Sitting of 16 June 1915

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

PRIVATE BUSINESS.
Streatley and Goring Bridge Bill,
Lords Amendments considered, and agreed to.
Bristol Tramways Bill [Lords],
Halifax Corporation Bill [Lords],
West Gloucestershire Water Bill [Lords],
As amended, considered; to be read the third time.
London County Council (General Powers) Bill (Suspended Bill) (by Order),
Glasgow Corporation (Celluloid) Bill (Suspended Bill) (by Order),
Consideration, as amended, deferred till Wednesday next.
Highland Railway Order Confirmation Bill [Lords],
Considered; to be read the third time To-morrow.
Local Government (Ireland) Provisional Orders (No. 2) Bill,
"To confirm certain Provisional Orders of the Local Government Board for Ireland relating to the urban districts of Armagh and Lisburn and the rural districts of Carlow and Dungannon." Presented by Mr. BIRRELL.
Ordered, That Standing Order 193a be suspended, and that the Bill be read the first time.—[The Chairman of Ways and Means.]
Bill accordingly read the first time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 100.]
London Electric Railway Companies' Facilities Bill,
Order [15th June] that the Bill be committed read, and discharged.
Ordered, That the Bill be referred to the Examiners of Petitions for Private Bills.
Lincoln Corporation Bill,
Reported, with Amendments, from the Local Legislation Committee; Report to lie upon the Table, and to be printed.
Message from the Lords,—That they have agreed to,—
Amendments to—
Brighton and Hove Gas Bill [Lords],
Falmouth Docks Bill [Lords],
Ormskirk Gas and Electricity Bill [Lords], without Amendment.
That they have passed a Bill, intituled "An Act to consolidate with Amendments certain of the local Acts in force in the borough of Plymouth; to confer further powers upon the Mayor, Aldermen, and Burgesses of that borough; and to make further provision in regard to the health, local government, and improvements of the borough; and for other purposes." [Plymouth Corporation Bill [Lords.]
Plymouth Corporation Bill [Lords],
Read the first time, and referred to the Examiners of Petitions for Private Bills.

PRISONERS OF WAR (MISCELLANEOUS, No. 12, 1915).
Copy presented of Statement relative to the treatment of Prisoners of War in England and Germany during the first eight months of the War [by Command]; to lie upon the Table.
ORAL ANSWERS TO QUESTIONS.
  WAR.

    ROYAL FLEET RESERVE.
    Mr. KINGasked the First Lord of the Admiralty whether he is aware that Form F 1, respecting the Royal Fleet Reserve, immediate class, has given rise to misunderstanding, and that men who expected to receive 1s. for every day in the year in any event find that on being called up after general mobilisation they receive only 8d. a day; and whether he can state that the payments now being made to this class of men are those to which they are entitled and nothing less, and that the conditions of service in the immediate class were fully understood by the men on volunteering for transfer to this class of the Royal Fleet Reserve?
    The PARLIAMENTARY SECRETARY to the ADMIRALTY (Dr. Macnamara): It is definitely stated on Form F 1 that when serving after general mobilisation men belonging to the immediate class of the Royal Fleet Reserve will draw a war retainer of 8d. a day. All such men are being paid retainers at that rate at the present time.
    Mr. KING: Has the right hon. Gentleman read the circular itself, and is it quite clear?
    Dr. MACNAMARA: I have the actual circular here, and, if it is read with the qualification that follows, it shows that 8d. a day is paid after mobilisation.
    Mr. KING: If an earlier statement needed to be qualified by a later statement, is it quite clear to ordinary men?
    Dr. MACNAMARA: It is quite clear if the whole be read together.

    LOSS OF THE "PRINCESS IRENE" (PENSIONS AND ALLOWANCES).
    Sir C. KINLOCH-COOKEasked the First Lord of the Admiralty what is the present position of the children of men who lose their lives under circumstances which make their dependants eligible for assistance under the Injuries in War (Compensation) Act?
    Dr. MACNAMARA: The awards in the event of death are as follows:—

    For a widow, one-third of the normal peace pay of her husband's rank at the date of death, or 10s. a week if greater.

    For a child, one-twenty-fourth of such pay, or 2s. 6d. a week if greater, subject to a limit of four children.

    For a motherless child, one-twelfth of such pay, or 5s. a week if greater, subject to a limit of what might have been awarded in respect of a widow with a similar number of children.

    For any other dependants, such sums as may, after investigation, be considered suitable, provided they do not in the aggregate exceed the amount of a widow's pension.

    Sir C. KINLOCH-COOKE: Then in the case of the dependants of a dockyard man who went down in the "Princess Irene," if there are more than four children in the family there is nothing for those in excess of four?
    Dr. MACNAMARA: That is so.
    Sir C. KINLOCH-COOKE: Will the right hon. Gentleman see if something cannot be done to assist families where there are more than four children?
    Dr. MACNAMARA: The mother and children get £1 a week, and under the Workmen's Compensation Act a man who is totally disabled cannot get more than £1 a week.

    COAL PRICES.
    Mr. THOMAS RICHARDSasked the First Lord of the Admiratly if he will state the increase in the price of coal supplied by the South Wales collieries for Admiralty purposes for the month of May as compared with the price paid in July, 1914?
    Dr. MACNAMARA: As the prices paid under contracts for Welsh coal are, in accordance with the usual procedure, treated as confidential, I regret that I cannot give the information asked for by my hon. Friend.

    MUNITIONS.

      BRITISH FIRMS WITH GERMAN DIRECTORS.
      Mr. SNOWDENasked the First Lord of the Admiralty if, in view of the fact that, according to the statement of the late First Lord, the Admiralty has been for the last four years engaged in preparing for war against Germany in case Germany attacked this country, he will say if any steps were taken to deal with such firms as the Nobel Dynamite Trust, which had four German directors on its board, had a considerable proportion of German capital, and was largely engaged in supplying explosives to Germany?
      Dr. MACNAMARA: As regards what I may style the preamble to this question, I may observe that the hon. Member for Westmeath North has a question to-morrow to the Prime Minister. I therefore pass to the substantive part of the question, and on that I have to say that the Nobel Dynamite Trust is a holding company, holding the shares of three British manufacturing companies and four German companies. The British directors of the trust number nine, as compared with five Germans. The foreign directors are understood to have resigned, and the trust is of its own accord taking steps for dissolution by a reversion of original

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      interests to British and German shareholders respectively. The British manufacturing companies are entirely under British control. The Admiralty has reason to believe that any interchange of products between the various manufacturing companies controlled by the trust was in respect of blasting material for mining or other commercial purposes. No manufacture of ammunition for Germany appears to have been undertaken by the British companies. The foreign companies were entitled to manufacture explosives for their own Government, and could not have been prevented from doing so by any action of the British Government. In these circumstances, as neither of the countries financially concerned in the relations of the companies was made thereby dependent upon the other for supplies of ammunition, no legislative interference with the financial arrangements of the trust, such as my hon. Friend appears to suggest, would have been of advantage to the defence of this country.

      TAXATION OF PROFITS.
      Mr. SNOWDENasked the Chancellor of the Exchequer if the King's Norton Metal Company has just declared its profits for the year ending March last; that such profits show an increase of 250 per cent. on the previous year; that such increase has been made during two-thirds of the year only; that this firm's special work is the manufacture of war munitions; and will he say if it is proposed to socialise these increased profits for the relief of the general taxpayer in view of the burden of the cost of the War and the increase in the cost of living?
      The CHANCELLOR Of the EXCHEQUER (Mr. McKenna): As regards the facts stated in the first four parts of the question, I would refer my hon. Friend to the reply which my right hon. Friend the President of the Board of Trade gave in answer to a question by my hon. Friend the Member for the Attercliffe Division on the 14th June. I will supply him with a copy of that reply if he wishes it. I understand that the firm in question is specially engaged in the manufacture of war munitions. The whole question of increased profits is under consideration.

      MEN SEEKING EMPLOYMENT.
      Mr. KINGasked the Minister of Munitions whether he is aware that men
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      have, in many instances, given up posts and positions in order to hold themselves in readiness to take work at a moment's notice in the making of munitions of war, that many such have for weeks had their names down at Labour Exchanges and are unemployed, while the work previously done by them is left unfinished; and whether it is the policy of the Ministry of Munitions to encourage a large number of persons to remain unemployed so as to have a surplus of labour from which to draw?
      The PARLIAMENTARY SECRETARY to the MUNITIONS DEPARTMENT (Dr. Addison): My right hon. Friend has no information to the effect stated in my hon. Friend's question, but he would be prepared to make inquiries if my hon. Friend would furnish him with specific instances. The reply to the second part of the question is in the negative.
      Mr. KING: Is my hon. Friend aware that a great number of persons in all parts of the country have actually left their employment, believing that they are doing a patriotic service in holding themselves ready to go out at a moment's notice?
      Dr. ADDISON: I am not aware of that.

    ADMIRALTY CONTRACTORS' LIST.
    Mr. WATTasked the Secretary to the Admiralty whether the method of traders and manufacturers getting themselves on the lists of his Department before being able to offer their wares to his Department has undergone any change since the outbreak of the War; and whether it is intended that the formation of these lists will be handed over to the new Munitions Minister?
    Dr. MACNAMARA: Where applications are made by contractors for admission to the Admiralty list the normal procedure in times of peace is for the firms in question to be asked to give references. These references are inquired into and, if satisfactory, an Admiralty officer is sent to inspect the firms' works with a view to seeing whether they are competent to supply the articles for which they desire to tender. This procedure is still being followed in the case of ordinary stores and in cases where the quality required is such that inspection is a necessity. Where,

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    however, in the present national emergency, it has been considered in the public interest to do so, we have dispensed with the usual preliminary inquiries, and in some cases we have issued invitations to firms who appeared likely to be able to assist us without waiting for them to apply to us. As regards the latter part of the question, it would in any case be our duty to keep the Minister of Munitions of War closely advised as to our operations, so that there may be complete co-ordination between the Departments purchasing munitions of war. But my hon. Friend must wait for the precise administrative powers and duties of the Minister in question in relation to the supply of munitions until the Order in Council prescribed in Clause 1 of the Ministry of Munitions Act is issued.

    "THE MELTING POT" (WITHDRAWAL OF PLAY AT EDINBURGH).
    Mr. ANDERSONasked the Secretary of State for Foreign Affairs whether Mr. Zangwill's play, "The Melting Pot," has been withdrawn from performance at Edinburgh owing to the intervention of the Foreign Office; and on what ground this action has been taken?
    Mr. KINGalso asked whether, seeing that the play has frequently been performed in England and is conciliatory, more particularly towards Russia and the United States, whether the prohibition of this play will be reconsidered?
    The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Lord Robert Cecil): The performance of the play in question was not prohibited, but, at the request of the Foreign Office, it was suggested informally through the Scottish Office to the producers of the play that, in present circumstances, they should replace it by another play. This they were good enough to do.
    Mr. KING: Is the Noble Lord aware that this play has been witnessed by a Member of the Cabinet, who expressed approval of it? If I give the Noble Lord the name of the right hon. Gentleman, in confidence, will he make inquiries on the point?
    Lord ROBERT CECIL: I am not responsible for the literary tastes of the whole of the Cabinet.

    BRITISH OFFICERS INTERNED IN GERMANY.
    Mr. EUGENE WASONasked the Under-Secretary for Foreign Affairs whether any reply has yet been received from the American Ambassador in Germany as to the treatment of the thirty-nine British officers interned in Germany, in view of the change in the treatment of German submarine officers interned in this country?
    Lord ROBERT CECIL: Telegraphic information has just been received through the United States Ambassador to the effect that steps will be taken at once to return the thirty-nine British officers to their former places of internment and a list of names and places will be sent as soon as the transfers take place.
    Mr. KELLAWAY: Does the Noble Lord not consider a most unfortunate precedent has been created by the Government in allowing themselves to be blackmailed by Germany?
    Lord ROBERT CECIL: I do not consider that the Government have been blackmailed.

    RECRUITING.

      LONDON TEAM STRIKE.
      Mr. GINNELLasked the Under-Secretary of State for War what special effort was made, and with what result, to recruit for the Regular Army among the 280 tram workers while engaged in the recent London tram strike?
      The UNDER-SECRETARY of STATE for WAR (Mr. Tennant): Every encouragement was offered to the men in question to present themselves for enlistment, and I understand that a certain number did so.

    ASPHYXIATING GAS USED BY ENEMIES.
    Sir WILLIAM BYLESasked the Under-Secretary of State for War what the Government is doing to combat the asphyxiating gas employed by the enemy; whether any adequate protection for our troops has yet been devised; whether any disabling gas, not cruel or inhuman in its effects, has been adopted by way of reprisal; and to what extent has the aid and advice of scientific men, chemists and others, been called in to meet this new and deadly weapon of warfare?
    Mr. TENNANT: I am afraid this is not a matter upon which I can give my hon. Friend full information as that would not be in the public interest. But I may assure him that effective measures for protection against these attacks have been and are being taken. The assistance of scientific men has not only been freely offered, but is also being fully utilised.
    Sir W. BYLES: Can the right hon. Gentleman make any observations about the phrase "not cruel and inhuman in its effects"?
    Mr. TENNANT: No, Sir, I am unable to say whether the proposals of His Majesty's Government will be effective and whether their efficiency will entail cruelty or not.

    ARMY BOOTS (ILLEGAL SALE ALLEGED).
    Mr. ANDERSONasked the Under-Secretary of State for War whether any complaints have been received respecting the illegal selling of Army boots by un-authorised persons; whether certain traders have purchased illegally this Government property; and what steps the War Office propose to take in the matter?
    Mr. TENNANT: Allegations have, I understand, appeared in trade journals to the effect that Army boots were being illegally sold by troops returning from the Expeditionary Force. The matter was brought to the notice of the military authorities in France, who have taken steps to obviate such improper transactions. No information has been received that certain traders have purchased illegally such Government property, but if my hon. Friend will furnish me with any information he possesses, I will, of course, consider it.

    CLAPHAM COMMON (ENCLOSURE).
    Sir JOHN LONSDALEasked the Under-Secretary of State for War if the enclosure which the War Office is making upon Clapham Common is for the purpose of an internment camp for alien enemies; if he is aware that although work was commenced on the ground a fortnight ago the fencing is not yet completed; if any limit of time has been imposed upon the contractor for the completion of the work; and at what date does he expect that the camp will be ready for occupation?
    Mr. TENNANT: No, Sir, the enclosure is not for the purpose of an internment camp for alien enemies. This being so, the remaining portions of the hon. Member's question do not, I think, arise.

    ROYAL ARMY MEDICAL CORPS (PROMOTION).
    Colonel YATEasked the Under-Secretary of State for War whether, considering that between the 31st July, 1914, and the 31st March, 1915, only fourteen captains in the Royal Army Medical Corps were promoted majors, and during the same period some ninety-seven majors were promoted lieutenant-colonels, he will now take steps to have a corresponding number of captains promoted to the rank of major?
    Mr. TENNANT: The majors were promoted to the rank of lieutenant-colonel to fill appointments for officers of that rank. The promotion of captains will be considered as and when majors are required. There is no fixed establishment of the latter rank, and, under ordinary circumstances, promotion to it goes by time qualification.
    Colonel YATE: Is not the right hon. Gentleman aware that a very large number of these captains have for months past been filling posts occupied by majors?
    Mr. TENNANT: No, Sir, I do not understand that to be the case as regards the Royal Army Medical Corps.
    Colonel YATE: Will the right hon. Gentleman make inquiries as to whether that is not the case?
    Mr. TENNANT: Yes, Sir.

    ULSTER (ARMS AND AMMUNITION).
    Mr. GINNELLasked the Under-Secretary of State for War what quantity of the arms and ammunition privately imported into Ulster in 1913 and 1914 have been placed at the disposal of His Majesty's Government for the purposes of the War; by whose authority and for what purpose stores of arms and ammunition are kept in the mansions of certain landlords in Ulster; and what action the Army Council propose to take regarding them?
    Mr. TENNANT: No arms and ammunition purporting to have been imported into Ulster during the period mentioned have been placed at the disposal of the War Office. I have no information on the second part of the question, and I am not aware that any action is called for.
    Mr. GINNELL: Will the right hon. Gentleman seek information?
    Mr. TENNANT: Of course, I am always open to receive information.

    VOLUNTEER TRAINING CORPS.
    Mr. FELLasked the Under-Secretary of State for War if he will consider the possibility of uniting the various volunteer training corps and bodies of national and town guards formed for the defence of the country in one comprehensive force and to entrust them with the duty of resisting air raids and supplying them with weapons for that purpose, seeing that these corps exist in almost every town and village and would be everywhere available?
    Mr. TENNANT: This matter is under consideration. I cannot make any statement.
    Mr. FELL: Is there not a large amount of excellent material in the shape of old Volunteers and Territorials, and, if some comprehensive scheme could be adopted would it not be of great advantage?
    Mr. TENNANT: That fact will be borne in mind in arriving at a decision.

    WAR LOAN (SMALL INVESTMENTS).
    Mr. MIDDLEMOREasked the Chancellor of the Exchequer whether he can make arrangements which will enable the British wage-earner to invest in the next war loan in sums of £5 and upwards?
    Mr. McKENNA: The suggestion is receiving careful consideration.

    GAMBLING HOUSES (TAXATION).
    Mr. GINNELLasked the Chancellor of the Exchequer whether the money recently seized by the police in a London gambling house has been confiscated for the service of the State; and,
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    having regard to the sums of money changing hands in bets and other forms of gambling and the other uses for which money is required at the present time, whether he will consider the advisability of imposing a heavy tax upon all such transactions?
    Mr. McKENNA: The question of the disposal of these moneys is one primarily for my right hon. Friend the Home Secretary, but I understand that it is not possible to apply them as suggested. I am afraid it would be quite impracticable to collect a tax of the kind proposed.

    POSTAL SERVANTS (WAR BONUS ARBITRATION).
    Mr. KINGasked the Postmaster-General whether he can make a statement as to the progress of the arbitration between the Post Office and the postal servants on the demand for an increased wage to meet the rise in cost of living?
    The POSTMASTER-GENERAL (Mr. Herbert Samuel): Sir James Woodhouse has undertaken to act as arbitrator, and the proceedings will start on Monday next.

    PARCELS FOR HIS MAJESTY'S SHIPS.
    Mr. WINGasked the Postmaster-General (1) if he can make a fixed charge for parcels to the men in the Navy, in order to avoid parcels being returned as insufficiently charged owing to the removal of His Majesty's ships into foreign waters; and (2) if he will issue instructions to sub-postmasters of proper charges on the presentation of parcels, thus avoiding the return of parcels as insufficiently charged, and so preventing delay and duplication of labour?
    Mr. HERBERT SAMUEL: It is not possible to apply the inland rate universally, because payments have to be made, in many cases, to shipping companies for sea conveyance and credits have to be allowed to Colonial Administrations for handling the parcels, and the inland postage rates would not nearly cover the Department's actual disbursements. In ordinary circumstances parcels addressed to one of His Majesty's ships in foreign waters should be prepaid at the rate proper to the station on which the ship is serving. But as in

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    present conditions the senders of parecls for His Majesty's ships cannot know where the ships are, my predecessor arranged to establish a general rate for all parcels to ships in foreign waters. The scale of rates now in operation is 1s. for parcels not exceeding 3 lb., 1s. 9d. for parcels over 3 lb. but not exceeding 7 lb., and 2s. 6d. for parcels over 7 lb. but not exceeding 11 lb. In the case of parcels for ships in foreign waters which are insufficiently prepaid—for example, at the inland rate only—the instructions are that the parcels should be sent on and the deficiency on the general rate collected from the sender subsequently. Full instructions are issued to all post offices as to these regulations, but if instances have come under the hon. Member's notice in which parcels have been returned, I will make inquiry on receiving the particulars from him.

    ARREARS OF RENT (EJECTMENT).
    Mr. ANDERSONasked the Under-Secretary of State for War whether his attention has been drawn to the case of Mrs. Michael M'Hugh, of 30, William street, Shettleston, the wife of a soldier, against whom a warrant for ejectment within forty-eight hours has been granted for arrears of rent; whether he is aware that the woman's husband is lying wounded at a hospital in Rouen; that a son is home on sick furlough, having been twice wounded; that two of her five children at home are ill with pneumonia and whooping-cough; that the arrears of rent, which are under 20s., are largely due to the necessity for providing extra nourishment for her sick children; and that the Shettleston branch of the Miners' Union, of which the soldier is a member, was arranging to pay the arrears; and whether he will consider the possibility of the War Office taking steps to deal with such cases?
    The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Forster): I will have inquiries made into the case referred to by the hon. Member. I am afraid that the general question of relief from payment of rent is not a matter which falls within the competence of the War Office.
    Mr. GALBRAITH: Is the hon. Gentleman aware that some people have received notice to quit their homes for no other reason than that their sons have joined the Colours?
    Mr. FORSTER: I could not quite catch what fell from the hon. Member, but I am having full inquiries made into the case, and if I can do anything to help I will do it gladly.

    NAVAL AND MILITARY SERVICES (PENSIONS AND GRANTS).
    Colonel YATEasked the Under-Secretary of State for War when the new scale for the pensions to widows of officers will be issued?
    Mr. FORSTER: I am afraid I am unable to name a date, but the urgency of the question is well understood.
    Mr. HOGGE: Will these particulars be included in the new Pensions Bill?
    Mr. FORSTER: I should like to have notice of that question.
    Mr. JONATHAN SAMUEL: Is it not a fact that the officials of the War Office cannot act upon the instructions of the Committee until the Bill becomes law?
    Mr. FORSTER: I would rather have notice about the whole question.
    Mr. WINGasked the Financial Secretary to the War Office if he will urge local pension committees to expedite investigations into the circumstances and necessities of soldiers' dependants, in order to reduce the present delays before payment of allowances to such dependants?
    Mr. FORSTER: Such instructions were given by the Local Government Board some months ago. If the hon. Member is aware of any cases of undue delay, I shall be glad if he will communicate with me.
    Mr. WING: Is the hon. Gentleman not aware that in some of the cases the investigation has been made, and that people entitled to the money in January last have not received it yet?
    Mr. FORSTER: If my hon. Friend will give me particulars, I will inquire into them.
    Sir C. KINLOCH-COOKE: Would it not be possible to take away the power from the local pension committees and give it to a more responsible committee?
    Mr. FORSTER: That would open so large a question that my hon. Friend must give me notice of it.
    Mr. WING: I have been continually sending the hon. Gentleman these requests.
    Mr. SPEAKER: This is not a time for making statements. The hon. Member should make that representation in the Lobby.

    ORDERLY ROOM QUARTERMASTER-SERGEANTS.
    Sir C. KINLOCH-COOKEasked the Under-Secretary of State for War whether he is aware that orderly room quartermaster-sergeants, a rank given in certain cases of seniority to orderly room sergeants, are not receiving the extra pay and pension of quartermaster-sergeant's rank as warrant officer, second class; and, in view of the important battalion duties required of officers in the orderly room, will he consider the advisability of granting the same concessions in both cases?
    Mr. FORSTER: It was decided, after careful consideration, not to include orderly room quartermaster-sergeants in the list of appointments, the holding of which qualifies for the new rank of warrant officer, second class, and they are ineligible for any of the financial conditions attaching to such rank.

    WAR RELIEF (VOLUNTARY AGENCIES).
    Mr. ANDERSONasked the Home Secretary whether his attention has been called to the rapid multiplication of voluntary agencies dealing with various phases of war relief; whether any attempt is made at present to prevent overlapping or the dissipating of effort or to insist that all organisations of this character shall be genuine and above reproach; and whether to this end he will consider the need for a scheme for registration, co-ordination, and public control in connection with these collecting and distributing agencies?
    The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. Long): I am aware that there are a large number of voluntary agencies of this character, and in many cases excellent work is being carried out by them. The policy of the Government Committee for the Prevention and Relief of Distress has been consistently directed to the prevention of overlapping and of the dissipating of effort, and I will
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    see whether any further action can be taken in this direction. I hope that the coming establishment of authorised bodies for dealing with pensions, allowances, disabled soldiers, etc., will do away with the necessity for the separate existence of many of the present organisations. I will consult with my right hon. Friend as to what measures can be adopted for investigating and controlling organisations which appeal for public subscriptions and donations.
    Mr. HOGGE: Is the right hon. Gentleman now in a position to answer my questions with regard to the Prince of Wales' Fund? There is a White Paper submitted to Parliament dealing with that.
    Mr. LONG: The White Paper in question was not presented by my Department, and whether I am in a position to answer any question is an interrogation so wide that I should hesitate to reply to it.
    Mr. HOGGE: Will the right hon. Gentleman inquire, in view of the fact that a Paper has been presented to Parliament as a Parliamentary Paper, and that before it was presented we were not allowed to make inquiries?
    Mr. LONG: Certainly I will make inquiries.

    BOG FUEL.
    Mr. GINNELLasked the President of the Board of Trade whether, in view of the increasing price of coal, there is any other reason but the influence of the coal trade for not developing and using the cheaper and, for many purposes, superior fuel obtainable from bogs; and whether the Board will at once give consideration to this latent source?
    The CHIEF SECRETARY for IRELAND (Mr. Birrell): I can assure the hon. Member that the coal trade has no influence over the Government, but I have nothing to add to the replies I gave on the 9th instant, in which I dealt fully with the considerations which arise in regard to the development of the peat industry in Ireland, and with the efforts which are being made to encourage it.

    PORT OF LIVERPOOL (CONGESTION).
    Mr. HOUSTONasked the President of the Board of Trade on what date the Committee was appointed by the Admiralty, with the concurrence of the War

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    Office and the Board of Trade, to co-ordinate naval, civil, and military requirements at Liverpool with the object of reducing the congestion of the port; if he will give the names of the gentlemen forming this Committee and their previous and present occupations; whether he is aware that the number of vessels awaiting allotment of berths, which had fallen to forty-five on the 5th instant, had on the morning of the 10th instant risen to sixty-one; and whether he can state on what date the Committee started work?
    Dr. MACNAMARA: The Committee appointed by the Admiralty to deal with the congestion at the port of Liverpool was formally constituted on the 8th inst. The members of the Committee are as follows:—

    Mr. A. A. Booth, Chairman (Chairman of Liverpool Shipowners' Association).

    Sir Helenus Robertson (Chairman of Mersey Docks and Harbour Board).

    The Senior Naval Officer, Liverpool.

    The Divisional Naval Transport Officer, Liverpool.

    Major E. K. Essel (Deputy Assistant Director of Railway Transport).

    Mr. L. A. P. Warner, Secretary (Assistant to General Manager of Mersey Docks and Harbour Board).

    I understand that the number of vessels awaiting allotment of berths was sixty on the 5th inst. and fifty-nine on the 10th inst. The Committee held its first meeting on the 9th inst. and is now meeting at frequent intervals.
    Mr. HOUSTON: Is the right hon. Gentleman aware that shortage of labour contributes to the congestion of the port, and that the Committee would be strengthened by the addition of a gentleman intimately associated with labour and acquainted with local conditions?
    Dr. MACNAMARA: I am very much obliged to the hon. Gentleman for making the suggestion. It shall receive consideration.

    MESSRS. SIMONIS AND COMPANY (INSURANCE CARDS).
    Mr. ANDERSONasked the President of the Board of Trade whether he is aware that Messrs. Simonis and Company, fire engineers, Park Royal, engaged on aircraft fittings, informed a workman who desired to leave their employment that he
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    was as much tied to them as if he had joined the Army, that they had power from the Board of Trade to prevent any other firm employing him, and that they would refuse to give him his insurance card; whether the firm had any authority for making such statements; and whether he knows that the workman in question has an opportunity to do similar Government work for another firm, and to save himself three hours travelling daily?
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman): The Board of Trade have not given this company any authority for making such statements, nor have they the power to do so. Nor would the company have the right to retain the workman's insurance card or unemployment book in such circumstances.

    SINKING OF STEAMSHIP "LUSITANIA" (COURT OF INQUIRY).
    Mr. GINNELLasked the President of the Board of Trade whether it is possible to locate the wrecked "Lusitania"; if so, seeing how much the present inquiry would be assisted by ascertaining impartially what arms and ammunition were on board that ship, whether he will have the wreck examined by divers from a neutral country not financially interested in the ship?
    Mr. RUNCIMAN: I doubt whether it would be practicable to have such an examination made as is suggested in the question, and I hope that the Court of Inquiry into the loss of the "Lusitania" will find no difficulty in ascertaining all material facts by other means.
    Mr. HAROLD SMITH: Has the right hon. Gentleman taken any steps to find out whether it is practicable or not?
    Mr. RUNCIMAN: Yes; I should not have said it was not practicable unless I had taken some steps and made inquiries. There is also the fact that those seas are not altogether free from enemy craft.

    METROPOLITAN POLICE FORCE.
    Mr. HOUSTONasked the Secretary of State for the Home Department whether he can state the total number of special constables enrolled in the Metropolitan area; and whether, in view of the work done by these volunteers and the

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    assistance and relief given by them to the police force, it is necessary to maintain the police force in the Metropolitan area at its present strength?
    The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Simon): The total figure is 32,617; but more than a fourth of that number are enrolled for the protection of their employers' works, and the others are largely employed on duties which arise out of the War and do not exist in time of peace. The help given by the special constables is invaluable, but the regular police force explained yesterday, been diminished by several thousands owing to enlistment, and to the demands of the War Office and Admiralty, and the Commissioner of Police is satisfied that its further depletion could not with safety be permitted.

    FIRES (GOVERNMENT WORK).
    Sir J. LONSDALEasked the Home Secretary if he is aware that within the last nine months upwards of thirty-five fires have occurred in various parts of the country at docks, stores, camps, and in factories engaged upon Government work; if any special inquiry has been instituted by the Home Office or other Government Department into the origin and significance of these outbreaks; and if he can state the results of such investigation?
    Sir J. SIMON: I have not got separate figures for factories engaged on Government work, but the returns which I have received from factory inspectors throughout the country show that the number of fires which have occurred since the outbreak of war in factories, docks and ware-rouses generally is not in excess of the normal, and in a number of districts is below the normal. In view of the exceptional conditions under which work is being carried on in a great number of works, these figures cannot be regarded as unsatisfactory. As regards fires in camps, I am informed by the War Office that all such fires have been investigated, and that in no case was there any evidence of incendiarism.
    Sir J. LONSDALE: Does the Home Office inquire personally into the origin of those fires, or is the inquiry left to the local police?
    Sir J. SIMON: In any case where there is any cause to suspect an incendiary
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    origin arrangements are being made for the best and most skilled inquiry to be made in connection with headquarters.
    Mr. KELLAWAY: Is there any objection to making public detailed information as to the number of fires which have taken place in similar areas during the corresponding period last year?
    Sir J. SIMON: I will consider it.

    CHANGES OF FOREIGN SURNAME.
    Mr. R. MCNEILLasked the Home Secretary if he is aware that a number of persons with surnames indicating German nationality or origin have recently by advertisement in the Press announced their abandonment of those surnames and their assumption of English surnames instead thereof; whether such substitution of English for foreign surnames by public advertisement is valid; whether, in view of the importance of facilitating supervision over all persons of hostile origin or association, in pursuance of the Regulation issued by Order in Council on the 12th of June, he will give instructions that all persons advertising such a change of surname shall be kept under close supervision by the police; and whether, if legislation be necessary for the purpose, he will introduce a Bill to prohibit such changes of surname for the future?
    Sir J. SIMON: Legislation already passed has secured that alien enemies cannot change their name during the War. Other persons have made public advertisement of their change of name since the War began, including persons of long British descent and unimpeachable loyalty, whose only desire is to repudiate the remotest connection with the enemy. Proper attention will be paid to any suspicious case, but public notice of change of name is the last step likely to be adopted by persons desiring to escape the attention of the police.

    ALIEN ENEMIES.
    Mr. R. McNEILLasked whether sympathy with the enemy and with his violations of the laws of civilised warfare, openly expressed by persons of hostile origin or association, is held to be sufficient reason for rejecting claims by such persons to be exempted from internment or repatriation?
    Sir J. SIMON: Claims for exemption are considered by the Advisory Committee, who inform me that they have never advised exemption in any case where the applicant is known to hold or has expressed views in sympathy with the enemy.
    Mr. McNEILLasked the Home Secretary whether his attention has been called to the case of a German woman named Kehrein, living at 15, Shrewsbury Road, Bayswater, whose insulting be haviour to her English neighbours and open exultation over such German achievements as the destruction of the "Lusitania" and raids by Zeppelins is likely to cause breaches of the peace; and whether he will take steps to accelerate the removal of this woman from the country?
    Sir J. SIMON: My attention had not previously been called to this case, but I have now made inquiry and received a report from the police which shows that the woman in question is a respectable and inoffensive dressmaker and that the allegations with regard to her behaviour emanate from a single neighbour and appear to be entirely without foundation. The question of her repatriation will be dealt with in ordinary course after consideration by the Advisory Committee of any application which she may make for exemption.
    Mr. McNEILL: If I lay before the right hon. Gentleman information which conflicts with his answer, will he consider it?
    Sir J. SIMON: I shall be very glad if the hon. Member will communicate with me. I should like to show him my information and should be very glad to see his.
    Mr. McNEILLhad given notice of the following question: To ask the Home Secretary whether a public meeting called by the Sherborne Town Council was held on 10th June to protest against the continued employment of Fraulein von Bissing, a relative of the German military governor of Brussels, as a teacher at the Sherborne Ladies' College; whether he is aware of the feeling amongst the parents of students of the college against the retention of this teacher at the present time; and if he will say how soon arrangements can be made for the removal of Fraulein von Bissing from the country under the recent Order for repatriation of women alien enemies?
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    Since giving notice information has reached me which leads me to believe that the residence of the lady mentioned in this country is unobjectionable. In these circumstances I will not put the question unless the right hon. Gentleman thinks it would be more just to the person concerned to have his answer on record.
    Sir J. SIMON: No. I am very glad the hon. Gentleman has said what he has. My information coincides with his own.

    INDUCEMENTS TO INVENTORS.
    Sir J. LONSDALEasked the Minister of Munitions if it is intended to offer inducements to inventors to devise new and improved methods of offence and defence, and to set up an advisory committee of experts to test and report upon inventions?
    Dr. ADDISON: My right hon. Friend cannot at present say more than that the question of the encouragement of inventors is receiving careful consideration between the Ministry of Munitions, the War Office and the Admiralty.

    CIVIL SERVANTS (NATIONALITY).
    Mr. R. McNEILLasked the Prime Minister how many persons of hostile origin or association, within the meaning of the regulation issued by Order in Council dated 12th of June, 1915, are in employment at the Treasury, the Foreign Office, the Admiralty, and the War Office, respectively; and whether such persons are to be retained in their employment during the continuance of the War?
    The PRIME MINISTER (Mr. Asquith): I am informed that British-born subjects alone are employed as Civil servants in the offices named. There is no case to which the regulation referred to applies.
    Sir C. KINLOCH-COOKE: Is it not a fact that one of the clerks in one of these Departments has a father who has been naturalised since the War; that the father was a German and has been naturalised since the War?
    The PRIME MINISTER: How can I tell that without notice?
    Mr. McNEILL: Does the right hon. Gentleman not think it important that in these particular Departments it is due to public feeling in this country that the employment should be restricted not only to British-born subjects but to those whose origin and associations are free from objection?
    The PRIME MINISTER: I have no reason to doubt that all the gentlemen who are employed at these various offices are most loyally serving the country. If the hon. Gentleman can bring any specific case to my attention, I will look into it.

    DAMAGE BY AIR RAIDS.

      STATE INSURANCE SCHEME.
      Captain Earl WINTERTONasked the Prime Minister if it is in contemplation to introduce a system of voluntary State insurance against air raids; if so, whether such a system will be introduced at an early date; and whether, pending its introduction, His Majesty's Government will undertake to compensate owners of property damaged or destroyed by air raids, such compensation ceasing immediately a State insurance scheme is in force?
      The PRIME MINISTER: The Board of Trade are considering the possibility of such a scheme. Meanwhile, each case as it arises will be considered on its merits.

    MUNICIPAL BORROWING POWERS.
    Mr. SNOWDENasked the Prime Minister if he will take steps to relieve municipalities from the position in which some of them have been placed by the restriction of borrowing powers in the following circumstances: Some municipalities have the option this year of purchasing the local tramway system, the Corporation of Bristol being a case in point, but, owing to the refusal of the Treasury to grant public loans, it is impossible to exercise this legal option, with the result that the private tramway companies will be reinstated for a long term of years, and the public rights will thus be rendered invalid, and that the loss of the power to exercise the option of purchase will, in the case of Bristol, involve a loss of £20,000 a year for seven years, as well as the advantages of public ownership, and also heavier cost if
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    purchase should be exercised at the expiry of the extended lease; and will he consider the desirability of special legislation entitling the municipalities to exercise the right of purchase now, but to postpone the raising of the loan, say to twelve months after the end of the War?
    The PRIME MINISTER: I understand that an application from the Corporation of Bristol has been received by the Treasury in the course of the last few days relative to the question of the purchase by the Corporation of the local tramway system, and that this application has been referred to the Committee on Fresh Issues of Capital. Pending the receipt of their report, it is premature to consider in this particular case what steps, if any, should be taken in the contingency to which the hon. Member refers. The general question raised is, I think, best dealt with in relation to specific cases as they arise.

    BOG TRACTS (IRELAND).
    Mr. GINNELLasked the Chief Secretary for Ireland whether he is aware that of the owners of large tracts of bog in Ireland some refuse to allow any peat to be got for fuel and some nominally allow but in practice prevent it by a prohibitive charge; and, in view of the urgency of this matter at the present time, whether he will introduce a short emergency Bill to make all unsold and unused bogs available for getting and saving peat for fuel during the continuance of the War?
    The CHIEF SECRETARY for IRELAND (Mr. Birrell): I have no information in regard to the statements made in the first part of the question, and, in any case, I do not anticipate that any legislation of a compulsory character will be necessary to secure a plentiful supply of bog during the continuance of the War.

  Victoria Tower Gardens (Statuary).
  Mr. KINGasked the First Commissioner of Works whether it is intended to divest of its present tarpaulin covering the group of statuary, by Mr. Rodin, in the Victoria Tower Gardens; and, if so, when?
  The FIRST COMMISSIONER of WORKS (Mr. Harcourt): I am at the present moment in communication with

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  the Committee of the National Art Collections Fund, the donors of the group, as to this question.
  Mr. KING: Does that point to an early official opening of the group?
  Mr. HARCOURT: I think it points to an early conclusion of the communications I am having.

  Falcon Road (Clapham Junction) Post Office.
  Sir J. LONSDALEasked the Postmaster-General whether the office of postmaster at the Falcon Road post office, Clapham Junction, is held by a person of the name of Kaufmann; what is his nationality; whether complaints have been made on behalf of soldiers' dependants drawing their separation allowances at this office of the way in which business is conducted there; and what steps he proposes to take in the matter?
  Mr. HERBERT SAMUEL: Mr. Kaufmann, who is a naturalised British subject, has resigned his position as sub-postmaster at Falcon Road, Battersea. His successor, Mr. James Wooding, who is a natural-born British subject, has already been installed.

  British Federation for the Emancipation of Sweated Women.
  Mr. GINNELLasked the Home Secretary whether he has any control over, or means of investigating, such institutions as the British Federation for the Emancipation of Sweated Women, which accounts for its use of £3,768 18s. 11d. by an expenditure of £1,100 in obtaining the money, of £1,100 in salaries of officials, £1,100 in running a home for domestic servants and giving a Christmas dinner; whether he can ascertain how the money was obtained and the number of sweated women emancipated by this institution; and, if it lives on the credulity of the poor, what action he proposes to take?
  Sir J. SIMON: I am aware that a collector of this institution was prosecuted last August for obstruction, and fined, and the magistrate commented severely on the methods of the institution, whose balance-sheet showed that more than half its receipts were expended on administrative expenses and advertising. The matter is being watched by the police, but I am advised that nothing is known which would justify further criminal proceedings.

ORDERS OF THE DAY.
  BILL PRESENTED.
    MILK AND DAIRIES ACTS POSTPONEMENT BILL.
    "To postpone the operation of the Milk and Dairies Act, 1914, and the Milk and Dairies (Scotland) Act, 1914." Presented by Mr. HAYES FISHER; supported by Mr. Walter Long and Mr McKinnon Wood; to be read a second time To-morrow, and to be printed. [Bill 101.]
  SUPPLY [15th June].—REPORT.

    SUPPLEMENTARY VOTE OF CREDIT, 1915–16.
    Resolution reported,
    "That a sum, not exceeding £250,000,000, be granted to His Majesty, towards defraying the Expenses which may be incurred during the year ending the 31st day of March, 1916, for general Navy and Army Services in so far as specific provision is not made therefor by Parliament; for the conduct of naval and military operations; for all measures which may be taken for the security of the country; for assisting the food supply, and promoting the continuance of trade, industry, business, and communications, whether by means of insurance or indemnity against risk, the financing of the purchase and resale of foodstuffs and materials, or otherwise; for relief of distress; and generally for all expenses, beyond those provided for in the ordinary Grants of Parliament, arising out of the existence of a state of war."
    Mr. JOYNSON-HICKS: I do not propose to travel over the Debate which took place yesterday on this Resolution, but I desire to make a few observations in regard to a subject in which I have taken a great deal of interest in times of peace, and that is, the sufficiency of the number of aeroplanes for our air services both by sea and land. I would like to make a preliminary observation in connection with the speech made by the Prime Minister yesterday. I did not conceive it to be my duty to join in the Debate in criticising the action of the Prime Minister in forming the Coalition Government. I have from time to time been rather a keen critic of the late Government and its Departments during the progress of this War, but the formation of the National
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    Government has made me feel that any criticism directed from this side, or at all events from myself, must be constructive criticism of a patriotic character and not destructive criticism. I therefore feel that it is not in my power in any sense to criticise the formation of the new Government. I accept it as a patriotic National Government, and in the few observations I make this afternoon in regard to the supply of our air machines I desire to speak purely from the most patriotic motive and not in any sense from a party point of view.
    We have had very full discussions in regard to the supply of munitions, but there has been no discussion in this House in regard to the supply of what is of equal importance to shells, and that is the aeroplane service and the bombs which our aeroplanists are able to use. Perhaps it is not unimportant that we should discuss such objects now, because of the constant raids of Zeppelins which are being made in this country. I agree entirely with what the Field-Marshal Commanding-in-Chief at the Front has said from time to time in regard to our Air Service. The Air Service, as far as the men are concerned, is absolutely perfect. It is perfectly clear from the Field-Marshal's reports that our men are not only equal but superior to the airmen of our enemies. There were a certain number of airmen sent out with the Expeditionary Force. I do not propose to enter into the actual figures this afternoon, because I do not want to say anything which could in any way be of assistance to our enemies; but it is clear, and it has been clear throughout the prosecution of the War that the Field-Marshal and those who have control of our Air Service at the Front could have done with the assistance of a very much larger number of aeroplanes and airmen than they have had at any time and at any period during the War. There are three purposes for which our airmen are useful. For the purpose of reconnaissance I think it is clear they have fulfilled practically all the requirements of the Commander-in-Chief. At the present time it is almost impossible to carry on artillery fire with any real effective purpose unless there are aeroplanes of a sufficient number—in the first place, to locate the enemy batteries, to locate the object of our attack, and to make reports to headquarters of the result of almost every shot as it is fired from time to time. Information is coming from the Front—and information is bound to come across from

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    wounded officers and others who have come direct from the front, and their information is that while our airmen are able to do practically all that is required in regard to reconnaissance, the airmen of the German enemy are, in many parts of our lines, still greater in number than our airmen. I heard only last week of a particular part of our line where there were no less than eight German aeroplanes circling above it, with the natural consequence that a vast explosion of high explosive shells took place on those trenches over which the German aeroplanes had manœuvred. In this particular instance there were none of our airmen there. If it is possible for eight German aeroplanes to go over any particular section of our trenches I think we are entitled, while we are asking the Minister of Munitions to give our soldiers more shells and more guns, to ask him to give our Air Service more aeroplanes and more high explosive bombs.
    These aeroplanes are not merely used for reconnaissance; they are essential for defence against Zeppelin air raids. I am not one of the alarmists in regard to the raids that have taken place, that are taking place, and that undoubtedly will take place in the future by enemy Zeppelins. The House will remember that two years ago at least I urged that we should have large airships and have at least one of the Zeppelin type in order that we might meet like with like. Lieutenant Warneford has shown perfectly conclusively that in certain circumstances it is possible to deal with Zeppelins by means of aeroplanes, but in this particular instance it is only fair to observe that the Zeppelin was going home; it was down very low, and our aeroplanist was able to get on top of it. But the Zeppelins which have come over here recently have flown at such a height that I believe it has been practically impossible for our aeroplanists to get up high enough to be on top of them, so as to attack them. It is quite clear that you cannot attack Zeppelins through an aeroplane except from above, because they are armed with several quick-firing guns, and it is therefore almost impossible for an aeroplane to deal successfully with a Zeppelin except from above.
    I do not want to pass comments, but it was thought wise that our country should not be armed with Zeppelins. We have got to face the fact—and I think that it would be much wiser that the Government
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    should let the people know exactly what they have got to expect in regard to Zeppelin raids—that we, in London, must expect a Zeppelin raid within the next few weeks. I do not know whether the House knows, but the Germans must know it, and there is no reason why people here should not know also, that quite recently there were over our coasts no fewer than five Zeppelins of the latest type. I do not suppose that anybody in this country knows how many Zeppelins Germany has, but that she has at least five of the newest type, ready for use against us, I think there is no possible doubt. If we are to meet those Zeppelins it will not be by one aeroplane; it can only be by what the present Chancellor of the Duchy referred to as a "swarm of hornets." I do not want to complain of the ill-success of the defence against the German air raids which have taken place up to the present time, but I do want the Government, and particularly now the Minister of Munitions, to give us the assurance that while he is dealing with munitions he will deal with, and will regard even as important, the provision of a very much greater number of aeroplanes than we have had up to the present. We want them, not merely for the front, not merely for the purpose of reconnaissance, not merely to attack hostile German aeroplanes in Flanders, and, of course, the Dardanelles also; but we must also have them as a means of defence at the present moment against the invasion of German Zeppelins.
    Then we want, and I think that we ought very shortly to have, some aeroplanes larger than those we have had up to the present time, or capable of carrying larger bombs. We were all delighted at the Cux-haven raid; it was most effective for the purpose for which it was designed. But we have never had a raid on Cuxhaven harbour. In the course of the War we ought to have a raid every week into German territory, instead of having a raid, as we do, of four, five, or ten, or possibly twenty aeroplanes, possibly every three months, or every six months. It would be practically possible, if this matter of the provision of sufficient aeroplanes had been taken in hand at first, and even if it were taken in hand at the present time, to have a continuous attack every week on some German town. I for one do not hesitate to say, after the attacks which have been made on our undefended seaports, after the murders of their undefended citizens which have taken place,

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    that I would not be too particular as to the German town upon which I dropped my air bomb; that is my own personal opinion. But, if we could establish an aeroplane service, there is no reason why we should not have a raid, not of ten aeroplanes, but of fifty or a hundred, taking place every week, instead of every six months, which would go a very long way to carry the idea of war home to the people in the towns of Germany. What we want is to make them realise in their territory what war is, just as they have made the people of France and Belgium, and the people in the towns and villages on our East coast realise what war is.
    There is no reason why we should not have far larger aeroplanes than we have been able to use up to the present time. Everybody knows that a large aeroplane was designed and perfected in France just before the War, and, moreover, that a large aeroplane has been not merely designed and completed, but has been brought into use by our Russian Allies in the course of the War. That aeroplane is not merely one of the small things which carry a few bombs of 10, or 20, or even 50 lbs. weight, but is a machine with five motors of 100 h.p. each, which measures 121 ft. across from the tip of one wing to the tip of the other, and can carry, and has carried, sixteen men; and a machine of this type—and there is no reason why we should not have many of them—is perfectly capable of carrying four or five bombs, each containing 400 or 500 lbs weight of high explosive. Suppose that we were to provide our men at the front with a considerable number of these large Russian machines, armed with these heavy, high explosive bombs. I do not propose for a moment to suggest the particular use to which they should be put, for the Army would know how they could be used, and the War Office and the Navy would know how they could be used. Everybody in this House realises the immense benefit which they would be to our Army in attacking the German Army and German communications, and getting behind the German line. My hon. Friend asked me how long they would take to make. It is certainly possible that several of them could be turned out in less than three months.
    I do not want to say whether I think it is quite possible that some arrangements are being considered at the present time for making larger aeroplanes. What is wanted here is exactly the same as has
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    been wanted in regard to munitions. That is, somebody who will take the thing in hand, who will do for aeroplanes what the right hon. Gentleman the Minister for Munitions is going to do for shells, and which I suppose he will probably do in regard to aeroplanes, because he has included in the definition of the word "munitions" the bombs necessary to use in those aeroplanes. Officers have told me that they see no reason why, as we have openly discussed the lack of ammunition in this House, we should not mention that our existing Air Service has been short of large, high explosive bombs, or, as we are speaking much more freely now than we have done in the earlier part of the War, why we should not suggest that this matter might be taken in hand by the new Minister of Munitions. There is no good giving the Government £3,000,000 a day to spend on the War unless it is spent to the best advantage.
    Possibly in years past hon. Members in this House may have thought that I was a crank on this point of our Air Service, but the Air Service has been proved now to be absolutely essential both to the Army and to the Navy, and I would suggest that the right hon. Gentleman the Minister of Munitions—of course one knows that he is too busy to do it himself, but he could appoint someone who could work under him—should take charge of this matter, and put himself in consultation with the head of the Air Service in the Navy, who is one of the ablest men in the Service, and also with the gentleman who is in charge of the Air Service under the War Office, and get from them what is absolutely required, not merely what they require at the moment, but what they would consider to be the type of absolute efficiency if they had all the money which they could desire at their command. Let them have the money. We are giving an enormous amount of money to-day. I am convinced that if the right hon. Gentleman opposite, or the Minister of Munitions, would take counsel with the heads of the Air Services, both in the Army and in the Navy, they would tell them that they could employ to-day not far more, but three or four times as many aeroplanes as they have got at the present moment.
    Let me give one fact which came within my own knowledge, and the mention of which cannot benefit the enemy, and it shows how eager our young men are to join this perilous Service. I went to the War Office about a month ago to see

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    whether I could not get an active young officer into the Air Service. What was the answer? "We have already 500 men waiting to get into the Air Service. We will put your friend's name down on the list as 501." If there are 500 men waiting as volunteers to enter the Air Service then you should increase your means of training at Farnborough and other places, and you should double and treble the number of machines for training purposes in order that these young men, so keen and eager to enter this dangerous Service, may be properly qualified to become members of it as fast as possible. You cannot have good training unless you have got a large supply of machines as well as a further supply for the use of these young men when they get to the Front. I did not want to let this opportunity pass without saying a word upon this subject. I hope the House will feel that I have not said anything which could be of use to the enemy and that I have endeavoured not to give facts or figures. I earnestly ask the Minister of Munitions to realise the importance of this matter, a matter as important as is the provision of high explosive shells, and I trust that he -will have it in his power also to deal with this subject to which I have called attention.
    Sir RYLAND ADKINS: I ask permission for a very little while to call attention to a matter of importance in connection with this Vote of Account and in connection with the continued and successful prosecution of the War. But before I touch on that one point the House will not think it improper if I take this opportunity of warmly thanking the Prime Minister for the speech which he made yesterday and for the way in which he presented to this country the condition of things with which the Government of this country is at present concerned. No Coalition Government in this country can rouse the same feeling which a homogeneous Government does, and the fact of the Coalition Government having been created in the middle of a great War is bound to make Englishmen think, and wonder, and realise more greatly the gravity of the situation. But I must say that both in the House and outside there is confidence, not only in the Prime Minister's speech, but in the Prime Minister's reticence, and we are willing in this House, and the people outside are willing, to take his word when the public interest necessitates his not
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    explaining any detail. While this Coalition Government will command universal support, and will command the support of everyone who considers what sacrifices have been necessary to compose it, the very fact that this Government is presided over by the present Premier ensures for it confidence, and that it will retain that confidence whatever be the fortunes of the country during the next few months or years.
    But there is one thing which appears to me to be of the highest importance, if the national confidence is to be maintained and stimulated in the Government, and in the conduct of the War. My right hon. Friend the Prime Minister, in sentences which will not soon be forgotten, spoke of his reliance on the willing support of the country both in fighting and in work. No doubt that confidence is well founded; yet are there not many Members in this House who agree that it is not easy, in many parts of the country, where trade is prosperous, and where there are few signs of distress produced by the War, for every person to realise as fully as he ought the greatness of the War in which we are engaged, and the imperative character of the call upon every citizen to do the best that he can. One cannot but wonder whether it is not to the advantage of recruiting, and maintaining and increasing a true kind of public interest in the War, to have further information given than has been given up to now on many details of the War and on many details of achievements of important regiments, or of men who come from different localities. No one would want to know anything about any matter before it should be divulged; that would be lunatic. No one wants to be given in public any details of what the War Office and Executive are to do. But again and again it is found—and it must have been found by all Members of this House engaged in recruiting or organising locally—that any particular detail of any fight which has occurred, and any particular act of heroism which has been made known, is of high importance not only in getting men to come forward with the greatest ardour to join His Majesty's Forces, but to make it clear to the locality, and to every one who hears of it, the nature of the struggle in which we are engaged.
    If there be one characteristic of the English people which is open to criticism—I do not speak about other races, I

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    simply speak of the English people—it is that their imagination is not excessively quick, and they do not find it easy to realise fairly the gravity of matters which are not brought home to their doors. We are told from time to time of valuable though not overwhelming successes in this long conflict of endurance on the western front. Are we always told equally of similar occurrences which go against us and which we only hear of incidentally after a time? I would take this first opportunity given to me to appeal to this Government, which represents all forms of thought and patriotism in this country, whether, entirely in consonance with military requirements, it is not yet possible to give far more detail as to what has happened to the public generally in order to secure that this willing support of the country, in its time of trial, may be given by an informed public and not by an ignorant public—may be given by persons who have all the opportunities to realise that now is the time of their life, when they ought to do everything they can for their country.
    Mr. FELL: I wish to address a few words to the Chancellor of the Exchequer on a subject which must shortly come before him. Following on this immense Vote of Credit there must come a loan in due course, and I wish to ask him, as I have often asked his predecessor, whether there will not be an opportunity, when this loan comes before the public, of its being so introduced as to reach the working classes, and cause them to take an interest in it, just as is done in France and in other countries? I think if the loan could be introduced in that way to the public, the results would convince the right hon. Gentleman that he had been given an opportunity of doing more good in this country than had ever fallen to the lot of any previous Chancellor of the Exchequer. I hold a very strong opinion on this subject, and I have put numerous questions about it. When we hear talk of the savings of England, I would point out that we are spending the savings of fifty years. The accumulative savings of this nation during forty or fifty years will be dissipated over this War in a year or two. While those savings are being spent, it causes an absolutely fictitious prosperity in many places. The greater that prosperity is at present and the greater the expenditure, the greater must be the reaction in the future. It is against that reaction that I
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    hope the Chancellor of the Exchequer will in some way provide. I may mention one short experience which I had in France. I was going round a small town with the mayor. He showed me a very large building, which he mentioned was a savings bank. I asked how could a small town like that afford a savings bank of that kind. He told me that two or three thousand pounds were paid into that savings bank every week in excess of withdrawals. I remarked how could that be with a population of from twelve to fourteen thousand. He replied that there was not a person in the town, rich or poor, who was not saving a third of his income and paying it into that bank.
    If the Chancellor of the Exchequer could make any arrangement by means of which some portion of the extravagant payments which are now being made could be returned to the Government in investments, he would be conferring not merely a benefit on the people affected, but on the community and the country at large. It might be possible at the big arsenals and great factories to arrange in some way when the wages are paid that the men, if they liked, might apply a certain portion of their wages towards the purchase of bonds of the value of £4 or £5. We might have £10 bonds, and the men might put aside some portion of their wages each week until they had paid for them, and then they would experience the pride and pleasure of holding bonds with coupons on them which they could cash in the future. They would have that pride of saving which is the backbone of the prosperity of France. I am convinced that something can be done in this way by offering bearer bonds of small amounts. I am always told that people have the opportunity of investing in Consols through the Savings Bank. I ask is it a success, and how much is invested in that way? The amount is very small indeed, and the working classes do not avail themselves of the Savings Bank for investment in Consols. I would ask the Chancellor of the Exchequer to try and do something to facilitate this proposal. I know the bankers will be against it. On the last occasion when it was suggested to them the large bankers said that the amount received in these small sums would be very small indeed and not worth taking into consideration. I think the bankers were wrong, and since the loan has been at a discount—since I think it is clear there was something wrong in the form in which it was issued, and you did

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    not get the small investor in that loan. I do strongly urge on the Government and on the Chancellor of the Exchequer that they would be conferring a great benefit on the working classes and on the community at large if they could induce the working people to take some share in these loans, and thereby show some interest in the country and feel that pride which necessarily follows from having investments and from having a share in the stock of the country. By doing so the Chancellor of the Exchequer would confer a benefit on the country such as no previous Chancellor of the Exchequer had done.
    Mr. SANDERSON: I do not intend to cover the ground so fully debated yesterday and to-day, but I rise to call attention to a matter which came to my notice this morning and which I am bound to say caused me a little disquiet. I think the House has shown, both yesterday and to-day, that it is animated by a very great desire that this vast amount of money which is being voted should be properly spent and that the country should get full value for the money. Secondly, as the Chancellor of the Exchequer explained yesterday so clearly, it is desirable that economy should be practised not only by Government Departments, but by the community as a whole. In connection with the question of getting full value for the money there is the important question of time, because unless you get the article you require at the time you want it, then it is not worth paying for and the money is badly spent. Before the Coalition Government was formed I suppose some of us had complaints made to us about the delays incurred when applications and representations were made to Government Departments, and especially with regard to this question of munitions. I myself had the opportunity of mentioning this matter in the House not very long ago, and there are many others who did the same thing. We felt with this new Ministry of Munitions established that, at all events, that cause of complaint would disappear. But having regard to what I see in one of the newspapers this morning, I cannot help feeling that in this respect things are going on very much as they were before. I read in this morning's issue of the "Daily Express" these few words which I think are material:—
    "On Friday last the 'Daily Express' sent to Dr. Addison, Mr. Lloyd George's assistant in the new Munitions Department, particulars of fifty factories on our register of munitions firms. All these factories are
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    fully equipped with the necessary machinery for making munitions, or are in a position to acquire such machinery at once, and the desire of the owners is to help in supplying the Army with what is needed. No reply to our otter has yet been received, nor has our letter even been acknowledged."
    The Ministry of Munitions has not been very long established, but I should have thought it was sufficiently long in existence to have some Department which could answer the letters which were received. What would be thought of any business house which had a letter sent to it upon any kind of business and which did not send an acknowledgment by return of post, and what would be thought of any professional man who received a letter about his business or profession, and who did not acknowledge it by return of post? Very strong things would be said. Here you have an obviously bonâ fide offer, and I submit an important offer. The owners of fifty factories are prepared to equip their factories with machinery at this moment for the manufacture of shells. An important offer of that kind should not be left for five days without an acknowledgment, and to do so is not business. The statement does not stop there. It goes on:—
    "In addition to offering these factories to the Government, we also offered to staff them with 2,000 skilled workmen if extra men were wanted. This offer is also still awaiting acceptance or refusal. It has not yet even been acknowledged"
    I quite agree with what was said by one of my hon. Friends just now, namely, that we are not here to offer any criticism of a destructive nature, but to offer criticism of a constructive nature. I am perfectly certain that business of this Department cannot go on smoothly and satisfactorily unless some drastic steps are taken to put it on business lines. I only mention this matter in order that steps may be taken at once to see that a thing of this kind should never occur again. The Chancellor of the Exchequer, speaking yesterday, referred to the question of economy. I had not the opportunity of hearing his speech, but I read it this morning. He hoped hon. Members would impress on their constituents the necessity for individual economy.
    4.0 P.M.
    I shall be very glad indeed to carry out his request. But I do not think it is much use talking about economy. Every person is so apt to think, "Oh, well, my little bit does not matter; I will let somebody else practice economy"; or, "The little bit that I can economise will not matter; it is so small." The Chancellor of the Exchequer will have to do something more

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    than ask Members of Parliament to talk to their constituents. He will have to do something to make them economise, or to tempt them to do so, as my hon. Friend the Member for Yarmouth suggested. Another suggestion made yesterday, that wages should be paid partly in cash and partly in scrip, is, I think, an excellent idea; or the right hon. Gentleman might go further, and take an article of luxury such as motor cars. Anybody living near a main road at Whitsuntide would have seen the enormous number of motor cars that were obviously being used by their owners solely for pleasure, and it would have made him think. It made me think of the wear and tear that was going on, of the number of people employed in cleaning and repairing those motors, and of the amount of petrol being used for pleasure which might well have been used for national purposes. Is it possible to put an end to that sort of things? That is simply an instance. If the Chancellor of the Exchequer could see his way to say that motor cars are not to be used except for business or on national work it would make people think at once, and bring home to them how essential it is that everybody should save where they can.
    Mr. LEWIS HASLAM: I should like to support the suggestion made by the hon. Member for Yarmouth (Mr. Fell). It is important that we should encourage wage earners to save as much as possible at all times, but in the present circumstances it is especially important. I understand that in Germany they have had for many years a system for encouraging national savings. A fair rate of interest over and above the ordinary interest on Government securities is given on savings up to a certain amount. I believe the amount is £200. In the past the German Government have allowed 5 per cent. on savings up to £200. Whether or not that is possible here I do not know, but I think that something of that sort might be done with advantage. The working classes ought at the present time to be encouraged to save in every possible way. After the War there will no doubt be a time of great depression, and those who are getting good wages now should understand that they ought to make some provision for the future. They might also be encouraged to put what they can spare into Government securities, so as to help raise the funds necessary for the prosecution of the War. With regard to raising the necessary income, I think it very advisable that a special tax should
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    be put on incomes larger than those made during, say, the previous three years. I do not think it possible to differentiate between incomes which are larger on account of their being derived from the manufacture of munitions and other war requirements and incomes derived from other sources. Incomes are increased for different reasons, but I think that those who make larger profits during the War should bear a special tax. If it were possible, I should be inclined to put a heavy special tax on incomes increased by more than a certain percentage, say, 5 per cent. It is only fair that those who are making larger incomes should bear a heavier burden than those who are suffering more. I think that this is a practical suggestion, and I hope the Chancellor of the Exchequer will find some means of carrying it out, so that the burdens of the War may fall upon the shoulders of those who can best bear them. It would show the working people, who are doing their best now to increase the supply of munitions, and otherwise help their fellows in the field, that, if they are feeling the pinch of high prices, those who are getting the advantage of high prices will not benefit by their exertions to any undue extent.
    Mr. KING: I venture to go back to a matter which I raised yesterday, namely, the form in which this Supplementary Vote of Credit is put forward. The Vote is drawn in the very widest terms, and is apparently intended to give the Government power to spend any amount of money in any possible direction. I am not against giving the Government a perfectly free hand, but I would call special attention to the fact that there are actually Members of the present Government who, in 1885, on the occasion of the Vote of Credit for the Soudan operations, protested very strongly indeed against the Votes not being strictly limited in the terms of the Supplementary Estimate which was then put before the House. I have read the Debate which took place on that occasion and I wish the financial authorities on the Treasury Bench would do the same. An Amendment was moved by Mr. Arthur O'Connor complaining of the way in which the Estimate was framed, because it mixed up the money to be spent on increasing the Army and the Navy with the money actually being spent in the Soudan. He was supported by Sir Henry Holland, by the right hon. Member for Wimbledon (Mr. Chaplin), by

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    Mr. W. H. Smith, by Sir John Gorst, and by Sir Stafford Northcote. Last, but not least, he was supported by the present First Lord of the Admiralty (Mr. Balfour), who protested, in his usual vigorous language, that he had never heard a weaker or more confused case put forward on behalf of an Estimate than the one put forward on that occasion by the late Duke of Devonshire. There can be no doubt that the principle has been established, not only in practice, but by the constant assertion of authorities in this House, that if you have a Vote of Credit you ought to define as clearly as possible not only the amount, but the object to which the Vote of Credit is to be devoted. With regard to one matter, at any rate, there is the greatest amount of uncertainty as to the direction in which this money is to go. The Prime Minister yesterday said that we had to add to the £200,000,000 which will be wanted for the Army and the Navy £50,000,000 at the rate of £500,000 a day—
    "to meet other expenses such as advances to our Dominions, and to Allied Powers, and other foreign States."—[OFFICIAL REPORT, 15th June, 1915, col. 555.]
    The Prime Minister therefore stated that out of this Vote we are going to advance money to other Powers with which we are not actually in alliance. I think that is perfectly clear. In the course of the Debate I called attention to the Prime Minister's statement, and the Chancellor of the Exchequer took it upon himself to correct me and, by implication, his worthy chief. He also called attention to the note at the foot of the Estimate, in which it is stated that this money will be required for loans to His Majesty's Dominions or Protectorates, and to Allied Powers, but in which note there is no reference, as there was in the Prime Minister's speech, to other foreign Powers. I am inclined to ask you, Mr. Speaker, whether a note added without the signature of any official person is at all binding upon the Treasury? The implication or suggestion made by the Chancellor of the Exchequer was that this note was as good as if it stood in the actual terms of the Vote. It is surely a new doctrine if a mere note added to a Resolution as an explanatory gloss, and nothing more, is to have as much effect and authority as the words of the Vote itself. Personally, I have no objection to giving the Government a perfectly free hand; but when you have one Minister implying that the advances will be given either to our Colonies or to our Allies, and
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    the Prime Minister intimating that other foreign States will also receive advances, I think we as a House have a right to know exactly where we are. This House—and I share the feeling myself entirely—is willing to give to carry on this War even greater latitude than it has ever given before to any Ministers. Personally, I feel the very highest confidence in, and respect for, the Prime Minister, and indeed for many of the other Ministers, some of whom are to me more or less untried. But so long as the Prime Minister is in the position he is, I shall certainly feel the very greatest respect and inclination to support to the utmost of my power any policy that he brings down to this House. May I ask you, Sir, on a point of Order, whether the note at the foot of the page of the Supplementary Estimate is as much a charge as are the words of the Vote that was actually voted in this House?
    Mr. SPEAKER: In reply to the hon. Member, I should say "No." He is committed by voting for this Resolution to the terms of the Vote as passed by the Committee yesterday, and to be shortly passed by the House to-day, and nothing more. Sir Albert Spicer—
    Mr. KING: I did not necessarily mean to sit down, Mr. Speaker.
    Mr. SPEAKER: I should not have given my ruling at once on the point put by the hon. Member had I not understood that he had finished his remarks.
    Sir ALBERT SPICER: There are just two points in this Debate on which a great deal has been said by various speakers, especially by Ministers, and that is the question of thrift. I want to ask the right hon. Gentleman the Chancellor of the Exchequer whether it would not be possible at this stage for the Treasury to issue some popular leaflets on thrift. There are, I believe, an immense number of people in this country at the present time, belonging to different classes, who are prepared to do their part. In the case of many, their expenditure has been carefully arranged for a long time, and they do not see their way quite where they are to begin to save. We all know, for instance, in certain classes of houses, whatever their size, that a great deal of the expenditure during the time the house is occupied is not voluntarily, but compulsorily, in conformity to, in harmony with, and in proportion to the rent paid or the value of the house occupied. I cannot

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    but think that the Treasury would do a real service to the country if they could have prepared a set of popular leaflets on the subject touching the various classes of the community. I believe there are an immense number of people only too willing to begin making a reduction in their expenditure if they can have a clear lead. Take the matter of servants. If a household employs a number and dismisses one, it may be that that person would find it very hard to get another sphere of employment.
    Take again the question of alcohol. If some hints were given it might lead to a great many more people following the example of His Majesty for the time being. I believe a lead on the subject would make all the difference and would be a great advantage to the thrift of the country. Another point is that I would like to inquire whether for the period of the War the limit in regard to investments in the Post Office Savings Bank could not be increased? The suggestion has been made that there are many people who, though the banks will take their money, prefer the security that the Government gives. Would it not be advisable during the period of the War to allow the annual amount invested to be increased from £50 to £100, and the total amount from £200 to £500?
    The UNDER-SECRETARY Of STATE for WAR (Mr. Tennant): I have been engaged since the hon. Member for Brentford (Mr. Joynson-Hicks) made some observations earlier in the Debate in getting some answers to questions put to me. Therefore I have not been able to attend the House and hear the Debate which, I understand, has taken a different course to that to which the hon. Member directed it at the outset. The hon. Member informed the House that it is the opinion of most people with regard to the Air Service generally that the men are perfect. I am glad to acknowledge that; it is universally admitted by everyone who has had any intimate knowledge of the great services performed in the air by our military in France. But, said the hon. Gentleman, there are more men and more aeroplanes wanted. I do not know if the hon. Gentleman limits his criticism to that particular service, but it might equally be said of the Artillery or the Infantry that the pity is that we have not more. That is perfectly true. If, however, the hon. Member reflects at all he will see that the
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    Air Service is in very good proportion indeed to the rest of the Army. What I want him to realise is that since the outbreak of the War there has been no smaller expansion of the Air Service in proportion to the rest of the Army. On the contrary, the expansion of pilots has been in a ratio of ten to one. Where we had one before we have ten now engaged in the Air Service, while the expansion of men generally is in proportion of five to one. These are the very latest figures, and I am sure the hon. Gentleman will agree that it is a very large expansion indeed. I am glad to say in spite of that very large expansion the; organisation which has been set up is working harmoniously, smoothly and with great efficiency. The hon. Gentleman stated that there was a deficiency of high explosive bombs for use at the front. I am not able to answer the hon. Member as to whether there has been cases where there was a shortage of high explosive bombs, but I can inform the House and the country that there has been no shortage of such bombs since February. [HON. MEMBERS: "Not shells?"] At the present time there is an ample supply, with an efficient and ample reserve. I am glad to be able to make that statement, which I hope will be reassuring to hon. Members in all quarters of the House. The hon. Member also spoke of a larger aeroplane which was in use, or contemplation, by Russia.
    Mr. JOYNSON-HICKS: It is in use.
    Mr. TENNANT: There again it may perhaps reassure the House if I state that we have in contemplation—actually in process of manufacture—a similar article. I do not want to go into too great detail, because I do not think that would be in the public interest, but I can assure the hon. Gentleman that the matter is in hand. My last word is in regard to the increase of the service in order to create a sufficient personnel to cope with this most important part of our service. Whilst at the moment of mobilisation there was only the Central Flying School, which, I believe, as hon. Members are aware, was only able to train twenty pupils at once, we have now eleven such schools where we are able to train, and instruct generally, upwards of 200 pupils. I have intervened early in the Debate in order that there might be no misconception following the observations of the hon. Member for Brentford, and that the House might be reassured that these most important matters are engaging our constant and our earnest attention.
    Mr. HOBHOUSE: I would like to ask a question, which, I think, is of some little importance, of the Chancellor of the Exchequer. Throughout the whole of the Debate upon the Vote of Credit there has been constantly urged upon the public, and upon Members of this House, the necessity for economy in all branches of the services. So far as the public services are concerned, the principal agent in promoting economy, as all Members of this House know well, in the expenditure of the various Departments, whether of the Army, or the Navy, or the Civil Services, is the audit by the Comptroller and Auditor-General of the accounts of the various Departments. Every Department has within it a representative of the Treasury, and that representative exercises the most careful control over the expenditure by the head of the Department for the various purposes for which the Department exists. After all, this control is limited, and it is supplemented by examination—previous in most cases—by the Treasury, of the various objects which the Department puts forward annually for expenditure. After all is said and done however, the real control exercised over the expenditure of this House is that of the Comptroller and Auditor-General, who is, for this purpose, an officer independent of the Government, and of the Departments, and is the representative of the economy which can be exercised by this House in respect to this expenditure.
    We have got a Vote of Credit for £250,000,000. That, added to the expenditure of the Vote of Credit for £250,000,000 already passed by this House, represents an enormous sum, probably the average expenditure of about three years. All of this has to be examined, or ought to be examined, by the Comptroller and Auditor-General. What I want to ask the Chancellor of the Exchequer is whether, in respect of the expenditure which is covered by the late and the present Vote of Credit, the items of expenditure will be so examined by the Comptroller and Auditor-General for the purpose of keeping a check upon the expenditure of the Departments? He is of all men in this House, I think, a notable example of financial purity and financial fitness in relation to expenditure and the examination of expenditure. Therefore, not merely in the public interest but in his own interest, I suggest—and if necessary the staff of the Department of that officer should be
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    strengthened—that steps should be taken in order that there may be a real control somewhere over these vast sums which are gladly voted by every Member of this House for the purposes of the Government. It is quite plain, when you have an expenditure on the Army and Navy under present conditions, that they must have what they want at once, regardless of the cost in most cases, and they must have it of the very best. When half the examiners of stores are taken up with duties which are sometimes twice in amount those of their ordinary duties, the control of expenditure, which in some cases is ridiculous at the present time, could only be general and, as it were, only over a percentage of the amount to be expended. But it is most important in the interests of economy, and in the interests further of the sums of money which the Chancellor of the Exchequer will have to raise from the market, that every possible form of economy, of which I believe this to be most important, should be exercised. I hope the right hon. Gentleman will be able to give the House an assurance in the direction which I have suggested.
    Sir FREDERICK BANBURY: Before the right hon. Gentleman replies, I would like to refer, by way of support, to the question raised by the hon. Member for Somerset. After your ruling, Sir, there can be no question that the footnote on the Supplementary Estimate does not in any way limit the Vote of Credit itself. I think it is clear that the Government can use this £250,000,000, or part of it, for any purpose they like, and that they can advance it to any country in Europe, or anywhere else. Under the circumstances, I do not want in any kind of way to be captious or critical either of the present Government or of any Government, but I am not quite sure that I put such enormous confidence as the hon. Gentleman below the Gangway seems to do either in this Government or in any Government. I have always been brought up to consider that the control of finance should be in the hands of Members of the House of Commons itself. I have not looked it up, but I think I am right in saying that on every occasion in the past when a loan has been made to a foreign Power an Act of Parliament has been passed. My right hon. Friend (Mr. Chamberlain) shakes his head. Then there ought to be. My right hon. Friend below (Mr. Lough) says there

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    was only one exception, the Persian Loan, which is a bad exception, and to which I raised objections. It was brought in by a Government to which my right hon. Friend did not then belong, and I have not the slightest doubt that if my right hon. Friend had been a Member of that Government at the time there would have been an Act of Parliament for that loan. That being so, I do ask the right hon. Gentleman whether, if it is possible to bring in a Bill, he will do so, and can he state that this is not to be considered in any kind of way as a precedent for any future Government? What I am very much afraid of is that somebody later on—it may be the Government of my own party, or the Government of any party—may make an advance, not only in war, but on some other occasion to a foreign Government. Somebody may then get up and say that this is unusual, and that there ought to have been a Bill, and he will be answered by the statement that on this particular occasion very large sums of money have been advanced. I do not want to say anything improper, but I am not sure an advance has not been made. I do not want that to occur again, and I hope the right hon. Gentleman will give an assurance that a Bill will be introduced bef ore these advances are made.
    Sir JOHN HARMOOD-BANNER: The point I desire to make is one, I think, of very great importance to the country. We have been talking a great deal about providing money for a Vote of Credit, and we have ignored the great principle that the best way of paying for your imports is by having sufficient exports. So far as I have found out, both in the case of my own business and from representations by other manufacturers, the Government have entirely ignored the principle that, in order to prevent this country being impoverished by war, and in order to keep the balance of exchange in favour of this country, it is necessary to protect and further, as far as possible, the exports of this country. I am not speaking of coal, which, of course, is as good as gold and silver in paying for imports, and, if we are going to cut off the supply of coal for any purpose, we are going to leave a large vacuum which will have to be filled up by other means, and it will not only be a disadvantage to us in the matter of exchange, but of great disadvantage to countries entirely outside Germany which require British coal to carry on the trade.
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    I am speaking of electrical concerns—iron concern—which deal all over the world.
    At present I have in my mind an order which has been stopped—an order quite outside any question of going to Germany—and it is to the value of £60,000. It is possible that after some little delay it will be passed. That is only one of numerous export orders coming to this country, which the Government, no doubt with the desire of preventing anything going to Germany, has stopped. I do appeal to the Government to treat this in a generous spirit, if they can be satisfied goods are not going to assist the enemy. None of us who are traders want to do anything that can assist the enemy, but we do want to keep on our export trade. We must have our trade back again at the end of the War. We talk as though it matters not what happens to our export trade, because exports and imports have gone by the board. We shall be in a sad plight at the end of the War, and I do appeal to the Chancellor of the Exchequer to ask the various Committees with which he is connected to deal with this in a liberal spirit, so as to provide funds to pay for this Vote of Credit as far as possible by exports against imports, instead of at present talking economy. Economy is all very well in its way, but it does not provide work, or keep this country strong at the end of the War.
    There is one other matter to which I would like to refer, also as being a large manufacturer, as well as doing a good deal of work in one way or another for war purposes. I had the satisfaction, the other day, of listening to the present Minister of Munitions, in Manchester, and I heard the course he suggested in his eloquent speech, but, in spending this money out of the Vote of Credit, we shall do it most ineffectively if we only bring the manufacturers and the trade unionists into it, and not our own officials at Woolwich Arsenal, the War Office, and the Admiralty. They must concur as well in supplying manufacturers and workmen with the plans and specifications on which they are to work. Without that assistance it will be impossible to carry out with speed and efficiency what is required. I give this one illustration as regards that matter. At the meeting in Manchester the engineer of a very large manufacturing concern got up and asked the question, "Will the gauges be provided for making the shells?" The head of Woolwich Arsenal was requested to reply. He said,

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    "Oh, certainly." Then this engineer, knowing what he was talking about, asked, "Will the shop gauges be provided? The other gauges are no use unless shop gauges are provided." I am bound to say the answer from the head of Woolwich Arsenal was a shuffle; it was not practical. The result was that, whilst we were all asked to do our best the officials were not quite as eagerly in the swim as the manufacturers and workmen. The same has taken place, to my knowledge, in specifications for aluminium, in specifications for steel, in specifications for copper, and all other work. You do not get from the heads of the Departments of the Government that information, that specification, that help which is requisite to answer truly and faithfully the appeal of the Minister of Munitions, and, therefore, while he waves the Defence of the Realm Act at manufacturers and workmen, I say distinctly that it is absolutely useless unless he waves it at his own officials and says, "You must help without jealousy, and without the retention of any detail of plans or of any assistance required. You must, even if they are outsiders, give loyally of your strength and ability in order that their work may be equal to your own, and in order that they may give to the nation as quickly as possible those munitions which are so much required."
    Mr. J. M. HENDERSON: I quite sympathise with my hon. Friend who has just sat down with regard to encouraging exports. There is a Department called the War Trade Department, which was established for the purpose of granting licences. I do not blame the Government, and I do not blame this Parliament, but I think of all the chaotic offices I ever remember, that is about the worst. I think they have a very difficult task with which to deal. There are a great many licences which run very close to the border, as they cover contraband, and I can quite conceive that they have the very greatest difficulty in coming to a conclusion as to whether they shall grant a licence or not. I will go the length of saying that where there is the slightest risk in the case of Sweden, Denmark, or Holland—
    Mr. SPEAKER: How does that come in under the terms of this Vote? I do not quite follow the connection.
    Mr. HENDERSON: Of this £250,000,000 a good deal is going to be spent on the
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    Department of which I speak. There is a large staff—a whole building of people—and I presume the Vote is affected, inasmuch as this is a matter of sending contraband through those countries.
    Mr. SPEAKER: I should have thought that would come under the ordinary Board of Trade Estimates. Of course, if the hon. Member says he knows it is covered by this, I will not contradict him.
    Mr. HENDERSON: I feel sure it is. The War Trade Department has an enormous building, and an enormous staff, all paid, I presume, out of these funds. I do not wish to complain beyond this: that it is chaotic, and that the facilities for granting licences are very bad. I think they ought to make up their minds much more quickly, and if there is any doubt at all that the goods will ultimately reach Germany, they ought to refuse a licence. More particularly do I say that for this reason: I happen to know that none of the British Consuls, with one or two exceptions, in Norway, Sweden, Denmark, and Holland, are British, and I know what the Swedish Consuls are. They will certify for merchants; they meet together in the clubs and cafes and arrange it amongst themselves. I will give an instance. A large quantity of permanganese was passed the other day for Sweden. The goods were going to Germany undoubtedly—there is no question about it We know, of course, that enormous quantities of copper and other things must have gone to Germany, because Sweden cannot possibly use them up for themselves. The quantity of copper and other things which have gone through has been enormous, and, so far as this War Trade Department is concerned, there ought to be some definite instructions that, wherever there is the slightest doubt about the destination of the goods, they should shut them down at once and refuse, and I am sure the exporters in this country would be quite satisfied. I have gone there myself on several occasions for licences or not — I do not care which, so long as I know where you are in the matter. So long as you keep this thing open, and it has been kept open for months, I am bound to do my best to get this matter through. Refuse it if you like, but the result would be that these firms for whom I am acting would refuse to take those orders because there is so much difficulty about them. I would suggest that some hard and fast line should be drawn

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    so as to absolutely prevent any of these things going forward which I know are going forward to-day between those ports.
    The CHANCELLOR of the EXCHEQUER (Mr. McKenna): An important point was raised by my right hon. Friend the Member for East Bristol (Mr. Hobhouse), who asked whether the expenditure of money voted under this Vote of Credit would be subject to audit by the Comptroller and Auditor-General in the same way as the expenditure of the year in the annual Estimates. I am pleased to say that the Comptroller and Auditor-General will have precisely the same powers with regard to the expenditure under this Vote as he would under any ordinary Vote.
    Mr. HOBHOUSE: And exercise them?
    Mr. McKENNA: The Comptroller and Auditor-General is not the servant of the Government, but the servant of this House, and I have no doubt whatever that he will exercise his powers to the full in the case of this expenditure.
    Sir CHARLES HENRY: Will this expenditure come before the Public Accounts Committee?
    Mr. McKENNA: Yes. The money now voted will have to be appropriated to the particular services on which it is expended by the Appropriation Bill, and that will authorise the expenditure. Consequently there will be Parliamentary authority under the Appropriation Act for the expenditure of every penny of the money now being voted. The hon. Member for the City of London (Sir F. Banbury) asked me whether an assurance would be given that this wholesale expenditure without any detailed Estimate under the Vote of Credit would not be taken as a precedent, and whether any recognition would now be made of the fact that Parliament was in no way committed to any expenditure under the Vote of Credit, whether made by loan to an Allied Power or not. The hon. Baronet asked me whether Parliament is to be committed to any other practice of voting large sums of money except in the ordinary way by an Estimate; or, in the case of a loan to a foreign Power, whether the usual practice would be adopted of introducing the loan by way of a Bill?
    Sir F. BANBURY: A loan to foreign Powers?
    Mr. McKENNA: Yes, a loan to foreign Powers. There is no intention by the present procedure of establishing any new practice in this House. It is always more convenient for the House that a loan to a foreign Power should be the subject of a separate Bill. Obviously it is better that a subject of that kind should be separately discussed, and that the House should have full and precise knowledge, which it can only have when the subject is introduced as the subject matter of a Bill. In the present case I am sure the hon. Baronet will be the first to recognise that I could not undertake to give in detail, such as would be necessary in the case of a Bill, every condition in respect of a loan which may be made to an Allied Power at the present time. That would be contrary to the public interest of this country and the Allied Power as well, and it would be a disadvantage to us in fighting the War. We have therefore to ask now for a special procedure which is perfectly legal and constitutional, but which is not so convenient as the ordinary peace procedure by a Bill.
    Sir F. BANBURY: Am I right in saying that during the Napoleonic Wars, when advances were made to the allied Powers and foreign Powers, it was always done by a separate Bill?
    Mr. McKENNA: I am afraid that is a question of which I must have notice, and I could not answer it without closer inquiry. But whatever the precedent may or may not be, now, in existing circumstances, it would not be in the public interest to introduce a separate Bill. On behalf of the Government I say, after reflection and after due consideration, that the present method adopted should not be taken as a precedent for procedure in peace time, and with that assurance I hope the House will be satisfied and not press me to give more exact reasons why a Bill would be inconvenient at the present time. My hon. Friend the Member for Somersetshire raised a question as to whether it was intended to spend any part of the money voted under this Vote of Credit by means of loans to Powers other than Allied Powers. I would beg my hon. Friend to bear in mind what he said yesterday on this subject. He was speaking of the rumours that were afloat both in this country and abroad as to our intention to make loans out of this Vote of Credit to foreign Powers. He said:—
    "I shall not refer to those rumours and statements, but it is perfectly obvious that when they cannot be

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    denied, and when no certainty exists in this country, even in the House of Commons, as to the nature of those rumours, they are widely believed among our enemies, greatly to our detriment, and also in neutral countries."
    In view of that statement it is very necessary to say that none of the money voted under this Vote of Credit will be lent to Powers other than Allied Powers, and I hope I have been able to set at rest my hon. Friend's anxiety, and I trust I have put an end to the dangers which he fears will arise by giving circulation to those rumours that we shall suffer detriment not only in our own country but in the countries of our Allies. There is no intention to spend any part of this money on loans to Powers other than Allied Powers. I stated that yesterday, and I gave a reason in support of what I said. The language used in the Note at the foot of the Vote of Credit states the point clearly, and only the words "Allied Powers" are used. I quite recognise that a loan under a Vote of Credit has not the same authority as it would have under an Act of Parliament, but when an assurance is given that the intention is to act upon the terms of that Note, and the terms of that Note are made public in order to give notice to Parliament what the intention of the Government is, I think my hon. Friend might reasonably be satisfied. The Member for the City of London also referred to this point, and I trust I have satisfied him on this subject. With regard to the general question of public economy and domestic thrift, and giving facilities to the working classes to save with profit to themselves, I can assure the House that every word upon that subject which is said in this House gives to me the greatest satisfaction. In this matter it is necessary that this House should give a lead to the country. It is not merely a matter for the Government. I admit that it is the duty of the Government to see that due economy is exercised in the public Departments, but I am not at all prepared to endorse the doctrine that money is no object in this War. My hon. Friend the Member for Brentford (Mr. Joynson-Hicks), speaking of aeroplanes, rightly called attention to their importance, but I think he went a little too far when he said that money should not be considered. The moment you get that spirit abroad we must remember that contractors are only human beings, and if they are told that no matter what they charge money will not be considered, you are asking too
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    much from them if you expect that prices will not rise. I am told upon authority which it is impossible to refuse that in the case of certain Government contractors the workmen employed on Government work expect higher pay than when working on private work. I do not say it is true in every case, but I heard in one case that this difference exists. I have no doubt hon. Members in this House could bring to my notice many cases in which pressure is brought to bear on employers to pay higher wages on Government work because it is Government work and money is no object.
    Mr. C. DUNCAN: Is it highly skilled work?
    Mr. MCKENNA: Yes.
    Mr. DUNCAN: The firms engaged in highly skilled work for the Government take the pick of the skilled workers, and that is the reason why they have to pay more.
    Mr. McKENNA: I quite recognise that these contractors take the pick of the workers, but there are cases in which other workers expect it, and I do not blame them. If a workman sees money being thrown about with both hands, naturally he expects to get his share; therefore we should be a little more cautious in our language. We have to remember that our money resources are not inexhaustible. You have to practise and encourage a due spirit of economy, and I am sure that we shall not be one whit worse off because we have practised a little economy. My experience is that thriftless expenditure never gets into the best hands. The habit of thrift brought into our expenditure, I am sure, will be a real advantage in securing the objects we desire. Our organisation must be carried through economically, and I hope I shall have in this difficult task the support of every section of the House in endeavouring on every hand to practise economy.
    5.0 P.M.
    Mr. DILLON: I am a great admirer of the industry of the hon. Member for Somerset (Mr. King) and of the hon. Baronet the Member for the City of London (Sir F. Banbury), but I do regret the question which they have raised to-night. When the hon. Baronet and the hon. Member for Somerset undertake to compare the present situation with the question of the Soudan Loan and the Loan to

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    Persia, I think that they are lacking in a sense of proportion. For my part, I think that it is unfortunate that the Chancellor of the Exchequer tied the hands of the Government in the statement which he has just made. The Prime Minister said to the House yesterday that they desired to have liberty to use this £250,000,000 for loans according to their discretion. These are exceedingly delicate matters, and I do not think it wise for the House to tie the hands of the Government at all in regard to these foreign loans. We all know what has happened. It has been the subject and has caused a deal of evil. The Empire of Germany has lent £10,000,000 to Bulgaria, Why should not we keep the same liberty in dealing with these matters as Germany has already exercised. The Government ought to be perfectly free to use this money according to their discretion, and it would be a most unfortunate thing if the Government were required to introduce a Bill.
    After all, there is no precedent for the situation in which the country is now placed. We are faced with a new situation, and, no matter what the precedents are—and I have been a stickler for precedents—having recognised that loans should be made to foreign countries, we ought to leave the hands of the Governments free. This House has agreed to trust this Government and the country has agreed to give it fair play in matters on which the very existence of the country depends. It might be in these very delicate and dangerous times that a loan to some foreign Power which is not an Ally would be an extremely desirable thing, and it might also be extremely desirable without consulting the House at all, or without having any discussion about it, or without even making it public. Once you admit the principle of making loans to foreign Powers, then to ask the Government to introduce a Bill before the loans are made is a most imprudent and absurd demand.
    Sir F. BANBURY: I never asked that the Government should introduce a Bill in this particular instance. I was particularly careful to say that this is a very exceptional time. I asked that the right hon. Gentleman should make some statement that this was an exceptional time, and that therefore exceptional powers had been given to him in this particular case.
    Mr. DILLON: I apologise. I misunderstood the hon. Baronet, and he is such a
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    high authority on finance that I really thought it necessary to deal with the matter. I understood him to press the Government to introduce a Bill.
    Sir F. BANBURY: No.
    Mr. DILLON: In spite of my great respect for the hon. Member for Somerset, I do not think that it would be desirable to follow precedent in this matter, or to press the Government to introduce Bills. I think it was unfortunate that the Government were asked to give a declaration that they would confine advances to Allied Powers.
    Mr. ANNAN BRYCE: I wish to associate myself with what fell from the hon. Baronet the Member for the Everton Division (Sir J. Harmood-Banner), and I am sorry that the Chancellor of the Exchequer in his reply said nothing at all upon the point of the discouragement of exports. It is a most serious matter for this country at present to diminish the exports in any way whatever. There is an enormous balance of trade against us, and the exchanges of several countries, especially the United States of America, are so severely against us that we shall be in very great trouble later on in order to make our exports and imports balance. It will be impossible to do it without sending away very large sums of gold or selling vast quantities of securities. Under these circumstances, it appears to me most disastrous to discourage exports in any way whatever. It has the additional disadvantage that if you discourage exports of the nature of which the hon. Member spoke—electrical machinery, and machinery of various kinds, you only throw the demand for those articles into the hands of Germany, who had almost a monopoly in the supply of electrical apparatus to foreign countries until this War began.
    I have never understood why the Government at the beginning of this War treated in a curiously differential way the firm of Siemen Bros. The firm of Siemen Bros, were allowed to trade in this country, largely, I suppose, because they were supplying the Government, although the capital is entirely German, and they are now using their name in this country as a means of retaining and holding together the whole of their business over the world. Orders are taken now in the name of Siemen Bros., of London. They are not supplied from London, because this Committee of the Chancellor of the Exchequer

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    would probably not give them a licence to export, but they take the orders in the name of Siemen Bros., and they supply the goods from Germany. The case which the hon. Member raised is a most excellent illustrative case. I am perfectly sure that the goods which the Chancellor's Committee is refusing to be allowed to be exported in that particular case will be supplied from Germany and will help the German exchange, whilst the loss of the business will damage our exchange.
    Question put, and agreed to.

  FINANCE (No. 2) BILL.
  Considered in Committee.
  [Mr. MACLEAN in the Chair.]

  FINANCE (No. 2) BILL.
    CLAUSE 1.—(Customs and Excise—Duty on Tea.)
    Ordered to stand part of the Bill.

    CLAUSE 2.—(Duties on Immature Spirits.)
    In addition to the duties of Customs payable on spirits imported into Great Britain or Ireland there shall, as from the eighteenth day of May, nineteen hundred and fifteen, be charged, levied and paid the duties specified in Part I. of the Schedule to this Act; and in addition to the Excise duty payable on spirits there shall, as from the same date, be charged, levied and paid the duties specified in Part II. of the Schedule to this Act:
    Provided that—

    (a) The additional duties under this Section shall not be charged on mixtures, compounds, or preparations which on importation are charged with duty in respect of the spirit contained in them or used in their preparation or manufacture; and

    (b) If any person proves to the satisfaction of the Commissioners of Customs and Excise that any spirits to which the restrictions contained in the Immature Spirits (Restriction) Act, 1915, do not apply, have been delivered to him and used solely in the manufacture or preparation of any article recognised by the Commissioners of Customs and Excise as an article used for medical purposes or have been used for scientific purposes, that person shall be entitled to obtain from the Commissioners repayment of the amount of duty (if any) paid under this Section in respect of the spirit used.

    Mr. GLYN-JONES: I beg to move, in paragraph (a), after the word "which" ["mixtures, compounds, or preparations which"], to insert the words "if they were imported, would."
    I am sorry, and I must apologise to the Committee for the fact, that the Amendment is not on the Paper, and is simply a manuscript Amendment; but, like most of the Members of the House, I did not at all anticipate that we should be taking the Committee stage of the Finance Bill today; and when I say that the Commissioners of Customs and Excise are tomorrow meeting the representatives of the Pharmaceutical Society and those interested in this matter, it does seem rather like putting the cart before the horse for the House to-day to actually deal with provisions which are to be the subject of consultation to-morrow between the Commissioners and those whom they have undertaken to see. I suppose that there is some reason for the Committee stage being taken to-day, but I hope that we are not going to take the new Clauses. There are new provisions entirely which only appeared on the Paper this morning. None of us have seen them until now, and they raise very difficult issues. I therefore hope the Chancellor of the Exchequer, if he feels that he must proceed with the Committee stage to-day, will not go further than the Clauses of the Bill as they stand.
    This is not an emergency Bill. There is every excuse for the House dealing with emergency matters. They can be taken rapidly and very often with very little consideration; but this is the Finance Bill of the year, and I cannot help thinking it will be only right that further opportunities should be given to the House to deal not only with this particular Clause, but more especially with the new Clauses which are to-day put on the Paper for the first time. This Clause provides for duties on immature spirits. The only reason why duty has to be placed on immature spirits is so that spirit which is kept the proper length of time should not be prejudiced in the market by spirit which may be immature. I deplore exceedingly the necessity for having to place this small tax upon this form of spirit, because it leads to enormous complications which the Revenue and the House want to avoid.
    Sir F. BANBURY: Would the hon. Gentleman mind telling us what the Amendment is?
    Mr. GLYN-JONES: I read it out.
    Sir F. BANBURY: I am sorry, but I did not hear it.
    Mr. GLYN-JONES: Perhaps I may be allowed to make this preliminary comment on what the Section really does in order to show the importance, if my Amendment is not accepted, of this point at any rate being made clear. It imposes a duty not for the purpose of revenue and then it exempts from the duty certain mixtures, compounds, or preparations. They are exempted by two provisions, "A" and "B." "A" says that the additional duty under this Section shall not be charged on "mixtures, compounds, or preparations which, on importation, are charged with duty in respect of spirit contained in them, or used in their preparation or manufacture." There is nothing there about preparations used in medicine. It is "preparations which, on importation, are charged with duty." They are to be exempted from the additional duty. When you come to "B," it is clearly intended to deal not with imported mixtures at all but with mixtures which are made in this country. Then you have got the stipulation that those things are to be for medicinal purposes only.
    It is true that the Chancellor of the Exchequer has to-day got a new Amendment which makes it clear that the mixtures referred to in "A" shall only be mixtures to be used in medicines. Trouble, however, has arisen, and, if my Amendment cannot be accepted, I hope at any rate that the Chancellor of the Exchequer will promise that between now and the Report stage he will see whether the words cannot be made clear. The Bill, as it stands, says "mixtures, compounds or preparations which on importation are charged with duty in respect of spirit contained in them." One of the leading technical journals has pointed out that those who will have to deal with this matter in the profession or trade read it in two ways. Does it mean imported mixtures, mixtures which have actually been imported, and which when imported pay duty, or is it a description of a class of mixture which on importation pays a duty? It, of course, makes the whole difference. My Amendment is moved in order that the Chancellor of the Exchequer may make it quite clear what he means to include by "mixtures" in paragraph (a), and if he is satisfied, as I hope he may be, that there is room for doubt on the point, perhaps he will before the Report stage agree to insert the necessary words.
    The DEPUTY-CHAIRMAN: I must point out to the hon. Member that if these words are accepted they will not read.
    Mr. GLYN-JONES: I quite understand that it will be necessary to move a further Amendment.
    Mr. McKENNA: I quite admit that the language of Revenue Clauses is not usually simple, but the explanation here is quite clear. The first part of Clause 2 deals with the additional Customs Duties payable on immature spirits. Then there is a proviso which discharges the additional duty in respect of certain articles. That proviso is in two parts. The first part (a) says that the additional duty—that is the Customs and Excise Duty—shall not be charged on certain "mixtures, compounds of preparations." So far as the Customs Duty is concerned, it is quite easy to let off the additional duty on importation, but, so far as the Excise Duties are concerned, this Clause (a) will not let them off, because the preparations when made in this country are made with spirit which has paid duty, and which would have paid, consequently, under the first part of this Clause, the additional duty. Hence, in practice, while (a) says the additional duties under this Section shall not be charged on certain mixtures, it can only in fact relate to the Customs Duties. We have, therefore, a second Clause (b), which deals with the Excise Duties. My hon. Friend's explanation of the meaning of the Clause is quite simple, and, as he has given it, it is the correct explanation. The additional duties under this Section are not to be charged on certain mixtures, compounds, or preparations which are defined in the rest of the Clause. This relief was given in response to arguments addressed by my hon. Friend to my predecessor, who, however, gave relief which went beyond the arguments of my hon. Friend. We propose now, in a subsequent Amendment, to cut down the relief to the precise point which my hon. Friend intended, and to limit it to those mixtures, compounds, or preparations which are in fact being used for medical purposes. The effect is that all mixtures, compounds, or preparations which are used for medical purposes will, on importation, not pay the additional duty, and, further, all medical preparations and compounds used for medical or scientific purposes will not pay the additional Excise Duty under proviso (b). That is the whole meaning of this Clause. It is

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    really quite simple, and with great respect to my hon. Friend I suggest that his Amendment is not necessary. I hope in these circumstances he will not press it.
    Sir GEORGE YOUNGER: I think the Chancellor of the Exchequer has taken a very wise course indeed in restricting the extremely wide words of this Clause. I doubt, however, whether he has gone far enough. He has used the words "medical purposes." How is it proposed to define those words? There are all sorts of wines and other medicated articles—con-coctions of a most villainous kind, which are said to be for medicinal purposes. Are they to be included?
    Mr. McKENNA: That can be dealt with in the next Amendment.
    Mr. GLYN-JONES: I can assure my right hon. Friend that this Clause is not clear at any rate to the trade. The right hon. Gentleman says it refers to the additional Customs Duty. The Excise does not affect imported articles. If the right hon. Gentleman will look at these words, he will find that, under this Section the additional duties are set out as Customs and Excise Duties. All I want from my right hon. Friend is an assurance that between now and the Report stage, if he is satisfied there is any ambiguity here which may cause trouble to the trade, he will take steps to make the words quite clear.
    Mr. McKENNA: Certainly.
    Amendment, by leave, withdrawn.
    Mr. McKENNA: I beg to move, in paragraph (a), after the word "manufacture" ["preparation or manufacture"], to insert the words "if the mixture, compound, or preparation is one which is recognised by the Commissioners of Customs and Excise as being used for medical purposes."
    Mr. GLYN-JONES: I beg to propose, as an Amendment to the proposed Amendment, after the word "recognised," to insert the words "by an advisory body representing medicine, pharmacy, and the Commissioners of Customs and Excise appointed."
    I want to move this because it is quite clear the Clause does not say who is to decide what is or is not a medical purpose. However expert the Commissioners of Excise may be,
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    it is clear cases will arise when they will want somebody to assist them in reference to this one point. It might be said, for instance, that everything in the British Pharmacopoeia is an article used for medicinal purposes, and, therefore, ought to be exempt. But who is to decide that? If my Amendment is adopted, instead of leaving the decision to the Commissioners of Customs and Excise, they will have the advice of some body which represents medical men and the pharmacists, as well as the Revenue side. I have no doubt the Chancellor of the Exchequer will tell me that it is the intention of the Department to seek some such advice, but I think it is important this House should see that it goes to a properly constituted body for that advice, for one often finds that people who may have particular interests to serve secure the ear for the time being of a particular official who may be perfectly bonâ fide and yet accept the advice of the expert who has that special interest to serve. It surely would be much better to say in the Bill what the advisory body shall be. Let us see that it consists of representatives of medicine and pharmacy, as well as of the Commissioners. We have a precedent for that in connection with the Insurance Commissioners, who have a large number of technical questions upon which they want advice, and, under the Act, an advisory body is appointed. I quite admit that that body is a very large one, and a large body may not be the best body that can be devised. I therefore do not stipulate for any particular number. You may have a small number if you choose, but I do suggest the House should see that the Commissioners do not take an arbitrary view of what is to come within these exemptions and should have at their back some authoritative body, representing medicine as well as themselves.
    Sir G. YOUNGER: How is it proposed to define the words "medical purposes"? I submit that they do require some further definition. One must remember that in the Bible St. Paul told Timothy to take some wine for his stomach's sake. Are the inventors of the various concoctions to which I have already referred to say that they are to be taken for the stomach's sake, and is that to be deemed to be a medicinal purpose?
    Mr. McKENNA: The Amendment as it, now stands would make the Commissioners of Customs and Excise final arbiters of

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    what is to be properly described as a medical preparation. My hon. Friend raises a question whether the Commissioners of Excise are competent to be the final authority upon this very important medical point. I quite agree with him that, without the assistance of well-trained advisers they would not be competent. I do not think the ordinary Commissioners of Excise are appointed from the point of view of their medical qualification. Would it be wise, on the other hand, to accept my hon. Friend's Amendment and to insert in an Act of Parliament a particular body which at the moment appeals to him or may appeal to us as a suitable body, but which, five or ten years hence, might be most unsuitable? I ask my hon. Friend to accept my assurance that we will set up and consult a body which will not be a statutory body, but which will be a properly qualified medical body to advise the Commissioners of Customs and Excise what preparations may properly be described as medical preparations.
    Mr. JONATHAN SAMUEL: You are setting up another advisory committee.
    Mr. McKENNA: No, we are not setting up a statutory advisory committee, but we will take steps to see that the Commissioners of Excise are properly advised as to what is or is not a medical preparation, and I hope, under these circumstances my hon. Friend will not press this Amendment.
    Sir T. WHITTAKER: I am a little uneasy about this matter. Reference has been made to a number of concoctions which have been sold—"Wincamis," "Hall's Wine," and a number of preparations which are advertised very widely—as medical and as medicines, but which do contain somewhere about 20 per cent. of alcohol. In my judgment they are most deleterious preparations, the use of which ought to be discouraged in every way. They are really very strong liquor being sold under the name of medicine. [An HON. MEMBER: "By chemists?"] Yes, by chemists. I am not at all satisfied that they would be excluded by these words, nor am I clear as to whether the decision of the Commissioners of Customs and Excise would exclude them. I do not know whether the people who sell them would have the power to appeal to the Law Courts. That is a matter of law upon which I cannot express an opinion. We all know that these things are advertised
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    and are sent out on the authority and with the support of a large number of medical men. The last thing we want to do is to relieve these preparations from these duties. I am rather anxious on that point.
    Mr. GLYN-JONES: The wines referred to by my right hon. Friend are not touched by the Bill and are quite outside it. This Bill only deals with spirits.
    Mr. McKENNA: Immature spirits.
    Mr. GLYN-JONES: The Clause deals only with spirits, while all the articles referred to come within the category of wines, and nothing in the Clause touches them in any way. In answer to my right hon. Friend's appeal that I should not press the Amendment, it is quite clear that he himself admits the necessity for expert advice. I understand him to say that he will see that a small body, not a statutory body, will be set up which will be representative of the interests named in my Amendment. If that is so, I see no reason to press the Amendment. I would, however, say to the right hon. Gentleman that he is wrong if he thinks we are going to get a Bill that will not want altering for ten years. He says that the advisory body might want altering in less than ten years. I can tell him that there are many things in this Bill which will require altering long before ten years. Personally I should have preferred a statutory body being set up in one year's time, and if next year it was not wanted, it could be altered. In view of the right hon. Gentleman's assurance I will not press the Amendment.
    Amendment to proposed Amendment, by leave, withdrawn.
    Mr. RAWLINSON: I doubt very much whether this Clause will carry out what was intended in the Debate we had upon the matter the other night. We had instances given of preparations, such as hair oil, which requires spirits in small proportions but which could hardly be said to be used for medical purposes. I hope the Government will look into the matter and see that all classes of manufactures dealt with in the Debate the other night come under the words "medical purposes." I rather support what was said by the right hon. Gentleman opposite (Sir T. Whittaker). My hon. Friend next me (Sir G. Younger) has quoted the scripture for his own purposes upon this point.
    Sir G. YOUNGER: Why not?
    Mr. RAWLINSON: There is a precedent for another person doing the same thing under the same circumstances.
    Mr. LEIF JONES: That was not a doctor's prescription.
    Mr. RAWLINSON: I remember the hon. Gentleman pointing out on another occasion that that quotation might have meant that the wine was for outside application only, therefore, it does not prove his case at all. I do not think much attention should be paid to that point, or that this Bill will deal with the wines to which the right hon. Gentleman opposite and my hon. Friend object and which are used for medical purposes. A small tax upon the amount of spirit contained in them is not likely to stop their use in any way, and it is no use altering the Clause for the purpose of dealing with them. If their use is to be stopped, and I agree as to the desirability of stopping it, the matter will have to be dealt with by legislation of some other kind.
    Sir J. D. REES: Would not port wine come within these words? It is, in point of fact, as drunk in this country a mixture, compound, or preparation. It is also used for medicinal purposes, and is one of the best medicines in the world. So far as I understand these words they do not cover port in the wood, as you drink it in Portugal, but they would apply to all ports sent over to this country, and it is very well known that people get into the habit of drinking their own pet port, which is well known to be a mixture or preparation which is made by the wine merchants out of different ingredients, not all of them being port wine, but other ingredients which produce a particular wine suitable to the taste of the particular customer. I submit, in all seriousness, that these words will cover port wine.
    Mr. McKENNA: I think, if the hon. Gentleman will look at the words of the Clause, he will see that the point is made quite clear. It says
    "mixtures, compounds, or preparations which on importation are charged with duty in respect of the spirit contained in them."
    How are they charged? This is a Clause which deals with duties on immature spirits. The port wine he refers to is charged as wine and not as spirits. I will, however, inquire further into the point, but, as I am at present advised on the subject, there is no confusion between the two.
    Question, "That the words, 'if the mixture, compound or preparation is one which is recognised by the Commissioners of Customs and Excise as being used for medical purposes,' be there inserted," put, and agreed to.
    The CHAIRMANcalled upon Mr. McKenna—
    Sir J. D. REES: On a point of Order. Inasmuch as the Amendment which the Chancellor of the Exchequer is about to move presupposes the acceptance of an Amendment at the end of the Notice Paper which creates Part III. of the Schedule, to which the Amendment relates, should not my Amendment take precedence for the reason that this Amendment does not satisfy its requirements?
    The CHAIRMAN: The hon. Member has handed in a manuscript Amendment to come at the end of the Clause which is an alternative proposal to that made by the Government. Of course, if the Government are defeated on that proposal, I shall call on the hon. Gentleman.
    Sir J. D. REES: Seeing that that is not quite probable, would it not be reasonable to take my Amendment first?
    The CHAIRMAN: Where there are two Amendments at the same place, it lies with the Chairman to decide which shall be taken first.
    Sir J. D. REES: For that reason I submit—
    The CHAIRMAN: It is customary to give precedence to the Chancellor of the Exchequer over a private Member.
    Sir J. D. REES: I submit there is reason, apart from the superior position of the Chancellor of the Exchequer and because of the merits of the case, why my Amendment should come first.
    The CHAIRMAN: On the hon. Member's submission I have given my decision the other way.
    Mr. McKENNA: I beg to move, at the end of the Clause, to add, "and
    (c) The additional duties under this Section shall, in the case of blended spirits, be subject to the modifications specified ill Part III. of the Schedule of this Act."
    If hon. Members will turn to the Amendment Paper, they will see the modifications dealing with Part III. of the Schedule,

    713
    and I do not think it is necessary to read them through. What we propose is that spirits blended in bond after to-morrow cannot be let out of bond until the youngest spirit in blend is three years old. That is to say, that anybody who blends after to-day, if he blends the spirit in bond, cannot let it out of bond unless the youngest spirit in the blend is three years old. The age will be the age of the youngest spirit for future blend.
    Mr. R. McNEILL: Regardless of proportion?
    Mr. McKENNA: Yes, in future. That does not relate to what is blended now in bond, but to the future. Anybody who blends knows he must not blend with immature spirits, or, if he does, he must keep it in bond until the youngest spirit is three years old. Existing blends of whiskies cannot be taken out of bond until the youngest spirit is two years old. When we remember that the sale of immature spirits under two years old is prohibited, that proposal will not be unreasonable. Where the youngest spirit is between two and three years old, for this year we propose that the blend may be taken out of bond and sold without additional duty—that is to say, we let off the additional duty in the case of existing blends where the youngest spirit is between two and three years old. It is a somewhat technical matter, and in the presence of hon. Gentlemen who understand the matter extremely well, I hope this may be regarded as reasonable in view of the difficulties of the blender.
    Mr. R. McNEILL: In the case of existing blends, how is it proposed to ascertain the age of the youngest spirit involved in the blend?
    Mr. McKENNA: It is all on record.
    Mr. R. McNEILL: Is that in the case of existing blends?
    Mr. McKENNA: Yes, it is all on record. The existing blends will be treated more favourably than future blends. Existing blends may be sold without the payment of additional duty where the youngest spirit in the blend is less than three years, but more than two years old.
    Sir G. YOUNGER: I do not know how far this proposal will meet the difficulties that have been placed before myself. I understand that in a large number of cases where whiskies are blended that
    714
    the blenders have been in the habit of using a very small percentage, indeed, of newer spirit, not the immature spirit of which we have heard, but spirit about a year old, in order in some kind of way to break the blend, I suppose to put sting into it. The difficulty which arises is that very fine whiskies which were blended before the Bill was introduced placing the embargo on immature spirits will not be allowed to be sold at all, because there is a portion of whisky under two years old in that blend. The right hon. Gentleman is not thinking of that case at all; he is still preventing these blends from being sold if there is any whisky at all in the blend under two years old.
    Mr. McKENNA: That is so.
    Sir G. YOUNGER: I do not know how far his advisers have told him that that will meet the difficulty. I cannot tell that myself, and I do not suppose anyone here knows anything about it. A great many complaints have been brought to me about the hardships in the case of blends made before the Bill was brought in. There can be no hardship in future, because everyone knows the conditions regarding immature spirits.
    Sir J. D. REES: I beg leave to differ with the hon. Baronet (Sir G. Younger). There will be difficulties and injustice in regard to blends made subsequently to 17th June. As I understand this proviso, it does not give such relief to the whisky trade as blenders expect and desire.
    Mr. McKENNA: It will be very difficult for me to determine what is necessary in order to meet the reasonable claims of the trade. I would suggest that the Amendment I have put down be accepted now and if on examination hereafter it is found that the trade is dissatisfied, representations might be made to me as to meeting them, if necessary, on the Report stage, pf course, it must not be understood that I am giving any undertaking that I can alter the existing Amendment, but I shall be quite ready to listen to arguments which hon. Members may not be ready at the moment to deliver on the subject. I shall be glad to hear privately between now and Report stage any representations which they may have to make.
    Sir J. D. REES: I have an Amendment down that the average age shall be taken as the basis for taxation.
    Mr. McKENNA: No, clearly I could not accept that.
    Question, "That those words be there added," put, and agreed to.
    Sir J. D. REES: I have another Amendment
    The CHAIRMAN: The hon. Member's Amendment conflicts now with what the Committee has already decided.
    Sir J. D. REES: I should like to make a few remarks on the Amendment.
    The CHAIRMAN: Two conflicting proposals cannot be put in the same Clause. When the hon. Member comes to the Schedule he will have an opportunity of moving the Amendment to the Government words if they do not meet with his satisfaction. I think that is the correct way of arriving at the object he has in view.
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    Sir J. D. REES: I cannot pretend to be an expert in whisky, though a moderate drinker thereof myself. I understand you to say that there will be a discussion on Part III. when it is moved, but practically the Committee by adopting the right hon. Gentleman's Amendment, accepts Part III. When the Immature Spirits Bill was passed it was regarded as a very severe addition to present taxation, and it was passed by a reluctant House at the urgent instance of the Chancellor of the Exchequer, who seemed to value each bit of the wreck of his original proposals like the owner of the Sibylline books, who charged more and more for the remaining volumes as each one was destroyed. I am not referring to what has happened up till to-morrow. Take the case of what is to happen in future in regard to assessing the age of a blend for the purpose of taxation, because that is what concerns the trade. That is the real point of interest. If a blend now contains even the smallest amount of immature whisky which is liable to the higher charge of 1s. 6d., the whole blend is taxed at that rate instead of the average of the whiskies employed, which obviously is the only fair procedure to adopt. Why, because there is a small quantity, a mere liqueur glass, or what you like, of immature whisky in the blend, is the whole amount to be charged at the higher price as if, as is the case for the Government, which is unaccepted, I believe, by the heart of the House, it makes the whole
    716
    thing an injurious compound and on that ground liable to the higher taxation?
    I submit—and I believe really it is just as well to do it now as when the final Amendment is being put—that the right hon. Gentleman should take into account just dealing with those whose business is concerned in making these blends, and that the fair thing to do would be to take the average—to say so much whisky of such an age and so much of another age, and with the help of those experts in mathematics who are always at his disposal he could easily strike from that the proper average of taxation to be levied upon the whole blend and not exact from the unfortunate blender the taxation which would be due on the little leaven which he holds leavens the whole lump, or parcel, of whisky concerned. This is a case which really requires treatment. This is a very unjust proposal. Perhaps it is out of the question to suggest that the whisky blender should receive justice. Nevertheless, I think there is no ground whatever for taxing the whole hogshead of whisky at a certain rate because it contains a small amount of immature spirit. The only just thing to do is to take the ingredients of that hogshead, or whatever the amount be, to average it and to tax according to what I believe really was the intention of the House. There is no provision in the Bill whatsoever dealing with this point. There is nothing providing in what manner, in regard to the ingredients and their age, the taxation should be levied. It is for that reason that I want to get something into the Bill in the words of my Amendment, and at any rate, if that is impossible, as we do not divide the House now and do everything that the Chancellor of the Exchequer wants, which ought to make him anxious to listen to what others want, I suggest that the least he can do is to state that he will give instructions to his Excise authorities to levy taxation upon the basis which I have explained.
    Mr. R. McNEILL: I agree with the remarks of my hon. Friend. I do not pretend to be an expert any more than my hon. Friend (Sir G. Younger) on this matter, but at the same time it seems to me a very much fairer principle that the taxation should be based upon the average of the blend rather than upon the age of one ingredient, which may be a very small' proportion of the whole. The right hon. Gentleman rather brushed aside that suggestion and seemed to think that it was

    717
    impossible. There may be some technical reason for it being impossible, but he has not explained it to the Committee, and I hope when we come to the discussion of the Schedule at the end of the Bill he will be in a position to explain to the House why it is impossible to charge the tax upon a principle which is so obviously a much fairer principle than that which he contemplates being placed upon the age of a single portion of the whole.
    Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.

    CLAUSE 3.—(Repayment of Proportional Part of Duty on a Liquor Licence in Cases where Business is Discontinued.)
    Where the holder of any of the manufacturers', wholesale dealers', or retailers' licences specified in the First Schedule to the Finance (1909–10) Act, 1910, satisfies the Commissioners of Customs and Excise that the business for the purpose of which or in connection with which the licence has been granted has been permanently discontinued, he shall be entitled to surrender the licence and to obtain from the Commissioners repayment, or so far as the duty has not been paid remission, of such part of the duty for the year as bears, to the full amount of that duty the same proportion as the period of the licence unexpired at the date of the surrender bears to a whole year:
    Provided that a person shall not be entitled to obtain any repayment or remission of duty under this Section where the business has been discontinued owing to the disqualification either of the premises or the licence holder by reason of the conviction of the licence holder for some offence.
    Question, "That the Clause stand part of the Bill," put, and agreed to.

    PART II
    (1) Income Tax for the year beginning on the sixth day of April, nineteen hunderd and fifteen, shall be charged at the rate of two shillings and sixpence, and Super-tax shall be charged, levied, and paid for that year at double the rates mentioned in Section three of the Finance Act, 1914.
    (2) All such enactments relating to Income Tax, including Super-tax, as were in force with respect to the duties of Income Tax granted for the year beginning on the sixth day of April, nineteen hundred and
    718
    fourteen, shall have full force and effect with respect of any duties of Income Tax hereby granted:
    Provided that—

    (a) Sections four and six of the Finance Act, 1914, which confer relief with respect to earned income and small incomes respectively, shall have effect as though the rates mentioned in those Sections were doubled; and

    (b) Sub-section (1) of Section twelve of the Finance Act, 1914 (Session 2), shall not have effect with respect to any duties of Income Tax hereby granted.

    (3) The annual value of any property which has been adopted for the purpose either of Income Tax under Schedules A and B in the Income Tax Act, 1853, or of Inhabited House Duty, for the year ending on the fifth day of April, nineteen hundred and fifteen, shall be taken as the annual value of such property for the same purpose for the next subsequent year; provided that this Sub-section—

    (a) so far as respects the duty on inhabited houses in Scotland, shall be construed with the substitution of the twenty-fourth day of May for the fifth day of April; and

    (b) shall not apply to the Metropolis as defined by the Valuation (Metropolis) Act, 1869.

    The CHAIRMAN: The Amendment standing in the name of the hon. Member (Mr. D. Mason) and the hon. Member (Mr. Snowden) is out of order, because it increases the charge, and that cannot be done without a proper Resolution in Ways and Means.
    Mr. D. MASON: I was rather dubious when I put the Amendment on the Paper that it might not come within your ruling. Should I be in order in discussing the question of the sufficiency of the revenue derived from Income Tax and Super-tax when the whole Clause is put?
    The CHAIRMAN: I do not quite gather what the width of the hon. Member's proposed speech may be. It will be in order, on the Question that the Clause stand part of the Bill, to discuss whether the Income Tax contained in the Clause is sufficient or not.
    Mr. PRINGLE: I beg to move, in Subsection (3) after the word "respects" ["(a) so far as respects the duty"], to insert "(1) Income Tax under Schedules

    719
    A and B in the Income Tax Act, 1853, in Scotland shall be construed with the substitution of the fifteenth day of May for the fifth day of April, and (2)."
    6.0 P.M.
    This proviso as it at present stands provides that in Scotland Inhabited House Duty shall be reckoned from the 24th May to 24th May, instead of 5th April to 5th April. The object of that provision is to make the levy of Inhabited House Duty correspond with the usual removal terms in Scotland. The intention of the words which I propose to insert is to extend the same principle to Income Tax levied under Schedules A and B, under which Income Tax is payable on profits arising from land. This Amendment is really the property of my right hon. Friend (Mr. Scott Dickson). Under the present circumstances, which the House well apprehends, he does not desire to move it, but I think I may, on behalf of the Committee, congratulate my right hon. Friend on his prospective appointment, which we all regard as the only universally popular thing that the Coalition has done. The Amendment has been suggested by the law agents of Scotland. A memorial in its support was sent to the late Chancellor of the Exchequer by the Society of Writers to His Majesty's Signet, the Society of Solicitors to the Supreme Courts of Scotland, the Faculty of Procurators in Glasgow, and the Institute of Accountants and Actuaries in Scotland. In the memorial it was pointed out that as a matter of practice the law agents and accountants in Scotland had agreed with the Inland Revenue authority to reckon Income Tax upon this basis. It has been found practically convenient to do so, and all that the Amendment proposes is to make statutory what has been the practice in the past. It is held that if this concession is made it will be found a matter of great practical convenience alike to the authorities and to all those who are interested in the finance of land in Scotland. I understand that some negotiations have already taken place between my right hon. Friend and the Treasury in this matter, although no final decision has been arrived at, and I take this first opportunity of bringing the matter to the attention of the new Chancellor of the Exchequer in the hope that, bringing his fresh mind to bear upon it, he will grant the concession which is asked for in the course of his term of office.
    Mr. McKENNA: As my hon. Friend knows, the Amendment which he has moved is not exactly new. The only new point of the whole proceedings is that I am new to my office. I hope, therefore, that he will allow me a little time to consider the full scope of his Amendment and to make inquiry as to what the exact purpose may be. I would like to be quite sure that there is nothing more in the words he uses than upon the face of them they appear to bear. I understand that the Amendment is that for the purpose of valuation only the Income Tax year shall reckon from the 15th May to the 15th May, but that, so far as the liability to pay taxes is concerned, the liability will be from the 5th April to the 5th April. I would like to inquire further into the matter, and I hope my hon. Friend will be content to accept an assurance of good will on my part, and that with that assurance he will not press the Amendment.
    Sir G. YOUNGER: It is difficult to follow the mutter because it is so intricate. Am I correct in thinking that the hon. Member, in proposing this Amendment, is trying to get over the difficulty which has arisen in Scotland in regard to the allowance for the Income Tax on interest due on 15th May, payable on bonds, and which has never been allowed by the faculty in Glasgow, or, so far as I know, by the solicitors in Edinburgh?
    Mr. McKENNA: If he means that, he means something much more than I understood him to mean. That shows the necessity of my inquiring further as to the precise meaning of the Amendment before I can consider it. I must apologise for having brought the Bill on so hurriedly, but my hon. Friend will understand the circumstances. Not having had notice of the Amendment, and not knowing its full purport, it is difficult to accept it.
    Sir G. YOUNGER: I hope we may have this matter settled. I do not think it is legal for these people to act as they do. Take this year. From whatever date in April the 2s. 6d. tax came into force, that was not calculated at all in the payment of interest on mortgages due on 15th of May. The 1s. 8d. rate was taken, and no allowance was made for the fact that a certain number of days were under the 2s. 6d. rate, I do not know why that is done. It must be a practice which is convenient enough when the rate is down, but very inconvenient when the Income Tax goes up. I am glad my hon. Friend has brought the

    721
    matter up, and I hope the right hon. Gentleman will go into the matter and see what can be done.
    Mr. PRINGLE: I think the circumstances are as stated by the hon. Baronet. The practice has been in existence, and it has given rise to some difficulty, and it will be of great advantage if the matter is cleared up. However, the assurance given by the Chancellor of the Exchequer has satisfied me, and I beg leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Sir J. WALTON: Perhaps, after what happened on Monday last in regard to the Second Reading, I may be permitted to congratulate the Chancellor of the Exchequer on the unique distinction of having had the Second Reading of a most important Finance Bill carried in this House without a word either of praise or of criticism being uttered in regard to it. I rise, not because I have the slightest objection, under present circumstances, to pay 2s. 6d. in the £ Income Tax and double rates in Super-tax; indeed, if I must confess what has been brought home to my mind by what has been disclosed to us in the enormous national expenditure that we are now incurring, I am tolerably certain that no great length of time will elapse before a substantial increase will take place, both in the rate of Income Tax and Super-tax. That being so, it makes it all the more important that the House should be assured that the method of assessment adopted, especially in regard to these new special war taxes, shall be one that will secure something approaching equality of sacrifice. There is no question that in normal times the method of making the assessment for Income Tax in manufacturing concerns on the three years' average, and in the case of coal mines on the five years' average over a period of years, worked out not too unfairly. But we are not in normal times. We are in absolutely abnormal times, and therefore in order to secure something like equal incidence of taxation, I think I shall be able to show the Committee that the old method of making assessment ought to be changed, and that the assessment, especially for these new war taxes already levied, and those which I am certain will be levied in the near future, should be made on the capital
    722
    income of the year, and not on the average of a number of years. Under that plan of making assessments, those who are reaping huge profits out of the War will pay on their largely increased profits, and those, on the other hand, who are not so fortunately placed and who are hit badly by the War, will have an equitable reduction in the financial demands which are made upon them.
    After the blunder of Monday last I have taken some trouble to acquaint the Chancellor of the Exchequer—I regret to say he is not here at this moment—to a certain extent with the arguments to be advanced in favour of my idea, that the Income Tax and the Super-tax should be levied on the actual income of the year. The imposition of this enormous increase in taxation could not be foreseen, and therefore business concerns which, in the ordinary way when well managed, make provision in their accounts for the Income Tax that will become payable, cannot possibly have been expected to make provision beforehand for this doubling of Income Tax. Therefore, it comes altogether under a different category. To impose these new war taxes on an average of years, whether three years or five years, will cause a most unequal burden to fall upon people in different trades in different localities. We know that the effect of the War on the same trade in different districts—
    Mr. R. McNEILL: Is the hon. Member in order in delivering on the Motion, that the Clause stand part of the Bill, an oration which he ought to have delivered on the Second Beading? Would it not be more convenient if he reserved it to the Third Reading, and allowed us to get to business?
    Sir J. WALTON: May I explain that I am not making a speech, and that I have modified my speech somewhat on the same lines that the hon. Member would have done if he had been placed in a like situation?
    The CHAIRMAN: Certainly it is not in order in Committee at any stage to deliver Second Reading speeches. The Question is whether the Clause fixing the Income Tax for the current year should stand part of the Bill. Therefore, so far as Income Tax alone is concerned, it is legitimate to review the circumstances of the taxes for this year.
    Sir J. WALTON: Not only does this Clause state the amount of the taxes that are to be levied, but it also states the method by which the assessment will be made in each individual case. I submit, therefore, that I am well within order when I seek to show what an enormous difference arises in the same trade in different districts and also in different trades in other districts. Take the case of Northumberland. Since the War broke out the collieries of Northumberland have been worked up to date at an actual loss, I believe, in every case. On the other hand, collieries in other parts, especially the steam coal collieries in South Wales, have been reaping a rich harvest. On the one hand you have the woollen trade of Yorkshire working practically night and day and earning very large profits. On the other hand, you have the cotton trade of Lancashire very seriously affected. I may say that I am speaking to-day on behalf of large and important commercial interests in many parts of the Kingdom, and at the request of manufacturers and colliery owners and others who are vitally affected by the method of assessment provided for in this Clause. In the cotton trade many concerns have been very hardly hit by the War. It is perfectly true that in one department—the tent canvas department—they have been extremely busy and doing well; but in other departments of the cotton trade they have suffered very considerable fosses. Then, on the other hand, you have the armament works, you have the shipbuilding concerns, and you have the ship-owning concerns, all earning large profits, and largely increased profits, in consequence of the War. On the other hand, you have the pig-iron trade of the North-East Coast of England losing money, because they have been seriously affected in those trade matters upon which they are so enormously dependent for their success.
    What I submit to the Committee is this: that, in view of this enormous variation in the effect of the War upon different trades and industries, the only fair and equitable way to arrive at assessment is to make them pay on the actual results of the working of the year. I believe that in that view I have the support of the great majority of the business men in the country. It is perfectly true that some who are earning huge profits out of the War take the other view. But justice to those who have been suddenly and hardly hit
    724
    by the War demands that those who are making huge profits shall pay upon those largely increased profits. Not only do I desire that they should pay 2s. 6d. in the £ upon those largely increased profits, but we all expect and understand that the Chancellor of the Exchequer is going to levy under a graduated scale a still further charge in the shape of Income Tax in the £ on war profits. I think that that is a perfectly just arrangement and embodies the principle of equality of sacrifice on account of the War. Take especially the coal trade. Whereas the coal owners of South Wales could easily pay the 2s. 6d. in the £ Income Tax out of their greatly increased profits, on the other hand the coal owners of Northumberland will have to pay an increased charge out of capital.
    It is a misnomer in the case of works, manufactures, or collieries which are being worked at a loss, to call this Income Tax at all. Income Tax is something levied on income, and when it has to be paid out of capital it is a misnomer to call it Income Tax, because you are taxing the capital. I do not object to a tax on capital if it is levied all round, but to have some people taxed on capital and others only charged an average amount on largely enhanced profits involves a departure from the only sound principle of taxation, namely, that every man shall be taxed according to his ability to pay, which this Committee ought not to sanction. In conclusion, I would like to explain that the only provision for making any abatement is that if the profit of the year under consideration is less than the profit of that year and the four preceding years or the two preceding years, then the persons assessed can claim on the difference, but that does not meet the case of all. I would not press this point so strongly to-day were it not that I am convinced that in the near future the demands upon the taxpayers, both as regards Income Tax and Super-tax, will be largely increased, and therefore it becomes urgently necessary that we should fix it and levy it on an equitable basis.
    Mr. SNOWDEN: I am very glad to welcome the hon. Baronet who has just sat down, as a valuable supporter of a proposal which I urged a few weeks ago in the Debate on the introduction of the Budget. Indeed Socialist proposals and demands are being made so universally in this House to-day that I am beginning to feel something of a very moderate and old-fashioned individual. I do not forget that

    725
    the proposal for the exceptional taxation of war profits, which, even Tory newspapers are now agitating with a great deal of enthusiasm, was first proposed from these Benches in the early days of the War. I rise merely for the purpose of seeing if it is possible to draw from the Treasury Bench something more than the formal statement that the question of war profits is receiving the consideration of the Government. That has been done now for many months past. The late Chancellor of the Exchequer made before this House a few weeks ago a Budget statement which was most remarkable in this respect: that he made no proposal at all for meeting the heavy deficit in the national revenue. How long are we going to wait before we get a proposal of this kind? This delay, I am quite sure, is having a very serious effect.
    I do not know whether the newspapers are being prompted by the Treasury or not, but there is something of a Press campaign going on in favour of national economy and domestic economy. I listened with a great deal of interest to the speeches made in the early part of this afternoon on this question of national economy and individual wealth, and with the exception of the hon. and learned Member for Leamington (Mr. Pollock) all the speakers seemed to confine their appeals to the wage-earning classes. I am reminded by the remarks which were made of an incident which came under my observation a good many years ago. A very wealthy philanthropic lady was in the habit of giving lessons to working people on domestic economy, and upon one occasion she had been addressing an audience of working men and women and pointing out how very nourishing soup could be made by boiling bones. When question time came a man rose and said that lip had been very much interested in what the bountiful lady had said, but when she was speaking about the nourishing soup that could be made from bones it occurred to him to ask what had become of the meat that belonged to the bones. That occurred to me this afternoon when I was listening to these appeals to the working people to practice greater thrift and economy. I deplore as much as any man can deplore wasteful expenditure on the part of working people. I deplore it all the more of course if, when every penny of the working people is spent to the very best possible advantage, that income is not sufficient to provide enough of the necessaries of life and the decencies
    726
    and comforts of life. I want economy of that sort. In regard to thrift I would like to have heard—
    The CHAIRMANrose—
    Mr. SNOWDEN: I am very sorry if I have wandered from the subject, but this is simply leading up to the point that this, delay on the part of the Treasury on the question as to what they are going to do in regard to meeting the national deficit is having a very bad effect, because people do not know whether they ought to be saving or not in anticipation of the Government making a call on their savings. However, I will leave that point. The-main point dealt with by my horn. Friend, who has just sat down was in regard to the three years' average of the Income Tax. The Income Tax law is full of anomalies and injustices. Now, we may tolerate these when the Income Tax rate is low, but they become an intolerable burden when the Income Tax rate is very high. Therefore I think that we must face this question. One of the gravest of injustices in the present system of levying the Income Tax, as bearing upon particular classes of the community, is this system of the three years' average and the five, years' average. I see no way of getting at what all of us appear to be anxious to reach, namely, the exceptional taxation of war profits, except by the abolition of this three years' average. I do not believe that it would be a practical question—it would be impossible—to deal with the special taxation of war profits by trying to find them out and putting special taxation upon them. Some general principle will have to be laid down, and the first step to that will be the abolition of the three years' average and the assessments of the profits upon the actual income of the year.
    This, I think, is specially necessary in the case of farmers' profits. My hon. Friend referred to the profits of armament manufacturers and certain branches of the coal trade. He made no reference to the enormous profits which are being made by-some farmers to-day, profits which in percentages are much higher than the profits of armament manufacturers and, I believe, even of the khaki cloth manufacturers. Under our present system no farmer pays a penny Income Tax if his rent be less than £480 a year. That is nothing short of a scandal. The landlord is supposed by the law to gain three times as much for permitting the farmer to use and work the

    727
    land as the remuneration of the fanner himself. We all know that a farmer who pays a rent of £480 a year is making an income of more than £160 a year. The price of wheat has increased considerably. The prices of oats and barley have also increased. Indeed, I believe that owing to the larger output of oats the farmers are deriving a great deal more through the increased price of oats than through the increased price of wheat. Unless this system is changed in two respects—in the first place, by the abolition of the system of assessment of farmers' income under Schedule B and placing them under Schedule D, and, in the second place, in assessing the farmers' income upon the profits which they have actually made—the farmers are going to pocket money to which they have no moral right and which has been made out of the necessities of this great national crisis. I especially commend these considerations to the Chancellor of the Exchequer, and I do hope that when the proposals for raising this additional revenue are put before the House we shall find that the long consideration of this matter by the Government has not been in vain and that practical proposals will be submitted to the House.
    The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu): The actual proposal before the Committee is to leave out the Section of the Bill which reimposes the Income Tax. I do not suppose that that proposal on its merits is worth a moment's discussion, because everybody is well aware of the fact that we cannot do without the Income Tax for this year.
    Sir J. WALTON: It is to be brought back with the system of assessment altered.
    Mr. MONTAGU: I agree; but that is not the actual proposal made. What the hon. Baronet really wants to do, instead of abolishing the Income Tax, is to charge it on this current year. I would suggest that, so far as this year is concerned at any rate, his proposals are almost hopeless, for we should lose on this year in Income Tax under Schedule D, Super-tax, and the other Schedules something like £100,000,000 sterling, to be got back at some future date when we should know what the income of the current year was, and I am very much afraid that we should never catch up with these tremendous arrears.
    Sir J. WALTON: Perhaps my tight hon. Friend will allow me to explain that my intention was that the income of the year ending the 6th of April last should be taken as the amount on which the Income Tax for the year ending the 6th April, 1916, should be charged.
    Mr. MONTAGU: I took down the words which he used. He said "the current year." Therefore, to get rid of the three years' average and to charge on the current year, is admittedly a thing which it is impossible to ask the Government to undertake. I come to the question of the three years' average, and I would suggest first of all, that it will be admitted in all quarters of the House that this is not the time to explore radically the Income Tax Acts. One sentiment which I have heard in the House, and which receive a good deal of assent, and in which I agree with the hon. Member for Blackburn, is that the Income Tax Acts are full of anomalies. They work unequally; they work unfairly, and they require revision in almost every one of their provisions; and, before the outbreak of the War, it was the intention of the Government to appoint a Commission the object of which was to do this work which is so urgently required, and as to the necessity of which we have fresh evidence every day. But you cannot explore the Income Tax Acts in the middle of this War. Men's minds are set upon other things. Men, having the knowledge, have not the leisure to give to this exploration, and, if there is to be a millennium, I think it must be deferred until we have settled with the Germans. Therefore, I think we must be content with stop-gap and make-shift expedients in regard to the Income Tax and Super-tax. Expedients were explained to the House by my right hon. Friend the Home Secretary, expedients which I need not explain again now, beyond merely saying that we intend to ask the House to renew those expedients for the present financial year.
    After all, the three years' average has worked very well for many generations. If you did without it you would find great difficulty in estimating what your revenue was going to be from year to year. It would work at one moment very unfairly to the taxpayer, and at another moment very unfairly to the Revenue. After all, the taxpayer gets the advantage of a bad year which comes in the three years' I average just as the Revenue gets the

    729
    advantage of a good year when in comes within the three years. But the real underlying motives of the hon. Members who have spoken in support of this Amendment is to urge upon the Government the necessity of doing something to tax War profits. I do not believe that the expedient of doing away with the three years' average and starting a new arrangement would be a good one. I do most heartily agree with those hon. Members who have spoken in this Debate that it is necessary and that it is just that we should find, and find soon, a means of taxing profits made during the War. War is a time of great national disturbance and emergency, and when everybody is being asked to do something to help us to carry it on in the way of personal or financial sacrifice, there is something repugnant in the idea that there should be individuals and firms who are making more than they made last year, and who are not subject to special and substantial taxation. Therefore, for the reasons I have given, I cannot assent, and I hope the House will not assent, to the Amendment to leave out Clause 4. I hope that at some very early date we shall be in a position to give Parliament a watertight proposal for getting at the extra income made during the War and for taxing it substantially.
    I would suggest to the hon. Member for Blackburn that it is desirable that the country should know that it is our intention to do that; but they cannot escape for a month or two, and we may have to wait for a month or two. It is not such an easy matter as it appears on paper. It is difficult to distinguish profits made actually in the War; it is difficult to distinguish between profits made with increased capital liabilities and actual net profits; and, above all, it is difficult to distinguish between profits which are due to expanding yield of capital recently invested and profits due to the exceptional necessities of the War. Our delay is simply caused by our desire to make a scheme which shall be watertight, and in the course of the next few weeks I hope the hon. Member for Blackburn will give us the benefit of his assistance and advice in doing our best to frame a scheme to meet the objects he has in view. With regard to the farmers, I believe the first thing a Committee of Inquiry would turn their attention to would be the peculiar position of the farmer. A rough and ready mode of calculating a farming business is to divide the profits into three parts—one representing
    730
    rent, another labour, and another profits. I suggest that the trouble in assessing farmers under Schedule D is caused by the extreme difficulty many farmers feel in keeping accurate accounts. As a representative of an exclusively agricultural district I suggest that it is by no means certain that farmers, taken as a whole, have been making large profits out of the War. Many farmers have been losers, and many of the profits that have been made have gone into other hands, and not into the pockets of the farmer. I do not think it is necessary for me to appeal to the House to pass Clause 4, and we ought not to get rid of the three years' average, and, as the hon. Member for Blackburn will be glad to know, we shall speedily find some means to tax increased profits made during the War.
    Mr. CHAPLIN: I am sure that the Committee will generally agree with the right hon. Gentleman when he says that any revision of the Income Tax Act at a time like this is entirely out of the question, and we have, in my humble judgemnt, no alternative whatever but to accept it as-it stands, and to accept it with all the burdens that it imposes at the present time, although some particular incomes over £8,000 a year are subject to an Income Tax of no less than 5s. 2d. in the £. This is an enormous burden, no matter upon whom it falls, and it is especially a burden on the owners of great estates, of which infinitely less goes into their own pockets, and whose real income is infinitely smaller than that on which they are compelled to pay—smaller to a degree,, of which many hon. Gentlemen on that side of the House, I am perfectly certain, have no idea. Notwithstanding that, I say we are bound to accept it, even although the charge upon those to whom I have been referring is now in many cases 5s. 2d. in the £. Why is that? It is because the Income Tax during the last few years has been put to purposes against which this House and Parliament has been warned over and over again in days gone by by the greatest financiers this country ever knew. I remember that only last year I had occasion to make a few remarks in reply to the proposals of the then Chancellor of the Exchequer, who is now the Minister of Munitions for War. I took the opportunity—it was in May or June last—of reminding him of passage after passage from the speeches of Mr. Gladstone himself, in which he called upon the House, in days gone by, to remember what

    731
    the Income Tax has done for us in great emergencies, and what, if you dealt with it as you ought to do, in reserving it for the case of war, it would do again in the future. I remember pointing out how the Income Tax was being piled up higher and higher, day by day, for purposes for which, in the wisdom of Parliament, it was never intended in former days.
    Who knows in this disturbed condition of the world that we may not be confronted with a great war again? Practically within four months of my making that statement to the late Chancellor of the Exchequer from this box we were landed into the immense struggle in which we are engaged to-day.
    I had hoped that it would not be necessary for me to intervene in this Debate at all, but when I came into the House, after a short absence, the hon. Member for Blackburn was making his speech. If I have misunderstood him he will forgive me, but as far as I could gather—I did not bear very distinctly—the hon. Member was making proposals to the House for further and definite taxation upon farmers at the present time. I am quite sure of this, that I should wrong the farmers if I said that they were not prepared to pay, like anybody else in this country, a fair proportion on the profits they were making. But I must repeat what I pointed out here the other night, and of which many hon. Gentlemen seem to be in perfect ignorance of the fact, that although it is perfectly true that the prices of corn of all kinds have been abnormally high and that not long ago wheat was making 67s. a quarter, and barley and oats have made high prices in the same way as well, they forget, or they do not know, that a great many farmers as a rule are extremely short of money. The hon. Member who has made his proposals to-night apparently has entirely forgotten the period of enormous depression which ruined half the farmers of this country, and from which the other half have never really recovered their old position.
    Something has been said about rents and the division of profits which arise from the land between the tenants who occupy the farm and the labourers who till the land. Everybody who knows anything about farming knows that far and away the largest amount of money is spent on labour, and that that is the great outgoing of all others on the farm. It is only after that is done that the profits, whatever
    732
    they may be, between landlord and tenant come into being at all. The farmers, and those men especially who suffered so heavily in the past, when the harvest is over always had, or the great majority of them, to thresh their corn and put a portion of it, and perhaps a very large portion of it, on the market as soon as ever they could. When they were pursuing that ordinary practice this year the prices were nothing remarkable at all. Wheat was then making between 26s. and 27s., and 32s. and 33s. per quarter. Some districts were making rather more, and some were making rather less. Not only was that the case, but there was not a good yield, and their produce depends perhaps more on the yield sometimes than on the actual price So it would be an entire mistake to say that up to the present time the farmers, taking them aw a whole, as a class, have made any enormous profis at all. Some of them, perhaps, who have been well-to-do, and who were able to wait when they saw wheat rising, and were able to keep it, may have made profits, and very considerable profits too. But whatever their profits may or may not be, I venture once more to repeat that as far as the farmers are concerned, if they have made exceptional profits they will be perfectly willing to bear a fair share of the burden in common with all other classes of the community. Having heard those statements I felt bound to rise and show that there is another side to the question than that which the hon. Member for Blackburn presented, and I am deeply grateful to the Committee for permitting me to state it.
    Mr. DAVID MASON: I am sure we have all listened with great interest and pleasure to the speech of the right hon. Gentleman the Member for Wimbledon (Mr. Chaplin). There is one particular passage in that speech with which I should like to say I agree, and that was what he said with reference to the high rate of Income Tax at the time when we started this War. I fought on many occasions for economy, for the very reason which the right hon. Gentleman mentioned, namely, that in the event of a great war we would be placed at a very great disadvantage in having such high expenditure as that in which we were then indulging. If I remember aright, the Income Tax at the time of the Crimean War was 7d., and it was doubled, making it 1s. 2d. We started with an Income Tax of 1s. 3d., and the position is much more

    733
    difficult when we have to ask for an in crease from 2s. 6d. The Financial Secretary to the Treasury made a very able and clever speech, but I think he must recognise the rather peculiar difficulty of the position in which we are placed at present. When I placed this Amendment on the Paper I was rather dubious about it being in order. The right hon. Gentleman well knows that the hon. Member for Blackburn (Mr. Snowden) and myself were prevented from proposing any new taxes, because to do so would be grossly out of order. Therefore we were handicapped in initiating a discussion since we could not propose anything that might entail an increased charge. I think the right hon. Gentleman might have given us credit for the belief, and might have grasped the fact that, if there was likely to be less income from our proposal, we would have remedied that by increasing the particular Income Tax and Super-tax which we proposed should be eventually passed. What we are anxious for, and I am sure the desire is shared by the right hon. Gentleman, is to obtain an increased revenue from the Super-tax or the Income Tax, and particularly to obtain it from those who are able to supply it. The present Finance Bill which includes this Clause is, as I think the Chancellor of the Exchequer himself said, quite inadequate for the particular financial position in which we are at present placed. What is that position, and what is the proportion between our expenditure and the yield of taxation? The late Chancellor of the Exchequer estimated that if the War continued for a year the expenditure would amount to £1,136,000,000. He estimated as against that that we would have derivable from taxation—
    The CHAIRMAN: That is going far in the direction of a Second Reading speech. The hon. Member should confine himself to details.
    Mr. D. MASON: We have derivable from taxation £267,000,000, of which this Income Tax and Super-tax forms a part. Therefore I submit that we must feel that this Clause which we are now asked to pass is entirely inadequate, and that the proportion of taxation which we are going to obtain from Income Tax and Super-tax in comparison with our expenditure is entirely inadequate. The proportion of £267,000,000 as against over £1,000,000,000 of expenditure is far less than what was formerly the case. The Crimean War cost over £70,000,000, and £38,000,000 was
    734
    derived from loans, and £41,000,000 from taxes. Therefore the amount we are now deriving from taxation is not anything like sufficient for the purpose which we have in view. I should like to read a brief quotation with reference to this very important matter of increasing our taxation from an illustrious predecessor of the present Chancellor of the Exchequer (Mr. Gladstone), if it is in order to do so.
    The CHAIRMAN: The hon. Member must recollect that we are now in Committee going into details, and not into general matters.
    Mr. D. MASON: I shall not then trouble the House now with the quotation, and I must defer it probably until the Third Reading. I should like to thank you, Sir, for the generous way in which you have treated my remarks. I did feel that this particular Clause was quite inadequate for the purpose for which it was intended. I was very glad to hear from the Financial Secretary to the Treasury that His Majesty's Government are really at present considering a No. 3 Finance Bill, and I think the Chancellor of the Exchequer himself also stated that we may expect in a very short period some fresh proposals. I think possibly this discussion may have served some useful purpose by emphasising the importance of new measures being brought in, and new proposals more in accordance with the proper proportion of taxation as against loans.
    Mr. R. McNEILL: I desire to make a few observations with regard to what fell from the hon. Member for Blackburn (Mr. Snowden). With regard to the taxation of farmers, as the representative of an agricultural constituency, I entirely agree with the statement of my right hon. Friend (Mr. Chaplin) that, although undoubtedly agriculture at the present time would be in a position to pay more to the Treasury in Income Tax than has ever been the case, yet it is an entire fallacy to imagine that the farmers of this country have been making very large profits. The Financial Secretary to the Treasury observed in his speech just now that an objection to the method of taxation proposed by the hon. Member for Blackburn was that farmers had great difficulty in arriving at accurate accounts showing profits for the year, and he implied that the Treasury had not got the knowledge either. It is rather remarkable that the knowledge which farmers have not got

    735
    themselves, and which the Treasury are unable to get, is in the possession of the hon. Member for Blackburn. There is only one further observation I should like to make on that subject, and it is this: I agree also with my right hon. Friend that there is no class in this country which is more ready than the farming class to pay their just and fair share of the taxation which is necessary to pay for the War. I am quite certain that is so. We have not only had this afternoon from the hon. Member for Blackburn, but on other occasions we have had in this House remarks which were, at all events, not complimentary to the farming class. We have been told, or it has been implied in tone in speeches that have been made, that they are a very rapacious class, and that in some very nefarious way they are making profits out of the necessities of the country. On that argument I have only this to say: For seventy years or more it has been preached to the people of this country that the highest duty of any person engaged in business was to sell in the dearest market. The farming class was the slowest class in this country to adopt that teaching, and it does seem a little hard, when perhaps at long last they have accepted that theory, that the moment the dearest market is such as to give them a little more profit than they have derived during long years of distress, that the very class of politician who has most strenuously taught them that doctrine should immediately turn upon them and say that their obedience to that teaching is a proof of their depravity.
    The special object which I had in rising in this Debate was to bring quite a different matter before the attention of the Chancellor of the Exchequer, and, in his absence, before the Financial Secretary. I put a question to the late Chancellor of the Exchequer a good many weeks ago as to whether the pensions payable to the widows of officers who fell in the War would be treated for Income Tax as earned income. The right hon. Gentleman will see the importance of the point. On the system by which the distinction has hitherto been drawn between earned and unearned income I imagine that the pension payable to the widow would be regarded as unearned income, but the late Chancellor of the Exchequer, in reply to my question, said that for this purpose the pension would be treated as earned income and given the
    736
    advantage accordingly. I want to know whether as this Bill stands that pledge of the late Chancellor of the Exchequer will be carried out.
    Mr. MONTAGUassented.
    7.0 P.M.
    Mr. R. McNEILL: The right hon. Gentleman gives his assent. But surely it is a question of interpretation, and I want to be quite certain that, when the authorities come to this Clause as it stands, that benefit will be given to the pensions of which I am speaking. If it is not quite certain that that interpretation will be given to the Clause, I would ask the right hon. Gentleman to insert a special provision on Report in order that that pledge may be carried out. I am certain the right hon. Gentleman will give the matter his consideration. As the Clause stands at present, as far as I am able to interpret it, it is very doubtful indeed whether, if the question were once raised, the benefit promised to that very deserving class—a class which in future will have the deepest sympathy of Members in all parts of the House—would be given. I submit that it ought to be given in exact terms and not left to be interpreted by the judicial authorities.
    Sir ARCHIBALD WILLIAMSON: I wish to bring to the notice of the Treasury, now that we are levying the Income Tax for the year, the position of a class of the community who, I think, have been very hardly treated in the past, and to ask the Secretary to the Treasnry whether, in order to alter that treatment, it will be-necessary to put down an Amendment, or whether he can do it without an amendment of the law. I wish to refer to the question of savings of nurses. The Royal National Pension Fund for Nurses is an-institution the capital of which is composed almost entirely of savings of nurses. It may surprise the Committee to know that these poor women, in receipt of totally inadequate incomes, have in that fund £1,900,000. That fund has to pay Income Tax on all its investments. Therefore, the nurses indirectly pay it, and cannot in any way recover it, as they could if they were shareholders in a public company. The average annuity obtained by the nurses who put their savings into this society is £26—a totally inadequate sum to maintain them in their old age. It seems very hard that this class of the community, who are doing such noble

    737
    work—a work which is brought to our attention just now more than usual—should be indirectly made to pay Income Tax upon their savings. I appeal to the Secretary to the Treasury—I am sure I have the sympathy of the whole Committee in this matter—to see whether, under the existing law, he cannot free this society, which invests the nurses' savings, from the payment of Income Tax upon those savings, and, if he cannot do it under the existing law, whether he will undertake to put down an Amendment to alter the law so that this fund shall be free from Income Tax.
    Mr. POLLOCK: It is very satisfactory to find that we have to-day a Financial Secretary to the Treasury who admits in broad terms that the Income Tax Act contains numberless anomalies which it is the duty of the Treasury at some time to put right. When some of us have attempted in past years to point out some of the anomalies of the Income Tax, whether in regard to wasting assets or on other points, we have usually been told that the loss to the revenue would be so much—it is nearly always £2,000,000—that it would be quite impossible and unfair to ask that the anomaly should be redressed. However, we have a new Financial Secretary who takes a different view and promises us that when it is possible a Commission on the Income Tax shall be set up and we shall be able to go into a number of matters to which we have called attention in the past. I thought the Financial Secretary's answer in regard to the three years' average system was hardly as good a defence as could be made. The complaint against the system is a very old one. It has been made from time to time over the period of fifty or sixty years during which the system has been in force. So recently as ten years ago a Committee of (Inquiry dealt with the matter very fully indeed. In the Report of the Committee on the Income Tax Members will find a number of paragraphs devoted to the question whether or not the system works well. They will also find that when the evidence of various traders was taken by that Committee the testimony in favour of the three years' average was far greater than the evidence against it. The system was given a new lease of life, and for my part I think it is a sound system.
    May I remind those who dislike the system that, having paid their Income Tax for this year, if the War ends in the course of another year they may look forward to
    738
    reaping the advantage as against the Treasury in the years which will follow. Those years will probably be years of depression, and, the Treasury having had its turn against the subject, the subject will once more have the advantage of getting its turn against the Treasury. I suggest that if those Members who have misgivings about the system look at the evidence given in 1905, they will probably find that there is a great deal more to be said for the present system than they suppose. [An HON. MEMBER: "In normal times?"] The Income Tax has passed through periods both normal and abnormal, and the three years' average system, which was originally established in 1842, has passed through periods of all sorts, times of peace as well as of war, and has stood the test over that series of years. The hon. Member for Blackburn (Mr. Snowden) has misgivings as to whether or not farmers pay an adequate sum towards the Income Tax. I think that he has been fully answered by previous speakers. No doubt misgivings arise from time to time, not as to whether we ourselves, or persons of whom we have intimate knowledge, pay enough, but usually as to whether a neighbour about whom we do not know much pays an adequate sum in Income Tax. So far as I know, the hon. Member for Blackburn is not in very close touch or association with farmers. He thinks that farmers do not pay enough, and he probably thinks that those with whom he is in close touch pay a more than adequate share. Some of us have misgivings as to whether or not certain classes or bodies pay enough to the Income Tax. An illustration of how hardly the law works in regard to the savings of poor persons was given by the last speaker (Sir A. Williamson). I am not quite sure that at the present time he could not secure redress for those on whose behalf he spoke by parity of reasoning with the case I am about to put before the Committee.
    There are cases in which freedom from Income Tax is secured, perhaps not very wisely or very rightly. Industrial and Provident Societies are at present engaged in carrying out large contracts, some of them with the War Office, and they are undoubtedly making large profits. Many of the small traders in the country are inclined to believe that they compete at a disadvantage with these societies because the Industrial Societies do not pay Income Tax. How comes that? Under the Industrial and Provident

    739
    Societies Act, 1893, it is provided that where a society by its rules is unlimited in the number of members and does not trade with any persons except its own members, it shall be immune from Income Tax, and it has been decided that that immunity arises where either of those conditions is fulfilled. The result is that all the Industrial and Provident Societies are able to take advantage of that immunity. They provide under their rules that the number of members shall be unlimited, and they are able to trade with all sorts of persons who are not members, and at the same time to secure total immunity from Income Tax. The retail traders find their competition very severe. If the position of farmers is to be looked into from any point of view, let me ask the hon. Member for Blackburn to look also into the question of the Industrial Co-operative Societies, who at the present time are undoubtedly making large profits from the contracts they have made with the War Office, which contracts they have, perhaps, obtained because, owing to this immunity from Income Tax, they have been able to tender on more advantageous terms than ordinary traders. That is one of the anomalies which certainly requires to be looked into.
    On the question of War profits, everyone must agree that if you can determine what a war profit is you should tax it, and tax it heavily—I will not say remorselessly, but certainly heavily. But who is to say what a war profit is? What are you to debit to the period while the War is going on? How much of those other charges which are carried forward, or which are incurred for the purpose of reaping the so-called war profits, are you to debit against them? You open up a field in which hardly any auditor or accountant can assist you. You raise a number of questions which have remained unsolved during the period of recent finance, or during the time when we have come to look at finance in a much more orderly and businesslike manner. If it is possible for the Treasury to discover some real definition which would be satisfactory to the business world, I am sure that Members in all quarters of the House would be ready to assist them in securing that war profits should pay their adequate share to the Income Tax.
    It is not denied that many anomalies exist, for the Income Tax system is one that dates from 1842, a time long before
    740
    our present commercial system was in vogue, long before the Companies Act, long before the joint stock company system was in full swing, certainly long before any system of accountancy and audit was general, and long before the burden was placed upon directors of companies, and all others engaged in business, to render a true and adequate account, according to recent business methods, of those businesses in which they were engaged. No doubt there must be anomalies in this system, but it is a system which does work, and with a fair amount of success at the present time. I only trust that the right hon. Gentleman may remain to carry out, I will not say a pledge or a promise, but the hope that he has instilled in us all, that before very long opportunity will arise, and that he will give it fulfilment by removing some of these anomalies which he confesses do exist.
    Sir PHIPSON BEALE: The scheme for the taxation of farmers suggested by the hon. Member for Blackburn, and that for the taxation for co-operative societies put forward by the hon. Gentleman the Member for Leamington, seem to me to stand very much on the same platform. They both pretend to be equitable propositions if they could be put into practicable form, but I believe they both would be very difficult to carry out. The objections to both of them are, I think, insuperable. The objections to the immediate alteration of the taxation of farmers seem to me to be enormously difficult. One point would be that in a farmer's account—when he keeps one!—the expenses of his own living, including a certain amount of luxuries, are inextricably mixed up with his general farming accounts. I put it on that simple and practical ground, and I do not at present see any hope of carrying out the suggestion of the hon. Member for Blackburn. The proposition of the hon. Member for Leamington as to the taxation of co-operative societies involves this enormous difficulty, that the members of these societies are almost all people of small incomes, and there would be an immense difficulty in the subject of claims for the return of Income Tax to be deducted. The only thing you could do would be to require an individual return. What the right hon. Gentleman has said is historically true, that there has been a sort of antagonism between Members on one side of the House and on the other on the subject of the agricultural community.

    741
    I myself have never accused either landlords or farmers of anything but of being of a patient nature, except in a few cases where evidence of their taking advantage of their position was obviously clear. The right hon. Gentleman rather understated than overstated the immense heaviness on these of the Income Tax in the case of the land. He put it at 5s. 2d. in the £. I can show him accounts where the accounts look more like 7s. 2d., if the estate is kept in such a way as to allow of everything obliged to be spent in order to keep up the capital value of the estate.
    It is true, as was stated by the right hon. Gentleman, that most people are very liable to misapprehend the rate at which farmers are making profits when we hear of prices going up and down. There was the case mentioned by the right hon. Gentleman where those concerned sell their produce at a given time of the year. There are curious and abnormal cases in regard to such crops as the potato crop. It is sold beforehand in expectation of a large crop. Then comes a bad season; it is diminished in value; the farmer has certainly made an abnormal profit and the middleman a loss. But the converse occurs exactly in the same way. The more one looks into the matter—and I speak from experience, and my experience is partly personal—the more one is convinced that the existing mode of taxation of the agricultural community cannot be altered without very much greater consideration than can be given to it at the present time. At all events, to come back to what is the real point of this Amendment, it would be absurd to refuse to pass the Section as it now stands, in the vague hope that something better may be foreshadowed in the way of Income Tax in the various ways suggested in the Debate.
    Sir JOHN SPEAR: I hope that the Government will select the Income Tax on the three years' average, instead of the actual income for a given year. We want the fat years to make up for the lean. It is much more helpful to a man in business that he should pay on an average for three years than on the year which happens to be pretty good, or on the year when he has made no money whatever. The Financial Secretary very ably pointed out that it is most important that every Government, in calculating their income, should have some firm basis to go upon. With reference to the taxation of farmers, I may say that I have been a farmer all my life, and know something about it. I agree in the main
    742
    with what the right hon. Gentleman the Member for Wimbledon has said. While we all admit that the times for farmers have improved very much this year, it is a fact that last year crops were largely sold in the autumn, when prices were not by any means high. Seventy acres of wheat of myself and my partner were sold for £2 a quarter, and we were sufficiently patriotic to plant 150 acres of wheat for this year. But the present high prices do not affect many farmers at all. The same with reference to the feeding of cattle. Fat cattle sold at a low price last autumn. Now they sell at a high price. Still we must remember that farmers do buy feeding stuff at a very high price to make the cattle fat. Therefore the prices for the cattle are not so high as appears on the surface. We welcome, after a period of unexampled depression which farmers have gone through for twenty-five years, better times for agriculture; but speaking myself as a farmer we are prepared to pay our fair share towards the expenses of the upkeep of the country.
    Two points have been mentioned—one by the hon. Member for Blackburn, who had suddenly developed a desire that farmers should pay on Schedule D instead of Schedule B. It is rather curious that the proposal was not made in the days gone by, when statistics plainly showed that the average farmer was getting no income whatever. The hon. Member for Blackburn now, when the farmer is getting a little income, wants to change the system at once, and make him pay on the actual income received. I, for one, do not object to that; but I do say, if there is any rearrangement made in the system under which farmers pay Income Tax, the question of the rates paid by farmers ought to be dealt with at the same time. While I admit that the farmer gets off easy generally by paying Income Tax on one-third of his rent, in paying rates he is more heavily burdened by far than any other section of the community. As an Income Tax payer, he has to pay a rental of £480 a year to be charged on £160. On that rental he pays rates on £400. There are plenty of manufacturers sitting on the opposite side of the House who pay only on £400 a year rates, whose income would be twenty times more than that of the farmer. Therefore, the Committee, in fairness, if they want to rearrange the system of taking Income Tax from the farmer, should also rearrange the system under which he pays his rates. In fair

    743
    play, both aspects of his contribution should be looked at, and I am certain that the alteration would be extremely beneficial to the agricultural classes. As for the present position of agriculture, we are delighted to see still better times, and we are patriotic enough, I think, to realise that there is a responsibility upon us to produce from all our land the utmost we possibly can produce in the interests of the people.
    We have our difficulties. At the present time cowkeepers can hardly pay their way. It would be calamitous for them to have any increased burden put upon them, for if they give up their industry the public lose their milk supply. Other directions I must not follow, because, though the Chairman is very indulgent, it is extremely difficult for a practical man, not having learned oratory, but having learned farming, to tell an unvarnished tale to his colleagues in the House without coming up against a point of Order. Still I do say this: our industry is the greatest industry in the country, after all. There is no industry in which the people of this country depend so much as upon agriculture. We do not ask favours of the House of Commons—
    The CHAIRMAN: I am sorry that the trend of the hon Member's observations are out of order. We are at present in Committee.
    Sir J. SPEAR: I was just going to say that if we pay too much Income Tax we shall not have so much money to grow food for the people. Therefore food will be dearer and the people will suffer, and the country will lose altogether.
    The CHAIRMAN: I am afraid that shows definitely that the hon. Member's observations cannot be allowed.
    Mr. J. M. HENDERSON: The Debate to a large extent, to my mind, has been founded on what I feel to be a fallacy—that is to say, in the present year being taken as a basis of what taxes will yield rather than the three years' average. It is quite true that it is a great principle, or a good principle, under which businesses have paid which are now making big profits, but if you take the whole country it is clear they cannot be making so much on the average. We all know exports have fallen tremendously. The Stock Exchange has been shut for half its
    744
    time. You have got any number of businesses throughout the country that cannot be yielding up to the average; therefore it would be folly to take this year as a guide and as a basis for assessment. Another point hinted at by several Members, and to which allusion was made by my right hon. Friend the Secretary to the Treasury, is what is called the taxation of war profits. Let me, a professional man, warn my hon. Friend that if he once goes into that question he will find himself in elaborate and most awful difficulties. What are war profits?
    I know one company which started business about the time of the South African War. It made good profits in the South African War, but after that, and from that day till last year, it has never paid a dividend. Its 20s. shares have been reduced to 4s. Now it is making a little profit, but do not forget that for these very shells a special plant has been put down by many firms. What is the value of that plant after peace is made? Why, the country will be flooded with plant which is no good to anyone. Then how are you going to reckon how much is attributable to the hard work of the man himself and how much is to be put by for the bad years immediately after the War? We all know that after a war, perhaps for a few months, business is brisk, but it is the universal fact, as shown by experience, that for years after that there is great depression, and the depression will be found more particularly in these businesses. Further, it is quite clear to my mind that next year the Income Tax will be still heavier. I am afraid that it will be so; in fact, I see no escape from it. If so, then the average will help the Treasury, because all these people who make these big profits this last year would come into the average. It is better to get 3s. 6d. on £100,000 than 2s. 6d. But, on the question of taking special war profits, or profits made during the War, I warn the Treasury that if they are going to start on that they will start on a most difficult problem.
    Mr. ANEURIN WILLIAMS: I sincerely hope the Treasury will not try to act upon the suggestion made by the hon. and learned Member for Warwick and Leamington (Mr. Pollock) by taxing profits of industrial and provident societies. For this reason: Every man who has an investment in an industrial and provident society does pay at the present time Income Tax on the dividend from that investment if

    745
    his income is above the Income Tax limit. In the case of a limited liability company, the Income Tax is deducted by the company when paying the dividend. That is because in nineteen cases out of twenty the shareholder has an income above the Income Tax limit. In an industrial and provident society the man who has shares receives his dividend in full, but if his income is above the Income Tax limit, he has to pay the Income Tax himself. The reason for that is that, in nineteen cases out of twenty, the shareholder in an industrial and provident society has an income below the Income Tax limit and, therefore, if you were to deduct the Income Tax from the whole twenty shareholders the nineteen would come and demand their Income Tax back, or find it too much trouble, and a great injustice would be done to them. Hundreds of thousands—in fact, you might say millions—of people would come for their money back, for the numbers in the industrial and provident societies in this country now run up to nearly three millions, the vast majority of whom have incomes below the Income Tax limit. I know that those who have an income above that limit pay at the present time, because I happen to be one of them. I have a number of small investments in industrial and provident societies, and the revenue authorities make me pay on the dividends which I receive from them. If you got the money in the other way, you would get no more money unless you did it by inflicting a grave injustice on people who have not incomes above the Income Tax limit.
    Mr. MONTAGU: I want to reply to two questions. I think, as far as I understood the case my hon. Friend the Member for Elgin and Nairn (Sir A. Williamson) put to me, it can be dealt with administratively if the persons are not really liable to Income Tax. Perhaps he will be good enough to talk to me about the details of the case, and I will see before the Report stage if I am right. The hon. and learned Member for St. Augustine's (Mr. R. McNeill) is under the impression that officers' widows and officers themselves will not be allowed to treat their pensions as earned income. If he will look at the Finance Act, 1907, Clause 19, paragraph (a), he will see that it is distinctly stated therein that pensions should be regarded as earned income and taxed only as such. The words are earned by "the individual," or "husband or parent."
    Question put, and agreed to.
    CLAUSES 5 (Separate Assessment of Life Assurance Business), 6 (Provision as to Calculation of Loss where Company Carries on Life Assurance Business), AND 7 (Accountability of Company for Income Tax Deducted from Annuities) ordered to stand part of the Bill.

    CLAUSE 8.—(Belief from Income Tax to Certain Companies in Respect of Expenses of Management.)
    (1) Where an assurance company carrying on life assurance business or any company whose business consists mainly in the making of investments, and the principal part of whose income is derived therefrom, claims and proves to the satisfaction of the Special Commissioners that for any Income Tax year it has been charged to Income Tax by deduction or otherwise, and has not been so charged in respect of its profits in accordance with the rules under the first case in Section one hundred of the Income Tax Act, 1842, the company shall be entitled to repayment of so much of the tax paid by it as is equal to the amount of the tax on any sums disbursed as expenses of management (including commissions) for that year:
    Provided that—

    (a) relief shall not be given under this Section so as to make the Income Tax paid by the company less than the tax which would have been paid if the profits of the company had been charged in accordance with the said rules; and

    (b)the amount of any fines, fees, casual profits, or profits arising from reversions in the case of an assurance company, and in the case of any other company the amount of any income or profits derived from sources not charged to Income Tax, shall be deducted from the amount treated as expenses of management for the year.

    (2) Notice of any claim to the Special Commissioners under this Section together with the particulars thereof shall be given in writing to the surveyor of taxes for the district within twelve months after the expiration of the Income Tax year in respect of which the claim is made, and where the surveyor objects to such claim the Special Commissioners shall hear and determine the same in like manner as in the case of an appeal to them against an assessment under Schedule D, and Section fifty-nine

    747
    of the Taxes Management Act, 1880 (which relates to the statement of a case on a point of law) and any rules made for the purposes of that Section shall apply in the case of any such appeal.
    (3) A company shall not be entitled to any relief under this Section in respect of any expenses as to which relief may be claimed or allowed under Section thirty-five of the Finance Act, 1894, or Section sixty-nine of the Finance (1909–10) Act, 1910, as extended by Section eight of the Finance Act, 1914, by which enactments relief is conferred in respect of the cost of maintenance, repairs, insurance, or management of land or houses.
    Amendments made: In Sub-section (1), paragraph (b), leave out the words "casual profits." At the end of Subsection (1) insert "and
    (c) in calculating profits arising from reversions, the company may set off against those profits any loss arising from reversions for any previous year during which this Section was in operation."—[Mr. Montagu.]
    Clause, as Amended, ordered to stand part of the Bill.

    CLAUSE 9.—(Charge of Income Tax on Investments of Foreign Assurance Companies doing Business in the United Kingdom.)
    (1) Where an assurance company not having its head office in the United Kingdom carries on life assurance business through any branch or agency in the United Kingdom, any income of the company from the investments of its life assurance fund (excluding the annuity fund, if any), wherever received, shall, to the extent provided in this Section, be deemed to be profits comprised in Schedule D of the Income Tax Act, 1853, and shall be charged under the rules of the third case in Section one hundred of the Income Tax Act, 1842.
    (2) Such portion only of the income from the investments of the life assurance fund shall be charged under this Section as bears the same proportion to the total income from those investments as the amount of premiums received in that year from policy holders resident in the United Kingdom and from policy holders resident abroad whose proposals were made to the company at or through its office or agency in the United Kingdom bears to the total amount of the premiums received by the company.
    (3) That relief conferred by this Act in respect of expenses of management shall, in the case of a company charged to Income Tax under this Section, be calculated by reference to a like proportion of the total expenses of management of the company for the year estimated in accordance with the provisions of this Act.
    (4) Every assessment under this Section shall be made by the Special Commissioners as though the company under the provisions of the Income Tax Acts had required the proceedings relating to the assessment to be had and taken before those Commissioners.
    (5) Where a company has already been charged to Income Tax, by deduction or otherwise, in respect of its life insurance business, to an amount equal to or exceeding the charge under this Section, no further charge shall be made under this Section, and where a company has already been so charged, but to a less amount, the charge under this Section shall be proportionately reduced.
    Amendment made: At end of Subsection (2) insert the words,
    "Provided that in the case of an assurance company having its head office in any British possession the Commissioners of Inland Revenue may, by regulation, substitute some basis other than that prescribed by this Section for the purpose of ascertaining the portion of the income from investments to be charged under this Section as being income derived from business carried on in the United Kingdom."—[Mr. Montagu.]

    CLAUSE 10.—(Limitation of Income Tax Relief in Respect of Insurance Premiums.)
    (1) A person shall not be entitled under Section fifty-four of the Income Tax Act, 1853 (as amended by any subsequent enactment), to deduct from profits or gains—

    (a) In respect of any premium or other payment payable for securing a capital sum on death (whether in conjunction with any other benefit or not), more than seven per cent. of the actual capital sum assured; and

    (b) In respect of any premiums or payments to which that Section applies payable for securing any other benefits, more than fifty pounds in all;

    and the relief by way of repayment of tax under that Section, or by way of deduction for the purposes of Super-tax under

    749
    paragraph (b) of Sub-section (2) of Section sixty-six of the Finance (1909–10) Act, 1910, shall be correspondingly limited.
    (2) In calculating the deduction under this Section in respect of any premium or other payment payable for securing a capital sum on death no account shall be taken of any sum payable on the happening of any other contingency or of the value of any premiums agreed to be returned or of any benefit by way of bonus, or otherwise, which is to be or may be received either before or after death, either by the person paying the premium, or by any other person, and which is not the sum actually assured.
    Amendments made: In Sub-section (1), paragraph (a), after the word "payable" ["or other payment payable"] insert the words, "on a policy." In paragraph (b) leave out the word "fifty" ["more than fifty pounds in all"] and insert instead thereof the words "one hundred." In Sub-section (2), after the word "payable" ["or other payment payable"], insert the words, "on a policy."—[Mr. Montagu.]
    Motion made, and Question proposed, "That the Clause, as Amended, stand part of the Bill."
    Mr. POLLOCK: I would like the Financial Secretary to give us some explanation of the basis on which he has now chosen the 7 per cent. in paragraph (a). I think originally it was to have been 5 per cent. I am not quite certain myself that 7 per cent. is really high enough, because I think that with the very high Death Duties which prevail at the present time in the case of men who have reached the age of fifty it will be found that 7 per cent. is not enough. I merely want to ask the hon. Gentleman if he will kindly give an explanation of the basis on which he has selected the 7 per cent., and whether he can give the Committee any materials to show that an injustice will not be inflicted in a number of cases. Of course, the system which this Clause strikes at is a new system which has grown up, or has been at any rate largely developed, in consequence of the very high Death Duties, and there is a close relationship between what we may call endowment insurance and Death Duties. I should be very grateful if he would give us some indication to show the class of insurance which would be struck at and that which would not be struck at by the Clause as it stands.
    Mr. HORNE: If this Clause passes in its present form I think there is a chance of some injustice being done to some insurance. Where the policy provides that the premium is to be paid during the term of a man's life it may be that, under this Clause, he will obtain a remission of Income Tax in consequence, but in some cases, owing to a man's industrial position, it has become convenient for him to pay his premium a very limited number of years. In those cases, of course, a larger premium is paid, because a limited number only is paid, and in that case he would not get so much relief. I venture to suggest that some means might be found by which a man should be allowed to obtain a remission on the premium if it was calculated what that premium would be during the whole period of the life of the policy holder, even though the premiums actually paid are only for a certain period of that time. It would not be a difficult thing to do. I believe the companies would be prepared to issue a certificate to show what the premiums would be if paid during the whole life. Of course, the point would be evaded by the insurer going to the company and asking for an alteration of the terms on which he has effected the insurance, and, instead of having a limited number of years of payment, to extend the number of payments, increasing in amount in accordance with the increased number of years to be paid. I suggest some way may be found by which the two methods might be brought into harmony.
    Sir T. WHITTAKER: The difficulty which the Inland Revenue has to guard against is the development of a kind of policy which is not really a bonâ fide insurance, but is a device for evading the Income Tax, and the simplest way of meeting that seems to me to limit the amount of premium upon which the tax should be allowed. Originally the premium was put at 5 per cent. Representatives of the life offices approached the Inland Revenue and suggested that a limit of 7 per cent. would be fair and reasonable. Seven per cent. really brings in what is known as the fifteen year endowment, and it was represented that it is not an unusual thing for a man of forty-five or fifty years of age to be in a position to take out a substantial insurance, but not to wish to pay his premium beyond sixty or sixty-five years of age, when his power to earn might be considerably

    751
    diminished, and, therefore, he takes out a fifteen year endowment policy, and that is roughly a 7 per cent. premium. At the age of fifty the premium for an ordinary whole life insurance would be less. This allowance would be made on the £7, and you would get the allowance on that sum, even if the premium were more, With regard to the limited payment insurances where a very considerable premium is paid for a short term of years, if you permitted the allowance on that you would really let in the very difficulty with which the Inland Revenue desires to cope. It is easy for insurance offices to devise a scheme under which heavy premiums shall be paid for a few years, and then they can arrange for the surrender of those policies which need never be completed. But the insurer would get the allowance on his Income Tax on that heavy premium, and that becomes really a means of evading the Income Tax. That ought not to be permitted in these times. With reference to the 7 per cent., this concession has been made in response to the representations of the life assurance offices through the Inland Revenue, and I think it has fairly met the case.
    Question put, and agreed to.

    CLAUSE 11.—(Provision as to Estimation of Total Income.)
    Where an assessment to Income Tax has become final and conclusive for the purposes of the Income Tax for any year, the assessment shall also be final and conclusive in estimating total income from all sources for the purposes of Super-tax for the following year, or of any exemption, relief, or abatement under the Income Tax Acts, and no allowance or adjustment of liability on the ground of diminution of income or loss shall be taken into account in estimating the total income from all sources for such purposes unless that allowance or adjustment has been previously made in respect of Income Tax on an application under the special provisions of the Income Tax Acts relating thereto.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Sir ARCHIBALD WILLIAMSON: I wish to ask what is the meaning of this Clause? It seems to me that when an income has been arrived at for the purposes of Income Tax it is intended the same figure shall be taken as applicable
    752
    to Super-tax. I think sometimes there are differences between the amount which is assessable to Income Tax and the amount which is under the present law is assessable to Super-tax. I want to ask whether this is a Clause which means that Super-tax is to be modelled on the figure arrived at by the Income Tax Commissioners? If that is so I would like to know what the merits of that proposition are.
    The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Simon): This is a matter which received some prominence in former Debates with which I was associated. My hon. Friend asks what is the object of this Clause. I will try in a few words to make its object clear. In order that I may be followed I must remind the House that Super-tax is a tax imposed upon the total income of the individual from all sources without regard as to whether he has been taxed at the source for ordinary Income Tax purposes or not. A successful professional man, for instance, who makes £5,000 or £6,000 a year is taxed for Super-tax at a figure which includes not only his professional earnings but also the returns from his investments. The successful professional man, when taxed for Income Tax under Schedule D, is only taxed on his professional earnings, and before the amount on which he pays tax under Schedule D is fixed he has every opportunity of challenging the assessment. As the Committee knows, he has to go to the Commissioners in the place where he carries on business, or the special Commissioners if necessary. There is an appeal, and on a case stated it may come up to the High Court, and then the right figure is fixed once and for all, and that having been fixed he pays ordinary Income Tax upon it. It was always intended, and was so explained from this Box years ago, that when Super-tax was exacted from such an individual his professional earnings which have already been ascertained and checked, and assessed for the purposes of Schedule D, should when so fixed be treated as an element in the calculation for Super-tax purposes. Otherwise you would be doing the same thing twice over, and that would not result in an advantage to him. He may have got a good assessment under Schedule D, and he would have reason to complain if the revenue officer said to him, "Now I am on Super-tax, I will go through the operation all over again." It

    753
    was always understood and intended that the assessment to Schedule on which he pays ordinary Income Tax on his professional or commercial earnings should stand, once ascertained, as an element in the Super-tax calculation. It is only an element because, in addition to the professional earnings under Schedule D, you would, for Super-tax purposes, add his income from investment. A short time ago an ingenious person thought he could argue that really he was entitled to have the Schedule D calculation revised before he paid Super-tax. He was not only an ingenious person but he employed ingenious counsel, and in the House of Lords he succeeded, and Lord Loreburn said that although he quite appreciated that the result was one which might be inconvenient for the subject and for the Exchequer, he thought it was the true construction of the Statute as it stood. The object of Clause 11 is to make the necessary amendment which will secure the continuance of the practice as it has hitherto always been understood. The result is that a man has every opportunity of challenging his assessment for Schedule D or any other Schedule, and he may succeed in cutting it down, just as the Exchequer may succeed in making it bigger by objection. But once fixed it ought to be regarded as fixed as between the State and the individual, and it should not be the subject of a second series of disputes before Super-tax is charged.
    Question put, and agreed to.

    CLAUSE 13.—(Continuation of Belief under 5 Geo. 5, c. 7, s. 13.)
    Section thirteen of the Finance Act, 1914 (Session 2), (which gives relief in respect of diminution of income due to war) shall apply to Income Tax (including Super-tax) for the current Income Tax year, but with the substitution, as respects postponed Super-tax, of the first day of January, nineteen hundred and seventeen, for the first day of January, nineteen hundred and sixteen, as the date on which the postponed Super-tax is to become payable.
    Amendment made: Add at end the words, and any payment of Super-tax for the year beginning the sixth day of April, nineteen hundred and fourteen,
    754
    which has been postponed under that Section may be further postponed until the first day of January, nineteen hundred and seventeen, if the individual from whom the payment is due proves, to the satisfaction of the Special Commissioners, that his actual income from all sources for the current Income Tax year is or will be less than two-thirds of the income on which he was liable to be charged to Super-tax for the year beginning on the sixth day of April, nineteen hundred and fourteen."
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    Mr. SANDERSON: Under this Clause notice is given to the taxpayer that in certain circumstances he is entitled to a rebate, or can claim to pay a certain rate of Income Tax, and have his abatement for so many children; but he does not receive any notice upon this most important point. It is a little difficult for anybody who is not a lawyer to follow this question, because, in order to understand the Clause, you have to refer not only to Clause 13, but to Clause 13 in the Finance Act of 1914, to a Section in the Income Tax Act of 1842, and to a Section of the Revenue Act of 1865, before you can arrive at any meaning whatsoever. Under the present system of legislation I defy anyone, except a lawyer versed in these matters, to have the slightest idea what it means. That is all the more-reason why this Committee, before it parts with the Clause, should have some assurance from the Chancellor of the Exchequer, or the right hon. Gentleman representing the Treasury, that this matter-shall be brought clearly to the notice of the taxpayers. It mean that if a man's actual profits for the present year turn out to be less than the amount of the assessment he is entitled to go to the Commissioners and claim that the actual amount of his income, instead of the average, should be taken into account. That, I believe, is the real effect of this. Clause, but that is not brought to the notice of the taxpayer. It is not put in this Yellow Paper, which we all hate so much when it is sent to us, and unless you happen to be pretty well conversant with these matters it never enters into your mind to make the claim. I dare say the right hon. Gentleman representing the Chancellor of the Exchequer will say we shall lose so much Income Tax if we do this, because we shall have so many more

    755
    claims made, but I do not think that is the proper way to look at this question. The Income Tax payer should be treated fairly, and you do not want to make him pay a sum which by law he is not bound to pay. I submit that the principle upon which these matters ought to be dealt with is that it ought to be made as simple and easy for the taxpayer as possible to understand, and I do not think it is playing the game to omit all reference to this right which the taxpayer has upon this Yellow Paper which is sent out claiming a return for Income Tax. I hope other hon. Members of the Committee who think this point is worthy of consideration will give me their support. I ask, is it really fair to the taxpayer to legislate in this form? It is all very well for the draughtsman to put in a short Clause like Clause 13, and then refer us to Clause 13 in the Act of last year, when you find that you have to refer back to two other Acts. Why cannot you set out what is the effect of these four Clauses, so that the taxpayer, if he wants to find out what his rights really are, can go to one Act, and at all events try to understand it without having to refer to three others? It really requires a trained lawyer to form the slightest conception of what Clause 13 means. I urge upon the right hon. Gentleman that this ought to be made clear in the notice, and legislation imposing a very heavy tax ought to be made perfectly clear and simple, so that everybody who has to consider it may understand it.
    8.0 P.M.
    Mr. J. M. HENDERSON: As I was largely responsible for Clause 13, I confess that I entirely agree with the hon. and learned Gentleman opposite who has just spoken. This kind of legislation is by reference, and consequently very few people are able to understand the relief to which they are entitled. I think it is only a fair thing to the taxpayer that the meaning of this Clause should be fully indicated in the notices of assessments which are sent out. Otherwise, 90 per cent. of them will not understand it. It is very important, and I think that it is only fair to the taxpayer that some note should be put in the Yellow Paper.
    Mr. WATT: I agree with the hon. and learned Gentleman (Mr. Sanderson) that this system of legislation by reference even to the third time is not the way this House
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    should legislate. Apart from that, this particular Clause 13, gives the taxpayer a right of relief, and I appeal to the right hon. Gentleman that it is his duty to indicate to the taxpayers who are entitled to this relief that the relief exists. It has already been said that no one but a lawyer can understand this, and that the average man submits to taxation without going to any expense in getting legal advice. I suggest that as there is this right of the taxpayer to get this relief in certain circumstances it is the duty of the Exchequer to intimate the fact to the taxpayer.
    Mr. MONTAGU: I really think that the difficulty of understanding this Clause has been exaggerated. I have been reading it again and again, and it seems to me, compared with some other Clauses, that it is not so very difficult to understand. The only possible way of avoiding legislation by reference is to undertake a compendious consolidation of these Income Tax Acts, and that would not have been possible in this year's Finance Bill. I should like the hon. Member for Glasgow (Mr. Watt) to try drafting a Clause which has no reference in it between now and the Report stage.
    Mr. WATT: Will you accept it?
    Mr. MONTAGU: I cannot conceive my being unlikely to accept it, but I should like to see it first. The hon. Member opposite asked that the provisions of this Clause should be brought to the notice of the taxpayer. The appeals hitherto made, I have always understood, have been that we should keep things off that Yellow Paper. It is so crowded with reading matter already that taxpayers are really alarmed at the idea of putting anything more on it. I do not think it fair to say that Clause 13 has been hidden from the taxpayers, because during the past financial year no less than £400,000 of Income Tax has been withdrawn.
    Mr. SANDERSON: That is Super-tax
    Mr. MONTAGU: Yes.
    Mr. SANDERSON: You are talking about Super-tax. I can quite understand that people who pay Super-tax do not suffer so much, because they generally put these matters into the hands of lawyers who know all about them; but the Income Tax payer is not the kind of man who puts the matter into the hands of lawyers. In the large majority of cases he make3 out the return himself.
    Mr. MONTAGU: My information is that there has been a very considerable amount of advantage also taken of the Income Tax provisions of the Statute, but if the hon. and learned Member has any reason to suspect that these advantages are not known to the taxpayers—
    Mr. SANDERSON: I am sure that they are not.
    Mr. MONTAGU: I will gladly consult with the Inland Revenue authority to see what can be done to bring them to their notice.
    Mr. RAWLINSON: I have seldom, if I may say so without disrespect, heard a more feeble defence of this abominable system of legislation by reference. To say that it is impossible to draft a comprehensive Section of a Statute to carry out the meaning which this Section is supposed to carry out is about the strongest admission of the villainy of the present system, because, if those who assist my right hon. Friend are unable to draw a comprehensive Statute, and if you must, therefore, throw it into this tangle, it shows pretty clearly that the public and the House of Commons have a very great right to complain of this system of legislation by reference. The only defence I have ever heard of legislation by reference is that if you did set out the law fully and clearly in any Bill or Act of Parliament it would take a very long time to get it through the House of Commons, because, if there were people who wished to obstruct, it would give an opportunity for obstruction. That, however, does not apply at the present time, and the sooner the Government give instructions to those who draft their Bills that excuse has gone the better. If they are incapable of writing plain language so that we can understand what they mean, well, instructions ought to be given to them to learn how to do so.
    The right hon. Gentleman said that there was really very little difficulty in understanding this Section compared with other Sections. He gave us figures about Super-tax. With regard to Super-tax, the relief applies to a few large business houses, and it is practically no relief at all, because it is merely deferring payment. It is only to a person in a big way of business that it may be convenient to deer payment of Super-tax, and to my mind, so far as the general public is concerned,
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    it is hardly worth saying "thank you" for. Then comes the relief given to the Income Tax payer. The relief given to the Income Tax payer, said the right hon. Gentleman, is exceedingly simple, and any layman in the House can understand it. May I just read to them—no doubt they will understand it more quickly than I do—the relief that is given:—
    "It it is made sure to the satisfaction of the Commissioners, by whom the assessment is made, that the diminution of profits and gains on account of which relief is claimed under this Section is due to circumstances attributable directly or indirectly to the present War, whether those circumstances are a specific cause of the diminution of income within the meaning of Section 134 of the Income Tax Act, 1842, or not"—
    Does the right hon. Gentleman seriously say that any layman can form an opinion upon that? Does he himself really understand it? I should like to hear his description of it. I should really like a little treatise from him as to what it means.
    "and diminution of profits and gains on which relief can be given under this Section shall not be deemed to be a specific cause authorising the grant of relief under the said Section 134."
    That is quite plain! Seriously, is it not playing with the Committee to be solemnly told that it is perfectly plain and that any Income Tax payer would be thoroughly aware of his rights? I am not ashamed to plead to this extent ignorance, and I should like to know what right that gives me if my income down to 5th April last has, owing to the War, been less than my three years' average. Assuming my income has been less than my three years' average, and I am returning now, what are my rights? That Section, clear though it is to the right hon. Gentleman, is not clear to me, and I want to know what my rights are. If he can tell the House clearly and succinctly, I hope that he will be able to draft such a notice on that Yellow Paper as will convey it to a layman. I am perfectly certain that it would be useless to reproduce the Section.
    Mr. J. M. HENDERSON: There is a further relief given to officers and others who have left their business and gone to the front. Those who have gone to the War, including the Red Cross people, are entitled to be only charged on what they have actually earned during the year. I do not believe that half of them know anything about it. I have come across any number of them who are astounded that there is any such relief.
    Mr. POLLOCK: May I remind the right hon. Gentleman that one of his difficulties need not seriously embarrass him? He

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    said that he did not like to write any more on this piece of yellow paper which was already abundantly covered. That is quite true, but if the Department would furnish him with one of these papers he would find that now an additional White Paper is included in the yellow form, and that certain notes, explanations, and instructions are given. There are two sheets, and there is a particular one which deals with exemptions, abatements, reductions of rates on small incomes, and so on. Although there is abundant space on this White Paper, not one of the exemptions, abatements, allowances, and relief given under this Section is referred to. The right hon. Gentleman has a very good opportunity to fill up the blank spaces and call attention to this relief which is given. I am in sympathy with the right hon. Gentleman. I am not quite sure that I share all the views expressed by my hon. and learned Friend the Member for Cambridge University (Mr. Rawlinson). After all, this is an Income Tax point and, when my hon. and learned Friend says that he wants to have something perfectly explicit, it seems to me that he is asking almost for the impossible. If I recollect rightly, there are at present in force several score—I and not sure that there are not over one hundred—Income Tax Acts, and to ask that they should all be written quite plainly is to ask us to unwrite history, and to forget the fact that we go back to 1842 for the purpose of the Income Tax Acts. If the right hon. Gentleman will fill up this new White Paper in the way I suggest, he will meet a practical point, and we shall be very grateful to him.
    Mr. SANDERSON: Will not the right hon. Gentleman respond to the appeal of my hon. and learned Friend, and tell us what is really the meaning of that Clause in the 1914 Act? My hon. and learned Friend and I are not quite agreed as to what the meaning is, and, if we do not agree, I do not suppose that the taxpayer will be clear about it. Supposing my income, or any man's income, for the year ending 5th April last is in consequence of the War less than the average of the three years, what is the result? What right has the taxpayer? And, secondly, when is he bound to make the claim for the relief given?
    Mr. MONTAGU: When this Section was passed last year the Home Secretary, then the Attorney-General (Sir J. Simon), explained
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    it to the House at great length. I believe two, and I would almost say three, of the hon. and learned Members whom I see opposite were present. I do not think I could do better than he did on that occasion, and I propose to save the time of the Committee, if I may, by saying that I will send them copies of his speech.
    Mr. RAWLINSON: Does the right hon. Gentleman propose to put that on the Yellow Paper, because it is really a serious thing? There is no better exponent of the law than the Home Secretary, who, I quite agree, did make certain points. My memory of his speech encourages me to venture to go so far as to say that my hon. and learned Friend (Mr. Sanderson) is not quite correct in his construction of this Section. That being so, it was a Section which I must say tried even the explanatory powers of the right hon. Gentleman to their fullest extent. Those who were here will remember we had to have two or three speeches before it was really understood. I am perfectly certain it would be very difficult indeed to condense it in an intelligent form on the Yellow Paper, but some effort should, at any rate, be made to do it.
    Mr. MONTAGU: I will consider how to do it.
    Mr. RAWLINSON: It is a very difficult thing, but it ought to be done, because everybody must be in the greatest possible doubt as to what the real position of the Income Tax payer is.
    Question put, and agreed to.

    CLAUSE 16.—(Application of 38 and 39 Vict., c. 45, s. 3, 4 and 5 Geo. 5, c. 60.)
    Sections three and five of the Sinking Fund Act, 1875 (which relate to the application of the Old and New Sinking Funds), shall apply and shall be deemed to have applied, to any securities issued under the War Loan Act, 1914, or any Act extending or amending that Act in like manner as they apply to annuities charged on the Consolidated Fund.
    Amendment made: At end, add,
    "(2) Any securities issued under the War Loan Act, 1914, or any Act extending or amending that Act, or any other

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    enactment authorising money to be borrowed for the purposes of the present War, shall be and shall be deemed always to have been included amongst the securities transfer of which may be accepted by the National Debt Commissioners as consideration for annuities granted by them under the Government Annuities Acts, 1829 to 1882, and amongst the securities in which any money received by the Commissioners as consideration for such annuities may be invested; and the provisions of those Acts relating to such consideration as aforesaid shall apply and shall be deemed always to have applied to such securities in like manner in all respects as they apply to Two and a Half Per Cent. Consolidated Stock."—[Mr. McKenna.]
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 18.—(Application of 38 and 39 Vict., c. 45, s. 3.)
    The CHAIRMAN: The Amendments standing in the name of the hon. Members for Coventry (Mr. David Mason) and East Edinburgh (Mr. Hogge) cannot be attached to this Clause, but must be brought up as new Clauses, and in that form I will give them consideration.
    Clause ordered to stand part of the Bill.

    GENERAL.
    (1) In this Act, unless the context otherwise requires—

    The expression "assurance company" means any persons or bodies of persons whether corporate or un incorporate to which the Assurance Companies Act, 1909; applies;

    The expression "life assurance business" includes the business of granting annuities;

    The expression "annuity fund" means where an annuity fund is not kept separately from the life assurance fund of an assurance company, such part of the life assurance fund as represents money paid in consideration of the grant of annuities;

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    The expression "Special Commissioners" means the Commissioners for the special purposes of the Income Tax Acts;

    The expression "Income Tax Acts" means the Income Tax Acts, 1842 to 1853, and any other enactments relating to Income Tax, and, if the context so requires, includes Part II. of this Act.

    (2) Part I. of this Act, so far as it relates to duties of Customs, shall be construed together with the Customs (Consolidation) Act, 1876, and any enactments amending that Act, and so far as it relates to duties of Excise shall be construed together with the Acts which relate to theduties of Excise and the management of those duties.
    Part II. of this Act shall be construed together with the Income Tax Acts.
    (3) This Act may be cited as the Finance Act, 1915.
    Amendment made: In Sub-section (1), paragraph 3, leave out the words "money paid in consideration of the grant of annuities," and insert instead thereof the words,
    "the liability of the company under its annuity contracts as stated in its periodical returns to the Board of Trade under the Assurance Companies Act, 1909.
    That expression 'foreign life assurance fund' means any fund representing the amount of the liability of an assurance company in respect of its life assurance business with policy-holders and annuitants residing out of the United Kingdom whose proposals were made to or whose annuity contracts were granted by the company at or through a branch or agency outside the limited Kingdom, and, where such a fund is not kept separately from the life assurance fund of the company, means such part of the life assurance fund as represents the liability of the company under such policies and annuity contracts; such liability being estimated in the same manner as it is estimated for the purposes of the periodical returns of the company to the Board of Trade under the Assurance Companies Act, 1909."
    Clause, as amended, ordered to stand part of the Bill.
    Question proposed, "That the Chairman do report Progress, and ask leave to sit again."—[Mr. Walter Rea.]
    Mr. D. MASON: When is it intended to take the new Clauses?
    Mr. MONTAGU: That question should be addressed to the Leader of the House.
    Question put, and agreed to.
    Committee report Progress; to sit again to-morrow (Thursday).
    The remaining Orders were read and postponed.
    Whereupon Mr. DEPUTY-SPEAKER, pursuant to the Order of the House of the 3rd February, proposed the Question, "That this House do now adjourn."
    Question put, and agreed to.
    Adjourned accordingly at Twenty-one minutes after Eight o'clock.

WAR.
  EMPLOYMENT OF WOMEN (TREASURY RATES OF PAY).
  EMPLOYMENT OF WOMEN (TREASURY RATES OF PAY).
  COTTON (EXPORTATION TO GERMANY).
  COTTON (EXPORTATION TO GERMANY).
  RELEASE OF SKILLED WORKERS FROM COLOURS.
  RELEASE OF SKILLED WORKERS FROM COLOURS.
  PRISONERS OF WAR.
  PRISONERS OF WAR.
  CREMATION ON BATTLEFIELD.
  CREMATION ON BATTLEFIELD.
  YEOMANRY OUTFIT.
  YEOMANRY OUTFIT.
  WIDOWS AND ORPHANS.
  WIDOWS AND ORPHANS.
  AUXILIARY POSTMEN (ENLISTMENT).
  AUXILIARY POSTMEN (ENLISTMENT).
  IRISH RAILWAY EMPLOYES (WAR BONUS).
  IRISH RAILWAY EMPLOYES (WAR BONUS).
  SCHOOL CHILDREN (CHEAP RAILWAY FACILITIES).
  SCHOOL CHILDREN (CHEAP RAILWAY FACILITIES).
  Sexual Offences.
  Sexual Offences.
LURGAN URBAN DISTRICT COUNCIL BILL.
Committee to meet on Tuesday next.
KILMARNOCK GAS ORDER CONFIRMATION BILL. [H.L.]
  IRVINE AND DISTRICT WATER BOARD (EMERGENCY POWERS) ORDER CONFIRMATION BILL. [H.L.]
    PORT-GLASGOW GAS AND BURGH EXTENSION ORDER CONFIRMATION BILL. [H.L.]
    To be read 3a on Tuesday next.
FRIENDS' PROVIDENT INSTITUTION BILL.
Reported, with Amendments.

PLYMOUTH CORPORATION BILL. [H.L.]
Moved, That Standing Order No. 143 be dispensed with, and that the Bill be now read 3a.—(The Earl of Donoughmore.)
On Question, Motion agreed to, and Bill read 3a accordingly.
THE CHAIRMAN OF COMMITTEES (THE EARL OF DONOUGHMORE): My Lords, before I move that this Bill do pass, there is one small point that I think I ought to explain to your Lordships. This Bill as introduced contained two clauses which were not in accordance with your Lordships' Model Bill—a clause which dealt with gas fittings, and a clause which dealt with electric fittings; and as soon as the Bill was known of I received letters from several of your Lordships desiring to move the rejection of the Bill on Second Reading. I appealed to those noble Lords to allow the Bill to go to Committee. They were good enough to consent to that course, and the Committee passed both of these clauses. Subsequent to the Committee negotiations, which I initiated, took, place between all the parties, and the result has been a settlement on the following lines. The promoters withdrew the electric fittings clause and substituted the Model Clause as regards electric fittings which is found in your Lordships' Model Bill. The gas fittings clause, however, is not in the model form. The corporation are allowed to trade in gas fittings on the same lines as the old Devonport Corporation—now part of the
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Plymouth Corporation—were allowed to trade. The reason why I appealed to the noble Lords who are opposed to the clause to withdraw their opposition was this, that under the faith of a Parliamentary title—namely, under a clause in the Devon-port Corporation Act—the old Devonport Corporation had spent some £70,000 in building up their business. I thought it would. be unreasonable, as this expenditure had been made on capital account under a Parliamentary title, that any action of your Lordships should cause the practical waste of that sum now. For that reason, my Lords, I recommended this compromise to both parties, and I desire to acknowledge the courtesy with which they met me and agreed to it.
Moved, That the Bill do pass.—(The Earl of Donoughmore.)
On Question, Bill passed and sent to the Commons.

ELECTRIC LIGHTING PROVISIONAL ORDERS (No. 2) BILL. (No. 93.)
  GAS AND WATER PROVISIONAL ORDERS (No. 1) BILL. (No. 94.)
  Brought from the Commons; read la; to be printed; and referred to the Examiners.
STREATLEY AND GORING BRIDGE BILL.
Returned from the Commons, with the Amendments, agreed to.

RETURNS, REPORTS, ETC.
National Galleries of Scotland Act, 1906—Eighth Report to the Secretary for Scotland by the Board of Trustees for the National Galleries of Scotland, for the year from 1st April 1914 to 31st March 1915:
Presented (by command) and ordered to lie on the Table.
Universities (Scotland) Act, 1889—Reports for the year 1913–1914 under the provisions of section 30 of the Act—

1. Annual Report on the state of the finances of the University of St. Andrews;

2. Annual Statistical Report by the University Court of the University of St. Andrews to the Secretary for Scotland:

National Insurance Acts—

1. Regulations entitled—

I. The National Health Insurance (Value of Contributions, Exempted Institution) Regulations, 1915, dated 12th June, 1915;

II. The National Health Insurance (Time for joining an Approved Society) Amendment Regulations, 1915, dated 12th June 1915;

2. Provisional Regulations entitled—

I. The National Health insurance (Transition to Full Rate of Benefit) Amendment Regulations, 1915, dated 12th June 1915;

II. The National Health Insurance (Arrears) Amendment Regulations (No. 2) 1915, dated 14th June 1915:

Laid before the House (pursuant to Act) and ordered to lie on the Table.

ELECTRIC LIGHTING PROVISIONAL ORDERS (No. 1) BILL.
  LOCAL GOVERNMENT PROVISIONAL ORDER (No. 7) BILL.
  Read 2a, (according to Order), and committed for Tuesday next.

GERMAN OUTRAGES—COMMITTEES REPORT.
LORD CHARNWOOD LORD CHARNWOOD rose to ask His Majesty's Government whether they would procure the translation of the Report of Viscount Bryce's Committee on German atrocities into the principal languages of Europe, and of sonic Asiatic countries.
The noble Lord said: My Lords, I should like to be allowed to say a word as to my object in putting this Question, because, of course, nothing could be more futile or distasteful to ourselves while the war is at its height than that we should relieve our feelings in any mere words in regard to the conduct of our enemies. But this war, however long it lasts, cannot be quite the final stage in what is nothing less than a conflict between two civilisations—the peculiar civilisation represented by modern Germany, and that other civilisation of which at any rate the rough idea is common, one might almost say, to all the other nations of the earth; and in that
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connection the grisly State Paper to which my Question refers is, and may for a long while remain, a very significant document.
I do not suggest that His Majesty's Government should undertake the task of distributing this or ally other literature in foreign countries. I am not sure that the hawking about of literature quite falls within the sphere of effective Government action. But if this Report were available in a number of different languages, I am confident that a demand for it would arise from time to time among people who read and think in a number of parts of this Empire and in a number of foreign nations, some, perhaps, of which we did not at first think. The initial task, however, of procuring translations of this Report into many foreign languages is one which at the present time would, think, be quite beyond the powers of anybody but the Government itself. If the Government should give at all a favourable response to my request—I am not now going to say one word as to the particular languages into which I think the Report might well be translated—I would only make two suggestions. First, that whatever translations have been or may be made should be kept in type for a considerable while in view of possible future demands; and, secondly, that the Government should lend a favourable ear to any suggestions that may be privately made from time to time as to further languages into which it might with advantage be translated.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF CREWE): My Lords, so far as regards one part of my noble friend's Question, there has already been action in the sense that he desires. Steps have already been taken by His Majesty's Government to translate this Paper into all the principal European languages, and I will see that the suggestion which my noble friend has made as to the retention of the various translations in type for a considerable time receives the notice of those who are responsible. As regards the languages of Asia, or any of them, that matter was also carefully considered, but at present I do not think that there would be an advantage in translating this Paper into any of the Asiatic languages. My noble friend may have some reasons to adduce to the contrary. That falls within the second suggestion which he made. If he has any

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reasons to suppose that it would be desirable to translate this document into any particular language, of course we shall be glad to hear and to consider them carefully. But as at present advised I am disposed to limit the translations to the very large number of European languages into which it has already been arranged that the Paper should be rendered.

TERRITORIALS' PAY IN INDIA.
LORD HARRIS LORD HARRIS rose to ask His Majesty's Government whether they can now specify what improvements in pay and allowances have been granted to Territorial soldiers serving in India and Singapore.
The noble Lord said: My Lords, the subject of my Question has already been before your Lordships on two occasions, and I make no apology for again bringing it forward. The regiments to which it refers have been very unlucky. They accepted, as soldiers should, the duty they were called upon to perform, which, of course, was altogether outside their original contract, of going to India in the place of Regular regiments brought home for the Front. I can say without hesitation that these Territorials went out on the understanding that they were to do their training in that country and were to be brought back to serve at the Front before the end of the year. Instead of that they have been kept out. through the cold weather and now they must stay through the hot, because the trooping season has ended. Therefore they will be kept there for, I suppose, at least a year, though I should hope that before then the understanding—I think I may say it was as much as a promise—will be redeemed and they will be brought back. As regards individuals, there were in these regiments a great many more married men than are borne on the strength of Regular regiments, and there being this understanding, or misunderstanding, as to when they were to come back married officers and non-commissioned officers and married men in the ranks were quite unable to make any arrangements about taking their wives out. They have been at the expense of keeping up two homes, one for themselves out. there and one for their wives at home; and in the ranks, of course, the incubus of the allowance which the married men have had to make out of their pay has been excessively heavy. Consequently from every
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point of view, both as regiments and as individuals, they have been, as I say, very unlucky.
The noble Marquess the Leader of the House, when the matter was brought to his notice, acknowledged that there was a case for consideration; and on the last occasion when Lord Selborne raised the question the noble Marquess said that something was going to be done which might cost a considerable sum of money to the India. Government. Then I understood that a Return was to be made which would give us some information on that point. The Return [Cd. 7949] was laid on the' Table this morning, but it affords no information as regards any advantages which are being given, or which it is proposed to give, to these regiments. I understood from the noble Marquess's last reply that an allowance was to be made in consideration of the disadvantages under which the Territorial in India is serving which would substantially acid to his daily pay. We have no information as to what that is, and that is the main answer which I am trying to obtain from the India Office.
The Return presented to-day purports to show that the Territorial gets as much pay in India as he does in England, but the fallacy of the comparison is that whereas Ire is extremely well fed in England and has not to supplement his daily ration out of his pay, in India he is very badly fed and is compelled to supplement his ration out of his pay. It is not very easy to understand this Return. For instance, in column (3) of the allowances in India you will find "Messing allowance, 1s. 3¾d." But if you look at the next column you will see that there is a messing deduction of Is. 3¾d. Where the man is better off I cannot see, because exactly the same sum as is given to him is deducted. What it amounts to is that the India Government claim that, after giving the Territorial the allowances which he gets and after the deductions which are made, he receives 6½d. in addition to his net pay. My information is that he only gets 2¾d., but the point is that he has to use. this residue to supplement. his ration. I have had letters from Territorial officers who are serving in India, and one of them—he was in a position to be capable of judging, because he had work of the kind to do when he was in England—calculates that a man gets about 2¾d. with which to supplement his

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ration, and that a married man, who has to send home about 3s. 6d. a week, has tot got this. Were it not for the generous assistance of the unmarried men the married men would really, he says, not have enough to cat. The expression used—and I am sure your Lordships will feel it to be lamentable that any officer of a British regiment should be able to write such a thing of British soldiers in thee times—is that "The men ale miserably poor." I hope that the noble Lord who is going to reply will be able to reassure your Lordships that something substantial has been done—not is going to be clone, but has been done—to carry out the acknowledgment of the noble Marquess that it was necessary to do something for these regiments.
As regards proficiency pay, the noble Marquess admitted that in that respect the Territorial in India is worse off than the Regular in England. The reason is this. When the Territorials were mobilised the War Office Order laid down certain conditions under which they might draw proficiency pay. The Territorial had to have put in two camps in order to be able to draw proficiency pay. A lot of these men had never been in the Territorial Force before, and could not have attended any camp; therefore they could not draw proficiency pay until they had done the Army qualification. There were other men who, I dare say, would have been able to complete their two camps had it not been for the fact that a great many Territorial regiments were mobilised either when they were in camp or before they could go into camp last year, so that a great many of these men are disqualified from earning proficiency pay, and my information is that they have been refused it. If the reason for refusing them proficiency pay is that they had not put in two camps, then all I can say is that it is extremely niggardly and paltry; for although these men had not put in two camps of a fortnight each in two years—that is to say, one month's training—they had already put in before they went to India three months' training. Again I saw a complaint in one of the Indian papers that although the Territorial has done his musketry he does not draw the allowance which is said to be made to the Regular who has completed his musketry. Another point is that the Territorial is penalised if lie does not show a full soldier's kit at inspections. Yet these men say that in a great many cases they
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were never issued a full soldier's kit; consequently they have to produce articles in their private possession in order to make up a full kit.
I intimated to the noble Lord that I should ask questions on these points. I therefore hope he will be able to give complete answers. I sincerely trust that we shall hear that the Government of India have recognised the very different conditions of the Territorial officer and man in India from those of the Regular officer and man, and that they have—some time ago, I should hope—made financial arrangements to supplement the pay or allowances of the Territorial in India in such a way as to put an end to such complaints as I have conveyed to your Lordships, particularly the complaint—one that no officer should be able to make of men serving in the British Army—that they are "miserably poor."
LORD ST. AUDRIES: My Lords, I regret to say that I also have received complaints from Territorials in India. There are two Somersetshire battalions serving out there, and from both have come complaints, in letters home to their relations, that they are not sufficiently paid and have to supplement the Government ration out of their rather scanty pay, that they practically have to pay entirely for breakfast and tea., and that there is a compulsory stoppage for cooking dinner. The complaints are, first, of the insufficiency of the food; and, secondly, of the heavy compulsory stoppages.
These Territorial battalions are in a quite different position in many ways from Regular battalions. In the first place, when Regulars go out from home in drafts to battalions in India they go to battalions which probably have been there two, three, or four years, the commanding officers and the quartermasters of which, and all the old soldiers, know the conditions of Indian life and are able to put these young drafts up to all the ways of eking out their allowances, and so on. But these Territorial battalions went out without any previous knowledge of India at all. Their commanding officers and quartermasters knew nothing of the conditions of India, and of what I believe to be the exactions which are occasionally imposed on green commanding officers by native dealers. There is another point of difference between Territorials and Regular soldiers. The

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great mass of these Territorials who have gone out to India agreed voluntarily to give allowances to their dependants quite apart from the compulsory allowance. I should think that certainly seventy per cent. of them are making these voluntary allowances. Had they not been able to do that, a great many of them would have felt considerable compunction about enlisting. It is very rare in Line regiments for a soldier in India to send home regularly an allowance. He may send home something at Christmas and at other times, but not regularly. A deduction from a Territorial's pay for these allowances, running up to from ls. 9d. to 3s. 6d. a week, is a considerable one from pay of 7s. a week.
Turning to the question of proficiency pay, it does seem to me rather absurd that a man who has done at home two trainings in camp of fifteen days each should get 3d. and a sergeant 6d. a day more than a man who has done six months' training at home and getting on for four months' training in India. A man who has done two 15-day camps at home may be considered in time of peace a proficient soldier. He is certainly more proficient than a man who has not done any camp training. But you cannot compare that man with a Territorial who has done eight months' regular training with all the new tests: Kitchener marches, musketry, and so on. Obviously the latter is much more proficient. The hardship is this, that the great majority of these men enlisted on the outbreak of war and have not had any opportunity of going into camp. There is the still harder case of men who left the Volunteers before the Territorial Army was formed, and who afterwards joined the Territorials. Because they have not done the two 15-day camps these men are not to get proficiency pay. I venture to think that if the Government could see their way to grant proficiency pay in view of the training these Territorials have undergone it would do a great deal to remove the grievance.
I feel a personal interest in these men because I was instrumental, with what little influence I had, in getting scores and scores of them to join the Territorial Force. They were not men who came to the scratch late; they were men who cheerfully enlisted in August, before the Kitchener Army was formed, and who joined for the purpose of going to the Front and fighting. The great majority of them are bitterly
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disappointed that they have not had the opportunity of going to the Front, and in all their letters home that I have seen they expre3s the hope that they are now, after the training they have had in India, considered efficient to take their place in the fighting line. Having used my influence to get men to join the Territorials I feel bound to stand up and tell your Lordships when I think they have a grievance. It is a grievance which could easily be put right, and I hope the Government will take up the question of proficiency pay as a first step towards remedying what really is a hard case.
THE UNDER-SECRETARY OF STATE FOR INDIA (LORD ISLINGTON): lily Lords, I will endeavour to reply to the Question on the Paper and also to the supplementary questions which the noble Lords have put forward. I regret very much that there has been delay in regard to an improvement in the conditions of pay and allowances to the Territorials in India, but the delay, as I think noble Lords will appreciate, has been to a large degree inevitable, owing to the fact that in order to arrive at a settlement of this question so many Departments have had to be consulted and their concurrence obtained. First of all the India Office had to consult the Government of India, who were best qualified on the spot to judge what the difficulties and grievances were, to what extent they were valid ones, and by what means they could be rectified. Next the consent of the War Office had to be obtained, and then that of the Treasury; and when noble Lords consider the high pressure upon all these Departments in these days of war emergency I think they will agree that there is at any rate some excuse for the delay that has occurred.
The pay, allowances, and deductions attached to forces in the Army have always constituted a difficult and complicated subject, and this complication has undoubtedly been accentuated under the novel conditions of sending Territorials to India. I venture to express my wholehearted concurrence, as will I am sure all other noble Lords, in the remarks that fell from Lord Harris and Lord St. Audries in regard to the patriotism of the Territorials in serving in India. They left their civil avocations and took up this distant and protracted Imperial obligation, and in doing so they are discharging

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patriotic duties just as much as those who are serving at the Front and taking part in the active campaign. And speaking as one who has known the Territorials for many years I entirely concur with the noble Lord who said that there is no body of men in His Majesty's Forces to-day who are more desirous of taking an active part in the fighting line than the Territorial.
My noble friend the Leader of the House, in the discussion which took place last month, admitted, as the noble Lord said, that the Territorials in India were suffering under a legitimate grievance and that the matter deserved full consideration. He undertook, in consultation with the Government of India and the other Departments, to deal with the question and to ensure that the Territorial serving in India should enjoy conditions as far as possible on equal terms with the Territorial serving in this country. He also promised to have prepared a comparative statement showing the pay, allowances, and deductions of the Territorials serving in India and those of Territorials at home. That statement has been to-day laid on the Table of the House and. can be subjected to examination by noble Lords. I will not attempt to go into the details of this statement. Certain criticisms have been made in regard to it. But broadly speaking I would say this, that in regard to pay and deductions the position of the Territorial in India is the dame as the position of the Territorial stationed anywhere else. It is only in regard to ration allowance that there is a marked difference. But I would point out that the disparity shown by the Return in respect of ration allowance is not quite so bad as would appear, because the ration allowance of 12 s. 3d. to a Territorial at home as compared with that to a Territorial in India, which amounts in all to 5s., does not show, in effect, the exact respective figures. The arrangement in England, with very few exceptions, is for rations to be given in kind to the Territorials, and though it is impossible to ascertain the exact amount which those rations cost I am informed that by contract it would be considerably under the sum of 12 s. 3d., so that, as I have said, the disparity as between 5s. and 12 s. 3d. is not really in effect so great.
In. view of the great difficulties and anomalies that would arise from increasing
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proficiency pay and altering the home service ration to field service ration in India, it has been decided by the Government of India and the other Departments that a daily increased ration allowance should be given to all Territorials in India, this additional allowance to be supplementary to any pay that they at present receive. The amount that it is proposed to give to all Territorials serving in India is as follows:—1st lieutenant, 1s. 4d. a day; 2nd lieutenant, 2s. 8d. a day; rank and file, 3d. a day; and, by the consent of the Treasury, I am pleased to be able to inform noble Lords that this additional allowance is to take effect from the date of landing in India, so that the additional grant will be a substantial sum in the pockets of those men who, as has been described by noble Lords, have suffered hardships.
It has been decided, however, not to touch the proficiency pay. Lord St. Audries suggested that considerable hardship was being experienced under the present conditions. I would point out that before the war no Territorial was eligible for proficiency pay at all; and Territorials are now only eligible for proficiency pay, which I am informed includes their course in musketry, if in other respects they have qualified. Those other respects come under three definite categories. They must either have served for two years as Territorials and attended camp both years for the full space of the fifteen days' training; or they must., in addition to completing one year's Territorial service before mobilisation, have rendered one year's mobilised service; or those who have joined the Territorials since the outbreak of the war must have rendered two years' mobilised service. Therefore a fraction of the old Territorials will be enjoying proficiency pm' to-day, and a considerable number will come in receipt of it in about two or three months time when the first year's mobilisation has expired; therefore to that extent the hardship suggested is at any rate of a diminishing character. The reason, I understand, why the War Office find it difficult in any way to interfere with proficiency pay is this, that it is the same in India as in the case of Territorials in other parts of the Empire, and if you make an exception on behalf of Territorials serving in India you will be immediately setting up a discrimination in favour of one

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group of Territorials. This would be invidious and cause discontent., and therefore the Government consider, and I hope noble Lords will agree, that on the whole the wisest plan to meet the difficulties and complications of the case is to grant an additional allowance on the lines that I have indicated and dating, as I have said, from the day of disembarkation in India.
have been asked by my noble friend who represents the War Office to reply to the other part of Lord Harris's Question in regard to the Territorials quartered in Singapore. The position at present in -regard to those Territorials is this, that they receive the same treatment as Regular soldiers. In the Straits Settlements the troops, including officers, draw full field service ration—that is the same ration as is enjoyed by Territorials in this country—and the usual Army colonial allowance is given to officers and warrant officers to meet the extra cost of living there as compared with the cost in this country. In order to be quite satisfied that there are no hardships attaching, to the troops in Singapore, a telegram has been sent to the General Officer Commanding asking what their conditions are, whether there are any grievances, and, if so, what proposals should be made. An answer has not yet been received, but directly it arrives the information will be conveyed to the noble Lord. But it would appear, on the face of it, that the Territorial in Singapore and the Straits Settlements, in view of the fact that he is in receipt of field service ration, has not so complete a. complaint to make as undoubtedly the Territorial had in the past in India.
VISCOUNT MIDLETON: My Lords, I am sure the House will have heard with satisfaction the statement which the noble Lord has just made. On the last occasion when this subject was discussed the noble Marquess the Leader of the House, in reply to a question which I put to him, undertook that the case of Territorial medical officers now serving in India should be considered, and I have only risen to express the hope that, although they have not been referred to in the statement to which we have just listened, their case will not be forgotten. We all know the sacrifices which have been made by Territorial officers and
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who have gone to India, but in some cases the sacrifices made by Territorial medical officers have been infinitely greater. Their case is a particularly hard one, and were sufficient public attention called to it I believe we should have no further halting in the matter. Medical officers who have enlisted since the beginning of the war enjoy a larger pay and bonus, and the medical officers who have been assigned to the new Army also receive higher pay. I do not know whether Lord Islington is in a position to make any statement on this question, but it directly involves the India Office. I have reason to believe that the War Office are favourable to an increased allowance being given to the Territorial medical officer; now serving in India. Perhaps the noble Lord who represents the Treasury, Lord Hylton, will be able to tell us off-hand whether or not the Treasury look favourably upon the War Office representations with regard to these officers. But the point I would urge is that this question has been under consideration now for several months, and, as my noble friend Lord Harris pointed out, the stay of these regiments in India has been infinitely more prolonged than they supposed would be the case when they went out eight or nine months ago. Bis dat qui cito dat really applies in this case. May I ask the noble Lord whether he will try to thread the mazes of the Departments and arrive at a conclusion with regard to these medical officers, and, if possible, announce it to your Lordships at an early date.
LORD ISLINGTON: I will certainly consult my colleagues in the India Office as to whether anything can be done in the direction suggested by the noble Viscount, but I am given to understand that the condition of the Territorial medical officer in India is on all fours with that of the Territorial medical officer serving in other parts of the Empire; so that were any improvement in the condition of the former projected you would immediately conic up against the difficulty to which I alluded just now of discrimination in favour of one group of Territorials. If the noble Viscount could point out specifically in what way the Territorial medical officer in India is suffering from hardships which the Territorial medical officer in England and elsewhere is not suffering from, it would simplify my inquiry in the Office.
VISCOUNT MIDLETON: The Territorial medical officer has had to pay somebody at home to look after his practice while he is in India, and in many cases after making this payment he has absolutely nothing left with which to maintain himself and his family. When the War Office wished to supplement the number of these officers in order to have sufficient for the new Territorial regiments as well as for the new Army, they found they were obliged to offer a higher rate of remuneration. So that tic Territorial medical officer who joined before the war, and had, perhaps, for years past given time and money to training, is in a worse position than the man who came in after the war. Unwittingly considerable hardship has been thrown on these medical officers, and I could send the noble Lord a pile of correspondence which would convince him that the case is one for immediate consideration. I may say that I would be the last person to ask the Government to add to the enormous charges which are now falling on the country except in a case of really proved hardship.
THE EARL or DARTMOUTH: With regard to the point that if certain things were done for the Territorials in India other Territorials would expect the same, may I suggest that, as the Territorials in India are prejudiced by having to satisfy four Departments, any concession to them might be looked upon as a just compensation for the trouble they had had to go through.
LORD HARRIS: It may seem rather audacious on. my part to suggest to the noble Viscount, Lord Midleton, that he is addressing the wrong Department, but I should have thought that the point which he raised was more a War Office than an India Office question; and. possibly the Paymaster-General aright be disposed to take up the matter and look into it and give us a reply- in that style which attracted us so much when he sat on these Benches. The grievance was published in a letter in The Times not very long ago. It is this, that the medical officers who had been serving for years—some of them in the old Volunteers and afterwards in the Territorial Army up to the date of mobilisation —are, according to the letter in The Times, which has never been contradicted. £150 a year worse off than the medical officers who joined the Territorial Army subse-
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quently. The War Office, I presume, found that they could not get sufficient medical men to officer the new battalions without giving higher pay. The result is that the old Territorial medical officers who for years have been putting in patriotic service are not only:£150 a year worse off now, but I believe will be worse off by a £60 bonus at the end of the war, than the medical officers who recently came in. If that is true, it does seem to me a serious hardship not only on Territorial medical officers in India but on Territorial medical officers serving elsewhere. I thank the noble Lord for his full and. clear reply to my Question. I understand that the increased allowance represents a clear 3d. a day in excess of everything the Territorial now receives, and in excess of proficiency pay if he is earning it.
THE PAYMASTER-GENERAL (LORD NEWTON): As my noble friend opposite has made a more or less direct appeal to me, I feel constrained to reply that, much to my regret, I find myself unable to supply him with any information on the subject. This question has been brought up quite unexpectedly as far as I am concerned, and I am bound to take refuge in the common expedient of asking noble Lords opposite to be good enough to put a Motion on the Paper.

CHAPLAINS WITH THE ARMY.
THE LORD ARCHBISHOP OF CANTERBURY: My Lords, in venturing to ask His Majesty's Government what is at present the proportion of chaplains to men actually serving with the Expenditionary Force, I am anxious to make clear that I do not do so as a mere matter of statistical curiosity nor with a desire to make any complaint against the War Office, who have from the first shown a full consideration of the importance of, from their view, an adequate supply of chaplains; still less do I want to complain of the action in this matter of the Chaplain General, who had extended throughout the utmost considerateness and courtesy to all the inquiries we have made.
The reason I put the Question is this. I and many other Bishops continue to receive private letters from officers and men at the Front who complain in general terms,

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not officially of course, that there is a strange absence of an adequate supply of chaplains at a time when chaplains are most wanted. They say that in some places there are practically no chaplains at all, and they contrast the position of members of other Churches with their own as members of the Church of England. An enormous percentage—something like 70 per cent. or more—of the men in all ordinary regiments belong to the Church of England, and the supply of chaplains in proportion to the men is supposed by many of those who write to us to be very much more ample in the case of those who are not members of the Church of England than it is in the case of those who are. I find it difficult to form any opinion on matters of that kind in the absence of a full statistical statement of what is, as a matter of fact, the number of chaplains at present assigned to the troops in proportion to the number of men serving, and it is in order to have those facts quite clearly before us that I ask this Question. When we have the figures and are able to see what the Government consider the proper number, we shall be able to judge whether the complaints which have been made are justified; and I should probably desire, if necessary, to raise the question again on the basis of the information which will then be furnished to us.
I should like to say that the testimony has been universal as to the appreciation of the services of our chaplains, and I think many of your Lordships must be aware that a good many of those who are now serving are anxious that there should be a larger number in the field of men who, at a time such as the present, are called for day and night—it is a constant requirement—and whose services in such conditions have been appreciated to the full. I should be glad if we might at least have the statistical facts which will enable us to judge whether or not the complaints which reach us seem to be well-founded.
LORD NEWTON: My Lords, it is not considered desirable by the War Office to state the exact proportion of chaplains to the men actually serving with the Expeditionary Force, as this would disclose the actual number of troops in France. But as regards the number of chaplains I am able to supply the most rev. Primate with the following particulars. The number of chaplains of the different denominations who had been posted up to the 12th of June (including Canadian chaplains and chaplains of the Indian Establishment) was as follows:—Church of England, 213; Roman Catholic, 96; Presbyterians, 55; Wesleyans, 34; United Board (including Congregationalists, Primitive Methodists, and others), 27; making a total of 425. The establishment is four chaplains to each Infantry Brigade, comprising one Church of England, one Roman Catholic, and one Presbyterian or Nonconformist, and in addition one of the predominating denomination. One chaplain is also allowed for the Divisional Troops of each Division. There are three chaplains also with each General and Stationary Hospital and Casualty Clearing Station. The present establishment of chaplains was arrived at as a result of a conference held at General Headquarters between the military authorities and the representatives of the various religious denominations. Perhaps I ought to add that the particulars which I have given apply only to the Expeditionary Force in France.

BUSINESS OF THE HOUSE.
LORD ISLINGTON: My Lords, as there is no business on the Paper for to-morrow I beg to move that, except for Judicial business, the House do adjourn until Tuesday next, June 22.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at twenty-five minutes punt Five o'clock, till To-morrow, half-past Ten o'clock.