Sitting of 20 October 1915

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

PRIVATE BUSINESS.
Dundee Corporation Order Confirmation Bill,
"To confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1899, relating to Dundee Corporation." Presented by Mr. M'KINNON WOOD; and ordered (under Section 7 of the Act) to be considered To-morrow.

TRADE REPORTS (ANNUAL SERIES).
Copies presented of Diplomatic and Consular Reports, Annual Series, Nos. 5490 to 5509 [by Command]; to lie upon the Table.
EXECUTION OF MISS CAVELL (MISCELLANEOUS, No. 17, 1915).
Copy presented of Correspondence with the United States Ambassador respecting the execution of Miss Cavell at Brussels [by Command]; to lie upon the Table.
UNIVERSITIES OF OXFORD AND CAMBRIDGE ACT, 1877 (OXFORD).
Copy presented of Statute made by the Governing Body of St. John's College, Oxford, on 2nd July, 1915 (and sealed on 5th July, 1915), amending Statute XVII. of the Statutes of the College by adding after Clause 9 thereof a new Clause numbered 10 [by Act]; to lie upon the Table, and to be printed.
NAVAL AND MARINE PAY AND PENSIONS ACT, 1865.
Copy presented of four Orders in Council, dated 14th October, 1915, under the Act [by Act]; to lie upon the Table.
FOREIGN JURISDICTION ACT, 1890.
Copy presented of Order in Council, dated 14th October, 1915, under the Act, entitled the Eastern African Protectorates (Appeal to Privy Council) Amendment Order in Council (No. 2), 1915 [by Act]; to lie upon the Table.
DOCKYARD PORTS REGULATION ACT, 1865.
Copy presented of Order in Council, dated 14th October, 1915, constituting the Dockyard Ports of Plymouth and Devonport, and repealing the Orders in Council dated 11th October, 1912, and 9th February, 1914 [by Act]; to lie upon the Table.
MERCHANT SHIPPING ACT, 1894.
Copy presented of two Orders in Council, dated 14th October, 1915, made under the Act [by Act]; to lie upon the Table.

SHOPS ACT, 1912.
Copies presented of Orders made by the Councils of the under-mentioned local authorities, and confirmed by the Secretary of State for the Home Department:—
County of London (portion south of the River Thames);
County of Worcester (urban district of Lye and Wollescote)
[by Act]; to lie upon the Table.

FORESHORES.
Copy presented of Treasury Minute, dated 12th October, 1915, directing the application of Moneys received by the Board of Trade, in the year ended 31st March, 1915, in respect of the rights and interests of the Crown in the Foreshores of the United Kingdom [by Act]; to lie upon the Table.
ORAL ANSWERS TO QUESTIONS.
  WAR.

    ROYAL NAVAL RESERVE (WARRANT ENGINEERS).
    Sir C. KINLOCH-COOKEasked the First Lord of the Admiralty whether he is

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    aware that Royal Naval Reserve warrant engineers, called up from the merchant service at the commencement of the War, are only receiving 8s. 6d. a day, whereas regular Royal Navy artificer engineers get 1s. a day extra for every five years' service and at the end of ten years 10s. 6d. a day; and whether he can see his way to equalise matters by raising the Royal Naval Reserve warrant engineers to 10s. 6d. a day, especially in view of the fact that men who declined to join as warrant engineers, Royal Naval Reserve, before the War are now holding temporary commissions as lieutenant-engineers with the corresponding pay of 14s. a day?
    The SECRETARY to the ADMIRALTY (Dr. Macnamara): The answer to the first part of the question is in the affirmative, but I may observe that warrant engineers, Royal Naval Reserve, with the necessary qualifications receive at all times an annual retainer of £15 a year. It is not proposed to make any change in the regulations in regard to the pay of these officers.

    AIRCRAFT RAIDS.
    Mr. JOYNSON-HICKSasked the First Lord of the Admiralty which Departments of the State and what actual persons are responsible for the defence of London from Zeppelin raids?
    Dr. MACNAMARA: Under arrangements made in August, 1914, the primary responsibility for the defence of London rests with the Admiralty. The Some Office are responsible for the arrangements about lighting and other precautionary measures of a non-military character, and they act in co-operation with the Admiralty. The officer in charge of the gun defence of London is Admiral Sir Percy Scott.
    Mr. JOYNSON-HICKS: Can the right hon. Gentleman say whether, when Army aeroplanes go up, they are directed by the Admiralty as well? What is the exact provision for the defence of London in regard to aeroplanes?
    Dr. MACNAMARA: The general responsibility rests with the Admiralty, as I have said. I think the question as to aeroplanes over London is down for to-morrow.
    Mr. JOYNSON-HICKSasked the Prime Minister whether the Cabinet has considered the policy of aeroplane reprisals on German towns as a deterrent to the Zeppelin air raids on our defenceless population; and whether such policy will be adopted?
    The UNDER-SECRETARY of STATE for WAR (Mr. Tennant): The policy of reprisals is always one open to controversy. The Royal Flying Corps is a military organisation and is engaged upon military operations. The dastardly raids by the enemy on undefended towns and defenceless people will not and should not be allowed to divert the energies of this fighting force from its primary military duties.

    ROYAL NAVAL RESERVE.
    Mr. CATHCART WASONasked the First Lord of the Admiralty (1) if it has been reported to him that a man named Charles Sutherland, belonging to the Shetland section, Royal Naval Reserve, died in a cell at Fort Charlotte, Lerwick, at 6 a.m. on the 2nd instant; has he any official information showing that the deceased had been sentenced by the officer commanding the troops in Shetland to two days' detention in cells for an alleged breach of naval discipline which the deceased emphatically denied and for which no evidence was submitted; that the only food deceased received while detained was 1lb. of bread and some water for each day; that on this fare he was caused to break road metal all day; that he was placed all night in a cell which was not heated, and was not supplied with sufficient clothes to keep him warm; if so, will he state what action he proposes to take in the matter; and (2) if he is aware that on Sunday, 5th September last, the officer commanding the troops in Shetland accused a man belonging to the Shetland section, Royal Naval Reserve, of chewing tobacco and spitting on the church floor during divine service on the occasion of church parade, and that without reasonable evidence or proof the officer held the man to be guilty notwithstanding the fact that he neither chews nor smokes; that the officer on looking up the man's age said to him that he could not order him to be birched as he was over eighteen years of age, but that he would give him the option of seven days' detention in cells or six strokes with the birch; that the man elected the latter,

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    whereupon his clothes were removed and he was laid over a gun on the parade square of Fort Charlotte, Lerwick, and flogged; and if he will state how he proposes to deal with the officer responsible for the execution of this sentence?
    Dr. MACNAMARA: No information has reached the Admiralty respecting either of the cases mentioned by my hon. Friend. Reports have, however, been called for.
    Mr. FALLEasked the Secretary to the Admiralty if he is aware that a Royal Fleet Reserve man, with a licensed business ashore, called up for service is assessed and taxed on the last three years of trade, plus Navy pay, plus pension; and if this assessment and taxation is correct.
    Dr. MACNAMARA: I venture to suggest that this question is one which should properly have been addressed to my right hon. Friend the Chancellor of the Exchequer. I am advised by the Inland Revenue authorities that the reply is in the affirmative. The assessment is, however, subject to allowances for abatement, life assurance, and children, and the Finance Act, 1914 (Session 2), provides for further relief in a case of this nature by the reduction of the assessment of the profits on the licensed business to the income of the year of assessment in lieu of on the average of the last three years of such profits.

    ROYAL MARINE BRIGADE (PROMOTIONS).
    Mr. FALLEasked the Secretary to the Admiralty if he is aware that time expired and other men of the Royal Marines who have come home from distant lands and who have rejoined as privates, and have been sent to the Dardanelles and elsewhere, and have returned from thence temporarily unfit to this country after having been given, on active service, the rank of corporals and even sergeants are, on their return to barracks at Gosport, reverted to the rank of private; and if this is merely due to difficulties of obtaining confirmation of the promotions or of set purpose?
    Dr. MACNAMARA: The men referred to were only promoted temporarily whilst serving in the Royal Marine Brigade, and on return to headquarters reverted to their substantive ranks, not being required any longer to perform the duties of non-
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    commissioned officers. The question of the retention of their rank by these men on return to headquarters is under consideration, but I cannot give any undertaking on the subject.
    Mr. FALLEasked the Secretary to the Admiralty if he is aware that lieutenants promoted during the War from commissioned warrant officers' retired list are, when called up and given promotion, receiving the pay of their new rank; if it is the intention of the Admiralty to give these gentlemen the pay of their rank; if he is aware that their new rank obliges them to mess in the ward room, which entails an additional expense of not less than £100 a year over and above the Admiralty messing allowance; and if some provision can be made to remedy this state of affairs?
    Dr. MACNAMARA: Hitherto commissioned warrant officers, retired with the rank of lieutenant or granted the rank of lieutenant on the retired list after being called up for service, have received pay on the commissioned warrant officers' scale, but by an Order in Council, published in the "London Gazette" of the 15th instant, these officers will be paid on the scale applicable to active service lieutenants promoted from commissioned warrant rank. This will take effect from the 1st August, 1914. As regards the last part of the question, these officers when in a ward room mess receive a mess allowance of 1s. 6d. a day. It may also be mentioned that all retired officers called out for service receive a bonus of 25 per cent, of the full pay earned exclusive of allowances.

    EGYPTIAN FINANCE AND COTTON.
    Mr. GINNELLasked the Secretary of State for Foreign Affairs (1) what are the arrangements, if any, made to protect Egyptians from loss in view of the refusal of the National Bank of Egypt to issue gold and the depreciation of paper money so that a £5 note has to be paid for the value of £3; and (2) if he will state the price of Egyptian and of other foreign cotton, respectively, before the outbreak of War and now; by whom and by what means the price of Egyptian cotton has been prevented from increasing proportionately; and whether this restriction and the depreciation of paper money are the chief causes of the present distress in Egypt?
    The SECRETARY of STATE for FOREIGN AFFAIRS (Sir E. Grey): The market price on the Liverpool Exchange of fully good fair brown Egyptian cotton in the middle of July, 1914, was 9.10d. per lb., and the price on 18th October, 1915, was 9.95d. per lb. The price of middling American was 7.35d. in July, 1914, and 7.29d. on 18th October, 1915. Thus the price of American cotton, though rising, is still slightly lower than before the War. On the other hand, the price of Egyptian cotton has been higher than before the War for the last three or four weeks. The second part of the question does not therefore arise. As regards the financial parts of the question, I can only say that having regard to the fact that the exchange between this country and Egypt is in favour of Egypt I do not understand how there can be any difficulty in carrying on legitimate trade.
    Mr. T. C. TAYLOR: Can the right hon. Gentleman say whether it is not the case that the price of cotton would have been lower if free planting had been allowed by the Government, and that it has been kept up artificially by restrictions of planting?
    Sir E. GREY: I shall require notice of that question.

    EGYPTIAN LEGISLATIVE ASSEMBLY.
    Mr. GINNELLasked the Secretary of State for Foreign Affairs the length of time the Legislative Assembly of Egypt has sat, if at all, since the War began; and, if the power of the Sultan or people of Egypt to convene the Assembly has been suspended, will he say why, and for what length of time?
    Sir E. GREY: So far as I am aware, the Legislative Assembly has not sat since the outbreak of war. The power of the Sultan and his responsible advisers has not been suspended.

    OPERATIONS IN EGYPT.
    Mr. GINNELLasked the Secretary of State for Foreign Affairs whether the General Officer Commanding the British Forces in Egypt at the outbreak of the War had the authority of His Majesty's
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    Government for the pledge he gave to the Egyptian people that, recognising the respect and veneration with which the Sultan of Turkey in his religious capacity is regarded by the Mahomedans of Egypt, Great Britain takes upon herself the sole burden of the War in Egypt without calling upon the Egyptian people for aid; whether the approval of the Egyptian Legislative Assembly was afterwards obtained before the Egyptians were called upon to fight against the Turks; and, if the theory is that they were fighting for Egypt, will he explain why medals in reward of bravery were conferred upon Egyptian officers not by the Sultan of Egypt but by British authorities?
    Sir E. GREY: The answer to the first part of the question is in the affirmative; that to the second part in the negative, as the Assembly was not sitting. As regards the last part, I have no information on the subject which would appear to be of a military nature.
    Mr. GINNELLasked the Secretary of State for Foreign Affairs the number of Egyptians deported, or invited without option of refusal to leave Egypt, since the War began, the number interned in Malta and other places of internment, the number required to leave Alexandria and Cairo and go to live in villages, and the number in prison in Egypt on political grounds?
    Sir E. GREY: So far as I am aware, no Egyptians have as yet been deported from that country. On the other points dealt with in the question I have no information.

    RUSSO-JAPANESE UNDER-STANDING.
    Mr. YEOasked the Secretary of State for Foreign Affairs if, in view of our alliance with Japan, he can state whether he has heard officially from either Russia or Japan with regard to the under standing or alliance which it is announced they are contemplating?
    Sir E. GREY: I may perhaps be permitted to observe that any such information, if it had reached me, would necessarily be confidential, and I venture therefore to deprecate any question of this nature.

    POSTAL TRANSIT BETWEEN NEUTRAL STATES.
    Mr. KINGasked the Secretary of State for Foreign Affairs whether the actions taken by His Majesty's Government affecting postal matter, in transit, across British territory, between neutral States, has been the subject of communications and explanations offered to the Governments of any neutral States; if so, whether the position of the Government has been conveyed by any general statement applicable to all States and circumstances; and, if so, whether such statement can be published or a copy placed in the Library of this House?
    Sir E. GREY: The answer to the first part of the question is in the affirmative; no general statement has been issued, but the attitude of His Majesty's Government, as expressed in the reply which I gave on the 12th instant, has been explained to those neutral Governments who have inquired.

    PRESS INSTITUTIONS (EGYPTIAN).
    Mr. GINNELLasked the Under-Secretary of State for Foreign Affairs for what purpose the Egyptian Government pays to Reuter's Agency in Cairo 1,500 Egpytian pounds a year; what is the total amount spent annually by the Egyptian Government in subsidising Press institutions in Egypt and in England; and whether His Majesty's Government will advise the Egyptian Government to stop all such payments, at least for the duration of the War, and to spend the money in relieving the starving Egyptians?
    Sir E. GREY: I have no information on the points mentioned in parts 1 and 2 of the question. As regards part 3, I am not prepared to make any representations on the subject.

    NEW ARMIES (TRANSFER OF SEASONED MEN).
    Lieut.-Commander WEDGWOODasked the Under-Secretary of State for War, whether the recent failure to hold certain captured trenches on the Western front has yet convinced the War Office that a salting of officers and men who have seen modern fighting is essential to the efficiency of the New Armies, and that
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    greater facilities will therefore be given for wounded officers and men to transfer with a rise in grade into the New Armies?
    Mr. TENNANT: I answered a question on this point put by my hon. and gallant Friend on the 30th September, but regret if I did not then make it clear to him that the principle he advocates had already been adopted before the date of that question. The bearing of current experience on this and similar questions will not of course be neglected.

  MEDITERRANEAN EXPEDITIONARY FORCE.

    SUVLA BAY OPERATIONS.
    Lieut.-Commander WEDGWOODasked the Under-Secretary of State for War if he will state who the officer was who was in command of the troops that landed at Suvla Bay; whether he is still in command, and, if not, whether he is still in the Service receiving full pay?
    Mr. TENNANT: The officer who was in command at Suvla Bay is no longer in any command. I do not think it would be in the public interest to say more on this point at the present time.
    Lieut.-Commander WEDGWOOD: Who appointed him?
    Mr. TENNANT: He was appointed in the usual way.
    Lieut.-Commander WEDGWOOD: On whose recommendation?

    WOODEN SHELTEHS.
    Mr. JOYNSON-HICKSasked whether supplies of timber and corrugated iron have been disembarked at the Dardanelles to enable shelters to be erected for the troops during the winter months; and, if not, what other steps have been taken to prepare for the comfort and health of the troops during the coming winter?
    Mr. TENNANT: Careful attention has been given to this matter. Arrangements for the supply of timber are being made locally, and a consignment from this country to supplement the local supplies has also been arranged for. Corrugated steel has been sent. I may add that sectional huts are being made up and despatched from this country, in addition to the supplies of material I have mentioned.

    HEALTH OF THOOPS.
    Mr. JOYNSON - HICKSasked whether the Government or "War Office have sent out a sanitary commission to the Dardanelles; and, if so, whether their Report will be published?
    Mr. TENNANT: Many experts in various branches of sanitary science have been sent to the Mediterranean and they have made recommendations locally to the military and medical authorities. Although they in effect perform the functions of a sanitary commission, they have not been required to report collectively to the War Office.
    Mr. JOYNSON-HICKSasked (1) what is the total number of cases of sickness removed from the Dardanelles during the campaign, and what is the number removed during the months of August and September, respectively; and (2) what was the average proportion of sick to wounded in August and September, respectively, removed from the Gallipoli peninsula; and is the proportion of sick to wounded such as might reasonably be expected under modern campaigning conditions?
    Mr. TENNANT: I stated yesterday, in a supplementary reply I gave to the hon. Gentleman, that I would endeavour to get figures. Statistics as to the number now in hospitals in the Mediterranean area, of those who have died from sickness in that area, and of those who have been in hospitals in that area and have recovered and returned to duty, are not available and to obtain them it will be necessary to telegraph. I regret that I cannot give any additional information to-day except to reassure the House that in the case of dysentery, which has been the chief disease, the figures show a remarkable and gratifying decline since the beginning of this month.
    Mr. BOOTH: Can my right hon. Friend say whether the information which he now declines to give was given to a small group of labour Members?
    Mr. TENNANT: I declined to give no information which it was in my power to give: it is merely because I have not got the information that I have not given it to the House. That being so, the latter part of the question does not arise.
    Mr. JOYNSON-HICKS: If I put down a question in about a week's time will the right hon. Gentleman be able to give information as to the number who have been removed?
    Mr. TENNANT: I think I can promise that.

  PRESS BUREAU.

    MR. BUCHAN'S DISPATCH.
    Lieut. - Commander WEDGWOODasked the Under-Secretary of State for War whether he can give the name of the officer responsible for censoring Mr. Buchan's dispatch, and referred to by the Home Secretary in his letter to the Press as being a military officer in France?
    Mr. TENNANT: I do not think that it would be in accordance with correct practice to state in this House and thereby to surround with publicity the names of subordinate officers who might be regarded as having made mistakes.
    Mr. HOGGE: Can the right hon. Gentleman say whether we pay this officer or not?
    Mr. TENNANT: Yes, Sir, I suppose that is so.
    Mr. HOGGE: Then are we not entitled to know something about it?
    Mr. TENNANT: I think it would be very undesirable.

    REFUGEES (HOUSING).
    Mr. BUTLER LLOYDasked the Under-Secretary of State for War if a number of portable dwellings for the housing of refugees in Belgium and Northern France are to be manufactured in the United States of America to the order of the British Government, thus taking a great amount of work abroad which could be done as well, as cheaply, and as quickly in this country; and if he is aware that there are a number of carpenters and joiners in this country above military age who are fearing unemployment during the coming winter?
    Sir E. GREY: I would refer the hon. Member to the answers returned to the hon. Member for Devonport on the 28th ultimo and to the hon. Member for Monmouth District on the 12th instant. I have no further information on the subject.

    NO-CONSCRIPTION FELLOWSHIP.
    Sir LEO CHIOZZA MONEYasked the Under-Secretary of State for War whether his attention has been directed to the formation of a no-conscription fellowship, the address of which is Merton House, Salisbury Square, London, E.C.; and whether this organisation has the support of the Government?
    Mr. TENNANT: Yes, Sir, the attention of the War Office has been drawn to the No-conscription fellowship. This organisation has not the support of the Government.
    Mr. WHITEHOUSE: Is my right hon. Friend aware that there is a very important branch of this fellowship in this House?
    Mr. TENNANT: No, Sir. I should be very much interested to know in what quarter of the House.

  RECRUITING.

    PAY AND ALLOWANCES.
    Sir L. CHIOZZA MONEYasked the Under-Secretary of State for War if, owing to the pay offered to tradesmen enlisted in the Army being so much higher than the pay of private soldiers, recent recruiting in London and some other places has been for the most part of tradesmen and not of fighting men?
    Mr. TENNANT: The answer is in the negative.
    Sir CHIOZZA MONEYasked the Under-Secretary of State for War if he will state what pay and allowances are now offered to private soldiers and what to men enlisting under trades?
    The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Forster): The Army requires a small proportion of highly skilled men of various trades, to whom various special rates of pay are given. It will probably suffice for the hon. Member's purpose if I mention the 6s. a day given to skilled motor drivers and 5s. given to smiths and fitters. The pay of the Infantry recruit is 1s. a day. There is no difference in the allowances.
    Mr. LLEWELYN WILLIAMSasked the Under-Secretary of State for War whether the statement made at a recruiting committee meeting held last week at
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    Dublin, and presided over by the Lord Lieutenant, that Ireland had contributed 81,000 recruits to the Army since the outbreak of war and that 1,100 recruits a week were now asked for from Ireland, was made with the approval of the Secretary of State for War; and, if so, whether he is now prepared to supply to the House similar figures as to the number of recruits already obtained and required to be obtained from England, Wales, and Scotland, respectively?
    Mr. TENNANT: The figure given by the Lord Lieutenant is apparently derived from information obtained locally. It is not known on what principle the demand for 1,100 recruits a week is based. It is hoped that Irishmen will take advantage of the opportunities now available under the scheme initiated by the Lord Lieutenant with the assistance of the hon. Member for Waterford and influential gentlemen in all parts of Ireland. It is not considered advisable to give the figures asked for in the last part of the question.
    Mr. WILLIAMS: Will the right hon. Gentleman consider the advisability of giving the figures with regard to Wales?
    Mr. TENNANT: I will consider that, but I do not hold out any great hopes of being able to satisfy my hon. Friend.
    Sir LEO CHIOZZA MONEYasked the Prime Minister if his attention has been directed to the fact that in the current issue of a newspaper called "The Nation," published in London, the statement of the Labour Recruiting Committee that over 30,000 recruits per week are required is denounced as a figure almost wildly in excess of the need, and that at most the nation requires only 5,000 to 8,000 recruits per week in the coming year; if he is aware that this statement has been reproduced by "The Daily News and Leader," and given a wide circulation; and whether the Government will instruct the Censor to prevent the publication of inaccurate statements injurious to the national cause and dangerous in the existing military situation?
    Mr. TENNANT: I have not seen the statement in the newspapers referred to, but my hon. Friend will have seen the authorised appeal now widely placarded all over London, which mentions 30,000 recruits a week as the requirement. I think it is well-known that 5,000 to 8,000 recruits a week does not represent the requirements of the situation, and I cannot

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    imagine that the statements referred to can have misled any properly informed person.
    Mr. SNOWDEN: Arising out of the latter part of the question, may I ask the Government to take into consideration the desirability of appointing the hon. Member for East Northants as Press Censor, if he can be spared from his important duties at the Admiralty?

    GERMAN GUN TROPHIES.
    Mr. LLEWELYN WILLIAMSasked the Under-Secretary for War whether the Welsh Guards in their first engagement with the enemy captured a German gun; and, if so, whether there is any objection to the gun being brought to Wales to be exhibited during the present recruiting campaign?
    Mr. TENNANT: I am glad to be able to inform my hon. Friend that arrangements are being made for some of the guns captured from the enemy to be exhibited. I have called for information regarding the particular gun mentioned.

    SOLDIERS (FOOD AND LODGING IN LONDON).
    Mr. CATHCART WASONasked the Under-Secretary of State for War if he will state whether the War Office makes any provision for Colonial soldiers or others for food and lodging in London; and, in view of the fact that the Horticultural Hall, Vincent Square, is rarely used except for purposes of luxury such as pet dogs and fancy flowers, he will acquire the use of the building for the accommodation of our soldiers, who seem now to have no consideration paid them except by the Young Men's Christian Association and private hospitality?
    Mr. TENNANT: I understand that the Union Jack Club, the Maple Leaf Club, and other similar institutions in London are open to Colonial soldiers equally with soldiers belonging to the United Kingdom. His Majesty has graciously placed at the disposal of soldiers arriving in London from the front the Buckingham Palace Riding School. I am also informed that a new and very large club, with some 227 beds for soldiers of Dominion contingents,
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    is just being got ready. The Victoria League Club, which has hitherto not been residential, is also opening a house which will accommodate a considerable number of men. My hon. Friend will thus see that this matter has not been neglected, and that to say that no consideration is paid to our fellow countrymen from the Dominions is to convey a most misleading impression. I am not sure that the Horticultural Hall would be very suitable for the purposes in view. At any rate, it certainly would not be so suitable as the residential clubs I have referred to.
    Mr. WASON: Is it not a fact that soldiers arriving from the front, especially Colonial soldiers, have not been met, and have been dependent entirely upon the exertion of the Young Men's Christian Association for the accommodation provided for them, and that in many cases they have been obliged to accept the hospitality of the Thames Embankment?
    Colonel LOCKWOOD: Before answering that question, will the right hon. Gentleman state whether he is aware that the Royal Horticultural Hall is used for exhibitions of fruit and vegetables grown in England, and is meant to encourage that industry?
    Mr. TENNANT: I have no information on that subject, but I quite believe what the right hon. and gallant Gentleman has said. I have no information which at all bears out the suggestion made by my hon. Friend the Member for Orkney and Shetland. On the contrary, I am given to understand that soldiers arriving here from the front are received in the most hospitable manner, and have every consideration paid to them, and that there is nothing lacking in the manner in which they are entertained while here.

    HAY PURCHASES.
    Mr. CLANCYasked the Financial Secretary to the War Office whether his attention has been called to the resolution of protest passed by the County Dublin Farmers' Association against the practice of the agents of the War Office in the purchase of hay in that county; whether the price paid for hay in that county is nearly a third under the market price, although it is notorious that rents have been fixed in the metropolitan county on a scale much higher than usual

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    on the ground of proximity to the metropolitan markets; and, if so, whether he will cause a proper price to be paid in future?
    Mr. FORSTER: No, Sir, my attention has not been called to the resolution referred to. The price paid for hay in the county of Dublin is that approved by a representative body specially called together by the Irish Department of Agriculture. It appears also to be in agreement with the market price on the Dublin market, as hay has quite recently been acquired by the Department on the Dublin market at the price which is being paid elsewhere in the county of Dublin.
    Mr. PETOasked whether he can state the daily wage paid to men employed to cut and truss hay purchased for the War Office in the Southern Command and the rate usually paid by farmers for the same service; whether hay after it has been cut out is always either promptly used or protected from the weather; and, if not, if he will take some steps in this matter to avoid the waste of public money in future?
    Mr. FORSTER: Men employed in cutting and trussing hay purchased by the War Office are paid 4s. 6d. per ton with an additional 6d. per ton to cover their lodgings in cases where men are employed away from their homes. This is the usual Tate paid for this form of labour throughout the country. Where the Department is responsible for protecting hay from the weather after it is cut or where the hay has to be stacked waiting delivery to the nearest station or other place required, sheets are provided for the purpose of protection.
    Mr. PETO: Is the hon. Gentleman aware whether the sheets provided are used, and whether, as I have been informed, in some cases six months' hay has been left out quite unprotected from the weather?
    Mr. FORSTER: If sheets are provided, I cannot see any reason why they are not used. If my hon. Friend will give particulars of any case which he has in mind, I will make inquiries.

    HOSPITAL STOPPAGES.
    Mr. TYSON WILSONasked the Financial Secretary to the War Office if his attention has been called to the case of Private Arthur Holroyd, No. 2,288, 2/4th
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    Yorkshire Regiment, who, whilst in hospital, had 7d. per day stopped from his pay, also 1½d. per week contribution under the National Insurance Act; and will he state whether these stoppages from a soldier's pay are in accordance with Army Regulations?
    Mr. FORSTER: I am inquiring into this case, and will inform the hon. Member the result as soon as possible.
    Mr. HOGGE: Is it the rule to follow the practice mentioned?
    Mr. FORSTER: I understand that when a man goes to hospital, the stoppages are deducted as a matter of course, until the medical certificate is received from the commanding officer showing that the stoppages are not to be made.
    Mr. HOGGE: Is that the case with all other Civil servants?
    Mr. FORSTER: I am not responsible.

    ARMY INSPECTION EXAMINERS.
    Mr. CHARLES DUNCANasked the Financial Secretary to the War Office whether he is aware that a war bonus has been given to the first and second-class examiners in the Army Inspection Department from the 17th April, while a similar award to the third-class examiners and other employés is dated from the 15th September; and whether he will give directions, in order to avoid discontent, that the war bonus shall be paid from the same date to all the employés in the Army Inspection Department?
    The MINISTER of MUNITIONS (Mr. Lloyd George): The bonus, in the case of the first and second-class examiners, was given as a sequence to an agreement which was come to by the London engineering trades generally, and was dated back to the 17th April, in keeping with the general trade agreement. The bonus, in the case of the other employés, has been given as the result of a special conference of delegates with me, held during the past month, and had no connection directly with a trade agreement. I do not think there is any ground for altering the decision to give the latter bonus only as from the beginning of the pay week in which the 15th September occurs.

  INDIA.

    AID FROM PRINCES AND PEOPLE.
    Sir JOHN JARDINEasked the Secretary of State for India whether he can give information in some detail as to the contributions made by the Mahratta, Rajput, and Mussalman chiefs and princes of India as regards troops, funds, ambulances, and hospitals to assist His Majesty's Armies in the various theatres of war?
    The SECRETARY Of STATE for INDIA (Mr. Chamberlain): I ask the indulgence of the House for the very long answer which I am about to give:—
    A very bulky and detailed statement of the offers of service in connection with the War made, by Ruling Chiefs and important persons and associations in India has been received from the Government of India, and copies have been placed in the Library.
    The statement includes the offers and gifts that were enumerated in the telegram which the Under-Secretary of State read to the House on 9th September last year, and which has since been presented to Parliament; but even the most monumental of these have since been largely increased. It is impossible to summarise these additions, which still continue to be received as the progress of the War has given fresh opportunities of service; but the House will, perhaps, permit me to quote one or two examples to illustrate the spirit that animates the whole of India.
    Besides the Chiefs mentioned last year, the rulers of Nawanagar, Rajkot, Baria, Jamkhandi, Akalkot, Savanur, Barwani, Loharu, and Wankaner have been permitted to go on active service in one or other of the spheres of operations.
    In addition to the Imperial Service troops originally selected from among those offered, contingents from the following States have also been accepted for service in India or abroad:—Junagadh, Khairpur, Nawanagar, Bhavnagar, Janjira, Tehri, Bahawalpur, Maler Kotla, Sirmur, Bhopal, and Idar.
    Three hospital ships, equipped and maintained from unofficial sources, have left
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    the shores of India—the "Loyalty," given jointly by a number of Ruling Chiefs; the "Madras," given by the Madras War Fund; and the "Bengali," given by the people of Bengal. The last was, most unfortunately, wrecked on its way to the Persian Gulf; the first two have been continuously employed this year in carrying sick and wounded between India and the theatres of war.
    The Nizam of Hyderabad has offered 60 lakhs for the expenses of one of his Imperial Service regiments, which has gone to the front, and of the Cavalry Regiment of the Indian Army, of which he is honorary colonel. The Maharaja of Mysore, besides the 50 lakhs he had already given, has offered the services of his State in many other practical ways. The Maharaja Sindhia of Gwalior, whose health has prevented him from going to the front, has made further munificent gifts in money and in kind, including a motor ambulance fleet and six armoured aeroplanes. The Begum of Bhopal, in addition to large contributions to relief funds and other services, has sent 500 Korans for sick and wounded Moslem soldiers. The Gaekwar of Baroda gave 5 lakhs of rupees for the purchase of aeroplanes. The Maharajas of Kashmir and Patiala and the Jam of Nawanagar, besides other services, are jointly maintaining a hospital for officers in a house at Staines, which His Highness the Jam has given for the purpose.
    It is not possible to enumerate the offers and the contributions of various kinds that have been received from individuals and from associations in British India. It must suffice to say that they demonstrate the firm determination of all classes and creeds to take their place in fulfilling all the positive duties of citizenship.
    Nor have the notabilities and tribes of the borderland been behind the inhabitants of British India in the spontaneity of their expressions of loyalty. The offers of service by the Frontier Militias, the proposal of the Khyber tribes to furnish an armed contingent, and the subscription by the Wazirs of Bannu of their allowances for one month to the Relief Fund, are striking examples.

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    Beyond the border, the Chiefs of Baluchistan made valuable offers of camels, and the Sheikhs of Koweit and Bahrein contributed to charitable funds in India. The Maharaja of Bhutan, besides offering the financial and military resources of his State, contributed a lakh of rupees to the Relief Fund. The Prime Minister of Nepal added largely to the munificent gifts mentioned last year, and has rendered His Majesty's Government most valuable services by the military facilities which he has accorded. The Dalai Lama of Tibet, as was stated last year, offered 1,000 soldiers at the outbreak of War; his continued sympathy with the cause of the Allies is shown by the fact that on hearing of General Botha's victories in South-West Africa he ordered flags to be hoisted on the hills around Lhassa, and special prayers to be offered for further victories. It will not perhaps be out of place in this connection if I add that His Majesty's Government have received striking proofs of the friendship of the Amir of Afghanistan and of his determined loyalty to the British alliance.
    It has not been possible for the Government to avail themselves of all these many and varied offers of service, but our appreciation of them is not less on that account. And the House will agree with me in seeing in them conclusive evidence of the unshaken solidarity of the princes and peoples of India and of the neighbouring countries, without distinction of race or religion, in defence of the vital interests of the Empire.
    Sir JOHN JARDINE: Arising out of that answer, may I ask the right hon. Gentleman if he will take measures to have this fine statement of the loyalty of the chiefs and peoples of India and surrounding countries translated into the language of Europe, especially of our Allies, and in some way communicated to those nations that anticipated a different state of things there?
    Mr. CHAMBERLAIN: I think news of this kind will find its own way into circulation.
    Sir J. RANDLES: Will the right hon. Gentleman consider the desirability of some expression of appreciation from this
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    House reaching the princes and chiefs concerned, either by Motion or otherwise, as he may see fit to bring before our notice, and which would give an opportunity to this House to express its appreciation in some marked and distinct manner?
    Mr. CHAMBERLAIN: That is a question on which I must consult the Prime Minister. If I might venture to express my personal opinion in the meantime, I would say the time has hardly yet come for it, and the House must consider the assistance it has had from all portions of the Empire at the same time, whenever it makes any recognition of it.

    BAGDAD.
    Lieut-Commander WEDGWOODasked the Secretary of State for India whether the possibility of a German advance on Bagdad is receiving the attention of those responsible for the Anglo-Indian Expeditionary Force in Mesopotamia; and whether a sufficient supply of river gun boats is available either to press the advance or cover the retreat?
    Mr. CHAMBERLAIN: The contingencies mentioned by the hon. and gallant Member and the provision required to be made against them have received due consideration.

    INDIAN ARMY (STATUS OF CAPTAINS).
    Lieut.-Commander WEDGWOODasked the Secretary of State for India whether he is aware that all captains of fifteen years' standing in the British Army have been now promoted to the rank of major; and whether he will see that similar promotion is granted to captains of the same standing in the Indian Army?
    Mr. CHAMBERLAIN: I would refer the hon. and gallant Member to the statement which I made regarding the British and Indian Army systems of promotion in a reply given to the hon. Member for Great Yarmouth on the 28th July last, of which I will send him a copy. I understand that the orders regarding the promotion of captains of fifteen years' standing in the British Army do not apply to all arms but to those only where the exigencies of the Service require that such promotion should be given. In the Indian Army no such exigency at present exists.

  FINANCE (No. 3) BILL.

    EXCESS PROFITS.
    Mr. JOWETTasked the Chancellor of the Exchequer whether he is satisfied that his proposal to tax extra profits made during the War will cover profits on the sale of ships sold since the outbreak of war, and will preclude the possibility of the enhanced prices realised on such sales being treated merely as realisation of capital and not as profit?
    The CHANCELLOR of the EXCHEQUER (Mr. McKenna): I would refer my hon Friend to the reply I gave yesterday to a similar question put by the hon. Member for West Ham.
    Sir J. JARDINEasked the Chancellor of the Exchequer whether he is aware that many limited companies owning india-rubber estates in India, Ceylon, the Straits Settlements, and Netherlands India have, until the War began or after that date, distributed no dividends because the trees had not reached the age when they can be tapped and in some cases had to borrow money on mortgage or debentures during this period; and whether, under the Finance Bill, refund of money so borrowed will be deducted before the Excess Profits Tax is leviable?
    Mr. McKENNA: Liability to repay borrowed capital does not constitute a ground for deduction from excess profit, but the conditions affecting the development of estates may be a factor for the consideration of the Board of Referees in connection with any application for an increase of the percentage standard for the class of business to which my hon. Friend refers.
    Mr. LOUGHasked the Chancellor of the Exchequer whether businesses which have been placed under control by the Minister of Munitions will be liable to pay the Excess Profits Tax?
    Mr. McKENNA: I would refer my right hon. Friend to the reply which I gave on the 30th ultimo to the hon. and learned Member for the City of York. I am causing a copy of this reply to be sent to him.
    Mr. LOUGH: Can the right hon. Gentleman not give us an answer to that question?
    Mr. McKENNA: If the right hon. Gentleman will read the answer which I have sent to him he will find it is fully
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    answered, and the House has already had the answer.
    Mr. LOUGHasked whether enter prises owned and carried on by municipal authorities of the nature of a trade or business will be liable to pay the proposed duty on excess profits?
    Mr. McKENNA: The answer is in the affirmative.
    Mr. LESLIE SCOTTasked whether it is intended to be provided by the Finance (No. 3) Bill that where a person, firm, or company earns an income by carrying on businesses of a like class in various towns or localities but has been hitherto assessed to and paid Income Tax in respect of each such business separately, the profits shown by such several assessments in pre-war years may be aggregated for the purpose of comparing the profits of the War year, and thereby ascertaining whether the income of such person, firm, or company, taken as a whole, is liable to pay Excess Profits Duty under the Bill?
    Mr. McKENNA: The answer is in the affirmative.

    INCOME TAX.
    Mr. JOWETTasked the Chancellor of the Exchequer whether working men whose wages amount in the full year to more than £130 will be entitled to claim abatement from their gross incomes for contributions paid by them for insurance to approved societies, trade unions, and friendly societies under the new Budget proposals, in like manner as policy holders in assurance companies and assurance societies are entitled to deduct the premiums they pay for insurance (within certain limits) from their gross incomes?
    Mr. McKENNA: I would refer my hon. Friend to the answer I gave on this subject on the 30th ultimo, of which I am sending him a copy.

    LAND VALUES.
    Mr. JOWETTasked the Chancellor of the Exchequer whether, having regard to the urgent need for increasing the nation's resources, he will include proposals in his next Budget to appropriate the whole annual value of all land for which the holders cannot produce a title, and to place a substantial tax on the annual value of all other land, the proceeds to be applied towards the cost of defending it?
    Mr. McKENNA: I fear I cannot anticipate the proposals of the next Budget.

    MOTOR DUTY.
    Sir ALFRED MONDasked the Chancellor of the Exchequer whether a tyre pump which is imported to be used for blowing up the tyres of a motor vehicle not subject to duty will become subject to duty if at any time it is used for blowing up the tyres of a motor vehicle subject to duty; and, if so, by whom will such duty be paid?
    Mr. McKENNA: Tyre pumps are accessories to tyres, and are not dutiable.
    Sir A. MONDasked the Chancellor of the Exchequer (1) what method it is intended to adopt to distinguish at the port of importation whether or not motor chassis and parts of chassis and accessories are going to be used exclusively for the conveyance of goods in the course of trade or husbandry; how is the importer to prove to the satisfaction of the Commissioners of Customs and Excise what the intention of a future purchaser may be; and (2) whether he is aware that there are, approximately, about 4,000 parts in a motor chassis; and whether it is intended that the Commissioners of Customs and Excise shall stamp or place a distinctive mark on all or any of such 4,000 parts imported either as a whole or separately in order to exempt them from duty as provided in Clause 7 of the Finance Bill?
    Mr. McKENNA: I am prepared to accept his statement as to the number of parts in a motor chassis, but I do not think it would be desirable to anticipate this afternoon's Debate in regard to the points which he raises.
    Mr. HOGGE: Is the right hon. Gentleman prepared to print those in the Schedule to the Bill?
    Mr. McKENNA: No, Sir.
    Sir A. MONDasked whether motor horns are intended by the Commissioners of Customs and Excise to be classified under motor-car accessories or under musical instruments?
    Mr. McKENNA: Motor-car horns are charged as motor-car accessories.

    NAVAL AND MILITARY SERVICES (PENSIONS AND GRANTS).
    Mr. HOGGEasked the Prime Minister whether his attention has been
    1790
    called to the fact that newly-married wives are entitled to separation allowance although there has been no pre-war dependance on their husbands; whether soldiers who are now so situated as to wish to secure separation allowances for mothers who have become widows since War broke out are barred because there has been no pre-war dependance; and whether he proposes to take steps to deal with the matter?
    Mr. FORSTER: The hon. Member raised this question in Debate on 21st June last, and I then replied to him. I can add nothing to the reply I then gave him.
    Mr. HOGGE: Can the hon. Gentleman say why it is that the War Office consider this question of pre-war dependance in the case of wives of soldiers and not in the case of mothers who have become widows?
    Mr. FORSTER: That is for the Select Committee to decide.
    Mr. JOWETTasked the Chancellor of the Exchequer whether the recommendation contained in the Special Report of the Select Committee on Naval and Military Services (Pensions and Grants), concerning disablement pensions, will apply to the case of M. Louglin, of No. 1, Maud Street, Bradford, who was discharged from the Army in 1901 owing to rheumatism and heart weakness contracted on active service during the South African War after serving with the Colours for fifteen years and sixty-six days, and whose pension amounts to 10d. a day only, although he is now totally disabled?
    Mr. McKENNA: The recommendations of the Select Committee only apply to-cases arising out of the present War.
    Mr. L. SCOTTasked the Chancellor of the Exchequer whether His Majesty's Government accepts the view expressed in Sir George Murray's Report that it is the duty of the State not only to pension disabled sailors and soldiers but also to train them and otherwise fit them for civil employment, and so far as practicable to assist them in obtaining it; and to find all the money required for such purpose?
    Mr. McKENNA: The training of disabled officers and men will be one of the duties of the Statutory Committee to be set up under the Pensions Bill.
    Mr. HOGGE: Will the right hon. Gentleman say where the money will come from for that purpose?
    Mr. McKENNA: I think my hon. Friend is fully aware of all that has been said on the subject in Debate.
    Mr. HOGGE: Will the right hon. Gentleman say I am not right in assuming that the Government will provide no money?
    Mr. McKENNA: NO, Sir. I am quite sure my hon. Friend is wrong in assuming that.
    Mr. SCOTTasked whether His Majesty's Government intends to ask Parliament to provide the Statutory Committee appointed by the Naval and Military War Pensions Bill with all money necessary for the efficient discharge of its duties in regard to disabled officers and men under Section 3, Sub-section (1) (i) of the Bill as amended in the House of Lords; and what method is proposed by His Majesty's Government for ensuring full Parliamentary control over the Statutory Committee in its performance of such duties?
    Mr. McKENNA: I would refer my hon. and learned Friend to the statements which I have made in this House with regard to the intention of His Majesty's Government to provide any necessary funds which may be needed for the work of the Statutory Committee. With regard to the last part of the question, I would refer him particularly to Clause 1 (2) (4) of the Pensions Bill.
    Mr. SCOTTasked (1) whether, in the case of disabled men desiring to earn a livelihood by work upon the land, His Majesty s Government propose that the central authority to deal with the problems of training and providing such men with opportunities for such employment should be the Board of Agriculture; if so, whether His Majesty's Government will propose or accept an Amendment to Clause 3 of the Bill giving effect to such opinion, and limiting the functions of the Statutory Committee, in respect of men desiring agricultural employment, to that of ascertaining their wishes and communicating the necessary particulars to the Board of Agriculture; and (2) whether His Majesty's Government intends in any, and what, way to link up the administrative body or bodies to whom is entrusted the duty of finding
    1792
    employment for disabled men with the administrative bodies to whom will hereafter be entrusted the duty of finding employment for the able-bodied on discharge from military and naval duty; and particularly whether, in the case of agriculture, both functions will be given to the Board of Agriculture?
    Mr. McKENNA: I am not at present prepared to make a statement with regard to able-bodied men discharged from naval or military service. It is proposed in the Pensions Bill to set up a special sub-committee of the Statutory Committee to deal with the care of disabled men, and I have no doubt that the Board of Agriculture will be represented on this sub-committee.

  MUNITIONS.

    NO-TREATING ORDER.
    Mr. PETOasked the Prime Minister whether, in view of the injury to the health and efficiency of the men of His Majesty's land and sea forces when on furlough directly attributable to the hospitable instincts of their friends, he will initiate legislation to apply the provisions of the No-Treating Order to all parts of the United Kingdom?
    Mr. LLOYD GEORGE: I have invited the observations of the Central Control Board (Liquor Traffic) on the hon. Member's suggestion.
    Mr. LEIF JONES: Can my right hon. Friend say whether the Board of Control has power to extend the Orders during the War, or would not legislation be required?
    Mr. LLOYD GEORGE: I think my hon. Friend is quite right in that matter.
    Mr. PETO: May I draw the attention of the right hon. Gentleman to the fact that the reply I received from him last week was the same?

    FLARES.
    Lieut. - Commander WEDGWOODasked the Minister of Munitions whether he has received any complaints that our flares are inferior to those used by the Germans; if not, will he cause inquiries to be made; and, if so, is his Department taking proper steps to remedy the matter?
    Mr. LLOYD GEORGE: The question of flares has engaged the attention of the Ministry, and such action as appears necessary is being taken.

    WORKING CONDITIONS.
    Mr. ANDERSONasked the Minister of Munitions whether it was part of the Treasury agreement between the Ministry and the trade unionists that due notice should be given to the workmen concerned, wherever practicable, of any changes of working conditions which it is desired to introduce, and that opportunity of local consultation with the men or their representatives would be given if required; and whether in all cases of changes in working conditions the men or their representatives have been consulted?
    Mr. LLOYD GEORGE: Paragraph 7 of the Second Schedule to the Act provides as follows:—
    "Due notice shall be given to the workmen concerned, wherever practicable, of any changes of working conditions which it is desired to introduce as the result of the establishment becoming a controlled establishment, and opportunity for local consultation with workmen or their representatives shall be given if desired."
    I have no reason to suppose that this provision is not being generally observed, but I am not prepared to say that there have been no cases in which an employer has failed to give notice in accordance with the paragraph. In the event of any case of failure being brought to my notice, appropriate action is taken.

    AEROPLANE WORK.
    Mr. ANDERSONasked the Minister of Munitions whether his attention has been directed to the case of Lawrence Nut-brown, a Sheffield wireworker, engaged on aeroplane work, who applied to the Munitions Court for a leaving certificate, on the ground that the firm had reduced his status from that of a skilled worker to that practically of a labourer, and had reduced his wage by 12s. per week; is he aware that the workman's application was refused by the Court; and, provided that this decision is not a violation of the Munitions of War Act, will he introduce amending legislation to deal with firms which, not requiring the services of a particular skilled workman themselves, deliberately prevent him from doing his best work for the benefit of another firm?
    Mr. LLOYD GEORGE: I do not think that the question states accurately the circumstances of this case, and I am accordingly sending the hon. Member a
    1794
    fuller summary for his perusal. In the circumstances, I doubt if the last part of the question arises.

    CONTROLLED ESTABLISHMENTS.
    Mr. LOUGHasked the Minister of Munitions what number of businesses altogether the Government has now placed under control; whether a list of the various firms has been laid upon the Table of the House, showing the character of the work they do for the Government; and, if not, whether he will do so?
    Mr. LLOYD GEORGE: The number of establishments already controlled is 1,002. The War Office are of opinion that it would be detrimental to the national interest to make public the names or localities of the establishments controlled or the character of the work which is done for the Government therein.
    Mr. BOOTH: Can my right hon. Friend say whether these firms have put any obstacle in the way of the Government or whether they are loyally co-operating with his Department?
    Mr. LLOYD GEORGE: Speaking generally, they certainly are working quite loyally and assisting the Department in every way.

    RETRENCHMENT COMMITTEE.
    Mr. HOGGEasked the Prime Minister whether his attention has been called to the existence of a Retrenchment Committee supposed to represent the House of Commons; whether it is within his knowledge that this Committee is making recommendations about economies of which they have no knowledge; that they are attempting to interfere with Scottish Departments although there is no Scottish Member on the Committee; and whether, in view of the dissatisfaction their interference is causing, he will either have the Committee discharged, or make it a representative Committee of the House of Commons, or compel it to make a report to the House before any or all of its recommendations are adopted?
    Mr. LLOYD GEORGE: The Committee to which the hon. Member refers is a Treasury Committee, which is examining with great care the possibility of economy in Civil Departments. I am not aware that the recommendations which they have made have caused any dissatisfaction, and I am not prepared to interfere with their discretion.
    Mr. HOGGE: Has the right hon. Gentleman not heard from Scotland that there is a large amount of dissatisfaction with regard to this matter?
    Mr. KING: Did not this Committee recommend a postal economy which was promptly withdrawn?
    Mr. WATT: In view of the fact that thrift is a characteristic of Scotland, does the right hon. Gentleman not think that representatives of that country would make good members of this Committee?

    BRITISH SUBMARINES IN BALTIC.
    Mr. LLEWELYN WILLIAMSasked the Prime Minister whether, in view of the repeated successes of the British submarines in the Baltic against German and neutral ships employed in conveying contraband of war to Germany, the Government will now consider the advisability of proclaiming a blockade of Germany, or whether he still thinks that such a course would entangle us in a network of juridical subtleties?
    The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Lord Robert Cecil): The matter is one which is receiving, and will continue to receive, the careful attention of His Majesty's Government.

    SIR EDWARD CARSON.
    Mr. KINGasked the Prime Minister whether the Attorney-General has tendered his resignation; and, if so, whether his resignation has been accepted?
    Mr. LLOYD GEORGE: Yes, Sir.

    ARMY EXPENDITURE.
    Mr. PETOasked the Prime Minister whether, with a view to economising the national resources available for the prosecution of the War, he will appoint a Joint Committee of the two Houses of Parliament, to take evidence and report on the allegations of waste and extravagance in the expenditure for housing, maintaining, and equipping those portions of His Majesty's Army stationed in this country?
    Mr. LLOYD GEORGE: For reasons which my right hon. Friend gave in the
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    House on 20th July it is not possible to adopt the hon. Member's suggestion. Every effort has been made and is being made to avoid unnecessary expenditure in the directions indicated in the question.

    WAR BONUSES (CIVIL SERVICE).
    Mr. C. DUNCANasked the Chancellor of the Exchequer (1) whether he will state the reasons for acceding to the request of the postal associations for arbitration upon their claim for a war bonus, and for referring the similar claim of the Civil Service Federation, in spite of their request for arbitration, to the Committee on Public Retrenchment; and (2), whether it is the intention to apply the recent award of the arbitrator on the postal servants' claim for a war bonus to Civil servants generally, in view of the fact that classes common to the Civil Service but actually employed in the Post Office have been paid the war bonus under that award; and, if not, will he indicate in what respects the conditions at present prevailing warrant any differentiation in treatment between Civil servants in the Post Office and those in other Departments?
    Mr. McKENNA: The arbitrator on the postal servants' application for a war bonus, in giving his award, stated that he had had regard particularly to the fact that the scales of remuneration of Post Office employés are based on two principal factors, namely, the volume of work done and the cost of living. This statement appears to have arisen from a misapprehension of a paragraph in the Hobhouse Committee's Report. It is clearly inconsistent with the statement in paras. 14–17 of the Holt Committee's Report, and it cannot be accepted by His Majesty's Government as representing the main principle on which the remuneration of public servants should be fixed. As the postal employés' application had been submitted to arbitration, the Government was bound to comply with the award, irrespective of the grounds on which it was based; but having regard to the fact that these grounds could not be accepted as accurate, they decided to refer to the Committee on Public Retrenchment the question of an extension of the award to other Departments. That Committee considered the matter very carefully and recommended that, in view of the fact that the reasons

    1797
    given in the award have no general application to the Civil Service, all applications from other Departments should be considered on their merits irrespective of that award.
    Mr. TYSON WILSON: Is the right hon. Gentleman aware that certain Departments of the service were told that the increase of rates would be governed by the award made?
    Mr. McKENNA: Can my hon. Friend say by whom they were told?
    Mr. WILSON: By the Treasury.
    Mr. McKENNA: Not that I am aware of.

    WAR LOAN.
    Mr. WINGasked the Chancellor of the Exchequer if he will make a statement of the intentions of the Treasury respecting the continued and continuous issue of 5s. vouchers by the Post Office and sale of £5 Treasury bonds as investment in War Loan, so that war-saving committees and other bodies, and also individuals, may make their winter arrangements with confidence and encourage their purchase as Christmas gifts?
    Mr. McKENNA: I hope to be in a position to make a statement on this matter at an early date.

    EGYPTIANS IN LONDON.
    Mr. GINNELLasked the Secretary of State for the Home Department if he will explain why Egyptians resident in London, who were informed by the Home Office last December that they had ceased to be enemy aliens, are now informed by the police authorities that they are enemy aliens; and whether he will definitely define their status here and not have them subjected to more annoyance than is consistent with that?
    The SECRETARY of STATE for the HOME DEPARTMENT (Sir J. Simon): Ever since Egypt became a British Protectorate, Egyptians have been in the position of alien friends, and have been treated as such. The Metropolitan police took off the register of alien enemies all who were known to be Egyptians, but in the case
    1798
    upon which this question is based and one or two others, the individuals were not previously identified as Egyptians, and had not taken any steps whatever to claim the status of Egyptians and to have their names removed from the register of alien enemies. As soon as they made their status known, their names were removed from the register. I understand none of them have been interned.

    PRESS CENSORSHIP.
    Mr. KINGasked the Home Secretary whether the statements published by several London newspapers in January last, that Roumania would shortly join the side of the Allies as a belligerent, were submitted to, and passed, by the Censor; and, if passed by the Censor, whether the confirmation of the Foreign Office or the War Office, or both, was secured before the permission to publish was given?
    Sir J. SIMON: Without a specific reference to the statements referred to, it would be impossible, after such a lapse of time, to give a definite reply.
    Mr. MacCALLUM SCOTT: May I ask whether the Censor guarantees the truth of the statements which he passes?
    Sir J. SIMON: He certainly does not. He merely ascertains whether there is any objection on the part of the parties concerned to the publication of the statement
    Mr. KING: When very important political statements are made in the Press, are they not subject for confirmation or comment to the offices concerned?
    Sir J. SIMON: I do not think so. When a statement such as the hon. Gentleman describes is proposed to be made it is right that the responsible Department should be asked whether in the public interest there is any objection to its being made.
    Mr. KINGasked whether the statement made in the public Press at the end of last January that the Bank of England had lent £5,000,000 to Roumania was, before being passed, submitted for confirmation to the Foreign Office or to the Treasury, or to both these Departments?
    Sir J. SIMON: The statement was referred to the Foreign Office and the Treasury before being passed for publication. These Departments, while they did

    1799
    not confirm the accuracy of the statement, saw no reason to interfere with its publication.

    BOVINE TUBERCULOSIS ORDER (IRELAND).
    Mr. CLANCYasked the Vice-President of the Department of Agriculture (Ireland) whether his attention has been directed to the resolution passed by the county of Dublin Insurance Committee relative to what is described as the grave danger to the purity of the milk supply and the consequent results to the health of the community, especially of the young, caused by the withdrawal of the Bovine Tuberculosis Order; whether he will say on whose advice and for what reasons the Order mentioned was withdrawn; and whether any local authority was consulted in reference to the matter before action was decided on by the Department?
    The CHIEF SECRETARY for IRELAND (Mr. Birrell): The resolution referred to was received by the Department. All provisions of the Order save one have been suspended in Ireland as they have been in Great Britain, and for the same reason, namely, retrenchment of expenditure owing to the financial position arising from the War. The local authorities were not consulted before the suspension, but a circular fully explanatory of the position was sent to each local authority by the Department.

    AFFORESTATION.
    Mr. MacCALLUM SCOTTasked the Secretary for Scotland whether he is now in a position to make any announcement with regard to the representations made to him by the Royal Scottish Arboricultural Society as to the desirability of increasing the resources of the country and absorbing the labour of soldiers returning from the War by means of a scheme of afforestation?
    The SECRETARY for SCOTLAND (Mr. McKinnon Wood): The question is under consideration by the Boards of Agriculture for England and Scotland and the Development Commissioners.

    MANUFACTURED STRAW PLAIT (IMPORTS).
    Sir J. JARDINEasked the President of the Board of Trade whether
    1800
    he has received information from any manufacturers of straw hats that quantities of manufactured plait made in Germany are being imported from Switzerland in competition with British industry; and what action is being taken in the matter?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Captain Pretyman): My hon. Friend has forwarded a. letter to my right hon. Friend in which this allegation is made, and if he is in a position to furnish definite evidence in support of it my right hon. Friend will be happy to have inquiries made. As he is doubtless aware, straw plait can be imported into this country from Switzerland only if accompanied by a certificate of non-enemy origin issued by a British Consul.

    GREAT SOUTHERN AND WESTERN RAILWAY COMPANY OF IRELAND.
    Mr. CLANCYasked the President of the Board of Trade whether his attention has been drawn to the memorial recently addressed to the board of directors of the Great Southern and Western Railway Company of Ireland by the labourers working in the various departments of the company's works at Inchicore, Dublin, for an increase of wages; whether he is aware that, while the company recently increased the wages of the men whom the labourers are employed to assist on the ground of the increased cost of the necessaries of life, it has declined even to consider the request of the labourers, although the same reasons exist for raising wages in their case, and although the labourers are the worst paid section of all the workers in the employment of the company; whether he is aware that, in consequence, a feeling of exasperation is growing up amongst the men; and whether, in view of all the circumstances of the case, he will exert all the powers he possesses for securing better treatment for the memorialists, and so eliminating the possibility of an open rupture between the company and its employés at a time like the present?
    Mr. PRETYMAN: My right hon. Friend has received a copy of the memorial referred to and he is in communication with the company upon the matter.

    COAL PRICES.
    Mr. ANDERSONasked the President of the Board of Trade whether the list of coal merchants in London who have agreed to a limitation of profits [Cd. 8070] is intended to convey an assurance that these merchants have undertaken not merely during the past summer, but also during the ensuing six months, not to add more than a prescribed amount to the contract or current pit-head price; if so, what sum has been thus agreed to and subject to what conditions; will the Board of Trade publish week by week, for public information, the maximum retail price per ton thus arrived at; seeing that the list does not include the names of the dealers who supply the mass of the people in small quantities (trolley coal), what arrangements have the Board of Trade succeeded in making to ensure that a maximum price for trolley coal shall not be exceeded; and, if no such arrangement has been made, what steps does the Government propose to take to protect the London poor against a repetition this winter of the prices frequently charged last winter?
    Mr. PRETYMAN: The merchants whose names appear in the list mentioned have agreed that the sum added to the cost of coal to them at the railway depot to cover expenses of delivery and profits shall not exceed 7s. 6d., with the addition of 2s. for coal sold from trolleys. The arrangement continues in force until altered with the concurrence of the Board of Trade. My right hon. Friend does not regard the publication of maximum retail prices as practicable in view of the difference in the cost of several varieties, mixtures, screenings and qualities of coal at the various depots. My right hon. Friend is discussing with the principal merchants the steps to be taken to guard against excessive charges by small dealers who are not parties to the arrangement, and he hopes that it will be possible to take effective action.
    Colonel LOCKWOOD: Is my hon. Friend aware that in the North of London men who take round coal to small consumers are charging 2s. and 3s. a ton for taking the same into their houses?
    Mr. PRETYMAN: Evidence of that character has been before the Board of Trade, and that is exactly the point upon which a conference is being held.
    Mr. WHITEHOUSE: Will my hon. Friend give special attention to the prices charged in the Isle of Wight, where they reach famine level?
    Mr. PRETYMAN: If my hon. Friend will send some evidence of that fact it will be carefully considered.

    LEATHER PRICES.
    Mr. ANDERSONasked the President pf the Board of Trade whether his attention has been drawn to the statement made at the annual conference of the Federation of Boot Trades Associations that leather was now selling at 3s. 6d., as compared with 1s. 10½d. before the War; that tanners' factors were reaping enormous profits; and to a resolution passed by this federation asking the Government to control the price of leather; and whether the Government intend to take action on the lines suggested?
    Mr. PRETYMAN: My right hon. Friend has seen a report of the Conference to which the hon. Member refers. In view of the numerous varieties of leather, and of the hides and skins and tanning materials used in its manufacture, he is not disposed to think that control of the price of leather sold for civilian purposes can be better controlled by administrative action than by trade competition. I would point out that a necessary corollary of the control of the price of leather would be the control of the prices at which manufactures of leather should be sold.

    INCREASED HOUSE RENTS.
    Sir CHIOZZA MONEYasked the President of the Local Government Board if, in view of the general raising of rents throughout the country and of the calling in of mortgages in evasion of the emergency war legislation, he can promise immediate legislation dealing with these matters?
    The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. Long): I cannot at present add anything to what was stated yesterday, in reply to various questions relating to the raising of rents.

    MAXIMUM FOOD PRICES.
    Mr. PETOasked the President of the Board of Trade whether, in view of the

    1803
    fact that in many villages the poorer people are dependent on one shop for all their supplies and there is no competition, and of the fact that in many places excessive prices are being charged for most ordinary commodities, although there are more than normal wholesale supplies of them in the country, he will again fix the maximum prices, at least for all the chief articles of food, and take the necessary steps to see that they are not exceeded?
    Mr. PRETYMAN: Supply carts from the neighbouring towns visit nearly every village in the country and have practically wiped out the village shops. The monopoly indicated in the question does not therefore exist, and no evidence has reached the Board of Trade to show that consumers in rural districts are more affected by high prices than those who live in towns. It must also be borne in mind that the former have the advantage of growing some of their own supplies themselves, but if my hon. Friend will furnish particulars of the prices he complains of my right hon. Friend will consider if any action is posible to deal with them.

    Shetland (Mail Contracts).
    Mr. CATHCART WASONasked the Postmaster-General if he is aware of the fact that for months past Shetland has been inconvenienced and suffered loss through the inability or unwillingness of the mail contractors to carry out the provisions of the contract when the mail contract expired; if the Post Office authorities before its expiry made any attempt to enforce its provisions; and if he will, before entering into any arrangement with the North of Scotland Steamship Company or other companies, consult with the provost and town council of Lerwick?
    The POSTMASTER-GENERAL (Mr. Herbert Samuel): The departure made by the contractors from the terms of their contract must be attributed to circumstances over which they had no control. Under existing conditions no fresh formal arrangement is practicable, but I will consider any suggestions for improving the existing circumstances which the town council of Lerwick care to address to me.

ORDERS OF THE DAY.

  BUSINESS OF THE HOUSE.
  Mr. CHAPLIN: May I ask the Minister of Munitions what business will be taken to-morrow?
  Mr. LLOYD GEORGE: The first business for to-morrow will be the Postal and Telegraph Rates (Statutory Limits) Bill; the second will be the Clubs (Temporary Provisions) Bill; and the third the Naval and Military War Pensions Bill. Then, if time permit, we shall take the Defence of the Realm (Evidence) Bill, and the Ulster Canal Bill.
  Sir G. YOUNGER: Can the right hon. Gentleman say whether the Committee stage of the Finance Bill, if not finished to-night, will also be taken to-morrow?
  Mr. LLOYD GEORGE: Next Tuesday.
  Mr. HOGGE: Does not my right hon. Friend know that the Naval and Military War Pensions Bill is an important Bill, affecting the pensions and allowances of a great number of people, and that it cannot possibly be got through after two other Bills? Is it not a much more important Bill than the Clubs Bill, which might easily wait?
  Mr. LLOYD GEORGE: I understood that the Naval and Military War Pensions Bill was non-contentious.
  Mr. BOOTH: Can my right hon. Friend say anything to the House with regard to the progress which we hope the Prime Minister is making towards speedy recovery, so that we may know when to put down questions to him?
  Mr. LLOYD GEORGE: The House will, I am sure, be delighted to hear that the Prime Minister is making most excellent progress, and that he expects to be in his place on Tuesday. If questions are put down for that day, there is every expectation that he will be here to answer them.

  MESSAGE FROM THE LORDS.
  That they have agreed to,—
  London County Council (Tramways and Improvements) Bill,
  London County Council (General Powers) Bill, with Amendments.

RESIGNATION OF SIR E. CARSON.

  PERSONAL EXPLANATION.
  Sir E. CARSON: I desire to ask the indulgence of the House for a few minutes in order to state, in as few words as possible, the reasons which impelled me to resign my office as His Majesty's Attorney-General. I greatly regret, as I know the whole House does, the absence of the Prime Minister and the reason which occasions it. In his absence it is, I think, necessary for me to go even more briefly into the cause of my resignation than I otherwise might have been inclined to do. I am well aware of the difficulties in existing circumstances of making any full statement, or of saying anything that might be taken hold of as showing any sign of weakness or divergence in the main object which we all have in view—of carrying on the War, at all sacrifice, to a final and conclusive issue. I think I need hardly say that upon that issue there is not, and never has been, either in the Cabinet, or in this House, or in the country, any disagreement or divergence of opinion. The real unity which the country wants is that steadfast unity of purpose to defeat our enemies and save our country. But I entirely deny the fact that the holding of divergent views as to the best policy and methods to be adopted in the various theatres of war for bringing it to a successful conclusion is in any sense an emblem of disunion. I have seen criticisms of myself, and of my reasons, for resigning, of a very petty and malicious character, attributing to me motives of a party political character. I do not desire to deal with these ridiculous assertions further than to say—and I say it in the presence of many of my late colleagues—that since I entered the Cabinet I have never heard one word of discussion or dispute on those party questions which divided us before the War. At every Cabinet I have attended we have all devoted our energies wholly and solely to discussions of questions which arose in reference to the prosecution of the War, I also desire to say that during the whole time I have been in the Cabinet I have never had any personal difference either with the Prime Minister—whose unvarying courtesy I desire to acknowledge—or with any one of my late colleagues.
  May I also add that no one realises more than I do the great difficulties under which

  1813
  we labour, owing to the fact that our policy, and our methods, must at all times be adopted in concert and co-ordination with our various Allies, and must also very frequently be framed with the view of consulting the sentiments and feelings of those neutral countries with whom we remain on friendly terms. This, I think, is a matter which is often lost sight of by critics of our actions who cannot possibly know the difficulties of the questions which arise from time to time. The difficulties which have arisen in the Eastern theatre of war have created a situation which to my mind must necessarily lead to very far-reaching results. At the time I entered the Cabinet we were already committed to what I may call the operations in Gallipoli. It is not, of course, my intention to deal either with the inception or the carrying out of those operations, but it must be plain to any observer that the new theatre of war in the Balkans has created a situation which cannot be divorced from our position on the Gallipoli Peninsula. The statement made by the Foreign Minister, under the sanction of the Cabinet, in this House, appeared to me to have announced a policy of the highest importance in our obligations in the Balkans, involving our prestige and our honour. That situation, with all its complications, necessitates, in my opinion, a clearly defined, well thought out, and decisive policy on the part of His Majesty's Government. Finding myself unable to agree in any respect with what I understood was laid down as the policy approved of by His Majesty's Government, I felt that my presence in the Cabinet could not be of any use in the critical situation in which we were involved. I need hardly say I am not suggesting that my views are possibly to be compared with those who have much more experience and greater wisdom in dealing with such situations. At the same time I held, and hold, the views which I express very strongly, and, I hope the House will believe, conscientiously and patriotically. I do not, therefore, think that in the circumstances I could be anything but a source of weakness at a time that requires great strength and consistency. That is really all I can say for the moment. I ask the House to believe that in the course I have taken I have been actuated by no personal or party motives, but that I have acted, to the best of my ability, solely in the interests of my country.

  FINANCE (No. 3) BILL.
  Considerd in Committee—[Progress,. 19th October].
  [Mr. WHITLEY in the Chair.]

  CLAUSE 12.—(New Import Duties.)
  (1) There shall, as from the twenty-ninth day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be charged, levied, and paid on any of the following articles imported into Great Britain or Ireland the following duties of Customs,, namely:—

  Motor cars, including motor bicycles and motor tricycles

  An amount equal to thirty-three and one-third per cent, of the value of the article.

  Accessories and component parts of motor cars, motor bicycles, or motor tricycles, other than tyres

  Musical instruments, including gramophones, pianolas, and other similar instruments

  Accessories and component parts of musical instruments, and records and other means of reproducing music

  Clocks, watches, and the component parts of clocks and watches

  Cinematograph films imported for the purpose of the exhibition of pictures or other optical effects by means of a cinematograph or other similar apparatus:—

  Per linear foot.

  £

  s.

  d.

  Blank film, on which no picture has been impressed, known as raw film or stock

  0

  0

  0½

  Positives, i.e., films containing a picture and ready for exhibition

  0

  0

  1

  Negatives, i.e., films containing a photograph from which positives can be printed

  0

  0

  8

  (2) The value of any article for the purposes of this Section shall be taken to be the price which an importer would give for the article if the article were delivered, freight and insurance paid, in bond at the port of importation, and duty shall be paid on that value as fixed by the Commissioners of Customs and Excise.
  In the case of a motor car imported with tyres attached, the value of the tyres shall

  1815
  be deducted from the value of the car for the purpose of the charge of duty.
  (3) Any dispute arising as to the proper rate of duty payable under this Section shall, so far as any question of value is concerned, be referred to a referee appointed by the Treasury, and the decision of the referee shall be final and conclusive.
  Sections thirty and thirty-one of the Customs Consolidation Act, 1876, shall, as respects any such dispute as to value, have effect as if an application for reference to a referee under this provision were substituted for the action or suit mentioned in that Section.
  (4) The procedure on any such reference shall be such as may be determined by rules made by the Treasury for the purpose.
  If the decision of the referee involves any variation in the amount of duty payable, duty shall be paid or repaid, as the case may be, so as to correspond with that decision.
  (5) If it is proved to the satisfaction of the Commissioners of Customs and Excise that the duty under this Section has been duly paid in respect of any article, and that the article has not been used in Great Britain or Ireland, a drawback equal to the amount of duty paid shall be allowed on that article if exported as merchandise: Provided that the Treasury may by Order declare that the drawback shall not he paid in respect of any accessories or component parts named in the Order on the ground that it is not possible to provide satisfactory means of identifying those accessories or parts.
  (6) An article shall not, notwithstanding anything in any Act to the contrary, be charged with duty under this Section on importation if it is proved to the satisfaction of the Commissioners of Customs and Excise that duty has been paid on a previous importation of the article into Great Britain or Ireland and that drawback has not been paid on its exportation.
  (7) Motor cars which are proved to the satisfaction of the Commissioners of Customs and Excise to be constructed and adapted for use, and intended to be used solely, as motor omnibuses, or bonâ fide. motor ambulances, or in connection with the conveyance of goods or burden in the course of trade or husbandry, and chassis, component parts, and accessories, which are so proved to be intended to be used solely for any such motor cars, shall not be charged with duty under this Section:
  Provided that in such cases as the Commissioners of Customs and Excise direct, cars, chassis, accessories, or parts, as the case may be, shall not be exempted unless they are marked or stamped in such manner as the Commissioners direct or approve with some distinctive stamp or mark showing that they are only to be so used.
  If any person obliterates or removes any such distinctive stamp or mark, or uses any motor car, chassis, accessory, or part which has been exempted from duty under this provision for any purpose other than the purposes therein mentioned, he shall be liable to a penalty of five hundred pounds: Provided that the Court may, if it think fit, in lieu of ordering the offender to pay a penalty, order that he be imprisoned with or without hard labour for a term not exceeding two years.
  (8) The Treasury may by Order exempt any articles mentioned in the Order which are liable to duty under this Section from that duty if they are satisfied that, having regard to the small value of the article, it is inexpedient that the duty should be charged.
  (9) The Treasury may make Regulations providing for the total or partial exemption for a limited period from the duty payable under this Section of any motor cars, including motor bicycles and motor tricycles, brought into Great Britain or Ireland by persons making only a temporary stay therein.
  Mr. PETO: I beg to move, in Sub-section (1), after the word "Ireland" ["Great Britain or Ireland"], to insert the words "except on reimport from the Channel Islands or Isle of Man."
  This Amendment deals with perhaps a small matter, but one which I hope the Chancellor of the Exchequer has had the opportunity of considering since I put it before him yesterday. As I understand the object of these Import Duties, it is to place a check upon the consumption in this country of articles imported from abroad. I am sure it is not the intention of the Chancellor of the Exchequer to impose a great hardship, and one which I think he could not possibly have contemplated, upon a very small section of people engaged in the cinema industry. I have a letter here which so exactly explains the position that I will ask to be allowed to read a short passage from it. The letter is from Albany Ward's military theatres, which cater for His Majesty's troops in

  1817
  Bulford, Fovant, Sutton-Veny, Wareham, Larkhill, and other of the camps in the Southern Command. They have also certain theatres in what are called, I believe, their circuit, which are in the Channel Islands, Jersey and Guernsey. The managing director wrote to the hon. Member for Wilton, whose constituent he 1s. He says:—
  "I am the managing director and joint proprietor of three theatres in the Channel Isles—that is the Opera House and Alhambra, Jersey, and St. Julian's Theatre, Guernsey. These theatres are booked and run in conjunction with my circuit of theatres in this country. In order to provide the necessary entertainments, programmes of films are sent up every three days from Weymouth to Jersey, and thence to Guernsey, and are returned again to England at the expiration of either three, six, or nine days, for which use ordinary hiring fees are charged. Under the said Bill, the Customs authorities have already, for the past two weeks or more, demanded the full tax of a penny per foot on all such films on their return to this country, and I have already had to pay under protest, a sum approaching £100 for films I have been compelled to release to carry out my obligations to other theatres. In addition, the Customs have in their possession some hundreds of thousands of feet of films already on which I have declined to pay duty, and of which I am unable to obtain possession. Many of these films are old, and their actual market value is considerably under one penny per foot. On the total footage of films coming back each week, the tax at one penny per foot works out at approximately £200 per week, a sum considerably in excess of the gross takings of the three theatres."
  I would merely ask the Chancellor if he has considered this particular case, and, if so, whether he does not think the words I propose to put into the Bill appropriate to meet it? It is not a question of import into this country at all, but merely a question of the transit, in the ordinary course of business, of these films from one of the Southern ports to the Channel Islands. If the right hon. Gentleman does not consider the words I suggest appropriate to meet the case, I would ask whether he would undertake to find suitable words to meet the case before we arrive at the Report stage?
  The CHANCELLOR of the EXCHEQUER (Mr. McKenna): If my hon. Friend will look at Sub-section (6), he will see that his point is there sufficiently dealt with. That will certainly be the proper place for the particular point which the hon. Member has raised. I hope he will not press the Amendment now, but when we get to Sub-section (6) I will explain that that covers the case he has raised.
  Mr. PETO: The Customs' officials have already collected a very considerable sum in duties, and are holding a very large footage of films waiting for the payment of the full duty on those films, which are not imports in the ordinary sense of the word at all. May I, therefore, assume that
  1818
  they are acting under a misapprehension as to the (purpose and meaning of the Sub-section?
  Mr. McKENNA: I cannot say without knowing the particular case what the Customs authorities have to say. I cannot answer the hon. Gentleman as to the grounds of their action, but if he will look at Sub-section (6) it is declared that:
  "An article shall not, notwithstanding anything in any Act to the contrary, be charged with duty under this Section on importation if it is proved to the satisfaction of the Commissioners of Customs and Excise that duty has been paid on a previous importation of the article into Great Britain or Ireland and that drawback has not been paid on its exportation."
  The hon. Member will see that entirely covers the point, so far as the law is concerned. Whether it covers it in practice I am unable to say until I inquire.
  Mr. PETO: It obviously does not cover the case of the stock of films in this country before the imposition of the duty.
  Mr. McKENNA: That I quite agree, and therefore I say to the hon. Gentleman when he gets to Sub-section (6) he may probably think it does not go far enough. The point should be raised when we come to that Sub-clause.
  Mr. LOUGH: The Isle of Man and the Channel Islands are not strictly, as my right hon. Friend says, part of Great Britain and Ireland, but in various parts of the fiscal relations, as the House knows, this House does interfere in a way it does not in regard to foreign countries. For instance, we passed the Isle of Man Customs Bill the other day. You cannot deal in Sub-clause (6) with these few islands.
  Mr. McKENNA: Yes, you can. Those islands do not come under the description "imported into Great Britain or Ireland." They are not included under the heading "Great Britain or Ireland," and therefore would come under Sub-clause (6).
  Mr. PETO: I beg to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Sir A. MOND: I beg to move to leave out the words, "Motor cars, including motor bicycles and motor tricycles."
  I do not intend to devote any amount of time in dealing with this Amendment. The

  1819
  question of principle, which has already been discussed at some length, will probably come better on the Resolution on the Clause in general. I will confine myself to the reasons why I believe we ought to leave out the articles mentioned in my Amendment. When the Chancellor of the Exchequer introduced these taxes, I think he could have been very insufficiently informed as to the position, the condition, And the carrying on of the motor trade industry in this country. He had got into his head that it was his duty by means of taxation to prevent consumption, and he enunciated the very bad economic theory that you can make people economical by taxation. I do not believe anyone has ever yet been made economical by taxation, and I am afraid the Chancellor of the Exchequer will find his new sumptuary taxes, from the point of view of economy, just as great a failure as they have ever been throughout the history of the world. At any rate, that is the theory he laid down which seems to have impressed a large number of people. In order to achieve the laudable object, he bas hit upon, of all things in the world, cheap American motor cars for the subject of a luxury tax. I could have understood if the right hon. Gentleman had taken some measure to prevent the purchase and use of large and expensive cars. He has not done so. This duty applies to the type of car which, however useful it may be, nobody would be likely to call a luxury.
  There is another point which obviously the right hon. Gentleman overlooked, and that is that the greater part of this motor car industry does not consist of cars used for pleasure at all, but of cars used for commercial purposes. A very careful survey made by a trade organisation on the question of the percentage of cars imported since the outbreak of the War, used for commercial purposes has resulted—and I may say these figures have been checked by a firm of accountants—in establishing the interesting fact that no less than 58 per cent, of all the cars imported since August last have been used for commercial purposes, and the balance consists of those used for so-called luxury purposes. I may say the so-called luxury purposes include the use of cars by doctors, veterinary surgeons, officers in His Majesty's serviecs, commercial travellers, and men of business who have been buying smaller or cheaper cars for every-day work. They also include those who, in their endeavour
  1820
  to carry out the Chancellor of the Exchequer's principle, namely, to economise, have discarded their large and expensive cars. In many cases—you can verify that every day—professional drivers having enlisted in His Majesty's Forces, the lady driver has come much more to the front. You will now see large numbers of ladies driving a small type of car, which, of course, is much more suitable for them, and easier for them than the large car, which requires much more professional assistance. There seems to have been some misnomer in treating all these cars as if simply imported for wasteful luxury, and I do not believe that if you put a duty on them the importation will necessarily cease to anything like the extent which is imagined by some will be the case.
  4.0 P.M.
  We next get to the question of revenue. That question is difficult to deal with, for this reason: When the duty was introduced the Financial Secretary to the Treasury for our guidance sent out an estimate in his White Paper of the amount of revenue which is due to be produced during this financial year and a full financial year. I find this statement: Imported motor cars and cycles—and I take it that that includes accessories and parts—for 1915–16, estimate £600,000. I have not been able to ascertain from any official statement on what theory these estimates are based, and it would be very interesting if the Chancellor of the Exchequer would tell us how the Treasury arrives at these figures. Since these estimates have been made a very large alteration has taken place in this duty by the concession which has been made on rubber tyres and commercial vehicles. I should like to know whether the right hon. Gentleman can say to what extent this estimate of £600,000 will be reduced by those concessions. I have tried to work it out myself on an estimate for a full year, and these are the figures at which I have arrived. We imported in the nine months ended 30th September, 1915, cars and chassis to the extent of £3,278,000, and adding another three months on the same basis, the estimate for the year is £4,371,000. Assuming that 58 per cent, of these are sold for commercial purposes, you have to deduct £2,500,000, and the balance left is £1,800,000.
  The same association which made the estimate in regard to commercial cars also inquired from its members as to the number of cars which would be excluded from importation. The average figure arrived

  1821
  at was 40 per cent., consequently you have to exclude 40 per cent, from the £700,000, and I arrive at a total importation of £1,100,000, and consequently the revenue at 33 ⅓ per cent, would be £362,000. That would be the whole revenue for a full year. I have not made any allowances for re-exports. All the figures we get on imports are gross and not net figures. A very large number of these cars have been re-exported. In regard to one make of American cars, there are no less than 1,000 of them being employed at the front as ambulances; these cars have figured in the import totals, and no deduction has been made for re-exportation. Therefore, if you deduct the re-exports, the revenue you will have left will amount in a full financial year to a very trifling sum. There is a further deduction to be made for loss of revenue. This tax is going to diminish the profits of a large number of trading concerns in this country who to-day are paying Income Tax, and possibly also Excess War Profits Tax. Has the right hon. Gentleman made any deduction for the loss of revenue which is likely to occur by an interference with these people's profits? There is another indirect loss which you cannot overlook in regard to English freights and English insurance. Our c.i.f. includes freight paid to English shippers on all these goods. Obviously these goods do not all come here, and we do not get the freight, consequently we lose revenue from Income Tax on the freights, and we lose as well from the point of view of balance of trade. All these facts have to be carefully taken into consideration in order to arrive at a final balance-sheet. I do not pretend to have got the accurate figures on all these points, but I am interested to know whether the Treasury has been able to single out these different factors, and I want to know whether these various deductions have been made in their estimate. It is pretty obvious to anyone who will go into these questions that as far as revenue is concerned you ought not to impose a tax like this at a time when there is a war proceeding which is costing £5,000,000 per day.
  I will now examine the argument in regard to the balance of trade. It is a very curious thing, but the more you go into these questions the more factors occur which do not appear on the surface at all. We hear from the Treasury that so many millions worth of cars are being imported, and that all this money is leaving the
  1822
  country. On investigation, it turns out that nothing of the kind is taking place. A large number of the American motorcar firms own houses over here, where they collect the payments in English money, and, as a matter of fact, at the present time there is a sum of £900,000 belonging to American manufacturers in this country which is not being sent to America because of the bad rate of exchange. That has to be deducted from the amount which figures in our imports, because that £900,000 has not gone out of this country, and it is stopping here. From the point of view of exchange, it is obvious to anyone that as far as that £900,000 is concerned the balance has not been disturbed, and will not be disturbed until the exchange becomes normal again. Therefore you cannot take these figures as giving you any accurate account of the balance of trade. Let me point out that the extent to which the balance of trade can be affected, more especially after the concessions which have already been made, is so trifling that even in ordinary times, to say nothing of a time of war, no one would think it worth mentioning. I know the Chancellor of the Exchequer says that every million counts, but I cannot believe that he would contend that if this duty were not in the Finance Bill there would be any appreciable difference in the amount of the American exchange. I do not want to give many figures, but may I point out that only a portion of these imports come from America. A considerable portion of them come from France, and as far as France is concerned the argument does not apply in the same way. What are the objections to this duty! I have already pointed out that the arguments which have been advanced in its favour do not really hold water. My first objection is that as long as cars are being manufactured in this country a duty of 33⅓ per cent, on imported cars is giving protection to the people manufacturing cars here.
  Mr. BlGLAND: Has the Ford company raised the price?
  Sir A. MOND: I believe so. This is a question upon which there seems to be some little dispute. I am informed that there are nineteen firms in this country making to-day ordinary motor cars for the public. If that is so, the right hon. Gentleman cannot deny that, as far as they are concerned, he is giving them a protective tariff of 33⅓ per cent., and that is

  1823
  naturally my first objection to the imposition of this duty. I now come to my second objection, upon which I hope the right hon. Gentleman will say something. There is no doubt that the motor-car trade in this country is looking upon this duty as protection for themselves. If the right hon. Gentleman will read any motor-car trade paper, or consult other authorities in the trade, he will find that, one and all, they look upon this duty not as a temporary thing, but as something which is bound to continue, and as something to which they will be entitled in the future, and their only complaint is that it is not high enough. I think it would be advisable if the right hon. Gentleman would give us a declaration that the Government do not intend to continue these taxes after the War, and that the present Government, on their own initiative, will take them off. I know that the right hon. Gentleman said that these duties would come off automatically in July; but, after all, if he imposes them again in his next Budget, they will continue, and if the War lasts there is every reason for believing that these taxes will again be imposed. The War may very well last beyond next July; I hope not, but it is not an impossibility. If we had some undertaking that these duties will be taken off by the Government, and that it will not be left to a private Member of the House; if we could get a Cabinet pledge that they will be taken off by the Government, and a clean sweep made of them before another election takes place, and when the War comes to an end, I am sure the right hon. Gentleman would remove a great many of the objections we have been making to these taxes. I do not think that that is an unreasonable request to make.
  We are not anxious to waste time discussing these points. We are not here as factious people, or as people who have got a crank. We are here because we feel the great importance of these taxes, and many of us speak with some authority on this subject. I know there has been some understanding, but the Chancellor of the Exchequer may not be in the position he now holds at that time. All these matters cannot be foreseen; but if we had a pledge that when the War is over these duties would disappear, and we should start with a clean sheet, I think that would do a great deal to relieve the mind of Free Traders, and it would do a good deal to make good the right hon. Gentleman's own claim. I think that is what was meant when the right hon. Gentleman said that these were
  1824
  temporary duties, and that is what he has in his mind, but a great many other people have not that in their mind, particularly those interested, and there are some very powerfully interested parties in this matter, and they look at it in an entirely different way. They look upon this duty as a protection to them in the future, because they are making munitions of war. I know that is not the way the right hon. Gentleman has regarded it, but I think he ought to safeguard himself against such an impression getting abroad. There seems to be a great many difficulties regarding the carrying out of the pledge which the right hon. Gentleman has embodied in the Finance Bill with regard to commercial cars. I have no doubt that when the right hon. Gentleman gave that undertaking he had every intention of carrying it out in a broad and liberal spirit, but I do not think he realised at the time that as a matter of fact there is no such thing as a commercial car. That is to say, that any chassis can be converted almost into a commercial or a pleasure car, entirely independently as to what body you wish to put on to it. The French import these chassis and they are asked here to make an affidavit that those cars are not going to be used for commercial purposes. The importer says, "I cannot make such an affidavit, because I have not the faintest notion what the chassis are to be used for." These chassis pass from the wholesale houses to the provincial centres, and then go into the hands of the retailers. Until the retailer sells one to a purchaser no one knows whether it is going to be the chassis of a commercial or of a personal car. The right hon. Gentleman sees where the difficulty is. I do not know how he can overcome it, or how the importer can overcome it, but, as he has given an undertaking to exempt commercial cars, I leave it to his ingenuity and to the ingenuity of his staff to find some way out of the difficulty. The procedure being adopted to-day will not do it. The honest importer—and I think the people engaged in this trade are honest people—simply refuses to make such an affidavit. He will not take the risk Therefore, the pledge which the right hon. Gentleman has given is not being carried out. I received a letter only this morning from a large importer of motor cars, component parts, and accessories, who had had this letter from the Customs House, dated 18th October:—
  "Motor lorries, vans, and parts thereof imported under Government contract are to be exempted from duty on production of a letter from the Admiralty or

  1825
  War Office identifying the goods as received. Other cars for Government use are to be charged the duty in the ordinary way."
  I do not know whether that is the usual procedure of the Customs House. As a matter of fact, it is an extraordinary thing to do, because the importer must naturally pass on to the other Government Departments more than the tax. If you are anxious to economise, and this is the usual way, I suggest that it had better be abandoned. If the importer has to pay this duty of 33⅓ per cent., naturally when he passes it on to the Admiralty or the War Office he has to reimburse himself, and therefore by adopting these methods the Admiralty and War Office are paying 50 per cent. more. The Treasury will only get 33⅓ per cent., and the taxpayer and the State will be 16⅔ per cent, worse off. I would like to call the right hon. Gentleman's attention to the extreme difficulty which is arising on the question of re-exports. The right hon. Gentleman was kind enough to say that there would be a full rebate of the duty on re-exports, but I am told by the importers that there are no bonding facilities available, and they do not know when buying cars how they can place them in bond in order to be able to re-export them without the duty. It is a very serious matter, and the re-export question altogether seems to be full of difficulties. I do not know whether the right hon. Gentleman has had his attention brought to an interesting article on these difficulties which appeared in the "Daily Telegraph," 15th of October. One of the difficulties that arises is this question of identity. A man imports a motor chassis. The motor chassis passes out of his hands, and is then re-exported by somebody who has put a body on to it. How is he to prove the identity of that chassis? What machinery exists for that purpose? I understand that in practice there is no machinery which can deal with the subject, and although on paper you may have a rebate given, in practice the rebate does not exist.
  I am very much surprised that the Treasury and the Customs House, and the Export Department, did not foresee many of the troubles that have arisen. They seem to have thought that you could deal with a complicated industry like the motorcar trade as you deal with sugar and tea. There you have a very simple and crude method of raising a tax by so much on the pound, and you have had bonded facilities established for many years. You have none of the difficulties in dealing
  1826
  with these articles that you have in dealing with motor cars. The right hon. Gentleman, in an earlier part of the Debate, said that there was no more difficulty in dealing with the question of rebates and drawbacks with regard to motor cars than there was in dealing with drawbacks on sugar in barley sugar. If that is his conception of the motor-car industry, I can understand why it is that he has plunged into the morass. I can assure him that it is very easy to ascertain the sugar in barley sugar, but it is extremely difficult to ascertain what are English and what are foreign parts of a motor car which is put together in this country and exported. I maintain that it is absolutely impossible to do so, and so would anybody who is intimately acquainted with the motor-car industry. I will not go into the difficulty of collection. In view of these difficulties for the small amount of revenue collected, and in view of the fact that already the greater part of the duty is gone, I invite the right hon. Gentleman to abandon this system and to adopt a more remunerative, a simpler, and a very much better way of dealing with the whole subject. Of course, we are not here to plead either for the American motor-car manufacturers or for cheap motor cars. We are here to prevent a cumbrous, difficult, and unworkable system being introduced and the money of the State being spent in collecting a tax which brings in very little.
  This would be a very much better system: If the right hon. Gentleman would only adopt the plan of treating it under the Inland Revenue and putting an amount equal to 10 per cent, on to the retail price of all motor cars in this country, whether American, French, Italian, or English, whether new or second-hand, whether commercial vehicles or not, he would find that he would arrive at a revenue approximately estimated at £2,000,000 a year, and he would introduce none of the protective features of this tax and practically none of the difficulties with which he has to deal now. He would make everybody who buys any kind of motor car contribute to the revenue, and that is only justice. I cannot understand why a man who buys an expensive second-hand car for, say, £900 should be looked upon as a virtuous citizen and a man who buys a cheap new motor car for £450 should be regarded as a criminal. This scheme has been worked out and submitted to the Treasury, and I think it deserves very careful consideration. It is simple, remunerative, and fair all round,

  1827
  and could be easily worked. I hope the right hon. Gentleman will not say because he has introduced his duties that he is under any obligation from the point of view of the prestige of the Government or for any other reason to adhere to them. I know that sometimes those ideas do animate Governments and Ministers, but I really think that they are not worthy of big men like my right hon. Friend. His position is too great and his reputation is too large that, if he finds on reflection that he can achieve an object he wants in a better way, he should not seize that way for any of these reasons, and I do hope the right hon. Gentleman will see his way to withdraw this duty and pursue a course more secure and more remunerative, and one which will be accepted by the whole of this large industry as a settlement of this very difficult question.
  The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu): The right hon. Gentleman for the purposes of this Clause alone is an enemy of the Budget. Every Amendment which he moves is not directed to improve the Clause, but to destroy it. When the Resolution imposing the duty on motor cars was introduced, the right hon. Gentleman with the wealth of dialectical skill which he possesses demolished it in principle and destroyed it in application completely to his own satisfaction. He now comes forward and does the same thing over again even better than he did before. Having tried his frontal attack, he then proceeds to be very coaxing and attempts by pointing out the well-known qualities of my right hon. Friend to get concessions. He says, first of all, "Well, I have been beaten by the sense of the House on the question of the principle of the tax, but for Heaven's sake do not apply it to commercial cars. It would be a very hard thing to apply it to commercial cars, and, if you must act on this principle, exempt commercial cars." My right hon. Friend exempts commercial cars, and then the right hon. Gentleman turns round and says, "You cannot work your tax, having done that which I asked you to do, and your case is worsened by your giving in to me and listening to my arguments. Therefore I go further. If there is any revenue left from your Clause, I will move another Amendment to get rid of the remaining revenue. Because you have accepted one Amendment and lessened the revenue, do something else which will
  1828
  lose you another £320,000." He supports this by all sorts of arguments, some of which I will not traverse, because I would suggest that they will come better on Subsections (6) and (7), which deal with such questions as the identification of commercial cars, and the other Sub-section which deals with rebates on re-exportation.
  I merely content myself with pointing out two things to the right hon. Gentleman. He suggested that by preventing or attempting to prevent the importation of American cars or foreign cars we have lost sight of the great profits made on the freight of carrying these cars. The right hon. Gentleman knows perfectly well that the great problems with which we have to deal now is to provide for freights. There is a shortage of ships for all the things we must have, and this argument that the Motor Car Tax is a bad thing because you would lose the profit made on the freight of carrying the cars is not worthy of the right hon. Gentleman's logical mind. He appealed to my right hon. Friend to declare that these taxes are only temporary. My right hon. Friend has said it over and over again. Nobody would be a more convinced opponent of these taxes if they were designed to be a permanent part of our fiscal system than my right hon. Friend, and, if I may say so, than myself. These taxes are designed in exceptional circumstances to meet exceptional conditions. We believe that there is a large purchase of cheap cars from abroad for a purely luxury purpose, and we desire to stop it. They are temporary in form and temporary in intention, and, after the declaration the Chancellor of the Exchequer has made more than once, I venture to suggest to the right hon. Gentleman that if these were taxes applicable to his own industry he would never build or invest one penny of his capital on the chance of their being permanent or prolonged after the end of the War. He and his Friends have made one or two attempts in this Debate to alter their character so as to make them permanent; but if he will leave them alone nobody in this country who carries on any business will have any ground for building any hopes on the fact that they are permanent.
  Mr. CHAPLIN: The right hon. Gentleman who has just spoken began by saying he was most anxious to avoid spending the time of the Committee unnecessarily, but he certainly succeeded in speaking at very considerable length. I was delighted

  1829
  to hear what fell from the Financial Secretary to the Treasury—not on the ground which hon. Gentlemen opposite who cheered that statement wish no doubt to attribute to me. I was about to observe that in this very long speech the right hon. Gentleman appealed over and over again to the Chancellor of the Exchequer to give a definite pledge that, at the end of the War, this particular tax would be repealed. Does he know when the War is going to end? Does anyone know? Can the Chancellor of the Exchequer even form an opinion on this point? A more unreasonable request I never heard from any Member of this House. Who knows what our financial position is going to be at the end of this War? I am afraid, as far as outsiders with no military knowledge or experience can form an opinion, that we must look forward to a very lengthy continuance of the War, and therefore if that should unhappily be the case, the Chancellor of the Exchequer is going to be faced with a permanent indebtedness of this country and with demands for the raising of revenue which may be something almost inconceivable in their magnitude compared with anything we have had in the past. Yet in the face of this the right hon. Gentleman the Member for Swansea gets up and makes a little modest request to the Chancellor of the Exchequer to give a definite pledge that, whatever condition the country may be in, he will at the end of the War repeal this tax, and if he did agree to repeal the tax the same request would be made in regard to half a dozen other little taxes of the same kind the moment the War is over.
  I must say, with all respect to the right hon. Gentleman, I do not think he has any right to make this request. Who does he speak for? What is the position of this little knot of Free Traders who have been raising this question night after night, and so unprofitably spending the time of the House? They represent a very small minority in this Chamber, and I suspect they represent a much smaller minority outside. Again and again they have given the impression to everyone who has ears to hear, or who has an opportunity of reading their speeches, that they much prefer to discuss these petty—and comparatively petty topics they are, in the face of the crisis in which we stand at this present moment—they prefer to discuss these small, petty trifling matters, utterly forgetting and ignoring the enormous issues with which we are confronted, and the still greater
  1830
  task thrown on the Chancellor of the Exchequer to meet demands which must be far greater than have ever been made on the financial resources of this country.
  Mr. JOYNSON-HICKS: There are one or two Committee points on which I wish to speak. I am not addressing the Committee as an opponent of the tax. As one somewhat interested in the motor world, representing not manufacturers but an association of close upon a hundred thousand motorists, I may say that the motorists themselves are not in any way opposed to this taxation. We users of cars desire to take our share of the taxation rendered necessary by this War. The first point I wish to lay before the Chancellor of the Exchequer is in regard to the effect that this tax will have, or rather which it might have, if he were to put it in a slightly different form. I take it that one of the main reasons for the tax is to correct the exchange with regard to America. The Committee should realise that America put a prohibitive tax on our motor cars while our Allies, France and Italy, do not place such a tax upon them. On the other hand, the exchange with America is exceedingly bad for us, while the exchange with France and Italy is good for us. The effect of this tax as it is proposed to be put on—I do not know whether the right hon. Gentleman has realised it—would be that American cars would continue to come in here while the cars of our Allies, France and Italy, would be kept out. The reason is this: the American car—the Ford car—costs about £120, and that will pay a tax, assuming it comes in ready-made, of £40, whereas the cheap French or Italian car, costing £200 or £300, will pay a tax of from £70 to £100.
  The Committee will easily see that the effect of this tax will be to absolutely prohibit our Allies' cars coming in and to make it easier for the American cars to come in. A suggestion has been made to the Chancellor of the Exchequer for an alteration in the mode of collecting the tax, and if he would do what every other civilised country does in regard to motor taxation—that is, collect the tax on weight instead of on declared value—he could quite easily get the same amount of money without having the effect of creating a preference in favour of the American car as against the cars of our Allies. Germany, France, Italy, and Switzerland all have taxes at various rates on motor cars, but each country taxes by weight and not by value. If the right hon. Gentleman would

  1831
  only consult his Customs authorities he would find it is very much easier and simpler to tax by weight than by the certificate which a vendor chooses to give as to the value of the article imported.
  There is another point in regard to the Ford car which I may mention. It is nominally worth £120, but in reality it is sent over here in an unmade condition, in crates and boxes containing pieces which go to the make-up of the car. These pieces are not valued at the present moment at more than £45 per car. They could easily be valued at £30. They are made up in a factory here, and the cost is not very great. Therefore the taxation on the Ford car, instead of being what the right hon. Gentleman expects, 33 per cent, of £120, will really amount to 33 per cent, on only £40, the value of the pieces imported here, and you will get your luxurious small car coming over in pieces, made up here, costing £120 to the English buyer, while the right hon. Gentleman will secure taxation not on the £120 but on £40. It is also quite feasible as the making-up firm here is owned by an American company, for them to import the pieces at a less price than £40, and the firm in England can charge an extra profit on the making up and thus escape with a still smaller tax. If the right hon. Gentleman will only consider this point with his advisers he will see whether it would not be better, in the interests of the revenue, to put the tax on weight rather than on certified cost, and I think he would find it much more profitable.
  The other small point I wish to put before him is with regard to travelling cars coming into this country. The right hon. Gentleman has travelled abroad. I have seen pictures of him on the Continent. Everybody knows that if you have a travelling car and take it abroad for pleasure, or any other reason, you can go to the Automobile Association and pay into its coffers a sum which will cover the French duty, the German duty, the Italian duty, or the Spanish duty. You can travel all over the Continent, and when you bring your car back again you get your money returned. There is no need to trouble about the Customs authorities either in France or Germany or any other foreign country. Cannot the right hon. Gentleman permit our Customs authorities to make a similar arrangement with, say, the French Touring Club, or one of the other great organisations, in order that our foreign friends who wish to visit us
  1832
  here may have the same privileges and the same facilities for getting their cars into the country and out again without being troubled by the Customs officials—privileges and facilities which they have granted to us when we desire to take our cars abroad. These are small Committee points, and I hope the right hon. Gentleman will consider them between now and the Report stage.
  Mr. DAVID MASON: The hon. Member who last spoke has made suggestions which will no doubt receive consideration at the hands of the Chancellor of the Exchequer. I wish to offer a few observations with regard to this Amendment, which I support. I have the honour to represent the city of Coventry, which is regarded as the seat of the motor industry in this country. I am sent to this House as a Free Trader, and I hope I shall remain a Free Trader to the end. I believe the hon. Member who has just sat down and others interested in the motor industry are prepared to pay their share of the taxation due to this War. Of course, there is a section in Coventry who are in favour of Tariff Reform, but I have had no representations from them asking me to take any steps with regard to this particular matter. The great motor industry of Coventry has been built up under Free Trade, and when I remind the Committee that that city increased its population in the ten years previous to the War by 50 per cent., on a Free Trade basis, the Committee will agree that under such circumstances there is no necessity for a protective duty for that industry. Not only has the industry flourished in this country, but previously to the War the export of British made motor cars to the Continent and all parts of the world was increasing. I do not propose, however, to discuss this question so much from the Free Trade and Protectionist point of view, but rather to refer to the motives which I believe have actuated the Chancellor of the Exchequer in the introduction of these taxes. What did the right hon. Gentleman say?
  The CHAIRMAN: The hon. Member appears to be rather anticipating the discussion on the Question that the Clause stand part of the Bill. I must warn him and other members of the Committee that I cannot allow a repetition on the various items in this Clause, and that if anything in the nature of a general Debate takes place I cannot allow another Debate on the Question that the Clause stand part.
  Mr. MASON: I will try to confine myself to the particular tax we are discussing. The right hon. Gentleman, referring to these taxes, said:
  "If we can by any means, by taxation at one and the same time restrict imports, reduce consumption and bring in revenue, then I think, for the moment, at any rate, that we may be considered to have found an ideal system."
  If these taxes are to restrict imports, reduce consumption, and bring in revenue, certainly they are ideal taxes, but I am not able to see how, if you restrict the import of motor cars, you are going to get revenue. If you get the revenue then the cars must come in. If they come in you cannot keep them out, that is very evident. We ought to press the right hon. Gentleman to say what is the real object of these taxes. He has said over and over again that he stands for Free Trade and that he is not in any sense desirous of protecting the motor industry; therefore we are driven to the conclusion that the principal motive for these taxes is the correction of the American exchange. I prefer to give the right hon. Gentleman the benefit of the doubt, because he has said over and over again that he is a Free Trader and that the correction of the American exchange was his sole object in bringing in these taxes; therefore we must assume that the object of these taxes is to do something to correct the American exchange. The right hon. Gentleman the Member for Swansea (Sir A. Mond), when introducing this Amendment, very ably showed the infinitesimal amount which the importation of these motor cars would bring into the revenue. The excess of imports amounts to something like £200,000,000 or £300,000,000, and the right hon. Gentleman the Member for Swansea estimated that the total revenue from the importation of foreign cars would be about £362,000. I believe the Chancellor of the Exchequer estimates that the total revenue from these taxes will come to £1,950,000, but now that he has eliminated commercial vehicles, upon a generous estimate, it will be something like £900,000. The effect, therefore, on the exchange is infinitesimal.
  It is trifling with the Committee to ask us to support these taxes for the purpose of correcting American exchange. They will have little or no effect on the American exchange, and it is absurd for the right hon. Gentleman to base his case upon so slight and ephemeral a foundation. If that is the basis of the introduction of
  1834
  these taxes, we are entitled to ask him to show how they will correct the exchange, how so small an amount as this will have any effect, and how it will even have the effect of checking the importation, which he so desires. As the last speaker pointed out, these taxes will really give a preference to the Americans as against our French and other Allies who send cars into this country. We may possibly see, instead of some falling off, rather an increase in the importation of American cars. I fail to see what justification the right hon. Gentleman can show for so serious a departure from the principles of Free Trade which we have been returned to this House to support. I should like him to justify this and to show how it will have the effect upon the exchange which apparently he believes it will have. As to this exchange question, there are other causes which have brought it about, and no doubt we may have an opportunity of dealing with them later on. For the life of me I cannot see how this particular proposal will have the effect he anticipates. The late Leader of the Opposition has himself told us that he has no responsibility for these taxes, and that the Tariff Reformers are by no means enthusiastic in their favour. The great motor-car manufacturers believe that the tax will not have the effect of keeping out these cars, therefore I cannot see what justification there is for carrying out these taxes. The Amendment is a very fair one, and I hope it will receive the enthusiastic support of the Committee.
  Mr. THEODORE C. TAYLOR: I believe there are one or two features of the motorcar industry to which the Chancellor of the Exchequer has not given enough weight. It is not an old industry by any means. That is one of the reasons why it is so large in the United States. It is not like the old-established industries of this country—cotton, wool, iron, and so on—it is an industry of recent origin. The makers of motor cars in this country have had, as their own representative has rightly said, certain difficulties to contend against. They had this cheap American production. I am quite willing to admit that in the production of cheap cars the Americans have a large advantage, and that they have largely swamped this Country with cars based on the principle of interchangeable parts. There is a manufacture on an enormous scale of small parts and the assembling of them together

  1835
  by very large firms. There are makers in this country who have built up large businesses in spite of that, Free Traders would say because of Free Trade, and Fair Traders would say in spite of Free Trade. As the hon. Member for Coventry (Mr. D. Mason), who represents the largest car-making town in the country, has told us, this industry is a growing and prospering industry, and is contributing to the welfare of the country. What are we going to do now with this industry? What is the proposal at which the Amendment of my right hon. Friend strikes? I cannot call it anything else but playing with that great industry. We have no right to take up a great trade like this and play with it.
  The Chancellor of the Exchequer said in his Budget speech that the motor-car industry were not making pleasure cars, for the reason that the Government is employing most of the motor-car factories. It is not quite certain that the Government is employing all the motorcar factories in the country. The right hon. Gentleman the Member for Wimbledon (Mr. Chaplin)—upon whose support I congratulate the Chancellor of the Exchequer—asked when the War will end. Nobody knows. The War has not ended yet, but it has been going on for a great length of time. A year ago woollen cloth manufacturers were all busy making khaki. I know that some of them are not so busy as they were twelve months ago. One has only to look at the Trade Reports in the newspapers to see that many of them are very slack now. May it not be the case that the motor-car industry, also, before the War is over, will be slacker? When the War is over there will be a very strong case, on the part of those people who have been laying down plant, and who are now making munitions, and are controlled by the Government. Those factories will be cut out only for making munitions of war. They will have a good case for consideration. They will come to this House and say, "We have laid out scores of thousands of pounds, and our plant, which is only suitable for that purpose, will have to be scrapped." What will happen to the motor-car industry if this War goes on for two years more—which Heaven forfend. There is quite a possibility of it.
  I defy the Chancellor of the Exchequer to say that the War Office will find
  1836
  employment for the whole of the motorcar industries that are going at present, and which we know are being enlarged. Before the end of the War, I venture to say in one year from now, our motor-car industry will have overtaken the demand, as our woollen cloth trade has overtaken the demand for woollens and khaki cloth, and they will want work. They will say that the Chancellor of the Exchequer has given them a home market with a 33⅓ per cent, advantage. The Chancellor of the Exchequer will be able to say at the close of the War that he only meant that to last during the War. But what will be the certain effect? I beg the Committee to consider that. Remember that at that time mechanics and all kinds of people will be wanting work, and there will be a greater number at the close of the War. At that very time there will be fewer people in this country able to buy cars, for as the War goes on fewer people will be able to buy cars, certainly for pleasure purposes. What shall we have done? With a view to keeping out competing American cars we are giving—nobody can deny it, if this Clause is passed without the Amendment—a bonus of 33⅓ per cent, to every manufacturer of motor cars in this country. At the close of the War, when these factories are competing with each other, there will be no imports. I venture to say that if this War goes on for two years there will be no further imports of pleasure cars, and the trade will be a much smaller trade. That will be the time when workpeople will be wanting work, and when there are fewer customers for pleasure cars. I beg the Chancellor of the Exchequer to have in mind not merely good intentions but the actual result of putting on a duty to protect an industry which will have a very good claim to come to the Parliament of this country for special help. I venture to prophesy that that special help will be asked for, and possibly, if we have a Chancellor of the Exchequer of the same action, I will not say of the same opinion, there will be granted a continuance of this duty.
  Mr. McKENNA: I am really at a loss to understand how my hon. Friend can repeat to the Committee the argument which he has just used. I say "repeat" because, in spite of the appeal made to me again and again and the answer I have given, he still repeats it. He says the claim will be made by the motor-car industries that they will be entitled to a continuance of protective duties because they will have invested

  1837
  capital under the favourable conditions of this tax. I think I am stating his arguments correctly.
  Mr. T. C. TAYLOR: Yes.
  5.0 P.M.
  Mr. McKENNA: The Government put these taxes forward as taxes on luxuries which they wish to discourage in the national interest, and so far from desiring or seeking to develop the motor-car industry they desire to discourage it, and they think it will be a most unpatriotic use of capital to invest it in a new motorcar industry. How, in these circumstances, with this declared policy, my hon. Friend can still get up and say that the motor-car firms will acquire a claim upon the goodwill of the nation, having admittedly committed an unpatriotic act, is absolutely beyond my comprehension to understand. I hope we shall not hear of any claims being founded upon the existence of these taxes. There is not a tax imposed on anything except a luxury, the manufacture or production or importation of which the Government desires to discountenance. Secondly, no claim can be founded hereafter on the ground that capital has been put into an industry. My hon. Friend (Mr. D. M. Mason) is greatly disturbed by what he considers the inconsistency of my statements that I desire at one and the same time to restrict imports, to raise revenue, and to help the exchange. In the very simplest form I will endeavour to bring home to my hon. Friend how it is perfectly consistent to achieve at one and the same time all these objects. Let him consider for a moment not one but two motor cars which ordinarily would be imported into this country if these taxes were not introduced, and suppose the effect of the introduction of these taxes is that not two motor cars but one motor car is imported. What is the effect of that? One motor car will be kept out and therefore, so far, importation will be restricted. One motor car will come in, and so far revenue will be obtained. What is the effect upon the exchange? My hon. Friend says inasmuch as the revenue, on what he calls a generous estimate, to be obtained is only £900,000, what possible effect can that have upon your exchange? Here again my hon. Friend has fallen into an error. The effect upon the exchange is not determined by the amount of revenue which we obtain but by the number of motor cars which we keep out.
  Mr. D. MASON: I said it was an indication.
  Mr. McKENNA: If it is only an indication I do not know why he mentioned the figure. We hope and expect that by these duties we shall keep out not £900,000 worth of goods, but a great deal more—some millions by all the duties.
  Mr. J. M. HENDERSON: Only three times the amount of the duty.
  Mr. McKENNA: Three times the amount of the duty will represent the value of the cars that come in. It will not represent the value of the cars we keep out. [An HON. MEMBER: "Oh!"] I should have thought that was stating an obvious truism. The effect upon the exchange is not measured by the amount of duty we get but, to use an Irishism, by the amount of the duty which we do not get, that is to say, by the number of cars which we keep out.
  Mr. HENDERSON: The assumption is that you keep them all out for the benefit of the exchange.
  Mr. McKENNA: The illustration I have given is that there are two cars. I have already shown how one car may be kept out and restrict imports, and one car may come in and bring revenue, and the car that is kept out not only restricts imports by the full value of the car but affects the exchange. If we bring in one and keep out one, we get the value of the exchange of one car. If we keep out two cars and bring in one, we get the value of the exchange of two cars, but at any rate we shall either get one-third of the value in duty or we shall get the whole of the value as the effect upon the exchange, and so far as we do not get the whole of the value of the imports as effect upon exchange we must get one-third of the value of the goods in the way of duty. It is not really so absolutely impossible that all three results may be effected by this means.
  My right hon. Friend (Sir A. Mond) asked for a pledge from the Cabinet that after the War these taxes would be withdrawn. I really am at a loss to understand my right hon. Friend's frame of mind. These taxes next August would have to be reintroduced into this House exactly as they are being introduced now. They become new taxes again. What is the value of any pledge? My right hon. Friend says he does not want a pledge from

  1839
  me, but from the Cabinet. If the War is over next year and the Cabinet wants to have these taxes again, the Cabinet has to come and ask for them. The right hon. Gentleman has as full power then to deal with them as he has now, and he will be in a much better position to deal with them because they are introduced by me as war taxes, and he will be able to quote the introduction of these taxes, and to say they were introduced under the conditions in which we now stand. But to go beyond that and ask for a pledge from the Cabinet individually and collectively that we will never have anything to do with these taxes again, is asking for something that he is not entitled to ask.
  Sir A. MOND: I did not ask for any individual pledge whatsoever. All I said was that my right hon. Friend asks us to accept his taxes in the circumstances in which we now stand. Admitting that argument, I ask for a pledge—surely not an unusual one—that the existing Government as a Government will not reintroduce these taxes after the War is over. My right hon. Friend surely must see that there is a very great difference between introducing these taxes at some future time, when private Members may do their best to oppose them, and asking the Government now not to reimpose them after the War is over.
  Mr. McKENNA: I do not agree with my right hon. Friend. After the War is over, next August, or whenever these taxes are dealt with again, they will have to be reintroduced into the House under a new Resolution. It is not as if the Government were merely continuing the taxes and a private Member would have to take upon himself the burden of getting them repealed. The Chancellor of the Exchequer of the day will have to take upon himself the whole burden of reintroducing them. I can do no more than to say that I have introduced them upon such arguments as my right hon. Friend has heard, every one of which is founded upon the special conditions of this War. I do not think he is entitled to ask for more than that. He cannot ask for more than that. The taxes are not introduced as permanent taxes. In form as well as in fact, as well as the argument upon which they are founded, they are introduced as temporary taxes. My right hon. Friend would be absolutely free, as every other Member would be, to
  1840
  oppose any Government which introduced taxes of this kind in peace. More than that I do not think he can ask for, and I think the sense of the Committee, even amongst hon. Members who remain Free Traders under all conditions, even in the midst of a great War, when other considerations besides the advantage or disadvantage of trade have to be taken into account, would be satisfied. I think the fact that the tax is a temporary tax, which must be reintroduced in order to be operative, is sufficient assurance for the Committee that they cannot have it forced upon them again against their will.
  The CHAIRMAN: Before the Debate proceeds, I must again say that the discussion is going much more widely than is justified on this Amendment, and I cannot permit the repetition of arguments already used, or the repetition of this Debate on other proposals in the Committee.
  Mr. LOUGH: I will try to keep within the narrow path which you have laid down for us. I quite see the force of your argument. I think we are only entitled to use those points which apply particularly to motors, and should avoid the general Protectionist argument. The Committee must really pity the Chancellor of the Exchequer for the difficult position in which he found himself. He was struggling all through his interesting speech to deal with two arguments, one presented by my hon. Friend (Mr. T. C. Taylor) and the other one by my right hon. Friend (Sir A. Mond). The argument from the opposite side of the House was simply that a claim would be set up by British makers who were protected, which the Chancellor of the Exchequer himself would have to recognise. My right hon. Friend said, "No claim will be set up because I now declare that the tax is to be temporary."
  Mr. McKENNA: No. I said no claim would be set up because these taxes are imposed on luxuries, the manufacture or importation of which, in the interest of the nation, the Government desire to discourage. Any claim founded upon the fact that new capital had been introduced into luxury trades of this kind would be unpatriotic.
  Mr. LOUGH: I know that point was made, but I thought it was a second point.
  Mr. McKENNA: It was the point.
  Mr. LOUGH: I will say nothing about the temporary point, because it seems to

  1841
  me, if that was the main argument, a more complete answer was given by my hon. Friend (Mr. T. Taylor) to that argument than to the other. My hon. Friend's argument was, "If you are honest in wishing to check luxuries, why do you not put on an Excise Duty?" Not a word was said in the Chancellor's speech in reply to that argument. How will he deal with this? I think I am treating the argument fairly, and I do not want to extend it. Unless we have an official answer to the argument put forward by the hon. Member, the point was not mentioned or dealt with. I maintain that it cannot be dealt with. If it is not dealt with, is not this the way that the hon. Member's argument will be worked out? The British manufacturer will say, "It is all very well for you to say you wish to discourage manufacture of motor cars, but you do not discourage me from building motor cars. On the contrary, by shutting out my opponents' cars, you encourage me to build. You give me the most powerful inducements to build them, and I have been doing it for a year at your request, and receiving a large subsidy from you for doing it, and now I ask you to treat me fairly in this position in the future." That is the argument that would be presented, and my right hon. Friend the Chancellor of the Exchequer is not able to say a single word in reply to it. My right hon. Friend here, in the simplicity of his heart, says, "Give us a pledge that the tax will not be renewed," but the Chancellor of the Exchequer was very discreet and astute not to attempt to give any such pledge. How does he know that he will be there on that bench when the time comes? This was the answer he gave. He said, "They will have to be introduced as new taxes." Really, that is treating the Committee as if they had had no experience; as if every member of the Committee did not realise that every tax that has been on the Statute Book has a tremendous advantage. It is put in the Budget in a few words, and therefore we have all the difficulty of the attack. All I can say is that if our difficulty in any future action is to be measured by the extraordinary difficulties which we have to meet now, I hope that we Free Traders will be spared from having to go through them again. The sole argument that we had from the Financial Secretary to the Treasury, who replied to the Debate in the first place, was that the tax was temporary, and that point was touched upon by the Chancellor of
  1842
  the Exchequer, although he says he did not expand it. I wish the right hon. Gentleman (Mr. Chaplin), who is supposed to lead us on this bench, was here now. What would he say? He got up and said, "What guarantee have we that it is temporary?" None at all. We can have no guarantee about it, and I think the House ought to be allowed to measure what the Government is doing in bringing in these comments about the future—a future which does not belong to any man in this Committee. If you look at the proceedings nakedly, as they are, no answer has been given to us, and I maintain that the Committee is embarking upon a very dangerous course if it puts on a duty for the reasons assigned.
  Mr. RUTHERFORD: The last speaker complains that no answer has been given to the argument about Excise. We have listened to the whole of the arguments which we have heard to-day half a dozen times in this Parliament. We have heard the same thing over and over again, and we have had the answer from the Government several times. It is perfectly conclusive, and the fact has been stated, that to set up an Excise would mean a new set of functionaries, the most elaborate arrangements, a lot more salaries, and a complicated system. There are no motor cars, to speak of, being made in this country to day.
  HON. MEMBERS: Yes, there are!
  Mr. RUTHERFORD: The cars that are being made are for war and ambulance purposes, and the whole suggestion about Excise would be futile, and involve an immense expense for comparatively nothing. That is the answer. It has been given over and over again.
  An HON. MEMBER: It is a poor answer!
  Mr. RUTHERFORD: That is the answer that has been given, and I maintain that, as we have a vast number of very important matters to deal with in this Budget, it is trifling with the Committee to waste time by giving us the same arguments and the same line of criticism half a dozen times over.
  Mr. J. M. HENDERSON: My hon. Friend (Mr. Rutherford) uses a very strange argument. He says it would create a big staff of men and a great amount of expense and difficulties to check the Excise on motor cars, which are not being made.

  1843
  My heart bleeds for the position of the Chancellor of the Exchequer in regard to exchange. He must know, if he has studied exchanges, as I had had to do in my early career, what effect these things will have on exchange. He talks about American exchange. What is making the American exchange against us? Not motor cars, but corn, wheat, and munitions. You cannot put a tax upon wheat. The country would not stand it for a moment, and the right hon. Gentleman himself would not stand it. Therefore he goes into the throes of labour, and this mountain, which is to help the exchange, produces this mouse of a few thousand pounds. I should think the right hon. Gentleman knows as well as I know, and as well as any exchange broker in the City could tell him, that this tax which is to keep out these cars will not make ½ per cent, difference in the rate of exchange. So far as the cars come from France, the rate of exchange is already disastrous against France. The French exchange today is 27.50 instead of 25.25. So, for goodness sake do not say anything about exchange. People will laugh at you. If you say frankly, "We want some money, and here is £900,000"—I do not make it out to be so much myself, I think you will be pleased if you get £500,000—"and we are going for a moment to throw over our Free Trade principles to try to get it." I could understand that, but when you bring up these side issues of exchange and economy, I assure you that it leaves any man who understands the subject thoroughly cold, and thoroughly sorry that the Government should have to adopt such reasons and arguments for these proposals, which I feel sure they have been led to bring in against their will.
  Mr. OUTHWAITE: I should like to join in the appeal on the lines taken by the hon. Member who has just sat down. I do think that the Chancellor of the Exchequer should not humbug us in this way.
  HON. MEMBERS: Order, order!
  Mr. OUTHWAITE: Hon. Members cry "Order,, order!" but I am paying the greatest compliment I possibly can to the Chancellor of the Exchequer. I say that you do not believe for one moment that these trifling amounts you are going to get at in the way of imports are going absolutely to adjust the exchange.
  Mr. McKENNA was understood to say: I never said that.
  Mr. OUTHWAITE: No, I think we have to look in other directions for the causation of these taxes. Perhaps one can find a reason in a statement which I saw at the time the Budget was being framed, that the right hon. Gentleman the Member for West Birmingham (Mr. Chamberlain) was assisting the Chancellor of the Exchequer in the framing of the Budget. I think probably the Chancellor of the Exchequer is standing by some tacit bargain made by the Tariff Reform section in that direction. He is unwilling to scrap these taxes because of the sorrow it will cause to Gentlemen with whom he is working.
  Sir PHILIP MAGNUS: On a point of Order. Is this a legitimate argument?
  Mr. RUTHERFORD: What has it got to do with the War?
  The DEPUTY-CHAIRMAN (Mr. Maclean): The Chairman, a few minutes ago, communicated to the Committee his view as to the far too general scope of the arguments used. I certainly think that the remarks which the hon. Member has just been addressing to the Committee are quite outside the scope of the Amendment. As far as my occupancy of the Chair goes, I shall endeavour to carry out very strictly the ruling that the Chairman has given, that remarks must be made directly relating to the Amendments before the Committee.
  Mr. OUTHWAITE: Of course, I bow to your ruling, but I think it is rather hard to make a legitimate remark when you are discussing an illegitimate subject. The Chancellor of the Exchequer must expect us, and the hon. Members opposite who objected must expect us, to make these speeches so long as the right hon. Gentleman refuses to give any reply to one of the chief demands in the arguments we make. We have had no reply to the question of Excise. If the Chancellor's object is to prevent the production of motor cars in this country, why could he not do so by Act of Parliament? Why should he upset the whole fiscal system of this country in order to do something which he could do much more easily by a practical prohibition of the manufacture of cars in this country? That, surely, is the proper way to proceed if that is his object. If he has other objects, undisclosed objects, in view; if it is part of some pact he is keeping with the Coalition Government, then I say he

  1845
  is not treating us fairly, and so long as he cannot meet our arguments and the objections we raise, he must expect these objections to be raised.
  Mr. PRINGLE: I wish to deal with a few of the practical questions that have been raised in the course of the Debate. I would like to direct myself first to the observations made by the hon. Member for Liverpool (Mr. Rutherford), who was endeavouring to enlighten the benighted Free Traders of the Committee. He informed us that there were no motor cars being made in this country at the present time, and that the Excise therefore was superfluous.
  Mr. RUTHERFORD: I did not say that.
  Mr. PRINGLE: I think the statement he made was that in this country to-day no motor cars were being made, except those for ambulance or War purposes.
  Mr. RUTHERFORD: Substantially.
  Mr. PRINGLE: If the hon. Member would take the trouble to read a newspaper with which he is in general political agreement, the "Daily Express," he would find in the motor column of that paper this morning one considerable motor firm advertising that it is able to supply pleasure motor cars, and that is represented by the writer of the motor column as not a singular or unique case in the industry at the present time. Therefore, we are entitled to believe that even in the abnormal conditions at present prevailing there are manufacturers in this country who will enjoy the advantage of the 33⅓ per cent, tax on imported motor cars.
  Mr. RUTHERFORD: That is not the case.
  Mr. PRINGLE: Then the motor expert in the "Daily Express" is misinformed.
  Mr. RUTHERFORD: You have not understood the article.
  Mr. PRINGLE: The hon. Gentleman informs me that I have not understood the article. Obviously, he, not having read the article, is better able to understand it than I who have read it. That seems to be on a footing with his general logical position. We have been told by the Chancellor of the Exchequer that this tax will not give any claim to the industry after the War, and that no claim has yet been put forward on the part of the industry for the continuance of the tax after the War. I have
  1846
  in my hand a cutting from an article by another motor expert, writing in a paper which is in general sympathy with the hon. Gentleman opposite (Mr. Rutherford). It appeared in "The Sunday Times" of 10th October, and it says:—
  "There is no burking the fact, Free Trade or no Free Trade, that if this Import Duty is to cease, automatically, with the declaration of peace, as is soothingly suggested in some quarters, and not obtained at any rate for a year or two, or become permanent, if justified by economic results, its actual value is, frankly, very small. The British motor industry has had the bottom knocked out of it and is disorganised. It will take a full year or two to recover its equilibrium, and it will frankly need protection during that period of re-establishment against neutrals with so much in hand."
  So that we have heard the claim already put out on the morrow of the introduction of the Budget for the protection of this, trade after the War. What is the answer of the Chancellor of the Exchequer? He says that this tax is merely put on for a stated period, that it is temporary and will come off again next year, that my right hon. Friend the Member for Swansea and other hon. Gentlemen in this House will have ample opportunity then of attacking the tax and possibly defeating it, and that then they will be able to quote his assurance that that tax is only intended to be temporary. But on another question last night I had the temerity to quote my right hon. Friend and he said, "I make you a present of your argumentative point. In a time of war it is not right to rake up my speeches against me," and I suppose that when he reintroduces the tax next year I shall have to meet them with a similar argument and shall be told that it is, useless to make argumentative points and to quote the old speeches and statements of the right hon. Gentleman. In these circumstances we, who do not believe in this tax, and believe that if now imposed it will be a permanent part of our fiscal machinery, are justified in paying no attention to the soothing utterances of the Chancellor of the Exchequer and in resisting the tax by every means in our power, now when it is first being proposed.
  Mr. BOOTH: I find myself in the happy position that I can escape the rebuke administered to so many of my hon. Friends by the hon. Member for Liverpool. I have not ventured to trouble the House at all on any point at issue in this Budget, and I do not rise to argue the matter now. But I do want to say; most emphatically that, in my mind, I do not see why there has not been more than one resignation from the Cabinet. I cannot understand why some of the men who

  1847
  have got into the Cabinet by taking up a Free Trade position have not the same manliness and honesty that characterised the right hon. and learned Gentleman the Member for Dublin University. It is no use bringing things like this forward and saying that they do not cut across the great vital principles of Free Trade and Protection. I do not, as one of my hon. Friends does, regard this tax as a result of the entry of some Conservatives and Tariff Reformers into the Cabinet. I think that Free Trade is in a safer position today from Tariff Reform members of the Cabinet than from Free Trade members.
  The DEPUTY-CHAIRMAN: These general remarks are not in order.
  Mr. BOOTH: I understand your rebuke, but I wish that you had sat in the Chair when the Chancellor of the Exchequer made his speech. My observations have reference to what he said. Take the instance of the Motor Car Taxes under this Clause. What is the purport of them? There is an utter absence of frankness about them on the Government Bench. If what you have stated is to be taken as the rule, I suppose that you would rule on other Clauses that we cannot discuss the main Question. That means that the Government is so weak that it is going to be protected against the arguments which can be brought against it. The Government have thrown over Free Trade long ago. They threw it over in reference to the dyes scheme and in reference to heaps of things, and went in for Protection. When they come to this particular point of motor cars and bicycles, I am astonished that some of my Free Trade friends have wakened up and denounced it as a sham and a fraud. The Chancellor of the Exchequer says that he is only aiming at luxuries. The hon. Member for Liverpool says that we are dealing with a thing that does not exist. So the main argument that has been advanced is entirely ignored by the hon. Member for Liverpool.
  Mr. RUTHERFORD: I did not say that.
  Mr. BOOTH: I was astonished to hear what the hon. Member did say. Evidently he came to the conclusion that the argument of the Chancellor of the Exchequer, that the tax is only one on luxuries, did not meet the case, and he assured the House that nobody was making motor cars.
  Mr. RUTHERFORD: No, I did not.
  Mr. BOOTH: That none were being made for pleasure in this country.
  Mr. RUTHERFORD: I did not say that.
  Mr. BOOTH: Then there was not an atom of common sense in the speech of the hon. Gentleman, for his argument was founded upon that. I am within the re-collection of the House. I was astonished when he repudiated the construction by the hon. Member for North-West Lanark. The fact is that the trade is making good these criticisms now. It is busy advertising. I got an advertisement only yesterday, evidently anticipating this particular tax, in which they give full particulars of the cars used by members of the Treasury Bench and explain how suitable they are for running through the country. The right hon. Gentleman said that it made all the difference because the Government had announced that this tax was aimed at luxuries. That would not have the slightest effect either upon the trade or upon the country generally. The right hon. Gentleman himself, I dare say, is alluding to a pamphlet with his name in it, in which motor cars are specially singled out to be denounced. But that does not prevent the fact that members of the Government use them. In that very same pamphlet, for instance, they say that vacant flower gardens should now be used for growing cabbages and carrots. I have never heard that the gardens attached to the right hon. Gentleman's residence in Downing Street are used for growing carrots. I venture to say that the declarations made from that box to-day in trying to justify that tax were so evidently out of order—
  The DEPUTY-CHAIRMAN: If the remarks of the Chancellor of the Exchequer were out of order, that is a very good reason for the hon. Member not following his example.
  Mr. BOOTH: I only hope that you will convey that rebuke also in the other quarter, where it was still more merited. But the right hon. Gentleman did use an argument which, on reflection, I rather think was in order. He said that the tax was introduced to discourage luxuries, and the fact that the Government have announced in advance that this was the object would prevent these people in the trade from bringing forward their claims later on. The only instance that I can call to mind to justify these remarks is this

  1849
  pamphlet, written by a paid servant of theirs, who, immediately after finishing it, jumped into a taxi-cab and drove off to one of the West End clubs to which he had been urging people not to go. Instances of that kind are not going to have any influence on any man in the trade. When a man puts his money into a business and organises it with a view to making a profit, he will act according to the Government taxes, and not according to their political talk. What is one of the commonest observations among business men, which will be applied to the businesses affected by this tax? "He had to say that. He was talking in the House among a lot of politicians, and that is the kind of thing that must be said to get it through." Business men are not influenced, and never will be influenced, by the talk of Governments so much as by their acts. This will be quoted as an act of the Government, a Government who say, "We will give you 33⅓ per cent, of preferential position against anyone else in the country, in a solid, material, and precipitate way," and no attention will be paid to a mere phrase which would be ignored by a judge on the bench if in construing an Act of Parliament a quotation was made from what was said by some Minister in introducing a Bill. The men who have gone into the business of motor cars and bicycles will not be put off by some pamphlet issued from Downing Street or a copy of the OFFICIAL REPORT containing the speeches of the right hon. Gentleman. Whether there is any good in saying anything now I do not know. Why in the world the Government, with this terrible War on, should plunge the House day after day into a controversy of this kind, I cannot understand! This is one reason why I have kept away while this was being discussed. I have yet to hear the most elementary defence of the Government's position.
  Mr. RUTHERFORD: I am very 10th to continue in any way the wasting of the time of the Committee in connection with the series of arguments which we have had already five times before, but there have been two criticisms that we have listened to to-day from a body of Members who of course entertain certain—what they call—principles. Those arguments have been first of all that we ought to put on an Excise. Of course they cannot propose an Excise because such a; tax can only be proposed by the Government. But the
  1850
  argument why we ought not to put on an Excise has been already explained to the House half a dozen times, when this subject has been raised before—that it would be too expensive to put on an Excise having regard to the amount of revenue that you could recover—
  Mr. PRINGLE: On a point of Order. Is the hon. Member entitled to make the same speech twice?
  Mr. RUTHERFORD: I am not making the same speech twice. I am dealing with this temporary tax. A lot of hon. Members do not seem to understand it. The tax is different from any other kind of legislation. Any other Act which we might propose would operate until that Act was revoked, but this tax is put on, in the words of the Section under discussion, for a limited period, and will require to be proposed again by a new Chancellor of the Exchequer, and therefore all that line of argument about it being put on as a permanency disappears entirely. The other line of argument, that we ought to have an Excise, is equally bad, for the excellent reason that you would require to set up an establishment to collect that Excise.
  The DEPUTY-CHAIRMAN: We have already heard that several times.
  Mr. RUTHERFORD: I wish to add that I did not say that no motor cars were being made in this country at the present time. I did not say that people were not advertising and selling their cars. Most of those cars were made earlier. Many of those cars are now on sale, and of course the people who have got cars have got to have parts provided for them, and those parts are being made. But what I did say, and wish to emphasise, is this: that compared with pre-war times there is not in this country at present anything like the old proportion of business in the construction of new cars. Therefore it would not pay to put on an Excise at the present moment. That has been explained to the House on the Resolution by the Chancellor of the Exchequer, and it does not lie with hon. Members to continue to repeat that the Chancellor of the Exchequer did not deal with that point.
  Question put, "That the words 'motor cars' stand part of the Clause."
  The Committee divided: Ayes, 169; Noes, 34.

  Division No. 13.]

  AYES.

  [5.45 p.m.

  Abraham, Rt. Hon. William

  Galbraith, Samuel

  O'Neill, Dr. Charles (Armagh, S.)

  Agg-Gardner, James Tynte

  Goddard, Sir Daniel Ford

  Parkes, Ebenezer

  Ainsworth, John Stirling

  Gordon, John

  Pearce, Sir William (Limehouse)

  Amery, L. C. M. S.

  Greenwood, Granville G. (Peterborough)

  Pennefather, De Fonblanque

  Baird, John Lawrence

  Greig, Colonel J. W.

  Perkins, Walter F.

  Baldwin, Stanley

  Gwynne, R. S. (Sussex, Eastbourne)

  Peto, Basil Edward

  Banbury, Sir Frederick George

  Hackett, John

  Phillips, John (Longford, S.)

  Banner, Sir John S. Harmood-

  Hall, Frederick (Yorks, Normanton)

  Pollock, Ernest Murray

  Beauchamp, Sir Edward

  Hamilton, Lord C. J. (Kensington, S.)

  Pretyman, Ernest George

  Beck, Arthur Cecil

  Hardy, Rt. Hon. Laurence

  Price, Sir Robert J. (Norfolk, E.)

  Bellairs, Commander C. W.

  Harris, H. P. (Paddington, S.)

  Priestley, Sir Arthur (Grantham)

  Benn, Arthur Shirley (Plymouth)

  Henderson, Rt. Hon. Arthur (Durham)

  Prothero, Roland Edmund

  Bentham, George Jackson

  Henderson, Sir A. (St. Geo., Han. Sq.)

  Pryce-Jones, Colonel E.

  Bigland, Alfred

  Henry, Sir Charles

  Randles, Sir John S.

  Birrell, Rt. Hon. Augustine

  Hewins, William Albert Samuel

  Rawlinson, John Frederick Peel

  Boland, John Pius

  Hope, James Fitzalan (Sheffield)

  Rea, Walter Russell (Scarborough)

  Bowden, G. R. Harland

  Horne, E.

  Reddy, Michael

  Bowerman, Charles W.

  Howard, Hon. Geoffrey

  Rees, G. C. (Carnarvonshire, Arfon)

  Boyton, James

  Hughes, Spencer Leigh

  Rees, Sir J. D. (Nottingham, E.)

  Brace, William

  Hume-Williams, William Ellis

  Roberts, S. (Sheffield, Ecclesall)

  Brady, Patrick Joseph

  Jardine, Ernest (Somerset, East)

  Robinson, Sidney

  Bridgeman, William Clive

  Jones, J. Towyn (Carmarthen, East)

  Rothschild, Lionel de

  Burt, Rt. Hon. Thomas

  Joyce, Michael

  Rutherford, Watson (L'pool, W. Derby)

  Butcher, John George

  Keating, Matthew

  Samuel, Rt. Hon. H. L. (Cleveland)

  Byrne, Alfred

  Lambert, Rt. Hon. G. (Devon, S. Molton)

  Samuel, J. (Stockton-on-Tees)

  Cator, John

  Law, Hugh A. (Donegal, West)

  Samuel, Samuel (Wandsworth)

  Cautley, Henry Strother

  Lawson, Col. Hon. H. (Mile End)

  Scott, A. MacCallum (Glas., Bridgeton)

  Cecil, Evelyn (Aston Manor)

  Levy, Sir Maurice

  Smith, Harold (Warrington)

  Chaloner, Colonel R. G. W.

  Lewis, Rt. Hon. John Herbert

  Smith, Sir Swire (Keighley, Yorks)

  Chaplin, Rt. Hon. Henry

  Lloyd, George Butler (Shrewsbury)

  Soames, Arthur Wellesley

  Coates, Major Sir Edward Feetham

  Lockwood, Rt. Hon. Lt.-Colonel A. R.

  Spear, Sir John Ward

  Collins, Sir Stephen (Lambeth)

  Long, Rt. Hon. Walter

  Strauss, Arthur (Paddington, North)

  Cooper, Sir Richard Ashmole

  Lonsdale, Sir John Brownlee

  Sykes, Alan John (Ches., Knutsford)

  Cory, Sir Clifford John

  Lundon, Thomas

  Taylor, John W. (Durham)

  Cosgrave, James

  Lynch, Arthur Alfred

  Thomas, J. H.

  Cowan, W. H.

  MacCaw, William J. MacGeagh

  Thorne, G. R. (Wolverhampton)

  Craig, Ernest (Cheshire, Crewe)

  Mackinder, H. J.

  Tickler, T. G.

  Crumley, Patrick

  Macleod, John Mackintosh

  Touche, George Alexander

  Cullinan, John

  Macnamara, Rt. Hon. Dr. T. J.

  Verney, Sir Harry

  Currie, George W.

  M'Neill, Ronald (Kent, St. Augustine's)

  Walton, Sir Joseph

  Dalrymple, Hon. H. H.

  Magnus, Sir Philip

  Wardle, George J.

  Dalziel, Davison (Brixton)

  Marks, Sir George Croydon

  Warner, Sir Thomas Courtenay T.

  Davies, Sir W. Howell (Bristol, S.)

  Mason, James F. (Windsor)

  Wason, John Cathcart (Orkney)

  Denniss, E. R. B.

  Meagher, Michael

  Watson, Hon. W.

  Donelan, Captain A.

  Molloy, Michael

  White, Col. G. D. (Lancs., Southport)

  Doris, William

  Montagu, Rt. Hon. E. S.

  Whittaker, Rt. Hon. Sir Thomas P.

  Dougherty, Rt. Hon. Sir J. B.

  Morgan, George Hay

  Williams, John (Glamorgan)

  Duffy, William J.

  Muldoon, John

  Williamson, Sir Archibald

  Duke, Rt. Hon. Henry Edward

  Munro, Rt. Hon. Robert

  Wilson, W. T. (Westhoughton)

  Duncan, C. (Barrow-in-Furness)

  Nicholson, William G. (Petersfleld)

  Wood, John (Stalybridge)

  Duncan, Sir J. Hastings (Yorks, Otley)

  Nield, Herbert

  Wood, Rt. Hon. T. McKinnon (Glasgow)

  Fell, Arthur

  Nolan, Joseph

  Wortley, Rt. Hon. C. B. Stuart-

  Fenwick, Rt. Hon. Charles

  O'Brien, Patrick (Kilkenny)

  Younger, Sir George

  Ferens, Rt. Hon. Thomas Robinson

  O'Connor, John (Kildare, N.)

  Yoxall, Sir Jamas Henry

  Ffrench, Peter

  O'Doherty, Philip

  Field, William

  O'Dowd, John

  TELLERS FOR THE AYES.—Mr. Gulland and Lord E. Talbot.

  Fisher, Rt. Hon. W. Hayes

  Ogden, Fred

  Fletcher, John Samuel

  NOES.

  Arnold, Sydney

  Hogge, James Myles

  Radford, George Heynes

  Booth, Frederick Handel

  Holt, Richard Durning

  Snowden, Philip

  Bryce, J. Annan

  Hudson, Walter

  Taylor, Theodore, C. (Radcliffe)

  Byles, Sir William Pollard

  John, Edward Thomas

  Toulmin, Sir George

  Clough, William

  Jones, H. Haydn (Merioneth)

  Trevelyan, Charles Philips

  Davies, Ellis William (Eifion)

  King, Joseph

  Watt, Henry A.

  Denman, Hon. Richard Douglas

  Lambert, Richard (Wilts, Cricklade)

  White, J. Dundas (Glasgow, Tradeston)

  Dickinson, Rt. Hon. Willoughby H.

  Lough, Rt. Hon. Thomas

  Williams, Llewelyn (Carmarthen)

  Edwards, John Hugh (Glamorgan, Mid)

  Mason, David M. (Coventry)

  Young, William (Perthshire, East)

  Esslemont, George Birnie

  Mond, Rt. Hon. Sir Alfred

  Glanville, Harold James

  Outhwalte, R. L.

  TELLERS FOR THE NOES.—Sir TudorWalters and Mr. Pringle.

  Goldstone, Frank

  Price, C. E. (Edinburgh, Central)

  Henderson, John M. (Aberdeen, W.)

  The DEPUTY-CHAIRMAN: As the words "motor cars" now stand part of the Clause, the hon. Member for North-West Lanarkshire must confine his observations to the subject matter of
  1852
  that Amendment, without reference to motor cars.
  Mr. PRINGLE: I beg to move, in Sub-section (1), to leave out the words

  1853
  "including motor bicycles and motor tricycles."
  I will endeavour to observe as strictly as I can the directions which you have just given, Sir. This Amendment raises a narrower point than that which was involved in the question upon which a Division has been just taken. Two of the main arguments which have been used on the general question of motor cars cannot, I think, be held to apply to the taxation of motor bicycles and motor tricycles. We have heard the taxation of motor cars justified on the ground that it will limit the luxurious use of motor cars, and, in the second place, that it will improve the exchange. I think it is obvious that neither of these arguments can be applied with even the shadow of foundation in relation to the small importation involved under the heading of "motor bicycles and motor tricycles." The motor bicycle cannot by any stretch of imagination be represented as in any sense a luxury. It is largely becoming a means of locomotion for the poor man. We all know that it has been very largely used in recent times by officers and men who have joined His Majesty's Forces, for the purpose of returning to their homes for brief periods of leave. We also know that the motor bicycle has been found of great use to those large numbers of munition workers who are at the present time compelled to live away from their homes. In both these cases the motor bicycle so far from being a luxury can be represented to be an absolute necessity, and by including motor bicycles in this taxation you are hampering and throwing heavy taxation upon means of locomotion which is at the present time of the greatest value to large sections of at least the middle classes in this country. I think that the arguments which I have put forward are sufficient to differentiate motor bicycles from motor cars, and, in these circumstances, I make an appeal to my hon. Friend the Financial Secretary to the Treasury to exempt them, because this tax cannot be justified by any arguments which hitherto have been used. At the same time, if this taxation is adhered to, it will impose a charge not upon a luxury but upon that which is a necessity to large classes of our fellow countrymen.
  6.0 P.M.
  Mr. L. WILLIAMS: I do not propose to repeat the argument of my hon. Friend in moving this Amendment, nor do I propose to argue it on the general question of tariff. I would point out that there are technical difficulties in the way of including
  1854
  motor bicycles and motor tricycles in this taxation. It is not only the motor bicycles and motor tricycles that are affected, but also their accessories and component parts, and it is perfectly obvious to anybody that the greater part of accessories and component parts of motor bicycles are the same as the accessories and component parts of the ordinary bicycle. The ordinary bicycle is not included, and therefore there is no tariff on the accessories and component parts of ordinary bicycles; but you cannot, according to the proposal of the Government, use them for motor bicycles, though they are the same. If you take the lamp of a motor bicycle it is exactly the same as the lamp of an ordinary bicycle. [An HON. MEMBER: "NO!"] I think the accessories and component parts of motor bicycles and ordinary bicycles are largely the same, almost the only difference between the two being the engine. It is impossible in practice to differentiate between the accessories and component parts of a motor bicycle and an ordinary bicycle. The Government proposes to penalise a man who uses one of those accessories or component parts that has been introduced for an ordinary bicycles to the extent of a fine of £500 or two years' imprisonment. Sub-section (7) provides—
  "If any person obliterates or removes any such distinctive stamp or mark, or uses any motor-chassis, accessory, or part which has been exempted from duty under this provision, for any purpose other than the purposes therein mentioned, he shall be liable to a penalty of £500, provided that the Court may, if it think fit, in lieu of ordering the offender to pay a penalty, order that he be imprisoned with or without hard labour for a term not exceeding two years."
  It is a question of user. Assume that a lamp has been imported, and that a declaration has been made that it is for the purpose of use as an accessory on an ordinary bicycle, and by some means or other, quite honestly in the course of trade, it is attached to a motor bicycle, the man who uses that is liable to the penalty I have mentioned. Surely that is absurd on the face of it. I would ask the Financial Secretary whether, in the interests of the tariff itself, it would not be better to exclude motor bicycles and bicycles from the purview of this Clause.
  Mr. DENMAN: I would ask the Financial Secretary to make a concession which, I think, he will find would help this particular Clause. Whatever may be the case with regard to motor bicycles, I imagine that the vast mass of motor tricycles are certainly used for the purposes of trade. Motor cars used for the purpose of trade are to be allowed in free, but that does not apply to motor bicycles or tricycles. In Sub-section (9), it is quite clear that by motor cars it is not intended to include motor bicycles or tricycles. If, therefore, the right hon. Gentleman will make that concession, and allow motor bicycles and tricycles used for the purposes of trade to come in free, he will certainly meet an objection which I have to the Clause as it stands.
  Mr. MONTAGU: I hope hon. Gentlemen who have spoken will acquit me of any discourtesy if I do not deal with their points now, because I suggest it will be better to move an Amendment to exempt motor bicycles or tricycles on Sub-section (7). As regards the other arguments, if anybody objects to the taxation on imported motor cars on principle, I quite agree he is perfectly right to object also to the taxation of motor bicycles or tricycles. But the House has approved of the principle of the taxation of motor cars, and I venture to suggest that we should not exclude from this Clause motor cycles and parts of motor cycles which have reached in eight months of this year a total sum of £171,000, mainly from America, the United States especially. It is just the kind of thing which at this moment, and it applies to no other time, it is our intention to discourage. As regards parts, I am bound to say I do not find the argument of my hon. Friend convincing.
  Mr. JONATHAN SAMUEL: I think we ought to have some more definite statement with regard to the importation of cycles, because, looking at the return of trade and navigation, I do not think they harmonise with what he has stated. I cannot find any return there of complete motor cycles, the vast majority of which, I believe, are made in this country and not imported. I find in the return for the past eight months up to August motor cycles, parts thereof, rubber tyres, and tubes amount to- £83,000, and other parts only £26,000. I do not find any return which gives any distinctive amount of complete motor cycles. Where does the
  1856
  right hon. Gentleman get his return, because I understand that rubber tyres are exempt from duty. I rather agree with the hon. Member who moved this Amendment that the better class working men are large buyers of motor cycles which are English made. [HON. MEMBERS: "No!"] If they are not they will have to pay this 33⅓ per cent. duty. I saw a prospectus dealing with one tax that has been removed and which stated that there was an anticipation of a protective tariff, and that they were going to put up a factory because the tax was going to be put upon the imported article. That is an indication that all those makers of motor cycles will certainly put up the price to those who buy them. I would appeal to the right hon. Gentleman between now and the Report stage to look into the matter and ascertain what is the actual amount of complete motor cycles imported. Motor cars are in large numbers imported, but with regard to motor cycles, so far as I have been able to judge, and I am a rather careful observer of what is going on in my own district, the bulk of the motor cycles are made in this country. It is a growing trade, and because of the cheapness and reduction from year to year. I was looking at an advertisement to-day of a new motor cycle which is being much reduced in comparison with the price of last year. Each year there are improvements, and both the motor-car trade and motor-cycle trade is largely increasing owing to that fact. If you put this tax upon those parts which are coming in you will be killing the trade, and largely increasing the burden, not only upon the middle class, but upon the better-class working men. Upon those grounds I ask the right hon. Gentleman to look into the matter, and I think he will find that the revenue from this will be very small indeed.
  Mr. HOGGE: I dare say my right hon. Friend has forgotten that there is another type of motor accessory which may make a bicycle practically a motor bicycle, and which would affect very largely the working classes of this country. You can have an attachment to an ordinary bicycle, a motor attachment with a very small wheel and motor engine. It enables the owner of the bicycle temporarily to make that into a motor bicycle. Does the tax include all the parts of that little wheel, and does that bring bicycles so used into the category of motor bicycles? Does that, therefore, upset all the plans my right hon.

  1857
  Friend has laid down for collecting the tax? This is an extremely important matter in view of the difficulties which the Cabinet is at the moment up against in providing accommodation for munition workers. I dare say the Cabinet will bear in mind the fact that all over the country there is starting a no-rent agitation, because of the inability of men to get housing accommodation close to those factories. Those men if they had motor bicycles, or ordinary bicycles with this attachment of which I speak, would be enabled to get out and live in healthier surroundings while working at those munition factories. This tax therefore is anti-social, and it seems to me is pro-German, because it is putting a disability on our workers engaged in munition work from living under healthier conditions. In view of that very serious charge against the proposal, we must divide upon it.
  Mr. RADFORD: I beg to appeal to my right hon. Friend to give us some figures about this Amendment, and if he can give us figures showing that the Amendment should be negatived, I am prepared to give them candid consideration. I should like to know what this particular Amendment would cost the Treasury. On the merits of the Amendment, it cannot be said that the Clause in its present form will in any way restrain the extravagance of the criminal rich. That is the only argument that I have heard in favour of the whole Clause, but as it does not apply to this particular part of the Clause we may leave it out of account. Subject to the figures which my right hon. Friend may give me, I cannot think that it would have any appreciable effect on the international exchange. The only reason that can be given for its support is that it will raise revenue. We want to know whether it will raise revenue. I belong to the old school who believe that the object of a
  Budget is to raise revenue, not to restrain extravagance or to support the exchange. If I can learn from my right hon. Friend that this will raise a large amount of money, and the Government want it badly, I may be persuaded to go into the Lobby with him.
  Mr. MONTAGU: With regard to the attachment for bicycles referred to by the hon. Member for East Edinburgh (Mr. Hogge), my information is that it is an English patent and manufactured solely in England. In reply to my hon. Friend the Member for Stockton (Mr. J. Samuel), it is true that there was a large import of complete motor cycles in the first eight months of the year. The figures, as supplied by the Customs authorities, are £157,000, of which £154,000 came from the United States.
  Mr. J. SAMUEL: There is no such return in the volume I have.
  Mr. MONTAGU: I have not examined the book which the hon. Member has in his hand. I merely state what our information is.
  Mr. WATT: Is that for motor bicycles?
  Mr. MONTAGU: Motor cycles. With regard to remarks of my hon. Friend (Mr. Radford), I do not contend that the cessation of the import of these motor bicycles will very substantially affect the exchange; but they are luxuries, and the imposition of this tax will give to the country an indication of the extreme care which it is necessary to exercise in the expenditure of money on unnecessary articles.
  Question put, "That the words proposed to be left out stand part of the Clause."
  The Committee divided: Ayes, 162; Noes, 36.

  Division No. 14.]

  AYES.

  [6.18 p.m.

  Abraham, Rt. Hon. William

  Bowerman, Charles W.

  Cooper, Sir Richard Ashmole

  Agg-Gardner, James Tynte

  Boyton, James

  Cosgrave, James

  Agnew, Sir George William

  Brace, William

  Cowan, W. H.

  Ainsworth, John Stirling

  Brady, Patrick Joseph

  Craig, Ernest (Cheshire, Crewe)

  Baird, John Lawrence

  Bridgeman, William Clive

  Crumley, Patrick

  Baldwin, Stanley

  Burt, Rt. Hon. Thomas

  Currie, George W.

  Banbury, Sir Frederick George

  Butcher, John George

  Dalrymple, Hon. H. H.

  Banner, Sir John S. Harmood-

  Byrne, Alfred

  Dalziel, Davison (Brixton)

  Beauchamp, Sir Edward

  Cator, John

  Davies, Sir W. Howell (Bristol, S.)

  Beck, Arthur Cecil

  Cautley, H. S.

  Denniss, E. R. B.

  Benn, Arthur Shirley (Plymouth)

  Cave, Rt. Hon. George

  Donelan, Captain A.

  Bentham, George Jackson

  Cawley, Sir Frederick (Prestwich)

  Doris, William

  Bigland, Alfred

  Cecil, Evelyn (Aston Manor)

  Dougherty, Rt. Hon. Sir J. B.

  Bird, Alfred

  Chaloner, Colonel R. G. W.

  Duffy, William J.

  Birrell, Rt. Hon. Augustine

  Chaplin, Rt. Hon. Henry

  Duke, Rt. Hon. Henry Edward

  Boland, John Pius

  Coates, Major Sir Edward Feetham

  Duncan, C. (Barrow-in-Furness)

  Bowden, G. R. Harland

  Collins, Sir Stephen (Lambeth)

  Duncan, Sir J. Hastings (Yorks, Otley)

  Fell, Arthur

  Lundon, Thomas

  Roberts, S. (Sheffield, Ecclesall)

  Fenwick, Rt. Hon. Charles

  Lynch, Arthur Alfred

  Robertson, Sir G. Scott (Bradford)

  Ferens, Rt. Hon. Thomas Robinson

  MacCaw, William J. MacGeagh

  Robinson, Sidney

  Ffrench, Peter

  Mackinder, Halford J.

  Rutherford, Watson (L'pool, W. Derby)

  Field, William

  Macleod, John Mackintosh

  Samuel, Rt. Hon. H. L. (Cleveland)

  Fisher, Rt. Hon. W. Hayes

  Macnamara, Rt. Hon. Dr. T. J.

  Samuel, Samuel (Wandsworth)

  Fletcher, John Samuel

  McKenna, Rt. Hon. Reginald

  Scott, A. MacCallum (Glas., Bridgeton)

  Galbraith, Samuel

  Magnus, Sir Philip

  Shortt, Edward

  Gibbs, G. A.

  Marks, Sir George Croydon

  Smith, Harold (Warrington)

  Goddard, Sir Daniel Ford

  Mason, James F. (Windsor)

  Spear, Sir John Ward

  Gordon, John

  Meagher, Michael

  Spicer, Rt. Hon. Sir Albert

  Goulding, Sir Edward Alfred

  Molloy, Michael

  Stewart, Gershom

  Greenwood, Granville G. (Peterborough)

  Montagu, Rt. Hon. E. S.

  Strauss, Arthur (Paddington, North)

  Hackett, John

  Morgan, George A.

  Swift, Rigby

  Hall, Frederick (Yorks, Normanton)

  Munro, Rt. Hon. Robert

  Taylor, John W. (Durham)

  Hamilton, Lord C. J. (Kensington, S.)

  Nicholson, William G. (Petersfield)

  Terrell, Henry (Gloucester)

  Hardy, Rt. Hon. Laurence

  Nield, Herbert

  Thomas, James Henry

  Harmsworth, Cecil B. (Luton, Beds.)

  Nolan, Joseph

  Thorne, G. R. (Wolverhampton)

  Harris, Henry Percy (Paddington, S.)

  O'Brien, Patrick (Kilkenny)

  Tickler, T. G.

  Holme, Sir Norval Watson

  O'Connor, John (Kildare, N.)

  Touche, George Alexander

  Henderson, Rt. Hon. Arthur (Durham)

  O'Dowd, John

  Verney, Sir Harry

  Henderson, Sir A. (St. Geo., Han. Sq.)

  Ogden, Fred

  Walton, Sir Joseph

  Henry, Sir Charles

  O'Neill, Dr. Charles (Armagh, S.)

  Wardle, George J.

  Hewins, William Albert Samuel

  Parkes, Ebenezer

  Warner, Sir Thomas Courtenay T.

  Hope, James Fitzalan (Sheffield)

  Pearce, Sir William (Limehouse)

  Wason, John Cathcart (Orkney)

  Horne, Edgar

  Pennefather, De Fóblanque

  Watson. Hon. W.

  Howard, Hon. Geoffrey

  Perkins, Walter Frank

  Whittaker, Rt. Hon. Sir Thomas P.

  Hume-Williams, William Ellis

  Peto, Basil Edward

  Williams, John (Glamorgan)

  Jardine. Ernest (Somerset, East)

  Phillip, John (Longford, S.)

  Wilson, W. T. (Westhoughton)

  Jones, J. Towyn (Carmarthen, East)

  Pollock. Ernest Murray

  Wood, John (Stalybridge)

  Joyce, Michael

  Price, Sir Robert J. (Norfolk, E.)

  Wood, Rt. Hon. T. McKinnon (Glasgow)

  Keating, Matthew

  Priestley, Sir W. E. B. (Bradford, E.)

  Wortley, Rt. Hon. C. B. Stuart-

  Lambert, Rt. Hon. G. (Devon, S. Molton)

  Prothero, Rowland Edmund

  Yeo, Alfred William

  Levy, Sir Maurice

  Pryce-Jones, Colonel E.

  Younger, Sir George

  Lewis, Rt. Hon. John Herbert

  Randles, Sir John S.

  Lloyd, George Butler (Shrewsbury)

  Rawlinson, John Frederick Peel

  TELLERS FOR THE AYES.—Mr. Gulland and Lord E. Talbot.

  Long, Rt. Hon. Walter

  Rea, Walter Russell (Scarborough)

  Lonsdale, Sir John Brownlee

  Rees, G. C. (Carnarvonshire, Arfon)

  NOES.

  Anderson, W. C.

  Holt, Richard Durning

  Radford, George Heynes

  Arnold, Sydney

  Hudson, Walter

  Reddy, Michael

  Bryce, J. Annan

  John, Edward Thomas

  Samuel, J. (Stockton-on-Tees)

  Burns, Rt. Hon. John

  Jones, Henry Haydn (Merioneth)

  Snowden, Philip

  Byles, Sir William Pollard

  Jowett, Frederick William

  Taylor, Theodore C. (Radcliffe)

  Clough, William

  King, Joseph

  Trevelyan, Charles Philips

  Davies, Ellis William (Elfion)

  Lambert, Richard (Wilts, Cricklade)

  Walters, Sir John Tudor

  Denman, Hon. Richard Douglas

  Lough, Rt. Hon. Thomas

  Watt, Henry A.

  Dickinson, Rt. Hon. Willoughby H.

  Mason, David M. (Coventry)

  White, J. Dundas (Glasgow, Tradeston)

  Edwards, John Hugh (Glamorgan, Mid

  Mond, Rt. Hon. Sir Alfred

  Young, William (Perthshire, East)

  Esslemont, George Birnie

  Outhwaite, R. L.

  Glanville, Harold James

  Pearce, Robert (Staffs, Leek)

  TELLERS FOR THE NOES.—Mr. Hogge and Mr. LI. Williams.

  Goldstone, Frank

  Pringle, William M. R.

  Henderson, John M. (Aberdeen, W.)

  Question, "That the words proposed to be left out stand part of the Clause," put, and agreed to.

  Sir A. MOND: I beg to move, in Subsection (1), to leave out the words "Accessories and"["Accessories and component parts of motor cars."].
  I move this Amendment formally in order to raise one or two points which may perhaps come more conveniently at a later stage. There is a difficulty in discussing this matter, because all these articles are included in the one Clause, and there are also a number of points of procedure connected with a later portion of the Bill. The point I am anxious to establish is that there are a number of accessories which are common to motor cars, motor bicycles, aeroplanes, stationary engines, and many other kinds of similar apparatus. The distinction between them is very difficult to establish. I do not myself think it is the intention of
  1860
  the Treasury to impose a general tax on articles which are not specially motor-car accessories, although they may form part of a motor car or motor bicycle. I have had supplied to me a list of 150 motor-car accessories, a large number of which are used for different articles. I will give one instance—motor-brake linings. Motor-brake linings may be employed for lining the brake of either a motor car, a lift, a crane, or other similar apparatus; therefore the importer importing these things does not know whether they are accessories of a motor car or not. I suggest that the procedure followed in the Bill is entirely wrong. We cannot really talk with any certainty. We ought to have had a Schedule for every one of these articles. I am not an expert in the financial pro-

  1861
  cedure in this House, but I would submit that on a point of Order it is most irregular for the House to levy a duty on an indefinite number of articles, the matter not being left in the discretion of this House, but in the discretion of the Customs authorities. I should like, Mr. Chairman, on a point of Order, to ask whether or not such procedure has been carried out before?
  The CHAIRMAN: That is a matter of historical research, and not a point of Order.
  Sir A. MOND: I should have thought that there would have been some procedure ruling this point. The question is quite a serious one. An importer in the City of London would like to know what will and will not be considered accessories or parts of a motor car. How can he know? Is there any Schedule or list which has been issued by the Customs officials informing him what is considered to be an accessory? If there is such a list, why should it not be put in as a Schedule to this Bill? We are talking vaguely, and absolutely at random, without any kind of detail whatsoever. I have had to examine a great many tariffs, and I venture to say that such a Schedule does not exist in any tariff of the world. Nobody has ever been asked practically to work under the difficulties which this creates. The right hon. Gentleman will see that if you tax the main article you cannot leave out the accessories, because by so doing you create an anomalous position. I would point out, as has been pointed out to him, that it is perfectly unheard of to put the same rate of tax upon a part as upon the completed article. If he will get any of his officials to go through any of the tariffs, he will find that it is invariably so. As a matter of fact, this Clause is drawn in such a skilful manner that it is extraordinarily difficult to amend it at all, or to make anything intelligible out of it. I understood the Secretary to the Treasury to charge me with putting down Amendments for no particular purpose. I very much object to that charge, because I have put down this Amendment in order to make it a probability that this will work at all. I object to anything in the nature of this Clause, and I think that if this House passes a Clause of this kind it ought to be of a workable and of a practicable commercial nature. I contend this is not. I consider that in relation to all these auxiliary and component parts the Clause is entirely un-
  1862
  workable. It creates the greatest difficulties and difficulties of a very serious character.
  I would like to give the House one. The right hon. Gentleman is continually telling us that he is very anxious to increase our exports and to diminish our imports. One of the largest importers of these component parts in this country has pointed out to me that a large number of these accessory and component parts, which come, to this country from America, are distributed by him from London throughout the Colonial and other neutral markets. He tells me that with this duty on the trade will cease. Provision is being made for America to take that trade direct. Does the right hon. Gentleman really think that by this measure he is increasing British exports—or, indeed, British trade at all? The right hon. Gentleman does not realise that we are, after all, a great entrepot country; that the City of London is a great entrepot, a free market for all kinds of things from all over the world, which are distributed through here, and which has established for us the merchant businesses and goodwill businesses which bring in a great deal of money. That has always been one of our greatest arguments against a tariff in this country. It only applies to a limited extent, but it does apply to these various articles, and even rebate and drawbacks do not get over the difficulty. If what I describe is going to happen in this case it will happen in many others. The effect that will be produced will be a permanent effect. Your tax may be temporary, but you cannot recall the goodwill.
  The CHAIRMAN: The hon. Baronet will remember that I allowed a great deal of latitude on the first Amendment on the understanding that it was not to recur on the further items in this Clause. He must keep now purely to detailed points.
  Sir A. MOND: I was raising the point, with due respect, Sir, that so far as accessories are concerned there is a re-export trade. The point was not raised on the motor-car discussion, because I do not think that trade exists to the same extent. I urge that this re-export trade will be affected. I do not want to labour the point. I merely state a fact which has been very prominently brought to my notice by those engaged in the trade of what will be one of the results of this duty being imposed. I do not want to pursue the point further. I am afraid it will be

  1863
  useless. I content myself by hoping that at a later stage of the Bill the Government will introduce a Clause which will meet to some extent some of the objections we have at present to a Bill of this kind. I have endeavoured to meet them not only in this Amendment, but in the next Amendment, which perhaps I might as well speak about and so save time. A number of these articles should be put on a free list, such as magnetos, sparking plugs, ignition apparatus, including coils, distributors, switchers, exciters, or any other apparatus capable of being used for the purpose of creating an electric spark for causing the explosion of a gaseous mixture, and so on. I shall not move this second Amendment because I think it will be covered by the Amendment of the Government. But I beg formally to move the first Amendment. I do not press it, but move it in order to get some expression of opinion which may facilitate us getting on with the Bill.
  Mr. McKENNA: Probably the Committee will agree with me that the arguments with which the right hon. Gentleman has supported this Amendment are quite applicable to every other subject-matter of the duty. Wherever you have parts you have the same difficulty as that to which he has now called attention. Therefore the remedy—where you are able to find a remedy—ought to be one of general application over the whole Clause. I will, therefore, read to the right hon. Gentleman, though I do not suggest it should now be discussed, but later at the appropriate stage, an Amendment which we propose to move at the end of Sub-section (6). The evil complained of would be general on all subject-matters of the Clause. We shall propose, at the end of Sub-section (6), to insert a new Sub-section:—
  "Where it is proved to the satisfaction of the Commissioners of Customs and Excise that any article is of a kind mainly used as an accessory or component part which is liable to duty under this Section and is imported for use for some other purpose, or has been or is being, exclusively used for some other purpose, the Commissioners shall, subject to such conditions as they think fit to impose allow the article to be imported free of duty, or repay any duty paid on importation, as the case requires"
  1864
  I think that meets the objection of the right hon. Gentleman, and I trust he will consider fairly. Perhaps he will withdraw his Amendment.
  Sir A. MOND: I have only just heard the words. They seem to carry out the intention of the right hon. Gentleman, but I think I should like time to consider them.
  Mr. McKENNA: Yes.
  Sir A. MOND: Then I shall certainly ask leave of the House to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Mr. LOUGH: I beg to move, in Subsection (1), to leave out the words "thirty-three and one-third," and to insert instead thereof the word "fifteen."
  My main objection to the duty will be met by the acceptance of this Amendment. I move it to see if my right hon. Friend will be conscience-stricken at any stage of the Debate. We are so much engaged with the principle that we are likely to allow details to escape us. If you are going to do something wrong the less you do of it the better. The second reason I move my Amendment is that we have been misguided in the action we are taking. We move Amendments which occur to us as reasonable Amendments in the hope of making an appeal to the conscience of the right hon. Gentleman. We are getting so little that we must be thankful for small mercies. I will not elaborate the point any further, but desire to give the right hon. Gentleman the opportunity of reducing the duty from 33⅓ per cent., which is unduly high.
  Mr. McKENNA: My right hon. Friend is not easy to follow in the variety of arguments which he addresses to the Committee. His Amendment would certainly give the taxes a better chance of permanency than in the form in which they now stand. As has been pointed out, anyone who was going to institute a general tariff would not put on a high duty of 33⅓ per cent, upon a completed article and upon the component parts. It has been rightly pointed out that this defect in the scheme of the Bill showed that it was not intended as a permanent system of general tariffs. Now the right hon. Gentleman comes in and wants to insist upon permanency. He proposes to reduce the rate from 33⅓ per cent., which is undoubtedly justified by certain circum-

  1865
  stances. I am not at one with him in his view, and I regret I cannot accept the Amendment.
  Mr. HOGGE:I gather from the reply of the Chancellor of the Exchequer to my right hon. Friend opposite that he thinks if the duty were reduced to 15 per cent, that might make it possible that these tariffs would become permanent—that the lighter the duty the more likely the tax would become a permanent part of our fiscal system. All I would ask is, that if we put down an Amendment to make the tax 66⅔, so as to secure for him safety from the position into which he thought he might fall [HON. MEMBERS: "It would be out of order!"] In that case there would be no use in putting the Amendment down. If, however, the right hon. Gentleman's fiscal future depends upon the size of this impost, why should he not secure himself by such action? To parody the popular song:—
  "We don't want to lose him:
  But we don't think he ought to go."
  So will he himself put down so exorbitant a tax that there will be no danger at all of it becoming permanent?
  Mr. T. C. TAYLOR: I should like to differ from the Chancellor of the Exchequer very strongly indeed. He believes that this tax would be very much easier to repeal, but it would evidently be much easier to repeal if a smaller tax. Those who benefit by it would have greater interest in retaining it if a large sum instead of a small sum. If its operation is good, the higher it is the better it must be. If the object, of course, is to exclude these articles, then, I think, the more straightforward course would have been to prohibit importation entirely. But, as between the effect of a high duty of 33⅓ per cent, and one of 15 per cent., with all respect to the Chancellor of the Exchequer, my own opinion is exactly opposite to his, and also, I think, in the opinion of many Members it would be easier to repeal a low tax, which would not have built up so considerable a vested interest, than to repeal a higher tax, which would be, of course, a greater sacrifice to those whose interests would be affected by its repeal.
  Sir RICHARD COOPER: I personally believe that if the purpose which the Government have in view is to be properly fulfilled, the higher duty will certainly be calculated to bring it about, but whether
  1866
  the duty should be 33⅓, which the Government have fixed upon, or whether it should be 15, or something of that nature, to some extent depends on a very important matter, which is not clear to the Committee at the present time, and which the Chancellor of the Exchequer referred to a few moments ago. On motor cars complete there is no question in my mind that the Government are doing the right thing, and I believe in accessories and parts it is equally applicable; but the Chancellor of the Exchequer does recognise that there are certain accessories or parts which may legitimately be used for other purposes, and that, I understand, in a later Amendment he is going to deal with quite properly. Might I ask him this question, because it affects the rate of duty very closely: Is he going to consider equally goods imported into this country, especially accessories, upon which the duty is paid, and which goods are ultimately reexported—is he going to consider giving a remission in that case of the duty already paid? I ask this question because there is, as the right hon. Gentleman the Member for Swansea mentioned some little time ago, a very considerable re-export trade done to my knowledge from London in goods which are now going to be taxed, especially of goods going to France and the East.
  Mr. McKENNA: We propose to give a drawback upon re-export in every possible case. There may be some parts which we cannot identify, but wherever we can we shall do so. With regard to the Amendment I read out to the Committee, I should like to say we should in any event have acted administratively the same way. We never intended to levy a tax upon articles which might be used for motor cars, but which, in fact, were going to be, or were, used for other purposes.
  Sir R. COOPER: Or re-exported.
  Mr. McKENNA: Or re-exported. Perhaps it might be convenient if I stated that, however far we get on with this Clause and other Clauses this evening, I do not propose to ask the Committee to enter upon the Excess Profits Tax. I am told that a number of hon. Members are waiting here in case that should be reached, and I think it would be convenient to them to say it will not be taken to-night.
  Mr. LOUGH: I would ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Sir TUDOR WALTERS: I beg to move, in Sub-section (1), to leave out the words, "Musical instruments, including gramophones, pianolas, and other similar instruments."
  Even if I were able to submit any new arguments against the tariff side of these proposals, I think I should hesitate to do so, it is so painful and distressing to see right hon. Gentlemen, members of the Government, whom one has followed so many years, indulging in plausible sophistry, instead of good sound arguments, when we know perfectly well they understand these questions much better than we do ourselves, and that if they were in mind to do so they could entirely and effectively destroy all the proposals they submit. I was very much surprised, however, that musical instruments should have been selected as the subjects of taxation under this scheme. The more I look into the reason given by the Government for this particular scheme of taxation, the more surprised I am that musical instruments have been selected, and it is quite certain that the small import of musical instruments cannot affect the question of the gold standard and international exchange. I have got all the figures here, but there is no use in repeating them. I should like, however, to remind the Committee that in the year 1913, of the total imports of pianos and all other musical instruments, amounting to £1,117,000, £900,000 came from Germany, only leaving £217,000 to come from all the other countries, so that the War has most effectively prevented the importation of pianos and other musical instruments. The returns for eight months of this year show that those that came from America, the only country affected in the matter of international exchange, are very small indeed, and that the bulk of the accessories and plant, on which the piano-makers of this country are dependent, come from France, some few from Spain, and some from Italy, so that I do not need to pursue that subject. I think it must be admitted, so far as international exchange is concerned, no rational person would have selected musical instruments for taxation. I suppose it must mean they are taxed because they are luxuries. At any rate, they are not luxuries to people who live next door to them, but only to people who own them. Really, if the intention is to tax luxuries, surely it would have been very easy to discover items of luxury upon which there is a much larger expenditure I understand
  1868
  from inquiries made from the trade, that the pianos purchased now are chiefly cottage pianos, purchased by working men, and it does seem to me that by a tax upon imported pianos you are going to raise the price of all the pianos made at home. It is rather rough on the working man, if he uses that particular form of luxury, to keep up his spirits during this dark and dreary time, and to treat these piano-players, gramophones, and the rest, the cost of which is ridiculously small, and the class of people who buy them so poor, as being luxuries which ought not to be indulged in the time of war, seems to me ridiculous.
  I come to the third point—the question of revenue. I do not think it is possible to get more than £50,000 or £60,000 a year. Why you should disturb a growing trade in this country by a taxation of this kind, why you should interfere with a very modest and harmless luxury in war time to get £50,000 or £60,000 a year, most of which you will spend in collecting it, really surprises me very much. I do not suppose what I have said up to the present has made the least impression on the Chancellor of the Exchequer, but I am going to say something now which I hope will do so. I will say it slowly and quietly and as politely as I can. I am very anxious that the piano trade of this country, which at this moment has an opportunity of capturing German trade, should not be prevented from doing that by any scheme of taxation upon pianos, accessories, and parts. Let me put it to the Committee in this way: When English manufacturers say they are manufacturing pianos, they do not really mean they are manufacturing the whole of the piano. They have not the knowledge or skill, or the workmen to do it. What they mean is that they make certain parts of the piano.
  The CHAIRMAN: The hon. Member, of course, has not moved his subsequent Amendment.
  7.0 P.M.
  Sir T. WALTERS: I thought it would be convenient if I stated the arguments altogether instead of making two speeches. My argument is that so far as the really important parts of the instruments are concerned, namely, the piano-actions, these have to be purchased from abroad. The best are purchased from France, and a number used to be purchased from Germany. There is a particular temperament, I understand, required, besides skill and experience, in the men who manufacture these actions. You

  1869
  cannot set up a manufacture in England at once and find Englishmen to do it. It is almost a thing of heredity—a peculiar touch and skill belonging to the temperament of the Frenchman—and I, therefore, do suggest to the Chancellor of the Exchequer that he should give, at any rate, an Amendment to exempt from taxation these piano actions and piano players. You may say that they do not come to any extent from America; they come chiefly from France. The imports from America are a comparatively small item in that particular section, and I ask this because, even if you had a particular skill in this country to make these piano actions and these important parts of musical instruments, you could not apply it now, because you could not get the plant, machinery or workmen to put up the buldings, and you could not establish this industry here now. If during a time of war you cannot establish these new industries here which are an essential part of piano making, and if by prohibitive tariffs you shut them out, you destroy this infant piano trade which otherwise you might develop into a very large industry indeed. By these proposals, instead of doing anything for the benefit of the nation, you are doing just the reverse. If you encourage this industry, you will be able to establish new industries in this country for which we have previously been dependent upon Germany. This business of piano making is one of the industries which we can capture from Germany during the War if only we use a little intelligence and common sense. If you put any extra price upon the parts that cannot be made in this country, you at once destroy the industry. Any trifling sum which may be conveyed to the Exchequer by this tax is not worth considering for a single moment in comparison with the development of this important industry. I do not want to weary the Chancellor of the Exchequer, and if I could only see one gleam of assent on his face I would not weary him any longer. I am, however, going to press the point of giving up the tax on musical instruments, because I think it is a bad tax, although in these days I know we are getting used to bad things. I hope the right hon. Gentleman will give way to the absolutely irresistible arguments which I am submitting to him, and if he is not touched by my meekness I hope he will be convinced by my arguments. You cannot develop the piano trade or manufacture the instruments in
  1870
  this country unless you have facilities for buying the parts from France and other places at the lowest possible price. As far as this Section relating to musical instruments is concerned, I hope the Government will make this one exception in favour of an important and growing industry.
  Mr. YEO: I noticed in the Debates the other day that the Chancellor of the Exchequer referred to something I have said, and stated that it had been denied by the trade. May I call his attention to a meeting of the piano trades, which was called together to decide as to what action should be taken to meet the new duty imposed by the Chancellor of the Exchequer. A resolution asking the Government to consider the question of refunding the duty on re-exported goods was referred to the sub-committee, and it was further unanimously agreed to increase at once the price of pianos to meet the Import Duty. What does any hon. Member of this House, reading that Resolution take it to mean? It either means that the tax is to be put on or it is not. The ordinary man in the street, picking up his daily paper, would at once agree that the trade had met and decided, in order to meet the increased duties by the Chancellor of the Exchequer, that they were going to put on 33 1–3 per cent. I have come to the conclusion that they have decided to put this on the price, and that is their business and not mine. Already these taxes are affecting the retail trade. In many cases £10 has been put upon some instruments as an increase in the wholesale price since the Chancellor of the Exchequer brought in his Budget. Does the right hon. Gentleman deny that that is true? I hold a trade document in my hands which says:—
  "This is a considered opinion, arrived at after hearing the views of many engaged in the industry. Since the Budget was introduced, the price of pianos, that is the wholesale price, has increased from £3 to £10, and certainly the retail price has increased much more."
  The consequence is that the purchaser, and not the foreigner, the buyer in England, has got to pay the tax. That is what we in the trade know, and the Chancellor of the Exchequer knows it better than anybody in the House. If we cannot get the tax in any way reduced or taken off pianos in the bulk, at any rate let us encourage the industry in this country by taking the tax off accessories and parts. I hold in my hand a list of 120 component parts that are imported from abroad in the matter of pianos. What on earth do the English people make at all? Evidently

  1871
  they cannot make anything except mistakes, and when someone else tries to put them right they immediately whisper in the ear of some official that what we say is entirely wrong. But we are not wrong, and I say that confidently. I believe the heart of this nation is absolutely sound on Free Trade. I believe the heart of this nation, if it wants a piano is going to have one, in spite of all the taxes. We hear that the Chancellor of the Exchequer is advising the people that they should not spend their money on luxuries. So far as pianos are concerned, the manufacturers this year have not been able to supply the demand. While the working classes are earning good money they spend it in order to make trade prosperous. The object of these taxes appears to be that we are not going to keep a prosperous trade, but to make it awkward for our own manufacturers in these Isles to live and carry on their business.
  There was an interview with the officials at the Customs the other day, and we presented to them two ornaments, one was a lion with a miniature clock inside, and the other was an elephant also with a miniature clock inside. They were taken to the Customs authorities, and the officials were asked, "Which of these two will you tax?" They said, "We shall have to leave the lion and tax the elephant." What are the business people of this country going to do if they are to be taxed like that? I thought the Chancellor of the Exchequer had a desire to attack luxuries, but I find on inquiry in the City to-day, and through the chambers of commerce, that the right hon. Gentleman is not attacking luxuries but he has gone to the nursery, to the cradle, and he is attacking the children's toys. I want to show him some [exhibiting a toy]. I want this House to see how the officials are proceeding. This article, because it emits a musical sound, is to be taxed 1s. 2d. That toy comes from a country that ought to be standing side by side with us in this War—I mean America. Here is another article [showing, a child's musical box]. There is a tax of 1s. 10d. on that little child's toy. [An HON. MEMBER: "How does it work? Will it play?"] Yes, it will play. [The hon. Member wound up the toy, which began to play.]
  The CHAIRMAN: Order, order!
  Mr. YEO: I now wish to show hon. Members another article [producing miniature bagpipes.]
  The CHAIRMAN: Really, the hon. Member must use his speech to describe these articles.
  Mr. YEO: I want to know where the Scotsmen are in this House to-night. This bagpipe is a child's toy, and we are taxing that article 1s. in order to raise the revenue. I may not be able to convince this House of the advisability of removing some of these taxes, but they are very absurd. Men of business in this House, who have the wealth of this country in their hands, do not mind being taxed, but the Chancellor of the Exchequer is now going down to the nursery and the cradle to prevent children enjoying a little musical instrument without having it taxed 1s. 10d. or 1s. Even if we go to the Customs we cannot get a true definition of a musical instrument, and we are told that if it is anything costing above 1s. which emits a musical sound then there is to be a tax upon it in order to keep this country going. In connection with the music trade, last year the imports into this country amounted to £56,000. What are we going to get out of that? If you are going to tax German pianos, tax them by all means, but what will the people of France say? They will send a protest to the Chancellor of the Exchequer because French musical instrument makers export here £80,000 worth of goods annually, and they are much concerned at the 33 per cent, ad valorem tax which comes up for discussion to-night in France. Two deputies waited upon the Minister of the Department asking him to urge upon England the importance of not taxing our Allies. Tax your enemies by all the power you can. You may tax them out of existence, but when it comes to those who are helping you to pull this War through I do not think it is very patriotic.
  My opinion is that this tax, instead of assisting trade, will have a detrimental effect on the export trade to South America and the Colonies. We have shut out German goods and trade, and our manufacturers were about to begin to recoup themselves by making those articles in this country in order to export them to the Colonies, and now they are face to face with the fact that before they can send them out they have to pay a tax on all imported parts. I appeal to the Chancellor of the Exchequer, if he cannot give some relief on the completed article, to consider the advisability of taking this tax off component parts. There are between 120 and 130 parts that we

  1873
  import which, if he takes off the tax, will give an impetus to the piano trade and other trades that will be affected, and then we shall be able to capture a good deal of the German trade that has hitherto gone to our Colonies and South America. By doing that the right hon. Gentleman will earn the gratitude of scores of little struggling tradesmen who are doing their best to help the Chancellor of the Exchequer.
  Mr. McKENNA: The Committee have listened to the powerful statement by my hon. Friend, who has spoken with an intimate knowledge of the musical trade which certainly the rest of us do not enjoy, but I very much regret that I am not at all one with him on the substantial part of his argument. He asks the Committee to disagree with the tax on the ground that he desires to develop British trade in pianos during the War.
  Sir T. WALTERS: And after the War too!
  Mr. McKENNA: Certainly, after the War, but this is a War tax, and he wants it taken off now in order to foster British trade in pianos during the War. That argument would naturally appeal to anybody engaged in the piano trade, who would see, as the matter would appear to his mind, the great advantage, the future advantage, of developing a trade which has hitherto been enjoyed by Germany. I appreciate that, and recognise the force of the argument, but I am bound to tell my hon. Friend that now, during the War, we cannot afford it. We cannot afford any capital expenditure upon the piano trade. We do not want during the War to develop the piano trade. It is an unfortunate fact for the people engaged in the trade, and I am extremely sorry. I should be only too glad to develop their trade, and all trades, and certainly to add to our revenue, but we have neither the capital nor the labour which we can divert from far more essential purposes to the object of assisting the piano trade. I regret it, but I am quite unable to follow my hon. Friend's argument in that direction. Then he and my hon. Friend the Member for Sheffield (Sir T. Walters) say that in the interests of our export trade during the War we ought not to impose these duties. I have just looked at the figures, and I find that the whole value of our re-exports of imported musical instruments and parts thereof during eight months amounted to £20,000.
  Sir T. WALTERS: The total exports of musical instruments in 1913 was £650,000. Unless you can buy these accessories and parts during the War without duty you cannot export this £600,000 worth of pianos, and you cannot assist your export, trade to that substantial amount.
  Mr. McKENNA: On the export of a piano made in this country containing taxed component parts a drawback would be given on the taxed parts, so that so far as the British manufacturing export trade is concerned the argument is not really a substantial one, though I admit it has some substance because the manufacturer has to lie on his money. As regards the entrepôt trade which might be affected the re-exports of these instruments and parts together have only amounted to £20,000.
  Mr. LOUGH: Completed instruments.
  Mr. McKENNA: Completed instruments and parts. On both those grounds I do not think my hon. Friend really ought to carry the Committee with him in his argument. If it is not desirable at this present time to devote capital and labour to the extension of the trade in musical instruments, and if our export trade is not and could not be materially damaged by the tax, how do we stand with regard to the arguments raised against it? We do not desire, and I am sure the Committee do not desire, to see money spent at the present time upon luxuries. I am sure that must be the universal opinion of the Committee. We are really, and it cannot be brought home to the public mind too soon, day by day spending more than we ought to spend, and when we have got to cut down our expenditure, as we must, surely luxuries of that kind should be one of the first things to go. My hon. Friend made very amusing capital in his speech of the absurdtiy of the British Treasury stepping in and interfering with the toys of children. We do not presume to deal with trifles. If my hon. Friend will look at Sub-section (8) of the Clause he will see that we have provided for trifles.
  Mr. YEO: Will the right hon. Gentleman kindly instruct the Customs officials to deal properly with business people in this trade and not to be so absurd in their answers when they are asked questions?
  Mr. McKENNA: Yes, I will do my best to get the Customs officials to continue the admirable course which they have hitherto followed. Sub-section (8) provides:—

  1875
  "The Treasury may by order exempt any articles mentioned in the order which are liable to duty under this Section from that duty if they are satisfied that, having regard to the small value of the article, it is inexpedient that the duty should be charged."
  Mr. YEO: That is all we ask.
  Mr. McKENNA: We propose that powers should be given to exempt from duty trifling things which would be more trouble than they were worth.
  Mr. LOUGH: What would be the limit?
  Mr. McKENNA: The limit of common sense.
  Mr. LAMBERT: Would harmonic strings be trifles?
  Mr. McKENNA: The persons who will have to deal with this matter will have much better knowledge of the individual article than I have. I will inquire if my hon. Friend wishes. There is one point with regard to the speech of my hon. Friend which I think ought to be cleared up. As I am informed, the manufacturers of pianos in this country have not raised their prices, except to meet the extra cost imposed upon them by the duty on the component parts which they themselves use for manufacturing British pianos. My hon. Friend says that they have raised their prices from £3 to £10. I understand that rise in price is to meet the duty on the component parts which they have used. I can only state what I am told, and I am told by representatives of some firms that where a piano is entirely British made there has been no additional price at all. The trade has not put up and do not intend to put up, and their language was not intended to convey the meaning that they would put up their prices 33 1–3 per cent., in order to meet the duty. As I understand it, their intention was where they themselves have used the taxed parts to raise their price, in order to meet the additional cost to themselves. If I am wrong in my statement, my hon. Friend, no doubt, will be able to show that I am wrong afterwards. But I think that statement ought to be made in justice to the trade. In these circumstances, I would, appeal to my hon. Friends not to press their Amendment. It is a purely luxury tax. [HON. MEMBERS: "Oh!"] It is, indeed. It is like the other taxes; it cannot be renewed except as a new tax,
  1876
  with a new Resolution and a fresh discussion in this House. It is imposed in the special circumstances of the War, and in these circumstances I think this and the other taxes, now that we have argued and reargued the principle, might be allowed to pass without further discussion.
  Mr. CLOUGH: I rise to support this Amendment, because the effect of the Government proposal will be to put back the clock of progress by at least half a century, and to bring into operation the pernicious principle of Protection.
  The CHAIRMAN: I do not think the hon. Member was in the House at the time, but if he had been he would have understood that I allowed a wide Debate on the first Amendment on the understanding that it would not be renewed on the particular items. We must now deal, not with the general question, but solely with the particular point of the Amendment.
  Mr. LOUGH: There is one point that arose out of the interesting speech of the hon. Member for Tower Hamlets (Mr. Yeo), with regard to which I would like to support the Chancellor of the Exchequer. The hon. Member complained that he could not get satisfactory answers from the Customs authorities. I am quite sure that was not owing to any want of courtesy or of desire to give full information and every assistance to the trade on the part of the Customs authorities. Speaking from considerable experience of them, I can say that in the difficult position in which they are continually placed in dealing with the circumstances of the War they are doing everything they possibly can to assist this House and the Chancellor of the Exchequer, and I think on reflection my hon. Friend will not feel that any censure should be passed upon them. I am greatly disappointed that my hon. Friend did not give a little more consideration to this tax. There were originally six taxes, and of the six this was the one which my right hon. Friend might most easily have parted with, because the circumstances of the War and the progress of events have destroyed the import trade here more than in any of the other cases. The imports in eight months have declined from a total of £691,925 in 1913, which is at the rate of about £1,000,000 a year, to £169,000 now. The imports in the case of the two taxes that were abolished only declined by about one-half, but the imports in this case have declined to about one-quarter.

  1877
  Surely my right hon. Friend might respond to this appeal. The Chancellor of the Exchequer has said that he wants to assist the exchange and to prevent the use of luxuries. He is not doing that. When he finds that one of the great ends he wants to secure has already been obtained by the circumstances of the War, surely it is an occasion when he might be satisfied and say, "Having regard to the striking figure the imports have already assumed, I will abolish the tax altogether." I put that point to him. It has not been put up to the present. The Chancellor of the Exchequer said that this was a tax on luxuries. He must have forgotten, surely, the fact that the effect of the tax would be that more pianos would be made and sold in this country. If he wants to tax a luxury, and prevent the use of pianos, he must put on an Excise Duty. The trifling amount he is likely to get out of the Import Duty is surely scarcely worthy his attention. The import trade has practically disappeared already, and, under these circumstances, I think the right hon. Gentleman would greatly expedite the passage of his Bill if he would grant this concession. He has got all the big taxes that he requires. He has given way in regard to two or three small ones. This is the smallest of all, and on that ground I would suggest he might accept this Amendment.
  Mr. R. LAMBERT: I want to make an appeal to the Chancellor of the Exchequer in regard to musical instruments other than pianos, for which I think a good case could be made out for exemption from taxation. Take the case of violins. I am not speaking of the expensive ones used by skilled musicians who prize old violins. I am speaking of those used by poorly paid musicians earning from 20s. to 40s. per week. These violins are made at Mire-court, in the Vosges, by women and old men who are left behind in a district which has been very sorely tried by this War. This particular industry has a good chance now of making some headway, seeing that German and Austrian imports are barred. Surely it is rather hard, at a time like this, to tax these articles. I want also to make an appeal to the right hon. Gentleman to exempt harmonic strings. Those used for violins and violoncellos come almost entirely from countries friendly to this country. The raw gut is exported from here. It is made up at Lyons, Barcelona, Rome, Verona, and other places, and the harmonic strings are reimported into this country and distri-
  1878
  buted from here to our Colonies. How are you going to identify these strings? It is a small thing—an important accessory no doubt—but I do appeal to the Chancellor of the Exchequer to grant exemption for these harmonic strings. It has been suggested that music is a luxury which ought to be taxed out of existence during the War. I think the Chancellor of the Exchequer rather forgets that there are forms of music other than pianos, and, at a time like this, when people's minds are fixed with the utmost absorption on this terrible War, it must be a good thing for them to find some relaxation in music in the family circle. I appeal to the Chancellor of the Exchequer—I am afraid it is hopeless, but, seeing the very meagre result that must accrue from the imposition of this tax, I trust that, even at this last minute, he will meet us in this matter, and abandon this particular tax. If he will, I will promise not to say a single word against any other tax.
  Mr. HOLT: The hon. Gentleman defended this tax on the ground that it was a tax upon luxuries, and he went further and said he did not wish to see any expansion of the export trade in musical instruments because we could not afford either the capital or labour to expand that trade. He spoke with very great approval of the piano manufacturers who had not raised their prices the full 33⅓ per cent. But had those manufacturers been patriotic, they would have raised their prices in order to restrict the trade in pianos, and to limit the output of their works, by releasing persons and capital for other employment more suited to the time. That would appear to be the logical conclusion to be drawn from the right hon. Gentleman's speech. A further logical conclusion would be that there ought to be an Excise Duty on the production of musical instruments in this country. I cannot see how the argument which the right hon. Gentleman advanced in his speech can lead to any other conclusion. An Excise Duty would clearly increase their revenue. It would diminish the consumption of these luxuries, and it would tend to prevent the employment of persons in such a foolish way as the making of musical instruments.
  Mr. DUNDAS WHITE: I want to make an appeal in the interest of our gallant men at the front. It is a matter of common knowledge that the demand for mouth organs, gramophones, and other

  1879
  instruments of a like nature, has been very considerable. A great many of these instruments have been sent out, and a great many more are required. I am not going into the economics of the tax, but—
  Mr. McKENNA: There will be a drawback in this case.
  Mr. WHITE: An absolute drawback on every instrument sent out to the men?
  Mr. McKENNA: Yes.
  Mr. WHITE: Even when they are sent to an enemy country?
  Mr. McKENNA: The drawback is on the re-export of imported articles.
  Mr. WHITE: No matter where they are sent to?
  Mr. McKENNA: Yes, on all exports. We do not know where they are going to.
  Sir A. MOND: I wish to say a word in regard to gramophones.
  The CHAIRMAN: We cannot have that twice over. There is an Amendment on that later on.
  Sir A. MOND: I beg to move, in the same Sub-section, to leave out the word "gramophones."
  There has been a great demand for these instruments among the troops in this country, and I want to know if the right hon. Gentleman cannot give a rebate in cases where it is proved that the gramophones are being sent to military camps in Great Britain. If he will agree to that, he will really be doing a very useful bit of work. It will enable those who are willing to send gramophones to the troops to dispatch a greater number than would be otherwise possible.
  Mr. McKENNA: I am very anxious to avoid complications by making additional exemptions or giving additional instructions. I have been asked many times why I have not imposed an Excise Duty. We could not do it; and for the same reason, if this particular proposal were accepted, it would mean a greater amount of additional work, and we cannot agree to undertake it.
  Mr. LOUGH: I beg to move, in Sub-section (1), to leave out:—
  "Cinematograph films imported for the purpose of the exhibition of pictures or other optical effects by means of a cinematograph or other similar apparatus:—

  Per linear foot.

  £

  s.

  d.

  Blank film, on which no picture has been impressed, known as raw films or stock

  0

  0

  0½

  Positives, i.e., films containing a picture and ready for exhibition

  0

  0

  1

  Negatives, i.e., films containing a photograph from which positives can be printed

  0

  0

  8"

  The object of my Amendment is to leave out the proposal to tax films. Here a different case presents itself from anything that we have been able to put before the Chancellor of the Exchequer up to the present. There is nominally a large import of films into this country. It amounted to about £844,000 in eight months, or something like a million and a quarter per year. We have no figures with which to compare it. We really have no history at all of this import into the country. I have been assured that these figures are wholly unreliable, and that no amount of money like this changes hands for films at all. The figures with regard to imports are fictitious, because payment is made in this country for the use of films by way of royalties. Perhaps I ought to explain that there are three kind of films: blank films, positive films, and negative films. If payment is not made for this special import at present, the whole basis of the tax disappears. We have heard that the object of the taxation of films is to prevent money leaving the country. This taxation will not prevent money leaving the country; on the contrary, I am assured that if the tax is passed a great deal more money will go out of the country in connection with this industry than comes in at the present time. The first point I make is that the figures are wholly unreal, and unless the Secretary to the Treasury can give me some basis for saying that the import may be taken at the amount at which it stands in the Return it is a very substantial point,

  1881
  and sweeps away the whole basis that has been given to us for this taxation.
  My next point is that a great deal more money will go out of the country under the tax than is coming into the country now. The reason for that is that it would be utterly impossible hereafter to import negatives into this country, excepting, perhaps, from time to time in the case of some special subject. Instead of negatives being imported, a few positive prints would come in, which will only pay a penny a foot, while the negatives will not be brought into this country at all, but will be sent into another country in which positives can be printed from them, so that positives alone will be brought in at, a small rate of duty. The royalty, which is the amount charged in connection with these films, amounts to £12 per 1,000 ft. The royalty will be paid on the positive film. If the right hon. Gentleman really wanted to put on this tax, he has put the high tax on the wrong film. He puts a tax of 8d. per foot on negative films and a 1d. per foot on positive films. The result will be that the negatives will be sent to Copenhagen or some other place where they are admitted free, and printed there, while the few positives that we require—I am told we do not require more than seven or eight of any one—will be brought into this country at 1d. per foot. The effect will be that a trade, small in amount though it is, which is growing up in this country and which has grown up lately owing to our Free Trade principles, will be entirely destroyed, and there will be nothing imported into this country beyond a few positive films. The export trade which was going to the Colonies and other countries, and which was growing up in this country, will come to an end. That is the second point that I make; that under the tax the money going out of the country will not be reduced at all, but a larger amount will go out for royalties than is the case at the present time.
  The final point that I make is that none of these taxes will cause such a vast expense or so much trouble to the Customs as the tax on these films. In the first place, these films are very troublesome things to store. They are made of very combustible material. Now they are not stored at all. They come in freely, and the importer takes them wherever he pleases. Now there will have to be large facilities given for bonding, and there will be great expense because of the combustible character of the films. The reason
  1882
  they will have to go into bond is this: that the trade now done of looking at a film, and seeing whether it is any good to take up in this country or to buy a few positives from it, once you put on this sweeping tax of 8d. per foot will all have to be done in bond, and facilities will have to be provided for allowing examination of the films. All this will be extremely expensive, and you will have a most expensive system to set up. An expert will be required by the Customs to distinguish between the three kinds of films. Sometimes it is extremely difficult to distinguish the negative, which is the film subject to the highest tax of all. It is taken hurriedly, sometimes in a place like Switzerland. You can hardly see the print, it is put into a dark box and sent to this country. It is a most valuable negative, yet you can hardly see that the print exists at all. It requires a dark room to develop it. The Customs will have to have an expert to detect the films which are really negatives and which look like common stock films. The Customs will require an expert to distinguish positive, negative, and blank films. This expert will require facilities which the Customs in this country are not used to providing and which they have not to provide in connection with any other article.
  No one appreciates more than I do the difficulties under which the Customs work, or appreciates more highly the efforts they make to serve the public in very difficult circumstances, but now they will have to provide a dark room for examining the film, and they will have to develop these negatives in the dark room to see whether they should come in at 8d. or ½d. a foot. There will be great delay. These films are 1,000 feet long, and facilities will have to be given for measurement. There will have to be a screen, and the films will have to be projected on the screen. The sort of trials that take place in this country now will all have to take place at the Customs, where there is no accommodation. This sounds very technical and wearisome, but when we plunge into these things it is the inevitable result. Both the importer and the Customs, for the purpose of levying the duty, will want all these facilities—a dark room, inspectors, and facilities for projecting and developing the films in the dark room. These will have to be provided at all the great Customs Houses. The importation now takes place in London, Liverpool, Hull, Newcastle, Folkestone, Newhaven, Dover,

  1883
  and Southampton, and these facilities will be required at all of these and the other Customs Houses throughout the country. Another difficulty will arise of finding reliable experts to do this work for the Customs. There is no analogous work done by our Customs at present. These experts are very few in number, because it is really a new thing. I have shown that the import is very small. I do not think it is one-tenth of the amount that is shown in the Returns, and I do not believe the value of the import now is £100,000. After the tax is passed it will be quite nominal. It is not possible to assume that the Government can get more than £30,000 or £40,000 out of the tax, and for this miserable sum—
  Mr. MONTAGU: Do you mean out of the tax altogether?
  Mr. LOUGH: Yes, the figures given at present are largely fictitious, because nobody pays the amount, and whatever payment is made is made by royalty. The Government has not applied the tax to the royalty. It is true they might get the tax in another way, by taxing theatre tickets, but trying to treat the import as if it were tea or sugar, or one of the other things we are accustomed to tax in this country, has led the Government into a great mistake. I make the point that it is an infinitesimal matter, that the whole value of the imports will disappear when the tax is put on, and that the great cost, inconvenience, and trouble of putting on the tax will far outweigh any advantage we get from it. I put this final argument on that point. We have been assured all along that the taxes are temporary. You will have to set up the machinery for the temporary tax just as if it were going to be eternal. From nine months from next July you will have to set up dark rooms, obtain experts, and set up measuring machinery, and get the whole thing going at the Customs Houses which I have mentioned. I think I have put sufficiently striking facts on this matter. A great many more have been submitted to me, but I do not want to trouble the Committee with too many details, besides which it is a very difficult matter for myself. Nobody gave the Committee any information about it, and everybody will admit that somebody ought to have said something about the article being taxed and the probable effect of taxing it. I have shown that it is an entirely new industry, and that the Government will not secure
  1884
  the end they have in view by this taxation. They check a growing import trade which is growing up at present. It will undoubtedly be extremely difficult and costly to levy the tax. In all these circumstances the Government would do well, if they have any discretion—I say that without offence—to at least waive this tax for the various reasons I have mentioned.
  Mr. MONTAGU: I am sure the Committee is extremely indebted to the right hon. Gentleman for the speech he has made, which shows very deep familiarity with this question, and for his statement as to the facts about a new tax upon an article which is not a subject with which the Committee is very familiar at the present time. My main answer, indeed, I think my only answer to his argument, is this: We estimated that the tax will bring in £400,000 a year. It is one of the biggest taxes which was contained in the Clause at first. The right hon. Gentleman tells us that his information is that the method of payment for these things is such that we shall not get that revenue or anything like it. Our advisers are of opinion that their estimate is correct. The tax has not got the statutory sanction of Parliament, but in order to meet the convenience of the taxpayers is being collected now, and there is nothing to show as yet that the estimate is a false one. We have every confidence that it will be smoothly collected and inexpensively collected. The method of imposing the tax, as the Committee will see, is different from the method adopted in connection with motor cars and clocks and watches. It was arrived at by experts as being the best way to impose an equivalent duty, and, as far as we can judge, it has proved entirely satisfactory. Special accommodation is at present provided by arrangement, and without protest, for this being done in London. I venture to hope that the anxiety which the right hon. Gentleman expressed will not be fulfilled. If it is, when the time comes for reconsideration of these taxes, his arguments will be very valuable arguments in resisting any attempt made by any who may make it to continue the tax.
  8.0 P.M.
  Mr. PRINGLE: This is one of the taxes upon which we have never got an estimate from the Government. We hear for the first time that under the system upon which they intend to levy this tax they expect to obtain £400,000. The right hon. Gentleman, of course, has not stated the

  1885
  proportions in which that sum will be obtained from the three different objects of the tax, the printed film, the positive, and the negative; but it is possible that the calculations which the experts of the Government have made may turn out to be falsified, and the means that will be taken to falsify the forecast probably account for the quietness and calmness with which the trade is taking the tax. It is, I think, assumed by the Government that the negatives will be received in the same proportion as they have in the past, and that consequently there will be a large number of negatives which will pay the higher rate of duty. I have, however, been told by some who are conversant with the trade that means will be taken to evade this heavier tax upon negatives—that instead of bringing in negatives, those engaged in the trade will simply bring positives into this country, and will print negatives from the positives which they bring in, and from the negatives so printed will reproduce all necessary positives for the purpose of leasing out any reproduction in various parts of the country. Obviously, if this method is taken, instead of having the 8d. upon the negative which is assumed to come in by the Government, there will only be 1d. upon the positive and the small tax upon the unprinted film. In that event the amount which will be collected, instead of being on the basis of 8d. for every negative, will probably amount to about one-eighth of that sum, and instead of having £400,000, as the experts whom the Treasury have consulted state, they may have only a return on the basis of the importation of positives alone, which will be at 1d. per foot, and under these circumstances you will only have one-eighth of the £400,000.
  Mr. MONTAGU: If positives come in, instead of negatives, there will be more positives than negatives necessary to make the positives from.
  Mr. PRINGLE: No, I think that interruption has proved how little my right hon. Friend understands the intricacies of this interesting business. A single positive will be sufficient for the production of a single negative within the country. It is true that if all the positives which were to be exhibited were to be brought in you would then levy a tax on all these positives. I admit that if every positive which was to be exhibited in every cinematograph show in the country was to be brought in you would collect into the Treasury, on
  1886
  the basis of the calculations of the Government. But the point I am making is that, instead of bringing in all these positives, the importers will simply bring in a single positive, and from that positive print a negative from which the positive for the purpose of exhibition will be printed. In other words, you will practically have no revenue from the negatives at all, and you will only have a revenue from the single positive which, as it were, will be the parent of all the positives used for reproduction. The case has been put to me by a person who is familiar with the trade that this will be the method of evasion. Consequently, if that is the method of evasion, instead of having the negatives upon which they calculate, and upon which 8d. per foot is to be paid, you will merely have positives at 1d. a foot, and, consequently, the revenue obtained from this tax will be reduced, probably not to the extent of an eighth, but to something approximating to an eighth of the amount. If that be so, instead of having £400,000, the Exchequer is only going to benefit by something between £50,000 and £60,000, and you are going to have all the machinery of collection, and all these special provisions made, dark rooms and so on, to which my right hon. Friend (Mr. Lough) has referred, and in these circumstances it seems to me that there is going to be practically no net revenue at all from the tax. It will, however, be interesting, in view of the confident forecast which the right hon. Gentleman has made, to see whether his prophecy is accurate or mine, whether the importers will be successful in evading the duty in the way I suggest, and whether, in consequence, the return to the revenue will be correspondingly reduced.
  Sir NORVAL HELME: I should like to ask if, in presenting this estimate of the yield of the tax, we are to regard it as a net estimate. Can my right hon. Friend give the Committee any particulars as to the advice which has been given him as to the cost of collection of the tax, because it is really a very important matter with the evidence we have had brought before us of the methods that there may be of evading the payment of duties. It may not necessarily be a malicious attempt to evade the tax but a bona fide trade effort. If the trade can by a system of importing certain classes of films meet the demand for the cinematograph shows according to law in a perfectly legitimate way, and if £50,000 is the gross amount likely to be

  1887
  received, taking his own showing of £400,000, I want to ask whether £400,000 is a net sum, and, if not, what is the cost that he estimates, taking into account all the arrangements which have to be made throughout the Custom Houses of the country, so that the House may judge between the two, and if he would under the circumstances look at this question and at another stage of the Bill be able to advise the House upon some of these points, so that we may be in a better position than we are now to judge. We recognise that the Custom House always does its best to carry out the arrangements this House imposes, but on the other hand the traders have put a case before the House to different Members whom they have approached. I should like to ask the question and make the suggestion that I have just made.
  Sir A. MOND: I do not know whether my right hon. Friend can give us what the yield of the tax has been since it has been in operation. If he has the figure will he tell us what the yield of the tax has been since it has been imposed? That will be some guide. A further point I should like to ask is this: Are we to understand that in the permanent arrangements cinema films which will be imported in the future cannot be cleared at the port at which they arrive, and, if not, will they pass in bond, say from Liverpool to London, or will they have to come direct to London? That is a point which will be of some importance to the port authorities in these various places. It seems a very serious restriction of trade right away to compel importers to bring all these films to London. Another question I should like to ask is: Are these things being examined in bonded warehouses belonging to the Government, or hired or rented by them, or are they being examined by any private arrangement with the trade? I understand there is a very considerable business being done in this country in the importation of foreign negatives which are printed here from the positives, and then exported and sold in various parts of the Continent. I do not quite understand how that trade will fare under the rebate Clause of the Finance Bill. If I import a negative and then print a certain number of positives, the rate of the negative and the positive being different, do I get any rebate at all, and, if so, what rebate do I get? Do I get a rebate of a penny on so many feet of
  1888
  positives, however many positives I import, or do I get a rebate equivalent to what I have paid on the negative or some proportion? I raise that question because I understand that Great Britain has been a distributing centre for all parts of the world. Quite a large trade has sprung up in which about 6,000 people, of whom about three-quarters are women, I understand, are at present engaged in this business of film printing from foreign negatives in Great Britain, the films being sent abroad to our Colonies and other countries. I can understand a mechanism being set up to deal with this, and I should like to know whether that point has been taken care of and in what way those engaged in that industry will be able to continue it when this duty is imposed. Of course any figure Ave have at present as to the yield of the duty must be a little misleading, because the trade, naturally, has not accommodated itself in any way to these new duties, and the right hon. Gentleman, of course, will in the first fortnight or perhaps month, get really what has been the normal trade in the past. Whether that will continue in the future neither he nor any of us can tell, but I should be very much surprised from what I have heard if it is not found to make this tax considerably less remunerative than the right hon. Gentleman and his advisers at present think.
  Mr. LOUGH: I think we are quite in order in asking that the figure should be given us. The whole object of my speech was to suggest that we had no figures to go on. My hon. Friend opposite, in a speech with which I sympathise entirely, pressed for some figures. One has been given us by the right hon. Gentleman. He mentioned that he had got the figures for the last fortnight.
  Mr. MONTAGU: No. If I said that I made a mistake. What I said was that we expected from this duty £400,000 a year. I was informed by the Customs that there was nothing in the collection of the duty that had occurred since 29th September to suggest that we were not going to get that amount. That is all. They have submitted a revised estimate on the experience of the last fortnight, but I have not got the figures accessible. I shall be happy to supply my right hon. Friend, when I can get them, with any figures I can find. This is a new duty. The yield must be highly problematical. We have done our best to find out what that yield is likely to be, and we have arrived at an

  1889
  estimate of £400,000. With regard to the complaints that have been made as to the collection, we consider that the cost of collection will be trifling. We hope that £400,000 will result to the revenue from the imposition of these duties.
  Mr. LOUGH: I do not think I have ever heard a more extraordinary statement. Unwilling as I am to press the Government, I think the situation that has been created is such that I must ask the attention of hon. Members to it. There is no secret about Customs Duties. We know there is a paper published in London daily in which the duties in regard to any trades with which I am connected are given, and anyone can ascertain how much of any article is cleared out of bond. That is public information which we ought to have now. What I have said to-day and on former occasions in the House is that this whole tax is a mystery, and that we know nothing at all about it. I am not an expert, and I am not in the Government, and I do not know anything about the Customs. I only make my suggestion from the best information I can get. Now the right hon. Gentleman has corrected himself, and says that the Customs have not told him that the estimate he made was wrong. That is the most curious statement I ever heard. For twenty-one days—for he has now mentioned twenty-one days—which is three-fourths of a month, they have been clearing on this duty. I ask, What has the duty realised? I think I am entitled to ask for that information. That will be a fact for us. That will be something to go on. We shall then get out of the realm of mystery, and the Committee will be able to judge whether I am right in suggesting that this thing is very vague, or whether the right hon. Gentleman is justified in saying that he will get £400,000 a year out of this tax. Without the least desire to press the Government unduly I do appeal to hon. Members generally whether it is not a known principle in this House that if a Minister refers to a figure, and he has documents, we are entitled to ask him to give us the exact figure. It is no use saying that we cannot get them from the Customs authorities. The Customs representatives are probably here now, under the Gallery. I ask, What is the duty you have received from the films in these twenty-one days? I must respectfully press my right hon. Friend to give us this fact. It is no use for him to say that he continues to hope. Of course, he always
  1890
  hopes. We ought to go by certainties. I do not want to be discourteous, because he has been most courteous to me, but I say that it is his duty to get the information, and it is the duty of the Chancellor of the Exchequer to get the information, and to give the House some facts to go upon. He has admitted he has got the fact. Therefore, I respectfully ask what is the duty that has been collected?
  Mr. MONTAGU: The right hon. Gentleman has put to me a question which I cannot answer, not because I am unwilling to answer, but because I cannot answer at the moment. I have got in my box a whole heap of information, and I have endeavoured to acquaint myself with the information that the House is likely to expect. It did not occur to me that the Committee would be guided in their decision as to whether we should impose this duty by the figures as to the yield in the first few weeks. I have not brought those figures to the House, and I cannot get them on a few minutes' notice, but I shall be very glad to supply them to-morrow.
  Mr. LOUGH: Under those circumstances I will not press the Amendment. I do not think we shall get out of the fog if I press the Amendment now.
  Amendment, by leave, withdrawn.
  Sir A. MOND: I beg to move to leave out the figure "½d." ["Blank film, on which no picture has been impressed, known as raw film or stock, ½d. per linear foot"], and to insert in place thereof the figure "⅛d."
  This is a very special point. The rate of ½ on blank films, which really are the raw material for the British film industry, is, I gather from what I have read, and from what I have been informed, very much too high. I do not know on what advice that rate of ½d. is inserted. As I understand it, if the ½d. rate is maintained, it will be a very serious disadvantage to the British film industry. The raw blank films coming into this country will be so dear by the time they have dealt with them and made them into negatives that when they want to export these negatives to other countries they will not be able to compete with other countries which are producing films as successfully as they are competing to-day. I do not know why there should be any duty on blank films at all. After all, the blank film is the raw material of a British industry. These

  1891
  industries have considerable trouble to-day in competing with their American and other rivals, who are very enterprising. I understand that the right proportion would be the sum that I have put down in my Amendment, namely, one-eighth of a penny. I have no doubt that the right hon. Gentleman has consulted with some of these manufacturers, who are experts in this matter; if so, he will have been told the same thing, that the figure of ½d. is out of proportion to the duty of 1d. and 8d., and that it will be a serious burden to the film producing industry in this country.
  Mr. MONTAGU: It was after consultation that the present scale was put in the Bill. Our information is that ½d. is the right proportion, having regard to the 1d. and the 8d. If, however, the right hon. Gentleman has information to the contrary, and he would be good enough to favour me with the information upon which he has come to the conclusion that ½d. is too high in proportion to the 1d. and the 8d., I shall be very glad to consider it, and to make further investigation between now and the Report stage of the Bill.
  Sir A. MOND: On that understanding I will withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. LOUGH: I beg to move, to leave out the figure 8d. and to insert in place thereof the figure 1d. ["Negatives, i.e., films containing a photograph, from which positives can be printed, 8d."] This Amendment is aimed at correcting what I think is a mistake in the tariff. It is to reduce the duty on negatives, which stand at 8d. in the Bill to 1d. I believe that the wrong film has got the high tax put upon it, and the want of knowledge which has been displayed on the Treasury Bench rather encourages me to think that I am right. In regard to the last Amendment which covered somewhat the same point, my right hon. Friend (Mr. Montagu) has said he will give me the figures to-morrow. In regard to the amount of money collected, I can raise the matter on the Report stage. We shall then have a whole month in which this duty has been collected, and if the facts then produced prove my point, as I expect they will, I hope we may be able to kill the tax then if we are not able to do it to-night. My present point is that this 8d. tax on the negative will kill an infant British industry.
  An HON. MEMBER: They do not want industries!
  Mr. LOUGH: My hon. Friend says they do not want industries. My right hon. Friend knows that the negative is the film from which the positive can be printed. As it appears in the Bill I suggest that the tax is eight times as high as exists today in Copenhagen. The result will be that negatives will be sent to Copenhagen and printed in Copenhagen, the positives will be sent in here and the industry which we have got will be transferred to foreign countries. All that would be obviated if the negatives were allowed to come in at a 1d. I will not press the other side of the Amendment. It is not my duty to get any rates increased, but I do think that the Government ought to see their way to accept this Amendment.
  Mr. HOGGE: I am glad that my right hon. Friend has raised this point. It concerns a very important industry, and he has very rightly pointed out that if you tax the negative film at 8d. as compared with 1d. on the positive film, you really injure an infant industry in this country, an industry which the Government ought to regard as most helpful to all the social reforms which they have ever advocated. As the Financial Secretary to the Treasury knows, the Government to which he belongs are greatly concerned about the drink problem. He knows likewise that the only method by which you can keep people sober is to provide the proper kind of recreation for them, and that that recreation is provided most appropriately and best in the large number of picture houses that have been set up over the length and breadth of this country. It does seem, therefore, extremely inconsistent that as a member of a Government having under their wing a Board of Control, which is attempting to diminish the consumption of alcohol in various parts of the country, he should introduce in the supplementary Budget a proposal which will destroy one of the very best agencies for dealing with the liquor traffic which have yet been set up. I dare say that all of us have been to a picture house at one time or other in our life. One knows that the cost of those negatives, which are produced from time to time, is extremely large, and that they involve not only the employment of a great number of individuals, but also the expenditure of vast sums upon the properties that are required for reproducing those particular incidents which attract the public.

  1893
  Some years ago there was a craze in this country for various kinds of pageants in which historical incidents connected with all our great cities throughout the length and breadth of the Empire were portrayed to the public after a great expenditure of time, energy, and money. A tax of 8d. per foot on those negatives will destroy a very valuable adjunct to the social habits and customs of this country. I should have thought that the Financial Secretary to the Treasury, with his reminiscences of his own university, would be considerably annoyed, for example, if the historic incidents connected with the rise and progress of his university could not be filmed at one time or another and put on record I would remind him, for example, that even at the British Museum they are now making a collection of films of incidents of interest, which may in future become almost as valuable as some of the manuscripts which are now kept there. I believe that even this Coalition Cabinet has been filmed going in and out of No. 10, Downing Street. I have never seen that film on exhibition at any cinema house in the country. I am sure that the House will be interested to learn from the Chancellor of the Exchequer what was done with that particular negative. He himself, of course, would be in that negative.
  The DEPUTY-CHAIRMAN: It seems to me that the hon. Member is dealing with the general subject of films. I think that he ought to satisfy me that he is referring to the subject under discussion.
  Mr. HOGGE: The negative which is being taxed is the original photograph of the original incident. In this country, at present, a great deal of that work is done that is so important, and I was drawing attention to the peculiarly significant incident of the Coalition Cabinet having been filmed, for some purpose or other, though the Press censorship has not yet told us what was done with that particular film.
  The DEPUTY-CHAIRMAN: That is a general question.
  Mr. HOGGE: This is a proposal to tax at 8d. the negative films containing the original photograph from which positives can be taken.
  Mr. McKENNA: Imported films.
  Mr. HOGGE: There is nothing to hinder any competent body coming from the other side, to take the Cabinet here, and send-
  1894
  ing across the film. If you are going to prevent them doing so you are going to prevent them keeping in the British Museum the records of events in this country which are extremely important to the community, such as the entrances and exits of Cabinet Ministers at 10, Downing Street. I think that the proposal is preposterous and, as I pointed out before the Chancellor came in, it is also anti-social. It is against the spread of temperance, and will destroy the work of the Board of Control which he and other members of the Cabinet have set up. I certainly hope that my right hon. Friend will persist in his opposition to this extraordinary tax, which is, as he said, destroying a very important infant industry.
  Mr. MONTAGU: My hon. Friend has referred to the taxation of negatives and its effect on the production of positives, and the results that are to ensue to the cause of temperance, but I am afraid that I cannot follow him in his argument on these points. The argument on which the right hon. Gentleman pressed his Amendment infringes the whole principle of this taxation, namely, an attempt to proportion the tax as between the value of the negative and the value of the positive. Besides that, there is the loss of revenue which would result from the adoption of his proposal. But there is more than that in it. The right hon. Gentleman is endeavouring to persuade the public to impose a Protectionist tariff, a tax that would encourage the importation of negatives and discourage the importation of positives into this country. It would help the British manfacturer of positives, and so from that point of view it would mean that, apart from any loss due to reduction of duty on negatives, the foreign positive, paying a duty of 1d. a foot, would be replaced by the British positive, paying a duty of only ½d. a foot. So because of the loss of revenue, the infringement of principle, and the Protectionist nature of the proposal, I urge the Committee to reject the Amendment.
  Sir A. MOND: This tax becomes more mystic as it proceeds. The more one endeavours to try to follow its tangled web the more one dives deeply into all kinds of fiscal heresies. I do not understand for myself we have not had it explained to us—on what magic principle this tax is constructed—that is to say, what is the relation between 8d. on the negative and 1d. on the positive? Is it based on the idea

  1895
  that a certain number of positives is sold for every negative, or is it done with the idea of discouraging the printing of positives in this country, thereby stopping the printing of cinema films here, so as to liberate men for the War, or women for munitions work, or on what principle is this tax based? I have here a quotation from an article in the "Kinematograph and Lantern Weekly" as to how the trade regard this matter In reference to the tax on negatives, it says:—
  "The form of the duty to which most exception is taken is the levy of 8d. per foot on negatives. In the House the Chancellor announced the duty as 33⅓ per cent, ad valorem. That assumes a minimum negative value of 2s. per foot. We do not know on what figures Mr. McKenna bases his imposts, but it is an easily ascertained fact that at the present time a great proportion of negatives are not worth this figure. We are assured by traders that a sale of from 12 to 16 positive copies of a film would be necessary to make it worth while to import a negative on which duty has to be paid. It is common knowledge that of very many films two, three, or four copies only are sold. If the duty remains as at present, negative's of such films will not be imported, but manufacturers will feel strongly inclined to bring in a number of prints which they will rent direct to the exhibitor. There is to our mind no doubt that the open market is threatened to a much more serious extent than by any recent changes in trade methods."
  Is that result a desirable one to achieve? If it is, of course there is nothing more to be said. I have already pointed out that while we are importing negatives we are carrying on a trade in printing from them positives for re-exportation. If these negatives have to pay duty you will not be able to arrive at any satisfactory rebate for the positives. If the negatives should not come here at all, and only three or four positives are brought to this country, the result of that must be to affect the trade in this country of printing positives for exportation, and the positives will be printed in other countries. To that extent you will damage the printing of positives here. I do not know whether it is a large or a small trade, but this proposal undoubtedly deals with a new industry, the conditions of which are not at all firmly fixed. I would like to know, in view of the objections entertained by those who do understand this trade, on what ground the Chancellor of the Exchequer has adopted 8d. and 1d.
  Mr. ANNAN BRYCE: The right hon. Member for Swansea (Sir A. Mond) is, I think, from my information, perfectly right in his argument. Negatives are imported, it may be for the purpose of being shown and tried, and then they are ordered here, the printing being mostly
  1896
  done in America. The goods are sent over here to be distributed by the persons who order them and buy them here. A certain amount of printing from the negatives is done here, but not a very large amount. The point is that if you tax negatives at a very high rate they will not be sent here. The distribution trade, which is a large one, will not be done any longer in this country, but will be done entirely in America. They might send over a positive to show, but the printing would be done in America. You will therefore, as I said, destroy a trade, which at present promises to become a very large one. Instead of taxing the negative so highly, as is proposed, it would be far better not to tax it at all. The Germans have been knocked out of the trade, and the larger share has been obtained by America. I hope the Chancellor of the Exchequer will consent to accept the reduction proposed.
  Mr. McKENNA: My right hon. Friend has just raised a new question, and I recognise the force of what has been said, both by my hon. Friend below the Gangway and the right hon. Gentleman. I will undertake between now and the Report stage to go very fully into the ratio of the duty on the positive and on the negative. I do not think that I am in a position to say more than that at the present moment. I quite recognise that it is a question that requires fuller examination than it has had.
  Mr. LOUGH: I could not ask for more than the right hon. Gentleman has undertaken, that between now and the Report stage he will look into the matter. I have honestly tried to direct attention to the merits and facts, and to explain the difficulty which arises.
  Mr. PRINGLE: I hope that in any inquiries which the Chancellor of the Exchequer makes he will direct his attention to the question of revenue from this trade. We have been told the object of some of these taxes, but this particular tax on films is practically Protectionist, and I want some assurance from the Government that in any readjustment they may make it will be such as to secure the largest possible amount of revenue.
  Amendment negatived.
  Sir A. MOND: I beg to move, in Subsection (2), to leave out the words "which an importer would give for the article, if the article were delivered, freight and insurance paid, in bond at the port of im-

  1897
  portation," and to insert instead thereof the words "at which an exporter agrees to sell the article free on board at the port of exportation."
  This Amendment raises the question on what data the valuation ought to be made "for Export Duty. There are various centres of importation, and the question is how you are to arrive at the valuation in different ports of the country. As a matter of fact the tax from New York to Liverpool, and New York to London, would not be the same, since the freights to those two ports differ. There is a pretty considerable number of ways in which taxes of this kind are levied and are paid. I understand that in Australia, where they have some experience of the working of tariffs, they have adopted a method which they find to work well. In other countries the importer produces an affidavit or similar document of the value, free on rail at the exporter's works. The Amendment I have put on the Paper is, I think, a simpler way of doing it. I propose that the article should be f.o.b. at the port of exportation. Under the method proposed in the Bill certain ports are likely to get advantage against others, and that, of course, is an absurd and very inadvisable thing to do. I do not think that my method will cause any difficulty to the Customs since they can check the rates quite easily. They get the certificate or invoice of the importer, of what the exporter charges at the port of export, and they can compare that with prices with which they are familiar. I hope the right hon. Gentleman will see his way to accept this Amendment, or, at any rate, to give it careful consideration.
  Mr. McKENNA: I am afraid I have to oppose this Amendment on the same ground that I opposed some other Amendments moved by my right hon. Friend. If I were to accept this Amendment we would require to set up machinery abroad for the purpose of valuing the goods f.o.b., which would not be justifiable except in the case of a permanent tax. On the other hand, in this country we have a measure of the value of the goods including insurance and freight. We have no similar measure of value as to the goods abroad. It is quite true that the country named by my right hon. Friend has adopted this system of taxing the goods on the valuation at the port of export, but a great many other countries have adopted the system proposed in this Bill. I strongly
  1898
  hope he will not press me to accept this Amendment, which could only be justifiable in the case of permanent taxes.
  Mr. L. WILLIAMS: I want to understand what is meant by this matter, as tariffs I am afraid will become a permanent part of our fiscal system. [HON. MEMBERS: "No, no!"] At all events the attempt will probably be made, and I would like, therefore, to be in a position to confront those who make that attempt, and to understand what is meant.
  The DEPUTY-CHAIRMAN: The hon. Member should address himself to the point of the Amendment, and not as to something in the future.
  Mr. WILLIAMS: If you had done me the honour of listening to me, you would have seen that I was referring to a difficulty I find in this Clause.
  The DEPUTY-CHAIRMAN: I did listen to the hon. Member's remarks, and it was clear that he was making inquiries for the purposes of the future, and not with regard to the present Bill.
  Mr. WILLIAMS: And for the purpose of understanding this as a model of future tariffs. The method proposed seems to me to give an opening for all sorts of fraud, and, if that is the case, I am sure my right hon. Friend will be anxious to prevent any possibility of the kind. An importer might conceivably give as the value of the article a fictitious price much lower than the real price. It would, therefore, be much better, I think, to adopt at all events a portion of my right hon. Friend's Amendment, which says that the value shall be the price at which the exporter agrees to sell the article. If my hon. Friend objects to the rest, providing f.o.b. at the port of exportation, why can he not adopt the part of the Clause that stands after that and take the price as that at which the exporter agrees to sell the article c.i.f. in bond at the port of importation? My right hon. Friend would then be able to get at the value as the selling price, and surely that is exactly what he wants.
  Mr. McKENNA: I do not think I made myself quite clear upon that point. I quite agree the question we have got to consider with our present machinery is checking fraud here. If the importer puts a fictitious price on the article, then we have some knowledge of what the value of the article is in this country, and we have some means of checking the matter, which we should not have in the other case.
  Mr. WILLIAMS: I suggest that the proper basis of valuation ought to be the selling price in this country c.i.f. That is surely a far better way of proceeding than to ask the importer to state what may be a fictitious value. The danger is that the importer might, in collusion with the exporter, put a fictitious value on the article, and state that he was giving a sum for the article much less in fact than he was willing to give and was actually giving. It seems to me that the danger would be obviated if my right hon. Friend, while adhering to the scheme of his Bill that the price should be fixed here, would adopt the first part of the Amendment, and make the Clause read in this way:—
  "The value of any article for the purposes of this Section shall be taken to be the price at which the exporter agrees to sell the article c.i.f. in bond at the port of importation."
  Mr. BRYCE: The proposal of the Amendment is really very simple, and I do not see what the Chancellor of the Exchequer's difficulty is. The suggested procedure is followed in the United States, where they require a sworn declaration that the invoice is correct. If there were any trouble on this side on the question of value and so on, the Consul here, whose staff, I suppose, know something about values, would not pass a declaration which was manifestly wrong. But no one ventures to try it on. I never heard of the slightest difficulty arising with regard to an affidavit or sworn declaration of value made before the United States authorities. The system works perfectly easily, and requires no intricate machinery. Therefore I cannot understand my right hon. Friend's difficulty in accepting the Amendment.
  Mr. WATT: I have approved of most of the Amendments moved by the Free Traders, but I think the answer just given by the Chancellor of the Exchequer is fatal to the present Amendment as it stands. As my right hon. Friend has said, it would be very difficult to get at the price on the other side, but there would always be in the market here a guide to the proper value of a particular article. Given the fact that these taxes are to be levied, it is surely best that they should be levied in the wisest fashion. There can be no doubt, I think, that the Chancellor of the Exchequer is right in adopting the price in this country, with the cost of insurance and freight added.
  Mr. BRYCE: In reference to the remark of the hon. Member opposite (Mr. Watt), how is the Chancellor of the Exchequer to estimate the value of a cinema film when it arrives here? Some cinema films are worth £100, some £250, and some £4,000 or £5,000. Nobody can tell what the value is until they are sold.
  Mr. McKENNA: The ad valorem duty does not apply.
  Amendment, by leave, withdrawn.
  Sir A. MOND: I beg to move to leave-out Sub-section (3), and to insert instead thereof,
  (3) Any dispute arising as to whether any article imported is or is not subject to the duties payable under this Section, or as to the proper amount of the duty payable, shall be referred to a competent staff of appraisers at the port of entry; and if the importer be dissatisfied with the award, he shall have power to appeal to a board of general appraisers, which shall consist of not less, than five members, none of whom shall be engaged in any other business or occupation. All such appraisers shall be appointed by the Treasury on such terms and conditions as it may see fit."
  9.0 P.M.
  This is really a matter of machinery. I quite realise the Chancellor of the Exchequer's difficulty with regard to establishing machinery if the taxes are not to be permanent. On the other hand, you are met with the difficulty that you must have some kind of machinery, and I have put down this Amendment in order to create it. As the Sub-section stands no provision seems to be made at all for deciding in case of dispute what articles are subject to the duties payable under this Clause. Perhaps the right hon. Gentleman will explain.
  Mr. McKENNA: The proposal of my right hon. Friend would undoubtedly in the main be a very valuable addition to the Bill if these were permanent taxes and we were living under peace conditions. But we find now a willingness on the part of the whole public to assist the machinery of government in a way which does not exist in ordinary times. In my experience nearly everybody you come across is most anxious to facilitate our work. Consequently we can attempt to impose taxes of this kind with arrangements under which we could not carry them out in ordi-

  1901
  nary peace times. If the taxes were imposed as permanent taxes we should require machinery such as that for which my right hon. Friend asks. As regards the determination of whether or not an article is subject to the duty, that is a matter which in any circumstances would have to be left to the Courts. It is not the machinery of the Act that is in question, but the nature of the law. It is for the Law Courts to determine what is the scope of the Act. As for the machinery for the exaction of the tax, I would ask my right hon. Friend to be satisfied with the very slender machinery which we have set up for the purposes of the tax during the War.
  Sir A. MOND: I would like to put a question to the Chancellor of the Exchequer as to this Sub-section. It says that any dispute shall be referred to a referee appointed by the Treasury, whose decision shall be final and conclusive. I ask him in the matter of drafting whether the term "referee" will enable him to appoint more than one referee, and if not whether the term should not be "referees"?
  Mr. McKENNA: Under the Interpretation Act, I believe the singular always included the plural. I will inquire into the point, and if the right hon. Gentleman is right I will see to it.
  Mr. WATT: Before we pass from this Sub-section, may I call the attention of the right hon. Gentleman to one point, though an important one—the question as to whether his Department should have the naming of the referee who is to decide any particular dispute, and not only to decide it but to decide it without any appeal. It says the referee's decision shall be final and conclusive. I have had considerable representations made to me about the inequity of this particular proposal in Clause 25, Sub-section (4), where the Commissioners of Inland Revenue—
  Mr. McKENNA: That is a different point, and a much more important one.
  Mr. WATT: But the principle applies to both! A Department of the Treasury appoints a judge who definitely decides as to whether an article should or should not pay a tax, and the amount of it. In a matter of dispute the question is to be handed over to a referee appointed by one of the parties to the dispute. That is a principle which I think is bad, and
  1902
  which I should like the Chancellor of the Exchequer to consider. If he still thinks it wise, of course he will adhere to it; but it would be better, I think, for it to be altered so that some neutral referee in this particular case, and in Clause 25, should be appointed.
  Amendment, by leave, withdrawn.
  Sir A. MOND: I beg to move, in Subsection (5), to leave out the words, "Provided that the Treasury may by Order declare that the drawback shall not be paid in respect of any accessories or component parts named in the Order on the ground that it is not possible to provide satisfactory means of identifying those accessories or parts."
  The purport of this Amendment is to leave out the last Section of Sub-section (5). It has been represented to me that there will be considerable difficulty in identifying some of these parts for the purpose of the tax. Some of these parts are worked up into motor cars or pianos, or something else, and then re-exported, and these it is desired to give a drawback upon. It is a question of the identification, but there are well-known methods which can be employed. In the American tariffs the practice is well established, and that is the practice of affidavit on export. It requires a certain amount of confidence in the honesty of the people with whom you deal. If some method of the kind is not adopted the right hon. Gentleman is really taking back with one hand what he proposes to give with the other. You say to a manufacturer of motor cars in this country, "If you import some foreign parts and utilise them here in the manufacture of motor cars, and then re-export them, I will give you a rebate, but I am very sorry I cannot give you that rebate because it is quite impossible to identify the parts except you take the whole of the motor car to pieces." That is not carrying out the undertaking that the right hon. Gentleman wants to carry out. We are actually capturing some of the South American trade in pianos from the Germans, but perhaps the right hon. Gentleman agrees to the Amendment?
  Mr. McKENNAwas understood to assent.
  Sir A. MOND: Then I need not say any more about it. The right hon. Gentleman will possibly put the thing in better words than I can.
  Amendment agreed to.
  Mr. McKENNA: I beg to move, at the end of Sub-section (6), to insert the words,
  "or that the article be imported into Great Britain or Ireland after having been exported therefrom, before duty became payable thereon, in pursuance of this Section."
  If the hon. Member will allow me to intervene, I will propose this Amendment, which I think will satisfy him. I think it will carry out the object the hon. Member has in view in his proposed Amendment. The effect will be that an article which was imported into this country before this duty became payable, and was exported to the Channel Islands, or the Isle of Man, and subsequently is re-imported into this country, will not pay the duty.
  Mr. PETO: I was going to make a more modest proposal than that which the Chancellor of the Exchequer has made, and I only rise to point out that it appears to me, with all diffidence, that possibly the Chancellor of the Exchequer's words may give a good deal of difficulty to the Customs House officials, because the place to which the articles are exported is left open, and it may be to any part of the world It may be very difficult to prove to the Customs House officials that the article exported was imported into this country before the provisions of this Bill came into force. I think the right hon. Gentleman might land himself in some difficulty as to the indentification of the article.
  Mr. McKENNA: I will consider that point on Report.
  Amendment agreed to.
  Mr. McKENNA: I beg to move, after Sub-section (6), to insert the words,
  "Where it is proved to the satisfaction of the Commissioners of Customs and Excise that any article of a kind mainly used as accessory or component part which is liable to duty under this Section is imported for use for some other purpose, or is being, or has been, exclusively used for some other purpose, the Commissioners shall, subject to such conditions, if any, as they think fit to impose, allow the article to be imported free of duty, or repay any duty paid on importation as the case requires."
  This Amendment carries out, I hope satisfactorily, the object which my right
  1904
  hon. Friend opposite had in view in regard to the payment of drawbacks on accessories and component parts.
  Sir A. MOND: It is very difficult to understand the exact bearing of the words. I would ask why the word "exclusively" is inserted. I cannot quite follow the bearing of that word. At what point does the question of use come in? Would not the Section read better if the word "exclusively" were taken out?
  Mr. McKENNA: I will consider that.
  Sir A. MOND: I certainly think the Amendment meets a considerable part of the difficulty.
  Mr. WATT: Are we to understand that the new Sub-section is in substitution of Sub-section (7)?
  Mr. McKENNA: No, it is a new Subsection to meet an Amendment moved by my right hon. Friend at an earlier stage.
  Mr. PETO: I beg to move to leave out Sub-section (7).
  I move this with the object of making an appeal to the Chancellor of the Exchequer whether he will not reconsider the question of exemption from duty of all cars used for purposes of trade. The object of that omission is, I think, most laudable, but I thought at the time the Chancellor of the Exchequer promised a concession when the Resolutions were before the House that it would impose upon the Customs officials an almost impossible task, and, though I was quite sure that was the last thing he wanted to do, I hoped he would have found another method of dealing with this question. I do ask him, therefore, to consider the terrible difficulty that will be incurred in deciding whether a particular article is intended for trade use or not. I will only give one illustration to the Committee so as to save time. Take the case of the Ford car, which is ordinarily imported. It may be bonâ fide imported for trade purposes, say for a grocer to carry round his goods. It may be sold with somewhat suspicious suddenness and quickness to somebody else, who may use it for altogether different purposes. Considering the immense profit on such a transaction, on the amount of money invested, there is a considerable temptation to evade the imposition of the duty, and I would ask the right

  1905
  hon. Gentleman to consider whether, in order to carry out his own undertaking to differentiate between the duty on cars imported for luxury purposes and that on cars for trade purposes, it would not be very much better to increase the license duty on all cars used for luxury purposes, and to leave his tax as he originally proposed it in a simple form, in which it would be perfectly easy to collect, and with a minimum of trouble to the Customs officials? I only put forward that suggestion as one which seems to me to carry out the spirit of the undertaking which the Chancellor of the Exchequer gave to make a differentiation between the use of cars for trade purposes and the use of cars for luxury purposes. He may have considered it already, but I think it is possible that, in the interval which has elapsed since the Resolutions were before the House, he may have had warning already of the great difficulty there would be in working it, and the great labour and burden that would be thrown on Customs officials, and that he may decide to find simpler means to carry out his own intentions and the undertaking he gave to the House.
  Mr. McKENNA: I am sure that the hon. Gentleman does not think I could accept this proposal. This is only a temporary tax, and deals with matters which are likely to trouble us only in the course of the War. I hope he will accept the Clause as it stands.
  Mr. RADFORD: Under this proposal a man might obtain exemption from the tax on the ground that no importation is intended for the purpose of trade. I do not envy the lot of the Commissioners who will have to ascertain whether a thing is proved to their satisfaction that it really is imported for the purpose of trade. The Commissioners will necessarily depend on evidence tendered by interested parties, and it is extremely likely that unscrupulous traders will not tell the exact truth, while scrupulous traders will tell the truth. Therefore the tax will be unequally proposed to the detriment of the revenue, and to the advantage of unscrupulous traders in competition. I remember being in Casa Blanca, in Morocco, and I acquired some goods. Afterwards I was accosted by the Customs officers on the beach, and they asked that these duties might be assessed. Happily, I was in the company of an American friend as my guest. He had a conversation with the officers, and
  1906
  in the words of that Clause he proved to the satisfaction of the Commissioners that no duty was payable on those goods. Afterwards I asked my friend what he had done, because I did not understand the language in which he spoke. He replied, "I told the man to go to Hades, as the goods were mine." I was sorry to have been the innocent means of committing this fraud upon the authorities in Morocco which my unscrupulous but kind-hearted friend committed. I am sure these Commissioners would be liable to the same sort of fraud which will be perpetrated in all cases where the Treasury has to rely upon persons interested in the transaction.
  Mr. WATT: There is a small difficulty in this connection which does not seem to have occurred to the right hon. Gentleman. There is such a thing as a car imported which is bonâ fide for use both for trade and pleasure. It is well known that small tradesmen in our small towns utilise their cars for the delivery and conveyance of goods in the course of trade during four or five days in the week, and on Saturdays and Sundays, and during the holidays, these same cars are often utilised for pleasure. The same applies to commercial travellers' cars, in which they make visits and try to effect sales, but when the car is not used in the way of trade it is often utilised for pleasure. I do not know how the right hon. Gentleman proposes to deal with that difficulty.
  Mr. McKENNA: They must be "solely" used.
  Amendment, by leave, withdrawn.
  Mr. LOUGH: I beg to move, in Subsection (7), to leave out the words, "which are proved to the satisfaction of the Commissioners of Customs and Excise to be."
  I do not think we ought to throw such an invidious duty upon the Commissioners of Customs. They are not a Court of Law, and how can anything be proved to their satisfaction? I think it is very unsatisfactory that unduly heavy duties of this kind ought to be imposed, and I should like to hear how this proposal can possibly be carried out. There are heavy penalties embodied in the Bill, and these will secure that the declaration would be true. I think that would be a better way to proceed, instead of throwing this very invidious duty upon the Commissioners of Customs. I think there is a tendency all through the Bill to show that these Commissioners are set up to discharge Parliamentary duties

  1907
  to take the place of this House. In this particular Clause they are put to take the place of a Court of Law, and I think it is very undesirable that phraseology of that kind should be used.
  Mr. MONTAGU: Matters of this kind have to be referred to somebody who must be the judge as to whether the car is or is not constructed and intended to be used solely as a motor omnibus or motor ambulance. The declaration must satisfy somebody. Of course, there is an appeal to the Court, and there is nothing in this Bill which prevents a man exercising the common law right to appeal as to whether he is or is not liable under this Bill. It is quite a common thing for the Inland Revenue and the Customs authority to be inserted in Bills to decide whether a duty is chargeable or not.
  Amendment, by leave, withdrawn.
  Mr. L. WILLIAMS: I beg to move, in Sub-section (7), to leave out the words "bonâ fide" ["bonâ fide motor ambulances."]
  To me it seems ridiculous to talk about bonâ fide motor ambulances, because bonâ fide refers to the state of mind of the owners and not to the ambulance. How can a motor ambulance be bonâ fide? According to this Clause a motor omnibus can be imported without being bonâ fide, but a motor ambulance must be bonâ fide, a thing which has never been defined in the Bill. I have looked in various parts of the Bill for an interpretation to find out what is the difference between a bonâ fide motor ambulance and a malâ fide motor ambulance, and I can find no such definition anywhere. I am afraid the right hon. Gentleman in trying to draft for the first time a tariff has fallen away from his ordinary lucidity, and has put the words bonâ fide in the wrong place.
  Mr. MONTAGU: The intention which we had in putting the words "bonâ fide" was to apply this relief only to ambulances that were ambulances, and not to any car that might or might not be used as an ambulance, but that was not, strictly speaking, an ambulance at all. I agree that my hon. and learned Friend, because of his learning, is much more an authority upon phrasing than I am, or than any layman can be. One does not want to insult the poor ambulance, and therefore I am quite willing to accept the Amendment.
  Question, "That the words 'bonâ fide' stand part of the Clause," put, and negatived.
  Mr. L. WILLIAMS: I beg to move, in Sub-section (7), after the word "ambulances," to insert the words "or for military or naval purposes."
  There are a great number of these vehicles being used during the War for naval and military purposes which, but for the War, would be used for other purposes, and it does not require any words of mine to commend the Amendment to my right hon. Friend. Surely the Government does; not intend to penalise those who are using their motor cars for naval and military purposes. If they are intended to be solely used for naval and military purposes, why make a distinction between them and those intended to be used for ordinary trade purposes? All I ask is that these vehicles which are used for naval and military purposes shall be exempt from the tax, exactly the same as if they were used for purely business purposes. It cannot be said that their use for naval and military purposes is worse than if they were used for trade purposes. It is perfectly clear that this must be an oversight on the part of my right hon. Friend, and I would therefore urge that he should accept this Amendment and deal fairly with these people.
  Mr. MONTAGU: I hope the Committee will not accept this Amendment. There is no point in imposing these taxes if one has continually to make fresh exceptions. I think we have gone quite far enough in the matter. It would be very difficult to identify a car used for naval and military purposes, and I think my hon. Friend, as I have accepted his last Amendment, might withdraw this one.
  Amendment, by leave, withdrawn.
  Mr. LOUGH: I beg to move, in Subsection (7), after the word "ambulances," to insert the words "or fire engines, fire escapes, or similar appliances, utilised for the extinction of fires."
  There is a genuine effort in this Subsection to exempt from the tax cars which are used for trade and for certain other purposes, and certainly, if they are to be excepted, I think cars used for the extinction of fires might also be excepted. It would be a relief to the local authorities, and I hope my right hon. Friend will see his way to accept the Amendment.
  Mr. MONTAGU: I cannot suggest to the Committee that they should accept these words as they stand, but I would suggest that the right hon. Gentleman should withdraw this Amendment, and move, or let me move, after the word "husbandry," to insert the words "or by a local authority, as fire engines, or otherwise, for the purpose of their fire brigade service."
  Mr. LOUGH: I should be glad to accept that suggestion, which is a very reasonable compromise.
  Amendment, by leave, withdrawn.
  Mr. PETO: I beg to move, in Sub-section (7), to leave out the words "in connection with the conveyance of goods or burden."
  If these words are left out, the Clause will read "Motor ambulances, or in the course of trade or husbandry." I am mainly interested at this moment in husbandry, and the major use of the motor car in husbandry is not in the bearing of burdens or the conveyance of goods, but is in enabling farmers to carry on their business. Horses are becoming, and have necessarily become, very scarce in the country, motor cars are getting cheaper, and the general tendency is for farmers to attend the weekly market and the like by using a small cheap runabout car, where formerly you saw nothing but the ordinary farmer's gig. If the Treasury desire to exempt from this tax cars which are used in the course of business, or husbandry, and they limit it by the words "in connection with the conveyance of goods or burdens," then in the case of husbandry they are giving no relief at all. If it is the purpose of the Treasury to exempt the car bonâ fide used by the farmer in the course of carrying on his business, these words must be omitted. I am quite satisfied that there is just as good a case, and I think a stronger case, to be made out for the exemption of cars used by farmers in doing their regular work as there is for the exemption of cars used by the village grocer carrying round his goods. Cars are absolutely essential to the farmer owing to the scarcity of horses and labour throughout the country. I therefore hope most sincerely that the right hon. Gentleman will see his way to omit these words, and leave the Clause in the simple form that cars used in the course of trade or industry will be exempt from this tax. I am perfectly certain, although the point has not been raised in any other connection, that I am speaking in this matter in the interests of a very
  1910
  large body of men in the country, and if you do not exempt the cars which they use in carrying on a most essential industry in this country in time of war, after they have given so much assistance by surrendering their horses, you will not be carrying out the real purpose of this part of the Clause.
  Mr. MONTAGU: I do not think the Committee would be well advised to accept this Amendment. In the first place, it would enormously enlarge the scope of the exemption. Consider what the hon. Member wants us to do. This is avowedly, as far as the promoters are concerned, a temporary war tax. During the time of War the farmers have made considerable profits, and they are the very people who are likely to be tempted to purchase these cars as pure luxuries, and they could easily declare that they are used for the purpose of farming, because the farmer uses them to take him to market. I hope, therefore, the Amendment will not be pressed.
  Mr. LOUGH: I beg to move in Sub-section (7), after the word "husbandry," to insert the words "or by a local authority as fire engines or otherwise, for the purposes of their fire brigade service."
  Mr. LOUGH: I beg to move, in Sub-section (7), to leave out the words "which are so proved to be intended to be."
  Mr. MONTAGU: The same answer must apply to this as to the other Amendment on that point. If the right hon. Gentleman had been successful in persuading my right hon. Friend to leave out his previous words, he no doubt would have left out these also.
  Mr. L. WILLIAMS: I beg to move, in. Sub-section (7), to leave out the words,
  "Provided that in such cases as the Commissioners of Customs and Excise direct, cars, chassis, accessories, or parts, as the case may be, shall not be exempted unless they are marked or stamped in such manner as the Commissioners direct or approve with some distinctive stamp or mark showing that they are only to be so used.

  1911
  If any person obliterates or removes any such distinctive stamp or mark, or uses any motor car, chassis, accessory, or part which has been exempted from duty under this provision for any purpose other than the purposes therein mentioned, he shall be liable to a penalty of five hundred pounds: Provided that the Court may, if it think fit, in lieu of ordering the offender to pay a penalty, order that he be imprisoned with or without hard labour for a term not exceeding two years."
  We are told that the Commissioners of Customs will have the duty of directing that the cars which are to be exempt under this Sub-section shall be marked or stamped in a way that they may approve with some distinctive stamp or mark. And then it is provided that if any person obliterates or removes any such distinctive stamp or mark, or uses any motor car, chassis, accessory, or part which has been exempted from duty under this provision for any purpose other than the purposes therein mentioned, he shall be liable to a penalty of £500; and a Court will have the power, if it thinks fit, in lieu of ordering the offender to pay a penalty, to direct that he be imprisoned with or without hard labour for a term not exceeding two years. I would suggest that this is an extraordinarily loose way of dealing with this matter. Who is to decide whether a person has or has not obliterated any distinctive mark, or whether he is using any accessory or chassis for any purpose other than that mentioned in the Section? Are the Commissioners of Customs and Excise to decide it? They are the only persons who are here mentioned. Or is it to be decided by the magistrates in a Court of Summary Jurisdiction? Or can the accused person claim to be tried by a jury? These are matters which have been left out of this Clause, and I submit that the machinery should be set out perfectly plainly, so that people may know what tribunal is empowered to impose these penalties. I mentioned this point yesterday, and I am not sure whether I shall be in order in drawing attention to it now, as I have put down an Amendment since this discussion started. Perhaps I may be allowed to explain the object of that Amendment, and it will not then be necessary for me to do it later on. If my right hon. Friend will direct his attention to the first line of the third paragraph of
  1912
  this Sub-section he will see it laid down that if a person commits an offence, whether intentionally or not does not matter, whether innocently or not does not matter, but if he in fact obliterates or removes any distinctive stamp or mark he may be liable to this grave penalty, and the same applies to the use of any motor, chassis, or accessory, or any part which has been exempt from taxation. However innocently the man may have acted he will be liable to this penalty. Let me give an illustration. It may be an extreme case, but assume that a bicycle lamp has been imported without paying duty because the importer has made a declaration that he intends to use that lamp on his bicycle. Assume that the lamp by some accident—not by the man who imported it, but by somebody who bought it in the ordinary course—is used on a motor bicycle. If the Clause remains as it stands the person so using the lamp on his motor bicycle, however innocent he may be of any offence, will have rendered himself liable to this grave penalty. In the Amendment which I have handed in, I suggest that the provision should read, "If any person, with intent to defraud, obliterates or removes," etc. I am not tied to these exact words, but I think that in drafting a Section of this sort, care should be taken to see that an intention to defraud is brought home to the persons rendered liable to this penalty. That is a perfectly reasonable suggestion, and I think my right hon. Friend agrees that it is a reasonable suggestion. If so, I do not care what the form of words may be, as long as the liberty of the subject is safeguarded. I am quite sure my right hon. Friend does not really mean to send a perfectly innocent man to prison or fine him even £1, much less £500. The object I have in view in moving the elimination of these words is to elicit from my right hon. Friend some undertaking that, if not now, at all events when the Report stage comes, he will see to it, first of all, that the machinery shall be defined and that the tribunal shall be defined which is being vested with these powers. I should like also to see the common law right of appeal. My recollection is that that right of appeal is a statutory one. If my right hon. Friend is going to define the tribunal, I should like to know whether the right of appeal is to be given and to what Court. I should also like my right hon. Friend to add some words such as I have suggested, in order that an innocent man may not be penalised in this way.
  Mr. MONTAGU: I understand that my hon. and learned Friend does not object to the principle of marking—which seems to me the best method of working the Clause—but rather to the penalty included in the Clause. His doubts about that provision will be very much removed if he will be good enough to refer for one moment to the end of the Bill, Clause 43, in which it will be seen, as is common to all Finance Bills of this nature, that Part I. of this Bill shall be construed together with the Customs (Consolidation) Act, 1876. In that Act all the methods for enforcing penalties are set out in detail. The penalty will, of course, not be recovered in any case by the Commissioners of Customs, but only recovered after a hearing in the High Court with the usual rules as to appeal, or, in some cases, before a Court of Summary Jurisdiction. With regard to the words to which my hon. and learned Friend refers, under which he suggests that a man might be punished for doing something perfectly and completely innocently and accidentally, I may say that during the course of the time I have been in this House I have seen very many penal Clauses in very many Bills, and lawyers have always taken the point one way or the other. Either the word "knowingly" has been suggested, in which case I have heard Attorneys-General and Solicitors-General say they were not necessary, or I have seen the word "knowingly" put in, when somebody assured us that they were unnecessary, but perhaps to allay the fears of some people it was put in. I am advised—I defer to my hon. and learned Friend, because I know nothing of the law—that any Court interpreting any Section of an Act of Parliament would not hold a man guilty unless it had been proved that he had knowingly and deliberately done a thing. I think the words are unnecessary, but if my hon. and learned Friend would like words put in, I will certainly consult our legal advisers, and put words down upon the Report stage.
  Mr. HOLT: I desire to ask my right hon. Friend one question about this Clause. The first part of the Clause says that the duty shall be charged from the 29th September, 1915, until the 1st August, 1916. I want it to be made quite clear that there should be no punishment for any person who obliterates or removes these marks, or uses a car for any other purpose as provided by the Clause, after the 1st August, 1916. It is quite clear to everybody that these penalties and restric-
  1914
  tions upon the use of a car must disappear when the duty itself disappears. Is that made clear in the terms of the Bill? So far as I can judge, under the terms of the Bill a man might be told that these restrictions on the use of a car imported during, the period of the duty were permanent. If there is any doubt upon the matter, I would ask my right Hon. Friend to explain the position to the Committee. It ought to be made perfectly clear that all restrictions on the use of a car and all the obligations in regard to marking disappear when the duty disappears.
  10.0 P.M.
  Mr. DILLON: I go very much beyond the hon. and learned Gentleman who moved this Amendment. The penalty proposed to be inflicted by this Sub-section is grossly and scandalously excessive. I assume that it is drafted upon the precedent of some of the penalties now in existence for cases of smuggling, but I maintain that to seek to put the administration of this new and strange law of tariffs on the same footing as the ordinary case, well-known to all citizens of this country for the last 100 years and upwards, of smuggling say tobacco, spirits or whisky, or other well-known articles, is an outrageous thing. It will be a very long time before the public understand these regulations, all the more because they are so entirely novel, and this is unlike anything that has been proposed for the last 100 years in this country. [HON. MEMBERS: "No!"] When did we have a Bill proposed which was so full of complications and pitfalls for the ordinary man in the street? Let us take this case: As I understand it, a man can be seized upon if, supposing he was in a violent hurry and some emergency occurred, he should take a car which was only to be used for the purposes set forth in this Clause and should use it for his own purposes—I mean for going on some message or for some purpose outside the purposes named in the Clause. He might actually be put in prison for two years with or without hard labour. It is preposterous for us to enact a law putting it in the power of any Court to send a man to prison for two years with or without hard labour or to inflict a penalty of £500 for any contravention of the complicated and almost meticulous provisions of this Clause, either for obliterating these marks or for using certain parts of these machine's for some purpose other than that set out in the regulations of the Customs, of which nine-tenths of the

  1915
  inhabitants of this country will not learn for many years and which they will not be able to follow.
  I think, therefore, that the penalty ought to be upon a wholly different scale. It is not a penalty under the ordinary well-recognised Customs law which has been in existence for 100 years, and is thoroughly familiar to every member of the community. The character of the offence is wholly different from the offence of smuggling whisky or tobacco, which has always been committed by people who deliberately break the law, and generally break it for the purpose of defrauding the revenue on a large scale. Here a breach of the law may very often not be deliberate, and it may be, at all events, even if it is deliberate, not done for the purpose of defrauding the revenue at all, but for the purpose of some passing temporary convenience or a very innocent purpose. You could hardly dignify it by the name of defrauding the revenue, but simply someone under the pressure of some temporary temptation or convenience will do a thing which he knows to be forbidden by the law, not for the purpose of stealing money from the revenue, but for a temporary convenience. It is no use for the right hon. Gentleman to tell us that we can always trust the Courts of Law to administer the law mercifully and reasonably. We cannot trust the Courts of Law. The Home Office knows well that there are judges on the bench who by temperament and inclination always give the utmost penalty, and I know one or two judges—some of them now living even—whose judgments have been continually surveyed and cut down enormously by the Home Office. That is simply a question of temperament, and when we are passing a law we ought to see that we do not attach to offences of a trivial character—and the offences contemplated by this Clause are in most cases of a trivial character, and not for the purpose of defrauding the revenue to any considerable extent—extravagant and preposterous penalties. Therefore, I would urge upon the right hon. Gentleman that the penalty in this Clause ought to be reduced to, say, a fine of £50 or £100, with the alternative at the very outside of six months' imprisonment.
  Mr. RADFORD: I should like to support what has just been said by the hon. Member, and to appeal to my right hon. Friend to withdraw the Clause on the understanding that another shall be
  1916
  brought up at a later stage after the matter has really been considered. Meanwhile I would put this case to him. Suppose a grocer in a little village has imported a car solely for the purpose of trade and under certain circumstances has used it to drive 10 miles into the country in order to bring a doctor to his wife, who wants him badly. That man, under the terms of this Clause, is liable to a penalty of £500, or imprisonment with or without hard labour for a term not exceeding two years. Surely that is not what my right hon. Friend means, and I think it is not well to try to deal with this Clause now, when many conflicting considerations will occur to a great many Members, but to take the Clause back, to think over it clearly, to have legal advice, and to bring it up in a shape which will commend itself to the good sense of the Committee.
  Mr. DENNISS: I feel with my hon. and learned Friend (Mr. L. Williams) and also the hon. Member (Mr. Dillon) that two years' imprisonment with hard labour is the most severe sentence known to the law—it kills most people—and a fine of £500 seems excessive. There is a precedent in the case of persons who are exempt from a licence so long as, they do not use their cars except for the purpose of trade. If you take that analogy and have a penalty somewhat on that basis, only a little higher, because the licence on a car for trade would only be a sovereign or two, while this may be £30 or £40, you might make the penalty somewhere about £50 or six months' hard labour at the outside. It should be, of course, a deterrent, and you must not make it too light. Smuggling penalties have always been very high, though the offence may be small, in order that they may act as a deterrent. Most punishments are intended to act as a deterrent, and we wish this to be a deterrent, and it might be somewhat severe, but this seems to me to be going quite beyond the line. A very trifling breach of this Clause might lead to a very severe sentence.
  Mr. J. M. HENDERSON: I wish to point out a little incongruity in the Clause. Whereas the penalty is an absolute £500, the alternative is imprisonment, with or without hard labour, for a term not exceeding two years. It appears to me that under this if a poorish man were convicted there would be no option but to give him two years, or something less, penal servitude. You might give him a less term of

  1917
  imprisonment, but that would be the only alternative because he could not pay £500. I suggest that it should read, "a fine not exceeding £500 or not exceeding £100," which would be quite sufficient for this class of penalty. I believe there is a slight distinction between the jurisdiction in regard to fines and in regard to penalties.
  Mr. MONTAGU: This Clause was put in as the result of a request in the House of Commons. It was not in the Bill originally, and we desired to make this concession to those who oppose the Clause, and we have got to try and see that the Clause does not enable a great escape of revenue and a great fraud. The hon. Member (Mr. Dillon) and my hon. and learned Friend (Mr. Llewelyn Williams) have in mind cases of innocent people, who do innocent acts and who ought not to be punished with two years' penal servitude or a £500 fine. Of course they ought not, and they will not. The hon. Member (Mr. Dillon) has not much faith in the Courts of Justice. I am perfectly certain that in the case of the tradesman who got a doctor for his wife it is inconceivable that he should be sentenced to two years' penal servitude.
  Mr. RADFORD: He would be liable to it.
  Mr. MONTAGU: He is liable, but you must have a maximum penalty. Take the case of a man who deliberately goes to the Custom House, escapes duty on a car which he has imported, and has it marked, and then goes round the corner and, in order to cheat the revenue, takes off the mark and uses it for some other purpose. In that case two years' penal servitude is not too much. It is not a new offence. It is an old common or garden fraud that the man has been committing, with the wickedest purpose and with the fullest knowledge, and, therefore, you need for these cases a maximum penalty. I agree with my hon. Friend (Mr. J. M. Henderson), if the Clause is not clear that lesser penalties may be imposed, it ought to be made clear, and therefore I promise that words will be considered, with the assistance of lawyers before the Report stage, and at the same time we will consider the very grave speech made by the hon. Member (Mr. Dillon), but I would have the Committee bear in mind the maximum and not the minimum.
  Mr. T. C. TAYLOR: I should like to draw attention to the magnitude of the offence, even if we make it six months
  1918
  and £100. It is going to be an offence to use a piece or an accessory of a motor car, etc., which has been exempted from duty "for any purpose other than the purposes therein mentioned." That is to say, that if there is a bit of a lever or a small casting from a motor car that a man in the country wants to use for the purpose of bolting his door, he may not put it in the door because he is using it for some purpose other than the purpose for which it was imported, and because it has been stamped. Further, it is to be an offence "if any person obliterates or removes any such distinctive stamp or mark" from the part which has been exempted from duty. If he does so, he is subject to a fine of £500 or imprisonment with or without hard labour for a term not exceeding two years. It does not say if he wilfully or knowingly removes the distinctive stamp or mark with intention to defraud. In the course of the use of a motor car and of a chauffeur's repairs of a car he is continually apt with his hammer or screw key to wear the distinctive mark out. It does not say if he knowingly or wilfully does it with a view of evading the law he is to be liable, and it does not say that even if he does it for the purposes of another motor car in order to evade the law he is to be liable, but it broadly states that he is liable to these penalties if he obliterates or removes any such distinctive mark from a part which has been exempted from duty for any purpose other than the purpose therein mentioned. Some of these parts of motor cars when they are done with may not be useful for the motor car. There may be a piece of iron that may be of use for something else, but the local blacksmith may not take this piece of iron and use it in the forge for some useful purpose. How absurd! I suggest that the Government should take this Clause back and remodel it entirely.
  Mr. HOLT: I should be glad if the Chancellor of the Exchequer would give me an answer to a question. This duty, under the terms of the Act, will terminate on the 1st August, 1916. I want to know if it is perfectly clear that the restrictions on motor cars and the penalties for using a motor car in contravention of the Act will terminate on the same day on which the duty terminates. If a person brings a motor car into this country and takes advantage of this exception, will his car be free from all the restrictions and penalties imposed in this Act when the tax is off his car? That seems to me to be

  1919
  the common-sense position, but I want to know whether it is perfectly plain. I do not think it is. Words must be inserted to make it quite plain.
  Mr. McKENNA: I think the common-sense position is so obvious that my hon. Friend can rest quite happy on the point. The common-sense position is that when a tax ceases to operate the obligations also cease to operate.
  Mr. HOLT: Is that plain?
  Mr. McKENNA: It is quite plain.
  Mr. RADFORD: I think it has been made quite plain by the Financial Secretary to the Treasury that this Clause needs further careful consideration. I hope that in these circumstances he will accept the Amendment of my hon. and learned Friend and take back the Clause and bring up something which has been more carefully considered. He referred to the case that I put of a man who had a car which he had imported for the purpose of trade, and who uses it to drive 10 miles in order to fetch the doctor to his wife, who wants a doctor badly. In that case the man has committed an obvious infringement of the Act, and is not able to give the excuse that he did it unknowingly. He knew he was breaking the Act, and he broke it, and he would have been wicked in such circumstances if he had not done so. What right of appeal for mercy has that man got? He has no right, unless cases of that sort are provided for in the Act. That is one of the reasons why I submit that this Clause has never had any proper consideration. It needs very careful consideration. When you consider the great number of cases that will come in when you run all the way from motor cars to Jew's-harps, you will see that the matter wants careful consideration. I do appeal to my right hon. Friend to take the Clause back.
  Mr. L. WILLIAMS: I think that it would be far better for the right hon. Gentleman to eliminate these words and introduce a new set of words on the Report stage. If he finds that course impossible I have received an intimation from him that all the points raised in the course of this very interesting discussion shall be considered on Report stage.
  The CHAIRMAN: Does the hon. Member wish to withdraw his Amendment?
  Mr. WILLIAMS: If my right hon. Friend says that he cannot accept the Amendment.
  Mr. MONTAGU: I would like that some penalty should be brought in. So long as we keep in the Clause the option of a fine, and imprisonment for certain things for which imprisonment, I think, is necessary, I am quite prepared to consider a modification before the Report stage.
  Mr. WILLIAMS: I am glad that my right hon. Friend has mentioned the word "fine." Several hon. Members referred mainly to the question of penalties being fines. Will my right hon. Friend now say that he is willing to alter the word "penalty" to the words "fine not exceeding"?
  Mr. TAYLOR: Perhaps my right hon. Friend will also have in view that it should be made not quite so bald, so that if a person obliterates or removes it shall be knowingly done.
  Sir R. COOPER: I entirely agree with the right hon. Gentleman the Financial Secretary to the Treasury that there should be adequate penalties according to the offence for anyone who breaks the terms of this Clause, but as I read this particular Sub-section it seems to me that the Court adjudicating upon a man, to see whether or not he has been guilty of an offence under this Clause, has no jurisdiction to decide whether it is an accident or a very trivial case. The words in this Clause are "penalty £500." If £500 is to be the maximum, what is the objection to inserting the words "not exceeding"?
  Mr. McKENNA: That has been promised long ago.
  Mr. WILLIAMS: I beg to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. MONTAGU: I beg to move, at the end of Sub-section (7), to add the words,
  "If it is shown to the satisfaction of the Commissioners of Customs and Excise that any motor car, chassis, component part, or accessory has been, and is being, exclusively used for purposes which entitle it to an exemption from duty under this provision, the Commissioners may, subject to such conditions (if any) as they think fit to impose, repay any duty paid on the car, chassis, part, or accessory on importation."

  1921
  The hon. Baronet opposite had an Amendment on the Paper dealing with magnetos, sparking plugs, and other accessories. He withdrew that, and did not move a similar Amendment dealing with piano actions, and several other matters, because he was promised that the Government would move a Clause of a similar kind with the view to dealing with the difficulty of a man who wished to import an article which looked as if it were going to be used as the component or accessory of a motor car or a piano, but was in fact going to be used for something else.
  Mr. RADFORD: I beg to move to leave out Sub-section
  "(8) The Treasury may by Order exempt any articles mentioned in the Order which are liable to duty under this Section from that duty if they are satisfied that, having regard to the small value of the article, it is inexpedient that the duty should be charged."
  I move this Amendment on the ground that I wish to give the Chancellor of the Exchequer an opportunity of explaining the object, meaning and scope of the Subsection , and also on the ground that I have some objection to the Clause as it stands. I think it is an important indication of the intricacy and difficulty that there is in introducing a tariff into a system of legislation which does not contain any apparatus ready for the purpose. The terms of the Sub-section appears to me to give to the Treasury a dispensing power to enable it to determine exemption from the duty. That seems to me a function which ought not to be allowed to pass without protest. Therefore I should like to hear from my right hon. Friend what the Treasury intends to do. Are the Treasury to go through the articles which will be enumerated hereafter? I think they ought to have been enumerated in the Schedules in this Bill. Are the Treasury to form their own judgment on the spur of the moment whether such-and-such things shall be exempted, and such-and-such things shall be taxed? I know they have got some indication in the words of this Clause that they are to exempt articles having regard to their small value. That is an entirely relative expression, and it may have a different meaning applied to makers of musical instruments and other articles, on which
  1922
  unfortunately we have got to impose a tariff. Perhaps my right hon. Friend will be able to explain and justify this Sub-section, and will tell us why he himself does not exercise these functions. But I suppose he finds it too difficult to face, and he foists them on to the Treasury, who are going to legislate without any hint from this House, and at their own sweet will and pleasure.
  Mr. McKENNA: I do not make it a reproach to my hon. Friend that he was not here during the whole of the Debate, because I know him so well that I am perfectly satisfied he has been much better employed. This point was raised earlier by the hon. Member for Poplar (Mr. Yeo) in connection with the proposed duty on musical instruments, some of which he produced in the House. He pointed out that they were so trivial that they ought not to be subject to taxation.
  Mr. RADFORD: I had the advantage of hearing him.
  Mr. McKENNA: There is a proviso enabling the Treasury to dispense with the duty on trifling articles which would not repay the cost of collecting the duty. Mouth organs were mentioned in the course of the Debate. We do not propose to tax mouth organs. They would come amongst the articles of small value. We require a little latitude to deal with these matters on ordinary principles of common sense. I hope my hon. Friend will not press the Amendment.
  Mr. RADFORD: I want to know what "small value" means.
  Mr. WILLIAMS: Will my right hon. Friend give a schedule of exempted articles?
  Mr. LOUGH: The Chancellor's explanation instead of diminishing our difficulties increases them. If he had commercial knowledge it would be a great advantage in the office he occupies. He would know that some of these articles of small value are imported in vast quantities. Mouth organs may cost only a shilling or sixpence, but suppose you have a thousand gross of mouth organs imported?
  Mr. McKENNA: Deal with it with common sense.
  Mr. LOUGH: There is no common sense about this from beginning to end. If my right hon. Friend had not got rid of his common sense he would never have

  1923
  introduced this Clause at all; and not only has he said good-bye to common sense himself, but he has induced the Government to do the same thing. Do not, however, let us get general, or I may be called to order. I do ask the right hon. Gentleman what does he mean by saying that the Treasury may by Order exempt articles having regard to the small value of the article. There might be an immense importation of motor cars at 5s. from toys. Mouth organs also present difficulties. I quite sympathise with the right hon. Gentleman, as it is extremely difficult to get a tariff drawn up in a moment. We have no Schedule, and the Treasury takes leave to exempt any article they please. I think we ought to have a little more light on the subject, and I hope he will consider the matter between this and the Report stage.
  Question proposed, "That the Clause, as amended, stand part of the Bill."
  Sir A. MOND: The discussion of the Clause in detail has demonstrated even more clearly than the earlier discussions the difficulties and the unsoundness of the whole form of taxation which the right hon. Gentleman has introduced. As a matter of fact, it is only by appealing to us on the ground that we are at War and assuring us that because of that fact people are ready to do things now which ordinarily they would not be ready to do, he has been able to establish at all the imperfect machinery which he himself agrees would never be tolerated except under the exceptional conditions and in respect of a temporary tax. It is difficult at this time to resist arguments of that kind, and the right hon. Gentleman has successfully appealed to us to withdraw a number of important Amendments. But is it right for the Chancellor of the Exchequer to introduce such far-reaching new legislation which he knows is incomplete and unsatisfactory? After all, it is poor comfort for those who have to carry on their trade under these duties to know that because of want of staff and want of time the necessary machinery has not been established. The right hon. Gentleman has told us again and again that the reason why he cannot establish an Excise is that he has not the people and the machinery to do it. The same argu-
  1924
  ment as to want of time seems to me to apply equally to the Customs. As to the Excise, I think that in some of the large factories a method could have been devised requiring very little machinery and staff. As far as motor cars are concerned, the right hon. Gentleman had only to examine for three months the books of the few firms that were manufacturing motor cars to see what motor cars they had sold. I know that such a provision would not be in accordance with the time honoured elaborate regulations of the past, but neither are the Customs arrangements. I would ask the right hon. Gentleman to consider that point between now and the Report stage. The Chancellor of the Exchequer has made a number of Amendments in the Clause which certainly make it more possible to work; but as the Clause is a bad one and introduces principles which I regret and which we may all regret before we have finished, I am afraid I must still oppose it. I would ask the right hon. Gentleman when he has more time at his disposal to read the history of the American tariff. He will find repeated word for word eloquent passages similar to those that have been heard here—that after the War the tax would be withdrawn. The right hon. Gentleman knows as well as I do that when pledges are given how impossible it is to resist them. I still say, although we may bind ourselves, that we shall find ourselves in exactly the same predicament. The right hon. Gentleman, to-day, when I asked him to give a pledge on behalf of the Government, asked: "How can anyone give such a pledge?" Of course he could not. Nobody can give a pledge as to what will happen after the War. The whole illusion of the temporary nature of these taxes appears to me to bear a striking resemblance to similar arguments heard in other countries, and on other occasions. I hope I am not a Cassandra. I hope the prophecies I fear will come true will not come true. But if they do come true the right hon. Gentleman cannot say that we have not warned him, and warned the Free Traders in the Government. The responsibility is not now on our shoulders but on the shoulders of those who started the controversy.
  Mr. BRYCE: I have no great love for shibboleths, and I do not worship fetishes. So, if this scheme of Protection which the Government has introduced had been a scheme to give any revenue on a large scale, if it had been a 5 per cent, duty on imports I might have considered whether,

  1925
  in the interests of the country in a state of war, it would not have been desirable to give it a trial, and have let pass principles on which so far the fiscal system of this country has been based. I do not at all mean to say that there are not many circumstances in which a fiscal system, which, after all is a matter of convenience, and not one of moral principle, might not demand a change. It may demand a change after the War. It may demand a change now. But I do put it to the right hon. Gentleman whether it is worth while for him to sell his birthright for so small a mess of pottage? I hope he will not mind me comparing him with his blooming and bare face to Esau? Perhaps he is much more like Jacob? Perhaps he has got a little of the slimness of Jacob, though I hope not. But he really does not seem to me to have realised, now that we have come to the end of this Clause, that this famous attempt to introduce Protection has become an affair of shreds and patches. Now that he has dropped hats and plate-glass he is going on for the sake of one and a quarter millions of money, which is the expenditure of six hours of this War. Is it worth while to get an income of six hours and give your soul for it?
  The arguments of the two right hon. Gentlemen on the Front Opposition Bench have blown sky-high all the arguments of the Prime Minister, the Chancellor of the Exchequer, and the Financial Secretary. There is no vestige left of argument in the speeches of the right hon. Gentlemen on the other side. Their apology; the apology of the Prime Minister and that of the Chancellor of the Exchequer is that it is such a little one. That is a famous and well-known excuse. Lapses from principle, however, whether from moral principle, as in the case when the excuse was first used, or of political principle, as in the case of the right hon. Gentleman, are at all times equally to be deplored, because one never knows where lapses from principle, whether moral or political, and however small, may lead to. I hope, therefore, that even at the last moment the right hon. Gentleman will withdraw what I consider a disastrous Clause.
  Mr. DILLON: I have taken no part in the general discussion of this tariff, although I have been a very attentive and constant listener in the Debates. But I really do desire to say a few words on the matter. During the last ten years we of the Irish party have been frequently approached informally to join the Tariff
  1926
  Reform party and to go in for Protection, and I on more than one occasion in the past have taken the liberty of warning English Members that the policy of Protection has great temptations for the Irish. If the policy of Protection as outlined by Mr. Joseph Chamberlain were adopted it would undoubtedly put millions of money into the pockets of the Irish farmers. That bait was dangled before us on many occasions, and there are Irish Members of Parliament who have urged that view in Ireland, and at one time our party was considerably embarrassed by these attempts. Attempts were made to shake the confidence of the Irish people in the Irish party, because we would not join the Protectionist party. I think it would have been in our power, if we had joined forces with that party, and had been willing, in the words of the hon. Gentleman who spoke last, to sell our birthright for a mess of pottage, to put upon the necks of the democracy of this country this terrible yoke, but we refused to have anything to do with the Tariff Reform party.
  I am not at all so bigoted a Free Trader as many Members opposite used to be, and some of them still are, because I have always believed that there are certain periods in the development of nations when Protection is good; but I have always believed that to the people of England Protection is a curse and a ruinous policy, both politically and economically. I daresay if I lived in America I might have been a Protectionist. But I have listened to this discussion with an open mind, and I am greatly afraid that you have to-night, in the House of Commons, forged for yourself a yoke which none of us will ever see taken off the necks of the people of England. Every Protectionist system in the history of the world, so far as my knowledge goes, has grown up exactly as this. They have all been temporary taxes, or generally. Certainly they were so in America, and they were brought in in connection with emergencies, as in this instance. But the moment you bring in these duties great interests instantly grow up behind them, and you are faced with the irresistible claim that, having protected motor cars and one or two things contained in this Clause, there are equally deserving industries that are entitled to the same consideration. Already we have warnings from every side that we must have an immense tariff wall erected against Germany as a matter of course,

  1927
  and I am afraid that when this War is over, after what has happened, you will find that the walls of the fortress have been laid low and Tariff Reform will be triumphant. My real motive in standing up here to-day was this: let no man blame us if, having stood out for fifteen years against the great baits and temptations held out to us, because of our feeling of fellowship with the democracy of this country, our sympathy with them for all that they have done for our country and our cause, we refuse to sell their birthright or in any way to barter or traffic with this Protection. Let no Englishman blame us if, in the future, when we have seen what is happening now, we are tempted to stray from these straight paths and take these advantages when they are offered to us. I do not say that we shall do so, but if we do we shall be entitled to say in defence of our action that as long as the leaders of the Liberal party remained faithful to Free Trade in this country the Irish Nationalist party stood by them.
  Mr. McKENNA: There is no hon. Member of this House to whom I generally listen with more respect and agreement than I do to my hon. Friend who has just spoken. He always speaks with great feeling, and as I share his views on politics generally so very much, naturally I usually find myself in complete agreement with him. If my hon. Friend will allow me to make a slight criticism upon his remarks, it would be that his sense of proportion is not quite equal to his general powers. He has spoken of these taxes—[HON. MEMBERS: "Tariffs!"]—these tariffs, if you like—as if they were really the opening of a new policy and the dawn of a great change in our political system. I have listened to the Debate for two days, and in the whole course of the Debate I have not heard a single speech from a declared advocate of Tariff Reform in favour of these proposals.
  Mr. ANNAN BRYCE: Why should they?
  Mr. McKENNA: I cannot conceive that anybody who really desired to establish the principle of Protection in this country would begin with taxes like these. My hon. Friend spoke of building up new industries under the protection of high tariffs. Does he believe that, between now and the 1st of August next, while we are in the midst of a great War, any new industry in the manufacture of musical in-
  1928
  struments, clocks, watches, cinema films, or motor cars, is going to be established in this country? Not one of these industries can raise any new capital by a public company without the permission of the Treasury Committee. Does my hon. Friend really believe that any new development of the motor-car industry, or the clock industry, or the cinema-film industry, or the musical instrument industry, is going to obtain a claim upon Parliament for a continuation of the taxes because it has invested new capital in that industry between now and the 1st August next? Of course no such claim could be established. Not only do we not expect any new capital to be invested in those industries—
  Mr. TYSON WILSON: The Ford Company are doing it now.
  Mr. McKENNA: They are not investing our British capital, and so far as they bring over American capital to establish an industry here it helps us now.
  Mr. WILSON: It is a vested interest, though!
  Mr. McKENNA: Are we going to give them a new vested interest? Is is conceivable that any Chancellor of the Exchequer or any Parliament will hereafter say that a manufacturer has acquired a merit because in the midst of this great War, when we have no capital and labour to spare, he has invested new capital and new labour in a luxury industry? The proposition is inconceivable, and really it astonishes me to find Free Trade friends, with whom I so deeply and entirely sympathise in principle, resorting to arguments of that kind in order to oppose these taxes.
  Mr. DILLON: I trust that the right hon. Gentleman does not attribute to me any statement that I believe that he was deliberately intending to bring in Protection. I had no such idea.
  Mr. McKENNA: Oh, no, I am sure that my hon. Friend knows far too well that I should have no such object. I was dealing only with the argument that he had put forward that a claim would be established.
  Mr. PRINGLE: It has already been made.
  Mr. McKENNA: No.
  Mr. PRINGLE: I read a quotation today.
  11.0 P.M.
  Mr. McKENNA: No claim could be established, and no claim could or would be recognised. Let me ask the House to accept these taxes now. They are taxes introduced during the War, under the conditions of the War, for the purpose of meeting the particular difficulties with which we are confronted. They do not in any way prejudice or compromise either the Free Trade case or the Tariff Reform case. They leave all our old issues absolutely free. [HON. MEMBERS: "No!"] I am speaking on behalf of the Government. We put these taxes forward now not with the intention or with the claim that they will in any way stand as a prelude or a preface to Tariff Reform or as a denial or refusal of Free Trade. They are put forward on their merits for the occasion as temporary taxes which cannot be renewed except with the assent of Parliament year by year.
  Mr. OUTHWAITE: How is the right hon. Gentleman passing these taxes? He knows if the matter had been left to the free decision of the House of Commons the taxes would be rejected, and he is only carrying them because we are in a state of war, and in a time of war we must not embarrass the Government. But he is asking us to surrender great principles that we hold dear—not only principles of taxation, but principles of ethics also. When Mr. Gladstone swept away over a thousand taxes in his great Budget he said the word "Protection" was a miserable misnomer and they should call it a delusion or a fraud. His successor on the Front Bench to-day is telling the majority in this House to take part in defrauding and deluding the people of this country. It is at a time such as this that the Chancellor of the Exchequer should not make such a call upon us. At a time such as this he should try to maintain as high as possible the authority and esteem of the House of Commons in the community. Yet to-day we see him asking Liberal and Free Trade members to surrender principles they have advocated from one end of the country to another. He is asking them at this hour of peril and danger to lessen the prestige and authority of the House. The Government have lost very largely, I believe, the confidence of the country by such methods as these, and if we had without any controversy, without making clear our position, simply obeyed the mandate of the Government we should have done something to derogate for the
  1930
  position of the House—we should have done something which we least of all should do in these dark days.
  Mr. HOGGE: The Chancellor of the Exchequer takes apparently a very curious view of his own attitude towards his Free Trade friends. In his reply to the hon. Member, for East Mayo he expressed his great sympathy with his Free Trade friends. But that is not much consolation to his Free Trade friends if they are the corpse and he is the chief mourner at the funeral. The House will notice that many of his colleagues in the Cabinet who are certainly jointly responsible for the introduction of these controversial issues are not present to express their share in that sympathy. I do not know where they are unless they are holding a wake over the funeral of Free Trade. I cannot for the life of me see why the Chancellor of the Exchequer should not be perfectly honest with regard to the object of these taxes. Those of us who believe in Free Trade principles are quite convinced that every object which he desires to be secured could have been secured by the direct prohibition of imports of luxuries, and that it could have been achieved very much more easily and very much more quickly, even without introducing controversy. Those of us who were associated with the Chancellor of the Exchequer prior to the Coalition, or at any rate so far as I am concerned, I myself wish to put on record the fact that we do protest, and protest most strongly, against the way in which they have sold the pass on this question. My right hon. Friend may not like it put in that way, but that is the way in which many of us regard it. The Prime Minister's promise to the House has also been sold by the action of the Government on this question. So far as I am concerned, I shall again divide with those who desire to place our protest on the Division Paper of the House of Commons against this most iniquitous proposal on the part of the Cabinet, a proposal which they have no moral right to make, a proposal which, in making it, they are breaking a deliberate promise made to those who supported them and who have never grudged them support in every action they have had to take throughout the War.
  The man who deserves our sympathy is the Chancellor of the Exchequer. One has been amazed at the pathos of the position of him standing at that Box attempting to defend what he himself con-

  1931
  siders absolutely indefensible. I should rather have seen him resign the great position which he fills than that he should have had the discredit placed upon him in a Coalition Cabinet, which contains men who want these things done, of defending this in the House of Commons. That is all I wish to say. I do not wish to argue the point, but I wish it placed on record that what we feel about these taxes is that we have been absolutely betrayed in this matter.
  Mr. PRINGLE: I wish to join with my hon. Friend the Member for East Edinburgh (Mr. Hogge) in tendering sympathy to the Chancellor of the Exchequer. We all saw his accession to the great office with the greatest pleasure, and we regret deeply that on attaining the summit of his ambition he should have had to break with all the fiscal principles he has advocated in the past. Most of us have endeavoured to follow the speeches he has made in the course of these Debates, and there will be general agreement on both sides of the Committee that none of the arguments he has put forward will do anything to efface the impression of the very weighty warning put forward by the hon. Member for East Mayo (Mr. Dillon) this evening. The Chancellor of the Exchequer, might well give up the farce of suggesting that no fiscal principle is involved in these taxes. He knows well that such a principle is involved. It has been admitted from the Treasury Bench. It was admitted by the right hon. Gentleman the Secretary of State for the Colonies, who quoted, in the course of the speech he made earlier in these Debates, a statement which he alleged had been made by the President of the Board of Trade. What was the quotation he made from the President of the Board of Trade? That this, indeed was Protection, but that it was Protection tried under the very worst possible conditions. I suppose that when the Colonial Secretary quoted that he did so approving the expression of opinion, so that we have Government authority now for the view that these taxes are Protectionist taxes, and in so far as they are Protectionist taxes the case for Free Trade, so far as the fiscal practice of this country is concerned, has once and for all gone. It is needless for the Chancellor of the Exchequer to say these taxes only extend till August. No one is imposed upon by the suggestion. We all know that by 1st August the difficulties of the Chancellor of
  1932
  the Exchequer in regard to revenue will be far greater than they are to-day. Even although the War is over he will be pressed by demands for not only the expenditure of the War, but for the interest and sinking fund on the Loans which the Government have contracted; and, in view of the tremendous demands for revenue which will be made upon him, it will be absolutely impossible either for the present or for any future Chancellor of the Exchequer to give away a single shilling of revenue on 1st August next. So that from the revenue point of view he will have an unanswerable case for adhering to these duties.
  Not only that, but we have a far better case at present in resisting it. Now no machinery has been set up, but in the course of the months between now and 1st August machinery will be set up, and either my right hon. Friend or his successor will say, "Now we have the machinery-ready for collecting these taxes. We have collected during the present year so much revenue. Why should we abandon this source of revenue now after we have for the first time created the necessary fiscal machinery?" Indeed, I take the liberty of predicting that instead of any movement for withdrawal of these taxes the experience of the present fiscal year will be used as an argument for extending the principle. That is why we believe that, small as these taxes are and apparently unimportant as they are, a great deal has gone by the transaction which has taken place in the House during the past fortnight. We believe that there is little likelihood of a return to the old fiscal system of this country, and we regret especially that this step should have been taken by a Chancellor of the Exchequer and under the auspices of a Prime Minister who in the past have so signalised and distinguished themselves as champions of Free Trade. It does not soothe the sensations of those of us who regret this change to be told by the Prime Minister that he has been the St. Paul of the Free Trade propaganda. We remember that St. Paul was never the head of a Coalition Government. He said he was all things to all men. That was the farthest he ever went My belief is that the Government should now frankly drop all these pretences and candidly admit that they have for the first time adopted a Protective system, and that that Protective system is the price of the Coalition or part of the price—I do not know how much more is to be paid. Certainly

  1933
  many on this side at one time would have agreed that it was worth while paying some price, but the Coalition is now falling on evil days. When we see, as we have seen to-day, the first member of the Coalition who has made a breach in the ranks received with enthusiastic cheers in the House of Commons many of us on this side will agree that the Coalition is not worth the money.
  Mr. T. C. TAYLOR: I wish to say a word on the attitude of some of the more serious Members of the House, one or two of whom I see before me. I do not mean the hon. Baronet (Sir F. Banbury) of course, but certain Members of the House who do not often speak but who, when they do speak, speak very weightily. We had three of these Gentlemen last night sitting in judgment upon those of us who have dared to oppose this Protectionist policy, as we believe it to be, and I want to tell these Gentlemen that we are not treating this in any spirit of merriment. I have never spoken so often in this House as I have done during the last fortnight-even that is not as often as a great many people speak—and it is because I am compelled to do so, not in any spirit of levity, but because I feel that the serious interests of this country are at stake at the present moment. I do not think we have devoted too much time to the discussion of the first measure that introduces a difficult and protectionist tariff. Although it is only confined to six classes it is a tariff which involves the principle of setting up boards of arbitration and quasi-judicial methods of judging the value of things like you have to do in highly protected countries. One of the difficulties of this Clause has been to try to get at the real value. When you come to ad valorem duties it is very difficult indeed. Everybody knows that. That is one of the great difficulties that one is faced with in supporting a policy of this kind.
  One of the weighty hon. Members who spoke last night told us that it was right to criticise the Government on the War and things of that sort, but that we ought not to criticise the Government and ought not to oppose them when they had made up their minds on a matter vitally affecting the country, not only during the War but all time to come. That is a rather curious argument. I do not criticise the Government about the War, because I do not understand military matters, and I do not know circumstances that the
  1934
  Government know. Therefore, I do not feel qualified to criticise the Government on these military matters, but I do venture to say that there are many hon. Members who have more experience of the effect of tariffs than most members of the Government, and who understand a question like Free Trade. The facts and history of Free Trade are open to the whole world, and have been studied by them, and, therefore, I am justified in saying that, individually, we are as competent to offer judgment upon this great question, of Free Trade as any member of the Government. Our criticism is perfectly legitimate. It is legitimate because it is honest, and it is serious. I am moved by the deepest motives of loyalty to my country, and to our present system of raising revenue which, without any protective ad valorem duties, enables us to raise money, not only for ourselves, but to help our Allies. On the question of the War some of us refrain from criticism because we do not understand it, but we do understand Free Trade, and we have a perfect right to express the convictions upon it that our constituents sent us here to defend and explain.
  I was very much interested in what the Chancellor of the Exchequer said to-night in his most impassioned manner. I do not think he is much enamoured of the thing, but at all events his manner was very impassioned. He said these taxes are raised during the War for the purposes of the War and for temporary purposes only. Those were precisely the same reasons that were given by Senator Morrill and his supporters, like Mr. Stevens and others, in 1864, in connection with the Morrill Tariff, which laid the great foundation stone of the Protective taxation of the United States.
  Mr. McKENNA Mr. McKENNA made a remark which was inaudible in the Reporters' Gallery.
  Mr. TAYLOR: Not the same taxes. Well, these are only the beginning. Theirs are very much higher taxes. How were those taxes raised? They were raised even after Excise Duties had been imposed to balance the Excise Duties. Here, at the present time, we have a tax without excise, almost nakedly and unashamedly admitted to be Protective. The Chancellor of the Exchequer says it is not, and because he says so he expects us to believe it. I understand the right hon. Gentleman to say that at the end of the year, when these taxes expire, we shall be just

  1935
  as free as we are now, and they would have no protective effect. I differ from him entirely. I say that a 33 per cent, duty in any country in the world, and in any business in the world, would have a protective effect, if it had any effect at all. The tax on night caps has gone, but the tax on tin whistles and mouth organs is left. Once more I beg the Government and the Chancellor of the Exchequer to reconsider this question, and to ask whether it is worth while to infringe a principle, to which at all events their followers attach great importance, for the sake of £1,000,000—it has come down to that—out of £387,000,000. It is perfectly preposterous to say that this is necessary to regulate the exchange with the United States. If you went into the office of any bill broker or banker or export merchant with any such proposition you would be told that it was perfectly absurd.
  Mr. McKENNA: Who has said that?
  Mr. TAYLOR: I thought that the Chancellor himself had said that these taxes are to regulate the exchange with the United States.
  Mr. McKENNA: To help.
  Mr. TAYLOR: Then it is not worth the violation of a principle which is vital to our finance. The Chancellor does not intend the natural result of his action. What is the good of good intentions if the action is bad? I warn the Government that men in positions of responsibility must be held responsible for the effect of their actions as well as for their intentions. I prophesy of this Government and of the tax that is being proposed that it will be seen to be true of Governments as it is of men, as was said of old, that—
  "The evil that men do lives after them:
  The good is oft interred with their bones."
  Mr. JOHN: I intervene reluctantly in this Debate, but I am unwilling that it should close without something being said on behalf of Wales. I do not think that the Chancellor of the Exchequer can claim to speak for the Principality in what he says. The influence of these taxes on the matter of exchange is perfectly infinitesimal, and they are not worth the trouble which they involve. A great deal more can be done for the exchange by much less controversial and more legitimate methods. The right hon. Gentleman the Member for Swansea referred to difficulties placed in the way of our export
  1936
  trade with America as accounting for some of the difficulty. I am engaged in the export trade with America, and so I am doing all that is in my power to correct the exchange. The Government are encouraging a trade with America in raw materials which, on the balance of trade, has resulted in an indebtedness to America on the part of this country of £80,000, but they are discouraging a trade in a comparatively manufactured article which, if they permitted it to develop, would imply an indebtedness on the part of America of £2,000,000. So that the Government in their operations are accentuating the difficulties of exchange, and I believe that the Member for Rochdale has a very much more flagrant case in connection with textiles. My experience of the management of the trade of this country during the last fifteen months by different Departments has been that a great deal more enduring mischief has been done to the commercial interests of Great Britain by fifteen months of departmental management than by fifteen years of the most strenuous German and American competition.
  The second point to which the Chancellor of the Exchequer referred as the basis of this taxation was that he wished to curtail expenditure on luxuries, but it seems to me that a small increase of the Spirit Duties would have done a great deal more than will be achieved by these duties which are proposed. I see no reason why that should not have been done. The contention that it would not have produced additional revenue is not borne out, in view of the fact that the consumption of spirits increased very materially in the first six months of last year. The Financial Secretary to the Treasury lamented very much the expenditure upon pianos for cottage homes, but he dismissed the question of the expenditure upon alcohol in a sentence by merely saying that the consumption of alcohol had increased. As a matter of fact the expenditure upon intoxicants would have continued the fighting for fifty days—
  The CHAIRMAN: This is not the occasion for a discussion of alternative taxes.
  Mr. JOHN: That is what led me to refer to it. It is an alternative method of raising the funds which the Government require to carry on the War. I am opposed to these taxes, which I think are very much a breach both of good faith with the country and of the political truce which we have had since the outbreak of the War,

  1937
  and which eventually culminated in the formation of a Coalition Ministry. The Prime Minister and the Chancellor of the Exchequer have to deal with things as they are here, but we have to deal with the people and with actualities, and the Government will be judged rather by their deeds than by their words. I regret that the abandonment of Free Trade principles has been decided upon under present conditions. I think that the advancing of Free Trade principles for discussion at this moment is most inopportune, seeing that we are involved in an international struggle with militarism and Protection, which are inseparable. We have heard that the policy of Protection is very much at the base of German politics and militarism, and this entire international struggle is—
  The CHAIRMAN: I am afraid the hon. Member has mistaken the occasion. This is supposed to be a businesslike discussion on the Clause as now amended in Committee, which is not the occasion for a general review of the whole of the circumstances. The hon. Gentleman should address himself to the question, "That the Clause as amended stand part of the Bill."
  Mr. JOHN: I quite appreciate that an other occasion will be more suitable, but I felt when we were dealing with a Clause which covers the whole of these duties that it would be permissible to challenge on the broadest grounds the entire policy. I had better reserve my remarks.
  Mr. DUNDAS WHITE: I venture to think that those who have received so much of what they want might well allow those who feel that they have not had fair play to make their protest and state their opinions. I would particularly like to say about this Clause that it is to me a matter of deep regret that at this stage, and in the middle of the great War in which we are engaged, the present Coalition Government should have thrown this apple of discord into the midst of a House which before these proposals were made was united on all sides as it has not been for a long time past. That to me is one of the most serious features of the situation. It was apparent from the time these proposals were introduced, from the first day of the Budget, that they would give rise to serious trouble. They have caused a serious rift in this House, and that rift threatens to grow wider and wider. From
  1938
  the international aspect it is to my mind a, most serious matter, and I would really ask the Chancellor of the Exchequer if he would not bring before his colleagues the result of these Debates and consider whether it would not be right before we reach the Report stage for the Government to decide to abandon these proposals and not to carry them further—at all events in this Finance Bill. I put that very seriously to him. It has been the experience of those who have listened to the Debates here again and again that when someone has risen to make a criticism of a proposal on its merits he has been met by an appeal to the authority of the united Coalition Cabinet. It has been experienced again and again also when various criticisms have been passed as to what the effect of the taxes will be, we have been told what the intentions were. What this House has got to consider is not the intentions of the Government in introducing a tax, but what the effect of that tax will be. After all, the House of Parliament is the final place where the character and effects of taxes can be discussed. I would like to assure the House that those whose opinions I have shared in this matter as well as myself have taken a very serious view of this situation. We consider when new taxes are proposed they should be most thoroughly thought out, and at a critical time like this sound practice in introducing taxation is as important to the future welfare of the country as sound operations in the field.
  Mr. TYSON WILSON: I would not have risen only that I interrupted the Chancellor of the Exchequer when he was replying to the previous speaker. He seemed to scout the idea that a motor manufacturing undertaking might grow up in this country. I suggest that the Ford Manufacturing Company, which is an American company, were lying down plant to increase their output of motor cars in Manchester. He said that the company could not raise money in this country. I am given to understand that the Chancellor of the Exchequer claims to know something about finance. I do not know whether that carries with it that he is a financier. From my limited knowledge of what is done in connection with the raising of capital, I am under the impression that the Ford Company can issue shares in America and sell the shares in this country. If they can do that, the Ford Company can get an

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  immense amount of English capital in that way. I have quite an open mind with regard to these taxes. I know that money is required, but when the taxes are whittled down to the value of £1,000,000 for the year I am very doubtful whether I ought to give them my support or not. I am rather inclined to think that the Government would be well advised to drop the taxes altogether. The one thing that
  Mr. LOUGH: I beg leave to move, "That the Chairman do report Progress, and ask leave to sit again."
  I hope that my right hon. Friend the Chancellor of the Exchequer will not ask us to go on any longer. We have had a very long sitting, and I think we have worked pretty hard. He will make quite as much progress as otherwise with his Bill if he meets us in this request, and does not ask us to go on.
  Mr. McKENNA: I think my hon. Friends will agree that they have not been hard pressed. Yesterday we did not go beyond Eleven o'clock. I think we might proceed a little longer, say up to Clause 16.
  impressed me in the Chancellor of the Exchequer's argument was that whenever he got into a tight corner it was "War, war, war!" As a matter of fact, the right hon. Gentleman has been using asphyxiating gas throughout the Debate.
  Question put, "That the Clause, as amended, stand part of the Bill."
  The Committee divided: Ayes, 78; Noes, 26.

  Division No. 15.]

  AYES.

  [11.40 p.m.

  Acland, Rt. Hon. Francis Dyke

  Gulland, John William

  Prothero, Rowland Edmund

  Agg-Gardner, James Tynte

  Hardy, Rt. Hon. Laurence

  Pryce-Jones, Colonel E.

  Ainsworth, John Stirling

  Haslam, Lewis

  Randles, Sir John S.

  Amery, L. C. M. S.

  Helme, Sir Norval Watson

  Rea, Walter Russell (Scarborough)

  Banbury, Sir Frederick George

  Henderson, Sir A. (St. Geo., Han. Sq.)

  Rees, G. C. (Carnarvonshire, Alton)

  Barran, Rowland Hurst (Leeds, N.)

  Hope, James Fitzalan (Sheffield)

  Roberts, S. (Sheffield, Ecclesall)

  Beauchamp, Sir Edward

  Jardine, Ernest (Somerset, East)

  Robinson, Sidney

  Beck, Arthur Cecil

  Keating, Matthew

  Rothschild, Lionel de

  Benn, Arthur Shirley (Plymouth)

  Levy, Sir Maurice

  Rutherford, John (Lanes, Darwen)

  Bentham, George Jackson

  Lewis, Rt. Hon. John Herbert

  Samuel, J. (Stockton-on-Tees)

  Bowerman, Charles W.

  Lloyd, George Butler (Shrewsbury)

  Samuel, Samuel (Wandsworth)

  Boyton, James

  MacCaw, William J. MacGeagh

  Scott, A. MacCallum (Glas., Bridgeton)

  Coates, Major Sir Edward Feetham

  Macleod, John Mackintosh

  Shortt, Edward

  Collins, Sir Stephen (Lambeth)

  Macnamara, Rt. Hon. Dr. T. J.

  Spear, Sir John Ward

  Craik, Sir Henry

  McKenna, Rt. Hon. Reginald

  Stewart, Gershom

  Currie, George W.

  M'Neill, Ronald (Kent, St. Augustine's)

  Talbot, Lord Edmund

  Dalrymple, Hon. H. H.

  Mason, James F. (Windsor)

  Thorne, G. R. (Wolverhampton)

  Davies, Sir W. Howell (Bristol, S.)

  Meehan, Patrick J, (Queen's Co., Leix)

  Touche, George Alexander

  Denniss, E. R. B.

  Montagu, Rt. Hon. E. S.

  Valentia, Viscount

  Dougherty, Rt. Hon. Sir J. B.

  Mount, William Arthur

  Wilson, Rt. Hon. J. W. (Worcs, N.)

  Duffy, William J.

  Munro, Rt. Hon. Robert

  Wilson, W. T. (Westhoughton)

  Duke, Rt. Hon. Henry Edward

  O'Brien, Patrick (Kilkenny)

  Wortley, Rt. Hon. C. B. Stuart-

  Duncan, C. (Barrow-in-Furness)

  O'Neill, Dr. Charles (Armagh, S.)

  Yate, Col. C. E.

  Duncan, Sir J. Hastings (Yorks, Otley)

  Pennefather, De Fonblanque

  Younger, Sir George

  Fell, Arthur

  Perkins, Walter F.

  Ferens, Rt. Hon. Thomas Robinson

  Peto, Basil Edward

  TELLERS FOR THE AYES.—Mr. G. Howard and Mr. Bridgeman.

  Field, William

  Pollock, Ernest Murray

  NOES.

  Arnold, Sydney

  Holt, Richard Durning

  Radford, G. H.

  Bryce, J. Annan

  John, Edward Thomas

  Taylor, Theodore C. (Radcliffe)

  Byles, Sir William Pollard

  Jones, H. Haydn (Merioneth)

  Toulmin, Sir George

  Clough, William

  King, Joseph

  Watt, Henry A.

  Denman, Hon. Richard Douglas

  Lambert, Richard (Wilts, Cricklade)

  White, J. Dundas (Glasgow, Tradeston>

  Esslemont, George Birnie

  Lough, Rt. Hon. Thomas

  Williams, Llewelyn (Carmarthen)

  Goldstone, Frank

  Mason, David M. (Coventry)

  Harvey, A. G. C. (Rochdale)

  Needham, Christopher T.

  TELLERS FOR THE NOES.—Sir A. Mond and Mr. Pringle.

  Henderson, John M. (Aberdeen, W.)

  Outhwaite, R. L.

  Hogge, James Myles

  Price, C. E. (Edinburgh, Central)

  Mr. LOUGH: I really do hope that more consideration will be given to the House. It is most unfair. We are not so well treated by the Press now even if we work reasonable hours. Clause 14 is the most monstrous Clause I ever saw in a Finance Bill. Parliament is asked to abrogate its powers to a Commission we scarcely know here, and we ought not to be asked to discuss that Clause, pushed as it is into the middle of this Bill at this hour of the night, when the attention of the country cannot be drawn to it at all. We are only meeting on three days a week; if we are not doing enough work let us meet on four or five days.
  Question put, and negatived.

  CLAUSE 13.—(Discontinuance of Duties on Certain Articles in the Manufacture of which Spirit is Used.)
  Ordered to stand part of the Bill.

  CLAUSE 14.—(Restriction of Delivery of Goods from Bond.)
  (1) During the continuance of the present war and for a period of twelve months thereafter, the Treasury may, by Order, authorise the Commissioners of Customs and Excise, during any period named in the Order not exceeding three months, to refuse to allow the delivery of goods or commodities for home use from ship's side or a warehouse on payment of duty in any cases where deliveries are demanded of amounts exceeding the deliveries which appear to the Commissioners to be reasonable deliveries in the circumstances.
  (2) Any refusal of the Commissioners of Customs and Excise within one month before the twenty-first day of September, nineteen hundred and fifteen, to allow the delivery of goods or commodities is hereby confirmed, and shall be as valid as if an Order of the Treasury had been in force under this section.
  Where, by reason of the refusal of the Commissioners of Customs and Excise within the period aforesaid to allow the delivery of any goods any person has been prevented from performing any contract for the sale of, or otherwise in connection with, the goods in accordance with the terms thereof, that person shall be freed and discharged from all actions and proceedings under the contract for or in respect of his failure to perform the contract so far as due to the reason aforesaid.
  Mr. LOUGH: I beg to move, in Subsection (1) to leave out the words "and for a period of twelve months thereafter."
  I do not know whether any of the members of the Committee notice the extraordinary character of this Clause. I do not believe any Government ever introduced to the House of Commons, certainly not without notice, such an extraordinary proposal as this one which has been flung at us. I think the attention of very few Members has been drawn to it because there have been other such exciting matters in the Budget.
  Mr. McKENNA:It was announced in the House of Commons.
  Mr. LOUGH: Yes, it was announced that you would make adequate provision for a most illegal act.
  Mr. McKENNA: This Clause.
  Mr. LOUGH: The charge is that you and the Treasury through the Commissioners of Customs—
  Mr. McKENNA: You said without notice.
  Mr. LOUGH: I am maintaining that notice was not given it would be in the middle of this Clause. When my right hon. Friend was challenged for having committed a perfectly illegal act—he said he knew it was illegal, and that was strong language for the Chancellor of the Exchequer. Law makers ought not to be lawbreakers. His pride ought to make him observe the law and not to break it in the outrageous circumstances to which I have referred. He said he would bring in an Act of Indemnity to obtain the approval of the House for what he has done. Quite so, but this is not doing that. The Chancellor of the Exchequer has pushed a Clause in this Bill to treat important matters quite away from the taxation of the country, and brings it on at midnight when no proper attention can be given to it.
  It has been the practice of this Parliament from time immemorial that no burdens should be laid on the people of this country except with the consent of Parliament. I am aware that this Clause does not lay burdens on the people except indirectly, but what does it do? It says that when this House has fixed the duty at which anybody can remove goods from bond, the right hon. Gentleman himself and his Commissioners of Customs can interfere and say that although Parliament has fixed the terms on which a thing may be removed from bond, it shall not be removed, and he can keep it there for three months. My right hon. Friend could interfere with any commodity that comes into this country, and he could say, "I shall not allow you to remove it from bond." This power is not necessarily confined to articles on which duty is levied, and the effect of the Clause, if passed, would be that either the Treasury or the Commissioners of Customs might make what regulations they like affecting the trade of this country. I know it is difficult to draw the attention of the House at this late hour to the great principle involved here.
  I may point out that all the great import trade of this country is carried on by means of public auctions and market terms in London, Liverpool, Hull, and other places, and if you interfere in this

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  way with the principle you will upset the market terms in every one of the ports throughout the land. The right hon. Gentleman has also authorised others far removed from the Commissioners of Customs to interfere, and now warehouse-keepers in every port of the country are allowed to use their discretion as to whoso goods they will delay. In many cases, often without the consent of the Customs authorities, very questionable steps were taken by these warehouse people, and a great crisis was caused in trade which caused losses of tens of thousands of pounds to the traders of this country. Everything now seems to be excused by the fact that we are in a state of war. This Clause asks that Parliament should deliberately allow this sort of thing to be done at the option of the Lords of the Treasury by the Commissioners of Customs, and this is a dangerous innovation to admit especially in such wide terms as are involved here. The Amendment is to leave out the words "for twelve months after the War." If during the War, or during any emergency this may be necessary, why should it be necessary for twelve months after the War? Why should we be asked in the middle of the night to abrogate powers of this House which it has always most jealously guarded and let a great innovation like this be brought about in the dark? If such drastic powers are asked for, they should certainly not exceed the duration of the War, and that would be the effect of this Amendment.
  The DEPUTY-CHAIRMAN (Mr. Maclean): I have allowed the right hon. Gentleman to open this Amendment rather widely, but he must bear in mind that he has made a speech which would have come more properly on the question that the Clause stand part of the Bill.
  Mr. McKENNA: Nobody listening to the speech of my right hon. Friend would have the slightest idea what this Clause is intended to deal with. The one subject which he left entirely out of contemplation was the only subject matter which I wish to bring before hon. Members. The reason for this Clause is that the practice of Forestalments had grown to such a hideous and disgraceful extent that I felt bound, although the law was not yet in my favour, to forestal the law relying upon the equity of Parliament for an Act of Indemnity. The proceedings of forestallers have been scandalous, and the statement of the right
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  hon. Gentleman would only have been complete if he had been good enough to describe to the Committee some of the things which take place under forestalments. I would like to tell hon. Members what happens. When my right hon. Friend the Minister of Munitions (Mr. Lloyd George) as recently as last May, introduced the last Budget before the present Budget, it so happened that the forestallers at that time were caught.
  Mr. LOUGH: What do you mean by saying that they were caught?
  Mr. McKENNA: Because there were few duties in the Budget. What happened? They forestalled to the extent of £7,000,000 sterling. They would have defrauded the revenue or the public—
  Mr. LOUGH: Why do you say that they would have defrauded the public?
  12.0 M.
  Mr. McKENNA: Well, I think that they would have done. I think that it is defrauding either the revenue or the public, and generally both. What they do is this:
  They take out of bond dutiable articles in excess of their ordinary trade requirements; they pay upon these articles the lower scale of duty and from the moment the increased duty is imposed these traders sell the articles to other traders and to the public at an enhanced price, including the higher duty.
  Mr. LOUGH: That is a very serious charge—a monstrous charge.
  Mr. McKENNA:' Does the right hon. Gentleman deny it?
  Mr. LOUGH: In spirit, I absolutely deny it.
  Mr. McKENNA: Forestalments have been the subject of comment by every Chancellor of the Exchequer who has introduced a Budget. He has, indeed, had to estimate in every Budget for loss of revenue by reason of forestalments, and sometimes it has been a matter of congratulation that the forestallers have made a mistake. I did not mean that they should have an opportunity of making a mistake this time, and when I found that the withdrawals began to be in excess of the ordinary trade withdrawals I gave instructions to stop them, feeling confident that my fellow Members would give me an indemnity and justify my action in preventing the Treasury being swindled out of its dues.
  Sir G. YOUNGER: I sympathise with the desire of the Chancellor of the Exchequer to do something to limit the extent to which forestalment has been carried on in some cases. I think that in the exceptional circumstances the right hon. Gentleman probably acted wisely in taking certain steps to prevent that. But at the same time he inflicted great hardships on perfectly innocent people who had no desire to forestall. It was at the very time when there was an enormous amount of fruit to be made into jam, and the jam makers were prevented getting the necessary amount of sugar, for, although it was required for trade purposes, the amount needed was in excess of the average withdrawals. It was most unfair so far as they were concerned. I mention this to show that there may be some very hard cases affecting people whose only desire is to carry on a legitimate business in a legitimate way.
  Undoubtedly the Chancellor of the Exchequer was quite right in calling attention to the large amount of forestalment which has taken place recently in connection with some of our budgets. It certainly did take place in the case of the Budget of 1909—in the matters of spirits. I do not know that I have much sympathy with the right hon. Gentleman (Mr. Lough) in that connection, and I will tell him why. I remember the 1909–10 Budget very well, and I remember the way in which the Clauses were forced through the Committee. My right hon. Friend had a lot to do with it. He was, I believe, a Member of the Government of that day. It was not at midnight we were called upon to pass these Clauses; it was generally at 6 a.m., and when we complained the right hon. Gentleman showed very little sympathy with our objections to dealing with such important questions at such an unholy hour. I do not think, therefore, he has any right to complain that the Chancellor of the Exchequer is asking us to pass these Clauses at twelve o'clock. We used to consider ourselves extremely fortunate if we could get off to bed at 3 a.m. It was a pretty strong order for the Chancellor of the Exchequer to take the action he did regarding withdrawals from bond, but under the exceptional circumstances I shall support him, although I feel that his regulations might have been made a little more elastic.
  Mr. J. M. HENDERSON: My right hon. Friend says that every Chancellor of
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  the Exchequer has found himself up against withdrawals. Of course, if you have indirect taxation, and people say that a certain tax is sure to be put on, everybody who deals in that article will come forward and draw it out. I remember distinctly that under the 1909 Budget there was a forestalment of the tax on whiskey, and there was one Member of this House who made a large sum of money by withdrawals. You cannot help that.
  Mr. C. DUNCAN: Oh!
  Mr. HENDERSON: The hon. Member may say "Oh!" and that if people withdraw the stuff they should be made to pay. You do not think of the honest people who are doing their ordinary business. This is the first Chancellor of the Exchequer who has tried to get the best of people who withdraw by doing an illegal action himself.
  Mr. DUNCAN: Quite right!
  Mr. HENDERSON: A firm I know paid the duty and held a receipt for it at the beginning of September. The firm could not get the goods which they were waiting to manufacture. It was their ordinary quantity, but they could not get it. They wrote to the Customs, but received an evasive answer. They wrote threatening proceedings, and still received evasive answers, and the appearance of this Bill is the first answer they get. That was an illegal action. It ought to be above the dignity of any Chancellor of the Exchequer to do an illegal thing, and then come to this House to whitewash him. That is my view of what the British Government should do, and my notion of equity and justice. I do not think the Chancellor of the Exchequer should avoid what he cannot help, and never can help. On the 5th April, or whenever a tax is passed, there must be always some time when the public will be talking of some duty that is likely to be imposed. It is very natural that a man with money should anticipate that and withdraw. There is another objection to the way that the Customs dealt with this withdrawing.
  The DEPUTY-CHAIRMAN: The hon. Member is now making a speech in his Amendment to leave out Sub-section (2). If the general Debate is going on, I shall feel quite justified in confining any subsequent remarks on Amendments

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  literally to those Amendments, because the general Debate will then have been taken. It just shows how unwise it is very often for the Chairman to allow a little latitude, because the Debate is now perfectly general, and there is not the slightest reference to the Amendment.
  Mr. LOUGH: On a point of Order. The Chancellor of the Exchequer did not make the slightest allusion to my Amendment, but took a point quite remote from it. He paid no attention to the Amendment at all, but simply made an insulting speech. [HON. MEMBERS: "Oh, oh!" and "Order."] Certainly it was a monstrous speech.
  The DEPUTY-CHAIRMAN: I am sure that the right hon. Gentleman, with his experience of the House, will at once withdraw that.
  Mr. LOUGH: I readily withdraw. At any rate, he made a very malignant attack.
  The DEPUTY-CHAIRMAN: I cannot allow that to pass.
  Mr. LOUGH: He dealt with some harshness against a section of the community who rendered the greatest service to the Treasury and State, and who should not have been recklessly attacked. The Chairman refused to allow the Subsection to be omitted, which would have permitted a general debate, and I was nearly confined to the point. I would ask you if it would not be better to confine ourselves to our Amendment.
  The DEPUTY-CHAIRMAN: The only safe course is to confine remarks to the Amendment.
  Mr. HENDERSON: I quite agree and I wish the Chancellor of the Exchequer had followed that course. He did not say a single word to the point of the Amendment. The point of the Amendment is whether this should go on for another twelve months after the War. My right hon. Friend did not give the slightest ground why it should be continued twelve months after the War. He spoke on the general subject, and I was following him. During the War they would like to get in as much money as possible, legally where they could, illegally where they could not, and justify themselves after, but he has not given us any reason, so far as I can see, why that should be continued for another twelve months after the War. It
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  is on that point that, I support my right hon. Friend. It may be necessary for the War, but I do not think it is, and I do not think it is dignified. It would be not only undignified but very wrong to continue it.
  Mr. LOUGH: We have not had a word of answer to the Amendment.
  Mr. McKENNA: I will give the answer if my right hon. Gentleman is anxious for it. It is because the possibility of a heavy increase of duties may exist even after the War. We shall have very heavy charges to bear. It is impossible to say what taxes may or may not be continued.
  Mr. KING: I really think we ought to be better treated by the Chancellor of the Exchequer. We have really had nothing whatever in the way of support for the position he has taken up. For instance, he told us he could give scandalous instances of forestalling, but he has not given us one.
  The DEPUTY-CHAIRMAN: I have already intimated to the Committee, and the Committee, I think, very generously supported me, that the remaining discussion should be strictly confined to the Amendment.
  Question, "That the words proposed to be left out stand part of the Clause," put, and agreed to.
  Mr. LOUGH: I beg to move, to leave out the words "three months" ["not exceeding three months"] and to insert instead thereof the words "fourteen days."
  I would ask the Committee to give me as much latitude as they can because it is impossible to make the Amendment understood owing to the absence of any explanation of the Clause at the beginning and owing to our having been prevented from discussing the subject generally. The point of the Amendment is that the Commissioners of Customs and Excise during any period named in the Order not exceeding three months may refuse to deliver the goods. This enables me to make my answer, which can very easily be given when the whole subject is opened up, to the attack which has been made by the Chancellor of the Exchequer. Merchants do not have this forestalment any more than anyone else. A very different statement was made a few months ago.
  Mr. McKENNA: No.
  Mr. LOUGH: They were charged with defrauding the revenue.
  Mr. McKENNA: Only some persons. By no means all merchants. Only some.
  Mr. LOUGH: My right hon. Friend's conscience is beginning to strike him. There were no qualifications put in then. [HON. MEMBERS: "Yes."] It was treated as a general practice of traders. [HON. MEMBERS: "No."] I am very glad the House is getting round to the same view. We shall gradually get the whole thing explained. My Amendment is simply that these autocratic powers shall not be used for three months. Let the Committee think how these difficulties can be prevented. Parliament sits seven or eight months in the year. A Minister, a Chancellor of the Exchequer can come down any day and alter any duty on 24 hours' notice, if he gets the consent of the House. If the Chancellor of the Exchequer wishes to change any duty he has only got to get the consent of the House to it, and it is done. What is proposed now is not to give the Treasury or the Customs authorities power to change the rate of duty—although we may come to that, perhaps, in a few weeks or months, and I would rather have that than the Bill in its present form—but to provide that for three months these Commissioners of Customs may entirely refuse to give a man his own property. They may say: "We will not give you what you want. We will not give you what Parliament says you are entitled to get. We will shut the whole thing up for three months and cause all sorts of confusion." I move this Amendment for the sake of certainty, and to enable the community to get on with its business instead of this waste and expense. I put the period at 14 days. I think it would not be unreasonable to make it 48 hours. All that is wanted is to put this matter right.
  I shall have an opportunity in other Amendments of showing how essentially reasonable is the attitude of the trade; but I must confine myself to this Amendment. If the Government of this or of any country wishes to change a duty, it does change the duty. Say there is a duty of Is. per lb. on tea to-day; make it 2s. to-morrow; put a notice up giving warning that the duty is to be 2s. Let that be done legally, and the trade will not object to it. The trade only asks to be fairly treated under the law. I am speaking of working against the illegality of those
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  who want to alter the law by the methods which I have described. I suggest that there are easy methods which could be carried out constitutionally without involving anyone in loss. The Government could cure the evil if they like, but they choose rather to perpetuate the evil. Do not keep us in a state of suspense for three months. Do not let the period exceed fourteen days. My Amendment provides that if drastic action of this kind is to be taken at any time, it should only be taken for the shortest period possible. The Chancellor of the Exchequer admits that it was totally illegal while it was done, but this Clause is an act of indemnity. It will be legal in the sense that permission will be given by this Clause. It is a severe Clause, and I suggest that we should make the period as short as possible.
  Mr. J. SAMUEL: I should like to ask the right hon. Gentleman, the Financial Secretary to the Treasury, one or two-questions. I think there is a great deal of substance in what the right hon. Gentleman (Mr. Lough) has stated. I have great sympathy with the Chancellor of the Exchequer, and I think he is right in trying to prevent these forestalments, but it would be a very serious matter for the trade generally if there is power given to the Commissioners to withhold delivery of goods for a period of three months. What I understood the Chancellor of the Exchequer intended was that he would allow an average quantity of goods to leave the bond. I understood that previous to the last duties put on the action taken by the Chancellor of the Exchequer was that he would not allow the traders to take out of bond anything beyond the average for the previous three months, and not that there should be total suspension of taking out of bond for a period of three months, because in that way many traders doing a very large business would be very seriously affected. I knew a case a short time ago in which there was some mistake made with regard to the delivery of 600 bags of sugar, and the trader practically lost almost his business through the suspension of delivery. He was under the impression that there was some mistake on the part of the Customs. In the case of men doing an enormous business and buying anything up to thousands of bags of sugar or very large quantities of tea for their trade, if the Commissioners were to refuse them their goods it would inconvenience their trade very much, and

  1951
  in fact might cause a panic in a given district. If the Chancellor only means that the average consumption or requirement of the firm should be taken out of bond, then I agree, but it should not apply to the total supply of the articles.
  Mr. MONTAGU: If my hon. Friend reads the Clause he will see that there is no power of total suspension of delivery of goods from bond, but that it is sought only to limit the amount of delivery from bonded warehouses to the amount which appears to the Commissioners to be reasonable.
  Mr. SAMUEL: If the right hon. Gentleman reads line 25 in the Bill he will see the word "refuse." I took the statement of the right hon. Gentleman the Member for Islington.
  Mr. MONTAGU: It says, "refuse to allow the delivery of goods or commodities … where deliveries are demanded of amounts exceeding the deliveries which appear to the Commissioners to be reasonable deliveries in the circumstances."
  The Treasury and the Customs are just as much interested in the welfare and prosperity of the traders as anybody else. We depend upon them for our revenue and we are not likely to do anything to injure them or the country. The reason we ask the Committee to resist this Amendment is that we desire to stop the practice resorted to by some traders of forestalling. We believe that that is a bad practice, We believe that it acts to the prejudice both of the revenue and of the public. Forestalling occurs immediately when a trader thinks himself in a position to gamble on the prospects of a particular tax in a particular Budget. This provision will be limited to action of that class. The fourteen days would allow a certain amount of that gambling. Therefore I would urge the Committee to stick to the longer period.
  Mr. WATT: Is three months not too long? A fortnight is too short a time. I venture to say that three months is too long to give the Commissioners the option of suspending. Could a compromise not be made between a fortnight and three months?
  Mr. SAMUEL: The explanation of the right hon. Gentleman is quite satisfactory.
  Mr. T. WILSON: I would suggest to the right hon. Gentleman who has moved the
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  Amendment that he should withdraw it, as the Clause is not a bad one at all. We must take it for granted that the Commissioners will be men of common sense, who will act in a businesslike manner. I would therefore suggest to the right hon. Gentleman that he should withdraw this Amendment and the following Amendment as well.
  Mr. LOUGH: Has my hon. Friend noticed that in both replies from the Front Bench prejudice was excited against the action which I have taken by going into the question of forestalling, which I have not yet been allowed to mention? When I raise the whole question of forestalling I shall put an entirely different aspect upon it as far as any trade, on whose behalf I can speak, is concerned. There is not this vicious forestalment at all. It has never taken place in the sense in which it has been described here to-night. What I mean is that the Chancellor of the Exchequer commenced by making that charge against me which has had an effect on the mind of the House. It has been repeated by the Secretary to the Treasury. I do not know whether I should be in order in replying to it.
  Mr. SAMUEL: Is it not a fact that some tea dealers have been advertising lately that they have paid £1,000,000 for tea?
  Mr. LOUGH: I did not know it. For many days after the change they have gone on selling the tea at the old price until their stock was exhausted. The difficulty is that these duties are paid in sums of £100 or £20 for grocers throughout the country selling teas. This suggestion that forestalment is done by fraudulent tradesmen for their own profit is most malicious—I was going to say, well, I will not—but it is an entire misunderstanding of the case. It takes place in this way. So much is said about what is to appear in the Budget that, as in the case of tea, a sort of panic arises in the country, and orders are sent in for three, four, and ten times the amount which is usually required. Payments are generally on account of orders received, and I know of very few wholesale houses, in fact I do not know of any, who have made any particular advantage out of this—nothing that balances the losses they have sustained. It is in order to meet tremendous demands from the country that the supply is increased, and there is no evidence that the dealers make a profit out of it. Two or three of the best houses

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  that I know did not pay £1 on their own account, and I know very few, except it was to meet the demands of customers, who have had larger stocks than usual. The Committee will see that the whole of this arises from the very mischievous practice of levying money by indirect taxation. If there were no indirect taxes at all no accusations of this kind could be made.
  The CHAIRMAN: The right hon. Gentleman is going beyond the question before the Committee.
  Mr. LOUGH: Perhaps I am, but both the Ministers immediately plunged into the subject of forestalments, and I do not think—I am not reflecting on you, Sir—that they should be allowed to do so without some reply. They talk of wicked tradesmen and bring this charge about forestalments. It is a charge easy to make, and it takes longer to answer.
  The CHAIRMAN: The right hon. Gentleman, when I intervened, was proceeding to argue on the merits of indirect taxation.
  Mr. LOUGH: All I say is that the authorities, in these matters, ought to act quickly so that there would not be opportunity for these forestalments to be carried on. What I wish to do is to deny that they exist on the wide scale stated, and to suggest that, so far as they do exist on any small scale, it is owing to the mischievous system of indirect taxes. Coming back, then, to the Amendment, though it is very difficult to discuss it because we are deprived of any explanation, it is generally admitted that it is a great hardship that this should exist for three months, and that people should not be allowed to get their goods, especially if the Committee would look at the Clause a little lower down. They will see that, as drawn out, it is not confined to tea at all. Timber, or anything at all introduced in this country, must be stopped by the Customs. That is a most extraordinary proposal to make, and I appeal to Members in the various parts of the House to consider whether it is necessary to keep the trade under the harrow for three months, and whether some quicker way cannot be found.
  Mr. KING: I am going to try to make a speech which is in order, because it will be entirely on the Amendment. I appeal with confidence to the sense of fair play which I am sure the Chancellor of the
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  Exchequer has in a very marked degree to reduce this lengthly period from three months to some lesser period. Does he really mean that three months before the new Budget is introduced forestalling begins? I cannot think it does. He did not say so at all, and I very much doubt whether he will get up now and say he has scandalous cases of forestalling the Budget three months before the Budget statement is made. Unless he can do that, I really think, in fairness to the trading community he ought to reduce this period to, say, one month. I have never heard of cases of forestalling over one month previous to the introduction of the Budget. The right hon. Gentleman may know more about it, but if he has such cases he ought to give them. Again, I appeal to the fair sense and generosity of the Chancellor of the Exchequer to reduce this very long period of three months to something more like reason.
  Sir G. YOUNGER: I should like to ask the right hon. Gentleman one question. How long was it in October before the Budget was introduced that forestalling occurred? My impression is that it was only two or three weeks—[HON. MEMBERS: "Not a fortnight"!—Probably less than a fortnight. Further, I should like to ask the right hon. Gentleman: Did not that fortnight suffice to meet very much the objection of forestalments? It appears to me that the right hon. Gentleman wants far too long a period. It is a monstrously long period. The complaint I made before on behalf of the jam maker will be very much aggravated indeed.
  Mr. McKENNA:I hope the hon. Baronet will not think that because this gives the power to refuse delivery of goods in excess of reasonable amounts for three months that, therefore, the power would be exercised for three months. That is not the intention at all. The power would never be exercised for a day unless the Customs have evidence that forestalment has begun. It is no guide to future practice to say that in the past, when there was no such power, forestalment was never more than two, three, or four weeks in advance of the expected date of the Budget. Of course it was not. No forestalled would pay so long ahead of the time unless it was necessary. They did begin two, three, and sometimes more weeks in advance of the Budget because it began to get so difficult to get goods

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  out of the Customs on account of the crowds of carts in the streets. It became a question of first come, first served, and oue of the evils of forestalment was—
  Mr. LOUGH: A general demand.
  Mr. McKENNA: A general demand which happened every year to coincide with the introduction of the Budget.
  Mr. HENDERSON: It always will.
  Mr. McKENNA: My philosophic Friend says it always will. I endeavour to stop it. May I continue my argument for a moment? One of the evils was that the streets outside the Customs House would be so crowded with carts that people who were not fortunate enough to obtain cartage would not get their goods at all. One of the worst evils was that the rich trader who had carts got his goods out before the date of the Budget, while the small man who could not get cartage was left, and could not even get his ordinary supplies. That state of things never existed in the past, I quite agree, anything like three months in advance, because the owner of the goods would not desire to pay the Customs Duty any earlier than he had to do, and we should never use this power long in advance. We do, however, want to take such time as will enable us to watch the taking out of bond so that when we see, as we did a fortnight before the Budget, that the rate of taking out is far surpassing the normal rate, we shall have power to stop it, and I am sure it is a power which the whole House, even including the hon. Gentlemen opposite, will be only too glad to give to the Treasury.
  Mr. J. W. WILSON: I think anybody can see that when the House broke up at the end of July all traders were perfectly satisfied that no change in the Budget would take place until we met again, and no forestalment took place. But if we had settled a datum line of fourteen days as proposed nobody would have suggested that there would not have been a certain amount of forestalment even before the meeting of the House in September. If it is as certain as it was in September that the duty would be advanced forestalling will begin, and it is no evidence to say that it has not begun fourteen days before this, because the Budget has been the datum line, and there is no evidence that it will not begin with just as great a rush as before.
  Mr. HENDERSON: What happened at the beginning of September was that people began to say, "There is going to-be big taxation on certain commodities, and we had better get out as much as we can." That is very natural, and when the Chancellor of the Exchequer speaks of "this swindling," it is mot swindling. If you knew that there was going to be some commodity that you could get away without taxation, and you could get it away, is that swindling when you are within the law? You have no right whatever to say it.
  Mr. McKENNA: I will withdraw.
  Mr. HENDERSON: Very well. They do not get it out necessarily to make a tremendous lot of profit, although some do. They get orders to be fulfilled, and in the case I have, it arose from orders for confectionery which had to be fulfilled, and on which the usual price was charged. Are we going to say that in future there is going to be three months of agitation and talking of more taxes? Every time you threaten to come to the House for more taxes this forestalling will go on. You talk about the average. I want to know how you will get at the average consumption that any particular man may have at any particular time, especially in War time. The average consumption of chocolates during War time has been enormous, mainly because of people sending them to the troops as presents. It has been twice as much as before. How are you going to say what is the average there? When he speaks of carts the right hon. Gentleman is speaking of people who cannot get delivery. That is not the principle adopted at the Customs. What is done, I am credibly informed, is this: that those brokers through whom the notice is given draw according to their average deliveries, and if you have bought through those particular brokers who had big deliveries you get your stuff, but if you have bought through a small broker who has not, you do not get it. I am speaking of people who have paid the duties, and have the receipt, and are entitled to send their carts day after day, and cannot get it. These people were actually stopped in their manufacture.
  Are you always going to be three months talking about your Budget before you make these taxes? Are you always going to give people this excitement? What is it you really get under this Clause? You get this: that the Commissioners are

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  clothed with a power that the House of Commons has never in its long history given to any despotic King. Are the Commons prepared to go as far as that? Are you prepared to say that the Commissioners are to be empowered to tie up a man's trade for three solid months'? [HON. MEMBERS: "No, no!"] But that is just what you are giving them power to do. I tell the Committee that if in the case of any dutiable article I were to ask for two or three cwts. more than the average quantity I had been accustomed to withdraw, then the Commissioners would say that they were not going to give it to me. That is as plain as it can be.
  Mr. McKENNA: My hon. Friend will excuse me interrupting him. I want to tell him that I will show him the figures of forestalments, and he shall see for himself the extent of the evil which has had to be met. Every Chancellor of the Exchequer has had the same trouble. We have the figures year by year, and my hon. Friend will see that they have always jumped up during the period preceding the introduction of the Budget. That means that there are forestalments, and sometimes, as I have told the Committee, those forestalments have represented an enormous amount.
  Mr. HENDERSON: It has always been in the month of April or May that the Budget has been brought in. Of course the traders of the country know very well when to expect it, and it is the experience of every Chancellor of the Exchequer, as my right hon. Friend says, that they withdraw goods which they think may have to pay higher duties under a new Budget. You will always have that state of things as long as you have taxes on these commodities. I tell the Committee quite frankly that if I knew that next month a tax was going to be put on some commodity which I held I would immediately get it out of bond and would think that I was doing nothing wrong. As a matter of fact, I would be acting according to the law, and when I am acting within the law, as I think the Committee will agree, then I hold that I am doing nothing wrong. The power you are asking for here is a power that has never been given to any branch of the Government. It enables the authorities to say to a man, "You are getting more goods than your average; so you do not get anything for three months." That is a very great power, and I would
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  like to ask the Committee whether they are really prepared to give such a power to any Government. What it really amounts to is that the Government are going to fix up my business for me and tell me what I am to do. That is the whole thing, and the whole thing is absurd.
  It is the first instance in which the Government are asking for the Customs powers which they have never had before, and which this House has always fought against. What the Government should realise is that if they will talk about the taxes long before they inflict them, then they are bound to have this trouble, because it is only natural that people should try to get their stuff away before increased duties are put upon it. To put a stop to that practice in the way the Government propose would be most onerous and irksome, and would, I feel sure, arouse great friction. There is serious complaint already about the action the Customs have taken, and if the restriction were put in force for three months it would mean a great deal of worry for traders. The whole proceeding in having to ask for an indemnity Bill is not dignified on the part of the Government, and I do not think it is fair of them to say that the people against whom their action was taken are doing wrong in the sight of the law.
  Mr. J. SAMUEL: Both the hon. Member who spoke last and the right hon. Gentleman the Member for Islington have, I think, misrepresented what transpired in regard to these duties. This Clause, as I understand it, is only to apply during the War and for twelve months afterwards. As the Chancellor of the Exchequer has stated, there is every probability that these duties will remain in force and that they may even be increased during the twelve months immediately after the end of the War. I was surprised to hear the right hon. Gentleman the Member for Islington stated that these things are due to the customers—he calls them agents—in the country. He knows as well as I do that they are not agents, but that they are customers of his.
  Mr. LOUGH: May I explain to the hon. Gentleman that—
  Mr. SAMUEL: If the right hon. Gentleman will excuse me I am in possession of the Chair, and I know the business as well as he does. It is like this. You are the wholesale agent. You have a few hundreds or thousands—just as the case may happen to be—of customers in the country. They

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  may have, most likely they will have, the same desire as yourself—that is to say, to anticipate a rise in the price of tea or sugar. They send in orders to you, and you for your part are not prepared to send the tea to them. If you have large stocks you are anxious to wait until the Budget is introduced and see whether there is an increase in the duty on tea or not. That is really what transpired in all this trading; it is what transpires also in ordinary times, in times when the country is not at war, if there is an anticipation of an increase in the duties, as the Committee will remember there was some time ago.
  What I have said concerning articles like tea and sugar applies with equal force to spirits, or to anything else that is dutiable. Of course, if there is an anticipation that there is going to be a reduction in the scale of the duties charged on tea or sugar every trader in the country reduces his stocks as much as possible before the Budget comes out, but if traders anticipate, as they do now in war time, when the Chancellor of the Exchequer is anxious to obtain money, that the duties will be increased, undoubtedly they try to increase their stocks as largely as possible in advance of the rise. If they can obtain tea, sugar, or spirits out of bond before the increased duty comes into operation there is not the slightest doubt that they will take such articles out of bond. The Chancellor of the Exchequer is under the impression that in doing this they are defrauding the revenue of a certain amount of money which it might legitimately expect to receive, and accordingly he has formed the opinion that it is essential to limit the amount of articles taken out to the average daily clearances for a period of three months.
  The power which the Chancellor of the Exchequer is taking is not intended to be used to interfere with the ordinary trade of a trader who may be doing a developing business, but if a trader begins to forestall by purchasing large quantities of dutiable goods above his present requirements, then this Clause will be brought into operation. I cannot help thinking myself that it is essential that the country should obtain revenue, and that a very large number of honest traders have not practised these things; this Clause is a very proper one for the Chancellor of the Exchequer to have inserted in a Budget
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  during war time. I would only make this suggestion, that if he would desire to meet the traders the Chancellor should agree that this provision should continue for six months after the war instead of for twelve months, as the Bill now proposed. If he were to continue it six months after the War instead of twelve months it might give greater satisfaction.
  Mr. LOUGH: I do not think it was very courteous of the hon. Gentleman who has just sat down not to allow me to interrupt on a matter of—
  Mr. SAMUEL: Well, I—
  Mr. LOUGH: I hope he will not interrupt me now, at any rate. If I were unintentionally misrepresenting him, I would certainly allow him to correct me. What I said was this. I said that the people who do this are usually agents of people in the country and have no interest in it at all. If they can get the tea out they do it, but if they do not they lose nothing. The difficulty we are in with the Chancellor of the Exchequer is that he is not familiar with the circumstances. He spoke in his last speech, of the Custom House being surrounded by carts. Nothing of the kind happens, and no tea is got at the Custom House. There are only papers there, and clerks. Where the commodities are stored is in warehouses, and these warehouses often belong to people—they are public bonded warehouses—who are either importers or dealers in tea themselves, and it is these warehouse keepers who have to carry out the instructions of the Customs House when an order like this is given. The usual custom or practice is that when the money is paid the goods can be obtained, and the effect of what the Chancellor of the Exchequer is doing is this, that although a man has bought his goods and paid a deposit or paid for them entirely he is not to get the goods. That is a strong measure in a Free Trade country. I do not want to assist any fraud that may be going on. Everything in this House now seems to be moved from the idea that every man is a scoundrel except the occupants of the Front Bench opposite.
  I want this House to take such steps as effectually to prevent at the fountain head any of these courses that we object to from taking place, and all that the trade want is something settled and certain under which they can deal with the tremendous volume of commodities on which this country has to

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  exist. A million pounds of tea per day have to be delivered in this country, so that if there are forestalments to the amount of 8,000,000 lbs., it is only eight days' consumption, so that it is very easy to speak of big figures here. The million pounds has got to be got out every day, or else you create far greater difficulties than you remedy, and it would not be got out if you allow the Customs for three months to stop the whole thing, quite contrary to all law. If my right hon. Friend the Chancellor of the Exchequer, instead of using strong language about fraudulent traders, would say what he wants done, all the trade would help him to do it. They do not care for these practices. I only want to suggest that the time should be shortened, and I have various other suggestions, but everybody in the House who has spoken has agreed with me on this, and there is scarcely a speaker who has not said, "Shorten the time." The hon. Member opposite said, "Shorten the time," and the Chancellor of the Exchequer himself says it ought to be shortened, but he would not do it. I make a final appeal to him to bring the Bill into some kind of shape to meet the general sense of the Committee.
  Mr. McKENNA: I believe the effect of having this power will be that we shall never have to use it. I quite agree with what the right hon. Gentleman has said in one particular, namely, that the great bulk of the traders of the country would infinitely prefer that there was no such thing as forestalling. It is only the few who make the profit out of it. If we have this power in our hands so that we can watch from day to day and week to week the outgoings of the Customs, I do not believe we shall ever have to exercise it; but it is the absence of the power and the knowledge that the forestalments—what I call forestalments, without any odium attaching to the word—could be exercised without danger that encourage people to that form of business. I am trying to use neutral terms.
  Mr. LOUGH: But you are always making the inference.
  Amendment negatived.
  Mr. LOUGH Mr. LOUGH had given notice to move, in Sub-section (1), after the word "commodities" ["goods or commodities for home use"], to insert the words "subject to any Customs Duty."
  The CHAIRMAN: The next Amendment in the name of the right hon. Gentleman
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  the Member for Islington is, I think, superfluous. If he looks further on in the Sub-section he will see the words "on payment of duty," and therefore obviously the commodities must be commodities subject to duty.
  Mr. LOUGH: If that is so, Mr. Whitley, I shall be delighted not to move it, but we have been discussing a set of new taxes all to-day, and the first Amendment we had was one where the right hon. Gentleman the Chancellor of the Exchequer insisted on his right to levy duty, against the Bill passed some years ago. What I suggest is that the whole general volume of the trade of this country might be suddenly suspended under this Clause, and at least, therefore, let us limit it to articles that are subject to Customs Duty. If there is no harm in my words, they might be put in here. I only want to keep the disturbance of trade within as narrow limits as possible,, and in order that that may be considered I should like to move my Amendment.
  The CHAIRMAN: It seems to me that the proposed words are totally unnecessary, because the words "on payment of duty" come in the next succeeding line. However, I will put the Question—
  Mr. MONTAGU: I am perfectly willing to accept the suggestion of the right hon. Gentleman opposite with one exception, but I am afraid I shall be precluded from moving an Amendment to it if you put the Question, Sir. I am willing to add the words "or Excise" to the right hon. Gentleman's Amendment, so that it would read "subject to any Customs or Excise Duty."
  Sir G. YOUNGER: There can be no possible question about these words being unnecessary, because you cannot possibly pay a duty on an article which is not dutiable.
  The CHAIRMAN: That seems to be my view, and therefore I will not put the Question as it involves superfluous words.
  Mr. LOUGH: I beg to move, in Sub-section (1), to leave out the words "the deliveries which appear to the Commissioners to be reasonable deliveries in the circumstances," and to insert instead thereof the words, "by more than fifty per cent, the average daily clearances during the previous three months to any firm."
  I have the same object in every one of these Amendments, and that is for this House to retain its power. What I suggest here is that no clearances should be

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  admitted exceeding by 50 per cent, the average daily clearances during the previous three months to any firm. If 50 per cent, is too much for the Government to accept, I will agree to 10 per cent., or even to the average daily clearance. I only mean to secure that trade may go on somehow. Do not leave it all open so that the Customs people can do what they like with the trade of the country.
  Mr. McKENNA: We would not do that.
  Mr. LOUGH: How can the Chancellor of the Exchequer say that, when his hands are red with having committed an illegality, and how do we know that the same thing would not be done again? Why can he not give us some guarantees that will enable trade to be carried on on safe lines, and so that people will know what they are doing? As the Clause stands there is nothing to prevent a total stoppage of the deliveries of these goods. My right hon. Friend replies, "Oh, we would not do it; we would not exercise the power," but he is not treating the businesses in that way. He is proposing a new law. Customs Duties have existed for two or three centuries, and nothing of this kind was ever before brought before this House, nor these charges made against the traders of this country, and, therefore, I think the House should insist that, at any rate, there should be some restriction on these officials who are to be given such large powers. I suggest that if the deliveries exceed by 50 per cent, the average daily clearances for the previous three months they should be liable to be stopped, but if 50 is too much, say 10 per cent, or even the average daily clearance, or anything else that will ensure the trade that, on some basis or other, the business can be carried on.
  Mr. McKENNA: I think that the words in their form in the Bill would be more favourable to the circumstances of individual traders than would the putting in of any hard-and-fast line of ten or fifteen or twenty per cent. At the present time when a trader complained that there were special circumstances in his case, of which he gave evidence, to justify exceptional withdrawal, and where he showed that he was not making a profit out of such withdrawal and not putting up the price against the consumer, we do not stop it.
  Mr. HENDERSON: But you do.
  Mr. McKENNA: My hon. Friend thinks that we do; at any rate, we do our best not to. I think the wider the words and the greater the latitude the less injury there will be to trade. I hope that there will not be any interference at all, and, seriously, I do not believe that there will be any. I do not think that we shall have to interfere, because the moment we have the power to interfere we shall not need to interfere. Therefore, I hope my right hon. Friend will agree to allow the Clause to stand in its present form.
  Mr. WATT: I think there should be some limitation of the power handed over to the Commissioners of Customs and Excise. The right hon. Member for Islington, in a former Amendment, tried to limit that in point of time, and now he tries to limit it in point of power. I think that this Amendment to limit power ought to be adopted by the Chancellor of the Exchequer; he got too much in point of time, and now we are giving too much in point of power. This House ought not to hand over its rights in this way.
  Question, "That the words proposed to be left out stand part of the Clause," put, and agreed to.
  Mr. McKENNA: Perhaps it will be for the convenience of hon. Members if I say that we do not propose to go beyond the present Clause to-night.
  Mr. LOUGH: I beg to move, to leave out Sub-section (2).
  This is indemnity for past action, and my hon. Friend below the Gangway opposite (Mr. J. M. Henderson), I understand, feels very strongly about it. But I want to take an entirely practical view of this question. I have protested in much of what I have said already against the action the Government has taken, but I do not know what good we will get by refusing them the indemnity. Therefore, although I will formally move the Amendment, I do not desire to press the matter.
  Mr. HENDERSON: In what has been done the Chancellor of the Exchequer has really done a very wrong thing, and the House of Commons, which is charged with, and is responsible to the country for, looking after its concerns and seeing that no injustice is done, has ratified all the right hon. Gentleman does. Of course all that is past, and I do not want the right hon. Gentleman to suffer or prevent his being

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  relieved of responsibility for his deeds; therefore I do not propose to proceed with the matter.
  Amendment, by leave, withdrawn.
  Mr. LOUGH: I beg to move, in Sub-section (2), to leave out the first word "as" ["and shall be as valid as if an Order of the Treasury"]. I cannot understand why you want this word.
  Mr. McKENNA: We do not ask for an indemnity beyond the actual terms of this Clause. But if anybody does anything in excess of this Clause we do not ask for an indemnity; we ought to be subject to due punishment. All the power given to the Treasury under Sub-section (1) shall be deemed to have been in existence on the 21st day of September last, so that future validity of action under Sub-section (1) will extend to past action under Sub-section (2). We do not ask for indemnity beyond the present Clause.
  Mr. LOUGH: There is a difficulty I would like to point out to the Chancellor. He takes larger power with regard to past action. I am alluding now to the second paragraph of Sub-section (2).
  Mr. McKENNA: That is not for our benefit.
  Mr. LOUGH: That does go a little further with regard to past action, but I have no objection to it. I venture, however, to point out a great defect in the Clause. The latter part of Sub-section (2) deals with contracts that will be broken by the action of the Government—
  The CHAIRMAN: That does not arise on this Amendment.
  Question, "That the word proposed to be left out stand part of the Clause," put, and agreed to.
  Question proposed, "That the Clause stand part of the Bill."
  Mr. LOUGH: I beg to move to leave out the Clause.
  In the first place, it seems to me that this Clause is defective in the respect I was arguing just now. The second paragraph of Sub-section (2) does give a necessary indemnity with regard to any breach of contract which may have arisen. In Sub-section (l), however, there is no such indemnity, so that if any person is prevented from fulfilling his contract by this there is no indemnity, and I think that there should be such indemnity. I
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  will not elaborate it, but I hope the right hon. Gentleman will consider the matter before the Report stage. On the general question that the Clause stand part, I must ask him to say one or two more words in reply to what has been said about the practice of forestalling. I think there has been a great deal of exaggeration about this matter, and I think it is a great pity that the Chancellor of the Exchequer should use the word "forestall" and make reflections on traders generally. There may be some to whom the right hon. Gentleman's remarks may apply but the great body, and particularly the people from whom he collects such a large amount of revenue, should be treated with more consideration.
  I was sorry to hear an hon. Member make an attack upon me for something he says I stated with regard to the 1909–10 Finance Bill. I do not remember the circumstances at all. I think I have always taken the view I am expressing here to-night. If my hon. Friend refers to whisky and beer I say nothing about it, and I know nothing about these businesses. What I maintain now is, that the practice of forestalling is immensely exaggerated. There is the simple fact that a new duty comes into force gradually. The grocer gives out to the public at the old price goods he has in stock for several days after the duty is raised; he may not even know that the duty has been put on—I admit that the grocer will not be likely to do so to the same extent now that this has been done—so that the effect of the duty is spread over a week or fourteen days. Then the House ought to look at what happens when duties are reduced. Any trader who is making a little profit when the duties are put on makes a great loss when the duties are reduced. The House has the greatest prejudice against everything I suggest because of the foolish ideas of the Chancellor of the Exchequer. When he suddenly reduces the duty there will be a considerable loss on stocks which will more than correspond with any gain that arises when the duty is increased.
  There is another consideration. Seven-eighths of the tea in the country now is retailed in paper packets. You are dealing with patent medicines in paper packets, and the Chancellor of the Exchequer gives the makers thirty days in which to change their wrappers. Think of all the loss of tea dealers in changing their wrappers!

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  Tons and tons simply useless; all these have to be thrown into the waste-paper basket when these charges are made. These evils are not met at all, or remedied well, by a violent proposal of this kind suddenly made with reflections on individuals by Ministers of the Crown who ought to know better. Means ought to be found, if we are to go on with these large indirect taxes, of changing the duty quickly. I cannot imagine that anyone would have a grievance if he went to the Customs House and found tea 2s. a lb. They would get their Tea Duty just the same. The idea of setting up a state of affairs and then making charges against individuals because they act in accordance with it and try to carry out their contracts is a very deplorable thing. We have not had much of a Debate, though I agree I have had every licence, and rather more perhaps than I like, but I am satisfied that the Clause is very bad, and the right hon. Gentleman ought to consider whether it is right to deprive this House for such reasons as he has given of its control of the great matter of taxes. The next step will be that the Treasury will make taxes without coming here at all.
  Sir G. YOUNGER: I only wish to say that I have not an uneasy conscience at all. I have nothing whatever to do with whisky, and beer is never bonded, so I could not forestall if I wanted to do so.
  Question, "That the Clause stand part of the Bill," put, and agreed to.
  Committee report Progress; to sit again upon Tuesday next (26th October).
  The remaining Orders were read, and postponed.

  GREENWICH HOSPITAL.
  Resolved, "That the statement of the estimated income and expenditure of Greenwich Hospital and of Travers' Foundation for the year 1915–16 be approved."— [Dr. Macnamara.]
  It being after Half-past Eleven of the clock, upon Wednesday evening, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at Fifteen minutes after One a.m., Thursday, 21st October, 1915.

WAR.
  INCOME TAX AND NATIONAL INSUEANCE ACT.
  INCOME TAX AND NATIONAL INSUEANCE ACT.
  FINANCE (No. 3) BILL.
    EXCESS PROFITS TAX.
    EXCESS PROFITS TAX.
  OVERSEAS DOMINIONS (GIFTS DURING WAR).
  OVERSEAS DOMINIONS (GIFTS DURING WAR).
  GERMAN TRAWLER "GUDRUN."
  GERMAN TRAWLER "GUDRUN."
  OFFICERS' PROMOTION (CAVALRY).
  OFFICERS' PROMOTION (CAVALRY).
  RECRUITING.
  RECRUITING.
  ROYAL FIELD ARTILLERY (WELSH ARMY CORPS).
  ROYAL FIELD ARTILLERY (WELSH ARMY CORPS).
  FUSES (KRUPP PATENTS).
  FUSES (KRUPP PATENTS).
  BOOTS FOR TROOPS.
  BOOTS FOR TROOPS.
  WOOLWICH ARSENAL (CLERICAL WORK).
  WOOLWICH ARSENAL (CLERICAL WORK).
  BRITISH REPRESENTATIVE AT SOFIA.
  BRITISH REPRESENTATIVE AT SOFIA.
  SHELLS FOR GERMANY FROM UNITED STATES.
  SHELLS FOR GERMANY FROM UNITED STATES.
  Ministerial Salaries and Fees.
  Ministerial Salaries and Fees.
  Sale of Securities.
  Sale of Securities.
  Old Age Pensions (Ireland).
  Old Age Pensions (Ireland).
  Experiments on Living Animals.
  Experiments on Living Animals.
LONDON COUNTY COUNCIL (TRAMWAYS AND IMPROVEMENTS) BILL,
  LONDON COUNTY COUNCIL (GENERAL POWERS) Bill.
  Read 3a, with the Amendments, and passed, and returned to the Commons.
GLASGOW WATER ORDER CONFIRMATION BILL.
Returned from the Commons, with the Amendments, agreed to.

RETURNS, REPORTS, ETC.
Trade Reports (Annual Series)—

No. 5490. China (Amoy, 1914);

No. 5491. Italy (Italy, 1914);

No. 5492. Portugal (Azores, 1914);

No. 5493. Congo (Congo, 1913);

No. 5494. France (French Congo, 1912 to 1931);

No. 5495. Greece (Corfu, 1914);

No. 5496. Portugal (San Thomé and Principe,1914);

No. 5497. Portugal (Southern Angola, 1914);

No. 5498. China (Wuhu, 1914);

No. 5499. China (Wuchow, 1914);

No. 5500. Corea (Corea, 1914);

No. 5501. Peru (Iquitos, 1914);

No. 5502. Egypt (Alexandria, 1914);

No. 5503. Japan (Japan, 1914);

No. 5504. United States (Chicago, 1911);

No. 5505. France (Pondichery and Karikal, 1914);

No. 5506. Bulgaria (Bulgaria,1914);

No. 5507. China (Canton, 1914);

No. 5508. Japan (Dairen, 1914)

No. 5509. China (Kiungehow, 1914):

Colonies (Annual)—

No. 862. Straits Settlements (Report for 1914);

No. 863. Northern Territories of the Cold Coast (Report for 1914);

No. 864. Ashanti (Report for 1914):

Australia—Report to the Board of Trade on the Trade of Australia, for the year 1914, by This Majesty's Trade Commissioner for the Commonwealth of Australia (Mr. G. T. Milne):
New Zealand—Report on the Trade of the Dominion of New Zealand for the year 1914, by Mr. W. G. Wickham (His Majesty's Trade Commissioner for New Zealand):
Rocket Life-Saving Apparatus—Report by the Board of Trade on the Life-Saving Apparatus on the coasts of the United Kingdom for the year ended 30th June 1915:
Reformatory and Industrial Schools—Fifty-eighth Report for the year 1914 of the Chief Inspector of Reformatory and Industrial Schools of Great Britain:
Reformatory and Industrial School (Ireland)—Fifty-third Report of the Inspector for the year ended 31st December 1914:
Irish Land Commission—Return of Advances made under the Irish Land Purchase Acts during the month of February 1915:
India (Sanitary Measures)—Report on Sanitary Measures in India in 1913–1914. Volume XLVII.
Presented (by command) and ordered to lie On the Table.
National Insurance Acts—The National Health Insurance (Medical Benefit) Regulations (Scotland) 1915, dated 8th October 1915:
Universities of Oxford and Cambridge Act, 1877—Statute made by the Governing Body of St. John's College, Oxford, on the 2nd July 1915 (and sealed on the 5th July 1915) amending Statute XVII of the Statutes of the College, by adding after Clause 9 thereof a new Clause numbered 10:
Foreign Jurisdiction Act, 1890—Order in Council, dated the 14th October 1915, entitled the Eastern African Protectorates (Appeal to Privy Council) Amendment Order in Council (No. 2), 1915:
Merchant Shipping Act, 1894— Two Orders in Council, dated the 14th October 1915, made under the Act:
Naval and Marine Pay and Pensions Act, 1865—Four Orders in Council, dated the 14th October 1915, made under the Act:
Dockyard Ports Regulation Act, 1865—Order in Council, dated the 14th October 1915, constituting the Dockyard Ports of Plymouth and Devonport, and repealing the Orders in Council, dated the 11th October 1912 and the 9th February 1911:
Children Act, 1908 (Grant to Day Industrial Schools, Scotland )—Recommendatio of the Secretary for Scotland as to Parliamentary Grant to Certified Day Industrial Schools in Scotland:
Shops Act, 1912—

1. Order by the Secretary for Scotland, dated 15th October 1915, under the Act, affecting certain classes of shops in the City of Edinburgh;

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2. Orders made by the under-mentioned Councils and confirmed by the Secretary of State for the Home Department, affecting certain classes of shops within their respective areas—

I. County of London (portion of the County of London south of the River Thames);

II. County of Worcester (Urban Districts of Lye and Wollescote) (2 Orders):

Destructive Insects and Pests Acts, 1877 and 1907—Orders, numbered D.I.P. 248–254, inclusive, dated 9th October 1915, declaring the areas described in the Schedules thereto to be infected areas for the purposes of the Wart Disease of Potatoes (Infected Areas) Order of 1914:
Post Office, Foreign and Colonial Post (except Parcels)—The Foreign and Colonial Post Amendment (No. 13) Warrant, 1915, dated 30th June 1915:
Lunacy—Return to the Lord Chancellor of the number of visits made and the number of patients detained under the provisions of the Lunacy Acts, 1890 to 1911, seen by the several Commissioners during the six months ended on the 30th June 1915:
Foreshores—Treasury Minute, dated 12th October 1915, directing the application of moneys received by the Board of Trade in the year ended 31st March 1915, in respect of the rights and interests of the Crown in the Foreshores of the United Kingdom:
Laid before the House (pursuant to Act) and ordered to lie on the Table.

VOLUNTEER BILL. [H.L.]
To be read 2a, On Tuesday next.

IMPORTATION OF H0PS.
LORD HARRIS LORD HARRIS rose to ask His Majesty's Government whether it is true that 147,252 cwts. of hops were imported from abroad from. January up to the end of August, 1915, and what quantity has been imported during September whether the quantity imported from January up to the end of August, 1915, exceeds by 50 per cent. the total importation during 1914 from January to December; and whether the appeal of

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His, Majesty's Government to avoid the purchase of foreign goods is meant to apply to hops.
The noble Lord said: Lords, I am tempted again to bring this question—important only, I admit, to a limited area of the country—before your Lordships' House in consequence of the sympathetic reply as regards the importance which the noble Earl the Minister for Agriculture made when I brought it forward on the former occasion, and also also because since I mentioned the matter last something very important has taken place. The market is Open, and I am sorry to say there is only one description of it—the market is a very ragged one. Factors and merchants and brewers are uncertain as to the future that prices, they can be got at all, are very inadequate and a great many cultivators cannot and a market at all. The consequence, I am afraid, will be what the noble Earl apprehended the other night; there will be a considerable grubbing of hops. That means that a great deal of capital will be scrapped and wasted, and it is an open question whether when the war is Over people will be tempted to put that, capital into this cultivation again.
We have reason to suspect that part of the cause of the present state of things is that hops are being imported from the Continent, if not direct, then through America, and are Cooling from enemy countries. There is no doubt that in 1914 hops were allowed into this country from Germany—I believe that cannot be disputed—under licence. I wish the noble Earl could tell us who was licensed to import German hops after the war commenced. Then there was an importation—I do not say it was large, only 280 cwts.—from a suspicious quarter, namely, Norway, Again, 258 cwts. came from the, Netherlands, apart altogether from the 27,000 cwts. From Belgium. In addition to that, what has affected the market this year is—I only give it as a rumour—that American hops of this year are being offered on the market at very low prices, and it is said that the reason why America can do this is that last year they imported very large quantities of German hops. Therefore they are independent. Either they can sell the German hops here, or they can sell their own. If it were possible for the noble Earl to give us a return showing what the importation of hops into the United
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States front Europe has been during the past twelve months, it would be very informative as to the idea that we have been during this last year buying from America hops which night have come from enemy countries. At any rate I do not think it can be disputed that we have bought from abroad this year something like double the quantity that we imported last year, and as the quantity purchased from abroad last year cost something like £500,000 means, this year's prices sing about the same, that something like £1,000,000 has to be found in some way or other to pay for these foreign hops. That is a pretty big sum. I do not know whether the noble Earl has done so himself, but members of the Government have been imploring the country to avoid as far as possible purchasing from abroad. Yet although this country is perfectly capable of supplying every hop that, is likely to be wanted for years to come, the financial arrangements of the country are such that people who prefer to do so can go into the market and buy foreign hops, thus sending money abroad.
The noble Earl said on the last occasion that he was not prepared to enter into a question of this kind. I do not press him to do so now. At the same time I take the liberty of warning him that what he then apprehended is coming to pass, and that, a cultivation which most important to the poorest classes of the population in its neighbourhood is going to be seriously curtailed. As the noble Earl is likely to know, those who suffer most are the children. I said to a country clergyman that I did not think children were as well clothed now as they were some twenty years ago, and he said, "No. What is more, they don't come to Sunday school as they did twenty years ago. The reason is this. Parents will not send their children to Sunday school unless they are well dressed, particularly in the matter of boots, and the 'hop money' which they earned used to be devoted to buying boots." Now the children in many cases have to go without boots because, in consequence of hops having been grubbed, they cannot earn hop money, and this has been brought about because foreign importations are knocking us out of the markets. During the period of heated argument on the subject of imports, I never advocated Import Duties except upon this one article, hops. I did so for these reasons—

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that it is perfectly possible, as I have said, for every hop required in this country to be grown here; that it is a cultivation which employs more labour per acre than any other; and that it is the poorest classes of the population who benefit by it. That is the actual position, and I desire to draw the attention of the country to the fact that these huge importations are going on in the face of the earnest request of His Majesty's Government that we should avoid as much as possible purchasing articles from abroad.
THE PRESIDENT OF THE BOARD OF AGRICULTURE AND FISHERIES (THE EARL OF SELBORNE): My Lords; I can answer the noble Lord's Questions, though not wholly to my satisfaction any more than to his own. The figure given by the noble Lord of hops imported from abroad from January to August, inclusive, of this year—namely, 147,252 cwts. is correct. The quantity imported in September was 7,182 cwts.—a decrease of over 11,000 on the average of the preceding eight months. If that is any indication of the future—as to which, of course, I can only express a hope, not an opinion—it would seem to show that the buyers of hops in this country may be acting more on the general advice of His Majesty's Government to purchase as little as possible from abroad than they did in the previous months of the year. That advice was most certainly intended to refer to hops as to all other commodities which may either be dispensed with altogether or produced at home. The quantity of hops imported during the first eight months of the current year was, as the noble Lord suggests, about 50 per cent. above the total importation of 1914. But—and I think it is necessary that I should state this, in order to put the matter in its proper perspective—it should be remembered that the 1914 total of 97,306 cwts. was a very low one, the total for 1913 being 262,184 cwts., and that for 1912 being 243,886 cwts. That, I think, answers all the Questions on the Paper.
Then the noble Lord put some supplementary questions to me, some of which I can answer and as to others of which I should like to have notice. He asked what quantities of German hops had been imported under licence in the year 1914, and by whose authority, and why the licence was granted. I do not know, but
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if he will put the question down I will ascertain. Then the noble Lord drew attention to the fact that some hops, not a largo amount, bad been coming from Norway. I quite agree that that is a very suspicious circumstance. I will try and find out where those hops really did come from, for I have never myself heard of hops being grown in Norway, and I think the matter requires the closest investigation. Then the noble Lord said he was informed that a large quantity of German hops had been imported into the United States Of America last year. That I believe to be quite true, and it would have taken place in consequence of contracts made before the Order in Council of last March came into force being admitted by His Majesty's Government as valid, in order not to treat with injustice or harshness American merchants who had already placed these contracts without knowledge of our intentions. Then the noble Lord inferred that American hops were being imported into this country this year because America is stocked with the German hops which they imported last year. That may be so. I have no knowledge of what the consumption has been in America of the German hops imported last year. I can only give the noble Lord the figures of the hops that are being imported into this country at the present time.

INDIAN CIVIL SERVICE (TEMPORARY PROVISIONS) BILL. [H.L.]
Order of the Day for the House to be put into Committee, read.
Moved, That the House do now resolve itself into Committee—(Lord Islington.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL or DONOUCTIMORE in the Chair.]
Clause 1:
Power to appoint to Indian Civil Service without examination.
1.—(1) The Secretary of State in Council may will the advice and assistance of the Civil Service Commissioners make rules providing for the admission and appointment to the Indian Civil Service by the Secretary of State in Council, during the continuance of the present war, and for a period not exceeding two years thereafter, of British subjects possessing such qualifications with respect to age and otherwise as may be prescribed by the rules, notwithstanding that they

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have not been certified as being entitled for appointment as the react of examination in accordance with the regulations and rules made under section thirty-two of the Government, of India Act, 1838, and section ninety-seven of the Government of India Act, l915:
Provided that—

(a) not less than one-fourth of the persons admitted to the Indian Civil Service during such period as aforesaid shall persons who have been so certified as aforesaid; and

(b) a person shall not be appointed to the Indian Civil Service under the rules made under this section unless the Civil Service Commissioners certify that by such means as may be seribed the rules they Intro satisfied themselves that in their opinion he possesses the necessary educational qualifications.

(2) The provisions as to the laying before Parliament of regulations and rules made under the said sections thirty-two and ninety-seven shall apply to the rules made under this section.
LORD MACDONNELL OF SWINFORD: I move to omit paragraph (b) and to insert the new paragraph (3) standing in my name on the Paper. Open competition for the Indian Civil Service has now prevailed for over sixty years and has given universal satisfaction not only in this country but also, I believe, in India; and no departure from that system should, I venture to think, receive approval from your Lordships unless on the most cogent grounds. I myself was satisfied with the statement of those grounds which was made on the Second Reading of this Bill by the noble Lord in charge of it. I think the circumstances of the time amply warrant the departure which is proposed; but if that departure is to be adopted an obligation, in my judgment, lies upon the Government to take precautions that no further variation from the system now in force should be permitted than is absolutely necessary, and that the essential fundamental principle of open competition should be as far as possible rigorously preserved. That principle, as I understand it, is that no favour or partiality shall be shown in allotting appointments, and that allotment shall be determined by the merits of the individual candidates only. That, I believe, is the principle which the noble Lord in charge of the Bill desires to enforce.
It will be in your Lordships' remembrance that in his speech in moving the Second Reading of the Bill the noble Lord foreshadowed the establishment of a repre-
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sentative Committee who were to assist the Secretary of State in making these appointments. Everything depends upon the character of that representative Committee. My object in bringing this Amendment to your Lordships' notice is to secure that this Committee shall be constituted as far as possible the light of public criticism and public opinion. The proposal in the Bill is that rules should be made under which the Committee is to be established. These rules will be framed by the Secretary of State for India after the Bill has come into operation, and action may be taken under the rules immediately on their being made. The law provides that rules framed in this way shall be laid before both Houses of Parliament within a fortnight of their being made, and the only means available to your Lordships and to the other House of Parliament of criticising those rules is to address the Crown with the object of vetoing them. That is a very cumbrous method, and one which is not altogether satisfactory. In my opinion it would be better that the rules should be, framed and submitted for your Lordships' consideration before they take effect. But if that is not permissible—and I admit it is a departure from the usual procedure—then I suggest that the classes of persons front whom the nominations to the Committee should be made should be indicated in the Bill. I believe it is far better for the Secretary of State to win the confidence of the public in that way before the Bill becomes law than to trust to winning that confidence by the character of the appointments made after the Bill has conic into operation.
Everything, as I have said, depends upon the character of this Committee. If you get a Committee which will command public confidence then I foresee that it is very possible that in this way you may secure for the Indian Civil Service a class of officers who will compare favourably, or at all events on Equal terms, with the highest class of officers hitherto appointed. This system has been adopted in manning the Egyptian and the Sudan Civil Service, and I believe it was established—I speak under correction—by Lord Cromer. Seeing the noble Earl, Lord Cromer, in his place, I can appeal to hint for confirmation of my statement that under this system he was able to obtain for the Civil Service of Egypt and the Sudan an excellent class

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of officers. In connection with the investigation into the Public Service here which was made by the Royal Commission over which I had the honour to preside, we made inquiries into the method of recruitment for the Sudan and the Egyptian Civil Service, and I privately called the attention of the noble Lord in charge of this Bill to the evidence which was given in that regard. I believe that the Committee to be appointed under this Bill will not altogether tread new ground, but will be able to derive considerable light from the experience of the Appointments Committee employed by the Oxford and Cambridge Universities in the recruitment of the Sudan Civil Service. At all events, what I wish above all to insist upon is that as much publicity as possible should be given to the constitution of this Committee. Not only should our educational institutions be called upon to nominate members of the Committee, but there should be included upon it men of experience and of weight in public affairs in the world generally. Where you cannot compare the capacities of men by a written examination it is most desirable that you should be able, by their methods of address, by their appearance, by the manner in which they frame their ideas and put them forward, to form an opinion as to the alertness and width of mind of the candidates who present themselves for these appointments.
I am myself a convinced upholder of the system of open competition, but I think that open competition has certain defects which might possibly he remedied by such interviews as I have now indicated. The proposal now is to enter upon a system which shall consist altogether of interviews, and from which the written examination is altogether to be eliminated. In my opinion you cannot form a true conception of the capacity and suitability of candidates by employing on your. Committee University dons and schoolmasters alone. You want also men of the world who have had experience of affairs and are able to say whether the candidate before them is likely to succeed in the career into which he desires to be admitted. That is all I have to say on the main subject of my Amendment. If your Lordships accept it, there will be no need for any subsequent revision of the recommendations of the Committee by the Civil Service Commission. The form of certification for finance purposes
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can readily be arranged for if the Civil Service Commission are authorised to accent the report of the Committee as sufficient authority for their action. I do not think that the Civil Service Commission as now constituted is altogether suitable for the purpose of the functions which this Bill proposes to confer upon the Committee. The question of the competency of the Civil Service Commission was fully considered by the Royal Commission on the Civil Service, who in their Fourth Report made certain suggestions with a view of improving the Civil Service Commission which I hope will in due time receive attention. I am quite satisfied in my own mind that it is far better to have a Committee of the kind that I have ventured to suggest, appointed ad hoc for this particular examination, than to trust the matter to the Civil Service Commission whose functions are properly exercised in a different sort of selection. I beg to move.
Amendment moved—
Clause 1, page 1, line 22, leave out paragraph (b) and insert the following new paragraph:
(b) The rules shall provide for the creation of a committee (to consist of not more than nine members) to include the First Civil Service Commissioner, a member of authority in public affairs, a proper representation of the Universities of Great Britain and Ireland, and a representative of the Incorporated Association of Head Masters. Such committee shall follow so far as possible time procedure adopted by the Appointments Committees of the Oxford and Cambridge Universities in connection with appointments to the Egyptian and Sudan Civil Service, and shall report to the Secretary of State in Council their opinion upon the respective merits and educational qualifications of candidates for the Indian Civil Service other than those selected by open competition.—(Lord MacDonnell of Swinford.)
THE EARL OF CROMER: I had not intended to speak on this subject, and I merely rise in answer to the appeal which was made to me by the noble Lord to say something about the principle that was adopted in selecting candidates for the Sudanese and Egyptian Civil Service. What was done was this. Every year a small Committee of two or three high officials belonging to the Egyptian and Sudanese Service sat in London to look over the names of candidates who had applied for employment in Egypt and the Sudan. The first thing they did was to look at the medical certificates. The

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member of candidates was always much in excess of the number of vacancies, and the first step taken was to throw out all those whose medical certificates were not first-rate. After that, the Committee looked at the reports from the Appointments Committee of the Oxford and Cambridge Universities and the other information received about the candidates who had not been at those Universities. Then they selected the candidates who appeared to be the most likely and saw them. I agree with the noble Lord that if anything is to be done in the way of a Committee of this sort it is enormously important to select the Committee well and to appoint men whose judgment may be trusted. The system in our case certainly worked well, and we got some good men by it. But I think it is only fair to state that it was tried on a very small scale, the number of men appointed to the Egyptian and Sudanese Civil Service every year being two or three, or, at most, five. Whether the system would work equally well in connection with the larger sphere of the Indian Civil Service is more than. I can say.
LORD SYDENHAM: I agree with what Inv noble friend Lord MacDonnell said in moving his Amendment, except in one particular. I am more doubtful than he is of the validity of the competitive examination as the final test for appointments of this great importance. I think an educational qualification tempered by wise selection probably gives the best results. The one point on which I do not agree with my noble friend's Amendment is think there should be on the Committee one person at least who has lived long in India, who knows the conditions of the work which those men would have to perform, and who also understands the kind of stress they would have to endure in that country. If such an addition were made to the Amendment I think it would moot the circumstances and the requirements of this important Bill.
THE UNDER-SECRETARY or STATE FOR INDIA (LORD ISLINGTON): I desire to associate myself with the remarks made by my noble friend who moved the Amendment in regard to the seriousness of this departure in suspending open competitive examination for entry into the Indian Civil Service. I will not delay the House
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this afternoon by repeating what I said on that subject in the debate on the Second Reading the other night, but I am sure it must be in the minds of all noble Lords that the circumstances of the war make it inevitable, if we are to ensure anything like the same standard of recruit for the Service in the future that, has been admitted to it in the past, that some means other than that of competitive examination must for the time being be devised. And for this reason, that a very large proportion of the candidates from the various Universities, instead of, as in the ordinary course, preparing for the examinations, are now occupied with either the Naval or the Military Forces of the Crown, and many of them are gallantly fighting for their country at the Front.
It is necessary, first of all, owing to this depletion, to adopt means by which we can ensure as soon as possible a high standard of candidates. It is also equally important that we should devise means by which those who have gallantly joined the Forces should in no way be disqualified or diverted from the career that they had hoped to enter upon in joining the Indian Civil Service. Therefore selection for a time, for the period of the war and for two years after, and in part—for three-quarters of the vacancies—is the main proposal of the Bill. The principle embodied in my noble friend's Amendment s is in entire accord with the scheme in contemplation by the Government. As I said on the Second Reading, the Government propose to set up a strong and representative Committee to undertake the work of selection. As far, therefore, as the final object is concerned there is no difference of opinion between my noble friend and the Government; and if I find myself unable to accept the Amendment which he has moved, at any rate precisely in its present form, I hope I may be able to persuade my noble friend that that fact will in no way prejudice the method of selection.
The Government consider that the constitution and powers of the Committee can best be established by regulation. My noble friend thinks that such establishment can best be introduced into the Bill. He went so far as to say that he would prefer to see the establishment of the Committee and its powers precede the Bill which is to set up the Committee. There are

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advantages in postponing the establishment of the Committee to regulations rather than embodying it in the Bill. In the first place, the selection of candidates, whenever it may take place—and it. is impossible at this juncture to say when it will take place—must be made on what I may call broad and generous grounds. Many of the hitherto standards will have to be looked at with a more lenient eve in the peculiar circumstances in which we shall stand when these candidates present themselves for entry into the Indian Civil Service. It may be that in the course of the next year some of those now fighting at the Front may be disabled to the extent of being unable to continue with the armed Forces of the Crown whilst at the same time their injuries may not be of sufficiently severe a character to disable them from passing the Medical Board for entry into and becoming useful members of the Indian Civil Service. But, of course, that is all hypothetical. We cannot say how many there will be who will be available in those circumstances; and it may be that the Selection Committee's work may have to be postponed until a later date, possibly until the termination of the war. As to the constitution of the Committee, my noble friend is anxious that there should be embodied in the four-corners of the Bill the actual personnel of the Committee. There are certain objections to that.
Loan MACDONNELL OF SWINFORD: I asked that you should embody the classes from which the personael, the actual people, ought to be taken. I foresaw that you would not be able in the Bill to name the actual members, but you ought, I thought, to name the sources from which the actual members should be taken.
LORD ISLINGTON: That would remove a certain objection. But there, again, it will tend to the better efficiency of the Selection Committee if time can be allowed for the Government to see from where the candidates are coming, whether they are coming in large numbers from one University or another, and the various conditions which there may be connected with the candidates if they come at the end of a prolonged war. I can see advantages in postponement being allowed in order that the constitution of the Committee may be framed in such a way as to meet whatever difficulties may present
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themselves at the time. Representation of the Universities—a broad generic term—would be difficult to define in selecting gentlemen to represent adequately and harmoniously all the various Universities. That will have, of course, to be carefully considered when the time comes.
There is another objection to the Amendment which I would like to bring before my noble friend. The object of paragraph (b) as it stands in the clause is for another and preliminary purpose to that of the actual work which will be discharged by the Selection Committee. The idea is that with the assistance of the Civil Service Commissioners the Secretary of State in Council may be enabled to assess a broad minimum of educational attainment no candidate below which will be entitled to go before the Selection Committee. That will be necessary because, as your Lordships know, the open competitive examination for the Indian Civil Service is a very severe one and a very high test of intellectual attainment. Whilst owing to the war and the removal of these young men from the various Universities they will not have the advantage of training to the high standard that has hitherto characterised candidates for the Indian Civil Service, at the same time I am sure your Lordships will agree that some minimum standard of education must be fixed below which it would not be advisable, or necessary even, for candidates to present themselves before the Selection Committee; and the Civil Service Commissioners are obviously the proper body to advise the Secretary of State in regard to matters of this kind. They are accustomed to set papers for and to control examinations, and they understand from long experience the broad equating of the various standards from different Universities.
There may be one or other ways by which this test of a minimum standard may be arrived at, and that, will be for the Secretary of State in Council, advised by the Civil Service Commissioners, to decide and to embody in the regulations. It may be laid down that candidates must have passed some examination towards a degree in one or other of the Universities from which they have been drawn. It may be, on the other hand, that the simplest and fairest manner of arriving at, the test will be a broad qualifying examination. That is a matter which will have to be very carefully

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considered, and in due course will be embodied in the regulations. Your Lordships will see that there are two definite and distinct processes—first, the test of a minimum educational standard; and then, when that standard has been passed, presenting the candidate before a representative Selection Committee. The analogy of the Egyptian and Sudanese examination, as the noble Earl on the Cross Benches remarked, has a certain weakness, because in the one case the average number of entries is five or six a year, whereas in the case of the Indian Civil Service the average number is over fifty; and if selection has to be postponed and you get an accumulation of years, it will be, of course, a very much larger number than that. Therefore some form of sifting the candidates before they come to the Selection Committee seems to be necessary.
It may be that my noble friend considers that paragraph (b) now in the clause gives rather too much power to the Civil Service Commissioners. If the suggested new paragraph (b) which I will read to the House would more nearly meet Lord MacDonnell's views than the paragraph as it stands I should be very glad to propose it in due course. The words which I suggest are—
"A person shall not be appointed to the Indian Civil Service under the rules made under this section unless the Secretary of State in Council has, with the advice and assistance of the Civil Service Commissioners, satisfied himself, in such manner as may be prescribed by the rules, that such person possesses the necessary educational qualifications."
That makes more clear and definite the complete authority of the Secretary of State in Council, who will merely take the advice of the Civil Service Commissioners rather than, as now embodied in the clause, be dependent upon a certificate issued by the Civil Service Commissioners. I do not think there were any other points raised to which it is necessary for me to allude. I would, however, assure Lord MacDonnell that when the Selection Committee is constituted very careful consideration will be given to all the points that he brought forward.
We fully realise that in substituting selection for open competition, even for a time and even though it be partial, we are making a great departure and one which will be regarded by many in India with a certain amount of suspicion, though I hope that all reasonable people will see the absolute necessity of this step in the circumstances. But as far as selection can be freed from
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anything in the nature of patronage or of preference, that matter will be very carefully considered in constituting the Committee, and great care will also be taken as regards getting gentlemen on to the Committee who are able to speak from the various points of view—not merely the educational point of view, but the point of view of India and the point of view of knowledge of the military conditions under which these young men will have been working during the previous years.
One word with regard to the Indians. My noble friend suggested the other day that another Committee should be set up in India with a view to selecting Indians if the proportion to be admitted by open competition had not been made up. We have considered that, and have come to the conclusion that the fairest and simplest means is to allow those Indians on the list who were unsuccessful in the open competition to have admission to the Service provided they fulfil the necessary qualifications and pass the Medical Board. I do not say this absolutely definitely, because these matters, of course, have to be decided and dealt with in consultation with the Government of India; but we are strongly of opinion, and we have it in contemplation, that this would be the best and fairest course to adopt where the proportion of Indians falls short of previous years. I am sorry I cannot accept my noble friend's Amendment, but I hope my explanation will allay his fears that due consideration is not going to be given to the constitution of the Selection Committee.
THE EARL OF CROMER: The noble Lord in charge of the Bill has suggested the insertion of words to the effect that the Secretary of State in Council should be Satisfied "that such person possesses the necessary educational qualifications." I suggest that after the word "educational" the noble Lord should insert "and medical," because the medical test for these appointments in hot climate, is quite as important as the educational test.
LORD ISLINGTON: All the candidates will be bound to go before the Medical Board and pass the medical test. That comes under a rather different category from the work which the Civil Service Commissioners would have to discharge. I think the point raised by Lord Cromer is fully met by the fact that the Medical Board will test all these candidates.
THE EARL OF CROMER: Very well.
LORD MAC DONNELL OF SWINFORD: The essential matter which I wished to bring under your Lordships' notice was that, having regard to the great change from competition to this system of nomination, the utmost publicity possible should be given to the constitution of the Committee at the time of its being constituted, in order that if any objections were taken by any section of the public they might be discussed in your Lordships' House and thoroughly ventilated. That point, I am afraid, was missed by my noble friend Lord Islington. It may have been my fault. I may not have put my views with sufficient perspicacity. But my contention was that if the personnel of the Committee could not be mentioned in the Bill—which I thought would be the better plan—the operation of the Act should be postponed until the rules had been framed and subjected to your Lordships' consideration. As matters now stand, the rules will be framed by the Secretary of State—I have not the least doubt with the intention of carrying out all the objects which the noble Lord has mentioned—but they will not see the light of day until they are placed before your Lordships' House and possibly not until appointments have been made under them. There will then be no possibility of considering or criticising the rules except in circumstances which limit your Lordships to either approval or carrying a Motion vetoing the rules. I think that in this very important matter the House and the country generally are placed at a great disadvantage in trusting altogether to the wisdom and the forethought of the Secretary of State. Animated by the most excellent intentions he may misunderstand altogether and misinterpret the feelings of certain classes of the people. The noble Lord has referred to the necessity of associating the Civil Service Commissioners with the Secretary of State in the subsequent part of the proceedings, especially in regard to the educational test which has to be demanded. There is nothing more simple than to put in the rules a statement that no candidate will be entitled to apply unless he has passed either, if you want a very low qualification, the Secondary Educational Final Examination, or, if you want a higher examination, a degree of a University. That would be acceptable as proof positive that the candidate had
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acquired a certain educational qualification. To ask the Civil Service Commissioners by talking to a candidate to say that he has acquired a certain educational knowledge is to ask from the Commissioners information which it is very difficult for them to supply. I am most anxious not to inconvenience the Government and not to stand in the way of the passage of this Bill, but this is a most important matter, important not only as regards this country but as regards India, and I think there will be misapprehensions and suspicions of favouritism, and so for h, unless advantage is taken of this opportunity of having the rules made in as public a manner as possible.
VISCOUNT MIDLETON: I think every one of us sympathises with Lord MacDonnell's desire that there should be the most careful selection of these candidates; but after what has been said by the noble Lord the Under-Secretary, it is perfectly clear that the India Office propose to proceed practically on the principle laid down by Lord MacDonnell. Therefore I think we might put confidence in the Secretary of State in the case of a temporary provision of this character. Certainly if the noble Lord presses his Amendment, which I hope he will not do, I shall vote with the Government.
LORD MAC DONNELL OF SWINFORD LORD MAC DONNELL OF SWINFORD I should like, before my Amendment is put, to amend the words "a member of authority in public affairs." I desire this to read "members of authority in public affairs, English and Indian."
THE LORD CHAIRMAN: The first Question I have to put is whether paragraph (b) should remain in the clause.
On Question, paragraph (b) deleted.
THE LORD CHAIRMAN: I will now put the new paragraph (b) moved by Lord MacDonnell.
On Question, Amendment negatived.
LORD ISLINGTON: I move to insert the new paragraph (b) which I have read to the House.
Amendment moved—
Clause 1, page 1, line 22, insert the following new paragraph:
"(b) A person shall not be appointed to the Indian Civil Service under the rules made under this section unless the Secretary of State in Council has, with the advice and assistance of the Civil Service Commissioners, satisfied himself, in such manner as may be prescribed by the rules, that such person possesses the necessary educational qualifications."—(Lord Islington.)
On Question, Amendment agreed to.
Clause 1, as amended agreed to.
Remaining clause agreed to.
The Report of Amendment to be received on Tuesday next, and Bill to be printed as amended. (No. 164.)

ZEPPELIN RAIDS ON LONDON.
LORD STRACHIE LORD STRACHIE rose to ask the Civil Lord of the Admiralty—

1. Whether the anti-aircraft guns were of any more effect last Wednesday than they were during the previous Zeppelin raid on London.

2. Whether the great reduction of the lighting of London was of any real value during the last raid in comparison with the previous one.

3. Whether any steps have been taken to give London as far as possible the same protection from aircraft which Paris enjoys; and if not, why not.

4. Whether the anti-aircraft guns here were not used effectively against the Zeppelins as they might, have been for fear of doing damage to persons or buildings; and to move for Papers.

The noble Lord said: My Lords, perhaps I ought to explain why for the third time I have placed a Question on the Paper asking the Civil Lord of the Admiralty Whether he will give us information as regards the present state of things. On the two previous occasions I withdrew the Question because I understood that the noble Duke either had no information to give or that the giving of it was undesirable. That was before the Zeppelin raid that has just taken place. I cannot help thinking that it would give much greater confidence to people generally if we were told that something had been done in
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this matter. The time has come when the Government ought to take the country much more into their confidence than they seem willing to do. I am much emboldened in giving expression to this opinion by what has been said by the Under-Secretary of State for the Colonies. Mr. Steel Maitland is not only an able politician but he thoroughly understands what the feeling of the country is by the fact that he is entrusted with the organisation of the Unionist Party. Speaking at Carlisle he suggested that the leaders of the country should take the people into their confidence more and tell them the truth. He thought the more the country was told the truth and the more the country was trusted the less there would be of controversy and the more the country would respond to the needs of the present time. Certainly no one could put better the true feeling of the people at the present moment as regards this question of Zeppelin raids.
I desire to ask my noble friend, first of all, whether the anti-aircraft guns were of any more effect last Wednesday than they were during the previous Zeppelin raid on London. One hears that there was very much less shooting on Wednesday and that whatever there was it was just as ineffective as upon the previous Occasion. If that is so, I think we might be told whether the Government have made up their mind to abandon the use of antiaircraft guns and to adopt some other system. In my next Question I ask whether the great reduction of the lighting of London was of any real value during the last raid in comparison with the previous one. As far as one can judge, it does not seem to have had the slightest, effect in preventing the Zeppelins finding a certain number of vulnerable spots in the metropolis. If the semi-darkness in which we are living is really of no value, would it not be ranch better to adopt less stringent regulations?
Then, I should like to ask my noble friend whether the Government have taken any steps to give London as far as possible the same protection from aircraft which Paris enjoys. The circumstances, I know, are somewhat different here. However, I am credibly informed by noble Lords who know what is going on in Paris that that city is entirely exempt from air raids owing to the admirable precautions that have been there taken. The noble Duke may reply that it is very difficult for us

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to adopt the same plan with regard to anti-aircraft guns because London is not a fortified city. But that is no defence for not having, as they have in Paris, a great fleet of aeroplanes continually scouting round and about the city. In Paris there is a proper landing place for the aeroplanes. I am told that there is no such landing place nearer London than Hendon. Why not have a landing place at Hyde Park? I hope the noble Duke will not tell me that it is a question of the cutting down of trees and that the First Commissioner of Works will not agree to this being done. I am told that the landing place provided in Paris is not very much larger than the space that would be available in Hyde Park. I was rather amused at the statement made yesterday in the House of Commons that during the last raid we had only three aeroplanes up, as if three small craft of that kind could be of the slightest advantage.
The last Question I put to the noble Duke is whether the anti-aircraft guns here were not used effectively against the Zeppelins as they might have been for fear of doing damage to persons or buildings. Statements are being put about to that effect, but personally I believe them to be untrue. I am sure we do not mind risking our own skins if we can smash the Zeppelins, and I do not think there should be any less shooting on that account if shooting is desirable. I hope that the Civil Lord of the Admiralty will be able to make a clear statement and give us an assurance that something is going to be done in order that London may be protected as effectively as is Paris at the present moment.
THE EARL OF PORTSMOUTH: My Lords, before the noble Duke replies might I make a suggestion. During the last raid it was only by a miracle that there was not a terrible catastrophe in the Lyceum Theatre. A bomb fell close to that theatre, actually in the street. What I want to impress upon the noble Duke is this. I understand that the Admiralty have warning of the Zeppelins some time before they arrive over London. Having regard to the safety of the inhabitants of London I think it would be most desirable if some practicable steps could be taken, whether in the form of notices previously printed or in some other way, upon the Admiralty receiving notice that Zeppelins
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were sighted at sea, by which a warning could be given to the general public to remain in their houses. If some precaution of this kind is not taken, a very heavy responsibility will fall on the authorities who are answerable. I would also like to be told that measures have been taken to remove from the Record Office to some place of safety the wonderful and valuable treasures that there are there. We cannot tell where the next Zeppelin bombs will be dropped, and we ought to be assured that the priceless treasures which exist in public buildings in London will without further delay be removed to places of safety, as has been the case already with most of the prudent private possessors of pictures.
LORD SYDENHAM: My Lords, I think from the terms of the noble Lord's Question that the great difficulties of obtaining practice against aircraft with anti-aircraft guns have not been sufficiently appreciated. In order to get effective practice at night several complicated conditions have invariably to be fulfilled. The attacking Zeppelin must be found by an electric beam, or else it cannot be shot at. When a beam has found it, that beam must continue on the Zeppelin as it passes rapidly over London, or hand it over to another beam. The range of an electric light beam is considerably less than the range of a gun and may be sharply affected by atmospheric conditions. In some conditions of atmosphere its range is very short indeed. Then the gunner must know the range within very narrow limits of accuracy, and the range will change as the Zeppelin moves. The time fuse of the shell must be set very accurately in order that the shell shall burst at the proper distance from the object. There are also difficulties with sighting, because sights are based upon range tables calculated for terrestrial targets, and therefore they are wrong when you begin to shoot up into the air. When all these and other conditions are remembered I think it will be seen that to put untrained and unpractised men in charge of guns like these is very much like expecting a man who has never before fired a gun to bring down driven grouse. My own impression, from watching the shooting last week, was that there was a great deal of random shooting. Some of the shells appeared to be bursting nowhere near the Zeppelins. But if men who had practised frequently at aircraft from the

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trenches could be brought to London I think that very different results might be obtained.
As to the danger to us of using anti-aircraft guns, I think that is very small provided a time fuse is employed. The fragments from the shells would fall with So that except for the small risk of hitting an individual in the street, risk we must take, there is nothing to fear. Buildings would be entirely immune. The question of the amount of illumination permissible is a very difficult one, and one that can be judged only by careful observations taken at night by our own aircraft. No doubt such observations were made long ago. On clear nights I think it is impossible to prevent a Zeppelin crew knowing they are over a city the size of London, but what you want to do is to prevent them from accurately locating themselves so as to select a special target oil which to drop bombs. If the illumination is kept so low as to prevent the identification of special buildings nothing will be gained by reducing it further. As the illumination gets lower and lower it shows up more prominently our own electric lights, which help to guide the Zeppelins, and it makes more easy any flashing of signals of which aliens in our midst may be guilty. I think we have gone a, little further than necessary in lowering illumination. When the fogs arrive traffic in the streets will become, with the present low illumination, extremely difficult and dangerous, though if the fogs extend far out beyond London they will baffle Zeppelins navigated only by dead reckoning.
I notice that in some quarters it seems to be thought that our aeroplanes ought to cruise over London on the nights when Zeppelins are known to be on their way. I believe that would be useless and dangerous. In the Cast place, as far as I know there have been only two cases in which Zeppelins have been brought down by aeroplanes, and in both cases they were brought down by bombs. Lieutenant Warneford, I think, dropped five or six bombs before the last effected its object. If a fight of that kind were carried on over London we should not only have the danger of Zeppelin bombs but the added danger of our own bombs. In the second place, the aeroplane must have great difficulty in finding a Zeppelin by night
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and in landing safely afterwards. If you make a great illumination in Hyde Park to guide the aeroplanes back there after they have done their duty, I think you will be showing more to the enemy than is safe. We have already lost some lives and damaged many aerpolanes by sending them on wild goose chases in the dark. The real chance of the aeroplane is to attack the Zeppelin when it reaches our coast line before the light fails, or at points in its course which it passes before nightfall.
The conditions in Paris are very different from those in London, as Mr. Balfour explained in another place. In the first place, Paris is surrounded by a chain of forts powerfully crated and doubtless manned by highly-trained gunners with a large number of anti-aircraft guns. Moreover, any Zeppelin attacking Paris must pass over the line of trenches where they would encounter heavy fire. Then there is the moral factor. I do not think that the killing of women and children in Paris would give the same amount of pride and satisfaction to the Germans as they derive from attacks on London, and that may possibly have some bearing on the immunity of Paris to which the noble Lord referred.
What must astonish us most is the long delay in maturing any proper organisation to oppose these raids. We had ample warning, and threats in abundance. Yet nothing was done until recently to take the question in hand and deal with it properly, and I am not quite sure that even new we can count on such a sound and complete organisation as would prevent any question of a division of responsibility, which, as we know, implies in the long run that there is no responsibility at all. I hope the noble Duke will say that this neglect has been entirely remedied, and that measures have at length been taken which will make these cowardly and brutal enterprises too dangerous to be undertaken. I am strongly opposed to reprisals in kind, but I believe that by proper organisation and proper handling of guns by men who know how to use them we can soon assure ourselves that these raids will never be attempted again.
THE CIVIL LORD OF THE ADMIRALTY (THE DUKE OF DEVONSHIRE): My Lords, the speech which my noble friend who has just sat down has made answers to

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a very large extant the Questions on the Paper, and I am grateful to him for the support he has given to us on this occasion. Before I reply to Lord Strachie may I deal with the subsidiary questions raised by my noble friend Lord Portsmouth. I am not in a position to make any statement now as to the removal of valuable records and pictures to which he made reference, but if my noble friend will place a Question on the Paper I shall be glad to afford him all the information I can on that subject. With regard to the noble Earl's suggestion as to warning being given, I am told that the probable effect of announcing that Zeppelins were on their way would be to cause a far greater number of people to go into the streets than at present. That is a matter of opinion and of conjecture. But judging by the experience of the two raids which there have been over London, it is thought that any recognised warning given throughout the metropolis would probably lead to the emptying of theatres—which in itself may be a good thing—but at any rate would mean the collection of very large crowds throughout the streets of London.
In reply to Lord Strachie's first Question, I have to say that there is no evidence in the possession of the Admiralty to show that any Zeppelin was brought down by gunfire in either of the two raids on London. With regard to the second Question, that clearly must be a matter more or less of speculation; but in the opinion of the Departments concerned the reduction of lighting in London was of value. As to the third Question, the position of Paris is not on all fours with the position of London. Sir Percy Scott if, aware of what has been done in Paris, and is taking every means at his disposal to adopt such measures here as are possible for our protection. I have to say, with regard to the fourth Question, that there is no foundation for the suggestion contained therein. I can assure my noble friend that the Admiralty do not intend to rest content until every step has been taken to render the defence of the metropolis as efficient as we possibly can. The problems are by no means simple, and require great consideration. We have availed ourselves of all the best information obtainable; no effort has been spared to provide proper material; and I hope we shall be in a position shortly to make the defence of London satisfactory.
LORD STRACHIE: Arising out of the noble Duke's answer, might I ask whether Sir Percy Scott has control of the aeroplanes? From what was said in the House of Commons the other day, it would seem that the aeroplanes are under the control of the Army Council.
THE DUKE OF DEVONSHIRE: I understand that a Question has been addressed to the Prime Minister with regard to this matter, and that he hopes soon to be in a position to make a reply. At the present moment the Admiralty are responsible, and they are working in close co-operation with Sir Percy Scott, who is responsible for the gunfire.
LORD STRACHIE: And the aeroplanes?
THE DUKE OF DEVONSHIRE: The Admiralty are responsible for the aeroplanes, and Sir Percy Scott is working in close co-operation with the Admiralty.
Loan SYDENHAM: Is it possible for the Civil Lord of the Admiralty to tell us whether anything has been heard in connection with the last raid about signals having been made by rockets, or flashing up chimneys, or by other means? There have been a great many stories going about as to that, and I think it would be a good thing to have them denied if possible.
THE DUKE OF DEVONSHIRE: I am afraid I am not in a position to answer that question. I had not heard of it before, but I will make inquiry.

THE EXECUTION OF MISS CAVELL.
THE EARL OF DESART THE EARL OF DESART rose to ask His Majesty's Government whether they are able to furnish particulars of the case of Miss Edith Cavell, who, as it is stated, was executed by order of the German authorities in Belgium on the charge of harbouring British, French, and Belgian soldiers, and assisting them to escape from Belgium; and whether they have information as to any other ladies being under trial or sentence on similar charges.
The noble Earl said: My Lords, it is but a few clays since that we listened with feelings of horror to the account given by the noble Viscount (Lord Bryce) of the terrible massacres of Armenians com-

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mitted under Turkish orders. Fresh in our memories are the brutalities and massacres committed by the Germans in Belgium and in France, and also the murder of innocent non-combatants by German submarines and aircraft. One had almost thought that the possibilities of ruthlessness had been exhausted, and that whatever instance might arise in the future there could be nothing in its nature that would shock the conscience more than, or as much as, those awful things that had taken place. When a few days ago we read in the Press the story to which my Question relates we felt that here was something not comparable, perhaps, in its horror or the extent of its consequences, but in kind as terrible as, or more terrible than, anything that had come to our knowledge since the commencement of the war. I know it so affected me. The few words which I shall address to your Lordships this evening I speak on the information which we have from the newspapers. We are familiar, terribly familiar, with the ruthlessness of German commanders. We know but too well the brutality in many cases of the forces acting under their command. And this case brings it home to us that their tribunals and those who have the power and privilege of exercising clemency are not free from the smite spirit and are not unwilling to exercise the same ruthlessness.
What are the facts of this case so far as they are known, or, at any rate, so far as we know them from the newspapers? Miss Edith Cavell was a lady of middle age, of unblemished reputation and character, living in Brussels and engaged in works of humanity and kindness—the training of nurses for the relief of humanity. She was charged with doing that which no doubt is an offence against the laws of war. The charge was that she assisted her fellow-countrymen and subjects of our Allies in distress to conceal themselves from the Germans and to escape from German control. That was her offence. She was tried in cold blood; she was convicted in cold blood; she was executed in cold blood. Here was no case of immediate terror of those who arraigned her, none of the excitement of lust, of blood and battle; it was an act of so-called justice, so conceived, so carried out to the bitter end. The scene of her execution was described in the news
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papers. I do not propose to remind your Lordships of it. It is one of those things of which one can hardly speak without more emotion than is suitable in this place. In time of war every belligerent has the right to protect itself against the offence with which Miss Cavell was charged. That she was liable to punishment of some kind I could not and do not dispute. That punishment would be such as was necessary to prevent her from carrying on the assistance she had been rendering and to warn others that they could not adopt that course without consequences. It may even be that a sentence of execution was technically one that, might be passed. But I do not think there is one of your Lordships who will differ from me when I say that though that sentence might be passed it was one that most emphatically would never have been carried out on a woman by any other country but Germany.
This is a matter which will appeal to all the world. As I have said, I do not dispute that these things must be guarded against in war time. In the case of espionage, with deadly danger to the State, there may be no measure that you are not justified, however unwillingly, in applying. But I cannot help thinking that if this offence had been committed by a German lady in this country to assist her fellow-countrymen to escape, we should have, taken prompt measures to prevent its recurrence, but there would have been no suggestion of imposing more rigorous conditions than were necessary for that purpose. This is a case of which it is seemly that some notice should be taken and some protest made in this country. As we have spoken about other horrors, we may say one word in this House to express our detestation of this particular one. Impotent as we are to punish, far away as may be retribution, I think our voices may now be raised. I think that all the facts should be made known. Those facts should reach the humane men and women of neutral countries. And not only neutral countries but Germany itself, for I cannot believe that when the facts are known there will not be some there who will feel as bitterly as we do the scandal that the governing powers should have permitted this execution. I have not confined my Question to the case of Miss Cavell, but also ask for information relating to other ladies, because there is a belief that there are other persons under similar

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charges lying in similar peril who have not yet suffered. Not perhaps by our action but through the action of neutral countries it might be possible to prevent a recurrence of what I venture to describe as one of the greatest tragedies of the war. I beg to put the Question which stands in my name.
THE MARQUESS OF LANSDOWNE: My Lords, my noble friend Lord Crewe has been called away from the House and has asked me to reply to the Question which has just been addressed to the Government by my noble friend opposite. May I be permitted, in the first place, to say that I am not surprised, and I am sure no member of your Lordships' House can be surprised, that the noble Earl should have called attention to this most deplorable incident. We have been during the last few months continually shocked by occurrences each more terrible and moving than its predecessor; but I doubt whether any incident has moved public opinion in this country more than the manner in which this poor lady was, I suppose I must say, "executed" in cold blood not many hours ago. It is no doubt the case—my noble friend did not disguise it from himself—that she may by her conduct have rendered herself liable to punishment—perhaps to severe punishment—for acts committed in violation of the kind of law which prevails when war is going on. But I have no hesitation in saying that she might at any rate have expected that measure of mercy which I believe in no civilised country would have beers refused to one who was not only a woman, but a very brave and devoted woman, and one who had given all her efforts and energies to the mitigation of the sufferings of others.
I am able to tell my noble friend that a full Report relating to the circumstances under which Miss Cavell was executed was forwarded to the Foreign Office yesterday by the United States Ambassador. We learn from this Report that the representatives of the United States and of Spain at Brussels up to the very last moment neglected no opportunity or effort in order to obtain a commutation of the death sentence passed on Miss Cavell, or even to obtain at least a period of suspense before that sentence was carried into effect. Those efforts failed. The material portions of the Report to which I refer will be published without delay.
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With regard to the second part of my noble friend's Question, I am able to tell him that two French ladies have been condemned to death on a charge of sheltering British and French fugitive soldiers. These ladies were to have been executed on Monday last, but I am glad to be able to add that as the result of strong representations made by His Majesty the King of Spain and by the Pope the execution of these sentences has been postponed pending consideration by the German Emperor of the reports on both cases. I will only add that I am convinced that there is not a man or woman in this country who will not join with the noble Earl in the protest he has made.
THE EARL OF DESART: There was a list of names, more than those of the two French ladies, in the newspapers this morning of people who had been sentenced to various terms of penal servitude. I do not ask for an answer now, but possibly at some future time we may be informed whether or not those reports are correct.
THE MARQUESS OF LANSDOWNE: I would rather not make any statement upon that at the moment.

SIR E. CARSON'S RESIGNATION.
LORD WILLOUGHBY DE BROKE: My Lords, I rise to ask His Majesty's Government why Sir Edward Carson has resigned his office. I am well aware that this is a question which may be very difficult to answer, but I think your Lordships will agree that it is not an unnatural one to be put. When at such a time as this a Minister whose integrity, courage, and strength of purpose must be a valuable national asset apparently tenders his resignation and leaves the Government, it is bound to excite a great deal of public curiosity and anxiety. The truth attending Sir Edward Carson's resignation will, I submit to your Lordships, have to be disclosed to the nation sooner or later; and perhaps it will be well, if it is not impertinent for me to offer advice to the Government to say that this public anxiety should be allayed at the earliest possible moment. For instance, people are asking one another whether Sir Edward Carson resigned on account of something to do with Home Rule for Ireland; whether his resignation is in any war connected with the question of National Service;

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whether he resigned because he had a policy and His Majesty's Government had no policy at all; whether he resigned because he had a different policy from that of His Majesty's Ministers, and, if so, what was that policy and what is the difference.
I know quite well that I shall not receive a very conclusive or satisfying answer to my Question. I shall probably be told that Sir Edward carson will make his own statement in his own House at the proper time. I hope that I shall get that answer. I am voicing what every one to whom I have spoken feels when I express the wish that if that statement is made it will be complete in every possible way and that we shall knew the whole story. On the other hand I may be told that it is undesirable in the public interest to lift even the corner of the veil of secrecy with regard to Sir EC ward Carson's resignation; that there are some things about which one ought not to speak for fear of disheartening our Allies and heartening our enemies.
I hope it will not be out of place if I say a word with regard to the suppression of news that has been going on since the war began. I have not mixed very much in political circles during the last twelve months, but I am not giving an unfair account of what being said by everybody with regard to the Censorship or suppression of news generally when I say that if the withholding of news is dictated purely by military and naval necessities—if an Adimiral or a Field-Marshal says that certain news is not to be published, and if the country was told that it was on military or naval authority that news was being so withheld—the people would cheerfully acquiesce. But there seems to be a very general impression——it may or may not be well founded—that news is being kept bark and things glossed over, not because the naval or the military operations demanded it, but because the position of politicians demanded that certain things should not be brought to light. With the greatest respect if suggest that this kind of thing breeds mistrust of the Government out of doors and is the one thing likely to react unfavourably and dangerously upon their authority in the country. Are you quite sure, my Lords, that the secrecy to which we have been treated is, after all, so very necessary? Will it make such a tremendous difference to the attitude of Germany towards this country? Is it not true that there are things published in
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the German newspapers which are suppressed from the British newspapers, things which we might very easily know?
I address this last remark to His Majesty's Government with all the sincerity that I can command. It seems to some of us that what is dragging us down now and is more likely to cause comfort and support to the enemy than the publication of news is a deliberate and well-organised pacifist, in effect pro-German, propaganda which is in progress all over the country. Why do you not suppress that? The people who are conducting this agitation are those whom we should like to see suppressed. I am not speaking without the book. I saw a well known citizen of this country yesterday afternoon, and I was informed beyond a shadow of doubt that there is a most dangerous anti-national campaign being carried on in this country which has for its object an inconclusive and premature peace which, if arrived at, would be the wickedest crime that this country could be guilty of, and would throw away every single thing for which British lives have been laid down and British money spent. I do hope that this aspect of the matter will engage the attention of Ministers. There is a body called the Union of Democratic Control, or something of the kind, the leaders of which are so democratic that they do not respond to the wishes of the majority of their constituents. If the Government want to suppress something, why do they not suppress that organisation? You would get the ardent support of the very best part of the nation. Unless we can get a clear idea that the Government of the day are going to proceed on inure healthy and more aggressive anti-German lines we shall feel that we are not putting forward all our strength, and our Allies will feel the same. And there will be a demand in this country for a national pro-English and anti-German policy which either this Government or some other Government, if we are going to win the war, will be bound to carry into effect. I do not apologise for having wandered rather far away from the subject with which I began. This is the only House now where you can really get up and say what you like. And, after all, if we do digress somewhat it is only a vindication of the ancient privileges that your Lordships have enjoyed, and, I hope, will continue to enjoy.
THE MARQUESS OF LANSDOWNE: My Lords, I would be the last person in the world to suggest that the Question which my noble friend has put to His Majesty's Government is prompted by idle curiosity. We must all recognise that at a moment like this the resignation of a Minister, and particularly a Minister of Sir Edward Carson's importance, is a grave incident, and it is not surprising that it has attracted a great deal of public attention. My noble friend was good enough to suggest in anticipation one or two different forms of answer that I might possibly give to him. One of the formulæ which he suggested was an answer to the effect that Sir Edward Carson would make his own statement in his own House at the proper time. I am not going to give exactly that answer, but I am going to give one not very far off it. My answer is that Sir Edward Carson has already in his own House, and at the time which he thought convenient, made a statement of the reasons which have induced him to separate himself from his colleagues. That statement, I believe, is to be seen exhibited in a conspicuous place not far from where we are sitting. I really feel that I have not the right to add anything to that statement or to take away anything from it. But this I may be allowed to say. My noble friend said that it had been suggested that Sir Edward Carson's resignation might possibly have something to do with the old Home Rule controversy. Now, we who know Sir Edward Carson will feel perfectly confident that at a time like the present he would not allow himself to be deflected by an inch from what might seem to him his proper political course by any old political prepossessions on questions concerning domestic policy.
LORD WILLOUGHBY DE BROKE: Hear, hear.
THE MARQUESS OF LANSDOWNE: All I can add is an expression of my own very deep regret, both on public and private grounds, that I should no longer have the satisfaction of counting Sir Edward Carson as one of my colleagues. I am sure my noble friend will excuse me if I do not attempt to follow him into the somewhat discursive remarks which he made upon what I think he described as the suppression of important intelligence. It is quite possible that mistakes have been made, and that in some cases news may have been withheld which might without any public disadvantage have been made public. All I will say is that these matters are being considered. My noble friend, as every one else, must realise that to set up the vast machinery which has been established on both sides of the Channel for regulating the publication of news does present immense difficulties, and if in those circumstances mistakes have been made one cannot be surprised. But the matter is being carefully attended to, and there certainly is no desire to keep back from the public any news which can be given without at the same time giving assistance to our enemies.

BUSINESS THE HOUSE.
THE MARQUESS OF LANSDOWNE: My Lords, as there is nothing on the Paper for to-morrow, I move that the House do adjourn, except for Judicial business, until Tuesday next, October 26.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at half-past Six o'clock, till To-morrow, half-past Ten o'clock.