself he will be able to make a better plea and a better excuse for the action which has been taken. I have also to complain very seriously of the Home Secretary's speech, because he has devoted it entirely to this very special matter. He said that he was going to endeavour to answer the technical points; but he did not do what he very well might have done—answer the specific questions that were put to him by my right hon. Friend the Member for East Worcestershire. He said nothing whatever on the subject of the licence promises which were made three years ago by the Chancellor of the Exchequer, and nothing about building profits not being taxed, or about that very important matter of site value tax being levied when there had been no
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increase in the site value. I think we are entitled to have some reply on these matters before the Debate is over, and a right hon. Gentleman in the position of the Home Secretary with the financial knowledge which he has admitted might have set himself to answer those very specific points which were urgently pressed upon him. I complain also more generally of the position taken by the Government on the whole of the financial situation. This applies more particularly to the Chancellor of the Exchequer himself. But there is a spirit of reckless expenditure abroad which it is notorious, is in the proposals of the Government, largely under pressure from their followers below the Gangway, and is largely the cause of our troubles. I complain seriously of the general policy of the Chancellor of the Exchequer—a policy which is largely caused by a desire to do acute pieces of electioneering, and I think the right hon. Gentleman has his eye far more sharply on any policy that may win votes than on any policy of sound finance. I have never seen or read speeches so deliberately designed, I think, to arouse class hatred as those of the Chancellor of the Exchequer. The language used on occasions has been most offensive, and I cannot but feel that it would be so much better, however strong his political views may be, and however much we on this side may disapprove of his political opinions, if he would avoid exciting class hatred or unnecessary dislike between one section of the community and another. It would be so much better if he used language which would cement the community together, while introducing legislation, though we on this side may not approve of it. From Cleon onwards I do not believe we have ever seen such an oligarchy of demagogues as that which reigns at present. We have been asked to what specific points we object. They say, "Do you object to the Old Age Pensions Act, do you object to the Insurance Act, do you object to the expenditure on the Navy?" and the answer has been over and over again in this House, "Certainly not. We do not object to these things specifically, but we do object to their cost being incurred as a whole; it is the duty of the Chancellor of the Exchequer and the Treasury so to direct national policy that excessive expenditure at any one time should not be passed." It is true that the Chancellor of the Exchequer takes proper credit for having

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paid off £64,000,000 of the Debt, but he does not at all mention to us the fact of enormous prospective commitments which will add largely to the National Debt. The Old Age Pensions Act now costs £12,500,000 a year, and if you capitalise that it would mean something over £400,000,000 at 3 per cent.; and, equally, if you calculate the prospective cost of the Insurance Act, which is now going to cost us £18,000,000 a year, that is another £600,000,000 which is going to be added to the National Debt, quite apart altogether from the commitments the right hon. Gentleman has made.
I think it is the duty of the Opposition, in season and out of season, to strongly put these facts before the country, and to urge upon it that these enormous capital commitments which involve an enormous annual debt, are not counterbalanced by the £64,000,000 which the Liberal Government has paid off. The commitments far outbalance any reduction of the Debt which he has been able to make. Our complaint, repeatedly made, is that while this expenditure may have been good in itself, and while the objects may be good in themselves, it ought not to have been incurred all at once, and in this way it has seriously jeopardised the national credit. The right hon. Gentleman has informed us, as regards more specific matters, that the balance of direct and indirect taxation is now changing very much from what it used to be. It used to be about half and half. Sir William Harcourt told us in 1903 that since the Finance Act of 1894 it had been the consistent policy of the Finance Minister of this country to maintain equality between direct and indirect taxation. That was the old Liberal policy. The present Liberal policy is wholly different and direct taxation is now 57.27 and indirect taxation 42.73. It is in many other directions that the old Liberal policy has been left. "Peace, retrenchment, and reform" used to be the watchwords of Mr. Gladstone, but they had been cast to the winds. Certainly there is no retrenchment, and reforms seems to be going in a very different direction from that followed heretofore. In regard to the general character of our finance I do want to appeal for hospitals and for charities. The immediate result of these enormous Income Tax impositions and these enormous Death Duties is, so far as my experience goes, to reduce the number of subscriptions given to hospitals and charities.
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Very honest, well-meaning, and straight-forward people are beginning to say that they do not see how they can contribute both to the Imperial taxes, to State charities, or charities that are run by the State, and also maintain the hospitals and other things to which they have been accustomed to subscribe. I think it is a great misfortune; we live in these days of so-called liberty, but I do not think there is very much liberty allowed to many a citizen who would wish to choose what charities he would subscribe to.
The whole tendency of recent years has been to tax him to such an extent for State purposes, Socialistic purposes, that he is not allowed to exercise his independent thought or judgment or responsibility to select the charities which he desires to support or maintain. I do not think it is really for the public good. If we are to maintain our position, citizens should be allowed general liberty of action so far as possible. It is for them to incur the responsibility of subscribing or not subscribing; it is for them to decide largely what charities they are to subscribe to, and the question ought not to be exclusively decided for them by the State. Members of the House must have been circularised by the hospitals in regard to the effect of the Insurance Act on those institutions, and as regards the finance of the right hon. Gentleman it has had much the same effect. I cannot but hope that in future years, without any party bias, the right hon. Gentleman will try and bear in mind that these heavy taxes are severely handicapping some of our best and most charitable institutions, and that he ought to regulate them in order to give them a better chance. But as long as this spirit of sustained expenditure continues, with utter indifference as to where the money can be obtained, if only votes can be got, using some wild scheme to be experimented upon, so long are we likely to find the national credit jeopardised. The national credit, owing to the reduced value of Consols has been very severely shaken. Hon. Gentlemen opposite say that it is a small matter caused by extraneous reasons, that there is no diminution of the national credit, that things will go on very well as they are, and that we are the richest country in the world and can very well afford what we are spending.
But that sort of thing cannot go on for ever; there must be a limit when the Chancellor of the Exchequer will find a difficulty in raising further taxes. The

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right hon. Gentleman is doing great harm to our commercial interests; he is causing many large businesses to transfer their centres from this country to other countries where they are more fairly treated in respect of taxation; and I believe, unless some halt is called to this constant policy of expenditure, we shall find ourselevs in a very serious position as regards other nations of the world. The question of emergency expenditure has just been touched upon, and one ought to remember that an emergency comes without a moment's notice, and that sometimes you cannot meet it by ordinary direct or indirect taxation, and must meet it by loan; and if the national credit stands so low as it does now you will have to borrow at a much higher percentage than otherwise you would have done. I can only trust that some of these considerations will appeal to the mind of the right hon. Gentleman as he gains more and more experience at the Treasury. The Treasury ought to be the real guardian of the public purse, and should not find more money by taxation for any scheme that the Government chooses to undertake. Let us endeavour to keep up the value of Consols, and regulate our annual expenditure by cutting it down whenever we have a chance, doing it, if we can, by means of international remedies, or international agreement. I do not know whether we could do that at present, but I trust that it will come in the future, and that we shall then find that our whole position among the nations of the world will be infinitely strengthened, that we shall bring back to our shores those commercial interests which we are at present driving away, and that we shall be able once again to make London the centre of the international markets.
Mr. WILLIAM REDMOND: I really think somebody in this part of the House should make a protest against the violent attacks delivered from several quarters upon the Chancellor of the Exchequer. For my part, speaking entirely for myself, I think this 15th July of the present year is a day which will be always honourably and long associated with the name of the present Chancellor of the Exchequer, and in years to come, with the better feeling engendered, after party strife has passed away, and when other men represent parties on these benches, I feel convinced that the name of the Chancellor of the Exchequer in connection with the great reform which commences to-day will be
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honoured and applauded by representatives of all sections of the people. The hon. Gentleman who spoke last, I think, spoiled his speech to some extent by repeating what so many of his Friends are fond of saying, namely, that the Chancellor of the Exchequer has been guilty of what would be the most unpardonable offence of endeavouring to arouse what is called class hatred in this country, and that he has been making speeches with the object of turning the poor against the rich, and in that way disturbing class relations and bringing about a state of affairs which, of course, everyone must deplore. It is an extraordinary thing what diametrically opposite views people take with regard to a man like the Chancellor of the Exchequer and his speeches. There are those of us in Ireland, as well as in this country, who consider that so far from being guilty of stirring up class hatred the Chancellor of the Exchequer, in pursuing the policy which he is pursuing is acting really in the best interests of true and desirable and real Conservatism. So far from stirring up class hatred and putting one section against the other, many of us hold that the Chancellor of the Exchequer, by his policy, not only in regard to the old age pensions and the Insurance Act, but by his policy generally, is acting in the only possible way in which any statesman can act who really wishes to see peace, order, satisfaction, and contentment amongst all classes of people in this country. The hon. Gentleman was very vehement in his protest against the Government expenditure, but he did not answer the question he put to himself. He did not tell in what particular he objects to the expenditure of the Government. He does not certainly object to the expenditure upon the Navy.
Mr. E. CECIL: I said that all this expenditure ought not to be incurred all at once.
Mr. W. REDMOND: The hon. Gentleman did not object to expenditure on the Navy. Naturally, I suppose, he is very much in favour of expenditure in that direction. He spoke as to the capital value of the expenditure on old age pensions and on insurance, but surely even he is not going to get up and say he is objecting to old age pensions. His party promised to give old age pensions, but they never did so. If his party returned to power to-morrow they would not for one moment attempt to withdraw old age

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pensions, and why does he object to the expenditure in that direction? He criticised the expenditure with regard to the Insurance Act. We all know that when the Insurance Act was introduced it was received with a shower of compliments from all parties, and particularly from the Conservative party. Until yesterday we know that it has been attacked in every direction, but yesterday we found that even the most cherished organs of public opinion representing the opinion of Gentlemen like the hon. Gentleman who spoke last, organs like the "Observer," the great safeguard and stand-by of the Conservative party for some time past, and the London "Times," have now filled their volumes with praise of the Insurance Act. [HON. MEMBERS: "No, no."] Yes, excuse me, I am sure the hon. Member does not want to contradict me on a point of fact.
Colonel WILLIAMS: Not the "Observer."
Mr. W. REDMOND: The "Times" certainly admits that the Insurance Act embodies a policy which is desirable, and which ought not to be resisted, at any rate by the Conservative party. The Conservative organ, the "Observer," went much further. It said that the Insurance Act, whatever blemishes there were upon it, embodied a great policy, and that the Tory party were doing a disastrous thing for themselves if they resisted the working of the measure. Surely the hon. Gentleman does not object to the expenditure on the Insurance Act?
Mr. E. CECIL: The hon. Gentleman does not answer my question as to why all this expenditure should be incurred all at once.
Mr. W. REDMOND: It is not incurred all at once. The expenditure on old age pensions was incurred some time ago. The insurance expenditure is incurred this year for the first time. With regard to the expenditure upon the Navy it is certainly not the fault of the Chancellor of the Exchequer, I imagine, if it has been found necessary to increase expenditure in that direction. The hon. Gentleman objects to all this expenditure at the one time. If it comes all at the one time it is simply because when the Conservative party were in power for twenty years they never made a beginning at all. I quite agree that the most natural and regular course of procedure would have been, if the expenditure for old age pensions had
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been made at the time when old age pensions were first promised by the right hon. Gentleman the Member for West Birmingham (Mr. Chamberlain), and if the insurance expenditure had been made afterwards, and if thus the work had progressed regularly. The Conservative party, however, though they were twenty years in office, practically without a break, talked continually, but they never made a commencement; and now when the Government which is in power is anxious to do practical work they object to the expenditure. There are a great many things in connection with the Budget of the Chancellor of the Exchequer I do not entirely approve of. As far as I am personally concerned, I saw the Fleet the other day. I do not know what impression it was supposed to bear in upon the minds of hon. Gentlemen who saw it, but I certainly came back with a feeling of deep and intense regret that so much of the money hardly earned by the taxpayers of this country and of Ireland should be sunk in such an investment as the Navy appears to me to be. I believe that £120,000,000 sterling is the amount of construction of the ships which we saw. I certainly shall view with great regret any increase in the expenditure. I think it will be the result of panic, and that even the present Government may be misled by that panic. I do not think there is any necessity for it.
While I say that I say that no person of any party, whether he be a Conservative, a Liberal, a Labour man, or an Irish Nationalist like myself, can honestly withhold a certain tribute of admiration to the policy of the Chancellor of the Exchequer which has enabled those vast sums to be spent, not only on the Army and the Navy, but in social reform which has brought the revenue of this country to what it is at the present time, and which has done all that without putting a single burden upon the shoulders of the masses of the people, without increasing a single duty upon the necessaries of life, and which has proved that it is quite possible without increasing the cost of necessities, which the people at large must have in order to live with their families, and to meet within reasonable terms of finance the requirements of this country. I speak here as an Irish Member, and I would not have intervened at all only I thought it was time for somebody to get up to give expression to the opinion which is very widely held with reference to the Chancellor of the Exchequer. We hold and believe, and I think we are entitled

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to have our opinion acknowledged as being marked with sincerity as I do with those of the hon. Gentleman—we hold—I do at any rate—that the Chancellor of the Exchequer in his Insurance policy has done more than has ever been done by statesman or by party to secure contentment, good order and peace in the community at large. From to-day, under the finance of the right hon. Gentleman, 14,000,000 or 15,000,000 of the masses of the people, representing the whole nation, will find that they have an interest in the stability of the State and in the good order of its government, that they are each and every one of them individually considered, and that the community at large will help them in time of need. Such a thing has never existed in this country before. You have had your poor houses and excellent charitable institutions, such as hospitals; a great deal of excellent work has been done by people of all parties, without which God only knows what would have happened to millions of people; but until this day you have never had the masses of the people placed above charity. From to-day they possess a right which will enable them, independently of the charitable inclinations of other people, to resist distress and to keep their homes together in time of unemployment and sickness. That is a wonderful thing.
It is absurd to talk of a reform like that in the same breath with revolution, setting class against class, and disturbing the foundations of society. Would any Conservative Member say that to give 15,000,000 workers a direct interest in the good government and stability of the State is doing anything likely to cause revolution, to upset order, or to make one class hate another? This Insurance scheme, in my opinion—and I believe it is so regarded by a majority of the people in Ireland—is a great act of social reform, and at the same time a great act of true conservatism—that is to say, it is an act which, while recognising the rights and demands of the masses of the people who make up the nation, at the same time gives them an interest in the stability, good order, and continuity of the government of the country. As far as I am concerned, I made up my mind that I would not allow this 15th July to pass without one voice from Ireland offering a tribute of heartfelt admiration and respect to the Chancellor of the Exchequer. An hon. Member spoke of the Budget as involving taxes which are undesirable and unpopular in
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Ireland. No doubt Governments of all parties have imposed such taxes on Ireland. It has been done ever since we lost our Parliament; it will be done, I believe, as long as we are governed as we are, no matter what party may be in power. We hope very soon, however, that the possibility of the imposition of such taxes will have passed away under a Parliament of our own. At any rate, while not approving in the slightest degree of some of the financial provisions of the Budget, so far as Ireland is concerned, I say that, on the whole, the Budget has not inflicted upon the Irish people the terrible wrong that was predicted. Apart from any question of that kind at all, there is profound admiration felt for the Chancellor of the Exchequer for the attempt he has made to deal with existing distress.
I would make an appeal to the hon. Member who spoke last, because I remember him for many years in this House, where, apart from party, he has done good work on Committees and elsewhere. Does he think in his heart that it is really a fair thing that the Chancellor of the Exchequer should be attacked in the terms in which he is, that he should be subjected to personal insult, or that he should have his name mentioned as something which ought to arouse loathing, abhorrence and contempt in the minds of right-thinking men? What are the facts? Hon. Members may think that the Insurance Act is badly conceived, that it will not work, that within a very short time it will have to be amended, that it would have been better to have postponed it until it had been put into a shape more acceptable to them. They may go further and say that no such insurance scheme is required or necessary. While I entirely disagree with all such expressions of opinion, I can quite understand hon. Members honestly thinking that by speaking in that way they are doing what is right, not only for their party, but for the State and the country at large. What I cannot understand is the bitter personal feeling directed against the Chancellor of the Exchequer. Why should he be insulted? Let us examine his position. Perhaps his insurance scheme will be unworkable; perhaps it is not good statesmanship; perhaps it may fail. I do not think it will; but it may. Granting all that, what has the Chancellor of the Exchequer done? He is the first man in his great and exalted position who has shown clearly and incontrovertibly that he has in his breast a heart to feel for the misery, wretchedness, squalor,

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and unhappiness which every man whose eyes are not shut knows prevail in every part of the country. He has shown that he is bold and brave enough to face all sorts of obloquy, opposition, and misrepresentation in order to attempt to save the masses of the people from the misery which comes upon them in their old age.
At any rate, whether his attempts be good or bad, whether they be destined to fail or to succeed, the Chancellor of the Exchequer deserves honour, inasmuch as he is the only man who has attempted to do this great and stupendous work. Hon. Members may find fault with the financial proposals of the Chancellor of the Exchequer, but no fair and honest man can deny him the honour of having made a great attempt such as was never made before. In these circumstances I believe there are on the benches above the Gangway numbers of upright, honourable men, who, if the truth were known, have but little sympathy with the vulgar, low, contemptible, and mean attacks which are made upon the Chancellor of the Exchequer—for what crime? What has he done? He has simply been bold enough to say that the time has come when something should be done by the State collectively to prevent the misery and wretchedness which exist in all directions. In conclusion, it would be a good thing for hon. Gentlemen of all parties in this House if they looked a little beneath the surface. There is nothing I admire more in hon. Gentlemen opposite who are connected with the Labour party than the fact that they take the trouble to see things as they really are. They do not take their presentation of how things exist from the opinions of other people, or from what appears in the journals of the day. They go and see I say there is no Member of Parliament who can do what I did last Saturday night myself without feeling the tremendous effect of it. I went from the West End of London where everything looked bright, happy, prosperous and well; with bright laughter in the air, to the extreme East End of London, beyond White-chapel and Mile End, to districts where the people live like swarms of flies. I spent a few hours going about considering their position, looking at their attempts to keep body and soul together; seeing with one's own eyes how much a penny is, even in some districts of this great city.
There is no man who can go and see the unspeakable squalor, misery, and
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wretchedness which is to be witnessed in this great Imperial city; who can go and understand all that takes place in these places to which I refer; can see the misery which is everywhere and realise it, that can find it in his heart as a Christian man to withhold from the Chancellor of the Exchequer on this day some measure at any rate of admiration, no matter how grudging it may be. The right hon. Gentleman has commenced on this day to do something to see to it that in the future when sickness comes into the home a man shall not have the misery of seeing his wife and children want food and the ordinary articles of everyday use in the home taken out one by one to the pawnbrokers. To those who are familiar with people who spend a sovereign or two on a dinner it may be a ridiculous thing to give a man a half-sovereign a week; but consider what it means—untold personal wealth—to the many people who work hard for a few shillings weekly? At any rate I am glad to know for the sake of human nature that no matter how some may gibe and sneer, affect to ridicule the Chancellor, and doubt his motives, there are very few men on these benches who can help in their heart of hearts believing "this a great, wonderful, little man who has come from Wales." He has stood up for the poor. No matter how wrong his efforts may be, he has made a gigantic effort to deal with all this great suffering and misery. When I have heard all these gibes and sneers about the right hon. Gentleman setting class against class, and all the rest of it, I thought I should like in days to come, when I am perhaps an older and a more sensible man than now to be able some winter's night by the fireside to take down the volume of the OFFICIAL REPORT, to turn to this day, 15th July. I should, I thought, be very glad to find—and I should hope that those who are interested in me and my name will have much the same feeling—that on this day, 15th July, 1912, at the commencement of this great new era, I, as an Irish Member interested in the poor of this country as well as the poor of Ireland, considered it an honour and privilege to get up and say that from Ireland, at any rate, we wish the Chancellor of the Exchequer everything gratitude can give him for the efforts he has made.
Mr. HEWINS: There are one or two observations that I should like to make on the remarks of the hon. Gentleman who has just sat down, if, Mr. Deputy-Speaker, I am in order—
Mr. W. REDMOND: I am afraid I was not in order, so you are all right.
Mr. HEWINS: I think the hon. Gentleman's argument about giving the workmen a stake in the country through the Insurance Act a very sound argument. My German friends have often told me that they thought the insurance scheme in Germany, amongst other schemes, has had the effect of preventing the Germans engaging in anything like revolutionary propaganda. In fact, I have heard the difference between those living on the two sides of the Polish frontier is attributed very largely to the operation of the German insurance scheme. I have always held that it is quite impossible for the old Trade Union methods to survive in competition with a great state system of insurance. It is for the working classes to decide whether this new scheme is to have that influence which it is suggested it will have over them. But it is not my hon. Friends who sit on these benches who have been foremost in using strong language about the Chancellor of the Exchequer. Mr. Bernard Shaw called the Chancellor "a sentimental amateur." I have never used an expression like that. We have the greatest admiration for the courage and tenacity of the Chancellor of the Exchequer, but we do not think that the Chancellor was the first man in English public life to show an interest in the public welfare. The tenets of the oldest Toryism, the Toryism in which I was trained did not differ very much in its social enthusiasm, or even in the measures it commended, from those ancient principles expressed for example in the social Encyclicals of Pope Leo XIII., on the basis of which the hon. Gentleman the Member for West Belfast made his appeal the other day to the Labour Benches. I was very much surprised to find the hon. Gentleman as an Irishman making this wonderful eulogium on Liberalism and Whiggism. I look at this meagre document, the Finance Bill, with a feeling of melancholy when I think of the financial history of this country; of the great measures inaugurated by British statesmen; when I reflect that the Budget and the Finance Bill used to be a perfectly full and straightforward account of the national financial situation. When I look at this I feel certainly that we have departed a very long way from English traditions. You cannot discover—some future historian may seek to do so—from the Chancellor's Budget statement and this Finance Bill how things stand.
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Is it not a remarkable thing that we have had one of the most wonderful changes in financial policy in recent years—I mean the institution of what Mr. and Mrs. Sydney Webb called the Chancellor of the Exchequer's poll tax—yet there is no mention of it in any of the financial statements of the year. I hope some day some great Chancellor of the Exchequer will arise who will give us a perfectly full and straightforward balance sheet that will show where we stand, whether upon the basis the Chancellor of the Exchequer tells us or not. Then I look at this Finance Bill, and I cannot help reflecting how very far we have departed from what were considered Money Bills in the old days of English finance. I was reading the other day with great interest a speech which the present Prime Minister made at Birmingham in 1909 upon the Chancellor of the Exchequer's "great" Budget. He was protesting against the old view that money should be allowed to fructify in the pockets of the people, and he defended the appropriation of large sums from particular classes and the devotion of these sums to causes of social reform and other schemes. I should be pleased to see some representative of the Treasury upon the Treasuy Bench, because I have one or two things to put to them.
Colonel WILLIAMS: On a point of Order. Is it not a fact, Mr. Deputy-Speaker, that on the Finance Bill the Chancellor of the Exchequer or the Secretary to the Treasury should be present?
Mr. DEPUTY-SPEAKER (Mr. Whitley): The hon. Gentleman who is in possession will, I have no doubt, deal with that.
Mr. HEWINS: I wish to draw the attention of the Government to the fact that the Prime Minister himself entirely gave away the case that the Finance Bills of modern times were pure Money Bills, basing his explanation of the principle on which taxation is raised in England at the present time. In Birmingham, in 1909, he defended the use of taxation under the new method of raising revenue although these methods did not confine themselves merely to raising revenue, but that they did look forward to the alteration of various things in society as the result of the measures adopted, and that, if I may say so, marks a new departure in English practice as regards finance. What were the old principles upon which our Finance Bills were arranged from the days

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of Pitt to Mr. Gladstone, and retained up to modern times? There was a tacit understanding, a belief that taxation when introduced constituted mere money measures. Why? Because they were arranged upon the principle of equality of taxation and equality of burdens, and if these taxes were imposed it was presumed—not, of course, always with perfect accuracy, but the principle was presumed that the relation between classes, the relation between different property holders, the relation between all grades of society remained roughly unaltered, and I think it has always been regarded that in the method of raising taxation in harmony with the great traditions of English finance you should not use the Budget, and that you should not use your taxation to promote other objects than the raising of revenue.
As hon. Members know, a school of financial writers, both in this country and Germany, regard the departure from that English method of equality of taxation as a very grave matter, and it has entirely altered the scope of the Budget, and is contrary to the spirit upon which your Budget used to be framed. Directly you adopt that method it follows naturally that every Finance Bill ceases to be a Money Bill. I do not think there is the slightest doubt about the soundness of this principle which I have just enunciated, and the Prime Minister himself, at Birmingham, in 1909, was good enough to point out that these were the principles upon which that Budget was framed, and he twitted Tariff Reformers with the charge that they had in view considerations of a similar character; that Tariff Reform, for instance—he was talking about an alternative to the Chancellor of the Exchequer's then Budget—had equally departed from the old established principles. I am not giving his exact words, but he said Tariff Reformers hoped, when they had the power to do so, that they would take advantage of their great Budget for the greater consolidation of the Empire, and the greater increase of our trade with the Colonies, and many other objects which Tariff Reformers consistently stated they had in front of them. He said he agreed and admitted their validity. If I may say so, I think this new departure is a very important matter, for reasons which I am presently coming to. It is a change which has now been introduced into English public policy, and I venture to say that at the time the Chancellor of the Exchequer's Budget was introduced in
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1909 you would not have had the crisis with the House of Lords except for the fact that your Finance Bill had already ceased to be a mere Money Bill, and that you were already trying to carry other than purely revenue objects in the Money Bill which was then under consideration.
I look at this present Finance Bill. It is as I say an extremely meagre document, and the considerations reflected on the face of this Bill are that the Government in offering to Parliament this Bill, obviously and carefully drafted, to avoid any difficulties of the kind I have suggested. The Government are afraid of the Parliament Act, and I suggest we should have no controversy about the inclusion in Clause 3 of the Budget to-day of the £1,500,000 to be allocated except upon that basis. There is a great precedent for the inclusion of these objects; they were in the Finance Bill of 1911. The objects are there set out, and the purposes are carefully stated. In this Bill there is no adumbration as to what the money which was left over is to be used for. That is, if I may say so, a revision of constitutional practice. We are not concerned at the moment with the Appropriation Bill; we are concerned with the Finance Bill and this Finance Bill in Clause 3 leaves £1,500,000 in the hands of the Chancellor of the Exchequer for purposes wholly undefined. If you have that stipulation now you may, as hon. and right hon. Gentlemen pointed out, have a stipulation of a very much more serious kind included in future Finance Bills, and I suggest that the very fact that this definition of the objects for which the money is to be allocated is left out of the Bill, it constitutes a change far more important than the mere finance provisions of the Bill in opening up a great vital constitutional departure. When I come to the particular objects of the measure I see, first of all in Clause 1, "Tea Duty, 5d." Why is this poor survivor of an ancient system of finance allowed to remain? What justification is there in the country at the present time for a 5d. duty on tea? Put yourself into line with the other great civilised countries of the world. Imagine the United States or Germany, or any other country, in the presence of a committee considering what duties they are to put on or what duties ought to be taken off. I know deliberations of the kind occur in these financial committees in other countries. They look through the articles, and they come to an article like

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tea, and they say at once it is perfectly absurd to put a duty upon this article of tea, which is an article of very general use not produced at home. Every halfpenny of duty will be paid by the consumer, and the Government prefer to put duties on other articles which are partly produced at home to fill the void, because, in the opinion of all economists, it is possible to select articles in regard to which all the duty at any rate is not paid by the consumer. I remember the great committee of Mr. McKinley adopted that policy, because he believed at the same time he would raise revenue and secure employment to the community. You take an article like tea, and you put a duty on it. You may be perfectly certain every halfpenny will be paid by consumers that is in the main by the working classes; a very remarkable state of affairs to be approved by a party which is supposed to be in favour of a free breakfast table. The Tea Duty used to be graduated. Why put on the same duty for the poor people and the rich people? I can quite understand people having objection to taxes on the poor, but I cannot understand right hon. Gentlemen and hon. Gentlemen opposite having any objection to putting heavy taxes on the rich. Why not try to solve this problem? The supporters of the Government loathe anomalies, and why keep this anomaly in English Budgets.
9.0 P.M.
When the Tea Duty was first introduced tea was a luxury and quite a proper object for taxation, but it is no longer a luxury, for it has become one of the necessities of life. You are putting taxes on something which is paid entirely by the people who consume the article taxed. After all, where do we get our tea from? We get it from China, India, and Ceylon, and it must not be overlooked that a duty which must have the effect of diminishing consumption must diminish the amount of our purchases, and the countries from which we get this tea are the people who purchase cotton goods in return from Lancashire. I present that argument to the Financial Secretary, and I hope he will find some reasoned economic justification for putting these taxes on the articles of common consumption of the people. The right hon. Gentleman knows that we have a plan to deal with this difficulty, and I will make him a present of it if he will give a pledge that he will use it. There is no justification for this heavy tax upon an article of common
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consumption when there is no advantage to be gained, and when it is taking away from the poor a tax amounting to 5d. upon every pound of tea they consume. Whilst this system is being maintained, expenditure is going up every day. The Government are at their wits' end and they dare not adopt a revision of their duties, because directly they attempt to do so they will be introducing Tariff Reform, which they are afraid of. Under the present system the poor classes have to bear the burden because of the nervousness and incompetence of the Government. I come to the next Clause. I scarcely dare quote the language of Mr. Pitt upon the system of differential direct taxes. It is quite a mistake to suppose that direct taxes have no effect upon the trade of the country. My belief is that one of the greatest difficulties we have to face at the present time is the drying up of the resources of our country by this iniquitous method of direct taxation. There is no economical justification for the way in which our Income Tax and Death Duties are raised. Why cannot the Government take this matter in hand? They are always pleased to say what wonderful alternatives they have to our proposals, and why do they not take our direct taxes as they are and reorganise them so as to make them more amenable to the canons of justice and equity propounded by Adam Smith? If they would do that they would earn the gratitude of the country. I believe a great deal could be done in that connection without raising this terrible question of Tariff Reform. If hon. Gentlemen opposite would devote their wits to that purpose they could find a solution, but they do not do it because they are afraid. They are afraid if they once touched the ark of the covenant upon which the basis of the system advocated by hon. Gentlemen opposite rests, it will break down.
I now come to the Clause about the National Debt. I listened to the Home Secretary's speech, and I noticed that the hon and learned Member for North-East Cork congratulated the Government on having chosen the Home Secretary to put up such a very adroit case. I do not like adroitness in this matter, but I like straightforward dealing, and in the case of the National Debt there is no room for any misconception whatever. What should be done with the surpluses is laid

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down by the Act of Parliament. I regret this endeavour to get round difficulties in the manner adopted by the Home Secretary. I should like to see the whole system regularised so far as it can be by inserting in the Finance Bill Clauses or subsections defining very carefully the objects to which this £1,500,000 is to be devoted. Why do the Government not do that, and why do they seek a roundabout course when there is a perfectly straightforward course open to them. They have a precedent in former Finance Acts. If it is justifiable to spend £1,000,000 on the Navy and half-a-million in East Africa, why not say so in the Bill. What possible objection can there be to that, except that the Government are afraid of other consequences. Suppose they take any step which is remotely likely to bring the Finance Bill into the purview of the House of Lords. They know perfectly well once they manage to do that except by a mistake, as they did last year, hon. Members opposite will feel that the whole agitation about the House of Lords is a fraud, and they will feel they have been duped and that there is nothing to live for as good Liberal democrats.
I ask the Financial Secretary to give the House an assurance that when the Finance Bill reaches the Committee stage the Government will do the best they can to atone for the irregularities they have already committed by including in the Finance Bill a proper stipulation showing beyond all question that this money is to be devoted to the purposes announced by the Chancellor of the Exchequer. It is not a hard thing to ask, and it surely is not a hard thing to grant, if they mean straightforward finance. After all, we have spent generations in trying to provide by our system of public policy against the very irregularities of which the Government are guilty. We had the utmost difficulty in doing so. We started on our career not having any definite stipulations as to what this or that sum of money was to be spent for, having no precedents to go upon, and having no traditions to observe. We know by experience that state of affairs led to corruption and to the greatest irregularities in our policy, and after years and years of effort, in which many men spent their official lives, we were able to build up a system of finance which, I venture to say,
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was left practically intact until this Government came into office in 1906. They have done more in the few short years of their tenure of office to upset the great precedents of financial history than any Government that has occupied those benches, and I do entreat them, if they do not agree, if they feel they have got their votes and their majority to maintain, to think of higher considerations, and to think a little not only of the Liberal party and of the present Government but of the great English traditions of finance of which they are supposed to be the guardians.
Colonel WILLIAMS: I desire first to raise a very strong protest against the conduct of the Government to-night. Since about five minutes before eight o'clock there has been neither the Financial Secretary to the Treasury nor the Chancellor of the Exchequer on that bench. I tried to get up to move to suspend the sitting until they came back. It used to be the tradition that when finance was under discussion at least one of those hon. Members should be on the Treasury Bench, and that their dinner interval should of the shortest possible time. I desire as an old Member of the House to make a very strong protest indeed against the conduct both of the Financial Secretary to the Treasury and of the Chancellor of the Exchequer tonight. I wish the Chancellor of the Exchequer were here, because I want especially to say a word about him. It is not fair to the Financial Secretary to give him the job he has to-night. He has been taken for at least six months away from his proper work. He was never able to attend the meetings of the Public Accounts Committee because he was made Chairman of the Joint Committee under the National Insurance Act. The business of the Financial Secretary to the Treasury is not to conduct inquiries and try to bring into working a new Act of Parliament. He has his business in this House and at the Treasury. It is quite impossible for anybody to work as the right hon. Gentleman has worked to bring this difficult Act into something like working order and to perform the functions for which his salary is drawn, and for the Chancellor of the Exchequer to leave him to bear the whole brunt of this evening like this is not fair. If those hon. Gentlemen do go out of the House, they might at least leave instructions with the hon. Gentleman representing them to take notes so that the points made may

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be answered by the Chancellor of the Exchequer. I shall be very curious to see whether any notice is taken of the very excellent speech of the hon. Member for Aston (Mr. E. Cecil), or of a good deal of the still more notable speech to which we have just listened, and during which the Financial Secretary, came back after his very prolonged absence from the House.
The FINANCIAL SECRETARY to the TREASURY (Mr. Masterman): I was not absent half-an-hour.
Colonel WILLIAMS: I thought I had timed the right hon. Gentleman 40 minutes. I want to say a word about one sentence in the very adroit speech of the Home Secretary. He said the Chancellor of the Exchequer had £6,500,000 in his hands. They were not in the hands of the Chancellor of the Exchequer at all; they were in the Old Sinking Fund by Act of Parliament, and the Chancellor of the Exchequer had to devise ways and means of getting them out for his own purposes. Over and over again in the speeches of the Chancellor of the Exchequer and of the right hon. Gentleman we have the assumption that the surplus is not part of the Sinking Fund until the Budget is passed. The surplus is part of the Old Sinking Fund on the 1st April, whatever that surplus is, by Act of Parliament, and it is deliberately breaking and evading an Act of Parliament to do anything with the Old Sinking Fund.
Mr. MASTERMAN: It was done by your party.
Colonel WILLIAMS: I thought the Liberal party were going to sweep away all the iniquities of the party opposite. I thought they were going to be the purists of finance. They very often twitted us about the South African war and the finances of that war, but they forget the country deliberately returned us to fight the South African war. They returned the party opposite to set the finances of the country right, and all they have done in these years of abounding prosperity is to pay off £10,000,000 of debt a year, and in proportion to the revenue of the country that is very little more than what after the conclusion of a great war was paid off, not with a rising but with a falling revenue. The Chancellor of the Exchequer does not seem to have any grasp of the finances of the country. Estimating and spending money is not finance. If he had any such grasp, how could he possibly say the strike of
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last year might cause some disturbance to the finances of this year? He forgets—no, he did not know—that on the 31st March the finances of the country finished for that year, and on the 1st April the finances for 1912–13 began. The two years have nothing whatever to do with each other, and he has no business whatever from a financial point of view to say this may happen, and therefore I am going to make up—for what?—my bad estimating and for some expenditure which happened during the year out of the Sinking Fund, which by Act of Parliament is applied to the reduction of Debt. He does not seem to have an inkling of the axiom that every single year must pay for itself and not for any other year. I quite agree both sides have occasionally deliberately paid back something out of the Sinking Fund towards the needs of the Navy, but the Chancellor of the Exchequer did not do that. He did not say to us, "We are going to take £1,000,000 for the Navy"; he said, "I may want something extra this year because of the coal strike," as if that had anything to do with the finances of this year.
Mr. MASTERMAN: The coal strike lasted into this year, and nobody could tell when it would end.
Colonel WILLIAMS: The finances of each year ought to pay for themselves, and, if the coal strike had affected this year, that is no reason for touching the Sinking Fund; you ought to make provision for it in the finances of the new year. I did not really think I should get such an answer from the right hon. Gentleman. It shows he does not even now appreciate the point I am making about the finances of each year paying for themselves. The Chancellor of the Exchequer not only took this money for the Navy, but he proposed to keep the other, as it was said, in his own hands. We know perfectly well that the action he ultimately took was involuntary. It was because of pressure, I believe, from his own side, where there are some Gentlemen who have a great deal more financial knowledge than he has himself. There was pressure also from this side and from outside, which obliged him to do what he has done. He has paid back five millions out of the six and a-half millions, and he has allotted—I agree in accordance with precedent—one million to the defence of the country; but he is going to make a loan by means of a Supplementary Estimate. I should be glad if the Chancellor

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of the Exchequer, when he comes to speak, will quote all the precedents for raising a loan by a Supplementary Estimate. I think it will be found that it is another departure in our financial arrangements. To my mind these are much smaller matters than the fact that the financial authorities of the Treasury Bench do not seem to understand the first canons of finance, namely, that each year ought to pay for itself, and that the Sinking Fund is not to do what you like with it, but is allocated by Act of Parliament.
Mr. BLACK: I wish to put in a humble plea for economy. I am a sufficiently old-fashioned Liberal to still believe in the watchwords "Peace, Retrenchment and Reform." I believe that many of us on this side of the House if we had been told six or seven years ago that the expenditure of the country would be rising by leaps and bounds as it has risen during the last six or seven years, would have hardly believed it. At any rate, in my opinion that time has come when it should be represented to the Government that they should seriously consider how far we are going on in this direction of increasing expenditure. I know it is exceedingly difficult, in view of the circumstances of the case, to economise on our national defences. It is the business of the Government to secure that the Navy should be kept up to the necessary pitch; but I think that even there they are overdoing it; and I trust the Government will seriously consider before they come to this House to ask for a large increase of expenditure during the present year. I know with regard to reforms that we cannot have such reforms as have been brought forward in the way of old age pensions and the Insurance Act without adding considerably to the National Budget, and I have never for a single moment objected to expenditure in these directions. With regard to the repayment of debt, it is greatly to the credit of the Government that they have succeeded in paying off so much as they have. The amount—seventy-eight millions—is an amount by no means to be despised. But personally I should be very glad when the Government can see its way to go back to the old standard and increase the Sinking Fund by the three millions which were taken away from it a year or so ago. With regard to the Income Tax, I think that the present amount of 1s. 2d. ought not to be regarded, and I should be sorry if it were regarded, as
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the normal basis. My impression is that in these years of bounding prosperity we might reasonably look for a lower rate than the amount that is now levied—the 1s. 2d. At the present time the yield of all taxes is considerably greater than it was a few years ago. My opinion is that some reduction of taxation may now reasonably be looked for. When the Government consider what items of reduction they may pay attention to I hope very earnestly they will not forget the question of sugar. A farthing in the pound still remains upon sugar, and that means a considerable handicap upon industry and a very material point in the weekly budget of the poorest in the land. I hope these few words will not be altogether lost on the Chancellor of the Exchequer, and that he will have some regard to the plea I have ventured to make.
Mr. TOUCHE: It is indeed very refreshing to hear even one solitary voice on the other side raised on behalf of economies. We have often heard voices from the Liberal party urging economy. We heard a good deal about it during the General Election in 1906. It is one of their favourite platform cries; but it seldom gets beyond that. When they come back to power, having preached economy in the country, and then having increased expenditure by leaps and bounds, their favourite reply to criticism is to say, "Which of those additional expenditures do you object to?" That is a reply I have heard frequently made by the Chancellor of the Exchequer. It was quoted to-night by his admirer on the Irish Benches. But when they are electioneering they do not say we are going to increase expenditure by leaps and bounds, and that the objects of that expenditure are desirable. No; they made a definite statement that they were going to exercise great economy in the administration of the country, and they have proved, as we all know, the most wasteful, spendthrift Government which this country has seen for a very long time. The Chancellor of the Exchequer has been criticised for not being present during the Debate to-night. I do not know whether he will take these criticisms very greatly to heart; but I do think that in all probability he will be sorry he was not here when he discovers that he missed the most eloquent eulogy, the most appreciative references which were made in the speech from the Irish Benches describing his many qualities, many of which we recognise on this side of the House. We were

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told that his great merit is that he has a heart to feel. We do not deny that for one moment. What I object to is the assumption in every speech which the Chancellor of the Exchequer makes before a congenial audience that he is the only politician in the country who has a heart to feel.
I do not wish to engage in what may be regarded as anything in the nature of a personal attack, and, if I make any criticism, it is criticism of the policy and not of the individual, excepting in so far as that policy is influenced to the detriment of the country by the shortcomings and idiosyncracies of the individual. We have heard a great deal this evening about forms and procedure. I am not so much concerned about forms and procedure in finance as I am about the substance. These forms exist in order to protect the substance, and to give this House a better control over finance. The control of this House over finance is little more than a sham. We all know how millions of money are constantly voted away in a few minutes, without any adequate discussion, on a purely party vote. I think the House would be much better employed in discussing finance at greater length, than in legislation, which might be discussed at much less length. I am concerned in these matters frankly from the City point of view. It is a point of view which looks at commercial stability, to security and to permanence in values. From the City point of view I confess that we do take very strong exception to the methods of finance which are now in vogue at the Treasury. The forms have been changed within quite recent years. The change has been made because the objects of finance have changed. Finance has been used more and more in recent years as a political instrument and as a weapon for furthering a particular policy and party ends. It is this more than anything else which has destroyed confidence throughout the country; it is what I may call this type of vindictive legislation, which singles out certain interests and certain forms of property to penalise them. It may be that when making their calculations the Government think that these forms of property are chiefly held by those who are not their political supporters, and they may not feel very greatly concerned if they do bear a little severely in some quarters. But the trouble is that if this class of legislation and finance is introduced, no one knows
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where it is going to end. Owners of other forms of property fear that very soon their turn will come, and if you take away money on the basis of unearned increment from one form of property and say you are entitled to it because the value has been created by the community, you can say equally of any industry, whether it be a cocoa factory, or alkali works, or soap boiling works, or professional practice, that its value is created by the community. Therefore, we have a very widely extended fear that this new method lays every form of property and every class of business open to vindictive and partisan attack in the future.
Reference has been made more than once in the course of the Debate to the Death Duties. Personally, I consider that the introduction of the Death Duties by the late Sir William Harcourt was one of the greatest misfortunes we could possibly have met with in this country. It is a most melancholy heritage. It has done a great amount of harm to the country. It has drawn away money which is capital and has applied it for revenue purposes. If any joint stock company or business conducted its affairs upon those lines, it would certainly lead to bankruptcy. In the case of the nation it has a somewhat similar effect. It does not lead to bankrupty, but it impoverishes the nation; it helps to diminish values, destroy credit, and diminish employment. I believe that the present condition of things, where we see gilt-edged securities enormously depreciated, is very largely owing to the fact that every fortnight a million of money has to be taken out of the market to pay the Death Duties. That money is taken from the investment market year in and year out, in good times and in bad times, and the strain must necessarily make itself felt and have a very bad effect. It is not only that it depreciates one class of security; it affects the whole range of securities, and all those who are interested in any form of saving whatsoever. Perhaps the worst feature of all is that it has caused the better class of securities to lose their liquid character. I remember the time when it was quite a simple thing to send into the Stock Exchange and sell a quarter of a million of Consols at a close price, and to repeat it, and repeat it yet again, in the same afternoon. You cannot do that now. If you send in £50,000 to sell you will probably be able to sell £5,000, and be asked to leave the other £45,000 to see what can be done with it.

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That means that those who formerly bought large blocks of gilt-edged securities were willing to take a low rate of interest, because against that they had immunity from capital loss. Those who formerly temporarily employed their money in that way knew that at any time they could liquidate their investments to any extent, at any moment, without loss. They now find they cannot do so; therefore that stream of investment has entirely dried up, and it has dried up very largely owing to the financial policy adopted by the present Government. The burden of the Income Tax, to which reference has also been made, has a very serious effect in depreciating values. It means an increase in the expenses of every investor, large and small. Added to the other increases in the cost of living it makes him feel that he must look to other quarters for better investments, and the consequence is that we find in the City almost the universal experience that people want an investment giving them 1 per cent. more than they obtained a few years ago. They say they want that owing to the greater burdens which are now cast upon them, and the increased-cost of living, so they do not go in for our once popular securities, but look elsewhere. They look abroad, and find that abroad they can get a higher rate of interest, and also greater security for capital. They get it both ways. They would put up with a very moderate rate of interest if they had immunity from capital loss, but in this country they are hit both ways, whereas if they go abroad they find it is their foreign investments which have appreciated in value, and their home securities which have depreciated in value. Only the other day I had occasion to analyse the accounts of a very important investment trust company in the City of London. It is one of the trusts which has an unusually large proportion of its investments in British securities. The accounts for the past year showed a considerable increase in the revenue, but when I came to examine them, in order to ascertain the sources of that increase, I found that 90 per cent. of it came from their foreign investments. If they had had to depend entirely upon securities of the British type, of which they already held a good many, they could not have presented a balance sheet anything like so satisfactory as that now laid before their shareholders.
It is beyond question that the nation loses in the end if inducements to accumulate capital in this country are diminished.
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It is not the capitalist who loses so much in the long run, it is the country as a whole. It is those who are employed by capital who suffer most. We know that the famous Budget was based on theories borrowed from the Socialists and from hen. Gentlemen below the Gangway opposite. Their theory is that if you make the rich poorer, you will make the poor richer. There could not possibly be any greater mistake. The more you depreciate the balances of the rich the less security of employment and of income there is for the poor. Take the simple question of the depreciation of high-class securities as an illustration. Supposing a railway company wishes to issue £1,000,000 of debenture stock. In certain conditions it would issue that stock at par, and get one million pounds of money. If times are bad and securities are depreciated it has to issue it at 80 and it only gets £800,000 of money. The obligation on the railway company is the same in both cases. Do you not think it would be more enterprising, and would build more extensions, and in that way have more to spend in wages, if it had £1,000,000 of money, than if it had only the £800,000 of money. Accordingly, when you have a bigger expenditure, largely in wages in the first instance, you would have more property created, more line of railway to be worked and to provide employment in the future. There can be no greater delusion from the working class point of view than that the man who brings capital for industrial development ought to be treated as if he were a mad dog. The best citizen of any country is the man who maintains a big pay roll. The type of citizen to be cultivated is the millionaire. If we get a millionaire we should not let him go. We should keep him here. We should give him every encouragement to remain here and spend his money in giving employment to our people instead of driving him to take his money away to other countries. He is the sort of man who ought to be encouraged by the working classes of the country and given a 1s. 9d. dinner for 1s. rather than their own leaders, who have never done anything to encourage the industrial development.
Another thing I should like to remind the House of is that when politicians set themselves to outwit the captains of industry, financiers and capitalists, the men who have done so much to carry on the machinery of the world, the politicians nearly always in the long run get the worst

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of it. They are not half so clever in that particular line of businesses as those whose lives are devoted to financial policy. They may think they are, but they almost invariably take action which simply means that these people are obliged to transfer their capital and enrich other countries, and it is not only the capital which goes abroad, it is the industries also and the people who suffer are the poor dupes in this country who lend too ready an ear to those orators who, we have been told to-night, have such remarkable powers of appealing. I should like to tell the Chancellor of the Exchequer what the City thinks of him. The City does not think of him in an unkindly way. They have no feeling of strong personal antagonism for him, but they think that he helps to make life very complicated. A good many people outside the City think that also. They do not at all like him in the role of the Chancellor of the Exchequer. They can imagine other roles where they would admire him greatly, but as Chancellor of the Exchequer they think he is flippant and irresponsible. They observe with real regret that he has no regard for the traditions of finance. He has shown that to-day, he has shown it in the Budget of this year, and in the way it has been introduced. But their chief complaint against him is that he mixes up politics with finance far too much. No Chancellor of the Exchequer who does that can ever go down to posterity as a good Chancellor of the Exchequer. I am afraid that the present one, in the estimate of a great many who think at any rate that they are entitled to form an opinion upon financial questions, will be long remembered as the worst Chancellor of the Exchequer we have had for a very long time. He is constantly showing by his actions that he is either ignorant of financial principles or reckless of financial consequences.
Mr. BARNES: I am not concerned to defend the Chancellor of the Exchequer as Chancellor, but as his conduct has been called in question I should like to say for my part that I admire him as a man who, I think, has utilised his great office in doing more than any previous holder of the office to lift up the humble people in this country and give them a better chance to live. The hon. Member, in addition to slating the Chancellor of the Exchequer, also felt it his duty to launch a jibe at those who sit on these benches, and, I suppose, at myself. We have done nothing he said to develop the industrial resources and prosperity of the country.
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[HON. MEMBERS: "Hear, hear."] I wish the electors of Crewe could hear those cheers. They would not help in any way the success of the Conservative candidate. So far as I and my friends here are concerned, we have many of us from our earliest years, before our bones were well set, earned an honest living by honest toil, and spent from twenty to thirty years in the workshops of this country, and I think we have done something by earning our living in that way to develop the resources of the country. I suppose the hon. Gentleman says when we cease to work in the workshops we cease to be useful citizens. He spoke of us in a slighting way as orators, and so on. I make no claim to oratory, but so far as we have been able to influence the working people of this country I think we may fairly claim that we have helped them to organise themselves and make themselves more a power in the State than they otherwise would have been. By that means we have enabled them to get higher wages and better their conditions of life, and in so doing we have increased the spending power of the people, and by that means done something to develop the industrial resources of the country. In the long, pessimistic jeremiad to which he has given utterance he must have failed to see the implication of his speech. He told us there were certain dire results that followed the direct taxation of wealth, and he was particularly hard upon the Death Duties of Sir William Harcourt and the increased taxes upon income which have been brought about in recent years, and he put it to us that, the effect of all that was to send money out of the country. What is the object of hon. Gentlemen opposite? So far as I can understand it, the whole idea that they have in their minds, in Tariff Reform and the other nostrums that they put before us from time to time, is to increase the demand for labour in the country, and their idea of that is to increase the work of the country. I claim no knowledge of these high financial matters, but whatever else has happened there has been during the whole of these years under review a constant increase in the amount of orders from abroad for the work of this country. Year by year exports have gone up by leaps and bounds, and therefore it seems to me that the industrial resources of the country, to use the phrase of the hon. Member, have not been much injured as the result of the taxation to which he refers. There is another thing behind it. I have been here seven years, and I have

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never heard a single hon. Member on the opposite side of the House object to any expenditure—
Sir F. BANBURY: I have often.
Mr. BARNES: Of the sort I am going to mention. I have never heard any hon. Gentleman opposite object to the building of "Dreadnoughts" or to the spending of money on the Army, or on any other soft job that might be going for them and their friends. [Indications of dissent.] It is perfectly true, and I must speak the truth. [An HON. MEMBER: "It is a perfect insult to the Service. You ought to withdraw it."] I am not going to withdraw it unless I am asked to do so by the Chair. I have never heard any objection to an increase of expenditure on the Army, Navy, or anything of that sort. Therefore the expenditure of this country for the last few years has been such that no objection would be taken to it by hon. Members on the other side. If the wealthy had not been taxed under Sir William Harcourt's scheme of Death Duties, and if the Income Tax had not been increased in the last few years, I take it that we should have drawn the increased taxation from somewhere. Would the hon. Gentleman suggest that, instead of drawing it out of Death Duties and Income Tax, we should have drawn it out of the bread of the people, or by means of other taxes imposed upon the mass of the people? After all, that is the alternative, and when an hon. Gentleman gets up and simply objects to the Death Duties and the Income Tax being increased, then the suggestion is that the mass of the people ought to have borne the taxes instead of the rich. I think that is a fair deduction.
I am glad to endorse the suggestion made by the hon. Member for Bedford for economy in one direction. I am going to put in a plea in anticipation of what may come later in the Session against increased taxation for, or increased expenditure upon, the Navy. I believe the increase in the amount of money we are spending on the Navy now year by year as compared with three years ago is largely due to the ill-feeling engendered as between this country and Germany—ill-feeling which I believe has been caused by speeches made on both of these Front Benches. As to the money which is in hand, I wish to put in a protest against any part of it being devoted to the Navy. If I understood the hon. Member for Bedford aright, he objects to the expenditure altogether.
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For my part, I think we have got beyond that. No man of feeling can look with anything like equanimity at the conditions under which the people of this country live, and therefore I believe that year after year we shall have to draw more taxation from the country somehow or other to improve the housing conditions, and, generally speaking, to improve the conditions under which the people live. For my part, I would not object to expenditure in that direction. I associate myself with the hon. Member for Aston Manor (Mr. Evelyn Cecil), who spoke in opposition to the Tea Duty. I believe that duty, like some others still remaining, are contrary to the protestations of the Liberal party for many years about a free breakfast table. I believe that people who pay 5d. per pound on tea pay a great deal more than 5d. owing to various profits. I think it is altogether contrary to Free Trade principles, and I regret as much as anyone that a duty of 5d. still remains on every pound of tea consumed by the people of this country. The hon. Gentleman opposite said the Government were afraid to tackle it, because they thought they would be up against the only alternative, namely, Tariff Reform. I cannot help regarding that as an obvious instance of thorough blindness to the facts around him. Year by year the wealth of this country is growing by leaps and bounds. Year by year land values are growing by leaps and bounds. [HON. MEMBER: "NO."] In the towns, certainly. [An HON. MEMBER: "They are diminishing."] If I were a landlord in Sheffield I would not think they were diminishing. I know a district now covered with houses, a thriving centre with 'buses running through it, where it may be said men got rich in their sleep. They might as well have been in Australia for any social benefit they have done to that community. The Government will have my support if, when the Tea Duty is removed, they, instead of adopting Tariff Reform, make up the sum by -a tax on landlords, and a further tax on accumulated wealth.
I want to say a word about the Insurance Act. I associate myself with the hon. Member for East Clare (Mr. W. Redmond), and say for my part I rejoice that the Insurance Act has now come into force. No doubt it has some defects. It is a great and complicated Act, and a measure of this sort could not be fitted into an old community with all kinds of institutions without some defects being

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revealed; but, whatever its defects may be, I believe it is one of the greatest pieces of social and industrial reconstruction ever undertaken in this country, and for my part I wish it every possible success. The hon. Member for Aston Manor said that in Germany the insurance scheme was altogether inconsistent with trade unionism. At all events, I can say that the workmen of Germany have not found it so. As a simple matter of fact, ever since the Act came into operation in Germany trade unions have gone ahead by leaps and bounds, and this country lost its position of pre-eminence in trade unions when that Act came into operation. When I went to Germany for the first time about fifteen years ago, trade unions were a mere bagatelle. About 500,000 would cover the membership in 1897. There are now organised workers numbering something like 2,750,000. It is perfectly obvious therefore that the German Insurance Act has not weakened trade unionism. I have sufficient faith in my fellow countrymen in this country to believe that the Insurance Act will have no such detrimental effect on trade unionism as the hon. Gentleman suggests. I know that insurance is based upon principles other than those of trade unionism. We have been content to ask our fellow workman to come and better his condition, and when he has not done so he has been allowed to go his own way. This is going to cease. He must now be insured. I am not at all sorry. As a workman I have had to work alongside of men who were just as well able to contribute towards the rainy day as I was. There have been hundreds of thousands of workmen who have taken no thought for the morrow, and who have been content to make themselves a burden upon the State or anybody else when the inevitable rainy day came. I am not at all sorry that a little gentle compulsion is being applied to those people, and that they are being compelled to make some provision for themselves.
I know very well that this Act does not do as much for those who are very low down in the social scale as many of us would have wished it to do. But that is no argument against the Insurance Bill. The very idea of insurance is that the people coming within its purview should be people whose lives are capable of ordinary adjustment and rearrangement; and there are in this country, thanks to the apathy of times gone by, large masses of men who have sunk so low that their lives
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are altogether incapable of being adjusted under an Insurance Bill. They have got no margin capable of paying premiums. They are not employed half their time. Many of them are so sick that they cannot be employed half their time. And when those people have to be tackled as they will have to be tackled before long, it is not an Insurance Bill will be wanted, but some sort of Bill to bring them into ordinary habits and put them in the position of ordinary decent citizens. Therefore, though I regret that the Act does not do so much for them as I should have liked to see it do, yet after all it does segregate them and put them to one side, and this makes it easier for this or some other Government to deal with them in the immediate future. But I rejoice that this Act has come into operation and is going to do something for the first time to organise in a national way and deal with the great twin evils of our industrial system. It deals with sickness, and does a great deal to lessen sickness, and it deals with unemployment, and will do a little, not much I am afraid, to lessen unemployment. But it will do a great deal to lessen sickness, and especially that sickness tuberculosis, which so long has been left without proper and scientific application being made towards its cure.
10.0 P.M.
I am afraid that there are too many people who cannot realise the number of deaths that take place owing to this disease. Some one on the other side referred a little while ago to the cost of this Act, and we were told of the millions spent to provide money to finance this Act. But cannot Members just project their minds forward a little, and see in a few years that the money that is now being spent to maintain the wives and families of those men who die in what ought to be the most productive years of their lives, between forty and fifty, will be saved to the nation in the work that is done, and therefore even from the low economic point of view there is nothing to be afraid of. The millions that have been spent under this Act will, in a very few years, be the means of adding greatly to the wealth of the community by saving the lives of men and enabling them to maintain themselves and their families in decency and comfort when but for this Act they would have died and the country would have been at a loss. I had not intended to speak in this Debate, but hearing the insulting references and the doleful predictions made in regard to

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the money spent in this way, I thought it right to express my opinion that this Bill is a step forward in the direction of true scientific inquiry into the causes of disease, and a systematic dealing with it which is long overdue. I congratulate the Chancellor on having been the means by which this Act has been put upon the Statute Book, and I hope that the people of this country will give their aid in getting it into smooth working operation.
Mr. ROYDS: The hon. Member who has just sat down has expressed the opinion that no one on this side of the House has objected to any special item of expenditure. Well, I have great objection to one item of expenditure, and that is the cost of valuing the land of this country. The opinion has been expressed that the duty on tea should be remitted, and the money raised by a tax on land values, and the hon. Member stated that there were plenty of land values to be taxed in Sheffield. The Tea Duty is an Imperial tax. I think that if the hon. Member will go down to Sheffield and suggest that there should be a tax placed on the land values of Sheffield, all going into the pockets of the Chancellor of the Exchequer as an Imperial tax, he would not receive very much support in Sheffield. The right hon. Gentleman the Member for East Worcestershire this afternoon expressed the opinion that the position of our national credit as reflected in the price of Consols was in no small degree owing to the character of the speeches of the Chancellor of the Exchequer, attacking particular forms of property and particular classes of persons. That is, I believe true, and the one form of property which has been the subject of attack more frequently on the part of the Chancellor of the Exchequer than any other is land, and the one class of persons specially attacked are owners of land. There are, of course, large owners and small owners of land, but I think we are rather apt to forget that there is another class of persons interested in land, those who have lent money on land, and that there is a vast amount of money invested in mortgages on land.
In that connection I put a question to the Chancellor of the Exchequer this afternoon. Unfortunately, it was not
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reached, so I have only got a written reply. The question is this:—
"if he has any means of ascertaining the amount of money invested on mortgage of land and house property in the United Kingdom at the present time, and if so, will he state the amount?"
The reply I got was:—
"I regret that I have no means of obtaining the information asked for."
You are in the midst of a great scheme of land reform. You are organising a further attack upon land, and yet it appears that at the present time the Chancellor of the Exchequer has no means of ascertaining what sum of money is lent on security of the land of the country, or how that money will be affected. I wonder if it would surprise him if I estimated the amount of money invested on mortgage of land and house property at the present time at £2,000,000,000 sterling. That being the case, and in consequence of the attack on land and the credit of land, the rate of interest on that huge sum of money has been increased by at least one half per cent., which is reckoning a very moderate increase indeed. Calculating it on that basis, the increased interest payments will amount to no less a sum than £10,000,000 annually, which is an additional charge on land occasioned by the land policy of the Government. A previous speaker on the other side this afternoon referring to the recent naval review mentioned that there was a sum of £150,000,000 sterling invested in ships which he thought was wasted. If you take £10,000,000 per annum as the new annual burden placed upon land and capitalize that you will find that it takes from the value of our greatest national asset a very much larger sum than £150,000,000 sterling. I said I rose with the object of calling attention to the cost of land valuation. The reason I do so is because I believe that the valuation, under the manner in which it has been carried out—and the Chancellor of the Exchequer states that it has been carried out in accordance with the law, therefore if an alteration is to be made it will have to be by alteration of the law—is absolutely useless, for this reason, that under the Finance Act of 1909–10 the true value is not being ascertained, and the total value—more or less equivalent to the market value—and the site value approximate one another. The method of ascertaining the site value of agricultural land in this country—and agricultural land forms very much the larger portion of the land of the country—puts that value at anything from five to fifteen

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or twenty times its true value. There was a discussion in this House last month on this subject, and I gave one instance of a farm in Lincolnshire the site value of which had been brought out at £3,950, whereas if credit had been given to the owner for actual improvements on that farm in the shape of buildings and drainage, the site value would have worked out at something between £100 and £200, instead of £3,950. The agricultural landowners of this country have been lured by the Chancellor of the Exchequer himself into the belief that it was in their interests that the site value of land should be placed high. I maintain that the landowners of agricultural land in England were led to believe by the Chancellor of the Exchequer himself that this valuation was only going to be used for the purpose of the Budget taxation of 1909–10, and for no other purpose, and that it was in their interest that the site value should be placed as high as possible. We now know that it is really in the interest of the Chancellor of the Exchequer himself, under his new scheme of land reform. As has been explained by the hon. Member for North-West Norfolk, the higher the site value of agricultural land the more there will be for the Chancellor of the Exchequer to get out of it. I should like to read to the House a question which I put to the Chancellor of the Exchequer on this subject on 17th May, 1911:—
"Whether the Chancellor of the Exchequer is aware that in many districts—Lincolnshire, for example—dykes and stone walls represent a greater outlay than live fences, and that, while a deduction must be made to ascertain site values under the Finance (1909–10) Act, 1910, in respect of live fences, no such deduction can be made in respect of the more expensive dykes and stone walls; whether he will state the grounds for this distinction; and whether he intends to propose any alteration of the law?"
The answer I got was:—
"The answer to the first part of the hon. Member's question is in the affirmative; the effect of the suggested allowance would be to lower the datum line from which Increment Value Duty is calculated, and consequently to increase the amount of duty payable when the building value of the land overtake its agricultural value; consequently I do not propose to introduce any amendment of the law."—[OFFICIAL REPORT, 17th May, 1911, col. 2004, Vol. XXV.]
I was not very satisfied with the answer, and I put another question on the 23rd May, and I asked the Chancellor of the Exchequer:—
"Whether the Chancellor of the Exchequer is aware that under the Finance (1909–10) Act, 1910, the assessable site value of land, where the fences are live fences, will, in consequence of the statutory deduction, necessarily be fixed lower than in the case of precisely similar land, where the fences are stone walls or dykes, for which no deduction will be made, and if he will explain why the site values of the land, of precisely the same actual value, are to be valued for the purposes of the Finance (1909–10) Act, 1010, at different values?"
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The answer which the right hon. Gentleman gave to me was as follows:—
"The answer to the first part of the hon. Member's question is in the affirmative. Even if dykes and stone walls do not receive the same treatment as live fences, I do not propose an amendment, which would be prejudicial to the taxpayer, as explained by me on the 17th inst."
I put a subsequent question:—
"Would the right hon. Gentleman answer fairly the latter part of my question as to why the value should be different?"
The answer I received was:—
"That is exactly what I answered on the 17th inst. If there is any alteration made it is an alteration which will not be to the detriment of the Treasury, but quite the reverse. If the hon. Gentleman really wants an alteration which will injuriously and prejudicially affect the taxpayer, if he puts down an Amendment to the Finance Bill, it will be open to consideration. It is not for me to object to receive more taxes."—[OFFICIAL REPORT, 23rd May, 1911, cols. 140 and 141, Vol. XXVI.]
I have read these out so as to make it quite clear to the House that the Chancellor of the Exchequer in reply to the question has led owners of agricultural land in this county to believe that it would be in their interest that site values of agricultural land should be placed as high as possible, and that he, the Chancellor of the Exchequer, was not willing that they should be made lower, because he did not wish to place any more burdens upon them. We know now that the position is precisely the reverse—that the higher the site values are placed the higher will be the taxes. If the site value of agricultural land is brought down to something like £1 or £2 an acre there would be little or nothing to tax. The fact is the owners of land throughout the length and breadth of the country are not at the present time receiving even a fair interest upon their improvements, much less getting rent for the land itself. Owners of land in the present state of affairs now know that every building they erect will increase the site value of their land. Every improvement they make on their property will affect the site value of their land, under the methods which are now being pursued, and the landowners understand this, I hope, or will understand it shortly. Of course, this state of affairs will immediately arrest building and other improvements. What possible object can any owner of land have in making improvements upon his property if he knows that the effect of his outlay will be to increase its taxable value? I gave the instance of a farm in Lincolnshire. I will give two or three instances in other parts of the country. A small holding in Cambridgeshire of thirty-six acres, with excellent buildings, equipped for small

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holders, cost for the buildings, I believe, £500. In the valuation £15 was allowed for those buildings, and the whole of the rest was included in the site value. A farm in Essex, the cost of buildings estimated from £800 to £1,000, and £50 only allowed. In another farm of 185 acres in Essex with excellent farm buildings the allowance was £60. The buildings in that case cost £2,000, the land was drained and improved besides, and all that was allowed was £60, while the whole of the rest of the value of the buildings is considered part of the site value. That is dons although the Chancellor of the Exchequer over and over again has led landowners to suppose that it was in their interests that their site values should be valued as high as possible. That is the position. All the trouble in regard to these valuations arises from divesting the buildings and their value from the particular farm which is the unit of valuation, and then assuming that the land can be split up and worked with the adjoining farms and their buildings used for that purpose. That is the way the difficulty occurs. I ventured to raise this point last month, but the Chancellor of the Exchequer did not honour me with an answer on the point at all, but he attacked my accuracy, and I propose to show that on that occasion I was perfectly accurate, and that he was inaccurate. I stated:—
"One-fifth of the number of the provisional valuations on land and small house property may have been received, but that one-fifth of the valuations of this country have been accepted as final, I doubt."—[OFFICIAL REPORT, 20th June, 1912, col. 1861, Vol. XXXIX.]
In his reply the Chancellor of the Exchequer said:—
"The hon. Gentleman mentioned 20 per cent., he was only 6 per cent. wrong, a very small percentage of inaccuracy in that quarter.—[OFFICIAL REPORT, 20th June, 1912, col. 1877, Vol. XXXIX.]
And subsequently the Chancellor of the Exchequer said:—
"I did not say one-fifth; I said 20 per cent. Is that inaccurate? As a matter of fact we have valued 26 per cent., and I said you were inaccurate to the extent of 6 per cent."—[OFFICIAL REPORT, 20th June, 1912, col. 1878, Vol. XXXIX.]
Four days afterwards I put the following question to the Chancellor of the Exchequer:—
"How many Forms IV. were served on owners of hereditaments, the subject of valuation under the Finance (1909–10) Act, 1910; how many of such Forms have been returned filled in: what is the total number of hereditaments to be valued; and how many final valuations have been made up to 31st May last."
The reply was as follows:—
"The total number of Forms III. and IV. served in Great Britain up to 31st March, 1912, was 10,874,668.
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The number of such Forms returned up to the same date was 10,097,769. The total number of hereditaments still to be valued cannot be exactly stated, but is estimated to have been 7,318,108 on 31st May, 1912. The number of provisional valuations which had become finally settled on 31st May, 1912, is estimated at 1,709,495 (equivalent to 2,107,400 hereditaments)."—[OFFICIAL REPORT, 24th June, 1912, col. 170, Vol. XL.]
A total of 1,709,495 is not anything like 26 per cent. of the valuations of this country, and is between 15 and 20 per cent. Therefore, when I stated that I did not think 20 per cent. of the land valuations had been passed as final I was absolutely within the mark, and the Chancellor of the Exchequer was wrong when he reproved me for inaccuracy. When this subject was last under discussion, the right hon. Gentleman said that a Committee of some sort was to be appointed to inquire into the working of the valuation scheme under the Finance Act. I understood that the reference to the Committee was to assume that the scheme of valuation set up by the Act was to be adhered to, and that the inquiry was to be limited as to whether the scheme was being carried out and whether the valuations were uniform. It must be clear that any Committee of that sort would be worse than useless unless the whole scheme of valuation is gone into. It must not be assumed that the scheme set up by the Act is the correct one, because I have made it clear that the scheme as interpreted by the Chancellor of the Exchequer, does not give the true value of land at all. The object of the valuation is to give the true value of the site, and to show the true market value. If the reference is wide enough to cover that it will be quite satisfactory. I rose to make the one point, that the valuation was not giving the true value, either the market value or the site value of the land, and that therefore the House was not justified in allowing the valuation to continue. There would be some justification for it if we were satisfied that the valuation was being fairly conducted, but when it is perfectly apparent that in every valuation of agricultural land the site is valued at five, ten, or fifteen times its true value, it is high time the House insisted on an inquiry and refused to sanction the continuance of the present system.
Sir HOWELL DAVIES: There are times when one would like to be on the Opposition side of the House. It is somewhat refreshing to be able to get up and criticise the expenditure of the country. There are many of us who are sincere and earnest economists, and deplore the enormous increase in the national expenditure. But

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we are overwhelmed by the forces of this House, and loyalty to our party makes us follow our leaders in very large expenditure that we personally very much regret. I have no doubt that the hon. Gentlemen who have been so loud to-day in the expression of their disapproval of the extravagances of the Government, if they themselves had happened to be in power would probably have supported Estimates considerably in excess of those for which the Chancellor of the Exchequer is responsible.
I have been wondering what are the special items of expenditure which the Opposition are so keenly interested in opposing. The item that the last speaker personally disapproves of is that for valuation. There may be reasons behind why he is very sorry that this method of valuation has been adopted, but I am quite sure that so far as the general feeling of the country is concerned, the time has been long overdue when a proper valuation of the land of the country ought to have been made.
Mr. ROYDS: A proper one!
Sir HOWELL DAVIES: Yes, a proper one, I admit. But I expect that the Gentlemen engaged in this valuation will discharge their duties properly and scientifically. The attack made on the Chancellor of the Exchequer by the last speaker but one on the Opposition side was, I think, somewhat unworthy. He spoke as representing the City. The "City" is rather an indeterminate expression. It is a sort of "holy of holies" to which the Chancellor of the Exchequer ought to make obeisance. I wonder what the City is? The City represents to a very large extent a number of gentlemen who are engaged in the discharge of financial business, and who are interested in considerable investments made by the great insurance companies of the country. I may say, knowing something of the subject, and what are the investments which are usually made, that it is not because the great insurance companies and other great investors look at our English securities less or like them less. They like them better to-day than other securities so far as their solidity and safety go. There is a demand for larger interest, and those who have these large sums to invest have to look afield and seek investments which yield a larger rate of interest. But it has nothing whatever to do with any question of policy for which this Governmen has been responsible that investors
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with large sums of capital are looking for investments to get from them larger sources of revenue.
Sir F. BANBURY: Yes, but other investments do not pay anything higher.
Sir HOWELL DAVIES: Oh, but they do.
Sir F. BANBURY: No, they do not.
Sir HOWELL DAVIES: If you only study—and I make the suggestion to the hon. Baronet—the investment list of the great insurance companies of this country, and they are available to anyone who takes any interest in the subject, you will find that the large sums that are deposited with those companies find their investments very largely in securities which yield a larger interest than our first line of English securities. There are the gold bonds of the American railways yielding their 4½ per cent. They find a considerable place in the balance-sheets of our great English companies. Canada is to-day appearing in the market with investments that attract British investors, and so we have to bear in mind there is greater steadiness in money in the great foreign securities which enable these great corporations in our country who are seeking more in return from their investments to take a very much larger share in these securities, not from any dislike to the present Government or any antipathy to the present Chancellor of the Exchequer, but simply because they want to secure a larger share of revenue for their stock holders, policy holders and shareholders. An hon. Member opposite made reference to the Death Duties and he said that they depleted national capital. I have no doubt he was perfectly correct. I am entirely prepared to agree with him. National capital is, of course, depleted to a certain extent by the payment of Death Duties, but you have to remember that while paying away some share of national capital in Death Duties there is growing up side by side greater wealth in the country than is ever taken from capital for the purpose of Death Duties. You have only to watch carefully the returns for Income Tax and you will find year by year that a penny in the £ notwithstanding that Death Duties have been paid in very large sums in the last 15 or 16 years, is yielding a larger return than formerly. That is proof that, notwithstanding the payment of Death Duties, the general capital of the country is increasing year

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by year. I say it is not worthy of hon. Gentlemen in this House, representing what they call the City, or those representing the landed interest of the country, who are more persisteent than anyone else in this House in appealing to our Government to enlarge their expenditure upon the national services, to object to some portion of the wealth of which they are the trustees finding its way to discharge obligations which they themselves are trying to set up. I say what we hear from moneyed men in this House and Gentlemen who call themselves the City and the great landed proprietors is not worthy of those great captains of industry in the attacks they make upon the present Government. I personally deplore that our expenditure is increasing to the extent it is. What do we say? We are here to support the Government, and the Government up to a certain extent are compelled to an expenditure especially upon the services which they themselves naturally deplore. But whatever we spend upon the services does not come up to the desire of hon. Gentlemen opposite, and assuming that even a Conservative Government were in power, judging by the criticisms that come from hon. Gentlemen opposite, this country would have to be prepared to face a very considerably increased expenditure. Therefore I say expenditure upon our great services is to a very large extent expenditure on behalf of the accumulated wealth of this country. It means that capital gets greater security in consequences of increased expenditure upon our services, and therefore those Gentlemen ought to be the last to offer criticism. I venture to say we ought to review our expenditure to-day under two different heads—the expenditure upon our services, which have been greatly increased year by year, and that portion of our expenditure which has gone to what is generally known as the promotion of social interests. Hon. Members opposite were rather reluctant in support of the proposal for old age pensions when it was passing through the House, but when it came to the election which immediately followed the passing of the Old Age Pensions Act they were tumbling over each other to impress upon the electors that they loved old age pensions from the bottom of their heart. If we passed that expenditure with the general approval of the House, we ought to be willing to provide for that expenditure not by taxing the poor, but by agreeing to
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a liberal allowance from the accumulated wealth of the country to meet that obligation. To-day we enter upon the great Insurance Act, which will meet a great social need. The Chancellor of the Exchequer has been attacked by the hon. Member opposite in not too pleasant a way, but he can afford to disregard all such attacks as those, knowing full well that in the heart of this nation, and amongst the industrial section, there exists for him a loving regard which must be far more to him than even if he were to succeed in obtaining the support of what is known as the City. Whilst I regret that our expenditure has grown, I cannot see how, in any other way, the expenditure can be met, and I am not prepared to depart from our present fiscal policy, and thus throw upon the people, who are supposed to be benefited by old age pensions and the Insurance Act, the burden of taxing the necessities of life to meet the growing obligations of a great country which has been increasing in wealth during the last few years in a way our forefathers never anticipated or expected. For these reasons I have much pleasure in supporting the financial proposals now before the House.
Sir F. BANBURY: The hon. Member who has just sat down said he was in favour of economy, and he also said he supported the expenditure of the present Government. The hon. Member let a little sidelight in upon his desire for further economy by saying that party considerations led him to support these proposals, and he finished with a great eulogy of the Chancellor of the Exchequer. I confess that I cannot see in the hon. Member's speech any fervent desire for economy, and what he said was merely a little platitude to show his real desire, which is to expend money as fast as he can. The hon. Gentleman told us that there had been a great depreciation in securities. I do not wish to throw the blame of that undoubted fact upon either party, but as this is a very serious question I want to induce the House to view it in a businesslike manner as a question affecting the financial welfare of the country. The hon. Member repeated the old worn-out argument that the reason for the depreciation in English securities was because insurance companies desired to invest their money in foreign securities because they got a higher rate of interest. If the hon. Member had any knowledge of City matters he would have known perfectly well that as a matter of fact

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at the present moment that is not the case, and a very large number of foreign securities taken up by English investors return no more interest than English securities. I have here an extract from the "Observer" of last Sunday week. [Laughter.] The hon. Member opposite laughs, but he had better wait until I have finished my remarks. The "Observer" does not make any statement founded on what is not fact. It extracts from the Stock Exchange official intelligence certain prices, and it shows the return in prices of foreign securities, and the return in prices of English securities; and, as I say, the English securities pay very little less, within a shilling or two, and in some cases no less, than foreign securities. What used to be the case?
Sir W. HOWELL DAVIES: Would the hon. Baronet give instances to confirm that statement?
Sir F. BANBURY: Certainly, I am going to do so. When I was married half my marriage settlement was in Pennsylvania Bonds, returning interest at 6 per cent., and the other half was in London and North-Western Railway Four per Cent. Preference shares, which then returned 4⅛ per cent. At present the Pennsylvania Bonds return interest of about 4 per cent., and the London and North-Western Preference interest is also about 4 per cent. Therefore, American railways, which in those days returned interest of 6 per cent., now only return interest of 4 per cent., while an English security—you cannot have a finer instance of an English security than the London and North-Western Railway—now practically returns the same interest as the American Railway bond.
Sir W. HOWELL DAVIES: Most of the gold bonds of the American railways return £4 3s., £4 6s., and £4 8s.
Sir F. BANBURY: I have not worked it out, but, supposing they do pay £4 3s., and supposing the London and North-Western Preference shares only pay £3 19s., it does not affect my statement that some years ago the Pennsylvania Bonds paid 6 per cent. while the London and North-Western Preference only paid £4 2s., and that now they have practically come down to the same level. That is the case everywhere. I will give the quotations the hon. Member asks me to give:—
By degrees during the past six years, we have seen the extra margin of interest, demanded by investors when investing in foreign securities steadily whittled down. To-day the average broker tells of orders to invest in
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this and that class of security, so long as it is not anything at home. British credit, measured by Irish land stock, with our full Government guarantee is below that of Colonial stocks, and even below that of our home municipalities. The extra margin demanded on leading foreign securities has gone. Other home stocks are consequently adversely affected. Good debenture and preference stocks in the home railway group are to be found in plenty yielding as much as debentures of foreign railways. That is a point of the utmost significance, a striking testimony to the events of the past six and a half years. It affects everybody with a shilling at stake in the country, whether invested in the Post Office Savings Bank or elsewhere. It is a standing danger. It is so serious a state of affairs that it had better be more exactly illustrated. Here are a few instances to bear in mind. We give the yield on some well-known home and foreign securities. The position is so striking that we may he excused for giving a fair number of instances, noting first some American bonds and other foreign issues:—

Yield.

£

s.

d.

B.A. Great Southern Debenture

…

3

18

6

B.A. Pacific Debenture

…

3

19

6

Union Pacific bonds

…

3

19

6

Lake Shore Mortgage bonds

…

3

19

6

Antofagasta Debenture

…

4

0

0

San Paulo Debenture

…

4

0

0

B.A. Western Debenture

…

4

0

6

Central Argentine Debenture

…

4

0

6

Argentine Great Western Debenture

…

4

0

9

Illinois Central bonds

…

4

1

0

New York Central Mortgage bonds

…

4

1

0

Mexican Railway Debenture

…

4

4

9

Entre Rios Debenture

…

4

5

0

Leopoldina Debenture

…

4

5

6

Here are some well-known Home Railway issues of excellent standing:—

Yield.

£

s.

d.

South-Eastern First Debenture

3

18

6

Great Eastern Debenture

3

18

9

*Midland and Great Northern Rent Charge

3

19

0

*L.B. and S.C. Consolidated Guaranteed

3

19

3

*Lancashire and Yorkshire Preference

3

19

9

*Midland Preference

4

0

0

Metropolitan Debenture

4

0

0

Great Central Debenture

4

1

3

London Chatham and Dover First Debenture

4

1

3

Metropolitan District First Debenture

4

4

6

London Electric Debenture

4

5

0

Great Central First Preference

4

5

6

Furness Consolidated Preference

4

6

6

Great Central 1872 Preference

4

9

3

* Full trustee stock.

Mr. BOOTH: What authority is that?
Sir F. BANBURY: The "Observer," last week's issue.
Mr. GODFREY COLLINS: Is that a Liberal paper?
Sir F. BANBURY: I do not know whether it is a Liberal paper, or whether it is not. What has that got to do with it? Does the hon. Member contend that the quotations are not correct?
Mr. GODFREY COLLINS: I was only desiring to know the source of the information.
Sir F. BANBURY: Is the hon. Member under the impression that facts as stated

175
in Liberal papers are not correct? I do not know. I can assure him that these figures are correct, and the hon. Member can check them by going to the "Times" or to the Stock Exchange official prices, which can be obtained from the secretary to the Stock Exchange for threepence. I do not mind paying the threepence for him. The figures are absolutely correct. I am sure the Chancellor of the Exchequer, who knows I am an opponent, will admit that I would not deliberately and purposely upon an important question like this give figures to the House which are not correct. I pass from the interruption of the hon. Gentleman to continue my argument. For a great number of years—it is a fact which no one can deny—all the foreign securities which I read out returned at least 1 per cent. more than the English securities I read out. For some reason or another—it does not concern me at the moment to go into the question why the change has arisen—at the present moment those foreign securities return no more, or only 1s. or 2s. per cent. more, than English first-class securities. That is a very serious position. I am glad that the hon. Member for the Blackfriars Division (Mr. Barnes) is in his place, because it is much more serious for the working class, whom he thinks he protects, than for Members on this side of the House. My hon. Friend the Member for North Islington (Mr. Touche) told us that in his opinion millionaires ought to be protected, and that he considered them to be good for the country. He went on to point out—what raised the ire of the hon. Member for the Blackfriars Division—that a millionaire, who has made his money with considerable trouble, was not likely to part company with it without some effort to save it. My hon. Friend rather insinuated that the genius that was capable of making money was capable of protecting it when it was made. If I may say so, from nearly forty years' experience of the City, I agree with my hon. Friend. The mistake which hon. Members below the Gangway opposite make is that they think they can put their hands in the pockets of the millionaires, take out what they have made through knowledge and hard work, and distribute it to their friends, and that then the millionaires will go on making more money, which can be taken out of their pockets in the same way. The capability of millionaires to look after themselves is
176
very much greater than the hon. Gentleman thinks.
Mr. BARNES: I said nothing at all about millionaires, or the reference to millionaires. I objected to his insulting my colleagues and myself, which he did.
Sir F. BANBURY: I am not concerned to defend the speech of my hon. Friend. I know what the hon. Gentleman (Mr. Barnes) is alluding to. I repeated exactly what my hon. Friend said.
Mr. BARNES: To which I took no objection.
Sir F. BANBURY: Then we are agreed. I hope that the hon. Gentleman will come over to us, and will see the folly of attempting to put his hand into any man's pocket and driving all the capital out of the country, because that is the reason why this difference between English and foreign securities, which I have just illustrated, is arising at the present moment. I am sorry the President of the Local Government Board is not here, because I remember that many years ago he was a private Member, and I was interested in the East London Waterworks Company. An uncle of mine was the chairman of the company, and I was a shareholder in the company. There was a considerable attack being made upon the waterworks companies by the London County Council, of which the right hon. Gentleman was a prominent Member. I said to the right hon. Gentleman, "Suppose you have your money or the money of your trade union in waterworks stock, would you like the guarantee given them by Parliament, on the faith of which they invested their money, taken away?" He said, "I should not put my money into that sort of thing. I should not run the risk." That is exactly what is going on now and people say when they see that hon. Gentleman below the Gangway, and the working men are encouraged to say that the greater part of the fruits of industry are to belong to them, and very little is to be given to those who have the brains to organise—[Laughter.] I do not know why the hon. Member laughs. He will find to his sorrow some day that I am right and he is wrong. I have preached this for the last six or seven years, and when I first spoke in this way after the Labour party first became a party in the House of Commons I was always received with laughter and politely with cheers. At present there is only a faint smile which comes over the

177
face of one hon. Member, and in the years to come they will admit that they were wrong and I was right. There is nothing for me to gain in speaking in this way.
I want to say to the people whom hon. Members opposite think they are protecting that unless English capital is put into English securities how are you going to get wages? Wages have to come from somewhere. I know what I am talking about, because for forty years I have had to invest people's money, and I know what they said when they gave it to me. In the old days they said they did not care what interest there was. What they wanted was something in England. About eight years ago all that turned, and people came to me and said, "Now we want something out of England." I remember a man of German extraction who made a considerable amount of money in England, and he had some money invested in East London Waterworks. When the Act of Parliament was passed the Water Board had to take over the stock of the company, and they proposed to take over the debenture stock of the company at a certain price which was fixed in the Act, but they said the value of the ordinary stock, which stood at 220, was worth nothing, and they actually proposed before the arbitrators that it should be handed over to them for nothing. My friend said to me, "If the Government of Honduras had made the proposal that the Water Board is making, we in the City should have resounded with indignation at the wholesale robbery which they proposed to commit. Never again will I put any money into English securities." That was the beginning. It grew gradually from one thing to another. The unrest spread, the desire of working classes to take more than their share extended, and then we have hon. and right hon. Gentlemen opposite, suggesting—take the case of the right hon. Gentleman—that any increase which was to be paid to the men employed by the right hon. Gentleman, was to be recouped out of the pockets of the traders. But when the Bill comes all sorts of excuses are made, and the traders object and the consequence is that it looks very much as if all that extra money will fall upon the shareholders. A man says, "I do not want to put my money into a security of that sort where I run the risk of having my hard earned savings touched in that way. I will put them into foreign securities, where I am not held up to ridicule and contempt for being a bloated
178
capitalist, but where I can realise them readily and move them out of this country if events get beyond a certain point."
That is going on and it is no use to blink at it, and the consequence is that they put their money out of the country. On the top of that comes the right hon. Gentleman with his Death Duties, which cost £25,000,000 a year, which has to be taken out of the pocket of the capitalist and spent as revenue. The prodigal son never exceeded himself as the right hon. Gentleman is doing. He never took large sums out of his capital. He took some years to dissipate his fortune. At the rate the right hon. Gentleman is going there will be very little capital left in this country. There will be some capital left, no doubt, which cannot be moved. What is the use of capital if you have no means, of using it? Take the landed interest. I do not know whether hon. Gentlemen below the gangway realise what it is to hold a landed estate. Do they think that it means a great income to the landlord? If so, they are quite wrong. They have only to investigate the accounts of any estate, large or small, to find that the outgoings are very large, and are in many cases greater than the income. I am the owner of a landed estate, and if hon. Gentlemen were to look at the accounts they would be surprised to find how little the net income is. It is not because of want of business management, but it is because of the fact that repairs and the ordinary expenses of upkeep eat up so much that there is very little left. I had a letter from my agent recently suggesting that I should avail myself of the proposal which was made by the Chancellor of the Exchequer two or three years ago, that you might get a certain amount of Income Tax returned if you prove that you spend a certain amount on repairs. I replied that it is not really worth the trouble, and that it would take an immense amount of bother to go into all that. It is not a large estate, fortunately, but, as a matter of fact, I could claim a considerable sum to be returned in respect of Income Tax if I did as suggested. The right hon. Gentleman knows that can be done. He said so during the discussion of the Budget of 1909.
I attach very great importance to the great fall in English securities. I have kept as far as I can from mixing the question up with any political consideration. When I first went into the City I was told

179
that Russia and Germany—Russia particularly—kept large gold chests as reserves in case of war. I was always told that we did not because our reserve was in the New Sinking Fund and the Income Tax—that is to say, the margin between the New Sinking Fund, which was then at £28,000,000, and the amount required for the service of the interest on the Debt was such that we could borrow a large sum for the necessary expenditure for war. I was told that therefore we need not keep a gold chest which, as the right hon. Gentleman knows, must be kept without interest, and is a great loss to the nation. It was stated then that we could borrow a large sum of money without putting anything further on the taxpayer.
In those days Consols stood at anything from 93 to 105. As has been stated, you could go into the market and sell £250,000 or £500,000 worth in half an hour—I have done it myself over and over again—with absolutely no difficulty. I was told the other day that if you wanted now to sell £50,000 worth—I am no longer a member of the Stock Exchange—you would probably sell £20,000 worth, and you would have to leave over the other, and might or might not sell it as the case might be. Supposing there was the margin, which does not exist now to any great extent, as the right hon. Gentlemen has reduced the New Sinking Fund from £28,000,000 to £24,500,000 could the right hon. Gentleman get the amount? Supposing he went into the market for a £100,000,000 loan with Consols at 75, what does he suppose he would get it at? Has he ever thought of it? That is a very serious question. I should not like to say what he would get it at, but he would find it very difficult to get it. The other margin was Income Tax. There was supposed to be a margin in Income Tax which could be raised in time of war to such an extent as would provide a sufficient sum in addition to borrowing to meet the war expenditure. Now that we have an Income Tax at 1s. 2d., where is the margin by which this sum would be raised? It does not exist. These are serious matters which ought to be considered not in a party spirit, but by everybody, especially hon. Members below the Gangway, because in case of war it is the working classes who would suffer more. The rich man who lives on an estate probably has got something else which he can remove. My hon. Friend the Member for Clapham (Mr. G. Faber) alluded to the Yorkshire Penny Bank.
180
This is a matter for serious consideration by hon. Gentlemen below the Gangway. That was a bank that took the investments of the poor classes at, as far as my recollection goes, 2¾ per cent interest as against 2½ percent. interest given by the Post Office. Many years ago, when I was in the City, I did all the investing for the Yorkshire Penny Bank, and therefore I know perfectly well what the investments were. They were all English investments of the very first class, first class trustee securities, consisting of English railway debentures. It was with a great deal of difficulty they would take preference and first grade stock, and owing to the depreciation of those securities if the bankers of London had not come to the rescue two or three years ago the result would have been that the Yorkshire Penny Bank would have gone into liquidation, and the people who would have lost would have been the friends of the hon. Members below the Gangway, entirely owing to the depreciation of first-class English securities.
Mr. JONATHAN SAMUEL: When did the depreciation begin?
Sir F. BANBURY: About the year 1904 or 1903, two or three years before the hon. Gentlemen opposite came into office. I was not trying to make a party matter out of it, but simply to put before the House what I believed to be the very serious state of affairs which exists at the present moment. Suppose, for the sake of argument, that the whole of the blame rested with this side of the House, it does not absolve hon. Gentlemen opposite from trying to put it right. It is absolutely absurd to say, "when did it commence?" It is here before us, and we have got to put it right. My bank was one of the banks which guaranteed the Yorkshire Penny Savings Bank two or three years ago, and I know it to be the fact that the securities of that bank since last year show an extremely large depreciation. I cannot state the actual percentage, but if the right hon. Gentleman will look into the matter he will find that it is very large. I have endeavoured to put before the House of Commons facts which are under my own special knowledge, and which I believe to be of a most serious nature. I only trust that the right hon. Gentleman and his Friends behind him, will divest themselves of party feeling for the moment, and, at any rate, endeavour to see whether something cannot be done

181
to remedy what, in my opinion, is a very serious matter for the welfare and future of this country.
Question, "That the Debate be now adjourned "—[Mr. Lloyd George],—put, and agreed to.
Debate to be resumed on Thursday next, 18th July.

HYDE PARK DISTURBANCES.
Motion made and Question proposed, "That this House do now adjourn."—[Mr. Gulland.]
Mr. LANSBURY: I am sorry to have to raise this question, but there is no other opportunity I know of in which it can be raised in a prompt manner, and the newspapers this afternoon convey to my mind a reason why the matter should be debated, and why the House of Commons should debate it in a very serious fashion. A number of men have been charged, and are now undergoing sentences in connection with the disturbance in the Park yesterday. It happens that from the moment the disturbance commenced to the time the disturbance finished I was in the crowd, and am perfectly able to give a clear coherent account of what really happened. The police or whoever gave the right hon. Gentleman the information conveyed in his answer to my question, say that it started by some person calling for cheers for Lord Devonport. As a matter of fact nothing of the kind really happened. The disturbance arose from quite a different reason. A comparatively young man in the crowd made some very sneering remarks with regard to the collection that was being taken. One word led to another, and there was a very heated discussion, at the end of which this young man was asked to leave the crowd because of the disturbance that was being caused. Some policemen rushed up and commenced, not to remove this young man, but to push and hustle and jostle the men who were wanting him to go out. I would like to ask the House if we are not entitled, even at open-air meetings, to preserve order in some way or other when we know that at Liberal meetings, and even at Tory meetings and at Socialist meetings indoors, the stewards preserve order, and throw out both men and women who interrupt? At this meeting, instead of the police dealing with the person who caused the disturbance, they dealt with the people who resented that disturbance.
182
That led to the whole of the knocking about that took place. It is perfectly certain that had the police, and I am saying this with a full sense of responsibility, done their duty and removed the young man when he was causing a disturbance, there would have been no such thing as those score of men being taken to prison and before magistrates in London.
Mr. BOOTH: What was the young man doing?
Mr. LANSBURY: He was disturbing the meeting.
Mr. BOOTH: In what way?
Mr. LANSBURY: By making noises and interrupting the speakers on the platform. He was doing exactly what the suffragettes do when they go to a Cabinet Minister's meeting and interrupt—exactly the same thing for which they are thrown out. I maintain it is the duty of the police, if they interfere at all, to interfere with the person who creates the disorder, and not with those who are trying to put the disorder down.
Mr. BOOTH: Does the hon. Member consider an interjection from a member of the audience at an open-air meeting out of order?
Mr. LANSBURY: It was not merely an interjection. The hon. Member knows perfectly well that one man in a big crowd, can create a great disturbance by merely talking while the speaker is trying to make his speech. That is what happened here, and the police, instead of dealing with this man, dealt with those who wanted to do what is done at every other meeting—that is, put out the disturber. That led to disturbance towards Grosvenor Gate. I hope that when the hon. Member for Pontefract (Mr. Booth) holds an open-air meeting and is interrupted persistently, his friends will allow the interrupter to spoil his meeting.
Mr. BOOTH: Why did they call the police?
Mr. LANSBURY: Nobody called the police. My objection to the interference of the police is that if they had allowed the people who were carrying on the meeting to remove the man who was disturbing the meeting, he would have been removed. Instead of interfering with the people, who wanted to preserve order, they should have interfered with the man who was creating disorder. That is not the only point. When the man was edged out of the crowd

183
the police had jostled and Hustled a lot of peaceable citizens; they were backed across the narrow piece of grass that divides the road from where the meeting was held. It is said in the answer to my question that bottles and stones were thrown and chairs used. I never saw any bottles or stones thrown, or anything of this kind happen, and I was there all the time. It is also said that you could not put a cordon round the meeting. That is not the charge. The charge is that a cordon was put round the crowd who followed the man and the police, and that is certainly what happened. It is stated that Grosvenor Gate was closed to prevent disturbance in the streets. I say that the police not merely closed Grosvenor Gate, but refused permission to people to go out through Marble Arch. I want the Home Secretary to investigate that statement. I can quite understand that when they wanted to get their prisoners out it might have been an act of wisdom to close the small gate, but I contend that the police had no right to block up the whole of the road and prevent people leaving the park by the big Marble Arch exit. I went to the inspector and asked why people could not be allowed to go through Marble Arch, and I was told I could go out that way, but that nobody else would be allowed to do so.
I altogether deny the right of the police to prevent people leaving the park if they want to leave it. It is said they ought to have discriminated between a man whom they knew to be a Member of Parliament and ordinary citizens. That is quite nonsensical. The people have as much right to the use of that road as I or anybody else. Not merely were the people knocked about when following this young man out, but when they returned to the meeting the police assaulted the ordinary people in the most brutal manner. I am not speaking from hearsay. I saw constables assault young men and old men; I saw women and children knocked down by the police. Any persons who remonstrated, it did not matter who they were, were immediately punched and knocked down, if they could possibly be knocked down. I say that the police of London as a rule conduct these arrangements in a perfectly decent manner. [HON. MEMBERS: "Hear, hear."] Yes; I have said that in this House before on a similar occasion. I want also to say that when a thing like
184
this happens the authorities ought not to cloak it over, but take it in hand and see that it does not happen again. Other Members of this House were there, and I am speaking about what I know. It was not a question of following the police out into the street and back again into the Park, where the assaults were committed. People were assaulted in that part of the Park which is usually used by people who desire to sit down. I see no reason why the people should have been moved on. Anyone who attempted to stand still was at once assaulted by one or other of the constables, and the result was that a large number of people have been taken to prison, some of them because they only remonstrated. I understand that the Home Secretary does not intend to go into a full reply tonight, and I am putting the case fully, because I want the right hon. Gentleman to make an inquiry and allow witnesses to give evidence as to the truth or falsity of the statements made. People coming back were assaulted, and further they had only to make a remonstrance to a police constable about a prisoner to get either thumped about the body or the face. I saw a young man most brutally assaulted by one of the officers.
I say if you want to have respect for the law in London you ought to see at least that those who have to carry out the law carry it out in a decent manner. That is not doing so. The people who were in Hyde Park and the people who were assaulted had no idea of breaking the law out in Park Lane. An order was given to prevent the people leaving the park by way of the Marble Arch, and whoever gave that order and the order for the cordon, in my opinion, invited disorder and riot. I have made no statement but what I can substantiate, not only by what I saw, but by witnesses. I think the least the Home Secretary can do is, not merely to take the word of the police in this matter, but also the word of onlookers and citizens who were in the park at the same time. You do not, as a rule, where persons do certain things take the word of those only who have, to defend themselves. You allow that certainly, but you do not take their words as the last word in the statement of the case. I want the Home Secretary to take other evidence in the matter as well as that of the police.
Mr. McKENNA: I will certainly do my best to investigate the circumstances stated by the hon. Member,

185
because I am quite sure anybody who knows him would recognise—as I do fully— that every statement he makes he believes to be strictly true, and so far as he was able to see what occurred I am sure he intended to put fully to the House exactly a statement of the facts. The evidence given to me, however, contradicts in several material points certain of his allegations. One or two points can be very easily settled. He stated that a cordon of police was drawn, not round the whole of the crowd, but round the part of it that was moving. I am informed there were not enough police there to make such a cordon as he describes.
Mr. LANSBURY: I mean across the Park Lane end, not round the whole meeting.
Mr. McKENNA: I am informed also that the young man who interrupted was
186
very badly treated and hustled, and that the interference of the police was for the purpose primarily of protecting this young man. He had a perfect right to be at the meeting. I cannot altogether agree with the analogy my hon. Friend intends to draw between this case and that of Boulter.
Mr. LANSBURY: You locked Boulter up.
Mr. McKENNA: Yes, because certain language he used was likely to lead to a breach of the peace. The police in this case were protecting a man because of the action of the crowd.
And, it being Half-past Eleven of the clock, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at Half after Eleven o'clock.

  Relief from Income Tax.
  Relief from Income Tax.
  Land and House Property (Mortgages).
  Land and House Property (Mortgages).
  Site Values (Southport).
  Site Values (Southport).
  Consols.
  Consols.
NATIONAL INSURANCE ACT.
  PRINTING.
  PRINTING.
  APPOINTMENTS (IRELAND).
  APPOINTMENTS (IRELAND).
  CHILDREN PHYSICALLY DEFECTIVE.
  CHILDREN PHYSICALLY DEFECTIVE.
  RULES OF APPROVED SOCIETIES.
  RULES OF APPROVED SOCIETIES.
  INSURANCE COMMITTEE MEETING.
  INSURANCE COMMITTEE MEETING.
  Blarney National School (Teacher's Residence).
  Blarney National School (Teacher's Residence).
  Illegal Trawling (Kerry Coast).
  Illegal Trawling (Kerry Coast).
  Land Purchase (Ireland).
  Land Purchase (Ireland).
  Old Age Pensions.
  Old Age Pensions.
  Living Persons' Wills (Ireland).
  Living Persons' Wills (Ireland).
  Mental Deficiency Bill (Ireland).
  Mental Deficiency Bill (Ireland).
  Reinstatement of Evicted Tenants (Ireland).
  Reinstatement of Evicted Tenants (Ireland).
ROYAL NAVY.
  ACTIVE LIST.
  ACTIVE LIST.
  SPITHEAD REVIEW, JULY, 1912.
  SPITHEAD REVIEW, JULY, 1912.
  HAULBOWLINE DOCKYARD.
  HAULBOWLINE DOCKYARD.
  Painting Forts (Fair-Wages Clause).
  Painting Forts (Fair-Wages Clause).
  School Attendance.
  School Attendance.
  Metropolitan Police (Chiswick).
  Metropolitan Police (Chiswick).
  Aliens Act (Newhaven).
  Aliens Act (Newhaven).
  Persons Arrested.
  Persons Arrested.
INDIA.
  POLICE PENSIONS.
  POLICE PENSIONS.
  British East Africa (Forest Concession).
  British East Africa (Forest Concession).
  Public Works and Customs Duties.
  Public Works and Customs Duties.
  Franchise and Registration Bill.
  Franchise and Registration Bill.
  Census (Population Volumes).
  Census (Population Volumes).
  Dockyard Workers (Port of London).
  Dockyard Workers (Port of London).
GOVERNMENT OF IRELAND BILL.
  AGRICULTURAL LAND VALUES.
  AGRICULTURAL LAND VALUES.
POST OFFICE.
  LONDON POSTAL SERVICE.
  LONDON POSTAL SERVICE.
TELEPHONE SERVICE.
  NATIONAL TELEPHONE COMPANY'S UNDERTAKING (SALE)."
  NATIONAL TELEPHONE COMPANY'S UNDERTAKING (SALE)."
  Scottish Fishing Industry (Report of Committee).
  Scottish Fishing Industry (Report of Committee).
  School Attendance (Scotland).
  School Attendance (Scotland).
  Medical Treatment of School Children (Scotland).
  Medical Treatment of School Children (Scotland).

BARONY OF LATYMER.
Committee for Privileges met: Counsel further heard on behalf of the Claimant: Witnesses examined: Evidence put in: Counsel heard on behalf of the Crown: Claim considered: Resolution agreed to by the Committee; report thereof to be made to the House.
The proceedings and minutes of evidence taken before the Committee for Privileges to be printed.
Ordered, That all deeds, documents and papers produced on behalf of the Claimant by his agents be delivered to the said agents.
House adjourned during pleasure; and resumed by the Lord Chancellor.

BARONY OF LATYMER.
Report made from the Committee for Privileges:
That the Barony of Latymer was created by Writ of Summons tested the 25th day of February in the tenth year of King Henry VI, addressed to Sir George Nevill, Knight, and that the said Sir George Nevill was subsequently present as a Peer in Parliament in the style of Lord Latymer.
That the Barony of Latymer so created is a Barony in Fee.
That the said Barony descended to John 4th Lord Latymer.
That John 4th Lord Latymer died in the year 1577 without issue male, leaving his four daughters, Catherine Countess of Northumberland, Dorothy afterwards Countess of Exeter, Dame Lucy Cornwallis and Dame Elizabeth Danvers his co-heirs.
That the said Barony thereupon fell into abeyance between the abovementioned four daughters of John 4th Lord Latymer and is now in abeyance between their co-heirs.
That the Petitioner, Francis Coutts, is a co-heir to the said Barony of Latymer.
That the other co-heirs to the said Barony are:

John James Hugh Henry, Duke of Atholl;

Elizabeth Anne, Countess Palatiano, Nina Katherine Elena WebleyParry, Olivia Fanny White, Frances Oxenham Russell;

Henry Rainald, Viscount Gage;

Colonel Hugo Montgomery Campbell;

Mary Ethel, Baroness Beaumont;

Henry Noailles Widdrington Standish;

Edward Carington Wright of Kelvedon;

John Rogerson, Lord Rollo;

Millicent Grace Gordon-Ives; and

Montagu, Earl of Abingdon:

Read, and agreed to; and resolved and adjudged accordingly; and Resolution and Judgment to be laid before His Maiesty by the Lords with White Staves.
The EARL OF TANKERVILLE—Took the Oath.
The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificates from the Examiners that the further Standing Orders applicable to the following Bills have been complied with:

London County Council (Finance).

London County Council (General Powers).

The same were ordered to lie on the Table.

SHIPLEY URBAN DISTRICT COUNCIL BILL.
Read 3a, and passed.

STAFFORDSHIRE POTTERIES WATER BILL.
GAS COMPANIES (STANDARD BURNER) BILL.
Read 3a, with the Amendments, and passed, and returned to the Commons.

LOCAL GOVERNMENT PROVISIONAL ORDERS (No. 9) BILL. (No. 115.)
LOCAL GOVERNMENT PROVISIONAL ORDER (No. 13) BILL. (No. 116.)
Brought from the Commons; read la; to be printed; and referred to the Examiners.

NATIONAL ELECTRIC CONSTRUCTION COMPANY BILL.
Brought from the Commons; read 1a; and referred to the Examiners.

BRIGHTON CORPORATION BILL. [H.L.]
GREAT CENTRAL RAILWAY BILL. [H.L.]
BAWTRY AND DISTRICT GAS BILL. [H.L.]
HOVE CORPORATION BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: The said Amendments considered, and agreed to.

NATIONAL INSURANCE ACT, 1911.
1. Provisional Regulations, dated 12th July, 1912, made by the National Insurance Joint Committee and the Irish Insurance Commissioners acting jointly—

I. As to the employer of a contributor employed by more than one person in a calendar week;

II. As to the payment and collection of contributions payable in respect of masters, seamen, and apprentices in the sea service and the sea fishing service;

2. Regulations, dated 12th July, 1912, made by the National Insurance Joint Committee and the Welsh Commissioners acting jointly—

I. As to the employer of a contributor employed by more than one person in a calendar week;

II. As to the payment and collection of contributions payable in respect of masters, seamen, and apprentices in the sea service and in the sea fishing service;

III. As to the contributions to be paid in respect of outworkers;

3. Regulations, dated 12th July, 1912, made by the National Health Insurance Joint Committee and the Scottish Commissioners acting jointly—

I. As to the payment and collection of contributions payable by and in respect of masters, seamen, and apprentices in the sea service and sea fishing service;

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II. As to the contributions to be paid in respect of outworkers;

III. As to the payment and collection of contributions in respect of persons exempt or excluded from insurance;

IV. As to employed contributors working under the general control and management of some person other than their immediate employer;

V. As to the employer of a contributor employed by more than one person in a calendar week;

4. Regulations, dated 11th July, 1912, made by the National Health Insurance Joint Committee, as to the contributions of the Admiralty and Army Council in respect of Seamen, Marines and Soldiers;
5. Provisional Regulations of the National Health Insurance Commission (Wales)—

I. As to Inspectors' Certificates of Appointment;

II. As to Notices by Employers under Section 47 of the Act;

III. As to Proceedings of Insurance Committees;

6. Provisional Regulations made by the Irish Insurance Commissioners as to Inspectors' Certificates of Appointment;
7. Provisional Special Orders made by the National Health Insurance Joint Committee and by the several bodies of Insurance Commissioners acting jointly—

I. Entitled the National Health Insurance (Special Customs) Provisional Order, 1912 (No. 1);

II. Entitled the National Health Insurance (Subsidiary Employments) Provisional Order, 1912 (No. 1);

III. Entitled the National Health Insurance (Subsidiary Employments) Provisional Order, 1912 (No. 2);

IV. Entitled the National Health Insurance (Subsidiary Employments) Provisional Order, 1912 (No. 3);

V. With reference to persons employed by or under the Crown;

8. Provisional Special Order made by the National Health Insurance Joint Committee as to outworkers who are married women;
9. Provisional Special Order made by the National Health Insurance Joint Committee and the Scottish insurance Commissioners acting jointly, entitled the National Health Insurance (Special Customs) Provisional Order (Scotland), 1912;
10. Provisional Special Order made by the National Health Insurance Joint Committee and the Insurance Commissioners acting jointly as to fishermen remunerated by share;
11. Provisional Special Order made by the National Health Insurance Joint Committee and the Welsh Insurance Commissioners acting jointly, entitled the National Health Insurance (Special Customs) Provisional Order, 1912 (No. 2);
12. Regulations, dated 12th July, 1912, made by the National Health Insurance Joint Committee, as to the Accounts of Approved Societies:
Laid before the House (pursuant to Act), and to be printed. (No. 117.)

LOCAL GOVERNMENT PROVISIONAL ORDERS (No. 6) BILL.
LOCAL GOVERNMENT PROVISIONAL ORDERS (No. 8) BILL.
LOCAL GOVERNMENT PROVISIONAL ORDERS (No. 10) BILL.
Moved, That the Order made on the 24th day of April last, "That no Provisional Order Confirmation Bill brought from the House of Commons shall be read a second time after Thursday the 4th day of July next" be dispensed with, and that the Bills be now read 2a; agreed to: Bills read 2a accordingly.

LOCAL GOVERNMENT PROVISIONAL ORDERS (No. 8) BILL.
Committed: The Committee to be proposed by the Committee of Selection in regard to the Caerphilly Order.
LOCAL GOVERNMENT PROVISIONAL ORDERS (No. 10) BILL.
Committed: The Committee to be proposed by the Committee of Selection in regard to the Salford Order.
GAS AND WATER PROVISIONAL ORDERS BILL.
Amendments reported (according to Order), and Bill to be read 3a To-morrow.

ELECTRIC LIGHTING PROVISIONAL ORDERS (No. 1) BILL.
MILITARY LANDS PROVISIONAL ORDER BILL.
Read 3a (according to Order), and passed.

FACTORY AND WORKSHOP (No. 2) BILL [H.L.]
Order of the Day for the House to be put into Committee (on Re-commitment), read.
THE MARQUESS OF SALISBURY: I have to apologise to your Lordships for not being in my place on Wednesday last when this Bill was under discussion, on which occasion a number of Government Amendments were inserted in the Bill on Report with a view to the Bill being reprinted and re-committed. The effect of the Government Amendments then inserted was in some respects to diminish the stringency of the Bill and in other respects to increase it. The principal form in which diminution has taken place under those Amendments is that the absolute prohibition of underground workplaces in the future, as the provision stood in the original draft of the Bill, is done away with. A broad distinction was made on the face of the Bill itself between existing workplaces and those started after the commencement of the Act. In regard to existing workplaces, what we originally proposed was that they should be subject to stringent regulations, but that any workplace hereafter established should not be permitted at all if it was underground within the meaning of the Statute.
Having made this short statement I will, without further preface, move that the House resolve itself into Committee on the Bill.
Moved, That the House do now resolve itself into Committee.—(The Marquess of Salisbury.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF DONOUGHMORE in the Chair.]
Clause 1:
Underground Premises.
1.—(1) On and after the first day of January one thousand nine hundred and fourteen, or such later date, not being later than the first day of January one thousand nine hundred and fifteen, as the Secretary of State may by order appoint, no underground room in a factory, workshop, or workplace shall be used for the purpose of any of the processes or occupations specified in the Schedule to this Act unless duly certified by the district council to be suitable for the process or occupation named in the certificate, and unless the regulations made under this Act or the conditions contained in the certificate are complied with.
(2) For the purposes of this Act an underground room shall mean any room any part of which is so situate that the surface of the floor is more than three feet below the surface of the footway of the adjoining street, or of the ground adjoining or nearest to the room.
THE MARQUESS OF SALISBURY: The first question I wish to raise on Clause 1 is that of the meaning of the word "workplace." There is no definition of "workplace" in the Bill, and what I venture to submit to the Government is that they would be well advised in agreeing to some definition. I know that there is great difficulty in the matter, and therefore I have not put an Amendment on the Paper dealing with this point, but I shall be ready to do so at the next stage. It is true that the word "workplace" has already received Judicial interpretation, and that that interpretation is of a very wide character; but we have to think not merely of the legal effect of the words in the Bill but of the indication which its provisions will constitute to the local authorities who have to carry it out. The local authorities who will primarily have to carry out the provisions of this Bill are the district councils, and if they are presented with a Bill dealing in rather a drastic way for the first time with workplaces of a certain character and are not told what a workplace means, they may feel rather bewildered, and may take what, after all, is the easiest refuge for a bewildered local authority—namely, do nothing at all. That is the most likely issue of any doubt on their part as to what "workplace" means. Therefore as we are all anxious, and I am sure the Government are, to make this Bill effective, it is necessary that some definition of "workplace" should be inserted, so that there should be an indication on the face
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of the Bill as to the scope the local authorities are intended to take in administering it. I do not know whether the noble Lord who represents the Home Office has had time to consider this point.
THE PAYMASTER-GENERAL (LORD STRACHIE): As the noble Marquess is aware, there is a great deal of difficulty in regard to this question. The danger is that you may either be too elastic in your definition or too limited and too narrow, and you may raise difficulties in that way. At present there is no definition of "workplace" in the Factories Acts. Parliament so far has not thought fit to frame any definition of the word, although it has been in use in Public Health Acts for something like thirty years, during which period there has been only one case brought before the Courts for an interpretation of the word "workplace." The point in that case was whether or not a cabyard was a workplace, and the learned Judge held that in that particular case the cabyard was a workplace, but he refused to give any precise definition of what a workplace was. If the noble Marquess, between now and the Report stage of the Bill, can make any suggestion on the point—and it must be remembered that any definition inserted in this Bill would have to be read with the existing Factories Acts—the Home Office will be ready to consider it. But I would urge him, seeing that this legislation has worked so well during the last thirty years, whether it is not wise to leave well alone in this particular case.
THE MARQUESS OF SALISBURY: I will not press the matter further at this moment, but I should be glad of a conversation with the noble Lord upon it. The first Amendment standing in my name on the Paper is to Clause 1, and it deals with the definition of what constitutes, if I may coin a word, "undergroundness." As the Bill stands, it says that an underground room shall mean any room any part of which is so situate that the surface of the floor is more than 3 feet below the surface of the footway of the adjoining street or of the ground adjoining or nearest the room. That, in fact, does not make a room underground, and it clearly cannot be said to be such a distinction as to justify putting such a workroom under the drastic provisions of this Statute. I venture to think we shall make a great mistake if we pass

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such a definition, which is on the face of it inadequate. What is important is not where the floor of the room is but where the ceiling is. If the ceiling is nearly on a level with the ground outside, then, indeed, the room is underground; but the position of the floor is of much less importance. In the words which I have ventured to place on the Paper I have endeavoured to strike a compromise by providing that it should depend neither upon the floor nor the ceiling, but that the definition should be that an underground room shall mean any room any part of which is so situate that half or more than half the whole height thereof measuring from the floor to the ceiling is below the surface.
Amendment moved—
Clause 1, page 1, line 17, leave out ("the surface of the floor is more than three feet") and insert ("half or more than half the whole height thereof measured from the floor to the ceiling is").—(The Marquess of Salisbury.)
LORD STRACHIE: In accepting the Amendment which the noble Marquess has just moved, I should like to point out that the Amendment which was inserted on my Motion on Report last week, before the Bill was re-committed, was put in so as to bring this Bill into conformity with the present Factories Acts. But if the noble Marquess thinks the provision too stringent—though I do not think it is as stringent a provision as the one in the original Bill—I am quite ready to accept the Amendment.
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2:
Certification.
2. An underground room shall not be certified by the district council as suitable unless the council are satisfied that such underground room complies with the regulations made under this Act: Provided that if no regulations applicable to the case have been so made a certificate shall not be granted unless the district council are satisfied that the room is suitable in respect of the matters as to which regulations might have been made, and the certificate shall specify the means required, as a condition of certification, to be provided for securing the health of the persons employed in the room, and shall be made conditional on such means being maintained and properly used.
THE MARQUESS OF SALISBURY: On the Question that Clause 2 stand part of the Bill I wish to lay a point before the Government. In the Amendments which they inserted on the last stage of the Bill they provided that in cases where there are no regulations under the Bill the district council shall act without regulations. That appears to me, if I may say so, an almost indefensible proposition. This Bill provides that in certain circumstances an underground workplace is to be suppressed. If such a step is necessary, it is very proper that it should be taken, but Parliament has always been very jealous that this shall only be done with every precaution. Consequently in I think almost all Statutes of this kind there is the ordinary rules clause, containing certain provisions for regulations which govern the operation of the Act, and this Bill, like other Bills, has the rules clause. Those regulations are to be made under the authority of the Home Office, and it seems astonishing that if Parliament should think it right to give the Home Office power to make regulations Parliament should also say that if the Home Office do not make regulations district councils may act without regulations. I am afraid that cannot be defended. Under the rules clause every conceivable precaution is taken that injustice is not done. There has to be an advertisement in the local newspaper, and there has to be an inquiry if it is called for by any persons who think they have a right to object. The regulations themselves have to lie on the Tables of both Houses of Parliament so that they may, if necessary, be objected to. All these precautions are taken in the case of regulations which are made by the Home Office. But it a district council is to act alone, none of these precautions are to have effect. If the Home Office makes regulations they are to be made with the greatest precaution, but if the Home Office makes no regulations then this drastic Statute is to operate on the fiat of the district council alone. I know that there is an appeal to a Court of Summary Jurisdiction, but that is not an exalted authority to which to entrust the rights and privileges of His Majesty's subjects in a Statute of this kind. If we attempt to go in front of public opinion to that extent we shall defeat our object, and the result will be that the Bill will not get through both Houses of Parliament. What we should say is that underground rooms are un wholesome and insanitary if they do not comply with certain regulations; that those

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regulations should be made by the Home Office; and that the Bill should not operate until the Home Office makes the regulations That is the right course, and I urge His Majesty's Government to consider the point before the next stage of the Bill is taken.
LORD STRACHIE: With a good deal of what the noble Marquess has said I agree, but I would point out some of the difficulties. It would be perfectly impossible for the Home Office straight off to make regulations dealing with every one of the various trades which have been included in the schedule of this Bill.
THE MARQUESS OF SALISBURY: They have till 1914.
LORD STRACHIE: It might take many years to do this.
THE MARQUESS OF SALISBURY: Oh!
LORD STRACHIE: Well, that is the opinion held at the Home Office. I would remind the noble Marquess, as regards some of the various classes which he desires to include in the schedule, that at the present moment there is no power for Home Office inspectors to deal with these classes. For instance as regards typewriting offices and restaurant kitchens there is no power of inspection by the Home Office. The only people who have that power are the officers of the local authorities. Perhaps between now and the Report Stage the noble Marquess can bring forward suggestions which may make it possible for the Home Office to undertake this work. I must say I was rather surprised at the fear shown by the noble Marquess of local authorities. I have served upon every kind of local authority, and I certainly have no dread that local authorities are going to be too active in this matter. I think the promoters of the Bill would rather have to fear that the local authorities would not be sufficiently active. If local authorities are too active, all they do is done in sight of the electors who return them, and where any injustice is likely to be done there will be a good opportunity of correcting those people who go in front of public opinion. For myself I have not the slightest fear that local authorities are likely to be too active or unfair or unjust in this matter. The noble Marquess not only appears nervous of local authorities but he also seems to think that there is not much faith to be put in Courts of Summary Jurisdiction. These
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Benches carry out their duties with the greatest care, the greatest circumspection, and the greatest fairness, and I cannot see anything wrong in the provisions of Clause 2 in regard to this matter. But I will see that the point is carefully considered and will bring the remarks of the noble Marquess before the Home Secretary between now and the Report stage.
THE MARQUESS OF SALISBURY: I am obliged to the noble Lord, and after his promise I will not press the matter. It is not that I distrust local authorities, but I think the Home Office ought to see that regulations are made in each case. I am not afraid that the local authorities will be too active in the matter, but rather that the interests which are involved will take care, unless there is an amendment in this direction, that the Bill will not pass into law.
LORD STRACHIE: It is difficult for the Home Office to make regulations in regard to places where we have no power to send our inspectors.
THE MARQUESS OF SALISBURY: I was not aware that the Home Office had no powers of inspection in the two cases referred to by the noble Lord. I will consider that point before the next stage.
Clause 2 agreed to.
Clauses 3 to 7 agreed to.
Clause 8:
Regulations.
8.—(1) The Secretary of State may by Order make regulations as to structure of underground rooms to which this Act applies, and the provision and use as regards such rooms of means for securing the maintenance of reasonable temperature, proper lighting and ventilation, freedom from damp, dust, effluvia, and exhalations, and the carrying off of dust and fumes, and otherwise for securing the health of persons employed in underground rooms in the processes and occupations to which this Act applies; and different regulations may be made as respects different processes and different occupations, or as respects rooms which are used for the purposes of any of such processes or occupations at the time when the Order comes into effect, and rooms which are not so used.
(2) The Secretary of State may by order extend the provisions of this Act to processes and occupations other than those specified in the Schedule to this Act, and thereupon this Act shall, subject to the provisions of the Order, apply as if that schedule included the processes and occupations specified in the order.
(3) Sections eighty, eighty-one, and eighty-four of the Factory and Workshop Act, 1901 (relating to the procedure for making regulations as to dangerous trades), shall apply to the making of orders under this section.
THE MARQUESS OF SALISBURY: On this clause I should like to represent one matter to the noble Lord who speaks for the Home Office. The regulations are perfectly elastic; they may be good or they may be bad—we trust the Home Office for that—but there is one particular about which I think there can be no doubt, and that is the question of artificial light. I do not think it is possible to defend a system under which workpeople have to work always under artificial light. I am confident that the whole public opinion of this country is against such a thing. There ought to be natural ventilation and natural light. The former it is somewhat difficult to define, but natural light is perfectly possible to define. I know that some ingenious persons have said that what I suggest would have the effect of shutting up mines and underground railways, but I would point out that neither one nor the other is included in the schedule. Moreover, they could, if necessary, be specially excluded from being brought in hereafter. But for people to go year in and year out working all day permanently in artificial light must be bad for their health and ought to he prevented by Parliament.
LORD STRACHIE: Here again I am quite ready to consider any suggestion which the noble Marquess may bring up on Report dealing with the question of artificial light, but I have some doubt whether his views on this question are not too stringent. He has already said that some people might say that by so stringent a regulation you would shut up mines and underground railways which are lighted by artificial light. The noble Marquess said that neither of these was in the schedule, but he must not forget that the Home Office has power indefinitely to extend the schedule. I think we ought very carefully to consider whether it is desirable to do this. The noble Marquess must also remember that it might be held that basements in London houses come under the Bill, and we are all aware that there are many houses in London where work is carried on in basements which are lighted by artificial light, if not during the whole of the day, at any rate during nearly the whole of the day. I am doubtful, if artificial light is of a proper kind and properly shaded and if there is proper ventilation, whether a great many trades cannot be carried on perfectly well, just
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as coal-mining is carried on, in artificial light—that is to say, if other conditions are satisfactory; but we are quite ready at the Home Office to consider this question between now and the Report stage. I urge upon the noble Marquess, however, that it is important to see that the provision does not interfere unduly with any trade which may be carried on perfectly well under artificial light.
THE MARQUESS OF SALISBURY: I am obliged to the noble Lord.
Clause 8 agreed to.
Remaining Clauses agreed to.
Schedule:

The making, cleaning, washing, altering, ornamenting, finishing, and repairing, of wearing apparel;

Hair-work;

Lace or embroidery making;

Upholstery and carpet making;

Watch and clock making and repairing;

Jewellery work;

Laundry work;

Typewriting;

Preparation of food for consumption in restaurants and other establishments for the sale of refreshments;

and other occupations incidental to any of the foregoing.
THE MARQUESS OF SALISBURY: The Amendment which I desire to move in the Schedule is of a drafting character. I am told that it is not quite clear as to what "hair-work" is, and my Amendment is intended to make it clearer.
Amendment moved—
Schedule, page 4, line 11, leave out ("Hair-work") and insert ("Wig making and the process of preparing hair for human wear or adornment").—(The Marquess of Salisbury.)
On Question, Amendment agreed to.
THE MARQUESS OF SALISBURY: On the Schedule as a whole I wish to represent to the Government that there is a great omission. We have typewriting included, but not other clerical work.

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I think that is a great omission. It is true that you cannot apply to clerical work all the conditions that you apply to other trades in the schedule, but the Home Office have reserved to themselves complete power to vary the regulations according to the difference of occupations to which the regulations are to apply. It would be perfectly possible for them, therefore, when dealing with other clerical work to apply only regulations which were applicable to that work. When you consider that the object of this Bill is as far as possible to prevent underground work, it is a serious omission to leave untouched the great branch of clerical work. The health of clerks, both male and female, is as much entitled to protection by Act of Parliament as the health of typists and those engaged in the other trades mentioned. I therefore think the Government would be well advised, between now and the next stage, to consider whether it would not be possible to add the words "and other clerical work."
LORD STRACHIE: I am afraid I cannot give the noble Marquess any hope that the Government will do this. It seems to me that he is opening a very large area indeed and making a very serious addition to the schedule. I should like to warn him that there is great danger in adding other clerical work. You would have to increase, not only the number of inspectors working under the Home Office, but you would certainly have to increase those under local authorities. I am sure none of us are anxious to increase the number of inspectors. In fact, I have been rather shocked to-day at the light way in which the noble Marquess has been ready to increase the number of inspectors and add to the cost not only upon the taxes but upon the local rates. I always thought that the principal charge against His Majesty's Government was that they were setting up too many officials, but here the Home Office is being urged to further extend this Bill and set up additional officials.
Schedule agreed to.
The Report of Amendments to be received on Monday next, and Bill to be printed as amended. (No. 118.)

THE TRANS-PERSIAN RAILWAY.
EARL CURZON OF KEDLESTON*EARL CURZON OF KEDLESTON rose to call attention to the project of a Trans-Persian Railway; to inquire as to the policy of His Majesty's Government and the views of the Government of India in relation to this proposal; and to move for Papers.
The noble Earl said: My Lords, I propose to confine myself very strictly to the terms of the Notice on the Paper. Though the question of Persian railways does touch the general position in Persia, and though the customary latitude of debate in our House would allow me, I imagine, to raise that question, I propose to resist the temptation altogether this evening. Neither shall I say anything about the cognate question of the Baghdad Railway except this, that it seems to me that, if we are going in for a Trans-Persian line, such a line must react unfavourably on the prospects of the Baghdad Railway; for this reason, that if by this railway you place your passengers or your goods at the Indian end of the Arabian Sea, obviously there is less inducement either for passengers or for goods to take advantage of a railway which will deposit them at the other or Turkish end of the Persian Gulf.
My first point is this. I doubt whether your Lordships realise the extraordinary and almost unsuspected rapidity with which this question is moving. I wonder whether Parliament, and, still more, the public, has any idea what is going on and what has already been done. This is not a question of an ordinary line being built in a foreign country, whether for the development of communications, the connection of cities, or the advancement of trade. This is a question of a great trunk line running all the way through Asia to India, necessarily altering the whole position in India itself and the future security of our rule in that country, and compelling us—this will be part of my argument—to revise the principles upon which the defence of India has so far been based. How many are there, even of the public who follow the affairs of Asia, who realise that such a line as I speak of is now being surveyed, that a sum of nearly £100,000 has been subscribed by financiers in this country and in Russia and in France for carrying out these preliminary proceedings, and, what is more important, that His Majesty's Government have agreed "in principle"—these are their

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own words—to the creation of this line without having in any way received the authority, the approbation, or the consent of Parliament?
A year ago nobody would have dreamt that such a thing would be possible, and the witness that I call is the noble Viscount (Lord Morley) who sits opposite me, and who, I believe, is to follow me this evening. He will recall that we had a debate here in March, 1911, upon the question of Persia, the Baghdad Railway, and other cognate subjects. In the course of that debate I asked him whether the idea of a Trans-Persian railway was seriously entertained by the Government and whether it occupied any place in the field of international politics, and the noble Viscount replied to me as follows—
"Any ideas or designs on that subject are far too immature for any sensible, or useful, or instructive observations to be made upon them."
The noble Viscount added that he himself was inclined to share my doubts as to the workableness of the particular design to which I had referred. These observations were, I think, calculated to lull any suspicions that might have been entertained by any of us as to this project. The same effect was produced by the answers of the Secretary of State for Foreign Affairs in the House of Commons up till quite a recent date. As recently as May 14 he was found saying in the House of Commons, in reply to a Question, that matters with regard to this railway were still in a very inchoate state. I do not know the precise degree of rapidity with which they have advanced between May 14 and to-day, but all I can say, if my information is correct, is that they are not at all in an inchoate condition now.
Let me state the facts as they are known to me, and, of course, if I am wrong I am liable to correction at the hands of the noble Viscount opposite, who has access to information much superior to that which is at my disposal. I believe the facts are as follow. There has been founded, with the knowledge and approval of His Majesty's Government, a body called the Société d'Etudes. This is an international body composed of financiers, politicians, and engineers drawn from the three nations—Great Britain, France, and Russia—to which I referred. At the head of this body is a council of administration consisting of twenty-four gentlemen,
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eight drawn from each of the three nations, the British representatives upon which were appointed with the knowledge and approval of His Majesty's Government. There is to be a committee of directors of twelve chosen by the larger body. And this society has, I think, already begun to meet in Paris. Their functions are, broadly speaking, these. Their business is to conduct the surveys for the railway, to obtain the requisite concession from the Persian Government, and to submit to the Governments concerned definite estimates and plans. I believe that to be a correct account of what their functions are. For the preliminary purposes that I have described a sum of £90,000 has been raised by these three financial groups, and I think we may rest assured that this money would not have been found unless there was some substantial belief that the Government were behind the undertaking.
Now, my Lords, let me state in a few words what the scheme, so far as I understand it, is. This great Trans-Persian railway is to start from Baku, the Russian port on the western shore of the Caspian Sea; or rather the railway, in so far as it is a Persian line, will start from Astara, but will be connected by rail with the Russian port. From there it is to run via Resht and Kazvin to the capital, Teheran, and onwards to the old capital Isfahan. From that point there would appear to be some difference of opinion as to the alignment. One idea has been to take the railway down by the town of Yezd to Bundar Abbas on the Persian Gulf, but I believe that that idea is not now favourably entertained. The other idea is to take the railway more to the East, through Kerman down either to the Persian port of Charbar on the shores of the Gulf, or, more easterly still, either to Gwattar or to Gwadar, which are ports in British Makran and therefore in Indian territory. The total length of this line is estimated by the promoters at 1,800 miles, but knowing the country fairly well through which it will go and remembering that you start at the sea on one side and end at the sea on the other, and that in the interval you have to climb at least 6,000 feet to cross the passes in certain sections of the Persian plateau, I venture to say the line will be nearer 2,500 miles in length than 2,000. The cost has been estimated at from £15,000,000 to £20,000,000; but I have no doubt that the actual cost, if the railway is ever constructed

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will be much nearer £30,000,000. It is said that this railway will reduce the journey from England to India from twelve and a-half to seven or eight days.
Such, my Lords, as far as I can give it, is a brief outline of the scheme of which I am asking your Lordships to discuss the political, strategical, and commercial aspects to-day. I think there have been evidences of Government sympathy beyond those to which I have already referred. I think I am right in saying that the British and Russian Ministers have been in consultation at Teheran with the Persian Minister of Foreign Affairs in order to procure an option for the survey, and, later on, the construction of the line. The Indian Government have deputed one of their Engineer officers, no doubt with the knowledge and approval of the Government at home, to examine the country lying to the west of Karachi, between Karachi and the eastern border of Persia, and I have seen it stated, apparently on good authority, in The Times newspaper that the Russian promoters have agreed—I call the House to notice the words "Russian promoters," because they indicate the source from which the active inspiration for the railway comes—that the Russian promoters have agreed to an equal participation at a later stage of the three countries concerned in the finance of the scheme. If I have been incorrect in any of my particulars no doubt the noble Viscount will put me right when he speaks later on.
Now we come to the attitude of His Majesty's Government. Fortunately, since I put down my Notice on the Paper this has been defined in circumstances of some precision by the Secretary of State, Sir Edward Grey, in the other House of Parliament, and I will ask your Lordships' leave to read what he said on the matter. These are his words—
"His Majesty's Government do not in principle oppose the Trans-Persian railway, and should under proper conditions be favourable to the principle."
He went on to say that His Majesty's Government must reserve to themselves full freedom of action with regard to certain points—namely, the alignment of the railway, the constitution of the board, the representation of British interests upon it, freight, passenger rates, and in regard to the break of gauge. Further, the Foreign Secretary said—
"Before it receives support from His Majesty's Government we should have to come to an agree-
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ment with Russia with regard to the branch lines to be made, with regard to the retention and control of lines in the British spheres, and with regard to equality of treatment for British trade."
The question of guarantees had been raised in the House of Commons, and the Foreign Secretary agreed that no guarantees should be given without the consent of Parliament. Finally, Sir Edward Grey said that he would at a later date lay the report of the Société d'Etudes before the House, and that the Government would state to the House under what conditions they were prepared to consent to any definite scheme before the country was absolutely committed. All these are sound and valuable assurances. I do not thank the Foreign Secretary for having given them, because in the circumstances of the case they were inevitable and indispensable. He might have given more; no Foreign Minister could possibly have given less.
The question I have to ask is, Do these assurances go far enough? I cannot help thinking—and I should be only too pleased to be disabused of the belief if it is wrong—that when the Government have encouraged, as they have done, the group of British financiers; when they have interested themselves, as I believe they have, in the appointment of members of the council; when they have set their diplomatic machinery working in the interests of the Scheme; and when, lastly, they have declared their sympathy with it in principle—when they have done this I cannot help thinking that they have gone a long way in the direction of support of this proposal. Their attitude seems to me to be more than an attitude of benevolent neutrality and to be really an attitude of implied support if not of positive encouragement of the scheme. So much so that I can quite believe that it may be a matter of rather serious difficulty for them to retreat at a later date, and if they come with definite proposals before the House of Commons it may be a matter of difficulty for their supporters in that House not to see them through in this affair. It may even be a matter of difficulty for the country, not fully informed upon the case, not to support the Government in the line that, according to my hypothesis, it may have taken. And thus, my Lords, it may be that, starting from these inchoate proceedings to which I referred just now we may end by finding that we are more or less committed to a measure of which I will only at this moment

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say this, that whether it be right or whether it be wrong it involves a more fundamental change in British policy towards India and the defence of India than any event that has taken place in the history of India since the days of Lord Clive.
In these circumstances I think your Lordships will agree that it behoves this House to look rather seriously into the grounds for this great departure, and to inquire what is the attitude of those who are really best qualified to advise about it. As regards the grounds, Sir Edward Grey, in the speech to which I referred, only found time for one, and that was the argument of inevitability. He said this railway must come; it is sure to be made sooner or later, and therefore we had better join. I should like to make these observations upon the argument of inevitability. If I were asked for my private opinion, I think I would truthfully say that some day or other the overland connection with India will come. I do not say that it will come now or in ten years or in twenty years, but I think some day it will come. But because you may look upon it from that point of view, because you may regard it as inevitable to that extent, it does not follow that the railway ought to be made now. It does not follow that because it is inevitable to that extent it will be good for us or good for India. It does not follow that because it is inevitable we ought to take an active part in joining at the present stage. In fact, it does not follow in the least that because it is some day certain to be made this Government or any British Government ought to be favourable to the scheme. There are, for instance, other ways to approach India overland which have met with favour in some quarters. The shortest overland route to India is through the Russian territories of Trans-Caspia and through Afghanistan. I think that less than 500 miles intervene which are not now covered by rails. There are many people who think that that is the line by which Europe ought to be united to Asia. The arguments for that line are just as strong or just as weak, whichever way you like to put it, as those for the Trans-Persian line. The argument of inevitability applies equally to that line with the other. Yet no British Government has brought forward a concrete proposal for such a line, because we know that the Ameer of Afghanistan, as was his predecessor, is inflexibly opposed to it. There is another scheme—that of running a railway from Egypt viâ
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Port Said across the Peninsula of Sinai and then across Arabia to the Persian Gulf. I make this observation to show that there is nothing in the argument of inevitability, for what it is worth, which applies particularly to the Trans-Persian scheme.
Upon this question of inevitability may I recall to your Lordships a memory which is probably fairly fresh in the minds of many of you—I mean the construction of the Channel Tunnel. How easily it used to be shown in the House of Commons that the Channel is an artificial and superannuated obstacle which ought not to be allowed to continue, in so far as the action of man could counteract it, in view of the wider and more cosmopolitan ideas of modern days. When first I entered the House of Commons I was rather affected by those views myself, and I fancy I gave a foolish vote in favour of the construction of the Channel Tunnel. But as soon as the military authorities had been heard on the matter, and when they demonstrated, as they did, that the Channel Tunnel would make England not safe, that it really would amount to a sacrifice of the incomparable frontier presented to us by nature, and that this little tube running under the sea, instead of merely being an instrument of amity and of commerce, might become an engine of invasion and destruction, from that moment public opinion changed and the Channel Tunnel scheme was overwhelmed with complete annihilation, an annihilation from which our friendly regard for France was not able to rescue it. And yet precisely the same reasoning was used about the inevitability of the Channel Tunnel. Therefore I am not impressed in the least degree by that argument.
I venture to say that the decision of a great issue of this sort ought not to be made on a priori grounds, nor on the fatalistic principle of accepting what will one day come. The sole test is whether the railway will be for the advantage of England, India, and Persia. Is this railway wanted for any of those three parties? Will it do good to any of them? Will it materially improve their security, their peace, their prosperity? If so, let us go ahead with the railway. If not, let us desist. If you look at the matter from this point of view I think you cannot fail to be impressed by the attitude so far taken up by those who may fairly be called experts on the matter. I have only myself met one man who can

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properly claim that title with regard to this question who is in favour of the Trans-Persian scheme. In the debate in the House of Commons last week not a single speaker on either side of the House gave it anything like a whole-hearted support. In fact, I think every speaker who alluded to it was against it. There are some newspapers which ordinarily support His Majesty's Government with unswerving fidelity—for instance, the Manchester Guardian—which are strenuously hostile to this proposal, on the perfectly worthy ground that it conflicts with all the ideas they have always entertained as to the principles of Indian frontier defence. Then we come to the military authorities. I can only speak for those whom I have come across, but among them there has not been a dissentient voice; and I dare say your Lordships may have noticed that there have been during the past few days two letters in The Times by a military authority who certainly speaks with great ability and with great weight and to whom His Majesty's Government are indebted for many kind acts of written support—I mean the Military Correspondent of The Times, Colonel Repington. Last week he had a letter in The Times of which I will only read one paragraph, because it really contains the objections entertained by many people to this railway in a very convincing way—
"My opinion is that this scheme, if carried out, will gravely alter the conditions under which India must be defended will enable external pressure to be applied to India and will therefore be politically unacceptable; will not materially benefit Persia nor British and Indian interests in Persia, except by affording a quicker route for mails; will divert mails and some passengers from the sea to the land route through Germany and will correspondingly injure our maritime carrying trade and industries; will reduce the profits which the public derives from the Suez Canal; will probably burden the finances of England or India or both; and, while being of no conceivable military service to us in any circumstances that can be foreseen, may in certain contingencies aggravate the military risks of India, increase the front which the Army in India has to defend with relatively weak forces, inflate expenditure upon defence, and render India more liable to foreign aggression by depriving her of the shield of her desert frontiers."
That argument has been reinforced by the same writer in another and longer letter which many of your Lordships may have read in The Times of this morning; and I must say this, that to the criticisms to which I am referring no answer whatever has yet been given either by Sir Edward
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Grey in the House of Commons or by any other spokesman of His Majesty's Government.
You will expect me, perhaps, to examine a little more closely these various points—namely, the manner in which this railway, if built, will affect the security of India, will affect our communication with India, will affect Anglo-Indian trade with Persia, and will affect the security of Persia itself. First let me take the defence of India. I imagine that it would be true to say that the history of the frontier defences of India during the last hundred years has, broadly speaking, passed through twophases. First there was the time in which the Government of India were spreading their conquests over the level plains of India until they came up to the mighty barrier of the mountains, which stand like an artificial palisade around our borders. Sometimes, of course, as in the case of the first Afghan War, we were tempted to cross that barrier, but usually to our detriment. Then came the period, beginning about fifty years ago, when either because of the depredations of the tribes in the mountains or the existence of hostile and intriguing influences beyond we were driven forward in search of what used to be called a "scientific frontier." The consequences of those forward movements pursued over a wide circumference were these. In parts we took completely into our own hands the country beyond the palisade; such was the ease with Baluchistan; elsewhere we put the mountain passes in charge of Militia levies, or military police raised from the tribes themselves, and we gave subsidies to the tribes; and as regards the countries beyond we contrived, by treaties or other arrangements, to protect or guarantee or neutralise the whole of the surrounding kingdoms to which I refer. Such was the case with regard to Persia, to Afghanistan, to Tibet, and, more in the East, Siam. But the whole point throughout in both these phases has been this, that India ought to be surrounded for the purpose of safety by a belt, be it of mountains or be it of desert, which it would be difficult to cross. You really may compare the position to that of a fortress with a great glacis stretching around it, cleared by the treaties and political arrangements which have been made, and swept by our guns. The theory has always been that no one should be at liberty to advance across that glacis

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up to the walls of the fort except by great expenditure to themselves and at the risk of open hostilities with the British Government.
I do not know whether anybody will dispute my summary of Indian frontier policy. Rightly or wrongly, I believe that has been the accepted policy of British Governments and Governments of India for the best part of 100 years. To support that policy we have fought wars, we have indulged in great expenditure of men and money, and on one occasion in 1885 Mr. Gladstone almost went to war with Russia. This has hitherto been the accepted policy of both political Parties in this country. There has been very little difference on broad ground of principle between us. I do not say that this policy has saved India from scares or from great expenditure. It has not. But it has saved India from attack, for during that time no single enemy has marched across the glacis of which I have been speaking or has crossed the protective zone. Now if this railway is built, if the theories upon which it is to be constructed are accepted, all these views are wrong. They are to be relegated to the limbo of obsolete and mistaken ideas, and we have now to acclaim and to accept the opposite theory—that the right frontier policy for India is not to close but to open her frontiers upon the west. We are, if assent be given to this railway, to assist in a proposal which will directly connect India on its most vulnerable side—that is, on the west—with the outside world; which will destroy the value of Afghanistan as a buffer State—and His Majesty's Government should consider the effect which will be produced on the Ameer by this proposal; which will span the desert upon which we have hitherto relied; which will turn the flank of Quetta, and will provide a route direct from the Russian military base to the borders of India. It is the fact that if this railway be made the Russian troops will be brought 1,000 miles nearer to India than they are at the present moment, and that the Russian War Department at St. Petersburg, should the unhappy circumstances ever occur that we should be again at disagreement or at war with that country, will be able to put their troops on the India frontier before reinforcements sent from England could get to Bombay round the Cape. I see that Colonel Repington, in his letter in The Times this morning, sums up the situation
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as regards Russia in these words. Assuming the construction of the railway, he says—
"Russia could, in my opinion, deploy within three months such a powerful military force on or near our frontiers that the Army in India would be unable to resist it even provided that all our Field Divisions were available, which I do not think is likely to be the case."
The only ground on which we are invited to run this very considerable risk is that of our present friendly relations with Russia. I rejoice at those relations. There is not a man in this House who does not regard our Entente with Russia as of extreme value, and supposing by any accident the Front Bench opposite were suddenly denuded of its present occupants and we were to step over and take their place we should be as loyal to our engagements with Russia as the Government are at the present time. About that let there be no doubt at all. But, my Lords, history shows too often that international understandings are not eternal. National sentiment, after all, is largely determined by national interests, and national interests are things that vary from year to year and from decade to decade according to the conditions of the hour. Therefore whatever may be our hopes or desires, it by no means follows that because we are on friendly terms with Russia now we always shall be, or that what we used to call the Russian bogey may not again show its features in the East. Let me put it in a rather more general way. There are two approaches to India—by land and by sea. Hitherto we have had command of both. We have had command of the sea route because we were supreme upon the sea; we have had command of the land route partly because of our treaties but still more because without a railway it was impracticable to any invader. But now it is doubtful whether, under your new naval arrangements, you are going to keep command of the sea, and at the moment when that command trembles in the balance you propose, if you agree to this railway, gratuitously to surrender your control of the route by land. There are many instances in history in which nations have been compelled by war or defeat to surrender or modify their frontiers, but I honestly do not know of any case in which a great Power, for no reason at all except surrender to what is called the inevitable, has abandoned a frontier so unique as that which is presented to us by nature in those parts.
I may be pardoned for saying that even in this breathless and staggering age I am too slow to be able to make these rapid changes myself. I am too slow to be willing to abandon, almost at a moment's notice, all the convictions of my lifetime about Indian defence, all the teachings of all our Generals and Statesmen and Viceroys during the last fifty years, all the accepted dogmas of both political Parties in this country. Before His Majesty's Government invite us to take such a step—I do not, of course, say they will do so—but before they contemplate inviting us to take such a step I hope they will think, not once, or twice, or twenty times, but a hundred times. I hope they will show better reasons than they have up to now advanced, and I hope they will give us the opinions of their military advisers on the matter. When I was in India a few years ago a scheme, almost identical with this which I have been examining, and which was at that time identified with a Russian officer named Captain Rittich, was sent out to us in India to be reported upon by the Government of India. We advised very strongly against it, and if I remember aright no one was more strong about it than Lord Kitchener, the then Commander-in-Chief.
What is the opinion of the Government of India now? What are the opinions of the military authorities in India and in this country? What is the advice of the Committee of Imperial Defence? Sir Edward Grey has been asked in the House of Commons for the opinions of his military advisers, but has answered as if the opinions of those officers were secret oracles which belonged to the Government to be treasured up by them and not revealed to any one else. I do not take that view of the opinions of our military advisers. Our military advisers are paid by the nation, and their views on matters of great urgency like this are, in my opinion, the property of the nation. That was the case in regard to the Channel Tunnel. There the military advisers were examined before a Parliamentary Committee; and if that was done in a matter affecting the security of England, surely we have a right to demand the same in a matter affecting the security of India.
One other point before I pass away from strategy. The strategical danger to India is not confined to the opening of her frontiers in the manner I have described. There are many people who fear that we shall be
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drawn forward into the open and driven to undertake responsibilities which I am sure every one of us would wish to avoid. We may very likely find ourselves, with this great railway running through Persia, compelled to send out garrisons to defend it without the soldiers in India to do it and without the money which would render such a scheme possible. I do not regard such a situation as fantastic. Let us conceive what might very likely arise. It might very well be, the railway having been constructed, that the Persian Government would be powerless to guarantee its security. Russia would obviously—and I do not say wrongly—undertake the policing of that portion of the line which affected her. What about the railway that lay in our sphere? We could not tolerate Russian guards in our sphere. We should inevitably be compelled to take similar steps on our own side; and it seems to me not unlikely that in this way our Government, whose one desire has been to keep out of these complications, might have to send Indian soldiers to Persia. So much for the question of strategy.
Is there any other way in which India would benefit by the construction of this railway? There is the question of the acceleration of the mails. I dare say there would be some acceleration of mails—a reduction of two or three days, though I doubt very much whether the Government would welcome the transmission of Indian mails exclusively through foreign countries in the future, and in the event of war I imagine that such an arrangement would have to be suspended at once. There may be some convenience to passengers in the reduction of the time spent on the journey, but against this you have to set the fatigue and heat of the journey, impossible at some periods of the year, the certainty almost that women and children could not travel by such a route, and the certainty that the steamship companies would at once make, as they could make, in my judgment, a corresponding reduction both in time and fares to meet the competition with which they would he faced. Anyhow, I think your Lordships will agree that in respect of mails and passengers there is nothing on the side of advantage which justifies us in accepting any risk or sacrifice of Imperial security.
Then I pass to the interests of commerce. If this railway were made, how would it benefit Anglo-Indian trade? The gross

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value of Anglo-Indian trade with Persia at the present time is something less than two millions sterling per annum. The greater part of this trade consists in piece-goods and in tea which is taken from Indian ports, deposited at the Persian harbours, and then put on pony-back, or camel-back or donkey-back and sent up to the towns in the interior. We know that that trade has to suffer many difficulties, difficulties arising from the severity of the passes, the insecurity of the country, and the cost of the caravans. But supposing this railway to be constructed. How is it to benefit that trade? How are our goods to do better when they are placed upon the railway at Karachi, or the harbour, wherever it be, and when they have before them the necessarily heavy freights of the railway before they reach the Persian towns? If you take that part of Persian territory contiguous to our border which the railway would first touch there are only two cities of any size, Yezd and Kerman, distributing centres of some but of no very considerable importance, with a population in neither case of more than 50,000 persons. After that there is nothing until you get into the Russian sphere, and when once you enter that sphere Russia will be able, by her system of rates and rebates at her end of the railway, to destroy any advantages which British or Indian trade may have obtained. I remember when I was in India I had as my financial and commercial adviser that very able man, the late Sir Edward Law. Before coming to India he had served as commercial attaché both in Persia and in Russia, and was warmly attached to both countries; and discussing as we did this question of a Trans-Persian line he always stated as his emphatic opinion that such a line, if made, could only act as a feeder for Russian commerce and would be a great detriment both to British and Indian trade. The fact is that if this railway be made we shall really be doing very much the same thing in the sphere of commerce as I have been contending we shall do in the sphere of strategy— that is to say, we shall be reversing the whole of the traditional policy on which we have so far acted. Hitherto our trade with Persia has been seaborne. Now you are going to substitute landborne traffic for seaborne. You are going to divert the trade from the routes which we do command to the routes which we do not.
There is one other country that has to be considered, and that is Persia herself.
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I am sure that if the construction of such a railway as this were to be of benefit to Persia there is no one who would be better pleased than the members of your Lordships' House. But I wonder if this will be the case. I have been a little struck, in so far as I have been able to follow this matter, with the extent to which Persia seems to have been left out of consideration. I have heard nothing of Persia in connection with the Société d'Etudes. There is no Persian member upon it, and I have not heard of any Persian finance in connection with the scheme, probably for the very good reason that there is no Persian money forthcoming. Sir Edward Grey, I think, said in his speech that the construction of such a railway would be an advantage to Persia because it would strengthen the central authority and enable it to deal with disturbances. It needs only the slightest acquaintance with the history and geography of Persia to know that the main centres of disturbance are far away from the projected line; and this railway running through the heart of Persia, from West to East, will no more enable Persia to grapple with the particular difficulties with which she is now confronted than would, for instance, the London and Brighton railway enable His Majesty's Government to put down a riot in Bodmin or Penzance. Even if Persia were enabled by this scheme to acquire a greater control over her territories—and I am sure we should be glad to see it—she may have to pay a heavy price for it. We have had some experience in recent years of international railways. International railways are apt to Le followed by international guards, and international guards involve some form of foreign protection, and foreign protection very easily merges into foreign control. Therefore I doubt whether Persia herself will really gain by this railway any substantial addition to her authority, her means of pacifying her own country, or her power.
There is only one other matter to which I will refer before I resume my seat. Issues such as those of gauge and of alignment—the reserved topics mentioned by Sir Edward Grey—can very well be postponed until the matter matures. But ought we not to say one word on the question of finance? I should like to impress upon your Lordships in my concluding sentences that the financial burden will be very much greater than anybody

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at present apprehends. I said just now that estimates of £15,000,000 and £20,000,000 had been published. I have no time to lay before your Lordships the grounds which lead me to think that the expenditure will probably not be less than £30,000,000. But the question I want to put is, whether it be £20,000,000 or £30,000,000, where is the money coming from? Or, if the money is found by the financiers of the three nations to whom I have referred, who is to give the guarantee? Because you may be quite certain that without a guarantee the money will not be forthcoming. Will Russia give the guarantee? At an early stage I saw a statement to the effect that Russia would not accept any obligation on the Russian Treasury for this line, but it is now said that out of the surplus on the Russian railways she may be willing to guarantee a loan for the northern section of the line. But when we come to the British section or the Indian section, who is going to give the guarantee? I confess I cannot imagine the present Chancellor of the Exchequer, or I may add his successor, coming down to the House of Commons and asking the consent of that House to a guarantee for a great railway outside of England, outside of India, in the heart of Persia, about which a great many people will tell him that its construction will add very much to the future burdens of India and of this country and will materially impair the defensive strength of our Indian Empire. I do not see an English Chancellor of the Exchequer making any such proposal, and I do not see any Indian Finance Minister going down to the Council Chamber at Calcutta—I ought now to say Delhi—and explaining to the more representative body created by the noble Viscount opposite, at a time when India is called upon to bear the heavy burden of the cost of the transfer of the capital to Delhi and of the suspension of the opium traffic, and when railway finance is so stinted that there is no money to build more than 100 miles of railway in the present year, that it is proposed to take Indian money and spend it upon a guarantee in respect of a continental line. I cannot imagine an Indian Finance Minister making any such proposal, at any rate with any chance of success. And if neither this country nor India will give a guarantee, then I want to know where the security for the money is coming from. I venture to say that if the scheme, should it eventuate,
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does not perish before that point, the rock of finance is the one upon which it will founder.
May I ask the noble Viscount who will answer me to consider another point '? May it not be said that in the treatment of the railway question in Persia His Majesty's Government are beginning at the wrong end? Here they are apparently contemplating presenting to Persia, a country- so poverty stricken and so backward that it has no railways at all—it has, I believe, not more than ten miles of railway—
VISCOUNT MORLEY: Six miles.
EARL CURZON of KEDLESTON: Here they are apparently contemplating presenting to this country a full-blown continental system without any regard to the commercial interests or the requirements of the country itself, and in complete ignorance of the fact that in many parts of Persia railways are waiting to be built (the promoters are actually forthcoming), which would add to the security of the country, diminish the burdens resting on the Government, and add to Persian trade. Is it not rather an absurd thing at such a moment to force upon that country a great continental scheme which is only introduced in other countries after long years of development and when the conditions of the country are those of peace and prosperity advanced to a very high degree? I should like to hear from the noble Viscount that His Majesty's Government are prepared to take advantage of the rights which we possess in respect to Persian railways. When we had our last debate here he will remember quoting with some satisfaction the terms of the Rescript of Nasr-ud-Din Shah, under which, if a concession for a railway be given to others in the North, the Shah—and the promise has been confirmed by his successors—undertook to give a similar concession to the British in the South. The case for such a railway has, I think, already been brought into existence. The Russians have obtained their concession in the North. I speak of the concession for the railway from Teheran to Khanikin on the Baghdad line, and there is no reason whatever, therefore, why British proposals should not materialise in the South. I believe that His Majesty's Government have taken steps in this matter. I have heard of a syndicate

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being formed and of powerful groups connected with Persia taking part in it with a view to a concession from Mohammerah to Khoremabad. I hope that this may be true, and that His Majesty's Government may be able to give us some information about it.
Here in this smaller policy of internal railways in Persia is a scheme which I think is practicable, which will not excite any jealousy, which will not raise any alarms in India or anywhere else, and which you may pursue with the knowledge that all parties are agreed upon it. I hope His Majesty's Government will curtail their ambitions in regard to the larger scheme, and will devote themselves to the humbler task which I have dared to suggest to them. And, above all, I hope that they will not involve this country or the Government of India in the great responsibilities that would result from a change of policy in regard to the defence of India without placing before us in the fullest manner the opinions upon which they propose to act, and that, whatever views they may entertain themselves, they will not proceed to convert those views into action without giving both Houses of Parliament an opportunity of expressing an opinion upon them. I beg to move.
Moved, That an humble Address be presented to His Majesty for Papers relating to the project of a Trans-Persian Railway.—(Earl Curzon of Kedleston.)
THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT MORLEY): My Lords, the noble Earl expressed the wish that the Government might curtail their ambitions, but the picture he has drawn of the so-called ambitions of the Government is really imaginary and unsupported. I am at a loss to know how, after reading Sir Edward Grey's speech in another place, the noble Earl should have taken up the attitude that he has done in respect to the Government. It is no discredit to him at all that he is not accurately informed as to the immediate relations of the Government to this Société d'Etudes. The noble Earl has fallen into various errors as to the facts and circumstances connected with that body and our relations to it, which I must point out to him and to your Lordships. The proposal—there is no concealment about it—was initiated in Russia. The promoters of this body were Russian
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promoters in the first instance. They have had no support whatever from His Majesty's Government beyond the negative refusal to veto their existence and to prohibit their operations so far as we could. Not one atom of money has found its way from our Exchequer to the chest of that body. The noble Earl has been entirely misinformed when he tells your Lordships that the two Ministers at Teheran, the Russian Minister and our own, approached the Persian Government and invited them to give facilities for the operations of this commission. There has been no communication of that sort.
Then the noble Earl said that we had encouraged this body and its operations. That is entirely imaginary. We have not encouraged it beyond the fact that when the proposal was presented to us we examined it—the fact of the proposal, not the contents of it—and in describing that as encouragement and in taxing us with using diplomatic machinery the noble Earl is entirely wide of the mark. The noble Earl made a point that supposing this body were to report in favour of some through line of which we, when the time comes, disapprove, it would be impossible for us with diplomatic decency and consistency to withstand the report of that body. I cannot imagine anything that has been said by any member of the Government—certainly not by Sir Edward Grey, who is the only person, I think, who has spoken officially—which could warrant the view that we should not be justified in dealing with perfect freedom with the report of this body. The noble Earl talked of the rapidity with which this proceeding had gone on, and he said that last year when I had the honour of following him in debate—in March, I think—I gave him a sort of assurance that nothing was on foot. My language does not bear that—
EARL CURZON OF KEDLESTON: I did not say that. I merely read the noble Viscount's words. I did not draw any inference from them.
VISCOUNT MORLEY: The word I used in that debate was "immature." There was nothing disingenuous in that. There was no suggestion that there was no project on foot. I ask the noble Earl, Does he of all men think that this question of Persian railways is at all a new one? He knows better than anybody in the House, from his experience in two Government Offices and in

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India, that since the year 1872 the question of railways in Persia, including the Trans-Continental railway, has been a thoroughly live issue. In 1872 there was, if I remember aright, a Committee of the House of Commons appointed. That was the first Committee which inquired into this question of Persian railways. From 1872 to 1888 there was a stream of applications from Germans, Russians, Frenchmen, Americans, to Persia for concessions, some of them on a grand and magnificent scale and others entirely insignificant. Still there was a constant series of applications; and at the end of it all—as I interrupted the noble Earl towards the end of his speech to say—at the end of it all Persia possesses only six miles of railway, which runs to the shrine of a Persian saint. Then came the period from 1888 to 1890. The noble Earl must be fully cognisant of the stream of telegrams and despatches that went on during those two years between the late Lord Salisbury and his Ministers both at, St. Petersburg and Teheran, all going fully into the very kind of arguments—the more important of them, at all events—which the noble Earl has brought forward to-night, and coming to a conclusion. There was a pause from 1890 onwards, and then came the pamphlet of Captain Rettich, referred to by the noble Earl, on which the noble Earl himself wrote a very elaborate antagonistic Memorandum. I submit, therefore, that the noble Earl greatly exaggerated when he suggested that we had sprung something upon Europe or upon this country or upon Parliament.
The question entered a new phase about the end of 1910, and this proposal was submitted for our consideration. I would like to ask the noble Earl what he would have done if this proposal for a Société d'Etudes had been brought before him. Were we to say, "We will not look at it; we have a frontier policy in India consecrated"—as the noble Earl would have put it most eloquently—"by the decisions of great men for many generations; we will not listen to this?" That would have been a very heroic attitude. There is not a man in this House who is not fully conscious of all the arguments that the noble Earl has brought forward to-night about keeping as long as ever we can a frontier on the Persian side of mountain and of desert. The military advantage of preserving that frontier, if we could do it, is quite obvious, and we do not want all this trumpet-
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blowing—I am not referring for the moment to the noble Earl—all this trumpet-blowing in the newspapers and so forth as to the dangers to which we are exposing India.
Let me go back. What would you have done? There is no doubt that any detriment to that frontier of mountains and desert does expose India to some disadvantages. But suppose we had said, when this proposal was made, "We will turn our backs upon all proposals of this kind; we will not listen." Would that blunt and bluff negative have been an extinguisher to the whole business? The noble Earl is a great deal too well acquainted with the currents and sub-currents, diplomatic, commercial, and political, which are running to suppose for a moment that the business would remain under that extinguisher. It would not be so; and anybody must have a very superficial knowledge of the political and diplomatic conditions and relations of this country in connection with India, among other things, who would dream for a moment that nothing would follow. The question which has been left all these years would undoubtedly remain, but it would have assumed a new aspect; and when the noble Earl says, and says truly enough, that this may involve a change in the conditions of frontier policy, I would point out that you would not have avoided that by simply giving a point-blank refusal to this proposal. A man must have a very superficial knowledge—I am not thinking of the noble Earl—of the diplomatic state of Europe and must have a very narrow power of political imagination if he does not see, after we had declined, gruffly or with polite evasions, to assent to anything involving the principle of the Trans-Persian railway, that a set of arrangements easily and naturally devised, in view of all the political and military consequences involved in them, would or might have led—I think would have led—to a very large extension in other ways from those which now alarm the noble Earl of frontier defence and military expenditure in India. That is a point that. I do urgently press upon your Lordships. The Government of India is just, as sensible as we are that a point-blank refusal to assent, not to the railway, but to an examination of the present proposal, might have led to combinations that would involve disadvantages to our Indian position much more serious in their character than the disadvantages that could arise from this limited co-operation. The noble Earl talked a

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great deal about fatalism, and of the idea of this Trans-Persian railway being inevitable. I could not but remember that last year the noble Earl himself told us of a "great scheme of inter-continental communication which in the belief of all of us will some day be realised." Is not that fatalism? Why are we to be reproached with a cowardly sort of fatalism when we really do not go far in advance of the line taken by the noble Earl himself only a year ago?
EARL CURZON OF KEDLESTON: You go about fifty years in advance.
VISCOUNT MORLEY: But how does anybody know—I certainly do not—that this railway will be made fifty years hence? We have not committed ourselves to it. We have committed the Government to nothing except to this examination, and we are perfectly free to deal with the results of that examination without any fatalistic intention of precipitating the noble Earl's own expectation that some day or other the Trans-Persian railway will be constructed. I leave this point by repeating the question which I put to the noble Earl, "Would you have had us say when this proposal was brought before us, No, we will have nothing to do with it; we will use all our influence in the way of vetoing, and, so far as may be, prohibiting it'?" If he speaks again I wish he would be kind enough to say whether he would or would not have had us say that.
Now with a great deal of what the noble Earl has said about trade and the effects of this railway, if it be made, upon trade, I am bound to say I entirely agree. I have had occasion to think a good deal about the scheme, and I agree that the prospects of its financial success would not strike most of us as satisfactory. The noble Earl is perfectly right when he says that, according to the best opinions that can be got, the estimated profits, if they are measured by Indian standards, are put four-fifths too high; they will be only one-fifth of the estimated amount. And the noble Earl is not far wrong, according to Indian precedents, in what he says of the cost of the railway. He puts it at £30,000,000 instead of £20,000,000—some people say it will he £40,000,000. We are quite alive to all those considerations. The point has been taken—and I confess I do not see any answer to it when I consider the authorities who make it—that Russian trade is very likely to get
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more profit out of this line than we are likely to do. That may be. That is an argument which the Government of the day will have to consider when they have the report forwarded to them. No doubt the cost of construction through a mountainous country where labour is scarce, where communications are very difficult, and where I suppose contracts will not be prepared on purely abstract benevolent principles will be very formidable. But i however that may be, the working of the line and the earning of profits will be a slow and gradual process. All the noble Earl's arguments about the immense difficulty of land transport competing with the cheapness and facility and accustomedness of the sea route will operate.
I was rather surprised to hear the noble Earl, after he had very carefully analysed all those elements, then say that the Government were favouring a line which would perhaps carry the mails or not carry the mails, which might or might not carry an increased number of passengers, and so forth. But does he not perceive that when the construction of this line and any support of it by His Majesty's Government is under consideration all those elements will be deciding elements? To suppose that we have already made up our minds to cast them all aside and to neglect these points is really to make us out more rash and heedless than the noble Earl had any right to do. As to this line not benefiting our trade but Russian trade, I would like to observe, in passing, that that very important set of people the Moscow merchants do not think so; they think the exact opposite, and they are now loud in their complaints that this line would lead to a great improvement of British and other foreign trade at their expense. The noble Earl must bear that in mind. Nobody pretends that Great Britain, and India, and the whole general trade of the world will not benefit from the creation of a better state of things in Persia. It is clear that wherever you get a better state of social well-being you get a greater demand for goods. Where you have roads and communications markets are improved. I wish some of my friends—the noble Earl referred to them—in the Press would realise what the difficulties now are, and how far those difficulties would be affected by railways whether a trunk line, or branch lines from the ports which in many ways we should

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be inclined to prefer. I wish they would realise the difficulties of trade in Persia—insecurity, inefficient and corrupt administration, maladministration of justice, the great distance between giving an order and its execution, the long delay of exchange remittances, the impossibility of supervising and controlling mercantile transactions—all these difficulties will be lessened by improved communications. They will yield to improved communications, and they are very little likely to yield to anything else. If I may venture upon a private observation I am not at all sure that those are not right who, instead of railways, recommend, not caravan roads, but cart roads, as they would be less expensive, and so forth. But that is a question that I have no right to go into to-night. Supposing circumstances compelled the Government of the day, whoever they may be, to adopt the railway policy the precedents are not quite encouraging. Though the overland route from London to Constantinople competes with the sea route, the latter suffers no disadvantage at all in consequence of this competing land route. Then we have been told a great deal during the discussions about the Siberian Railway. I rather think that some of the Russian advocates of this line have pointed to the Siberian railway. There is no real parallel at all.
EARL CURZON OF KEDLESTON: Hear, hear.
VISCOUNT MORLEY: I am glad the noble Earl agrees, because there is no real parallel at all between the Siberian railway and this Trans-Persian railway. The Siberian railway shortens the distance from the centre of Europe to the Far East by one-half. Then it gives a direct railway route much shorter than the sea route, not merely to India but to an area infinitely larger in size than India, comprising as well the important seaports of China and of Japan. The only other observation I make about the Siberian railroad is that on that there is an immense emigration traffic. On the Trans-Persian line there is no reason to suppose that there will be any emigration traffic at all.
I was disappointed, I admit, at what the noble Earl said about the effect of this line upon Persia. I do not suppose for a moment that this line or any other line or any number of them would bring the millennium to Persia. The confusion in Persia along with the advent of the Baghdad
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railway and the Anglo-Russian Convention are the elements that have made this proposal actual. As to the effect upon the confusion of Persia one thing is certain, and will not be denied by anybody who has any idea of government in any part of the world and who is at all acquainted with—shall I cad it—the chaos that exists in many parts of Persia—namely, that railways would immensely increase the power of the Persian Government in dealing with disorder and maintaining something a little more like security. I saw the other day some emphatic language of a very competent observer who knows Persia well. He says that to introduce railways, including this trunk line, would be to put the most powerful weapon into the hands of the Central Government in Persia, which is to-day a mere shadow and can be derided with impunity. I was surprised that some political friends of mine who are so anxious that we should be more active on the popular side of affairs in Persia should be the most indignant of all at the idea of a measure which would do more than any other, if it were financially workable and so forth, to put into the hands of the Persian Government the power of managing their own affairs and holding up their heads, in the language of my friends, against both Russia and England.
I will not detain your Lordships longer. The whole question of the alignment and the terms on which the railroad is to be administered and controlled, the question of whether the profits made on the northern lines ought to be pooled with the profits made in the south, a much more dubious quantity—all these are matters which this House and the other House and the country can consider much more effectively when they have a definite scheme presented to them. It is said, "You have never consulted Persia." It will be quite time enough to consult Persia as to a concession when we and the other Powers concerned have made up our minds as to what is the concession we ought to ask for. Let us then make up our minds what is the best alignment and what all these other subsidiary arrangements ought to be. The noble Earl, I hope, will not think that I have at all shirked the important discussion that he raised about the alignment of the route. He will understand that some of those projected routes involve considerations of extreme danger, and therefore I have not thought it worth while

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to detain your Lordships with a long investigation into the competing routes. It is an extraordinarily intricate and complex subject. It is barely intelligible without one of those maps which the noble Earl reproached me for producing last year, and therefore I will not attempt to follow him over that area.
I only say that in keeping open to ourselves the option of asking for railway concessions when the proper time comes we have not designed and do not design to shut out all foreign enterprise from Persia. That would be a great disadvantage to Persia, and not any advantage to ourselves. It must be clearly stated that we have no desire to make this railway ourselves in Persia at this moment, but we may well wish to guard against the possibility of waking up some morning and finding that the Persians have placed some important concessions elsewhere involving foreign control which would be detrimental to our political interests and strategically menacing to our frontier. We therefore desire to have the option of making railways of that sort ourselves in case Persia favours foreign enterprise. I hope the House, in considering the noble Earl's speech and in reading the arguments, of which we shall have, perhaps, a plethora in the next few months, will remember the strictly conditional situation in which the Government stands in respect of all these proposals, and will not forget, although there may be drawbacks, which we do not deny, to the Trans-Persian railway, that any Government that might succeed us would think, not twice but a hundred times, before they repudiated and turned their backs upon our action.
LORD LAMINGTON: My Lords, I do not know whether the noble Earl will think the reply of the noble Viscount opposite has been a satisfactory one. I confess that I am still considerably dismayed with regard to it. It has, however, thrown some light on what has led up to the establishment of this Société d'Etudes. It is interesting to see that the Government have from time to time desired apparently to thwart this railway project, and equally interesting to see that whenever they have put some obstacle in the way of the project the Russian Government have been quite agreeable, so desirous have they been to see some scheme adopted, to accept whatever this Government have proposed. The noble Viscount opposite referred to the many
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railway projects in Persia which have been put before the public for a number of years past. He did not say why not one of them has ever come to fruition. And do not the same reasons that prevented those lines from being constructed equally hold good to-day as to why this line should not be constructed? The light which the noble Viscount has thrown upon the present proposal seems to show that the line is not desired by His Majesty's Government, that they have not done what they have done willingly, that they have not done it because they considered it good to Persia or to India but because of some other alternative—because some rebuff that they would have had to administer would have led to serious and disastrous consequences.
The noble Viscount speaks of the sub-currents of diplomacy that are going on. I do not know of them, being a man in the street, and I do not know what disastrous consequences would have ensued from a polite disclaimer. But I do not see how it is going to improve the position when a few months hence this Société d'Etudes may possibly furnish a satisfactory report. What then will be the duty of His Majesty's Government? Will they be in a better position to refuse then than they are now? The objections to the line as put forward by the noble Earl and also as stated by The Times Military Correspondent—all so powerful and forcible—would remain just as great eighteen months hence as they are to-day. How will the Government then be in a better position to reject the scheme? It seems to me only to intensify the evil, and if the line does involve a certain amount of risk to India that risk will be just as great then as now. I share, like the noble Earl, a belief in universal peace between the great nations of the earth and that India will be linked up by railway communication with the rest of the world. But there is no need to anticipate that day. The conditions that have rendered it undesirable in the past are just as strong to-day, and until you change the environment of affairs you are merely putting new wine into old bottles by allowing this line to be constructed.
I know of no single commercial body in India or in this country that desires to see this line built—with one exception only, the Chamber of Commerce at Karachi. The chairman, Mr. Webb, is a great believer, as I am also, in the future of Karachi as one of the principal Indian ports, and he is

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naturally keen to see his hopes realised at once. And in Karachi being made the terminus of the Trans-Persian railway no doubt Karachi would be very much uplifted. But even the Chamber of Commerce realise that there is a risk, and the Government recognise the risk, because, as we understand from the papers, there has been an obligation imposed by the Government and admitted by the noble Viscount that the alignment should, if required, be brought down within reach of the coast with the idea that our naval forces would be able to command that line in case of any emergency. I think that is a sufficient argument without waiting for the utterances of the military experts and others to show what a danger lies in this line when you propose to divert it in order to bring it within command of your sea forces so as to prevent its being used as a hostile instrument in the event of invasion. First of all, it is very obvious you would have to have a much stronger force than you have at the present time in Indian waters if you wish to secure the line by such means. But I am quite content merely to take that argument to show what a great danger there is in having a line to India linked up with the outside world by railway communication, and, as I say, the conditions that rendered it undesirable in the past still obtain at the present moment.
I am not one of those who wish to represent that the utterances of the Press are to be taken as indicating the views of the whole of the nation. I would not for a moment think that the carping criticisms which are sometimes uttered in the Press of this country against Germany indicate the feelings of the people of this country against the people of that nation. But there is one very notable Russian journal, the Novoe Vreinya, and that paper recently, just previous to the interview at the Baltic port, published a very lengthy article with reference to the relations of Germany and Great Britain. Let me read two quotations. One is—
"On the other hand, only the loss of India by England, from whatever cause, would establish permanent peace between us and her."
Then it goes on—
"Russia ought to rejoice that somebody has arisen to fight the enemy who for a hundred years stood in her way everywhere. Is it not England's hegemony at sea which has compelled us to stop dead, as before a stone wall, in all the Easts—the Near, the Middle, and the Far East? Is it not this hegemony which will keep us back in our natural evolution on two continents in the future?"
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I associate myself entirely with the word: spoken by the noble Earl as to the value of the friendly relations subsisting between us and Russia, but we only have to look back to our foreign relations (luring the last twenty years with the different Powers of the world to see how shifting and how variable these relations are; and really the sole excuse for the putting forward of this scheme at the present time is our Entente with Russia. All the other objections remain exactly as they have been for the last fifty or a hundred years, and whilst we earnestly hope that the Entente may be continued for many long years to come we ought not to consent to the construction of a permanent work of such a character as a railway line on such a very shifting foundation or base as that which I have described. I do not think the noble Viscount vouchsafed any reply as to our having the opinion of the military experts and as to putting ourselves into the position that this country was in when a Committee reported on the project of the proposed Channel Tunnel. Surely we ought to have the views of the Council of Defence on this matter. We ought also to know whether the Board of Trade have considered the commercial advantages of this line. I think we are entitled to have put before Parliament the views of these different bodies. I think it is admitted that there is practically no commercial advantage in this line to India—nothing that will pay a half per cent. on capital; and you have this very great risk and also the great expenditure the Government would have to incur by giving a guarantee.
I am surprised to find that the noble Viscount has been bold enough to stand up and make an apology for this project. He has refused on two or three occasions to consider a poor little railway in the Aden Hinterland, a railway which would open up the fertile country around and give relief to your sun-baked garrison at Aden by letting them get to a hill station, and which would not cost your Government a single rupee. Lord Morley when the autocratic Secretary of State for India would have nothing to do with that small project; yet here the noble Viscount ventures to defend a project of great risk without any possible advantage to India and with only a minimum of advantage to Persia. The noble Viscount, in his reply, dilated upon the benefit to Persia of improved com-

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munications. Every one admits that. But what the noble Earl and others who share my view object to is the extension of any railway communication to a line east of Bandar Abbas to the Indian frontier. The country that wants bringing into order is essentially Laristan and the adjacent districts on the western side of Persia. That is the country where railways are most earnestly desired, and railways, too, by which we could co-operate heartily with Russia if the Persian Government thinks fit—a system which would be really to the commercial and political benefit of Persia. This line, if it ever became realised, would in my view only create mistrust between ourselves and Russia. It would not be to the improvement of our relations, and I think on that score alone it is sufficient to inquire whether it ought to go any further.
There is another point. If you have a line inter-connected by this railway you will not increase that confidence that is so very necessary for our good and firm government of India you will at once render India more liable to scares. I asked two prominent Indians who were over here lately what they thought of this scheme. One said that he did not know very much about it, but that it certainly should not be done until we have compulsory service in England. The other said that it might lie a nice thing for India because then the Indians would be able to go into Persia and establish themselves there. That gentleman spoke with a great lack of knowledge of the conditions that prevail in Persia if he thinks that Indian labour, which is so scarce at the present time, will find any pleasant outlet into Persia, that dry and and country where in most places they do not find enough water to perform their daily ablutions. There is, to my mind, no advantage to be gained by this line, and, on the ether hand, there is every possible risk. It could be said in favour of the Channel Tunnel—it was admitted by the Committee—that it would lead to a great improvement in commerce and to a much greater passenger traffic; but neither of those conditions would prevail were this line built. I therefore hope that the Government will not be too benevolently disposed towards the inquiry that is being held, and I think they will only put themselves into a much weaker position if they have to reject the proposal hereafter. There are plenty of other lines
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that can be constructed-in Persia with the greatest advantage to that country and that can be reasonably undertaken on a friendly basis between ourselves and Russia. Those could be made without violating any portion of those great natural defences with which Providence has favoured India.
LORD INCHCAPE: My Lords. I associate myself with what has fallen from the noble Earl, and I would venture to ask your Lordships to consider for a moment the financial and practical side of this proposed railway through Persia. The British section, or it may be the Indian section, will start from Karachi and run through 920 miles of unpopulated, unfertile, and waterless country, and, as Lord Lamington said, those who promote the line admit that it must be close to the shore through the Makran district in order that it may be shelled by our ships in the event of its being used in a hostile manner against India. The traffic that the line would create would probably be about sufficient to fill a single truck in a fortnightly train. I submit that the Government of India have quite enough on their hands for many years to come in developing their own railway system.
With your Lordships' permission I desire to dwell for a moment on the position of Indian railways. Some five or six years ago I was appointed by the noble Viscount who was then Secretary of State for India to be Chairman of a Committee to inquire into and report upon the development of the Indian railway system. One member of that Committee was the Financial Secretary at the India Office, Mr. Lionel Abrahams. Another member was an ex-Financial Member of the Council of the Governor-General of India, Sir David Barbour, a gentleman who was closely associated with Lord Lansdowne, when Viceroy of India, in his great work of putting the currency of the country on a stable basis. Another member was Sir Felix Schuster, an eminent financial authority in the City of London. The unanimous conclusion of that Committee was that India should spend not less than £12,500.000 upon the development of her railway system, and that the expenditure of that sum would be a profitable proposition. A further recommendation was that the money in the first place should be devoted to the equipment of the lines then opened, which were lamentably short of rolling-stock. Since that time there has been devoted to

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the railways of India every penny which the Government of India could spare from its surplus balances, and every penny which could be borrowed in England and in India on the security of the revenues of India, and every penny which the railway Companies could borrow in this country, but the twelve and a-half millions have never been reached.
I spent last winter in India, and having been appointed President of a Conference between the Government of India and the railway companies to try and settle some long out-standing differences, I had occasion during the course of my investigations to travel sonic 12,000 miles over the railway systems of India. And, my Lords, what did I see? From Bombay in the west to Calcutta and Madras in the east, from the Himalayas in the north to Cape Comorian in the south, practically every large railway station was congested with goods for which there were no means of transport to be found. The mills in Calcutta, Bombay, and Madras were dangerously near the end of their coal supplies, ships were hung up in the Hugh for' want of coal, which had gone to famine prices, although at the mouths of the pits in the Bengal coalfields not 150 miles away from Calcutta I saw tens of thousands of tons of coal piled up, which reminded me of that old song "Wait for the Wagon." There were no means of getting the coal down to the seaboard. It was anticipated when I was there in March that things would mend by May, but only the other day an influential deputation waited upon the Secretary of State for India and represented to him that, the state of affairs was still as bad as ever. I impute no blame to the India Office, to the Government of India, to the Railway Board, or to the directors and managers of the great railway companies in India who manage the railways so admirably for the Government.
When I went to India about forty years ago there was a cry for more permanent way and more rolling-stock. That cry has gone on every year since then, and the cry exists to-day. The fact is it is difficult to get sufficient money in this country, where the capital alone can be found, to meet the railway requirements of India, and it has been more difficult than ever in the past five years through young countries being opened up and trade being so active all the world over. The Three-and-
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a-Half per cent. Loans of the Government of India, which used to stand well over par, are now under 92, and so long as trade continues active, and so long as India continues to be a borrowing Government, we cannot expect to see her annual issues absorbed except at constantly dwindling prices. The outlook at the moment for getting more money for Indian railways is by no means bright. The opium revenue is being relinquished, as the noble Earl said, for the supposed moral and material benefit of the blue-robed nation, although, if recent reports are correct, as the poppy cultivation diminishes in Hindustan it increases in the Celestial Empire.
Then, my Lords, the Government of India is faced with an expenditure in the immediate future of several millions sterling, it may lie four, it may be six, it may be eight, I think it will probably be ten millions, for the new capital at Delhi. All this means that there will be less money available for irrigation, for railways, and for other reproductive works in India. I have heard it stated—although I felt somewhat reassured by the statement of the noble Viscount that nothing was being done in connection with this railway— that the survey has either been begun or is about to be undertaken from Karachi to Charbar. It would be a distinct misfortune if the resources of the North-western State railway were to be squandered on a project of this kind instead of being laid out in providing that rolling-stock which is so necessary to enable it to handle the goods which it is now unable to carry. I submit that the time is inopportune for the Government to think of building a line from Karachi either to the centre or to the confines of Persia—a line which will never pay its working expenses, far less interest upon the cost of its construction. I submit that the funds at the disposal of the Government of India should be employed in the development of the railway system of that country and not wasted on a silly project of this description. Even if the money is found by outside financiers the effect will be the same. If the interest is guaranteed on the cost of construction and if the guarantee conies from the revenues of India it will be a dissipation of the credit of the Secretary of State and a charge upon the revenues of the country. I strongly urge, therefore, that neither His Majesty's Government nor the Government of India should have anything to do with the building of this

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line. I further urge that they should not guarantee a sixpence of interest on the cost of the construction of a railway from which we have nothing to gain either from a political, a military, or a commercial point of view. For, after all is said and done, the first line of a country's defence is solvency; and I think we should refrain from embarking on an enterprise, however attractive the name may be, which is calculated to hang a financial burden round our necks for years to come.
THE LORD PRIVY SEAL AND SECRETARY OF STATE FOR INDIA (THE MARQUESS OF CREWE): My Lords, I had no intention of intervening in this debate, but perhaps I might say a word upon one or two of the points which have been raised by noble Lords opposite. I think that my noble friend Lord Morley showed that the picture which the noble Earl opposite drew in his opening speech, a somewhat alarming picture, as to the extent to which His Majesty's Government were implicated in the proposition of a Trans-Persian railway, was not entirely accurate. But, in spite of that fact, I noticed that when Lord Lamington pursued his share in the debate he again accused us in no measured terms of being completely committed to this project, and he seemed to regard the railway as being as good as made and the frontier of India in almost immediate danger. I am bound to say that my noble friend behind me who has just sat down and whose intervention in the debate I am sure we all welcomed, speaking as he does with great authority, also went further than the facts altogether justify in appearing to assume that the Government of India was on the point of undertaking, if it had not already undertaken, serious financial responsibilities in connection with this project.
On the question of defence, we should all, I suppose, agree that as a purely abstract proposition, India being what it is and governed as it is, it is a thorough convenience to ourselves and no real disadvantage to the people of India that it should be isolated from direct communication by land with the outer world. The great mountain ranges, the inviolable desert frontiers, the impenetrable stretches of jungle, all have had much to do in making the history of India what it is to-day, and we should all admit, as I say, as an abstract proposition, that a continuance of that state of things could not be altogether
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distasteful to us. I do not mind admitting a personal view which is of no particular interest to anybody but myself, that I have more than a sneaking sympathy with the objections which Lord Palmerston took to the making of the Suez Canal from the point of view of our Indian Empire. I am quite prepared to admit that if we had had the great sea route to India as our main route and the overland route for those who were in a hurry, crossing the Isthmus at Suez, we in India should not have been greatly the worse. At the same time we have to admit—the noble Earl has explicitly admitted it himself—that even if we do not like to call a particular railway inevitable, yet the tendency of railway construction, of increased trade, and also of international relations, points in the direction of railway construction in Persia, and that construction, whether it involves or not—as to which I will say a word in a moment—the construction of a Trans-Persian railway as such, undoubtedly awakes new questions of frontier defence.
I might say, for the information of the noble Earl and of the House, that this particular matter of a possible Trans-Persian railway has not been formally considered by the Committee of Defence because it is not in any sense yet a live project. The subject has been considered by the General Staff in India, and in considering it they, of course, expressed marked preferences for certain schemes of alignment in comparison with others. Some they thought far more disadvantageous and even dangerous than others from the Indian point of view. But on the whole subject they took the view that it might be a disadvantageous and even a dangerous thing to pronounce an absolute veto on the proposal when it was made in this quite tentative form, on the ground that if you were prepared not to dismiss the principle altogether, and if—which is a very large "if"— the money was forthcoming for the making of the railway and preparations proceeded for its construction, then you would be able to secure that it should be made in the way least detrimental to your interests; whereas if you attempted to interpose a veto, and nevertheless the railway was made, it would very probably then be made in the manner least advantageous to Indian interests. From that point of view the General Staff in India did not consider themselves debarred, but quite the contrary, from examining the project

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from the defence point of view and expressing a preference for certain alignments and their conviction of the necessity for certain safeguards; because they recognised that it was impossible not to realise, bearing in mind what the noble Earl and other noble Lords have said, the possible destructibility of any existing arrangement as between European Powers, awl that it was impossible to shut your eyes to the possibility of certain other combinations through which or by means of which, the line might be made in spite of our declared intention to have nothing to do with it so far as the Indian frontier part of it was concerned.
My noble friend behind me drew attention to the fact that some of those who ordinarily support His Majesty's Government in domestic politics and to some extent also in foreign politics have uttered somewhat severe strictures on the assumed action of His Majesty's Government in this matter of a Trans-Persian railway. One might ask them, as my noble friend asked the noble Earl, What is the precise step which in the circumstances they would have taken? What do they consider to lie the error that we have so far committed—I will not say in not vetoing the institution of this Société d'Etudes, because I do not see how we could have prevented its inception although we might possibly have prevented certain persons from joining it—but in somehow not placing a veto on the project in a manner the precise form of which I confess I am unable to conceive? It is one of the curious ironies of history that brings some of those pacific friends of ours into the precise position which thirty and more years ago those very different people enjoyed who delighted in the doggerel song of which the word "Jingo" is, I suppose, the only survival at this moment. I hope they will see that we have not committed His Majesty's Government, not merely to any participation in this proposed line if it be made, but to any definite approval of the line. We are not prepared on principle—as the noble Earl reminded us my right hon. friend used the words "the principle of the undertaking" in another place—we are not prepared on principle to say that this line shall not be made. But that is a very different story from the kind of participation in the project of which in some quarters we are accused.
And on that I should like so far as possible to reassure my noble friend behind me, Lord Inchcape, as to the
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attitude of the Government of India and the policy of His Majesty's Government in the matter of finance. He said with great truth that all the money that is available for Indian railways is required for those railways. It is required to a very large extent for the improvement of rolling-stock and for the improvement of lines in all manner of ways by widening and the provision of marshalling sidings and a number of other improvements. If money were forthcoming there are also new branch lines in many directions which we should be glad to make. We are entirely alive to the importance of not squandering Indian money which might be devoted to our own railways upon a project of this kind. I certainly have no desire to expend a single rupee of Indian money on such a project as this. And as to the question of guaranteeing a return for the lines, if and when they are opened, altogether apart from the question of assisting in any way in the construction, we have entered into no engagement of the kind. We are under no engagement to the promoters of this line to assist this railway should it be made.
To continue the question of the construction of the main line, there is this other point of view which arises out of what fell from the noble Earl when he drew attention to the possible advantage to Persia, in the construction of various railways through districts which, as he stated, needed the service of a railway more than those districts through which a perfectly direct Trans-Persian line would pass. It is certainly not for me to prophesy, but it is, of course, quite possible that the immediate future of Persian railway construction may be brought about in that form. I, for one, certainly should not complain if it were, but would welcome it. It; may come about that railways may be made in Persia piecemeal, and that one day we may wake up and find that a Trans-Persian railway thereby exists just as the London and North Western Railway, to name only one instance, was composed of four or five different lines before you were able to travel by it through to Manchester or through to Carlisle. That is, of course, a possible outcome. But I hope that if the noble Earl proposes to say anything more in replying on the debate he will absolve us from having unduly complicated our position in Persia or of having implicated His Majesty's Government in

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this particular project. We recognise as fully as he could the various objections which may be raised on different grounds to the construction of this particular line. But we do await from him any statement that lie may wish to make of what alternative action he would have taken, what policy he would have pursued in the circumstances differently from our own; and I trust that he will be willing to admit that we have done nothing which ought to be treated as detrimental to the interests either of India or of this country in the steps which we have taken so far, or in not vetoing the constitution of this Société d'Etudes.
EARL CURZON OF KEDLESTON: My Lords, I will, with the greatest pleasure, answer the challenge which has been directed to me both by the noble Viscount and by the noble Marquess. Both noble Lords said to me, "Had the proposals made by the Société d'Etudes come before you, what would you have done in the circumstances? Would you have met them with a point-blank refusal? "It is almost impossible for me to give a direct answer to the question, because, of course, I do not know the form in which the proposal first came before His Majesty's Government. I have no idea who started it. It has been assumed more than once that the influence of the Russian Government is behind it. Whether the first proposal came to His Majesty's Government through a group of independent financiers or through the Russian Government I do not know. The noble Viscount, Lord Morley, more than once hinted, although in somewhat obscure terms that serious consequences might have ensued if the British Government had taken any other line. He hinted at pressure, diplomatic or otherwise, that might have been put on, either in this country or in Persia or in India.
VISCOUNT MORLEY: I never used any word that carried pressure with it. I said that combinations might naturally and easily develop—arrangements which would be more disadvantageous than any that are now proposed.
EARL CURZON of KEDLESTON: Exactly; but I am no wiser than I was before. The noble Viscount indulged in language of obscurity in his first speech Which I am bound to say he has not in the least degree removed by his subsequent explanation. I cannot say, therefore, what I would have done in the circum-
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stances. But I think I may say what I would not have done. The noble Marquess seemed to think just now that the action of His Majesty's Government had been confined to not placing a veto—I think those were his words—upon the scheme. Surely they have gone a great deal further than that. What I would not have done would have been to say what the Secretary of State said in the House of Commons. He distinctly stated that, given the satisfactory conditions required by the Government, the Government were "in principle" favourable to the scheme. That has never been said before by a British Government. It was not the view of the Government of my day, either in England or in India. They were in principle unfavourable to the scheme. Really if you have a Secretary of State making this pronouncement deliberately on behalf of his Government in the House of Commons you cannot be surprised if the result is what it has been—namely, that your friends think that you have given to the proposal a support perhaps in excess of that which you have actually done. Certainly that impression exists, as you have admitted, in your own newspapers. It exists in both Houses of Parliament, and I am not certain that a lingering element of it does not exist in my own mind still. To give a concrete example. I think the noble Marquess somewhat dissented from the idea that any active steps had been taken in pursuance of these plans by the Government of India. I would point out that it is notorious that an engineer has been sent out—I know his name and all about him—by the Government of India from Karachi to investigate the country lying between Karachi and the Persian border. If the Government are merely not imposing a veto on the scheme, why should they take this active step and associate themselves with it? I am bound to say for my own part that if there has been any misinterpretation of the Government's attitude they have only themselves to thank.
The noble Marquess was kind enough to give us some information with regard to the opinions that have reached him from the authorities, military and otherwise. He told us that the Committee of Imperial Defence have not yet been consulted. If these plans take a shape later on that will require them to be placed before that Committee I do most earnestly hope that we shall be favoured with their opinion.

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As regards the Military Staff in India, it is difficult for me to speak with exactitude about that, because in my day there was no Military Staff that gave an opinion as distinct from the Government of India. The military opinions of the Government of India were given by the Governor-General in Council. There appears to be a difference now. Here, again, it transpires from what the noble Marquess said that the Military Staff were never consulted upon the policy of the line. All that happened was that they were asked to give an opinion as to this or that alignment. They were told that unless the line were made some ulterior consequences of a formidable kind would ensue, and therefore their advice was offered on the scheme on the lines of what would be the least unfavourable to the Government of India. That carries an implication which I would like to dispose of. It seems to lie in the background of the thoughts of the noble Marquess and the noble Viscount that if His Majesty's Government had not signified in some degree their sympathy with these proposals they would have been carried out without them. That has lain behind both their speeches to-night. May I venture, although I have no official sources of information, to state my opinion that it is absolutely impossible that this line could ever be made without the consent of the British Government. It could not be made because the money is not forthcoming; it could not be made because under existing political conditions a railway cannot be made through the British sphere in Persia without the consent of the British Government. How, then, is a railway ever to reach the Indian border? I think that the idea that this railway must in any case be made, that we are, so to speak, on our knees and have to accept what is dictated to us by our rivals, is a mare's nest for which there is not the slightest foundation.
I would like to say this in conclusion. There have been two debates upon this matter, one in the House of Commons last week and this debate in the House of Lords. As I remarked in my former speech, not a single Member rose in the House of Commons to support the policy or the attitude of the Secretary of State for Foreign Affairs, and not a single noble Lord has risen in this House to-night to support the views or the policy of His Majesty's Government. Perhaps that is not putting it quite fairly. Not a single Member has
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risen to express any opinion in favour of the construction of the line. I must distinguish between the two, because His Majesty's Government apparently repudiate any responsibility, though after listening carefully for an hour and more to the two speakers opposite I have not at this moment the ghost of an idea what their real attitude towards the railway is. There were moments in the speech of the noble Viscount when he alluded to the cost of the railway, the profits, and so on, when he seemed to me to be, if I may say so deferentially, a disciple in my own school; and yet when he talked of the future of the railway he seemed to contemplate its coming into being. The same mystery ran through the speech of the noble Marquess. He said it was not the intention to place any charge on Indian finances, that he was rather disposed to the old views as to Indian frontier policy; but, at the same time, he asked what more could they have done in the circumstances than what they did do. Whether that will relieve or confirm our apprehensions I cannot say, but this debate has left one very distinct impression on my mind, and that is that should the proceedings of this Sociétté d'Etudes take a concrete form, and should a scheme be brought before the British Parliament, such a scheme will have very little chance indeed of ever being carried out. I believe you will find, as Lord Incheape said, that India will be against it; I believe the bulk of public opinion in this country will be against it; and this debate to-night will not have been without its value if, whether His Majesty's Government agree with us or not, it has indicated to them the very- strong feelings that are entertained upon the matter by some of us who have served in the East. I beg to withdraw my Motion.
Motion, by leave, withdrawn.

ANCIENT MONUMENTS CONSOLIDATIONS AND AMENDMENT BILL. [H.L.]
ANCIENT MONUMENTS PROTECTION BILL. [H.L.]
ANCIENT MONUMENTS PROTECTION (No. 2) BILL [H.L.]
The Lord Willingdon discharged from serving on the Joint Committee, and the Lord Stanmore added to the Committee in his place.
House adjourned at twenty-five minutes before Eight o'clock, till To-morrow, a quarter past Four o'clock.